Budget Resolutions

Angela Smith Excerpts

Monday 27th November 2017 Commons Chamber

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Thank you, Madam Deputy Speaker. I think this is the first time I have spoken in the Chamber while you have been in the Chair.

This Budget debate is quite rightly primarily about Brexit, and the statistics underpinning the Chancellor’s statement last week have to be read in that context. From being one of the fastest growing economies in the G7, we are now joint bottom. Indeed, over the next five years our economy is forecast to grow more slowly even than that of Greece. I could say much more about the statistics. It is of course true that our productivity gap is a major factor in our faltering performance, as it acts as a huge brake on growth. Despite this dreadful situation, investment intentions by businesses are weakening because of uncertainty about the future of the British economy in the context of a shambolic Brexit process. The situation is fragile.

The Budget is based on a positive outlook for negotiations, yet there is a lot of scope for things to go badly wrong. The biggest fear, as far as our wealth creators are concerned, is a cliff-edge Brexit, with the UK leaving on World Trade Organisation rules. That would mean, according to the Chancellor’s own forecasts, the economy emerging at 7.5% smaller by 2030 than it would otherwise have been. Even if the Government secure a Canada-style trade deal, the Treasury estimates that the country will be only around 1% better off than if we leave on WTO rules. It is hardly enticing, is it? Analysis also suggests that trade deals with other countries will add only 5% to our trade, and nowhere near compensate for the 40% reduction in trade consequent on leaving the single market.

The Government need to acknowledge the warning signs sent out by the figures underpinning the Budget. The first and most important response needs to be an acknowledgement that there is no such thing as a bespoke deal. There is only no deal, a trade deal on Canada-like terms as a third country, or continued membership of the single market and the customs union. It is that latter option that promises business certainty for the future, and which will encourage investment and improvements in the country’s productivity, giving the Chancellor—whoever that may be—more room for manoeuvre in future years. Maybe at some time in the future we will have a woman Chancellor making good on our place in the single market.

At a time when the NHS is desperate for money, it is surely madness to keep pursuing a policy that threatens to cost us dear. The truth is that we cannot end austerity without growing our economy. The Budget last week made that fact painfully clear and it is my contention that growing the economy is best secured by staying in the single market. The fear with the present course the Government are following is not only the sheer chaos of it, but the failure to accept the pragmatic view that disruption to our economy must be avoided at all costs.

It is not in the national interest to allow this to happen and the Government should and must act responsibly. Those on both the Government and the Opposition Front Benches should grasp the nettle and accept that membership of the single market and the customs union offers the best deal for Britain.