EU Membership: Economic Benefits

Ben Howlett Excerpts

Wednesday 15th June 2016 Commons Chamber

[Ben Howlett (Bath) (Con)]

It is a pleasure to follow such eloquent speeches from across the House. I probably share exactly the same concern as the hon. Member for Ross, Skye and Lochaber (Ian Blackford) about a possible increase in whisky prices. I hope staying inside the EU will keep prices down low.

It is often quite difficult, in a debate that has lasted for so many months and so many hours, to add something new. I want to commence today with a measured assessment of the highly likely instability a vote to leave would cause our economy and what that instability may lead to. Later, I want to return to the benefits our economy receives from our membership of the EU, particularly in the south-west and in my constituency.

We have heard from many economists in this debate, some of whom were more convincing than others. I am not an economist—I am an economic historian—but I think it is helpful to look back at recessions caused by external factors in our history and explain how their impact helps to predict what could happen after a Brexit in a couple of days’ time.

During the 1976 International Monetary Fund crisis, the Labour Government of the time faced one of the largest crises of confidence in the British economy since the second world war. Britain racked up huge debts, creditors lost confidence, there were runs on the banks, inflation was sky high, interest rates rocketed and unemployment began to shoot up. Fast-forward 30 years to the recession of 2007 to 2008 and the country was running a substantial deficit, debts had been rising for years and the world economy faced the worst sovereign debt crisis in our history. There were queues of people withdrawing cash from their bank, unemployment rose, recession hit the UK and it has taken years of hard work to rebuild the confidence of our creditors. The current Government have worked hard to restore our economy, brought unemployment levels to record lows and put more money in all our constituents’ pockets.

Both those incidents caused a reduction in the confidence of our creditors in our ability to repay our debts. One required an IMF bailout, the other a downgrade in our credit rating. Despite the hard efforts of this Government, a budget deficit still persists and it is vital that the costs of servicing that debt are kept low. We retain confidence that the UK will be able to service the debt. Rating agency Standard & Poor’s has already signalled a downgrade of the UK’s credit rating by up to two degrees in the event of Britain leaving the EU. We cannot sacrifice years of hard work of deficit reduction for a leap into the dark. We have to learn from our past mistakes before we make that decision. That is on top of the risks posed to jobs and economic growth that Members from across the House and almost every major economist and financial institution have warned about thus far. Leaders of the leave camp cannot guarantee a single job in the event of an exit. I seriously do not think Britain is in a position to be able to put all that at risk. If we take the leap into the unknown, we do not know how big the recession will be, how long it will continue or how deep it will go. It is an absolute no-brainer: Britain is stronger, safer and better off inside the European Union.

Finally, I want to turn quickly to the benefits that the UK’s membership of the EU brings to the UK economy, in particular to my constituency. Many Members who are also from the south-west have noted that 250,000 jobs in the south-west are linked directly to our place in the EU, and that withdrawal from the European Union could put tens of thousands of jobs at risk in our region. The Government have done so much to boost our economy and reduce unemployment levels. All that hard work could be undone quickly as the result of a Brexit. My constituency has a very vibrant tourist economy. I do not want anything to put it at risk. In conclusion, we are better and stronger in the European Union than out.