UK-EU Summit
Bernard Jenkin Excerpts(5 days, 19 hours ago)
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Alex Burghart
When I first arrived in the House, the leader of the hon. Gentleman’s party was advocating leaving NATO and giving up Trident, so I will take no lectures from those on his side of the House. My party is committed to 3% defence spending, and I think that those defence contractors in his constituency would very much like to see a Conservative Government spend some of that money in his patch.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Would my hon. Friend care to disabuse Labour Members who seem to be under the impression that whatever amount we put in, somehow our defence contractors in the UK will get more out of the fund than we are contributing? The history of defence procurement in Europe is that France and Germany invariably make sure that they get more out of it than they put in, and we are always the losers. I do not think we will suddenly become winners when we are not a member of the EU.
Alex Burghart
My hon. Friend’s experience in these matters speaks volumes. The truth is that we must be absolutely certain that this will not be just another scheme for funnelling money into French defence companies while keeping it away from defence companies in other jurisdictions.
Sir Bernard Jenkin
May I point out that the Conservative motion says that the Conservatives stand by the result of the 2016 referendum, but the Labour amendment does not say the same of the Labour party? Is the right hon. Gentleman saying that a one-term mandate in one election trumps a referendum result, or does he respect the referendum result of 2016?
Nick Thomas-Symonds
I absolutely respect the referendum result. If the hon. Gentleman bothered to read our manifesto, he would discover that there are red lines: we will not go back to the single market, the customs union, or freedom of movement. Let me say to the Conservative party that delivering on our manifesto promises will unlock huge benefits for the United Kingdom, reduce barriers to trade and accelerate economic growth. In an uncertain world, it will keep us safer, more secure and more prosperous. That is what this Government are working towards.
James MacCleary
My hon. Friend is a strong advocate for farmers in her constituency and across the country, and I absolutely agree with her.
Our fishing communities have suffered similarly. I hear from local fishers in Newhaven, in my constituency, who fear their livelihoods are close to collapse. Elsewhere, we have the example of offshore shellfish in Brixham, represented by my hon. Friend the Member for South Devon (Caroline Voaden), where a vet is now needed to sign 17 separate documents by hand for every shipment of mussels. If the deadline is missed at Calais, the entire catch goes to waste. That is not taking back control—it is losing the plot.
The Tories have thoroughly botched our relationship with Europe, but Labour’s overcautious approach risks cementing this failure. We acknowledge the Government’s recognition that this Brexit deal was not working, but their approach falls a long way short. Where Britain needs bold leadership, they offer nothing more than reluctant half-measures; where we need decisive action, they offer excuses and red lines.
Sir Bernard Jenkin
The hon. Gentleman raises an interesting point about shellfish. The environmental and hygiene standards we apply to our shellfish remained exactly the same the day we left the EU as when we were in the EU—it was the EU that supplied all that bureaucracy and requirement for wet stamps. Under World Trade Organisation rules, if a territory has equivalent standards, it is obliged to allow goods to enter its jurisdiction unchecked. Why does the EU breach this international law so wantonly, and why have the Government become a supplicant to the EU, trying to gain its favour to remove these illegal barriers?
James MacCleary
I think the hon. Gentleman would acknowledge that the regulations he references are not the only barriers to export in this country. I mentioned Calais; the port of Dover currently sees massive delays in getting any goods through the port because of the additional bureaucracy and security that are necessary as a result of Brexit. Newhaven port in my constituency, which I know very well—in fact, I humbly suggest that I know it better than other hon. Members—has had to spend millions of pounds simply putting in place more barriers in order to move goods through the port, and that is what is slowing things down. The hon. Gentleman makes a fair point about equivalence, but at the end of the day, it is not the only output of Brexit that is harming our industries.
With its half-measures, Labour seems so afraid of its Reform-shaped shadow that it has ruled out bold measures to set free British business and stimulate growth. Britain cannot afford such timidity; our businesses cannot afford it, and our young people, who face a future with fewer opportunities than their parents, absolutely cannot afford it.
James MacCleary
I am pleased that the right hon. Member agrees with himself.
By contrast, my hon. Friend the Member for Honiton and Sidmouth (Richard Foord) tells me of an engineering firm in his constituency that, due to the mountains of Brexit red tape, now finds it far easier to trade with South Korea than with Europe. This is not just damaging, but frankly absurd. The one thing that the Government will not do that is guaranteed to deliver growth is negotiate a bespoke customs union with the EU, yet they are hiking national insurance for businesses, stifling investment and refusing to support the most vulnerable in our society by not scrapping the two-child benefit cap or safeguarding personal independence payments.
James MacCleary
I will, if I may, make a little progress, because I am conscious of the amount of time that I am taking up.
Only a customs union can give businesses the long-term certainty they need, which will help to shield British jobs from the looming threat of Trump’s trade wars. I will take an intervention from the hon. Gentleman first and then from my hon. Friend.
Sir Bernard Jenkin
The hon. Gentleman told us that he has a constituent who finds it easier to trade with South Korea than with the EU. What does that tell us about the EU? Is that not one reason why people voted to leave? It is because of its excessive bureaucracy and its protectionism. Why is it easier to trade with South Korea than with the EU if it is not for EU bureaucracy?
James MacCleary
Just to be clear, I was talking about one of the constituents of my hon. Friend the Member for Honiton and Sidmouth. But on the hon. Member’s point, the reason was the trade barriers put up by the Conservative party as part of the Brexit deal. It is as simple as that. It was a protectionist party putting up trade barriers, and it continues to advocate for it.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I am delighted to follow the hon. Member for Chelsea and Fulham (Ben Coleman) and his flowery optimism for the future of this country, with it somehow being a terribly good thing that we are realigning ourselves with the European Union without actually rejoining it. It makes me wonder about all the debates I have attended over 33 years in the House about our relationship with what used to be called the common market, then the European Communities and now the European Union.
This debate has a ring of familiarity about it, because there are two sides in the House that tend to completely misunderstand each other—only, I think that Conservative Members now understand the truth, because that came out in the referendum. The referendum demonstrated that the House of Commons was completely out of alignment with the population on the question of our membership of the European Union. The whole Brexit story was about a battle within the House as to whether the pro-EU majority would assert itself and somehow negate the referendum, or whether the referendum would be respected. That is why my right hon. Friend the Leader of the Opposition and her shadow Cabinet colleagues are right to put at the front of the motion the importance of honouring the referendum result.
The fact is that a referendum result represents a superior mandate to a single term of election for an elected Government, because that referendum takes place on a single issue. I do not think anyone would pretend that the European Union was the main issue at the last general election, so anyone in the Government or indeed in the Liberal Democrats trying to use the general election result as a mandate to circumvent the result of the 2016 referendum is playing a dangerous political game.
Sir Iain Duncan Smith
Of course, that argument was used in reverse on those of us who had had concerns about Europe for 40 years as we were told—exactly to my hon. Friend’s point—that a referendum was superior to continuous elections. We made a decision after the last referendum; that was a generational move. We have hardly had a generation in the few years since the referendum.
Sir Bernard Jenkin
I agree with my right hon. Friend. The important point is that we do not have a written constitution, but we do have in our minds a hierarchy of legitimacy on which, in the end, the democratic credibility of the House depends. The fact is, a referendum represents a superior mandate on a single issue and, with a great struggle, the pro-EU majority eventually aligned itself with the decision that the British people had taken on our membership of the European Union.
Sir John Hayes
Since we are straying into political ideas and philosophy, is not the point that the democratic legitimacy we enjoy in this place is on the basis of popular consent, and there is no more direct expression of popular consent than a referendum, which is why its result has to be honoured?
Sir Bernard Jenkin
I agree with my right hon. Friend, and that is why it was an extremely ominous portent that the Minister at the Dispatch Box refused to answer him on the question of whether there would be alignment or subjection to the European Court of Justice. If the referendum was about one thing, it was about taking back control of our laws. In fact, many of us in the leave campaign at the time argued that the British people do understand sovereignty—they certainly did by the end of the referendum—and getting into permanent alignment of regulation or subjecting the meaning of laws applied in the United Kingdom to the scrutiny and jurisdiction of the European Court of Justice is giving back control. It is a dangerous thing for a Government elected on the principle of honouring the referendum result, and one who are now playing dog-whistle politics with immigration, to be backsliding in secret, with a sleight of hand, into allowing jurisdiction of the European Court of Justice and permanent alignment back into our law while pretending that is not happening. That is exactly what the Minister did at the Dispatch Box.
Sir Bernard Jenkin
I will give way to my right hon. Friend, but I have another point that I wish to make.
Mr Francois
My hon. Friend will well remember that during the referendum a booklet was circulated to every household in the United Kingdom, which famously said:
“This is your decision. The Government will implement what you decide.”
The people decided to leave, and some in this place spent three years trying to frustrate their decision. In that context, is he concerned that today the Minister blatantly refused three times to answer a straight question about whether the Government would concede dynamic alignment at the summit? Is that not the sort of duplicitous behaviour that made the public so angry in the first place?
Sir Bernard Jenkin
I agree. But there is another dangerous game being played by another political party: the Liberal Democrats. My right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) pressed the hon. Member for Lewes (James MacCleary), who wants to rejoin the European Union, on whether there would be another referendum, and he did not say that there would be. That we would have a referendum to leave the European Union but not require a new referendum to rejoin it would be incendiary politics for this country.
Why have people become disillusioned with their politicians? It is because politicians seem to agree to one proposition and then do something completely different from what was voted for. I hope we can all agree on one proposition: that there could be no possibility of a proposal to rejoin the European Union or to accept dynamic alignment or the jurisdiction of the European Court of Justice—except over its current limited areas, which will eventually expire—without a further referendum. That is a serious matter.
Caroline Voaden
The hon. Member talks about people losing their trust in politics. Does he agree that the promise of £350 million a week to go to the NHS, which was broadcast on the side of a big red bus during the referendum, might have somewhat reduced trust in his party?
Sir Bernard Jenkin
I am happy to point out that after the referendum and since we left the European Union, we are spending way more than £350 million a week more on the NHS than we were, and our contributions to the European Union have fallen dramatically—in fact, much faster than was expected under the withdrawal agreement. So the benefit that was on the side of the bus has turned out to be correct, although I believe it was a statistical sleight of hand to use that particular number; I disowned it at the time. But have no doubt that if we are to get drawn back into the European Union, we will have to start raiding the NHS to make payments to the European Union again. I do not think that is what the British people voted for.
That brings me back to this great defence fund, which I think will be borrowed. Will we have to borrow some of that fund as well? No, it was going to be borrowed through some European Central Bank mechanism. Will it instead be taxed? In any case, it is all Government borrowing, so will we add to Government borrowing by participating in the borrowing or funding of that fund, or would it not be better if we just remained aloof from it to concentrate on spending money on our own defence? That is the point that has already been made: the money that we have committed to defence over the years, in the period since the second world war and, indeed, since the end of the cold war, is far greater than that of the vast majority of EU countries. We also mandate our nuclear deterrent to the protection of the whole of Europe. We play our part in the defence of Europe. As for the idea that we can deploy troops more quickly through free movement of people, what planet are the Liberal Democrats on? It is utterly ludicrous.
I come back to the point about the defence fund. There have been such funds in Europe before, but I can assure Members that the game that every country plays is the one where what they put in, they get out. The French are past masters at that. They will participate in a multilateral programme, but if they do not get the lion’s share, they pull out. They pulled out of the Eurofighter programme when that was meant to be part of their deal because they were not getting enough work out of it. Therefore, the idea that it is a freebie for British defence companies to participate in the fund and get extra money into the British defence industries will simply not happen.
In any case, this fund is not about creating warfighting capability this year or next year, which is what we need; it is about the very long-term, big programmes that the defence industries want. That will not rescue us from America’s absence from NATO, if that were to occur for more than a few months or a few years under Donald Trump. Let us also remember that Donald Trump will not be there forever; he has 45 more months to go. Let us not do more damage to NATO by making it look to the other side of the Atlantic that we will take care of our own defence in Europe from now on. That is very dangerous.
I remember Madeleine Albright, a Democrat Secretary of State, railing against what was then called the European security and defence policy. She warned that it represented the “Three Ds”: the duplication of NATO assets, which was wasteful and unnecessary; the discrimination against non-EU members of NATO such as Norway, Turkey, Canada and the United States; and the decoupling of American and European defence policy. Is that what we want? Is that what this House wants? Is that what the Labour party wants? No. The Labour party says that NATO is the cornerstone of our defence and rightly so, but what signal is it sending to President Trump?
Sir Bernard Jenkin
I ask that he wait just a minute.
What signal is it sending to Donald Trump by suggesting that we will have an EU defence policy that excludes the United States? It is exactly the wrong signal for this moment.
Sir Iain Duncan Smith
I am pleased that my hon. Friend raises that point, which I want to elaborate further. The real point is that J. D. Vance, the vice president, came over to Munich and ripped a hole through the Europeans, including ourselves, for not having spent enough, although we were one of the top spenders. Since then, the Americans have gone on and on about that, but each time we get the sense that they are keener to decouple. Does what we are about to do not give strength to the argument that we do not need them any longer and therefore they need to look somewhere else? That is the danger, because NATO was not just about defence of the west; it was about making sure that the US never goes into isolationism again.
Sir Bernard Jenkin
Yes. That promise of creating an EU defence capability has been on the table since the St Malo declaration of 1999, in the aftermath of the Maastricht treaty that first introduced the word “defence” into the EU. That was when France and the United Kingdom, under a Labour Government, declared that the EU would have autonomous military capability, with separable but not separate military forces from NATO.
We still have the absurdity in which the armed forces of the EU countries are allocated to NATO tasks but, at the same time, are ready for EU tasks. There had to be a complicated de-confliction arrangement to try to ensure that an EU defence mission does not conflict with a NATO defence mission. We finished up with something called the Berlin-plus arrangements, which Turkey has never accepted because it is not a member of the EU but is a member of NATO.
There has always been an impasse between NATO and the EU on those two questions, and it is all completely unnecessary because NATO has a military headquarters, it has a political committee and it is an international organisation. Indeed, it is the most successful military alliance in the world. Why is the EU trying to duplicate it just for itself? The EU is more interested in statecraft and state-building than defending our own continent. The anger with which Ursula von der Leyen and Friedrich Merz have attacked Trump reflects a latent anti-Americanism that has always been there and which we could do without at this moment.
Sir John Hayes
My hon. Friend makes a profound argument. He highlights the EU, which sees itself as a supranational body, and NATO, which, by nature, is anything but that, in that it is a confederation of sovereign nations. That tension lies at the heart of the EU’s ill-concealed and now evident disdain for NATO. I do not know whether the Government are careless or unknowing of that. They are either complicit or ignorant; I wonder which one my hon. Friend thinks it is.
Sir Bernard Jenkin
Sadly, European Union defence has always promised far more than it delivers. It was meant to galvanise all the European states into spending more money; it failed and just did not do that. When any serious military operation was required, it was NATO. To the EU’s credit, some EU military operations are taking place, but they are on a very limited scale. The British and the Americans need to reinforce the Balkans now, because the Europeans are not committing enough on their own and are incapable of doing so.
Even if, this time, there were rapid growth in EU military capability to address the crisis that we face, it would take decades to replicate what the Americans currently provide, such as tactical nuclear weapons and air cover. Why does the EU need to have its own air defence policy when that is exactly what NATO does? It does European air defence. We need to bolster NATO. It is encouraging that force planning for a possible peacekeeping force in Ukraine is all being done at NATO and not in the EU crisis management centre or at EU military headquarters. Only NATO has the capability to plan large-scale military activity.
Sir Bernard Jenkin
The hon. Gentleman shakes his head. What does he know about it? I would be interested in him challenging me.
Luke Taylor
Does the hon. Gentleman not see the fragility of a European defence that is dependent on key items of American hardware, which he correctly identifies that we do not have, and which it will take decades for us to replicate, operate, integrate with our systems and train people on? Does he not see the fragility of our defence if President Trump or another incoming US leader says, “Actually, you’re on your own. We don’t care about the defence of Ukraine”?
Madam Deputy Speaker (Caroline Nokes)
Order. While I am in the Chair, interventions will be shorter than that.
Sir Bernard Jenkin
I am glad that the hon. Gentleman has made that point, but the best thing for all European nations is not to try to build our own EU defence capability, but to strengthen NATO. There is an argument that we are somehow doing this through the EU so that it can strengthen NATO, but I do not think that is really the ambition of the bureaucrats in Brussels. They have a flag and a Parliament, and they want an army—a Euro army. That is what people periodically talk about, particularly the Germans and the French. They want a Euro army, but that would send the wrong signal to President Trump. Yes, we need to develop those capabilities, but let us develop them through NATO.
Jim Allister
Is not the hon. Member’s point put beyond all doubt by the wording of article 42 of the treaty of the EU, which expressly says that the purpose of co-operation is to arrive at common defence? Is it not therefore perfectly clear that the EU is setting itself up to have its own sovereign defence capability?
Sir Bernard Jenkin
Yes, and when we look at the European Defence Agency and all the mechanisms that have been created, we can see that the European Defence Agency is an embryo European Ministry of Defence. That is what is intended.
Let us just suppose that, in the ideal world that Labour and the Liberal Democrats live in, this defence capability comes about. The fundamental problem is that the European Union was never originally conceived as a defence and foreign policy organisation. There are many countries in it with very different—[Interruption.] No, it was functionalism that drove the foundation of the European Communities. It was about trade and creating a single market. Defence was never in the minds of the early founders of the European Union, and it is very ill suited to the task of getting defence capability, because the institutions were not designed for that purpose. It is not in the culture of those institutions. To rely on them for our defence and security is extremely unwise. On the other hand, NATO is already very well suited to the task and does not need to be duplicated.
To put it mildly, given the political disunity in the European Union, particularly towards Trump—okay, that afflicts NATO as well—this is not an instant solution to the political problems in NATO, if those are what the European Union is seeking to resolve. We should dispense with the idea that making a defence pact with the European Union is somehow the great panacea for all the problems we face on our continent because of President Putin. On the contrary, I think it is likely to make things worse—more complicated and more bureaucratic—and it would probably make our defence industries less competitive, because they would be cocooned inside this fund, instead of competing on the on the global stage with the Americans. Incidentally, our defence procurement co-operation with the Americans remains essential. They have the lion’s share of the technology; they are way ahead of the European Union when it comes to technology.
So, why are the Government doing this? I think they have always been religiously committed to the idea of EU defence—they introduced it in the first place, in the St Malo declaration—but why are they so devoted to doing this now? Of course, it is what the European Union really wants. We are the supplicant in these negotiations. We are asking the EU for concessions, and the one thing that would really make it feel good is drawing the United Kingdom into the defence arena of the European Union.
Meanwhile, what concessions are we getting from the EU? I do not see any. It will be interesting to find out. It will not instantly reduce all trade barriers, because we are not in the single market and will not be in the single market. It will still apply all the checks, including the antiquated wet stamps that are applied to forms certifying the fitness of shellfish. Wet stamps are so last century, but the EU is still using them on customs forms. That is how backward it is. There are electronic frontiers between African countries where there are no barriers. Incidentally, that is the answer to the Northern Ireland problem.
I fully support the Opposition’s proposals, which are to question everything that the EU will demand of us and which the Government might pursue, and to reserve our ability to tear up those agreements if they are not in the national interest. The Government do not have a monopoly on the national interest. “National interest” is a subjective term—the national interest might be different in the mind of one person and in the mind of another. As far as I am concerned, we left the European Union in the national interest, because we wanted to remain a sovereign democracy, in charge of our own laws, and to be like most other countries that are not in the European Union; they get on fine. As my hon. Friend the Member for Brentwood and Ongar (Alex Burghart) pointed out, the economy is still growing, or was growing until the Government hit it with their Budget. We have every opportunity at our feet.
One of the reasons we left the European Union—sorry to relitigate all these arguments—and left that slow-growth, high-unemployment, high-regulation, high-tax trade bloc was so that we could make deals with the high-growth, low-regulation, high-employment parts of the world, which in the end will provide us with far more business than we get from the EU. Actually, the vast majority of our trade, particularly our services trade, is outside the EU—people forget that. By being obsessed with trade with the EU, we drive our economy into a straitjacket; we are well out of that.
The Government should take away from this debate a warning. They know that they are being attacked by Reform. Those voters would probably never vote Conservative, or are less likely to vote Conservative than Labour, but they are going to Reform because they can sense the backsliding going on in this Government. If there were ever to be another referendum, I would hazard a guess that the vote would be against rejoining the European Union, so there can be no rejoining by stealth, which seems to be the Government’s policy. We will stand by the British people, and will dishonour any agreement that the Government make with the European Union that is not in our interests.
Indeed, there are parts of the withdrawal agreement that we may need to revisit—for example, in the Northern Ireland protocol. The technology has moved on, and we can move to an electronic frontier across the north-south border, without the need for checks on trade between Northern Ireland and the rest of the United Kingdom. One of the founding principles of the Act of Union was that there should be frontier-free trade within the United Kingdom as a whole. If the continuing development of the Northern Ireland protocol continues to impose those checks, those checks are not in the national interest, and we should reserve the right to jettison the protocol and replace it with something better.
Tom Hayes
After 30 minutes of speaking, the hon. Member has probably said everything he needed to say, and if he did not, we have a serious problem in this House.
On the question of expanding opportunities in the UK-EU relationship, I am particularly struck by the need for a capped, controlled, balanced youth mobility scheme. Around our country, including in my constituency of Bournemouth East, young people are suffering generational challenges that their predecessors did not face, be it their inability to buy a home at an affordable price, find secure work or get the education they want, or the fact that they have gone through a cost of living crisis and a pandemic. Surely we owe it to our younger generation to provide them with some of the conditions that will allow for a better life. A capped, balanced, controlled youth mobility scheme is key to that.
Such a scheme will not just be beneficial for the youth of the UK. I have in my constituency a significant number of English language schools. I had the privilege of visiting Beet Language Centre in my constituency last Friday for a roundtable that it hosted, and we were joined by other important language schools. They talked to me about the difficult financial circumstances they are all in and the difficulty of keeping the doors open because of the damaging Brexit deal that was negotiated. With a youth mobility scheme, we can put money back into our English language sector, which is critical.
We are living in an insecure world. Britain’s soft power is critical to ensuring that we are respected around the world. By bringing people to the UK—and particularly to sunny Bournemouth—for one to two weeks, or four to six weeks, they get a sense of how wonderful, open and accepting we are as a country. They can then take that back to their families and their home countries, and they can grow an affection for this country, come back repeatedly, spend money here and grow our tourism sector. Bournemouth, Christchurch and Poole has the highest concentration of English language schools of any borough or local authority in the UK; they contribute £400 million to the BCP economy. Indeed, English language schools contribute £44 billion nationally. Imagine how much better we could be if we had a youth mobility scheme and support for our English language schools.
I will soon conclude my speech so more Members can speak, but before sitting down I want to talk about not just the importance of the UK-EU reset as a way of delivering trade in its own right between the UK and the EU, but the benefits of trade. In an increasingly protectionist world, we need to be talking up the benefits of trade. Trade brings people into closer, and more harmonious and profitable relations, with one another. It brings down the walls and the barriers between nations. It makes war less likely because it binds people in peace. It does not just put money into people’s pockets or create jobs in our communities; it grows our economies faster and it raises living standards.
We know that trade has its challenges, but—done well—trade deals can help to make sure our countries prosper. At its heart, the EU-UK reset should be about trade, our economy and our businesses. It should not be a question of identity, culture wars and scaremongering. It should be about grown-ups gathering in this Chamber and talking about what is important to our constituents on the basis of the facts, rather than rehashing old, tired debates and scaremongering. We need to face the future, and I am pleased that finally we have a Government who are doing so.
Ms Creasy
And lo, Bugs Bunny did appear. We have also heard from the man I started arguing with 33 years ago as a young campaigner about the merits or otherwise of working with Europe. It appears that the hon. Member for Harwich and North Essex (Sir Bernard Jenkin) was on the other bus in the debates about Brexit. That is exactly it: our constituents, who might listen to this, would be horrified to see us going backwards again, acting as if the last 10 years had not happened and there was no evidence about what Brexit means.
Sir Bernard Jenkin
Who is it that is trying to take us back to the past? It is the Government. Brexit is giving this country its new future and the Government are trying to turn the clock back. That is what is wrong.
Ms Creasy
I hate to warn the hon. Gentleman, but I have a horrible feeling that if he were to compare the speech he made today with many of those he made between 2017 and 2019, he might find that he would lose “Just a Minute” on the grounds of repetition. That is going backwards. This country deserves better.
Let me start with a clear statement of intent. Brexit has happened; we have left. I am not here to prosecute the argument to rejoin. We do not have time for that. What we need is a salvage operation, because of the damage that has been done, especially in a world with so much uncertainty, where tariffs are now part and parcel of the everyday conversation and the damage that is being done to our constituents.
We can fight many things in life, but geography really is not one of them, however hard some Members on the Conservative Benches try. We heard from the hon. Member for East Wiltshire (Danny Kruger) the continued myth that somehow the isolation to our status that Brexit has brought would bring us strength. The last 10 years—indeed, the last six months—have shown how clearly that is not the case. In fact, we are uniquely isolated and at risk as a nation. That is why what this Government are doing is absolutely right. They are getting on with signing trade deals, trying to sort out the damage that has been done and, indeed, looking for that hat-trick.
I have to say to Conservative Members that there is no conspiracy here. Those of us who were here in 2019 remember exactly the details of that deal and the fact that a five-year review process was written into it. What we are going to see next Monday is not some secret negotiation; it is part of the trade and co-operation process—[Interruption.] I hear Conservative Members chuntering. Hang on, I can see their tin foil hats! I beg them to look at the details of the agreement, which said clearly that there would be a renegotiation point, where we would review whether or not it was working. I am sorry that the shadow Minister is not in his place. He tried to claim affinity with Sam Beckett but frankly I suspect he is going to be more like Jim Trott from “The Vicar of Dibley”. He will say, “No, no, no, no, no, no, no”, and then have to say yes. The summit is not the end. It is the start of the process of reviewing the trade and co-operation agreement, and looking at what is in the best interests of this country.
Let me be clear: I am absolutely committed to the idea that there should be parliamentary scrutiny. My colleagues on the Front Bench will know that I have been concerned that the European Scrutiny Committee was deleted, because I think we should be able to discuss these matters. However, I think there probably ought to be a summit first in order for us to have something to discuss. I hope that will account for me putting in an advert for the Backbench Business debate that the hon. Member for Boston and Skegness (Richard Tice) and I were going to have after the summit on 22 May, so that we parliamentarians may properly examine what comes out of it. Sadly, he is not in his place, which is a shame because I know how strongly he feels about these things, and I am sure he would want to talk about the benefits of Brexit and other mythical creatures. The summit is the starting gun. It is not the final deal, and it is really important to look at it in that way.
This is the test for the motion today. Are the Opposition really telling us that the trade and co-operation agreement is perfection? Is there absolutely nothing in that agreement that they would not wish to amend, revise or refine? Is there absolutely nothing in what it has delivered in the last five years that they are troubled by? For example, there are 1.8 million fewer jobs in our economy because of the Tory hard Brexit, and the academics who have studied this recognise that that figure will rise to 3 million by 2035. Trade is down 27% with the European Union—a bloc that we do five times more trade with than we do with America. Over 16,000 businesses have given up trading with Europe all together, because the truth about Brexit is that it was just paperwork—reams and reams of it—and small businesses in this country have sadly had to up sticks.
I declare an interest as the chair of the Labour Movement for Europe. I am not standing here arguing to rejoin, but I am a red against red tape and what I see is the amount of paperwork—[Interruption.] I am loving the fact that Conservative Members are chuntering from a sedentary position, as if this was some sort of revelation. Perhaps they can borrow some tin foil from their fellow Members and talk about a conspiracy. They would do better to reflect on the impact of the border trading operating model—an entirely self-inflicted wound by the previous Government on British farmers and British food supply chains that pushed up inflation, because charging for pallets of food coming into the country created more and more paperwork. Unless Conservative Members are genuinely telling us that they think “chef’s kiss” for the trade and co-operation agreement, it is right for us to look at whether there are things we can do to deal with the problems it has created for our constituents—including the £6.95 billion of additional cost to households—and to account for some of the myths that have been created.
Again, the hon. Member for East Wiltshire—he will accuse me of being obsessed, but let us look at what he talked about—said that somehow being out of the European Union made our response to covid better. Well, he might want to talk to the UK covid inquiry, which found that it was the reverse. It found that our failure to prepare was increased by the fact that we were dealing with a no-deal Brexit; it harmed our covid response. He might even want to reflect on the words of the UK medicines regulator, which said we could have used the emergency processes to bring forward our own vaccine. I am sure that is what he was talking about.
The hon. Member also talked about Ukraine. He might want to reflect, as he thinks about the summit on Monday, on how hard it was for us to make the case about the importance of standing with Ukraine from outside of the room, and that those who were less convinced who were part of the European Union would have heard our message more clearly if we were inside the room, particularly when it came to gas imports. We championed Ukraine, but we had to shout from outside rather than being part of the conversations from the start.
This summit needs a strong agenda, and that is exactly what this Government are talking about. It is an agenda focused on fixing the problems that this trade and co-operation agreement has created. That is what the public want—they agree with us. They do not want us to spend five to 10 years on treaty renegotiation and the possibility of rejoining; they want us to salvage this country from the damage that Brexit has done. Two thirds of the country say that Brexit is bad for the cost of living, and 65% say that it has had a negative impact on the economy. Opposition Members might want to reflect on the fact that that is nearly twice the number of people who think that immigration is bad for our economy.
The British public are not daft; they are wise about what needs to happen next. They understand the value of a defence deal. They understand that, in a world with Putin at our doorstep, with the challenges we face and the uncertainty in other parts of the world, it is absolutely right and proper, and will complement NATO, to work more closely with our European counterparts, to increase investment in the UK defence industry and to collaborate on crime. Those of us who used to have constituents whose needs were served by the EU arrest warrants know the damage that the previous Government’s deal has done. Those of us who want to see us stepping up the way we collaborate on international aid know that we need to get round the table with our European counterparts. The best way to tackle those who might be stuck on a boat, fleeing persecution, is to try to stop the conflict at the source. That is what collaborating on international aid with Europe could offer.
The public understand the value of an SPS deal, which my hon. Friend the Member for Monmouthshire (Catherine Fookes) mentioned, and the value of the Pan-Euro-Mediterranean convention, which deals with the paperwork about rules of origin. Thanks to the Tory hard Brexit, those rules mean that every time a tomato is brought into this country to make a pizza in the Wirral, extra paperwork comes with it. The public would want us to look at the VAT rules, because small businesses are now struggling with 27 different VAT regimes. They would also want us to sort out the carbon border adjustment mechanism; that is how we save British steel, which will be affected if there is a divergence. We need to look at how the emissions trading schemes can be linked, and we can save British business £800 million in charges.
The public want us to look at mutual conformity assessments to try to reduce duplication. They want common sense on regulation. The previous Government tried to bring in separate regulatory regimes and, understandably, British business said, “That is twice the cost.” British businesses want to be able to sell to their neighbours; they do not want extra pieces of paperwork. The previous Government tried to make us have separate regulations on airline safety—as if an aeroplane taking off in London would need to follow a different set of regimes if it landed in Berlin. That is bonkers. Understandably, we walked back from it, and we should not go back to those kind of arguments just because those on the Conservative Benches have a blindness when it comes to Europe.
This Government have got their head on. They are looking at what they can do to help the chemicals industry and supply chains, and of course it is looking at what a deal on youth mobility might look like. This is a summit; it is about having the conversation, looking at the details and looking at how we can support apprenticeships through youth mobility. Clearly, youth mobility is not freedom of movement, otherwise I would have heard complaints from Opposition Members about the fact that we have freedom of movement deals with Canada, Australia, New Zealand and Uruguay—[Interruption.] I can see a Conservative Member saying, “Yes, indeed.” I presume they are going to call for the abolition of freedom of movement from Canada, then; that would be consistency.
We could also do more to help our creative services and financial services, and, yes, to resolve some of the tensions in Northern Ireland. Many of us feel deeply that the people of Northern Ireland have suffered the most as a result of the Tory hard Brexit. Yes, we could do a deal on fishing. We could acknowledge the fact that our fisheries industry felt sold out by the previous Government by supporting them to be sustainable. All those are issues that we can return to in that Back-Bench debate, but we cannot do that if we do not have the summit. We cannot walk into the summit saying, “No, no, no.” We need to walk in saying, “What gives? What are the opportunities here? How can we solve some of these challenges?”
Many, many years ago, one of my next-door constituency neighbours was Winston Churchill. We on the Labour Benches have become the defenders of his vision of ending conflict in Europe. Conservative Members spend all their time fighting with each other and fighting a ghost. We need to talk about the future. We need to get away from the fantasy that somehow Brexit will deliver and start getting back to the cost of living crisis in our communities and how we can help people.
Sir Bernard Jenkin
This is something that I have looked at quite closely. The reason for the collapse is that the United Kingdom is not in the internal market, so we do not give direct applicability and direct effect to EU SPS laws. The EU procedure is to check every consignment of shellfish coming into the EU to see if it complies with EU standards, even though the provisions in EU law on clean rivers, clean beaches and clean water all exist in the United Kingdom, and our provisions are probably of a superior standard to those that apply in much of the EU.
Mr Francois
I defer to my hon. Friend, who is clearly a subject matter expert.
I will conclude, because others want a chance to speak. The Labour Government will go for dynamic alignment. They will sign us up as a passive rule-taker at the behest of the EU, despite the British people voting in 2016 to take back control of their laws. I have absolutely no doubt that if the Labour Government get away with this surrender summit early next week, that is precisely what they will do. It is therefore very important that we alert the British people, and the media that serve them, to exactly what Labour is up to, in an attempt to expose the situation and prevent it getting any worse.
In summary, we will not allow our obsessively Europhile Prime Minister—in this context, our “white flag” man—to surrender our right to govern ourselves. This surrender to the EU has absolutely no democratic mandate, and we will oppose it tooth and nail. If necessary, we will eventually overturn it. Remember what the booklet in the referendum said:
“This is your decision. The Government will implement what you decide.”
The British people decided to take back control of their own laws. It is not for Labour to give them away.
Oral Answers to Questions
Bernard Jenkin Excerpts(2 weeks, 4 days ago)
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The Prime Minister
My hon. Friend is absolutely right to raise this important issue. Communities across the country face the consequences of the Conservatives’ utter failure of to build enough homes. Our Renters’ Rights Bill improves the system for 11 million private renters, blocking demands for multiple months of rent in advance, and finally abolishing no-fault evictions—something that the Conservatives said over and over again they would do, but, as usual, never got around to doing. That work is backed up by major planning reforms, our new homes accelerator and £600 million to deliver 300,000 homes in London, as part of the 1.5 million homes that we will build across the country, which are desperately needed.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Does the Prime Minister recall from our history that, even during the blitz, concert pianist Dame Myra Hess continued performing her piano recitals at the National Gallery, including the performance of German music such as JS Bach’s “Jesu, Joy Of Man’s Desiring”? As a trustee of the Parliament choir and a singer, may I ask him to lend his support to Parliament’s own VE Day celebration, which will take place next Wednesday evening in Westminster Hall? We will perform, in the presence of His Royal Highness the Duke of Kent and the Speakers of both Houses, not only that Bach chorale, but the music of our allies and some British music, too. Tickets are still available.
The Prime Minister
I wish the hon. Gentleman the very best of luck. It will be a fantastic event—just one of the many important celebrations taking place to commemorate VE Day. I encourage the whole House to buy those remaining tickets and go along to the concert in Westminster Hall, as well as to the many street parties and other events across the country. I look forward to paying my own tributes on VE Day, but I wish him luck.
Ukraine
Bernard Jenkin Excerpts(2 months, 2 weeks ago)
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The Prime Minister
I agree with my hon. Friend: Putin does feast on division. When I was Leader of the Opposition, among the reasons I supported the then Government was the fact that Putin would have been the only winner if there was division in this House. That is why I commend the Leader of the Opposition and the Conservative party for continuing that unity, because it demonstrates to Putin that we are a united House on this issue.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
May I just point out that Vice-President J. D. Vance seems to be in favour of free speech, but not free nations? Do we not also have to point out, as others are saying, that there is no history of Vladimir Putin proving a trustworthy treaty maker? There can be no security and there is no path to a peace in Ukraine that is secure without the engagement of the Americans, the failure of their support risking a wider war in Europe that would inevitably draw them in. Can we quietly and diplomatically keep making those points to the White House, so that we have a chance of peace in our continent?
The Prime Minister
The hon. Gentleman is quite right: history shows that Putin is untrustworthy. That is why the Ukrainians are so concerned that there should be a security guarantee in relation to any deal: they have been here before, they have seen the credibility of his word and they know he is untrustworthy. That is why they are so concerned, and we share their concern and are working with them. He is quite right that we need the US to be working alongside us and with us, in the way we have done for decades, to ensure the security and defence of Europe. I will continue to do everything I can to ensure that that arrangement, which has proved so successful—the alliance that is NATO, the most successful and important alliance we have ever had—continues and goes from strength to strength.
Defence and Security
Bernard Jenkin Excerpts(2 months, 3 weeks ago)
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The Prime Minister
Yes, I am happy to make that commitment. I ask my hon. Friend to carry that message to her constituents, along with my thanks and those of the Government and the House.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
When the Prime Minister flies off to Washington, he will go with the confidence that this House and the whole country are behind him and wish him well in that very difficult meeting. We know that this country and our continent face possibly the most dangerous moments that we have experienced since the height of the cold war. I welcome his statement on increasing defence spending, which some of us would say is a couple of decades overdue. Will he accept that the benchmark for the success of the defence review is not some arbitrary percentage of what we are spending, but whether we are spending whatever is necessary to give back to our armed forces the warfighting capability that is the only real deterrence that the Russians will respect? I very much doubt that 2.5% or 3% will be enough; I do not say that as a criticism, but because, as a nation, we must be prepared for that.
The Prime Minister
I thank the hon. Gentleman for his sentiments. At a moment like this, it is important that I am able to carry the House with me as we undertake the next stage of these discussions about the security and defence of Europe. It is a very important generational moment, and this House and this country have always come together and stood up at moments like this. I know he has long been a supporter of increased defence spending and capability, and of the notion that there must be a warfighting capability. He is right about that, which is why we have made the decision we have today.
Oral Answers to Questions
Bernard Jenkin Excerpts(3 months, 3 weeks ago)
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The Prime Minister
I thank my hon. Friend for raising this awful case—the stories and accounts are heartbreaking and deeply concerning. I will make sure that she and the group receive a meeting with the relevant Health Minister at the earliest opportunity.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
The Prime Minister’s Budget raised taxes, borrowing and public spending as a strategy for economic growth. When will he accept the words of one Labour Prime Minister in the 1970s, who explained to a Labour conference that
“in all candour…that option no longer exists”,
and that the only way to obtain sustained economic growth is by cutting taxes and regulation?
The Prime Minister
The hon. Gentleman must have missed recent reports. The Office for National Statistics has just said that we have the highest investment in 19 years; PwC has just said that this is the second-best place to invest in the world; and the International Monetary Fund has just upgraded growth, now saying we are predicted to be the fastest growing major European economy. Wages are up and inflation is down—that is after just six months.
Covid-19 Inquiry
Bernard Jenkin Excerpts(4 months ago)
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Sir Bernard Jenkin (Harwich and North Essex) (Con)
May I echo the sentiments of the hon. Member for Blackley and Middleton South (Graham Stringer) by expressing concerns about the inquiry? The Minister has been clear that he wishes it was not taking quite so long. It is taking far too long.
What can we learn from other countries about how they have conducted their lessons-learned exercise, in order to make sure that the people watching the proceedings, who lost their loved ones, feel that something has been done, and done in good time? This is by no means the first public inquiry that has taken too long. The right hon. Gentleman is in the great position of not being responsible for setting up the inquiry. Will he set out what he thinks we should learn from failed and lengthy inquiries to make sure we do these urgent lessons-learned exercises much more quickly? The next emergency could strike tomorrow. We do not have time to hang around and have these long, blame-fest inquiries with criminal lawyers asking “gotcha” questions to get headlines.
Pat McFadden
The shadow Minister, in his response, also asked about the general question of inquiries. I believe there is a legitimate question to be asked about whether there can be a quicker way for the state to admit when it is wrong and get justice for the victims. However, it is important that in the processes we set up we do not lose the valuable question of independence and the valuable capacity these inquiries have for the victims to have a voice, which has sometimes been denied in other areas. We have to have a system where the state can admit when it gets things wrong and which gets justice for those who have felt the consequences of that.
Plan for Change: Milestones for Mission-led Government
Bernard Jenkin Excerpts(5 months, 1 week ago)
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Pat McFadden
I welcome what my hon. Friend said about pay. The Chancellor announced a significant increase in the minimum wage at the time of the Budget a few weeks ago. Of course we want public sector workers and everybody who helps to deliver a plan to be rewarded well, but it also has to come with change in the way the state works, to make sure we get the best value for money and the best productivity and make the best use of technology. We cannot have that just in the private sphere; we have to apply it to the public sphere to make sure we get the best bang for the taxpayers’ buck.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I assure the right hon. Gentleman that I do not think anybody doubts the sincerity of the new Government in wanting to achieve these laudable aims. I remind him, however, of John Lennon’s line:
“Life is what happens to you while you’re busy making other plans.”
Notably absent from the priorities are ones such as reducing the national debt or dealing with the demographic challenge or the lack of defence and security that we need to build up to confront global challenges. Are these aims the Government’s only priorities or will we see a bigger list that deals with some of the really existential challenges that threaten the independence and survival of our country?
Pat McFadden
I welcome the hon. Member’s question. He referred to defence and security. I did deliberately mention that area in my remarks, because it is an absolute foundation of any Government that their first duty is to protect their people. That is why there is a specific section on it in the document, and why it is an underpinning foundation for the goals that we have set out today.
Speaker’s Statement
Bernard Jenkin Excerpts(5 months, 3 weeks ago)
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Jon Pearce (High Peak) (Lab)
Further to that point of order, Mr Speaker. It is wonderful to hear all the various tributes to John and I wanted to share my own memories of him. As some have mentioned, when it came to campaigning, his big thing was his battle bus—who would not love touring the country eating sweets with Martin Angus? I am sure my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) will attest to that.
I have my own memory of John’s battle bus from after the 2005 election. He got a small group of us together and we toured London as commuters were on their way to work, at around 7.30 or 8 o’clock in the morning. John was on the tannoy thanking them all individually for voting Labour and for another five years of a Labour Government. Watching people literally stop in the street, confused that a bus was talking to them, only to discover that it was actually the Deputy Prime Minister talking to them, was incredible. John then took us all to his flat, where, despite having had no sleep at all, he made us bacon sandwiches and tea. That was John at his best: generous, indomitable and completely unpredictable.
John’s incredible achievements and those of that Labour Government will stand the test of time. He was the cement that kept the broad church of those New Labour Governments together and we will always remember him for that. I also want to say that last year my father died of Alzheimer’s, and it was very difficult, in those early days, to remember the man who was, before that cruel disease took him away. I really do hope that Pauline and John’s family are listening to the wonderful tributes that are being paid here in this House and around the country, so that they can remember the extraordinary man that John was and the extraordinary life that he lived.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Further to that point of order, Mr Speaker. I first collided—if that is the right word—with John Prescott when I was shadow Secretary of State for Transport as he ploughed on with his integrated transport plan, which was one of the centrepieces of the first Blair Administration. I found that some of my colleagues tried to treat John Prescott as a bit of a joke. That was a mistake. Yes, we teased him about his two Jags, and he rather loved that, but he was utterly sincere in what he did, passionate, and pretty brutal with his Opposition opponents when he felt he was on top. We clashed again over the proposals for regional assemblies. Great campaigner though he was, he lost the north-east referendum, and I do not think he ever really forgave me for that.
When required, however, John could be a great statesman. He was right to insist on a public inquiry into the Marchioness disaster, which the previous Government had refused to hold, and he was right immediately to announce an inquiry into the Paddington rail disaster as soon as it happened. I recall getting one of the most surprising telephone calls of my political life when, having told the Conservative conference that he was right to call that public inquiry and that we should wait for its outcome, I got a call from him to thank me for that bit of bipartisanship—something even he was capable of when the cameras were not looking.
I pay tribute to John for that, because the Cullen inquiry came up with a completely new safety regime for rail, including a rail accident investigation branch for the Department for Transport. We have not had a public inquiry into a rail accident ever since, because of the safety regime that he implemented following the inquiry. Every survivor of the Paddington rail crash and subsequent rail crashes is grateful to him for what he did for passenger safety on our railways. If for nothing else, we should remember him for that.
I send my best wishes to John’s family and to all his friends and colleagues on the Government Benches at this sad time.
Ms Julie Minns (Carlisle) (Lab)
Further to that point of order, Mr Speaker. I will share two particular memories of Lord Prescott. The first is from my time working for the disability charity Scope. We had decided as a campaigns team to use the 1997 general election to highlight the many obstacles that disabled people faced when exercising their democratic right to vote. I and my campaign colleagues devised the “Polls Apart” campaign, which included a special campaign pack for candidates.
Bearing in mind that this was in the halcyon days before email, a campaign pack was something of a rarity. We printed, stapled and posted out hundreds of packs to candidates the length and breadth of the UK, including one to the Labour candidate for Kingston upon Hull East. Off it went, sent second class. To our amazement, a week or so later, a reply came back saying that Mr Prescott not only supported the campaign, but had written to all of Labour’s candidates in his capacity as the general election co-ordinator, instructing them to take the campaign actions that our pack suggested. More than that, when Labour was elected a few weeks later, he brought forward amendments to the Representation of the People Act to make it easier for disabled people to exercise their right to vote.
I had met John Prescott a few years before that, when I worked for the then Member of Parliament for Streatham, the right hon. Keith Hill. Both John and Keith were members of the RMT parliamentary group, which was as broad and diverse as its talent was deep. I asked Keith ahead of my remarks today if he had any particular memories of John that I might share with the House, and he told me of one from his time as a Minister in the Office of the Deputy Prime Minister.
John and Keith were due to make a presentation on Labour’s housing growth areas to the Prime Minister, Tony Blair, in the Cabinet Room one morning at 9 am. At 4 am, John was still working on the presentation. He decided that he needed to know about the rail connections between Cambridge and Oxford, so he phoned Network Rail. Members can doubtless imagine the startled reaction of the poor Network Rail official who answered that call at 4 o’clock in the morning from someone claiming to be the Deputy Prime Minister, who had a very specific question about east-west rail links. Tony Blair was equally amazed at 9 am. “And did he tell you what the rail connections are?”, asked the PM. “There aren’t any,” replied John—“We’re going to change that.” Now, thanks to the Budget, that change will finally be delivered—a fitting tribute, perhaps, to the work ethic, energy and enthusiasm for change that John Prescott exemplified.
Income tax (charge)
Bernard Jenkin Excerpts(6 months, 2 weeks ago)
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Sir Bernard Jenkin (Harwich and North Essex) (Con)
I congratulate the hon. Member for Ribble Valley (Maya Ellis) on her spirited maiden speech. Her speech, along with the other maiden speeches, underlines how new Members come here with good will in their hearts, full of good intentions and full of ideals. It is heartening to see that in new colleagues on both sides of the House.
I do not think the new Labour Government have any lack of good intentions, but this Budget is happening in something of a political bubble. Much of the Chancellor’s discourse seems to reflect a continuation of the general election campaign, which we now know could have been fought more honestly, openly and transparently by the Labour party.
That said, I am sure the Chancellor believes she has produced the best Budget for this country. The biggest cheer from the Labour Benches yesterday seemed to be for the 1p cut in draught beer duty, but I have since spoken to people in the hospitality industry, and they have described this as a shattering Budget. The money that publicans and restaurateurs will now have to pay their staff, and pay for their staff, massively dwarfs any benefit they could possibly pass on to their customers from the 1p beer duty cut. In fact, most of the increased beer prices that we will see as a result of this Budget are a direct consequence of the tax increases inflicted on businesses. I am afraid that those cheers demonstrate a complete lack of reality about the world we live in.
The character of this Budget reflects a reversion to the failed Labour policies of the 1960s and 1970s. It is naive to believe that taxing wealth creators, wealth creation and capital formation will not drive entrepreneurs and business leaders out of our country, which is happening. It is also deceiving, because the Budget reflects that Labour’s plans were not fully costed, and it is destructive of wealth, wealth creators and pensions. The Budget massively reduces people’s incentive to save into their pension pot, as they will now be taxed on what is left over at the end of their life to pass on to their children.
Of course, there is also a streak of vindictiveness towards wealth creators. I heard a Labour Member shout “Good!” when the shadow Chancellor said that we are climbing the league table of countries with higher tax rates across the economy, moving beyond Germany. The attitude that taxation is somehow an inherent good has limits, and we are going beyond those limits.
Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)
On that point, will the hon. Gentleman give way?
Alex Sobel
What is wrong with the German economy? The German economy has consistently performed well over the past 30 years, in excess of our economy, and has a strong industrial strategy. This Government are going to produce an industrial strategy so that we can have just as strong an economy as Germany, and a similar tax base.
Sir Bernard Jenkin
When Margaret Thatcher was elected in 1979, we were the sick man of Europe. What she, Lord Howe and Lord Lawson did to the British economy in that period put us on a faster growth track than the German economy. Since that time, we have been falling behind again. This Budget will help us fall behind again.
Elements of this Budget are a defiance of reality, because behind the cheer for the 1p cut on draught beer is the real world outside. I have been watching the gilt rate—the 10-year bond rate—on my telephone. It closed yesterday at 4.362% after going up substantially in the last hours of trading, and now stands at over 4.5%. That means the Budget has spooked the markets into increasing the cost of borrowing, which the Government will have to pay. The idea that these measures are pain free, and that getting more tax revenue in and borrowing more is going to bail out the economy, is very flawed.
I do not suggest there is going to be a bond crisis tomorrow, but we are enmeshed in a debt trap in this country, as are so many other mature democracies, after the energy crisis and covid, so there is likely to be another liquidity crisis of some kind over the next few years. How well prepared will this Government be, if they have already put up taxes and borrowing to spend on more consumption, rather than for our long-term economic benefit?
This is not a Budget for growth. Apart from the initial impact of the extra spending in the forthcoming year, the throttling back of expenditure, then the decline in borrowing and the burden of the extra taxes, suppresses economic growth, which the Office for Budget Responsibility is perfectly clear about. It was an empty promise for the Prime Minister to say, “We are going to prioritise economic growth.” This Budget simply does not prioritise economic growth. We have forgotten all the lessons of our economic history, learned from the disastrous policies of the 1960s and 1970s.
If socialism worked, everyone would do it. Socialism does not work. This is a more socialist Government than we have seen since the 1970s. They have forgotten what Tony Blair and Gordon Brown did. It was Gordon Brown who cut the capital gains tax rate. As Chancellor, Gordon Brown was the successor to Margaret Thatcher and continued with many of the same policies. Gordon Brown did not set up a ludicrous vanity project like Great British Energy. He did not believe that taking control of investment in a sector like energy would increase the wealth of the country. All the equivalent state-owned enterprises around Europe lose money—the Government will not make a return in that sector.
Yuan Yang
The hon. Gentleman mentions Gordon Brown. Yesterday’s Budget starts to restore the level of Government spending as a share of the economy to levels that are similar to those under Gordon Brown and the last Labour Government. It starts to restore the foundations of our public services. Does the hon. Gentleman welcome that restoration and investment?
Sir Bernard Jenkin
I wish we could all have everything that we wanted. Gordon Brown inherited a golden economic legacy from the Conservatives in 1997—[Interruption.] Yes, he did. Debt was falling and growth was outstripping our competitors. By the time of the financial crash in 2008, he had already increased borrowing and spending. The consequence of the financial crash is that he achieved what every Labour Government always achieve: they leave office with higher debt, higher unemployment and higher inflation. That is what Labour Governments always do, and that is what this Labour Government are set to do again.
Sir Bernard Jenkin
I am not going to give way any more. We need only look around the world to see that the idea that an ever-larger state makes the people richer is confounded by economic experience, otherwise the richest countries in the world would be those with the biggest state. It is businesses and free enterprise that generate the wealth that pays for the public services we need.
We can all recall Milton Friedman’s four ways to spend money. There is people’s own money that they spend on themselves: they think about it, spend it very carefully and make sure they get the maximum value for money. There is money that people spend on other people, such as when they buy a present: they may want to keep the cost down and may not be sensitive about whether the person really wants a particular gift or not. There is somebody else’s money that people spend on themselves: when people use expense accounts, they go on the most expensive aeroplane or get the biggest car their company will pay for. Finally, there is somebody else’s money that is spent on other people: that is what Governments do. It is a reality that Governments are the worst allocators of resource for ensuring future wealth creation. That is just a fact.
The record will always confirm that if we want to create more wealth, the smaller the state can be, the faster economic growth will be and the more we can afford to then spend on public services. This Government are profoundly un-strategic—just look at what the OBR says about investment:
“Tax rises in this Budget weigh on real incomes, so private consumption falls as a share of GDP”—
that means people are going to be getting poorer. It continues:
“Corporate profits are expected to continue falling as a share of GDP in the near term”.
It adds that
“business investment falls as a share of GDP as profit margins are squeezed, and the net impact of Budget policies lowers business investment.”
Is that good for the British economy? I submit not.
What about debt? If someone has too much debt, the one thing they should do is not borrow more money, if they want to get out of a debt trap—[Interruption.] Members on the Government Benches have surgeries attended by people who are in debt. The one thing hon. Members will tell them not to do is to stack up more debt, but that is what the Government have chosen to do. That is not a long-term policy.
Finally, what about GDP? I take no pride in saying that growth in GDP has been struggling for a decade or more—
Sir Bernard Jenkin
Yes, I do not think we did enough to dynamise the British economy. We did not do enough, but I was very grateful for the support of the Liberal Democrats for the first five years of the Conservative Government. That helped us to keep public expenditure under better control so we could begin that process.
GDP per head has really been flatlining. We are falling significantly further behind the United States, but what are the trends? On these trends, we will be overtaken by Poland by 2030 in terms of GDP per head. What are this Government doing to address the real long-term trends? Let us look to 2050. What is the shape of public expenditure going to look like in 2050? This Budget does not begin to address that. What will be our national debt on a long-term basis? What is happening to our demographic, including the ageing population and the ratio of people in work and out of work? What are this Government doing to address that trend and to address the immigration trend, because that is adding to the cost of our economy?
How will we be able to increase defence spending? The Chief of the General Staff has recently said that this country could well be directly involved in a war within the lifetime of this Parliament. We will have to spend more on defence, as well as controlling the rest of the public sector. It is many decades since health, education and welfare started swamping out every other kind of expenditure in the Government. If we are to survive as a country, we will have to address these very damaging long-term trends.
Sir Bernard Jenkin
If the hon. Gentleman will forgive me, I am just drawing to a close.
What is the true cost of decarbonisation? That is something that the Government are hopelessly naive about. It is as though investing in decarbonisation is somehow a get-out-of-jail-free card, and everybody’s bills will start to come down, but anyone involved in the industry will say that that is not the case. The need to dynamise our zombie economy is still there and being made worse by the burdens that this Government have inflicted on us. How will we re-industrialise our economy when deglobalisation has taken away the opportunity to import all the cheap things that we used to make, but no longer do? Those are the real strategic challenges, and the Budget does not begin to address them.
Richard Baker (Glenrothes and Mid Fife) (Lab)
Thank you, Madam Deputy Speaker, for giving me the opportunity to speak about how this Budget is fixing the foundations of our economy, which could not be more important for my constituents. I listened with interest to the remarks of the hon. Member for Harwich and North Essex (Sir Bernard Jenkin) about the last Labour Government. Let us remember that the last Labour Government lifted 900,000 children out of poverty. What costs to our economy are caused by poverty, rather than getting people into work and securing for them the quality of life and living standards that they deserve?
Richard Baker
Of course, because I have just mentioned the hon. Gentleman in my speech.
Sir Bernard Jenkin
One hon. Member complained about food banks. Actually, food banks started under Tony Blair. I think that we need to share these problems and concerns. We need to understand each other’s different approaches to economic policy if we are eventually to have a solid approach to reviving the economy of this country, but I am afraid that this Budget does not do that. There will be more poor people as a result of this Budget.
Richard Baker
I thank the hon. Member for his intervention. In Scotland we say, “Facts are cheils that winna ding.” The fact of the matter is that 900,000 additional children were lifted out of poverty by the previous Labour Government, and the rise and use of food banks under this Administration has been exponential —to the extent that, now we as a Government are dealing with food banks running out of food because of the level of poverty that we have inherited. This Budget will fix the foundations of our economy. It will redistribute wealth, tackle poverty and invest in growth. That is why we can look forward to what will be achieved by this Government, thanks to the decisions taken by my right hon. Friend the Chancellor of the Exchequer.
Anybody looking at events in Scotland will see that my constituents have suffered from two Governments failing to deliver on investment and failing to deliver on growth. Their mismanagement of the public finances stands in sharp contrast to the measures that have been bought forward by my right hon. Friend the Chancellor of the Exchequer, who has taken some challenging decisions on taxation, to ensure that there is no return to austerity and that we can invest in growth.
The Budget gives us the chance to move on from the reckless incompetence of the Tories here in Westminster and of the SNP in Holyrood. It is a chance to move on from the catastrophic mini-Budget of Liz Truss—a mini- Budget that caused so much damage to my constituents. The hon. Member for East Grinstead and Uckfield (Mims Davies) conjured up images of Halloween in her speech, but the economic nightmare was caused by the Conservative party, and our constituents paid the price in their living standards.
Those of us in Scotland cannot underestimate the impact of the shambolic stewardship of Scotland’s finances by the SNP. It is one thing for the SNP to crash the finances of its own party, but quite another to crash the finances of our country. The SNP Government have completely mishandled contracts for much-needed new ferries. Other public sector projects have been overspent by millions, while others have been delayed or cancelled. They have also failed to spend hundreds of millions of pounds which had been allocated to them in structural funds. Funding for our local authorities has been slashed. The housing budget has been cut, and the Institute of Fiscal Studies assessed that the Scottish health budget faced a real-terms cut under the SNP in this financial year.
While we know that this Budget is fixing the foundations, so that we can deal with the reckless approach of the previous Government here, the SNP cannot simply blame everyone else for its own mistakes, as, yet again, it has attempted to do over the past 24 hours.
James Murray
Although we will not comment on market movements, the Chancellor outlined yesterday two new robust fiscal rules, which are the bedrock of stability on which this Budget is built. Those rules will put the public finances on a sustainable path and prioritise investment to support long-term growth. The current budget is in surplus by £9.9 billion in 2029-30, with net financial debt falling in 2029-30 and with headroom of £15.7 billion.
When we went into the election in July, the first steps that we promised to the British people opened with these three words: “Deliver economic stability”. As the Chancellor confirmed yesterday, our first fiscal rule is the stability rule. That means we will bring the current budget into balance so that day-to-day spending is met with tax receipts. No more borrowing for day-to-day spending, no more living beyond our means, and no more papering over the cracks. Our tough new stability rule means that the British people, businesses and the markets can all see the fiscal responsibility that will underpin every decision we take in government.
The Chancellor is clear that taking the tough decisions needed to deliver stability is not always easy. The previous Government ducked the difficult decisions. They made promise after promise to the British people that they knew they could never afford. Our stability rule offers a different approach. Meeting it means we needed to raise taxes, but we have been clear that we will protect working people. That is why the Budget does not increase income tax or national insurance contributions that working people see on their payslips. Instead, we are balancing the books in a fair way.
That does not always mean decisions are easy—far from it—but it is also right that, before considering any changes to taxes, we make sure everyone pays the tax they owe by closing the tax gap. That is why, as the Chancellor set out yesterday, we will deliver the most ambitious package to close the tax gap that this country has ever seen. Alongside a series of policy changes set out in the Budget documents, by 2029-30 HMRC will have recruited 5,000 additional compliance officers and funded 1,800 additional debt management staff. Together, that will mean £6.5 billion in additional tax revenue to pay for the country’s priorities before we make a single change to a tax rate or threshold.
Beyond the crucial work to close the tax gap, the Budget confirms that we will implement our manifesto promises, including to abolish the non-dom tax loophole, which the OBR says will raise £12.7 billion over the forecast period. We will end the VAT exemption and business rates relief for private schools, which the OBR confirms will raise £1.8 billion a year by 2029-30. As of today, we have increased the stamp duty land tax surcharge on second homes to 5%, helping more than 130,000 people to buy their first home or move home over the next five years, while raising £310 million a year by 2029-30 to support public services.
I know hon. Members have raised questions about some of the other tax changes announced in the Budget, and I am glad to have the opportunity to respond. In particular, I would like to address the changes we have made to inheritance tax, specifically the reforms to agricultural property relief. I realise that people may be concerned about the impact on family farms, so I would like to make clear some of the facts about how the reforms to this relief will work. The main rate of agricultural property relief on all assets was set at 50% until 1992, at which point it was raised to 100% just before the election that year.
Let me be clear: these reforms still provide a very significant level of relief to protect family farms. The Chancellor confirmed yesterday that the first £1 million of combined business and agricultural assets will continue to receive 100% relief in most circumstances. Assets above £1 million will attract a 50% relief, equal to the pre-1992 rate, which means that inheritance tax will be paid at a rate of 20% instead of 40%. Our reforms, in a tough fiscal context, still leave the relief as being far more generous than it has been in the past.
It is important to note that agricultural and business property reliefs are in addition to the nil rate bands and other exemptions, such as the transfers between spouses and civil partners, and the rules on gifts. Indeed, the National Farmers Union director of strategy has highlighted that these other features of the tax system are important. He said just today that APR
“is not the be all and end all for passing on farms on death.”
Indeed, these exemptions mean that if someone has no other assets and is passing it on to a direct descendant, a farm or farming business worth up to £2 million can be passed on without paying any inheritance tax at all. Furthermore, those liable for a charge can in most circumstances pay any liability over 10 annual instalments.
Let me also be clear about the data on agricultural property relief. The total value of a farm should not be confused with the value being passed on at death. Multiple family members can own part of a farm. For example, if an individual jointly owns a farm worth £3 million with their partner, only £1.5 million is in their estate at death. In 2021-22, the most recent year for which data is available, the median value of assets qualifying for APR was £486,000. Three quarters of estates claimed for assets below £1 million, and such estates will continue to pay no inheritance tax at all. Just 463 claims were for agricultural assets of over £1 million, or 27% of all claims. The largest assets, those worth over £2.5 million, related to just 7% of claims for APR. That data is published openly on gov.uk for everyone to see, and I encourage people to investigate it.
Sir Bernard Jenkin
It does seem rather odd to introduce a new tax and then to defend it on the basis that very few people will pay it. Why is the Minister so confident that it will yield anything recognisable in terms of a contribution to the public finances? The few landowners who will be caught by this measure will be making other arrangements to ensure that they avoid it, particularly the very large landowners.
James Murray
I thank the hon. Gentleman for acknowledging that the impact of these changes is limited and targeted. That is an important point. He leads me on to my concluding point, which is to point out that the decision we have taken to retain APR, but to limit its generosity for the top quarter or so of assets, is the right approach to fixing the public finances while also protecting family farms.
I have set out some of the detail of how we are restoring stability and responsibility to the public finances and meeting our first fiscal rule, the stability rule. As the Chancellor set out yesterday, that rule is accompanied by the investment rule, which makes sure that debt is falling as a share of the economy. Debt is measured as net financial debt—a statistic measured by the Office for National Statistics since 2016, and forecast since then by the OBR. It recognises that Government investment can deliver returns for the taxpayer by counting not just liabilities on our balance sheet, but our financial assets too. That new approach provides space to deliver the step change in investment that our country needs, within a strong fiscal framework that puts public finances on a sustainable path.
To drive investment further still, the corporate tax road map, which we published yesterday, commits us to providing the best environment for businesses through a predictable, stable, tax system. It caps the headline rate of corporation tax at 25%—the lowest in the G7. It maintains our world-leading capital allowances system, including permanent full expensing and a £1 million annual investment allowance. It maintains our generous R&D reliefs so that the most innovative companies can invest in the long-term future of our country.
Before I conclude my remarks, let me thank all hon. Members for their contributions today. It is a pleasure still to be hearing maiden speeches so far into this Parliament. I found the speech from my hon. Friend the Member for Worcester (Tom Collins) truly uplifting as he spoke about what he drew from the past of his constituency, the promise of the future and, most importantly, the people who he represents and the inspiration they give him. I thank him for bringing some of that uplifting inspiration to the Chamber.
I thoroughly enjoyed the maiden speech by my hon. Friend the Member for Dagenham and Rainham (Margaret Mullane), and everyone in this Chamber will immediately have felt the connection that she has to her constituency and the people she represents. Having formerly been the Deputy Mayor for Housing in London, I found her emphasis on the history and future of affordable housing particularly close to my heart.
My hon. Friend the Member for Livingston (Gregor Poynton) spoke passionately about his constituency, and perfectly articulated the strength of our Union in the UK, balanced with the strength of our national identities in Scotland, England, Wales and Northern Ireland. I thought he encapsulated that perfectly in his speech, and I will be looking at Hansard to remember his phrasing.
The maiden speech from my hon. Friend the Member for Ribble Valley (Maya Ellis) touched us all as she spoke about her late father, who I am sure would be incredibly proud of what she has achieved. I thank her for sharing that close personal story with us today.
We also heard from the hon. Member for Carshalton and Wallington (Bobby Dean) whose maiden speech I believe I heard last time I was at the Dispatch Box. Was he trying to claim that the change in fiscal rules was his campaign win during his speech? I am pretty sure it was the Chancellor of the Exchequer who came up with the idea, but I thank him for his contribution none the less, and I look forward to seeing him on the Treasury Select Committee.
I also thank my hon. Friend the Member for Leeds Central and Headingley (Alex Sobel) for acknowledging the importance of working with mayors across the country, including the excellent Mayor of West Yorkshire.
Let me briefly address two points made by Opposition Members, including the hon. Member for North Cotswolds (Sir Geoffrey Clifton-Brown) who spoke about a pensions review. It is an excellent idea to have a pension review, so I am glad that the Chancellor announced in August a landmark pension review, which is looking at how to boost investment and to increase pension pots. It will set out how billions of pounds of investment could be unlocked from defined contribution pension schemes and how pension pots in such schemes could be boosted by up to £11,000. I hope that the hon. Gentleman will look at that review, and I would welcome discussing it with him in due course.
The hon. Member for North East Fife (Wendy Chamberlain) spoke about the Scotch whisky industry. I understand that it may not have welcomed everything in the Budget, to put it mildly, but I want to be clear that we feel that the overall package on alcohol balances the commercial pressures on the alcohol industry with the need to raise revenue. Of course, 90% of whisky is exported so no duty is due on that. We have also looked to support the Scotch whisky industry by reducing fees for geographical verification—specific support that I hope will help the industry in the years ahead.
Today’s debate has brought to the surface the stark difference between this side of the Chamber and the other. The Conservatives have made it clear, yet again, that they are unable to take responsibility for the state of the country as they left it. In contrast, Labour’s first Budget makes it clear that, above all else, we are taking the difficult and responsible decisions to fix the mess they made. We know there are no shortcuts. We are realistic about that, but our Budget is the one our country needs. It is a Budget to restore economic stability while protecting working people, to fix the foundations and fix the NHS, to invest in the future and to rebuild Britain. I commend it to the House.
Ordered, That the debate be now adjourned.—(Taiwo Owatemi.)
Debate to be resumed on Monday 4 November.
Ministerial Code: Policy Announcements
Bernard Jenkin Excerpts(6 months, 2 weeks ago)
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Nick Thomas-Symonds
My hon. Friend is absolutely right. Frankly, when I heard Conservative Members talk about ethics and standards in Government, I thought that irony had died.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Can we take it that the Government did not think that the Chancellor’s announcement in America last week was important? I think most people in this House felt that it was. Therefore, if it was important, did the Chancellor break the ministerial code?
Nick Thomas-Symonds
The Chief Secretary to the Treasury made a statement to the House yesterday. The entire Treasury team has been here answering questions today. The Chancellor will deliver a Budget tomorrow and we will have four days of debate on it. I doubt that the House has seen so much of the Treasury team since the Tories were forced to deliver two emergency Budgets in September 2022.