The Economy

Catherine McKinnell Excerpts

Thursday 24th October 2019 Commons Chamber

[Sajid Javid]

First, the IFS does not predict that at all, so the Gentleman should check his facts. Secondly, I gently point out to him that debt is brought under control by controlling borrowing. Borrowing is the deficit, and the deficit was what the Labour party left at 10% of GDP, but it is now four fifths less than that. Controlling borrowing is how we bring debt under control.

Better infrastructure and fiscal responsibility will enable our future economic growth, but so will trade. Ninety per cent. of future global economic growth is estimated to be outside Europe, with more than a quarter coming from China alone. Britain has always been an open country that believes in free trade. British businesses have strong trading relationships around the world. The new deal that we have agreed with the EU will allow us to have an independent trade policy and to strike new trade agreements with countries around the world, and the new trade Bill will put that into practice. Let me compare that with Labour’s position on trade. Labour would lock us into the EU customs union, ending any chance of an independent trade policy. How did Labour’s head of trade policy describe Labour’s views? He said:

“We reject the whole principle of free trade.”

Our support for free trade is not the only thing that marks Britain out on the global stage. Our remarkable financial services sector, which is now back to good health, does so, too. It is not just the City of London; our financial services sector involves the entire UK. All our financial and professional services firms truly are a national asset, employing more than a million people and contributing more than £130 billion to our economy every year. The financial services legislation that we brought forward in the Queen’s Speech will maintain and enhance our position as a world-leading financial centre after we leave the EU.

This Queen’s Speech gets Brexit done, invests more to grow the economy and delivers on the people’s priorities: action on infrastructure, trade and financial services, and a new economic plan for a new decade of renewal.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I am sure that the Chancellor is correct that some parts of the economy will benefit from a number of the changes, but other parts of the economy, particularly in the north-east, will be heavily damaged by the plans that he is outlining and that are outlined in the deal. The north-east exports over 60% of its goods to the EU, and hurting that relationship will be hugely damaging to our region. He does not seem to be taking any account of the disparate regional impacts around the country.

[Sajid Javid]

I do not accept the hon. Lady’s analysis. Once we leave the EU with the close economic partnership that is set out in the political declaration, our economy will continue to be one of the strongest in the world, unleashing many new opportunities for all parts of our country, including the north-east.

Turning to the amendment tabled by the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), let me be clear about one thing: Britain will always be an open, global, outward-looking country. I am proud of living in a country as diverse as this one. We have dropped arbitrary immigration targets and recently announced new highly flexible fast-track visas for scientists; none of that will change as we leave the EU. We will continue to welcome the best and the brightest from across the world. I therefore urge all hon. Members to vote against amendment (h) because it is important that we end free movement as we regain control of our borders.

I turn now to the shadow Chancellor’s amendment. There are no mainstream parties in the developed world with an economic agenda as extreme as the one now proposed by Labour. There is no tax that the Labour party would not hike, there is no business that it would not nationalise, and there is no strike that it would not support. Instead of embracing the future, the shadow Chancellor demands that we turn back the clock on progress. He claims that 95% of people would face no income tax hikes under Labour, but then proposes more than 20 new tax hikes. He claims that he would protect pensioners, but tell that to the millions whose pensions will be smashed by Labour’s threats to renationalise vast swathes of the economy without any proper compensation. He told businesses he had nothing up his sleeve, but then he announced plans to confiscate £300 billion of shares from private investors in the biggest state raid this country will ever see.

The shadow Chancellor has never worked in a business. He does not get business. He even refuses to name a single business that he admires. And guess what? He calls business the real enemy. Given his threats to hike taxes, to renationalise businesses and to load them up with new bills and regulations, I am pretty sure the feeling is mutual.

We have even heard Labour officials suggesting—I am not making this up—the nationalisation of travel agents. It will be free trips to Havana for Labour Front Benchers, and perhaps a ticket to Siberia for the hon. Member for West Bromwich East (Tom Watson). The simple truth is that Labour is not fit to govern. It would wreck the economy and hard-working families would pay the price, just like last time.

These are the fundamental dividing lines in British politics today. We will raise wages; Labour will raise taxes. We will back business; it will smash business. We will get Brexit done; it will dither and delay. A Conservative party that believes in free enterprise and that will get Brexit done and deliver the change people want; or an anti-aspiration, anti-business Labour party led by a pair who would wreck the economy, cancel the referendum and leave Britain less secure and less safe.

I know the shadow Chancellor is a fan of the little red book, but these days he is less Chairman Mao and more Colonel Sanders—too chicken to face an election. Let us back this deal; let us back this Queen’s Speech; and let us have a general election. I commend the Queen’s Speech to the House.

[Catherine McKinnell]

On a point of order, Madam Deputy Speaker.

[Madam Deputy Speaker (Dame Rosie Winterton)]

It had better be good.

[Catherine McKinnell]

Out of respect I did not want to interrupt the Chancellor’s speech, but is it in order for him to impugn the motives of my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) in raising concerns on behalf of her constituents? Is it not unparliamentary for somebody holding his high office to do that, especially when he refuses to appear before the Treasury Committee to answer directly for his plans?

[Madam Deputy Speaker]

I sort of thank the hon. Lady for her point of order. I really do not want to see the debate interrupted by points of order that are, frankly, matters of debate. It is a matter of debate whether people think what the Chancellor said is appropriate. I want to get on with the debate.

--- Later in debate ---

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

This Queen’s Speech is nothing but a wish list, setting out a programme for government that completely ignores the new reality that looms large over our economy: the big unknown that is the post-Brexit world. The Government’s withdrawal agreement marks the most profound peacetime transformation of the economy in our country’s history. That is why, in my brief but timely tenure as interim Chair of the Treasury Committee—I welcome and congratulate the newly elected Chair, the right hon. Member for Central Devon (Mel Stride)—I wrote to the Chancellor last week to ask the obvious question: what is the Treasury’s analysis of the economic impact? Unfortunately, the Chancellor’s reply flatly declined to provide any such analysis. He ended his letter by saying:

“trust in democracy and bringing an end to the division that has characterised this debate over the past three years is something that cannot be measured solely through spreadsheets or impact assessments, important though they”.

What patronising drivel! This Government think they can take us for fools.

The Chancellor does not think there is any need for an economic assessment. He tells us that the previous assessments do not apply, but he will not produce a new one. He says that the new deal is

“self-evidently in our economic interest”,

but it is not at all self-evident. The overwhelming evidence is that any Brexit would lead to a weaker economy compared with staying in the EU. If the Government had evidence to the contrary, they would produce it. The Chancellor is basically telling us to ignore the economics. How can the Government have any credibility when they announce their Budget next month? If the Treasury is not interested in the economics, who in government is? Economic analysis matters. It affects our constituents’ jobs, taxes, spending, prices, interest rates, wages, and imports and exports. Surely we should have the latest and best economic evidence as we make a decision of this magnitude. We must make this decision with our eyes wide open. It is the least the public deserve from us.

As founder and co-chair of the all-party group on the east coast main line, I want to highlight the pressing need for investment in my region. The details of the Government’s proposals on rail reform are still to be finalised, but simply changing the way train operating companies work will not improve our railways in the way we need. The east coast main line is a critical piece of national rail infrastructure. It is one of the country’s most strategically important transport routes, linking the north-east to London, the east of England, the east midlands, Yorkshire, the Humber, and the east and north of Scotland, but the line cannot cope with the demands upon it. Instead of being an asset, it is now holding back the communities and economies it serves. It does not have enough capacity for today’s growth in passenger and freight, let alone for the future. Figures from the Library show a 73% rise in delay minutes on the London North Eastern Railway route connecting Newcastle and London, and around 60% of that is due to Network Rail. The Government must commit additional funding for Network Rail as a matter of urgency so it can invest in the east coast main line and improve reliability.

That is not enough though: we also need HS2 to go ahead. If we want to run more regional and local services, we need the capacity that HS2 will free up, and I am pleased to have had much support from business communities and stakeholders on this. I can understand why fellow northerners might look at the cost of HS2 and think that this money might be better spent elsewhere, but I have never seen this as an either/or choice. London has multiple infrastructure projects at any one time. Do we ever suggest it should only have one? There are worrying rumours that the Government are planning to scrap HS2. It would make a mockery of the Prime Minister’s pledge to empower the north and do nothing to solve the problems on our network. If they scrap the investment in the north, will we really get it back in another form? I do not think so.