UK Modern Industrial Strategy
Charlie Maynard Excerpts(3 days, 8 hours ago)
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Madam Deputy Speaker (Ms Nusrat Ghani)
I call Select Committee Member Charlie Maynard.
Charlie Maynard (Witney) (LD)
The Secretary of State said,
“The UK has long been and will remain a champion of free trade”
—if only! It is not on the big stuff or the important stuff. Leaving the EU’s customs union and single market has reduced UK GDP by between 2% and 4%. The deal with India is good news, but according to the UK Government’s own estimate, it adds 0.1% in the long term—that is, 20 to 40 times smaller. UK exports are down 13% since the trading co-operation agreement took effect. That impacts people in my constituency and all hon. Members’ constituencies. When will the Government move faster to repair the enormous economic damage of a hard Brexit?
Jonathan Reynolds
I understand the point that the hon. Gentleman makes. This was the question that faced the nation at the time of the referendum. If a country leaves a single market and customs union, there will of course be economic consequences, particularly when there is the free movement of people, but that is the decision the country took. Let’s look to the future, not the past. We could have this argument forever. We would have a situation where the business uncertainty created by never fundamentally coming to a settlement on Brexit would in itself become as big a problem as the impact of leaving the single market that he talks about.
Of course, if we were in a customs union without being part of the EU, could a G7 economy subcontract that area of policy entirely to other countries and not have control of a key aspect of our economy? Honestly, I do not think that is reasonable. I appreciate the Liberal position is almost certainly to go back into the European Union—there is consistency there—but I say again that doing so would mean, for instance, denying us the benefits of the India trade deal and services access to India, the reduction of tariffs on agriculture, whisky and cars, and the benefits of the US agreement, which has saved tens of thousands of jobs.
Oral Answers to Questions
Charlie Maynard Excerpts(3 months, 1 week ago)
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Justin Madders
Microbusinesses such as that of Mr Stevens are central to the Government’s growth mission. We are committed to strengthening our relationship with the EU and to tackle trade barriers and frictions, and we regularly engage directly with businesses and their representative organisations to understand the difficulties they face. Our export support services help small and medium-sized enterprises navigate opportunities in EU markets and get the practical help they need to do so. For example, the Unlock Europe programme, which was launched in December as part of the export academy, offers practical guidance to help UK businesses enhance their exporting potential to the EU.
Charlie Maynard (Witney) (LD)
Our country’s very high electricity costs are another huge problem facing businesses in my constituency and nationally. Reintegrating our power markets with Europe’s through the single-day ahead coupling system would cost our country nothing, save costs for businesses, reduce carbon dioxide and make our power markets more efficient. Will the Minister take fast steps to reintegrate our electricity markets with those of our European neighbours?
Justin Madders
I thank the hon. Member for his tangential question relating to GPSR. He makes an important point about energy costs, and we are working closely with the EU on how to build on that, and of course the industrial strategy will also be looking very closely at how energy costs can be brought down for businesses.
Budget Resolutions
Charlie Maynard Excerpts(7 months, 2 weeks ago)
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Jonathan Reynolds
I have already given the right hon. Gentleman a go. I will make a little progress, and we will see whether he can do a better one next time.
The result was a protracted period of anaemic growth. Had our economy grown at the average rate of other OECD countries over this period, it would have been £171 billion larger. Imagine the difference that would have made to all of our communities and to today’s Budget debate. British firms, facing such uncertainty, have not seen investing domestically as a sufficiently attractive proposition. They have been reluctant to adopt new technology, to upskill their employees or to plough money into research and development. We have even heard that, in any given year, roughly 40% of UK firms choose not to invest at all. We want to change that for good. We want to give businesses certainty, confidence and stability so that they can make decisions for the long term.
That is why, at the Budget, the Chancellor reaffirmed our new modern industrial strategy. Invest 2035 will be a central pillar of our growth mission. The strategy will allow businesses to plan not just for the next 10 months, but for the next 10 years. It has already won the backing of Make UK, which has told us that businesses will no longer have to
“fear the constant chop and change in policy we have seen over the last decade.”
Instead, they can focus on the long term.
Our industrial strategy will create a strong pro-business environment, making it simpler and cheaper for companies to scale up and invest. It will unleash the potential of our high-productivity services and industries, because our recent economic history has taught us that we have to play to our strengths. Over the last 25 years, high-productivity sectors were responsible for roughly 60% of our economy’s entire productivity growth. Looking at the figures since 1990, over half of the UK economy’s GDP growth has come from just three sectors—information and communications technology, financial and professional services, and advanced manufacturing.
That is why our industrial strategy will channel support to eight key growth-driving sectors, those in which the UK services sector will excel both today and tomorrow—the services and industries that present the greatest opportunity for output and productivity growth over the long term.
Charlie Maynard (Witney) (LD)
How does that all gel with the fact that the OBR is saying that business investment will fall by 0.6%, as a share of GDP, by 2029? It sounds great, but it does not add up in the OBR’s eyes. Will the Minister please elaborate?
Jonathan Reynolds
We have a similar question. The Government’s wider pro-business changes cannot be modelled by the OBR, and we know that we have to prove them. There is simply no way that we will get to the higher business investment, the higher productivity growth and the stronger economic growth that we need in all parts of the country unless we are honest, robust and responsible with the public finances, as this Budget is and the previous Government were not. If the Budget does not set the trajectory for strong long-term public investment, to leverage in that degree of private investment, we will not have the foundations to succeed. I am so excited by this Budget because it gives us those strong foundations for the future.
Charlie Maynard (Witney) (LD)
In this Budget debate, I am going to focus on the massive disconnect between the Government’s talk about growth and investment and what the OBR considers will be the outcome. Sadly, we can want something and talk about it, but if we do not enact the policies, we are not going to get it. That will hit everybody across the country really hard, particularly the most vulnerable. I am seeing that reality in my constituency, where a lot of employers are relocating plants abroad to the EU, rather than relocating and growing those jobs in the UK. That is not just happening in my constituency: very likely, it is happening in every other Member’s constituency as well. That is a huge problem for our public services, which are ultimately underwritten by our taxes.
As a result of this Budget, real private consumption as a share of GDP is set to fall by 0.4% by 2029, and real business investment is set to fall by 0.6%. It is not me saying that: it is the OBR. That is very different from what the Secretary of State has told us. It leaves real GDP growth lower in the outer years, in the 2027-29 forecast—again, not my words, but the OBR’s. As per OBR data, Brexit is cutting our long-run productivity by 4%, and is cutting the overall trade intensity of our economy by 15% in the long term. The UK has a free option to boost economic growth at zero fiscal cost by restoring a closer economic relationship with Europe. However, although not a single person on Labour’s Front Bench even voted to leave the EU, we find ourselves with a Government supporting daft Conservative economic policies that nobody in the country voted for, such as remaining outside the customs union and the single market.
Even before Trump’s win today, we as a country could not afford to be taking these wrong decisions. Continuing to do so, wilfully and in direct contradiction of the facts, is neglectful and shows a disregard for the wellbeing of our country. I urge the Government to change course.