Government’s EU Exit Analysis

Charlie Elphicke Excerpts

Wednesday 31st January 2018 Commons Chamber

[Hywel Williams (Arfon) (PC)]

rose—

[Charlie Elphicke (Dover) (Ind)]

rose—

[Keir Starmer]

I will complete this point and then give way.

There is a serious point. Is it seriously Government policy that impact assessments are so inherently unreliable that it is better to proceed without them? That is the logic of the position described yesterday. Is it not better to adopt the approach tweeted last night by the Under-Secretary of State for Justice, the hon. Member for Bracknell (Dr Lee), who said:

“The next phase of Brexit has to be all about the evidence. We can’t just dismiss this and move on. If there is evidence to the contrary, we need to see and consider that too”?

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[Keir Starmer]

I am grateful for that intervention, and I agree that it would be highly likely that such material would be put into the public domain.

I come back to this serious point: the choice now to be made is how we leave the EU and what the future relationship might be. That is a profoundly important question. There are many different choices, and we absolutely need—and there should be—a robust impact assessment that we can all see and all discuss.

[Charlie Elphicke]

rose—

[Keir Starmer]

I will give way once more, and then I will get on to the third point.

[Charlie Elphicke]

I thank the right hon. and learned Gentleman for giving way. Is it his party’s policy to remain in the European Union’s customs union—yes or no?

[Keir Starmer]

Mr Speaker, I rather thought that the point of interventions was to engage in the debate that was going on, rather than to make a completely different point. Our position on the customs union has been made clear very, very many times, and I do not see that that is an intervention on the point that I am making, so I will press on.

The third line of defence that was advanced by the Minister, who now seeks instructions from the civil servants he disparaged yesterday, was that any disclosure might harm or undermine the negotiations. Again, we have heard that one before. We have always accepted that anything that genuinely undermines the negotiations should not be put into the public domain, but there is a difference between that and something that is simply embarrassing to the Government, a point made by the right hon. and learned Member for Rushcliffe (Mr Clarke) yesterday afternoon. This motion provides for confidentiality. That defence was immediately undermined by the Minister himself yesterday. When there is a leak, Governments usually say that they will not comment on the leak, and that they do not rely on the information in the leak, because if it is not to be in the public domain, nobody should rely on it. But the Minister not only commented on it, but sought to rely on the leak to advance his own case. When challenged by my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) about the customs union, he prayed in aid the figures, saying that

“there is economic growth under all the scenarios in the economic assessment.”—[Official Report, 30 January 2018; Vol. 635, c. 683.]

One cannot simply say, “I will rely on the figures to advance my own case, but I won’t publish the full figures so that anyone can question me properly on what I am saying.” We now need to go back to first principles.

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[Charlie Elphicke (Dover) (Ind)]

Thank you for calling me to speak, Mr Deputy Speaker. May I also welcome you back to your place? You are much loved in this Chamber, and you have been deeply missed.

The best thing to do with these forecasts is not to hand them to the Brexit Committee but to put them in the nearest waste bin. I will explain why. I backed remain in the referendum, partly on account of the Treasury’s forecasts in April 2016 setting out what it thought would happen in the case of a vote to leave the European Union. It provided two scenarios: “shock” and “severe shock”. There were no categories entitled “success” or “continued economic brilliance for our country”. The “shock” scenario predicted recession and a sharp rise in unemployment. It also predicted that GDP would be 3.6% lower and that unemployment would be 500,000 higher, with 74,000 jobs being lost in the south-east alone. It wanted to ensure that everyone understood how badly every single region of the country would fare.

[Andrew Bridgen (North West Leicestershire) (Con)]

My hon. Friend is making a great point. We all remember “Project Fear”. Will he confirm beyond doubt that those Treasury predictions related not to effects that would happen after Brexit but to what would happen immediately after we voted to leave the European Union?

[Charlie Elphicke]

My hon. Friend is absolutely right. I am looking at the forecast of 500,000 more unemployed, and it relates to the beginning of 2018. The Treasury produced a little chart showing just how bad it would be, how joblessness would rise and how if people did not vote the right way they would lose their jobs and be visited by recession.

Under the second category—“severe shock”—it was forecast that GDP would be 6% lower and that unemployment would increase by 800,000. Those forecasts made me think that there was a big risk involved, and that we ought to back remain. I advised my constituents to back remain, but they advised me that they did not agree and that they wanted to leave, by a margin of about two thirds. So I thought, “Well, we will make do, and try to secure the economy as best we can, because things are obviously going to be really dreadful and I am really worried about the employment situation.” But what has actually happened? I have not seen a recession. In fact, growth has continued in this country. There are 32.2 million people in employment, and 1.4 million unemployed. That is an unemployment rate of 4.3%, and unemployment is at a 42-year low. Rather than going up by 500,000 or 800,000, it has in fact fallen by 250,000.

We do not hear about that from Opposition Members, do we? We do not hear them saying, “Well, wasn’t that Treasury forecast completely and utterly wrong?” All we hear them saying is, “Don’t be mean to civil servants who come up with forecasts that are hopelessly wrong.” We do not hear them asking why those forecasts were wrong. There has been no recession, and GDP and employment have continued to grow. It is hard to think of any part of that dossier that was correct. Indeed, it is now notorious as the “Project Fear” dossier.

I have asked questions about this in the Treasury Committee, of which I am a member, and every time I ask a Bank of England official or a Treasury official about it, they shuffle nervously and sometimes give a little cough. Sometimes they say, “The reason we did not have a massive rise in unemployment and a recession was that the Bank of England cut interest rates by 0.25%.” Interest rate cuts can be assimilative, but I am not sure that a 0.25% cut really made that much difference to 500,000 jobs. I think that the Treasury’s predictions in April 2016 were wrong, and if they were wrong before, the chances are that they could well be wrong again.

[Andrew Bridgen]

I, too, was worried about “Project Fear”, and I wrote to the Treasury after the referendum asking it to name and shame the 80% of economists who had claimed that there would be absolute meltdown if we voted to leave the European Union. The Treasury refused to name and shame them. I wanted their names because I wanted to ensure that they never got a job anywhere near government because their predictions were so bad, but the reason that the Treasury would not name and shame them was that they were already working there. They are the architects of this latest report.

[Charlie Elphicke]

Again, my hon. Friend makes a forceful point, and these people are not just in the Treasury.

The shadow Secretary of State—a knight of the realm, I should add—was kind enough to come down from St Pancras to see us in Dover recently. Grandly, he came down to tell the people of Dover that we ought to retain the benefits of the single market and the customs union. Everyone understood what he meant. He meant that we should stay in the single market and the customs union, that we should continue to have a trade policy made in Brussels rather than in Britain, and that we should continue to have uncontrolled EU immigration into this country with completely open borders. My constituents are very clear on one thing: they do not want uncontrolled immigration into this country. It has not helped them or their families, and they do not feel that it is helped their prosperity. They do not want trade policy to be made in Brussels. They want it to be made in Britain. That is why this Government are right to be leaving the single market and the customs union.

This is not a question of forecasting; it is a question of a mandate. That mandate was handed to us by our electors when they voted to leave the European Union. I understand that there are those on the other side who wanted to remain and who still want that. I respect that. I do not really respect their constantly re-fighting the referendum, but I respect the fact that they feel passionately that we should be back in Europe. However, that is not my mandate from my constituents, and it is not the mandate given to a lot of Opposition Members who represent constituencies in Wales and in the north of this country, who ought to spend a bit more time talking to their electors on the doorstep and a bit less time at grand dinner parties enjoying elite establishment-type conversation about how terrible it is all going to be.

Let me move on from Hampstead to the speech made by my hon. Friend the Member for Redditch (Rachel Maclean). She was absolutely right that we cannot predict the future, so why is it that the EU-funded CBI so passionately wants Britain to stay within the single market and within the customs union and says that businesses do, too? The answer is that it loves the regulation produced by Brussels, which helps to keep things in their place, but we need to become more competitive as a country. If we become more competitive, we will grow more quickly.

[Wera Hobhouse]

Will the hon. Gentleman give way?

[Charlie Elphicke]

I will not give way as I have given way twice already.

The Treasury analysis was wrong in the first place. The Treasury did not predict containerisation or innovations such as the internet. We are about to have an automation revolution, with cars driving themselves, and a revolution in solar power, which will reduce our unit energy bills, and this country is well placed to become much more competitive than any Treasury forecast would predict, but we can all see that that kind of future is coming down the road. To make sure that we embrace that future, this country needs maximum freedom, maximum discretion and the maximum ability to diverge from the policies and laws of the European Union and to embrace the wider world.

In the future, 90% of global economic growth will not come from the European Union, but from the world outside the EU. Over the past 40 years, it is an historical fact that the EU’s share of global GDP has fallen from 30% to just 15%. That is relative decline. We do not need to see relative decline. The future for this nation is global.

[Several hon. Members rose—]