Oral Answers to Questions

Chuka Umunna Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Mr Hammond]

As my hon. Friend knows, we have signed off the Truro funding decision, and I am sure she is happy about that. The Prime Minister has made it very clear that dealing with the challenges in the housing market is a priority for the Government, and in the spending review we will continue to prioritise funds to support both the housing market and the provision of social and affordable housing.

[Chuka Umunna (Streatham) (LD)]

If the UK leaves the EU without a deal and the Chancellor is still in his post, does he envisage there being enough fiscal headroom following the spending review to give the top 10% of earners a tax cut worth more than £9 billion? Surely that is wholly unjustified.

[Mr Hammond]

I think the hon. Gentleman has sketched a highly unlikely scenario, but I can answer his question. We have built up about £26 billion or £27 billion of fiscal headroom, and the purpose of that headroom is precisely to protect the UK economy from the immediate effects of a possible no-deal exit. I have no doubt whatsoever that in the event of a no-deal exit we will need all that money and more to respond to the immediate impacts of the consequent disruption, which will mean that no money will be available for longer-term tax cuts or spending increases.

Let me go further: the Government’s analysis suggests that in the event of a disruptive no-deal exit there would be a hit to the Exchequer of about £90 billion, and that will also have to be factored into future spending and tax decisions.

Spring Statement

Chuka Umunna Excerpts

Wednesday 13th March 2019 Commons Chamber

[Mr Hammond]

The whole point of the borderlands growth deal is to celebrate the economic geography of the borders region on both sides of that non-line between Scotland and England, so my hon. Friend makes a very good point. If I am coming to Carlisle, I shall certainly cross the border and visit his constituency.

[Chuka Umunna (Streatham) (Ind)]

Growth is now forecast to be 1.2% in 2019 and 1.4% in 2020. It is worth reflecting on the fact that, before the EU referendum, it was forecast to be 2.1% in each of those years. Growth of under 2% over the forecast period is sluggish and unimpressive, and the problem will be exacerbated if we fall off a cliff and leave the EU without a deal. Can the Chancellor therefore tell the House—I think we need the benefit of knowing this before we vote—whether, when we vote on the motion this evening, he will be voting against us leaving without a deal?

[Mr Hammond]

Yes, I will be voting against us leaving without a deal. I have always believed that leaving without a deal would be bad for the UK economy, and that continues to be my view. May I just take the hon. Gentleman up on his point about the relatively higher growth forecasts we saw until a year or so ago? We need to remember that this is a structural downgrade. The OBR revised its estimate of the growth rate of productivity in the economy. Until we get that productivity growth rate back, we will not see sustainable higher growth in the economy. That is why it is my No. 1 priority, and it drives every announcement I make.

Leaving the EU: Economic Analysis

Chuka Umunna Excerpts

Wednesday 28th November 2018 Commons Chamber

[Mel Stride]

Within the papers we have produced today there are regional impact assessments, including for the hon. Lady’s part of the country, of the various possible outcomes. The direction of travel that this Government are taking is to make sure we have as frictionless arrangements as possible with the EU27 going forward so that just-in-time delivery exports and imports can flow freely; indeed, that was at the heart of the July White Paper model. The hon. Lady will also know that at the heart of the political declaration is a no tariff, no quota, free trade arrangement. All those things will be important to ensuring we protect the jobs of her constituents.

[Chuka Umunna (Streatham) (Lab)]

This is totally unacceptable. Had amendment 14 to the Finance (No. 3) Bill been put to the vote last week, it would have passed and it would have required the Government to provide a model with remain as the baseline against their proposed withdrawal agreement. On the basis of promises made at the Dispatch Box, we did not press it to a vote. The Minister has denied that those assurances were given, and I do not want to do this but I am going to read what the Exchequer Secretary said to me and the right hon. Member for Broxtowe (Anna Soubry): “I will explain at the Dispatch Box that we will look at three scenarios: WTO, FTA and the Government’s proposed deal.” There is no doubt about the promise that was made to us, in return for which we agreed not to press amendment 14 to a vote. Can the Financial Secretary tell me why I should not think that the right hon. Member for Broxtowe and I have not been misled, and does this analysis not prove the overriding point that the best deal on offer is the one we have now, which is why we need a people’s vote on this issue to settle it?

[Mel Stride]

What the Exchequer Secretary said at the Dispatch Box was right, and these reports deliver on exactly what he said. [Interruption.] If the hon. Gentleman gives me a moment, I will try to explain the answer to his charge. First, he sought a comparison with the baseline, as he termed it. The baseline comparison is there: it is the status quo—it is our arrangement with the EU27 that we have at the moment as a member of the EU. He then suggests that we did not make a comparison of the deal with that, but many Labour Members have said, “We don’t know exactly what the deal is and we want to know what it is now.” We do not know what the deal is because the political declaration—understandably, given that we have a negotiation now to go through—sets out the parameters and the spectrum of potential outcomes. Therefore, in order to fulfil the obligation the Exchequer Secretary made at this Dispatch Box, we have made just that comparison—a comparison of the Chequers arrangement, with a sensitivity around that, with the base case. That is exactly what the Exchequer Secretary said we would come forward with.

Finance (No. 3) Bill

Chuka Umunna Excerpts

Committee: 1st sitting: House of Commons
Monday 19th November 2018 Commons Chamber

[Joseph Johnson (Orpington) (Con)]

I have arrived late to the debate, relatively speaking, having been detained by the trains in my previous role.

I wish briefly to address amendment 14, tabled by the hon. Member for Streatham (Chuka Umunna). We stand at a critical moment in our nation’s post-war history, and the decisions we take in the next few days and weeks will shape not just what happens over the next few months and years but our entire lifetimes. It is vital that we take these decisions in full possession of the facts and that we are answering the right questions. I believe amendment 14 will help us to do exactly that.

The Government are attempting to frame the choice before us in a binary way: the Prime Minister’s deal or no deal at all, which is effectively vassalage as rule takers on the one hand, or chaos and disruption on the other. As I said in my resignation letter last week, I believe that to present the country with this narrow choice represents the single greatest failure of British statecraft since the Suez crisis in the 1950s, for neither choice is in the national interest. Amendment 14 rightly seeks to expose this for what it is and will make clear everything to full public scrutiny. Both options—deal and no deal—are significantly worse for the UK than our present arrangements, and the amendment will make that clear by requiring the Government to be transparent.

Any serious appraisal of a major policy change needs to measure the costs and benefits against a clear economic baseline. Indeed, the Green Book—the Treasury manual on how to appraise policies, programmes and projects—states clearly that the Government’s preferred course of action must always be assessed against a “do nothing, business as usual” benchmark. If the business as usual option—in this case, staying in the EU—were not to be included in any such appraisal, the process would be contrary to the Government’s own manual, in addition to being clearly below the standard applied in any well-run business.

I am worried and concerned that it appears to have taken an amendment that the Government would have been in no position to overturn to secure their commitment that this full appraisal will eventually be published in time for it to be fully considered by Members of this House before the meaningful vote. Members need to know detailed information about this appraisal. We need to know the impact, region by region and sector by sector, because the impact, as hon. Members have made clear, will vary sharply around the country. We also need to know which groups in society will suffer the most, relative to other courses of action available to us as a country. I would be grateful if the Minister, in his winding-up speech, could confirm that that will form part of the appraisal that the Government publish and that the OBR will provide an independent assessment of the Government’s appraisal.

If we have learned anything from the chaos of the past 30 months, it is that facts are sacred. This debate has been characterised by falsehoods and misinformation from day one. It is extraordinary that we have now had to force the Government, at this relatively late stage, to publish the vital information necessary for an informed public debate. Some may say that this horse has long bolted, but I say it is better late than never. I believe that amendment 14 will go some way to righting this wrong.

Given that the reality of Brexit has proved to be so far from what was once promised during the campaign, the democratic thing to do is not just to accept amendment 14, as my hon. Friend the Minister has done, and to publish the like-for-like economic analysis showing how costly this Brexit will be, but to give the public the final say about whether they really want to proceed on this hopeless basis.

[Chuka Umunna (Streatham) (Lab)]

It is a pleasure to follow the hon. Member for Orpington (Joseph Johnson), who kindly spoke in favour of amendment 14. The amendment is in my name and in those of the right hon. Member for Broxtowe (Anna Soubry) and 70 other Members from all parts of the House. I want to take this opportunity to thank all the Members who have supported this amendment.

As the Minister said, what we were seeking to do with this amendment to clause 89—as he says, the clause allows the Government to make amendments to UK tax law—is to ensure that this House is provided with all the information needed for it to come to an informed decision. The Prime Minister made a very important admission last week, both outside No. 10 and in this House, where she moved on from the falsehood that has been peddled by too many, which is that this House has only two choices: the withdrawal agreement that has been presented by the Government, or leaving without an agreement at all. She moved on from that to the very clear choice that we now know faces this country: no Brexit, no deal or the agreement that the Government are putting forward. As may already have been said in this debate, this is arguably the biggest decision that this House will be making since the second world war, and it is absolutely vital that we are provided with the requisite data in order to come to an informed decision.

For the benefit of the record, our amendment seeks to make the exercise of the powers sought in clause 89, which the Minister mentioned, subject to the publication of a proper economic impact assessment of, and comparison between, each of the three scenarios the Prime Minister has set out before any meaningful vote on the withdrawal agreement takes place under the provisions of the European Union (Withdrawal) Act 2018. It is true, as the Minister said, that this Bill is likely to become an Act after the meaningful vote, but the amendment we have tabled is worded in such a way that its provisions will need to have been complied with before the meaningful vote in order for the powers under clause 89—to keep the tax system running in the event of no deal—to be usable.

I want very quickly to explain why we felt it was necessary to table this amendment and to deal with the three principal objections, which have been made in the House before, standing in the way of providing the information that this House needs to make a decision.

[Kevin Hollinrake]

I think it was Mark Twain who first said, “You should never make predictions, particularly about the future”. The hon. Gentleman refers to these forecasts as data, but does he accept that they are not data? They would simply be predictions, and as predictions they are inherently unreliable because they cannot take into account the reaction of business to the different scenarios we may be in. Does he accept that they are simply a forecast and cannot be relied on as facts?

--- Later in debate ---

[Chuka Umunna]

The hon. Gentleman intervened at precisely the moment when I was about to deal with that point, which is one of the three objections that are raised to our being provided with this important information. I will go through each of them, and I will address his point.

The first argument that is usually put up as to why the House should not be provided with the relevant economic impact assessments, which the Government are producing internally in any event, is that publishing that analysis would undermine the ongoing negotiations. That is clearly ridiculous. The leaking of the cross-Whitehall economic impact assessments by BuzzFeed in January had no obvious impact on the Government’s negotiating position vis-à-vis the European Commission, and frankly it is not as if those on the other side of the negotiating table will not have access to similar economic forecasts and models so that they can come to similar conclusions.

--- Later in debate ---

[Luke Graham (Ochil and South Perthshire) (Con)]

The hon. Gentleman talks about statistics. Does he not agree with me that many Members—this is shared across the House—use statistics as a drunk man uses a lamppost: for support, rather than illumination? Will he join me in trying to strengthen the Office for Budget Responsibility, so it can have more resources and ensure the statistics presented to the House are objectively verified?

[Chuka Umunna]

I have to say that when I gave way to the hon. Gentleman I did not imagine I would actually end up agreeing with what he said. He pre-empts my final point, which is that I understand the general worry about the accuracy of official forecasts. The bottom line is that we are never going to get forecasts that are 100% accurate, but we have to work with a certain number of assumptions to make policy, as I am sure he will discover if he has the privilege of serving in government.

On the point he makes about the OBR, I was quite careful in how I drafted the amendment. Its powers and capacity from a resource point of view are circumscribed, but there is no reason why we should not change the statutory remit of the OBR. At the very least, for those who worry about the accuracy of forecasts, we could see whether the OBR would be prepared to do an evaluation on the methodology and the techniques it uses to produce the forecasts by the Treasury.

[Dr Sarah Wollaston (Totnes) (Con)]

Does the hon. Gentleman agree that this issue relates not just to future forecasting? The Health and Social Care Committee has been hearing that hundreds of millions of pounds are already being spent by pharmaceutical companies on no-deal contingency planning—money that would be far better invested in our NHS.

[Chuka Umunna]

I could not agree more with the hon. Lady.

I will finish by saying this: the reason we tabled the amendment, and why I think so many colleagues on all sides of the House supported it, is because ultimately it is an assertion of parliamentary sovereignty. If the House were denied this really important information in order to come to a considered informed view, it would make a mockery of the argument that says the reason for withdrawing from the European Union is to assert parliamentary sovereignty.

I did not expect to be in this position at the beginning of today. I am grateful to the Minister for making this important concession and for making the promise, at the Dispatch Box, that we will get the economic impact assessments that we sought to secure through the amendment. Given the firm commitment he has made to the Committee, I will not be pressing the amendment to a vote. I would like to take this opportunity to thank all Members who supported it. Ultimately, we have done this because we think it is important that our constituents understand why we make the big decision that we are going to have to make in the next few weeks.

[Justine Greening (Putney) (Con)]

I was a signatory to amendment 14 because I think that good policy making needs good evidence at its heart. That is what the amendment sought to do. I think we all recognise that the debate on our future relationship with the European Union has often been characterised by facts that have turned out not to be facts, and, far too often, by lofty ideals and phrases that have had little meaning to back them up in practice. It is now time, as we come to possibly the most crucial parliamentary debate in 50 or 60 years, for Members to have the information they need to be able to take an informed decision—and, dare I say, for members of the public to have the information they need to be able to convey to their own Members of Parliament what they think about that information and why they want their MP to vote accordingly.

I welcome the statement the Minister made at the beginning of this debate, in which he set out his plans to provide more information to the House. Along with the rest of the Treasury, he will play a vital role in ensuring that we have an informed debate. I was one of those MPs who earlier this year went to the Reading Room—I actually went three times—to wade through the Treasury analysis. I would like a similar level of detail so that, again, Members are able to analyse the impact of the three different choices facing our country, as the Prime Minister has now set out: whether we have the deal that she proposed, whether we leave effectively with no deal, or whether we keep the existing deal with the European Union. I would like a level of analysis that includes a sectoral split in relation to the different impacts of the different deals on different sectors, as well as a regional and geographical split, so that we, as Members of Parliament representing very different communities in very different parts of the country, can really understand what the geographical impact of Brexit and the options will be.

I would like the analysis perhaps to go beyond what we originally had from the Treasury, so that we can understand what the impact on GDP might be for employment and jobs. There will be many MPs who do not believe that unemployment is a price worth paying for some of the options on the table. I believe that MPs and communities have a right to be informed about the risks to local jobs before casting their votes in favour of different options. Of course, we need to see, for all the options, the impact on public finances, both in the short and longer terms. I know that the Minister has in mind a period of 15 years for forecasting. I think that that is absolutely necessary for us to see not just the immediate shorter-term effect, but the medium and longer-term structural impacts of any route forward on our economy.

Leaving the EU: Customs Arrangements

Chuka Umunna Excerpts

Tuesday 10th July 2018 Westminster Hall

[Stephen Hammond]

My right hon. and learned Friend is correct. I think that he has made the point several times in this place and in others that there has been a misunderstanding and a failure to comprehend exactly what the EU Commission is. It is a legal body that takes its instructions from others, and therefore its ability to deviate too much in those negotiations until its instructions are changed means that we have failed to understand how we should have been negotiating initially. Now that the plan is there, I am hopeful that we will see more progress.

[Chuka Umunna (Streatham) (Lab)]

I am very grateful to my fellow south Londoner for giving way. I know this is a debate about customs, but my biggest issue with the Prime Minister’s proposals is that they do not cover most of the economy, which is services. On customs, however, I have a couple of questions.

First, does he know of any example of where the EU has allowed a third county to collect customs duties on its behalf? The hon. Gentleman has talked about the importance of the rules. Secondly, although I appreciate his comments welcoming the proposals, they are also based on “to be invented” technology to resolve the Irish border issue. Unless that technology is invented and can work, I do not see how it will be able to resolve that conundrum.

[Stephen Hammond]

I will deal with my fellow south Londoner’s latter point first. I agree with him on technology. There needs to be a system in place. We may move to a technological solution, but, as I said a few moments ago, it is clearly not there at the moment, or it has not been tested on this sort of scale yet.

Secondly, I do not know of any such example, and that will obviously be challenging to the rulebook, but that does not mean that we should not put the proposition forward and therefore I respect what the Government are trying to do in that regard.

As for services, which the hon. Gentleman was clearly talking about and is 80% of the UK’s exports and economy, my hope is—I am not sure whether the Minister will be able to say so today, but it is my hope—that the White Paper may give some hints about how the Government will put in place their enhanced equivalence regime, and the proposals for that, which the Chancellor mentioned in a speech at a different Mansion House event just recently. So I hope that we will hear some news on that in the near future.

Let me go back to the idea of free trade arrangements and free trade agreements. The Treasury Committee had the privilege of going to Washington in April and we met a number of American free trade or trade arrangement negotiators. Everybody I spoke to was excited about doing a deal with the United Kingdom, which is good news. Why were they so excited? Because they told us, frankly and openly, that they can dictate the terms they want, they will get whatever they want and any agreement will give their producers unfettered access to our markets.

We have to be careful, because no one is asking the right question. Of course people want to do deals with us; why would they not want to? The question is this: on what terms of trade will those deals be done? If someone can tell me the answer to that question, I will happily sit down and conclude my remarks now.

Customs and Borders

Chuka Umunna Excerpts

Thursday 26th April 2018 Commons Chamber

[Mr Kenneth Clarke (Rushcliffe) (Con)]

I will strive to do my best, Mr Speaker.

May I begin by congratulating the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), the other Chairmen of the Select Committees and the Liaison Committee on obtaining this debate and on tabling the motion? It is remarkable how little attention Parliament has been allowed to pay to the momentous events that are taking place at the moment and that will certainly take place over the next few months, which have a profound importance for the future health of our economy and the standing of this country in the world.

At the moment, Cabinet members are trying to agree among themselves their negotiating position, and those in the shadow Cabinet are trying to reach an agreement among themselves on their response. Meanwhile, events are moving on, and I think the House of Commons should have more opportunities to give its views, exercise influence and debate a substantive motion every now and again, not just a motion that has already been dismissed, in the curious way we do in this Parliament, as somehow not legally binding and therefore one that need not be regarded as important.

I have often agreed with the right hon. Lady in the past, but I do not think I have ever heard her make a speech in which I agreed with just about every sentence she uttered. That will enable me to respond to your request, Mr Speaker, because she said it all with great eloquence and there is absolutely no point in my simply trying to repeat all of it or anything like all of it. The only thing I disagreed with is that she revised—no doubt for party reasons—the strange conspiracy theory that trade deals with America might involve privatising the NHS. I have no doubt that someone will try to explain the logic of that argument in the course of this debate. However, I totally agreed with everything else she said.

That is rather surprising, because everything the right hon. Lady said was in line with what has always been the official, mainstream policy of the Conservative party throughout the first 50 years of my membership of it. Some of my colleagues seemed to have a strange conversion—like St Paul on the way to Damascus— about two years ago, but I am afraid that the light did not strike me.

This debate bodes well for what needs to emerge. Many of us in this House have argued for some time for a cross-party convergence, in the national interest, so that this House can make sure that no damage is inflicted by the consequences of our leaving the European Union, or—to be more precise, I am afraid—so that we can limit that damage so far as possible.

The underlying point is clear: the economy of this country and, to an extent, those of other European countries, will be damaged if a sudden decision is taken to erect new barriers at the border between the UK and our major trading partners.

[Chuka Umunna (Streatham) (Lab)]

rose—

[Mr Clarke]

I will give way in just a second. There are no advantages in introducing tariffs to European trade, which I do not think anybody wants to do, or new customs procedures and processes, and there are no advantages in producing regulatory differences between our market and the European market. If people insist on having a new free trade agreement, it should include, and as far as possible replicate, the arrangements that the customs union and the single market give us now. If any hard-line Eurosceptic wishes to get up and say why it is positively in the British interest to have new customs procedures, and that we want more lorry parks at Dover and wish to delay the lorries carrying goods one way and the other, I would be interested to hear it. I shall turn in a moment to the main argument—indeed, as far as I am aware, it is the only argument—that most of them ever give for leaving the customs union. First, I give way to the hon. Gentleman.

[Chuka Umunna]

I am grateful to the Father of the House for giving way. He has served in this House for 48 years, if I am not mistaken, and served in a number of Governments. He will know that this Government have been advised by their own officials that leaving the single market and the customs union will make this country poorer. In all his time in this House, can he think of any Government who have knowingly taken a decision of this gravity that would make the country poorer? Can he think of any example of any Government he has seen do that?

[Mr Clarke]

Not deliberately—but accidentally, several times. [Laughter.] The hon. Gentleman makes reference to my great longevity, which is the one non-controversial feature of my presence in this House. Practically all my old friends from several Governments are now ennobled and in the House of Lords, where they are debating these very matters. Actually, all my colleagues who have served in Governments during my time—particularly under Margaret Thatcher and John Major—who are still with us and in the House of Lords are voting in line with this motion. They are of the same opinion, because is it is utterly unprecedented for us to get into a position of this kind.

The only argument—certainly the only one the Prime Minister ever uses—for leaving the customs union is that we can have trade agreements with the rest of the world. We also refer to “a customs union”, for reasons that have been explained; it would be a replica of the present customs union. It is quite right to say that, in the customs union, we do not have total freedom to negotiate. We have a common tariff barrier around the customs union, and no member can punch holes through it and start letting in goods from various markets under different arrangements. Once anyone started to do that, it would be necessary to stop the goods seeping through. A great deal of work is being done at the moment, as I understand it from following the leaks in the newspapers and talking to my contacts among those involved, to try to find a way to achieve something similar that would be acceptable. We will have to see how that goes.

It has already been said that, for over 40 years, Governments of both parties in this country who essentially believed in free trade, and who found that Britain gained ever more advantages from developing a free trade climate, have been extending free trade through our membership of the European Union. First, we had the common market—the customs union—and then we added the single market to it, removing all the regulatory barriers. Then we encouraged EU agreements with an ever-increasing number of countries, which reduced the barriers yet further in all those markets around the world. Indeed, my right hon. Friend the Member for Wokingham (John Redwood) has said that this helped us to make progress in the rest of the world as well. Not only have we participated in that but, in my opinion, British Governments have been the most influential and leading advocates of that approach inside the European Union.

It is not true to say that we have been an isolated, powerless member, ignored and penalised by the others. I believe that on issues of the economy, on liberal economic policy and on trading policy, the United Kingdom has been the leading influential member in Europe, and I think that was probably as true under the Blair Government as it was under the Thatcher and Major Governments. We were responsible for the single market. All the way up to the Cameron coalition Government, we were in the lead in Europe in pressing for the EU agreements to be extended to other countries.

I do not remember even Eurosceptics bothering to raise much objection to that policy. Even during the referendum, I did not hear any Brexiteer, including the ones I debated with, saying that they wanted more protectionism or that they wanted to withdraw from all that. Dan Hannan is one of the most articulate advocates of the Eurosceptic cause, and I debated with him twice in town hall settings during the referendum. I always got the impression that he was in favour of the single market. Again it is important to stress that it is possible to leave the European Union and to stay in the single market and the customs union. There is no constitutional or legal barrier to that happening, and the Commission has made it plain that it could be on offer. However, if we are not going to do that—for reasons that I do not understand—we will have to replicate it pretty well.

Spring Statement

Chuka Umunna Excerpts

Tuesday 13th March 2018 Commons Chamber

[Chuka Umunna (Streatham) (Lab)]

I cannot believe that the Chancellor did not have more to say about the NHS in this statement. The NHS in my area is not just in crisis, but at breaking point. He refers to putting an extra £4 billion into the NHS in the current financial year, but if we extrapolate what the OBR says that the NHS will need just to keep current standards of care going and to meet rising demand, we will need at least £30 billion extra going into the NHS by 2022-23. We need a solution that can subsist across Governments of different persuasions, so will he meet the demand that the hon. Member for Totnes (Dr Wollaston) and others across both Houses have made for a proper, cross-party convention on how we put our NHS on a sustainable footing? Secondly, will he support the suggestion of the former permanent secretary of his Department for a proper, hypothecated NHS tax to help to give it the funding that it needs?

[Mr Hammond]

I suspect that now is not the moment for a long debate about the structural funding challenges of the NHS, but the hon. Gentleman is right. We have an ageing population. Technology is driving an ever-wider array of interventions that can and should be made to support people with medical conditions—particularly chronic medical conditions—and we have to look at how to ensure that our NHS remains sustainable in the future. Of course we are looking at that issue. I will not give him a commitment today at the Dispatch Box on how we will do that, but it is absolutely something that we need to do. I very much hope, as he suggests, that this could be done on a serious, cross-party basis, but I fear that his Front Benchers would not be able to resist the temptation to try to play politics with any such serious discussion.

Economy and Jobs

Chuka Umunna Excerpts

Thursday 29th June 2017 Commons Chamber

[Chuka Umunna (Streatham) (Lab)]

I congratulate those who have given maiden speeches. I rise to speak to amendment (g), which stands in my name and the names of my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) and many other Members, on the biggest economic issue of our time—Brexit.

I am proud to represent the borough that scored the highest remain vote in the country. In my seven years in this place, I cannot recall any issue provoking such a strong and emotional reaction from my constituents, particularly the young, who feel that last year’s referendum robbed them of opportunities in the future that others have enjoyed and will now be denied to them. I accept the result of the referendum, but whether people voted leave or remain, it is clear from the election that the idea that there is one way of withdrawing from the European Union is dead in the water. The Leader of the Opposition is absolutely right to say that we do not need to withdraw in a way that destroys people’s jobs. My right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer) has already powerfully made the case against leaving without a deal and highlighted the disgraceful treatment of EU citizens.

I therefore want to focus my comments on why I believe that membership of the single market is important. In my view, access to it is both different from and inferior to membership. If we leave the single market, whatever the level of access negotiated, working people across Britain will be worse off and revenue to the Exchequer will plummet. There is a clear economic argument for this. The Institute for Fiscal Studies has forecast that leaving the single market could cause a £31 billion hit to the public finances, making it all the more difficult to end years of austerity.

But above all, for me, there is a clear social justice argument. The single market is more than a free trade zone. It provides a framework of rules that protects people from the worst excesses of capitalism and unfettered globalisation. If we have mere access to the single market, we are talking about leaving this framework of rules. These are EU laws that outlaw discrimination in the workplace, give us a multitude of rights at work, produce regulations to protect our environment, and give protections to consumers. Let’s get real about this. Some say that we could have all these things on our own—that we do not need to be part of a single market. However, large multinational companies work across borders to maximise their profits and reduce these protections, and one national Government cannot take on the power of these people alone. We need only look at the example given this week by the European Commission in slapping a record £2.1 billion fine on Google because it has been seeking to rig the marketplace in its favour. In the end, the social justice arguments are clear.

There are three main arguments advanced against this. The first argument is that we cannot restrict immigration while being in the single market. That is rubbish. We can restrict immigration now, but we choose not to. The second is that the state aid rules will stop us having proper industrial strategies. Tell that to Germany, which has an investment bank, or France and the Netherlands, which use procurement to protect their industries.

The final issue is that of sovereignty and of us being a rule receiver and not making the rules. If we want to access the single market, we will have to comply with its rules. If we are a member, at least we have influence. I say to the Government: yes, they can look at other counties—Norway and the rest—as a guide, but we are the United Kingdom. We are the fifth biggest economy in the world, the second biggest military power, the home of Shakespeare and we created the world wide web. Let us be ambitious and get the best deal for future generations in this country.

Points of Order

Chuka Umunna Excerpts

Thursday 8th December 2016 Commons Chamber

[Mr Speaker]

I am grateful to the hon. Gentleman for his courtesy in giving me advance notice of his intended point of order. I have a twofold answer. First, every Member of this House is responsible for the veracity of what he or she says in it, and it is incumbent upon a Member, upon discovery of a mistake, to correct it; that applies to Ministers as it applies to anybody else. Secondly, the hon. Gentleman will understand why I do not wish to delve into the detail of the matter, and I certainly do not seek to adjudicate between the hon. Gentleman making an accusation and any Minister who might seek to defend himself or herself against it. All I would say, perhaps delphically, is that what the hon. Gentleman has said about a political motivation and what the Minister has said are not necessarily mutually exclusive.

[Mr Chuka Umunna (Streatham) (Lab)]

On a point of order, Mr Speaker. My point of order is not dissimilar to the previous one. Mine relates to the response given by the Department for Transport to the urgent question tabled on Monday by the hon. Member for Brighton, Pavilion (Caroline Lucas) in respect of Southern rail. My hon. Friend the Member for Dulwich and West Norwood (Helen Hayes), the right hon. Member for Carshalton and Wallington (Tom Brake), who is present, and I asked the Minister in question whether the Government’s intention was still to devolve rail commuter services to Transport for London. We were not given any answer. However, as my hon. Friend the Member for Hammersmith (Andy Slaughter) has just said, clearly the Secretary of State for Transport has already made up his mind about that on the basis of party political reasons, and, secondly, having provided no answer, we then found it in the Evening Standard the day after.

I know you, Mr Speaker, place a premium on Ministers coming here and giving information to this House when questions are asked, not providing it in the newspapers afterwards. Frankly, I am utterly exasperated at this, because my constituents will take grave exception to Ministers playing party politics with the misery they are facing day in, day out on this line. I would be very grateful for your guidance, Mr Speaker, on how we can ensure Ministers give the right information to this House and do not fail to give us the information we require.

[Mr Speaker]

I am grateful to the hon. Gentleman for that point of order, and of course I remember well the exchanges to which he refers as they took place only three days ago. My off-the-cuff response is twofold. First, the absence of comprehensive answers to questions posed, under Governments of a variety of complexions, is not without precedent. Secondly, it is difficult to know—and it is not for the Speaker to judge—at what point a Government have decided on a policy and decided to communicate it. However, it does seem a tad strange if something is not communicated in the House in response to a specific question but is then communicated to the media a very short time afterwards. As I have said, it is not for me to judge in each case, but I really do think that if Ministers wish to avert the potentially embarrassing scenario of another urgent question being tabled on the same matter, with the possibility of a Minister having to come to answer it a second time, it would be wise for them to factor that consideration into their calculations of how to conduct themselves.

Leaving the EU: Financial Services

Chuka Umunna Excerpts

Thursday 3rd November 2016 Commons Chamber

[Liz Kendall]

I agree with the hon. and learned Lady, and I will come on to that point later in my speech.

As well as playing a crucial role in our domestic economy, the UK’s financial and professional services have an unrivalled reach and influence across the globe. The UK is the world’s leading exporter of financial services. We have the world’s fourth largest banking sector, third largest insurance industry, second largest fund management sector, and second largest legal services industry.

Many people believe that the British economy is too dependent on financial services and that, despite the significant number of jobs outside the City, that predominantly benefits London and the south-east. I agree. I have long argued that we need to rebalance our economy, develop a modern industrial strategy, and devolve power to our cities, towns and counties to boost jobs and growth in every region, in every part of the UK.

However, strong and effectively regulated financial services are crucial. They directly create jobs and growth, and support employment in related sectors such as legal and accountancy services. They are the bloodstream of the wider economy, pumping money through the country by lending to local businesses. They attract huge levels of inward investment, including about £100 billion over the past decade—more than any other sector—and they are crucial for our pensions and mortgages, and for funding the public services on which we all rely. That is why I am so grateful to the Backbench Business Committee for granting today’s debate, because the decision to leave the European Union has serious implications for the future of this vital sector.

Membership of the single market has brought huge benefits. In particular, it has entitled financial services to use the passport—the mechanism that gives companies the legal right to provide services across the EU, without having to obtain separate authorisation from other member states. Those passports are the foundation of the single market for financial services, and they are essential for investment banks and international insurance companies. Many are now deeply concerned about losing their passporting rights, but I am afraid that some leading hard-line Brexiteers have poured scorn on the idea that we need passporting at all and say that third-country equivalence will do.

Equivalence is when the European Commission recognises that a country’s rules and oversight of a specific area of business are as tough as its own. It is true that some countries outside the EU have been granted equivalence in some areas of financial services, but the Commission is under no obligation to grant it. It can also take years to negotiate, be time-limited, and withdrawn at short notice, and it does not cover areas that are crucial for UK financial services, such as insurance, bank lending and bank deposits.

The new Under-Secretary of State for International Trade and envoy for financial services—I am disappointed that he is not here today—admitted the problems with equivalence in his recent interview with Bloomberg. He said that the UK will probably lose its current legal rights to provide services in the EU after Brexit, and that equivalence will not be “good enough”. He told Bloomberg that the Government want a better version of equivalence, but that in return we may have to accept future EU regulations handed down from Brussels. The problem with that is that we will not have a seat at the table when the EU decides how to regulate our financial services. We will therefore lose our ability to influence regulatory decisions for the better.

The risks of losing our membership of the single market and our passporting rights for financial services are clear. While passporting is permanent, equivalence is precarious. The UK will move from being a rule maker to being a rule taker, and that is not what our financial and professional services want. Although they may hope for the best, they must plan for the worst, and they cannot wait until the last minute to find out what deal they might eventually get. That would not be right for their business, their employees or their customers, who expect them to take action to mitigate any potential risks now. It takes three to five years to move operations to a different country. That is why most international banks, many asset fund managers and other financial services are now working out which operations they might need to move to ensure that they can continue to service their customers, how best to do it, and by when they should do it. The chief executive of Morgan Stanley has said:

“It really isn’t terribly complicated. If we are outside the EU and we don’t have what would be a stable and long-term commitment to access the single market then a lot of the things we do today in London, we’d have to do inside the EU 27”.

Other countries have not been slow to try to exploit the uncertainty. France and Spain have already launched campaigns to lure companies to Paris and Madrid after Brexit. The more likely risk is that some jobs will move to Dublin, Luxembourg or Frankfurt, and even more will move to New York or Asia, unless the Government get their strategy right.

The impact of losing passporting rights and the risks of relying on so-called equivalence are not the only major worries for our financial services. They are also deeply concerned about the Government’s plans for freedom of movement.

[Mr Chuka Umunna (Streatham) (Lab)]

I congratulate my hon. Friends the Members for Leicester West (Liz Kendall) and for Nottingham East (Chris Leslie) on instigating this excellent debate. Of course, people want financial services to make a bigger contribution to the Exchequer, but they already make a massive contribution, which is why it is right to have this debate.

In respect of the point that my hon. Friend the Member for Leicester West just made about the benefits and other issues beyond passporting, the desire of other EU member states to take part of the City’s market is illustrated by the fact that we have already had a tussle with the European Union over the City’s role as the clearing house for euro-denominated transactions. That has already been the subject of court action. If we leave the single market, it will not simply be a question of access; the likelihood of our losing the ability to be the clearing house for euro-denominated transactions is only likely to increase.

[Liz Kendall]

My hon. Friend puts that point extremely well. There are a huge number of risks on the issue he raised as well as on access to services, but the Government have so far had virtually nothing to say. Businesses cannot wait to get that certainty. Their regulators, their boards, their customers and their clients want to know what will happen. This will have a huge knock-on effect on the rest of the economy.