EU Referendum Rules

Debate between Chuka Umunna and Kwasi Kwarteng

Monday 5th September 2016 Westminster Hall

[Mr Umunna]

I agree with the hon. Gentleman. I was going to mention his constituency, where he kindly hosted a visit for me. For the record, he represents the area that had the highest leave vote. I represent the area that had the highest remain vote. I wanted to go to see whether we could perhaps heal some of the divisions in society. That miraculously takes me to my first point on the substantial issue and whether we should have a second referendum.

My first point is that, yes, the referendum clearly delivered a decisive result, but it was not a landslide for leave. Different generations voted differently and I certainly saw that in the constituency of the hon. Member for Boston and Skegness. Different areas of the UK voted in different ways, as did different ethnicities. It is incumbent on all of us, given all that I have just mentioned, to see how we can stitch together this fragile democracy of ours. It was very much in that spirit that I made the visit to Boston and that I came to this issue.

The second issue that I want to raise is this. I campaigned all over the country for us to stay in the European Union. I led the Labour In for Britain campaign in London. I was one of the main national spokespeople for Britain Stronger In Europe. However, it would be disingenuous to deny what has partly powered this petition: a split has arisen in the remain camp post the referendum result. Half of remainers think that Britain has voted to leave; that is what the polls show, and now the Government have a duty to carry out its wishes and get the best deal in order for us to leave the European Union. Slightly less but about half—I am sure that many of those here who applauded would fit into this category—think that we should ignore the vote to leave or seek to overturn it by way of the second referendum that we are talking about today. So inevitably what I am going to say will disappoint half the people I have been campaigning with over the last few months.

It is true that a lot of overblown claims, misleading promises and the rest were parroted by the leave campaign. The right hon. Member for Carshalton and Wallington (Tom Brake) said that perhaps there were a few overblown claims on our side as well. However, in the end, the leave campaign won, and it is important that it is held to account now for what follows, because it was the victorious side in the debate. That is why I, the right hon. Gentleman, my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) and the right hon. Member for North Norfolk (Norman Lamb) have set up Vote Leave Watch—to scrutinise what comes out of the deal and to seek to ensure that people are held to account. Frankly, it is as much to give a voice to the 48% who voted to remain as it is for the 52% who voted to leave to see whether promises have actually been delivered. In so doing, we will hopefully try to forge a national consensus and bring the two together.

[Kwasi Kwarteng]

I have just a quick question on the point that the hon. Gentleman made with respect to a split in the remain vote. Given that the remain vote, as polls suggest, is split and given that he is a keen observer of the political scene, does he honestly think that a second referendum held, say, within the next year would overturn the result that we saw on 23 June?

[Mr James Gray (in the Chair)]

I call Chuka Umunna—

Budget Resolutions and Economic Situation

Debate between Chuka Umunna and Kwasi Kwarteng

Thursday 24th June 2010 Commons Chamber

[Mr Chuka Umunna (Streatham) (Lab)]

I have listened with interest to the various speeches made today and I do not think anybody denies the need to reduce the deficit. Neither do I think that my fellow Labour Members think that the answers all lie with government, but the big decisions that we are taking at the moment are about judgment and the direction in which we think economic strategy should go.

I want to pose some questions on those issues, because it is clear, on any analysis, that this Budget is going to hit everybody. My own view, which is obviously not shared on the other side of the House, is that it will hit the poorest and most vulnerable people in society hardest. How can it not, given the figures that we are looking at? The IFS data for 2012-13 leave no doubt of the Budget’s regressive nature. They make it clear for all to see: indeed, the Financial Times said yesterday that

“the result of cuts in government services will be felt more on Nottingham's estates than by the Notting Hill set.”

There has been a lot of talk in the Chamber today about comparisons with the situations in Greece and Canada, but in my view they are false. I think that the most appropriate comparison in many respects is a domestic one, and it was touched on by the hon. Member for Cities of London and Westminster (Mr Field). He is no longer in his place but he made a very interesting speech, in which he compared the present situation with the approach adopted by Geoffrey Howe and Margaret Thatcher. In fact, the Culture Secretary has been talking up the appropriateness of making comparisons with the Thatcher Budget of 1981 and the general economic strategy of that Conservative Government.

There are differences—we are in a different time, and the economic circumstances are not the same—but what is being done with this Budget has strong parallels with what was done in the early 1980s. Geoffrey Howe raised VAT from 8% to 15% in 1979, following an election campaign in which he said that his party had absolutely no intention of hiking up the tax. Today, of course, the Chancellor has raised VAT from 17.5% to 20%, following an election campaign in which he—and his coalition partners in particular—said that they had no plans to increase VAT.

Geoffrey Howe slashed benefits in the 1980s: the 1981 Budget made sickness benefits and unemployment benefits taxable, and unemployment benefit for the over-60s was reduced. The Chancellor today has done similar things today: among many other things, he has cut child benefit and disability living allowance, and reduced tax credits for young parents earning just £15,000 each.

The reactions from the national commentariat are similar too. In 1981, 364 economists signed a letter to The Times warning that the Thatcher Government’s policies would deepen recession and threaten social and political stability. In April this year, 80 economists signed a letter to The Times warning that the current Tory Government’s approach would lead to job losses that would affect spending and confidence and tip us back into recession.

Surprisingly, Washington in some respects took a more cautious approach, then as now. In 1981, just after Geoffrey Howe’s Budget, President Reagan signed the Economic Recovery Tax Act to stimulate US consumption. This month, President Obama wrote to the Prime Minister and other G20 leaders to remind them of the dangers of withdrawing stimulus and engaging in fiscal consolidation too quickly.

What were the effects of the approach adopted by Geoffrey Howe in the 1980s? I can describe what they were in my constituency, in which I am proud to say that I have lived all my life. In April 1981 my mother was out shopping with my sister and me in the middle of Brixton when the riots broke out. I was too young—just two and half—to be able to remember what happened, but my mother remembers it well, and it was terrifying.

Soon after those riots, Lord Scarman was appointed to hold an inquiry into what caused them. It is well known that racism in the police at the time was a major factor, and the rioting was attributed to a loss of confidence in the police among significant sections of the population in my constituency and the other two constituencies in the Brixton area. However, although the report said that

“the social conditions in Brixton do not provide an excuse for disorder”

it added that

“the disorders cannot be fully understood unless they are seen in the context of complex political, social and economic factors”.

The report continued:

“There can be no doubt that”

unemployment

“was a major factor in the complex pattern of conditions which lies at the root of the disorders in Brixton and elsewhere. In a materialistic society, the relative deprivation it entails is keenly felt, and idleness gives time for resentment and envy to grow.”

With regard to the Tulse Hill estate—I have just come from that estate to the House today—it was pointed out that high unemployment, coupled with society’s emphasis on material acquisition, led to both material deprivation and a sense of hopelessness, particularly among the youth. Of course we know what happened after that: unemployment rocketed beyond the 3 million barrier and stayed there until 1987.

[Kwasi Kwarteng]

Is the hon. Gentleman seriously suggesting that riots on the scale witnessed in Brixton in 1981 will come as a result of the Budget?

[Mr Umunna]

No, I am not, but I am seeking to point out what happens when people take a cold, dispassionate and inhuman approach to economics and neglect to consider the consequences of their actions.