UK Economy

David Rutley Excerpts

Wednesday 29th June 2016 Commons Chamber

[John McDonnell]

It must be recognised that the trading relationship with India, although growing, is still relatively small. I welcome the negotiations that are taking place, but we know from our experience of the timescale in which trade agreements have been secured over much of the past decade that the process is lengthy, and that when individual states negotiate on their own, they do not necessarily achieve the benefits that they would have secured within a trading bloc.

The simplest explanation for these decisive economic weaknesses is the poor state of investment in the UK. Admittedly, business investment was already in decline before the referendum, but it is undoubtedly falling still further, and, as the press has reported, the ongoing uncertainty alone is enough to deter investment. That fall in business investment is being worsened by the Government’s plans to cut their own investment which, according to current projections, is set to fall by the end of the decade. Without sustained investment—private and Government investment—we shall not be able to address the economic decline that has blighted too much of our country.

[David Rutley (Macclesfield) (Con)]

The hon. Gentleman talks about the need for an industrial strategy. The Government have set out important strategies for key industries such as life sciences, and, of course, for a northern powerhouse to help to rebalance the economy. Given the challenges that we face and the continuing need to rebalance the economy, will the Opposition now get behind the Government’s plans and, in particular, support the northern powerhouse, about which they have been equivocal?

[John McDonnell]

We have welcomed initiatives to try to rebalance the economy; the problem has been the success rate. The investment pipeline that the Chancellor announced several years ago has been less than 20% successful. Five years on, we have seen only £1 billion of the £20 billion that was meant to come from pension funds. The Government announce well, but they do not implement very well. There is too much government by press release rather than by implementation.