UK Economy: Post-Referendum Assessment

Ian Mearns Excerpts

Monday 23rd May 2016 Commons Chamber

[Mr Gauke]

That is an important point. Anyone who has met international investors who are considering where to locate their European headquarters, for example, will be aware that they value and support membership of the European Union. Without that, it would clearly be harder to attract some of that inward investment. My hon. Friend also raises an important point about whether we would see a recovery. Evidence suggests that there has been a slowing down of investment due to the uncertainty about our relationship with the EU, but that—the Bank of England has supported this view, if not the IMF—there is likely to be a reasonably quick recovery if we vote to remain on 23 June, and we would see the investment coming back without a long-term detrimental impact.

[Ian Mearns (Gateshead) (Lab)]

The north-east is a manufacturing region, and recent analysis suggests that manufacturing is already in recession. Does the Treasury analysis go into the detail of distinctive regional impacts on areas such as the north-east of the shock or severe shock scenarios if we leave the EU? It used to be said that if America sneezes, Britain catches cold, but when Britain catches cold, regions such as the north-east get pneumonia.

[Mr Gauke]

The hon. Gentleman raises an important point. The increase in unemployment would affect every region of the UK, and the north-east of England would not be immune to that. Indeed, as an important exporting region, it might be particularly vulnerable. The Treasury assessment suggests that there would be something like 20,000 more unemployed people in the north-east of England as a consequence of leaving the EU.