UK Economy

Debate between John McDonnell and Bob Blackman

Wednesday 29th June 2016 Commons Chamber

[John McDonnell]

I fully agree. I echo the Chancellor’s statement on Monday that this country is open for business, and Members of all political parties must repeat it time and again to ensure that we retain the confidence of overseas investors as best we can.

We have to recognise that the confidence of international investors has been undermined by uncertainty over the UK’s relationship with the rest of the world. It is regrettable that the current account deficit has not been addressed so far. To address it would have required a restructuring of our economy. We would have needed an industrial strategy to develop and support our key industries. The Government must now produce a comprehensive industrial strategy to support those industries and lay a path to future growth.

[Bob Blackman (Harrow East) (Con)]

Given that uncertainty, does the hon. Gentleman welcome the fact that the Speaker of the House of Representatives has today called for immediate talks between the United States and the UK about setting up a trade deal that will be in place for the US when we leave the EU? Does he also welcome the statements from the Indian Government, who want a trade deal between the UK and India to be arranged immediately so that we can ensure that there is no interruption to the UK economy?

[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.