Oral Answers to Questions

Kevin Brennan Excerpts

Tuesday 19th July 2016 Commons Chamber

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

7. What assessment he has made of the near-term effect of the outcome of the EU referendum on economic confidence and growth in the UK.

[Kevin Brennan (Cardiff West) (Lab)]

8. What recent assessment he has made of the economic effect of the outcome of the EU referendum.

[The Chancellor of the Exchequer (Mr Philip Hammond)]

While it is clear that the referendum decision represents a shock to the UK economy, thanks to the actions taken over the past six years by my predecessor, the economy is well placed to respond. I will work closely with the Bank of England to provide immediate stability and to maintain confidence in the fundamental health of the UK economy as we prepare for the autumn statement. As further post-referendum economic data are published, the economy’s short-term response to the Brexit decision will become clearer. If further measures are required, they will be announced in the autumn statement.

--- Later in debate ---

[Mr Hammond]

The hon. Gentleman is right; the figures that he quotes are right. The evidence is anecdotal in the early stages, as he would expect. As he would also expect, the initial response to this kind of shock must be a monetary response delivered by the Bank of England. In announcing that interest rates were not to be lowered last week, the Governor made it clear that the Bank is developing a monetary package that will be announced in due course.

[Kevin Brennan]

The Chancellor’s certainty that the purchase of ARM by SoftBank is good for the UK following the EU referendum is not shared by its founder Hermann Hauser, who said it means that

“determination of what comes next for technology will not be decided in Britain any more, but in Japan”.

Why does the Chancellor think that the company’s founder is wrong?

[Mr Hammond]

I suspect that the founder of the company has not had the benefit of discussions with the acquiring company. I have met the leader of the current management team, who are wholeheartedly supporting the purchase by SoftBank. We have achieved some very hard guarantees—these were volunteered without our having to extract them—about the future autonomy of the company, headquartered in the UK, and about its commitment to double the number of UK employees over the next five years. What became very clear from a discussion with the founder and CEO of SoftBank is that it firmly believes Cambridge will be the global centre for developing the internet of things and ARM will play a key role in developing that industry.