Brexit: Economic Forecast

Lord Callanan Excerpts

Wednesday 28th November 2018 Lords Chamber

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

My Lords, the UK will be leaving the EU on 29 March next year. Today the Government published their EU exit analysis. It is not a forecast, but focuses on the long-term impact on the UK’s economy. The analysis shows that the model White Paper scenario would support higher economic output for all sectors, compared to the model “no deal” scenario. This is the best deal on offer for protecting jobs and our economy.

[Lord Strasburger (LD)]

I thank the Minister for that Answer to my Question, if that is what he thinks it was. The Prime Minister repeatedly asserts that rejecting her deal will take us back to square one. That can mean only one thing: that we continue with our current status, which is full membership of the European Union, with all its benefits and with all our current opt-outs. Does the Minister agree with the majority of this House, the majority of the other place, and the majority now of the voting public that square one is a great place to be, and the best option for the country?

[Lord Callanan]

I am sorry if the noble Lord was disappointed with my Answer, but perhaps he has neglected the small matter of the EU withdrawal Act, which was passed by this Parliament—this House and the House of Commons—and legislated for our withdrawal from the European Union as a result of the referendum, which the Liberals also want conveniently to ignore. We are leaving the EU on 29 March next year. I hope that we will leave with this deal, but if we do not, we will leave with no deal.

[Viscount Hailsham (Con)]

My Lords, does my noble friend agree with the Treasury assessment that the United Kingdom’s economic interests would best be served by remaining in the European Union on existing terms?

[Lord Callanan]

I refer my noble friend to the Answer I just gave the noble Lord. We had a referendum on the subject and the country decided to leave the European Union. That referendum was authorised and legislated for by this Parliament, our notification of withdrawal was legislated for by this Parliament, and we have now ratified the withdrawal Act, which legislates for our withdrawal date of 29 March next year.

[Baroness Hayter of Kentish Town (Lab)]

Given that that analysis is based on the Chequers deal and not on the deal that has been negotiated with the EU, when will we have an economic analysis of the deal that is to be put in front of this House, and when will we get the legal advice?

[Lord Callanan]

The agreement of the political declaration will now be followed by negotiations on the legal text. We and the EU both recognise that this means that there could be a spectrum of different outcomes, and have agreed that it should be as ambitious as possible. On the legal advice, my understanding is that there will be a Statement in the House of Commons next week.

--- Later in debate ---

[Lord Lilley (Con)]

My Lords, is it not a myth that there is a conflict between democratic control of our laws and prosperity? In fact, democracy and prosperity go hand in hand, because in a democracy, if the Government do not deliver prosperity, the people can chuck them out. But the EU is not like that. Its principal economic policy, the euro, has been a disaster which has deprived millions of young people throughout southern Europe of jobs, but nobody in the European Commission has lost their job. Should we not be free to have our own laws, not constrained within a straitjacket of uniform laws across the European continent?

[Lord Callanan]

As always, my noble friend makes a powerful point. One of the results of the referendum that I am particularly proud of is taking back control to this country. It delivers control of our immigration policy, our fishing policy and our agricultural policy. Once again, the destiny of this country is in the hands of its elected representatives, which is a good thing.

[Baroness Ludford]

My Lords—

[The Earl of Clancarty (CB)]

My Lords, the original Question was on sectors of the economy. What do the Government think will be the particular effect of the loss of freedom of movement on our service industries with regard to business in Europe?

[Lord Callanan]

The noble Earl is correct that freedom of movement is ending. We are in favour of agreeing a mobility partnership with the EU which will allow the movement of business professionals, tourists, and so on, from which both our economies develop. But there will no longer be freedom of movement as in the original treaties.

[Baroness Ludford]

My Lords—

[Baroness Ludford]

No; I will not give way to a third Tory. Can the Minister tell us whether this is the first Government in history who have deliberately pursued a policy that they know—as the Chancellor confirmed this morning—will make this country and its people poorer? If not, please can he name any other Governments who have acted in such a way?

[Lord Callanan]

I do not think the noble Earl would be happy to be called a Tory by the noble Baroness. This policy will not make the country poorer. On every scenario, this country will continue to grow. A range of possible growth predictions is modelled in this analysis, but of course many other factors can influence economic growth, and this is likely to be a relatively small contributor to the overall economic growth. Of course, what would be truly disastrous would be a Labour Government, who would affect the economic growth of this country. We are proud of our economic record; we have delivered record low levels of unemployment for 40 years, the Government can be proud of their economic record, which will continue.

[Lord Bridges of Headley (Con)]

My Lords—

--- Later in debate ---

[Lord Tebbit]

My Lords, will my noble friend remind the questioner that square one for this country was to be a free, democratic country in which we elected our own Government and could sack our own Government? That is not the European Union.

[Lord Callanan]

I will agree with my noble friend briefly and then perhaps we can hear from the noble Lord, Lord Bridges.

[Lord Bridges of Headley]

As we have heard, a number of my noble friends have been asking whether Article 50 might be revoked and making the case for this. Yesterday, the European Council’s top lawyer argued that Article 50 cannot be unilaterally revoked but would require the unanimous support of all EU member states. Do the British Government agree with the EU on this point?

[Lord Callanan]

I knew I would regret asking the noble Lord to come in on this one. He will be well aware that as the Minister responsible for this matter, I am unable to comment on the ongoing judicial process beyond saying that the UK will not revoke its Article 50 notice.