Leaving the EU: Economic Impact of Proposed Deal

Debate between Mel Stride and Ian Blackford

Wednesday 20th February 2019 Commons Chamber

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

(Urgent Question): To ask the Prime Minister if she will make a statement on the economic impact of her Government’s proposed deal for the UK exiting the EU.

[The Financial Secretary to the Treasury (Mel Stride)]

At the end of November, the Government published our analysis that assessed the economic impact of leaving the European Union. It not only included an analysis of the Government’s negotiating position, as set out in the July 2018 White Paper, but went further still and considered three other scenarios: a free trade agreement, a European economic area-type relationship, and a no-deal scenario.

Specifically, the analysis showed that the outcomes for the proposed future UK-EU relationship would deliver significantly higher economic output—about seven percentage points higher—than the no-deal scenario, which would result in lower economic activity in all sector groups of the economy compared with the White Paper scenario. That is why we should pass the deal, to avoid no deal and support jobs and the UK economy.

In publishing the work, the Government delivered on their commitment to provide an appropriate level of analysis to Parliament. In addition, the House has had plenty of opportunity to debate both the analysis and the deal that is on the table. As the Prime Minister has said, we will bring a revised deal back to the House for a second meaningful vote as soon as we possibly can.

In the meantime, it is right that that the Government are afforded the flexibility and space to continue our negotiations. That is because the agreement of the political declaration will be followed by negotiations on the legal text. The UK and the EU recognise that that means there could be a spectrum of different outcomes. We need to approach the negotiations with as much strength as possible. The focus must now be on the future, planning and prioritising that which matters.

Let me remind the House that we will have an implementation period, a new close relationship with the EU and, crucially, the ability to strike trade deals around the world. We are bringing back control over our money, borders and laws to mould a prosperous and ambitious new path for our country, and on our terms. No matter what approach we take, the UK economy will continue to be strong and grow into the future.

[Ian Blackford]

With respect to the Minister, this was of course a question to the Prime Minister, and it is the Prime Minister who should be answering. This is a matter of the utmost importance, because this House is going to be asked to vote on the Prime Minister’s deal. The specific question I asked was about the economic analysis that the Government have done on their deal. It is quite clear from the Minister’s answer that the Government have done no analysis on this deal. On arguably the most important matter that this House has voted on since the second world war, we do not have an economic impact assessment from the Government. It is, once again, this Conservative Government treating this House and the United Kingdom with contempt. It is a disgrace that the Government have continued to duck and dive in respect of their responsibilities.

Economists are clear: the Prime Minister’s deal is set to hit GDP, the public finances and living standards. Analysis published by the London School of Economics estimates that

“the Brexit deal could reduce UK GDP per capita by between 1.9% and 5.5% in ten years’ time, compared to remaining in the EU.”

The National Institute of Economic and Social Research has warned that

“if the government’s proposed Brexit deal is implemented, then GDP in the longer term will be around 4 per cent lower than it would have been had the UK stayed in the EU.”

Bank of England analysis states the UK Government’s deal will raise unemployment by 4% and inflation by 2%. The Prime Minister is running feart of the truth, with her Government refusing to admit the damage that her deal will do.

The Government cannot claim that their November document covers their deal. Let us look at the facts. Page 17 of the Treasury analysis looks at the modelled average free trade agreement and states:

“As such, it does not seek to define or model a bespoke agreement.”

But the Prime Minister tells us she has a bespoke deal. The Treasury analysis continues:

“This scenario is not indicative of government policy, as it would not meet UK objectives including avoiding a hard border”

in Northern Ireland.

There we have it in black and white: the Treasury analysis conducted last year does not account for the Prime Minister’s deal. So, I say to the Government, where is the analysis? MPs continue to be expected to vote on the proposed deal without the Government explaining the economic consequences. That is the height of irresponsibility.

The deal would be a disaster for Scotland, taking us out of the EU single market and customs union. We know that up to 100,000 jobs in Scotland are under threat. The Government are sticking their head in the sand. Everyone knows this Government are bringing our economy to its knees. We cannot allow the Tories to drive us off the cliff edge.

No Government can be allowed to bring forward a vote on such a significant matter without an economic assessment. It must be published. Shame on the Prime Minister if she fails to protect our economy; shame on those on the Government Benches if they allow businesses to collapse and jobs to be lost; and shame on any MP, including the Leader of the Opposition, if they march through the Lobby to deliver a deal that secures economic catastrophe.

No Member should believe that there is a binary choice; there is not. This is not a choice of no deal or this deal. Both are bad. Both will plunge our economy into an unmitigated disaster.

[Mr Speaker]

Order. Before I ask the Minister to apply, I very generously did not interrupt the flow of the right hon. Gentleman’s eloquence—or, indeed, for that matter the eloquence of his flow. However, by way of a public information notice, may I say to the House—this is not directed particularly at the right hon. Gentleman, as I have seen this burgeoning phenomenon in recent times—that an urgent question is supposed to be that, not an urgent oration? With whatever rhetorical force and insistence it is delivered, it is supposed to be a question and I have noticed over recent times an increasing tendency on the part of Members who have secured such an opportunity, through the courtesy of the Chair, to launch into a lengthy preamble, sometimes constituting the entirety of their remarks.

For future reference, because in future I will have to cut people off if they abuse the parameters, however inadvertently, it is supposed to be a question; a sentence of preamble is one thing, but thereafter a Member should put a series of inquiries to the Minister on the Treasury Bench. We will leave it there for now. The right hon. Gentleman has made his point, but I know that he will not misbehave again.