UK Economy: Post-Referendum Assessment

Rob Marris Excerpts

Monday 23rd May 2016 Commons Chamber

[Mr Gauke]

The economy is a key issue in the debate and in the choice that the British people will make on 23 June. Today’s analysis is an attempt to assist the British people in making an informed decision, based on the likely consequences of the United Kingdom leaving the European Union. Indeed, many supporters of the leave campaign have been prepared to acknowledge that leaving the EU would at the very least have a short-term impact on our economy and create a shock.

As my hon. Friend said, the analysis produced by the Treasury has been signed off by Sir Charles Bean, the former Deputy Governor of the Bank of England and a distinguished macroeconomist. He said that

“this comprehensive analysis by HM Treasury, which employs best-practice techniques, provides reasonable estimates of the likely size of the short-term impact of a vote to leave on the UK economy.”

It is not only the UK Government who are highlighting the risks of leaving the European Union; the International Monetary Fund, the OECD, the leadership of pretty much every ally we have, business groups, and many respected independent economists have all made it clear that this country would lose out from leaving the EU. However one looks at this debate, we cannot get away from that central fact.

[Rob Marris (Wolverhampton South West) (Lab)]

Unusually, perhaps, I find myself agreeing with a great deal of what the Minister has said. The hon. Member for Harwich and North Essex (Mr Jenkin) tried to rubbish the report and referred to trade agreements. If we were to leave the European Union, we would have to negotiate in very short order trade relationships with the rest of the world, including more than 50 other countries. Rome was not built in a day, and there would be huge uncertainty. As he will know—and as I know from having been in business—one key concern of business is always uncertainty.

At the moment, our economy is in great shape in terms of jobs, but on almost any other indicator—productivity, balance of payments, the housing crisis, investment in infrastructure, and the national debt, which has risen by two-thirds in the past six years—the economy already has red lights flashing, as almost every economist has said. Were we to leave the European Union, that would become considerably worse. I welcome the fact that the Prime Minister and the Chancellor of the Exchequer now recognise that the large majority of the problems we faced in 2008 and onwards were caused not by a Labour Government, but by a world recession. We now need not a Tory Brexit, but an economy that is strong and will remain stronger if we stay in the European Union, but that still needs considerable changes, particularly in investment in infrastructure and skills. Our security, both economic and military, will be strengthened if we remain within the European Union. We should build on a strong economy by investing, not by leaving the European Union.

[Mr Gauke]

The hon. Gentleman’s point about uncertainty is right, and there is clearly uncertainty in the economy at the moment as a consequence of the referendum on Brexit. It is absolutely right that we have that referendum, but such uncertainty can resolve itself quickly on 23 June if there is a remain vote. If there is a leave vote, we clearly face at least two years of uncertainty, and quite possibly longer.

On the state of the economy—this is perhaps where the hon. Gentleman and I may differ—we have taken steps to address the long-term challenges faced by the economy, but there is no doubt that the past few years have been difficult for the British economy. We are now one of the fastest-growing major economies in the world, and our progress over the past six years would be put at risk were we to vote to leave the European Union.