Government’s EU Exit Analysis

Seema Malhotra Excerpts

Wednesday 31st January 2018 Commons Chamber

[Hilary Benn (Leeds Central) (Lab)]

It is a great pleasure to follow the right hon. Member for Broxtowe (Anna Soubry), and I echo what she said to you, Mr Deputy Speaker, on behalf of all of us in the Chamber about seeing you back in your place. We feel for you enormously.

Such is the interest in our debate today that we have been joined by a robin—[Interruption.] Not that Robin—I was thinking of the other one, which has been hopping around the Gallery.

Well, well, well, this is all rather familiar. However, as well as the despair expressed by the right hon. Lady, I feel a growing sense of puzzlement. Let me give Members just a little history. We were led to believe in the first instance that the Government had been carrying out assessments of the impact of Brexit on different sectors of the economy. Then we were assured by the Secretary of State that they had not. Now we discover that, in fact, they have, although clearly those are not the same assessments we had mistakenly been asking for before. If I understand it correctly, they are now the assessments that will be shown to Cabinet Ministers in the locked room over the next week or so.

I want to say something about what the Minister’s hon. Friend—the Under-Secretary of State for Exiting the European Union, the hon. Member for Wycombe (Mr Baker)—said yesterday. We on the remain side need to be honest and acknowledge that forecasts have been made that have proved to be spectacularly wrong. The right hon. Member for Broxtowe just referred to a forecast by the International Trade Secretary, whose precise words were that a post-Brexit free trade deal with the EU should be the “easiest in human history”. In 2016, the Secretary of State for Exiting the European Union forecast that by September this year, the UK

“can negotiate a free trade area massively larger than the EU.”

Well, that forecast was wrong too, and then there has been the repeated assertion by many Ministers, including the Prime Minister, that no deal is better than a bad deal. All of us know that is nonsense, because no deal is the worst possible deal of all, which merely proves that when it comes to talking about inaccurate forecasts, some Ministers live in very, very vulnerable greenhouses.

If Ministers in the Department do not trust any of the forecasts, it prompts the question: why did they bother to commission them in the first place? I see that the Under-Secretary of State for Exiting the European Union, the hon. Member for Wycombe, has tried today to soothe the no doubt ruffled feathers of his civil servants with a tweet—I do not habitually follow his tweets, but they were drawn to my attention—saying that

“I still love them and my critique is of economic method, not individuals”.

I am sure that will be of great reassurance to hard-working and professional civil servants.

Then there is the very perplexing question that it would be good to hear an answer to. What confidence should we have when the Minister said yesterday from the Dispatch Box that we do not need to worry about the gloomy forecasts, because the very same analysis shows that under every one of them, the British economy would continue to grow? How do we know that that forecast is true if it is being produced by the same people whom the Minister said from the Dispatch Box always get their forecasts wrong? It is a farce—it is a Whitehall farce.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

My right hon. Friend just pointed to the extraordinary circumstance whereby we see Ministers against civil servants, and I have never seen that situation in my lifetime. Does he not agree that at the heart of this is honesty and transparency for Parliament and the public in the most important debate that we will have for generations?

[Hilary Benn]

I agree absolutely. Indeed, I made the point yesterday about the importance of transparency and about a lack of transparency not being in the national interest. I gently say to Ministers that trying to have a go at people who are asking questions about what analysis has been done and what it shows, and attempting to suggest that all of them are trying to undo the referendum result, is an unwise approach. I think it reveals a great defensiveness and a lack of confidence on the part of Ministers about the position that they have put the Government in.

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[Emma Reynolds (Wolverhampton North East) (Lab)]

As ever, Mr Deputy Speaker, it is a pleasure and a privilege to serve under your chairmanship. It is also a pleasure to follow the right hon. and learned Member for Rushcliffe (Mr Clarke).

In the referendum, people were asked to decide whether or not we should leave the European Union. They were not asked about the form that Brexit should take; that was not on the ballot paper. However, as was pointed out by my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer), the choice now is about how we are to leave the European Union. There are many different options and models. We need to secure the best possible deal to protect people’s jobs and livelihoods, and we therefore need to pursue policies based on evidence, not ideology.

Let me say gently to Ministers that the debate which took place in our country about the EU referendum was one of the most divisive that I can remember. It divided the country pretty much straight down the middle. It divided cities, regions, rural areas and towns. It divided generations, and in some cases it divided families. I will admit that it divided my family: close family members voted to leave the EU, and we had many robust debates about it, although thankfully we did not fall out over it in the end.

Surely the role of the Government in the 19 months since the referendum should have been to try to unite the country again, to bring the country together, and to stand above the fray and do the right thing, rather than getting their hands dirty in the fray and levelling accusations at Members. I say to Ministers—not the thoughtful Minister from whom we heard today, but perhaps the Minister who spoke yesterday, the hon. Member for Wycombe (Mr Baker)—that they should not question the integrity of Members of this House. I see it as my duty, in representing the people of Wolverhampton North East, to ensure that leaving the European Union does not make them poorer. I will hold to that very firmly, and I will not be cowed by Ministers or any other Members who tell me that I am not acting in the national interest.

Some of the extremists—or Brextremists—on the Conservative Benches advance the same arguments day after day, week after week. If any of us dares to question the mess that the Government are in, we are told that we are acting against the national interest. If we ask what impact a certain model or option for Brexit will have on our constituents, we are told that we are betraying the will of the people. Ah—the other Minister, the hon. Member for Wycombe, has entered the Chamber at a very appropriate time.

If economists, or any other trade experts, warn about the consequences of leaving the customs union or the single market, they are told that they are always wrong and it is rubbish. I am afraid that we are descending into a position in which a Government are making decisions solely on the basis of ideology, and not on the basis of evidence.

[Seema Malhotra]

My hon. Friend is making a very powerful and passionate speech. The report appears to highlight the fact that the biggest negative impact comes from the UK’s decision both to leave the customs union and to leave the single market, neither of which we have to do if we leave the European Union, and the fact is that both decisions were made without proper debate, scrutiny and the presenting of evidence in the House. Is that not interesting?

[Emma Reynolds]

I agree with my hon. Friend. As the right hon. Member for Broxtowe (Anna Soubry) said earlier, those options were taken off the table soon after the referendum result. They were not debated very much in the House. There were no impact assessments, or economic analyses, whatever the difference between those may be. There was no discussion about the impact of leaving the customs union and leaving the single market. What will be the impact on the car industry in our country? What will be the impact on Jaguar Land Rover, which employs thousands of people in my constituency, and on Honda, whose representatives gave evidence to the Business, Energy and Industrial Strategy Committee? They said that if we left the customs union, the delays at the border would cost hundreds of thousands of pounds, and could lead to job losses. Why are we not listening to those people?

When the Secretary of State appeared before the Exiting the European Union Committee, we asked him about the automotive sector, and about the evidence presented to us by businesses. He said that

“existing trade associations tend to reflect the existing interests of existing factories, businesses and so on. They tend to be small-c conservative. In other words, they support the existing trade and do not think too much about future trade.”

Wow. Gosh. So we should not even bother to listen to the existing factories and existing businesses that employ tens of thousands of people throughout the country. Ideology will see the position in its own way. That is what we have been reduced to. If we follow the argument to its logical conclusion—my hon. Friend the Member for Wirral South (Alison McGovern) made this point—why should we bother to have the Treasury? Why should we bother to have a Budget? Why should we bother to set up the independent Office for Budget Responsibility? If we are going to rubbish all the experts all the time, we do not need to listen to anyone; we can simply follow our own ideology to its logical conclusion. I cannot believe that we have come to this, but we have.

Let me say this to the Government. We need a better analysis from them—a proper analysis—of the impact on the car industry of leaving the customs union. I am also very concerned to read in the leaked reports about the impact on my own constituency and my own region, the west midlands. This is a serious point. I want to know what more is behind the analysis that suggests that the midlands, Northern Ireland and parts of the north will be hardest hit, and I also want to know what exactly is the solution to keeping the border invisible between Northern Ireland and the Republic. When the Select Committee was in Dublin last week, we were told that the Government proposed that regulatory alignment, as agreed in December, would apply to 142 areas, not six, as the Secretary of State told the Committee.

I am afraid that the Government need to take this issue much more seriously. I am sick of the blunder. I am sick of the arrogance that tells us that everything will be okay. Where is the evidence that the trade agreements that the Government want to forge with other countries around the world will replace the jobs and the other benefits of the trade that we already have with our nearest neighbours in the European Union?

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[Rachel Maclean]

I thank my right hon. Friend for that intervention. Absolutely: when we have spoken to businesses in the Select Committee hearings, of course they want certainty, but the point I am making is that it cannot be provided, whether it is Brexit or not, in any economic situation to the extent that some people seem to want.

[Seema Malhotra]

Does the hon. Lady not agree, however, that there is a difference between uncertainty in a macroeconomic climate and legal certainty about how we may be trading with our neighbours?

[Rachel Maclean]

I agree that there are various areas where uncertainty can exist, but there is legal uncertainty when a business enters any new market or develops any new product. That always exists and businesses need to take that into account. The debate today seems to be about the need to provide certainty for businesses. It would be very desirable to provide certainty, but it cannot ever be done in quite the way suggested by forecasts and economic analysis.