UK Economy

Wes Streeting Excerpts

Wednesday 29th June 2016 Commons Chamber

[Mr Osborne]

We are going to face some big questions about providing support to the institutions, regions and sectors that have been receiving European Union assistance, most notably the regional support that has been provided to areas such as south Wales, the ongoing support that the EU provides for research in our universities and the support for our farming community. We in the House of Commons are going to have to address all those issues in the coming months and possibly beyond. However, at the moment we remain a member of the European Union—I shall talk about the procedure for our departure in a moment—and the European funding and grants will continue to be made. We are looking specifically at areas where questions have been asked about long-term uncertainty in relation to particular projects, and I will keep the House updated. This is a challenging question, which we have to answer, and we are looking at it very intensively now. But at the moment nothing has changed and we remain a member of the European Union.

That brings me back to the question of trying to resolve as quickly as is practical the uncertainty about the new relationship we are seeking with the European Union and our European neighbours. We need a bit of realism and we need to offer reassurance. It is apparent that the uncertainty will be fully resolved only when we as a country have negotiated an agreement with our European partners on the relationship we now want to have with them. We know what the broad options are. The Government spelled them out and set out the different relationship models over the past few months in the Treasury and Cabinet Office papers that were produced in advance of the referendum. We could join the European economic area, like Norway; we could forge a new negotiated bilateral agreement with the EU, like Canada; we could adopt the Swiss model; or we could rely on World Trade Organisation rules.

As the Prime Minister set out at this Dispatch Box, the Government have established a new unit at the heart of Government made up of some of the best civil servants, reporting to the Cabinet, that will help us as we make that decision. I stress, however, that Members of Parliament and other organisations can feed in to the work that is taking place, so that we have the fullest possible information on the decision that we will have to take collectively as a Parliament on our new relationship with Europe.

My view is clear that we should move towards an arrangement that provides us with the closest possible economic ties with our European neighbours. Close to half of our exports go to the EU and millions of jobs are supported by our trade with the EU. Leading industries, such as car manufacturing, farming and our services industry, are reliant on that relationship, and we should be moving towards an arrangement under which—if we reach it and can negotiate it—the trade of both goods and services, including financial services, is as free as possible. In the meantime, returning to a point I made earlier, UK firms continue to have exactly the same status as any other EU firm. Business continues in the City and elsewhere, including for euro-denominated trading in our financial markets.

However, I am a realist—we have to be realistic about this—and we must acknowledge that we cannot have all the benefits of the EU without accepting any of the costs and obligations. It will be for this Parliament to decide what the accommodations and compromises should be.

[Wes Streeting (Ilford North) (Lab)]

So much of the leave argument was predicated on shifting our focus to the world beyond Europe. If the Chancellor agrees with that assumption, we need to ensure that we can get there. Given that Heathrow expansion would deliver a £16 billion privately financed shot in the arm, up to £211 billion of economic growth—predominantly outside the south-east—180,000 jobs and 10,000 apprenticeships, I urge the Chancellor to commit to giving Government Members a free vote safe in the knowledge that there will be sufficient votes on the Opposition Benches, irrespective of whipping arrangements, to deliver that result.

[Mr Osborne]

We await the work that is being done on air quality around the airport. When we discussed the matter some months ago, people were a bit dismissive, but to be fair to the new Mayor of London, he raised air quality issues during the London mayoral contest that resonated with voters’ concerns—the hon. Gentleman would know that as a London MP. Before Parliament makes a decision, it is important that we have addressed the issues, concerns and questions about air quality. It will be nothing new if I tell the House that the decision will be controversial when we come to take it, so it is important that no one cries foul over the process. We can then make a decision on the merits of the case. People know my view, which is that we need additional runway capacity in the south-east of England, but where that capacity should come from must be a matter first for the Government and then for Parliament.

--- Later in debate ---

[Wes Streeting (Ilford North) (Lab)]

I was going to say that it is a pleasure to speak in this afternoon’s debate, but that is not really how it feels. I am not the baby of the House, but I am among its younger Members, and for the 33 years in which I have been alive I have grown up in a country that is part of the European Union. Part of its character is a confident, open, outward-looking nation that looks to the world with optimism, confidence and strength.

Although I respect the result and the verdict of the voters last week, I cannot disguise my bitter disappointment with the result. It has put this country on a fundamentally different course for this century from the one we were previously on. We have already seen the economic impact of that decision, and we have seen some of the political repercussions of it, too. Probably more worrying than anything else about last week’s result is the sense that our political leaders have yet to find adequate answers to the questions that have been thrown up by the leave vote.

I represent an outer London constituency on the Essex border, and many of the people I represent travel in on the Central line to work in the City of London, and many of them will be worried about the future of their jobs. We have already seen the announcement of thousands of jobs potentially moving abroad into the eurozone, and we hear rumblings about other jobs set to go elsewhere. Communities, including those that voted overwhelmingly to leave, are seeing the consequences of their decisions, with a loss of the inward investment that delivers jobs—whether it be investment in car manufacturing in the north-east or investment to bail out the steel industry in Neath Port Talbot.

Without feeling too bitter about the result or finger-wagging at people who have reached different conclusions, I cannot but say—and am deeply sorry to say—to those who attacked Stronger In and its advocates for prosecuting “Project Fear”, especially those in the House and in the officially designated Leave campaign, that it looks increasingly likely that it was “Project Fact”, whether we are talking about instability in the currency or the markets, or about decisions that have already been made in the space of a few days that will relocate jobs, change people’s lives, and affect communities for the worse.

As far as I am concerned, the Conservative leadership contest cannot come soon enough. I relish the prospect of seeing the hon. Member for Uxbridge and South Ruislip (Boris Johnson) at the Dispatch Box, because I want him—along with his right hon. Friend the Member for Surrey Heath (Michael Gove) and other Conservative Members who prosecuted those arguments—to live up to the promises that were made. I want them to live up to the promise of £350 million for the national health service, the promises about immigration, and every other promise that they made to the British people, which, in good faith, those people believed when they voted leave. This place must deliver accountability if we are to place any trust or any faith in politics.

When those Members assume the reins of power—and some of them are already in that position—they should expect Labour and, I suspect, Conservative Members to hold them to account for the promises that they made. If I had been a leave voter and I found that my job was at risk, or that immigration had not changed substantially in the way I had been promised, or that there was not £350 million for the NHS or anything remotely like it, I would feel very betrayed and let down—and so many of those who are members of my generation or younger do feel let down, because they will bear the consequences of this decision for longer than anyone else.

I cannot recall any other issue on which there has been such an overwhelming economic consensus, among this country’s leading economists and economists around the world, that in the longer term this country will not be as well off as it might have been: not poorer than it is today, perhaps, but certainly not as well off as it might have been. Why should we be concerned about that? If our country is not as well off as it might have been, in communities like the one in which I grew up—in communities like my council estate in the London borough of Tower Hamlets, and other working-class communities throughout the country—it will not be the wealthiest who feel the impact in their pockets, but the poorest.

When businesses do not have as much custom, as much trade or as much inward investment from around the world, it will not be the mighty global players that are affected; they will simply take their business elsewhere. It will be the small and medium-sized enterprises. It will be the hard-working people who take the risk, who take the plunge and set up a business, who work their fingers to the bone, day in day out, to turn a profit and provide a home and an income for their families. Those are the people who will pay the price of this decision. So forgive me, Madam Deputy Speaker, if I feel somewhat angry about that.

[Jeremy Quin (Horsham) (Con)]

I congratulate the hon. Gentleman on his powerful and effective contribution to the debate. I also congratulate him on what he said about airport expansion during the Chancellor’s speech. Whatever our future constitutional position, we shall need to make whatever decisions we can to get the country moving, to show that we have momentum, and to encourage inward investors back into the UK.

[Wes Streeting]

I am grateful for that intervention. In the short time during which I have been in the House, I have been appalled by the extent to which party-political self-interest has slammed the brakes on vital infrastructure decisions to secure the future economic wellbeing of our nation, or even our national security. The Government should allow votes on airport expansion, on our continuous at-sea nuclear deterrent, and on other major, vital infrastructure projects to keep our country safe and prosperous. We cannot continue to allow such crucial decisions to be sacrificed on the altar of party-political management, not least when the attempts that are made appear to be futile.

We are not just seeing a fundamental change in the role of Britain in the EU; I think that we may be looking at the break-up of the United Kingdom. I am thinking not just about Scotland, but about the huge achievement that was made in Northern Ireland, from the Downing Street declaration under John Major to the Good Friday agreement under Tony Blair. The Northern Irish peace process itself could be put at risk because of the way in which this debate has been handled. It is troubling that, days after the referendum, there are still no answers to some of the critical questions that have been asked about how we are to move forward as a country.

[James Cartlidge]

The hon. Gentleman is making a fantastic speech and I agree with the sentiments that he has expressed. Is it not the case that, in the best case scenario, it is inevitable that a huge amount of Government energy and time will be diverted to legal wrangling and other issues? We should be focusing on the huge issues that the country faces.

[Wes Streeting]

I wholeheartedly agree. I came to this House not to spend hours and hours scrutinising changes to the law to protect the rights we already have as members and citizens of the EU, but to advance new ones and to fight for my schools, my hospitals and my public services and to improve the life chances of people in my constituency. I did not come to this House to take part in a grand constitutional convention tinkering at the edges to maintain the status quo, rather than advancing the interests of our nation.

[Stephen Pound (Ealing North) (Lab)]

I am almost reluctant to interrupt my hon. Friend’s flow, which is magnificent, but he mentioned the Northern Irish peace process. May I ask him to comment on the fact that the EU was one of the key components of the Good Friday agreement, just as we worked with Washington and with Dublin? The EU and peace 1, peace 2 and peace 3 are essential components of the architecture of the peace process. The possibility of customs posts from Derry to Dundalk is not some fanciful nonsense; it is a reality. Is he aware of the negative impact that this is having on the people of Northern Ireland?

[Wes Streeting]

My hon. Friend has a great deal of expertise in this area and we take seriously his warnings. I would feel less aggrieved by what he says if it were not for the fact that in the run-up to the referendum these very questions were put to the Secretary of State for Northern Ireland. We were told, “Don’t worry”—which seemed to be the blank cheque; it was said with every promise of the leave campaign—and now we find that we should very much worry.

We should also worry about the reason people voted to leave the EU. Much of it was not about the Lisbon treaty or where decisions are taken. Many people, even with this British Parliament as sovereign as it is today—and as sovereign as it was last week by the way—still do not feel that they have control over their lives and their destiny. I would hazard a guess that when the analysis is done we will be able to map community by community those places that voted leave and those places that have had the hardest time because of the unequal nature of our economy. That should worry us more than anything else. Many people voted leave out of desperation, in the vague hope, in the belief that their circumstances could not be worse than they are today and that our immigration system and the flow of people into this country make them and our economy less well off, rather than better off. That concerns me deeply.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

I represent one of the areas that overwhelmingly voted out. Thirty-six per cent. of my constituents earn the living wage and believe that this decision will increase their salaries, yet 7,000 of my constituents are employed in an industry that is already looking to see what happens next, is unstable and is stopping investment. Does my hon. Friend agree that we have to get strong answers from the Government to protect future investment?

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[Wes Streeting]

We do need those strong answers. We also need to accept that it is not just about our economy as it is today; it is about our economy as it will be defined in the future. This country now faces choices about the structure of our economy and about how to compete in a globalised world. With respect to Members on the Government Benches, it is my belief that there is a risk, under not just the current Government but the next Prime Minister, that the future will be about a race to the bottom, further casualisation of labour—a race to the bottom in terms of wages and terms and conditions —because outside the protection of the single market that is the only way for this country to profit in the way those at the top of society want. That makes me even more worried for our country’s future. That is why we desperately need a change in Government.

More than 100 years ago, working people, socialist societies, friendly societies and trade unions came together to form the Labour party because they knew that the way to improve the lives of working people and their conditions was not by marching through the streets demanding change but by marching through the corridors of power and delivering that. The Labour party has a great history, whether it is the creation of the national health service, homes fit for heroes, the white heat of technology, the creation of the Open University, the introduction of the national minimum wage, or the improvements in education standards that let this council estate boy from Tower Hamlets make it to university and to this place. Successive Labour Governments are the only vehicle for delivering progressive change in this country.

I urge Members of my party to think very carefully about whether we prefer the futility of opposition to the ability to change people’s lives through power. The pursuit of power is not about our careers; it is about the life chances and opportunities of the people the Labour party came into being to represent—and if they do not have confidence in the Labour party and its leadership to be that change, we consign this country to decades of Conservative Government, just as we did before when I was growing up in the 1980s. That should hang heavily on the consciences of the skeleton Front Bench of this party, because until we start providing effective opposition now, that lot will get away with it. That is why we should remember above all else that the Labour party is a cause, not a personality cult, and it is time some people put the interests of the people the Labour party was founded to represent at the forefront of their judgments about their futures and do the right thing so we can get on with taking that lot apart and delivering a Labour Government.

[Huw Merriman (Bexhill and Battle) (Con)]

It is a pleasure to follow the powerful and eloquent speech of the hon. Member for Ilford North (Wes Streeting); I feel somewhat like a dull bank manager following on from his act.

Perhaps unusually, may I welcome not just the subject of the motion, but also the wording of it? I congratulate those on the Opposition Front Bench on bringing this motion forward today.

I must confess that the decision made by the voters of the UK to leave the European Union came as both a surprise and a shock to me. I spent my time holding debates across my Bexhill and Battle constituency so that constituents could hear both sides of the argument and then come to their own conclusion. I never sought to influence their votes one way or the other. This position of balance also permitted me to speak to 25 schools—both secondary and primary—over the last week of the referendum campaign. It troubled me greatly that young children whose parents were originally from the EU were asking if their parents would have to leave the UK or whether Britain would go to war if we left. At least it gave me the opportunity, with balance, to do my best to reassure them.

I would contend that the campaign themes and sometimes extreme scenarios that were being asserted were causing these concerns to be raised and it is little wonder to me that some votes appear to have been irrationally cast. Had the remain side recognised, perhaps in more balanced tones, that there were positive reasons for the UK to leave the EU but even more positive reasons to remain, I wonder whether the UK population would have so readily lined up to give the establishment opinion-makers the thumbs-down.

All this is for historians to deal with in due course. We are where we are and it is my belief that we in this place have to lead from the front and get the best deal for the UK in order to preserve the rights that our population has enjoyed from the EU while delivering the semblance of democratic control which the public have demanded of us through this result.

While I have concerns about the economic implications in the short term, I believe that, with the right civil service negotiation team in place, we can get a good deal from our European partners. I do, however, believe that this will take determination, good grace, hard work, focus and an ability to work with our European counterparts. Thumbing our noses, as Nigel Farage did so disgracefully in the European Parliament this week, not only demonstrates that he should not be let anywhere near this process, but also demonstrates that vitriol and triumphalism rarely bring out the best in negotiation counterparts.

My rationale for this is borne of my experience working at Lehman Brothers over a 15-year period, for seven years with the small team that was unwinding what became the world’s largest bankruptcy. I was running a legal department the day Lehman Brothers went bankrupt. During the speech of the hon. Member for Ilford North, there was a time when I wanted to come over and give him a cuddle, because there was great fear in 2008 just like the fear for his generation that he was describing. There is great fear right now, but I remember that fear back in 2008, from a personal perspective because I had my mortgage on that institution, and my friends and colleagues for many years worked for it. Despite what people say about investment banks, they include not only bankers, but cleaners, secretaries, and people who do not earn a great wage, and they lost not only their job, but their sense of pride and security in that institution.

[Wes Streeting]

The hon. Gentleman is right to mention the support staff and cleaners who make those businesses function, but it is also worth mentioning the fact that, although the people who work in financial services have been guilty of all sorts over the years, including bringing our economy almost to its knees, the financial services sector still generates enormous investment in this country and creates jobs. It would be foolish to allow that great industry to go by the wayside, given all the benefits that it brings and the tax receipts that we invest in public services. We should not let those people off the hook, but we should never pretend that financial services are not an asset to this country.

[Huw Merriman]

I absolutely agree with the hon. Gentleman. There were some who really needed more punishment than they got, while others took a huge amount of punishment, but those services are still a great exporter for UK plc.

The events on that day in 2008 were an enormous shock, and I remember them well. I worked with a guy from another bank—the largest international and commercial bank—who was in control of its legal department. He said he had spent that weekend dealing with Lehman Brothers as it fell over. He then spent the following week dealing with one of the other largest banks as it fell over. The week after that, his own bank fell over as well. Back then, those of us who were there remember feeling that money was just not safe in any financial institution at all. People might be fearful right now, but I ask Members to cast their minds back to 2008 when things felt even more uncertain.

I also ask the House to recognise that, in the past six years, the economy in this country has got better. We have recovered. Who would have thought we would reach a position in which 2 million new jobs could be created? Perhaps the decision on the European Union has been such a great shock because we have once again got used to a form of stability.