Debate on the Address

William Cash Excerpts

Wednesday 21st June 2017 Commons Chamber

[Ian Blackford]

I need to make some progress; I apologise.

We know that a decade of austerity will see the highest inequality since the Conservative Government under Margaret Thatcher. While Tory Members might proclaim cuts to Government spending, they mean real pain and hardship for people across the country. The SNP has consistently opposed austerity and we are offering a credible alternative. Our approach to the public finances would balance the UK budget for day-to-day spending by the end of the Parliament. It would set debt on a downward path and, crucially, free up an additional £118 billion of public investment over the Parliament to grow the economy, safeguarding public services and protecting household incomes—a clear alternative to five more years of Tory austerity; investment and hope, not more destructive cuts.

Those on low incomes who rely on in-work social security, and the vulnerable and the disabled, face a further £9 billion of additional social security cuts from this Tory Government. There is an alternative. Where Labour has only pledged to reverse less than a quarter of those cuts, SNP MPs will stand against all the further planned cuts to social security. Our pensioners, too, now face real pain from Tory austerity. The Government’s intention to remove the triple lock and raid the winter fuel allowance will hit pensioners hard, at a time when their budgets are hard pressed. In the highlands of Scotland, 77% of pensioners are in fuel poverty. Until we have driven fuel poverty out of our society, we need to make sure that we are standing up for the rights of our pensioners.

[Sir William Cash (Stone) (Con)]

I just wonder whether the hon. Gentleman has factored the Barnett formula into the description that he has given of the finances in Scotland. Given that there is such a catastrophe in the Scottish finances at the moment, is the SNP still insisting that the Barnett formula has to be applied?

[Ian Blackford]

I find that quite extraordinary, because the real-terms cut to the Scottish budget over the last 10 years has been about £2.9 billion and it is simply because of Tory austerity. Yes, we support the Barnett formula, because it is applied on a needs basis. It is interesting that others have wanted to take it away. It is not the SNP who are a threat to the public finances in Scotland; it is those who want to attack the Barnett formula. Let me make it absolutely clear: in any back-door deal that is done with the DUP, if there is any increase in spending in Northern Ireland, which we would of course welcome, that must be reflected in the Barnett formula. Scotland must be protected by any deal that the Conservatives do.

SNP MPs will oppose the removal of the triple lock, so that our pensioners still see the pension that they worked for rise, and we will continue to support the WASPI women in their campaign to secure fairness. The Government must act with speed to address the WASPI issue. The Prime Minister and her Government must reflect on the circumstances that the WASPI women are in and put in place mitigation.

The most startling impact of austerity is the effect it has on children in working families. The incomes of the poorest third of working-age households will fall by 10% over the next four years, driving a further 1 million children across the United Kingdom into poverty. It was no wonder that in the last Parliament the previous Secretary of State for Work and Pensions wanted to redefine child poverty, because the numbers are quite simply eye-watering and shameful. By 2021, more than 5 million children across the UK—a number equivalent to the total population of Scotland—could be living in poverty, in one of the richest countries in the world. Above all, austerity erodes our public services, at a time when we need more than ever to ensure that our public services are well funded and delivering for people in our communities. In this Parliament, SNP MPs will champion our public services.

Over the past 10 years, the SNP Scottish Government have prioritised the health service and we will continue to do so. Our NHS, like health services across the world, faces real challenges. However, in Scotland, patient satisfaction is at record levels. Our hospital A&Es are the best performing in the United Kingdom. Many nurses in Scotland are better paid than in the rest of the UK. Our health service in Scotland will be £2 billion better off by the end of this Parliament. However, we want to go further. If the UK Government chose to increase health spending per head of population in England to the current Scottish level, which is 7% higher, that would mean more money for the NHS, not just in Scotland but across the UK. It would increase the health budget in England by £11 billion more than inflation by 2022, and it would deliver funds to support up to £1 billion of additional investment in Scotland’s NHS.

Ensuring that everyone has a safe, warm and affordable home is central to the SNP Scottish Government’s drive to make this country fairer and more prosperous. Over the last parliamentary term, the SNP Government invested more than £1.7 billion in affordable housing. We are delivering more than 30,000 new affordable homes, and our target is 50,000 affordable homes by the end of this Parliament.

High-quality and well-funded public services, a growing economy with investment in business, and a fairer and more equal country are the alternatives to austerity. Given that they were denied their majority by the public, I had hoped that this Queen’s Speech might signal a Government who were more willing to listen and compromise, but I see scant evidence of that today.

In the last Parliament, the SNP was a real and effective opposition. It was the SNP that led the challenge to the proposed cuts in working tax credits which led to a coalition, here and elsewhere, that forced the Government to change course. It was my friend and colleague, my hon. Friend the Member for Glasgow Central (Alison Thewliss), who championed the campaign against the changes in tax credits for families with more than two children—what became known as the rape clause. We ask the Government again to revisit that issue.

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[Mr Kenneth Clarke (Rushcliffe) (Con)]

It is a pleasure to follow the hon. Member for Ross, Skye and Lochaber (Ian Blackford). I congratulate him on his elevation to the leadership of his somewhat diminished party, and congratulate him particularly on his fortitude in the face of the rather clear setback that his party suffered in the recent general election. I think I share some of his feelings, as my party has also lost some good colleagues. Scotland seemed to have a slightly different election campaign. I took the results in Scotland as a serious rebuff to the Scottish National party’s one central cause of holding another referendum in an attempt to break up the Union of the United Kingdom, and I hope that it is terminal on this occasion. I assure my very welcome new friends from Scotland on this side of the House—[Interruption.] They are secure in my support. I assure them, and our friends in the Democratic Unionist party, that I am a stalwart supporter of the Union, and that, whatever happens in this Parliament, I shall certainly be unswerving in that support.

In England, however, this was a Brexit election. In fact, the public are slightly losing interest in the political bubble’s debate about Brexit, and lots of other issues came into the election, but it was designed as a Brexit election, and I think that history will see it, and this Parliament, as such.

As I am entitled to somewhat less of the House’s time than the leaders of the political parties—quite rightly—I shall confine my speech to the issue of Brexit. I should have liked more time in which to welcome the aspects of the speech made by my right hon. Friend the Prime Minister that reflected, yet again, the liberal social conscience which I know she has, and her deep feeling for those who have not prospered enough during the periods of prosperity that we have experienced in this country recently. She recaptured the spirit of her Downing Street address.

I would also like to debate the national economy. I welcomed the sound principles—in my opinion the only possible principles—that she set out in describing how to tackle and get through the present uncertainties and get back to proper growth in a modern and competitive economy. However, I propose to confine my remarks to what history will regard, whatever happens in this Parliament, as the great, lasting work of this Parliament: what kind of deal we achieve as we leave the European Union.

In case anyone immediately starts to disagree with me on the basis that I am challenging the referendum, I point out that I never accepted that a referendum was a sensible way to proceed on such a huge and complex question. I regard the idea of having a second referendum, in case my side might win on this occasion, as a particularly foolish proposal. I thought this was a parliamentary matter. I spoke and voted against the invocation of article 50. I accept that the majority in favour of invoking it was overwhelming on both sides of the House. For this Parliament, I accept that the matter is settled: we are definitely going to leave the European Union.

We now have to debate what we all agree in principle is the best deal we can obtain for the future special partnership with Europe and our new relationships—political and economic—with the rest of the world. The subject that we will have to consider as the Parliament proceeds was scarcely debated in any sensible way by the national leadership of either side in the referendum, as reported in the national media. Nor, I regret to say, was any particular debate in the general election devoted in any sensible way to the content of a new arrangement.

I could make a very long speech if I addressed every question—again, I have to be selective. We are right to concentrate at this moment, as the debate is beginning to do, on our economic relationships with the European Union, and the prospects for trade, investment and jobs. That is obviously most compelling. We must leave for a later stage the dozens of important questions that will arise on security, international crime, environmental standards and so on. At this moment, we are interested in how we will trade with Europe and what the relationships will be.

It is important that we do that because Brexit is already, through its short-term effects, making many people in this country, particularly the less well off, considerably poorer. The immediate effect of the vote was to cause a significant devaluation of sterling. International investors decided that the attractiveness of sterling assets was much less and that the prospects of the British economy were seriously damaged. The pound has fallen and stayed low, and that is feeding its way into inflation, which is exceeding the low wage growth in the economy. Investment is also stalling, so we are seeing a serious slowdown in growth and a drop in living standards, particularly among vulnerable communities. If there are those who believe that eventually we can get a deal that can reverse those things, the sooner we reach a sensible agreement on that and my right hon. Friend the Brexit Secretary pursues and achieves it, the better.

[Sir William Cash]

I just wondered, in the light of the extremely sensible remarks that my right hon. and learned Friend has made so far, whether he would follow up what he said on television at the weekend about not really seeing any reason why we should not stay in the single market. I think he said that he thought we should not leave the single market or the customs union. Does he want to say that now in the context of leaving the European Union as well?

[Mr Clarke]

I am about to address that very issue—it is one of the principal contents of the speech I propose to make. I am delighted to debate it again with my hon. Friend. We have debated these matters for a very long time, and I think he and I will eventually have to reach some sort of compromise—only when that is achieved will the votes of the Democratic Unionist party move the Government very far in the same direction. I will certainly bring him up to date with my views on the single market and the customs union, as that is precisely what I intend to go on to.

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[Sir William Cash (Stone) (Con)]

I support the Gracious Speech, except the proposal for a Bill on HS2, which I shall oppose, as I have done so far. I will support my constituents relentlessly on that matter.

I turn to Brexit. [Laughter.] What a surprise! Leaving the European Union is a given, even for my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke). It follows that we will leave the single market and the customs union, as stated in the article 50 notification letter and in our manifesto. I disagree with my right hon. and learned Friend on the question of the single market and the customs union. The European Union Referendum Act 2015 was passed by a massive majority. In the referendum itself, there was a clear majority for leave. The European Union (Notification of Withdrawal) Act 2017 passed in this House by 498 to 114 Members. At the general election, 85% of all constituencies voted for Members of Parliament to deliver the referendum result. We will soon debate the repeal Bill—I think it is somewhat based on a Bill I put forward a few months ago—which is the consequence of our leaving the treaties, as laid down in the 2017 Act. We will not now be governed by other member states, or by any cohort dominated by one in particular: Germany, which we increasingly find is the EU in all but name. We will regain our sovereignty, law-making powers, borders and money, and we will run our own affairs, as we did for century after century before 1972.

The economic, political and constitutional nature of our leaving provides us with a historic economic and political opportunity. As the Chancellor rightly said in his Mansion House speech—as well as on “The Andrew Marr Show” last week—during the general election campaign insufficient attention was paid to our success on the economy. Despite the commentariat’s recent reports on his speech stating that there would necessarily be a loss of sovereignty, I can find no explicit reference to that in his speech. He was completely right to emphasise the great economic progress we have made since 2009: we grew faster than any other major advanced economy bar Germany; business has created 3.4 million more private sector jobs; and the deficit is down by three quarters. At the same time, we have lowered income tax for 31 million people and taken 4 million people out of income tax altogether.

I do not think the Chancellor mentioned our foreign direct investment, which soared to £197 billion in 2016—up from £33 billion in 2015, according to the OECD. That is an incredible record, and we are now the primary foreign direct investment destination in Europe on the back of our successful economic policies. At 4.5%, unemployment is at its lowest since 1975. Compare that with unemployment in other member states and, in the context of those who voted Labour in the general election, with the massive 40% youth unemployment in so many other member states.

[George Freeman (Mid Norfolk) (Con)]

My hon. Friend referred to our stunning economic success in Europe. How much of that inward investment does he think can be attributed to the fact that we are a gateway to the European market?

[Sir William Cash]

That is a terrific question to which I shall return emphatically in a few minutes. The basis of my hon. Friend’s argument is completely wrong, as I shall explain in a moment.

The reckless spending alternative—the false alchemy of the Labour manifesto—would, in contrast with the Government’s economic success, simply bankrupt us and wipe out our success, as the Institute for Fiscal Studies made clear the other day. The Chancellor was right to say that stronger growth is the means by which reasonable taxation can be raised to deliver better public services and better living standards. We need sound money to go with that growth.

The Chancellor mentioned the European Investment Bank, in which we have a massive 16% shareholding, worth more than €10.2 billion. He and others should bear in mind very carefully indeed the fact that the EIB was set up under articles 307 and 308 of the European Union treaty, along with article 28 of protocol 5 on the statute of the EIB. That demonstrates that, as far as I can judge, the EIB is within the jurisdiction of the European Court. I am convinced that that is the case. We should find an answer to the question without surrendering our commitment to insisting on our own Westminster jurisdiction and not that of the European Court. We are going to have to think through this matter very carefully.

The Chancellor discussed the importance of free trade and how the Prime Minister’s Lancaster House speech made clear we would seek a comprehensive free trade agreement. He also confirmed—I repeat: confirmed —that we were leaving the customs union, for which there is a good and fundamental reason. I shall now address the point raised by my hon. Friend the Member for Mid Norfolk (George Freeman). When we leave the EU, our independent trade policy will be made by our Government, elected at Westminster, not by the unelected European Commission and by majority vote, which, as with all decisions taken under the European Communities Act 1972—as the European Scrutiny Committee made clear in its report in May last year—is made by consensus behind closed doors, with nobody knowing how the decision is arrived at. There is no public record, as we have in Westminster. It is all far removed from the democratic, transparent accountability of our procedures, our Hansard and our parliamentary system, in which people know who is deciding what. Furthermore, most EU business is done through the aegis of covert decision making in unsmoke-filled rooms. The EU is intrinsically undemocratic, as the recent Malta declaration of the 27 clearly indicated. I note that the Chancellor stated that as regards our trading policy he believes that we must negotiate

“mutually beneficial transitional arrangements to avoid unnecessary disruption and dangerous cliff edges.”

This mirrors, I think, what has been said by the CBI, the Society of Motor Manufacturers and Traders, the manufacturers’ group EEF and a number of other trade bodies, some apparently and some actually seeking to keep us in the single market and the customs union for up to five years, as my right hon. and learned Friend the Member for Rushcliffe indicated and with which I disagree.

The Chancellor also emphasised that we need an implementation period and frictionless customs arrangements, albeit, he said, outside the customs union. That poses a serious problem. Against this background, we need to understand where we are with the customs union and the single market and why it is important we leave both on leaving the EU, on which the Labour party is completely confused.

I want to draw attention to our trading within the single market, and ask our friends who are still at heart remainers to please take note of what I am saying. The Office for National Statistics and the House of Commons Library tell us that last year we ran a trade deficit with the 27 member states of £71.8 billion, up £9 billion in that year alone. In the same year, Germany ran a trade surplus with EU countries of £98.9 billion, up £16 billion in that year. Yet we enjoy a trade surplus with the rest of the world of £34.4 billion, which is accelerating rapidly. Yes, 44% of our trade is with the EU, and our trade with it will continue if we leave the single market and the customs union, but our global trade is where our successful economic future lies as soon as we leave the European Union and we have to get real about that.

Furthermore, although many describe leaving the customs union as a cliff edge, if done wisely it will be a launch pad for new and greater opportunities for growth and prosperity, providing trade deals with other countries, improving our regulatory environment, achieving a free trade agreement with the EU with zero-for-zero tariff deals, dealing with rules of origin, mutual recognition of goods, including agricultural products, and allowing expedited customs arrangements based on new technologies.

[Sir Peter Bottomley]

My hon. Friend might find it easier to speak less fast once this intervention has given him a few more seconds.

[Sir William Cash]

I am most grateful to my hon. Friend; I am determined to get through what I have here.

In the context of the City and financial services, there is so much for us to learn from the experience of the European Free Trade Association and its jurisdictional relationships with the European Court of Justice. These provide guidelines and lessons to be learned in achieving mutual respect while retaining our sovereignty and unshackling ourselves from the European Commission’s exclusive jurisdiction over external trade policy, which does not work for us even though it does specifically for Germany.

We are fortunate to have Mr Crawford Falconer as our chief trade negotiation adviser and a strong team to deliver a first-class trade policy with major countries such as the USA, Canada and Australia. A few days ago, the Secretary of State for International Trade had an extremely good meeting with the US Commerce Secretary, Wilbur Ross. We have had similar reactions from the other countries I have mentioned. These provide the launch pad for us to enable the growth that will accelerate us towards a global prosperity zone for the United Kingdom. This is a massive new opportunity for the United Kingdom to resume its 300-year-old role in international trade in goods and services, in which we have always delivered throughout our commercial history.

To give some flavour of that, the House of Commons Library tells us that in the last year alone we had a trade surplus of £39.6 billion with the USA, of £1.3 billion with Canada, and in 2015, the most recent year for which data are available, a trade surplus of £3.7 billion with Australia. They have already said that they want to trade bilaterally with us, and we would be crazy not to do it. Out of the customs union, we will build on this—inside it we cannot—and our economic growth and prosperity will expand exponentially, and there will be the means of providing security and stability, and, with that, the provision of good and effective public services mentioned by the right hon. Member for Enfield North (Joan Ryan).

I believe that leaving the EU while achieving acceptable jurisdictional answers to our financial services and other regulatory arrangements, which are currently with the EU, is eminently achievable. An overly narrow view of the potential jurisdictional difficulties is wrongly pessimistic, particularly as regards our potential trading relationships with the rest of the world and our recognition that the single market does not deliver for us.

I was glad that the Chancellor did not refer to the words “soft” and “hard” Brexit in his speech. The words “soft” and “hard” Brexit, so favoured by the BBC and others in the media, are an exercise in casuistry, a weapon of propaganda intended to create a fog when we need above all else clear lines and meanings. This applies equally to the expression “transitional arrangements”. Where do we draw the lines? What does it mean? Under what jurisdiction?

Leaving the EU is in the national interest and it is our duty, which we are obliged to deliver. I refer now simply to the exchange between Humpty Dumpty and Alice in “Through the Looking Glass”:

“‘When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean—neither more nor less.’ ‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’ ‘The question is,’ said Humpty Dumpty, ‘which is to be master—that’s all.’”

No longer will our master be the European Union and its political puppet masters. They sought to absorb us into a political union, now on the cards as Angela Merkel has demonstrated this week as regards the new financial arrangements—

[Mr Deputy Speaker (Sir David Amess)]

Order. In order to accommodate the 16 Members who have notified me that they wish to speak, the time limit has now dropped to nine minutes.