The Economy

Catherine McKinnell Excerpts

Thursday 24th October 2019 Commons Chamber

[Sajid Javid]

First, the IFS does not predict that at all, so the Gentleman should check his facts. Secondly, I gently point out to him that debt is brought under control by controlling borrowing. Borrowing is the deficit, and the deficit was what the Labour party left at 10% of GDP, but it is now four fifths less than that. Controlling borrowing is how we bring debt under control.

Better infrastructure and fiscal responsibility will enable our future economic growth, but so will trade. Ninety per cent. of future global economic growth is estimated to be outside Europe, with more than a quarter coming from China alone. Britain has always been an open country that believes in free trade. British businesses have strong trading relationships around the world. The new deal that we have agreed with the EU will allow us to have an independent trade policy and to strike new trade agreements with countries around the world, and the new trade Bill will put that into practice. Let me compare that with Labour’s position on trade. Labour would lock us into the EU customs union, ending any chance of an independent trade policy. How did Labour’s head of trade policy describe Labour’s views? He said:

“We reject the whole principle of free trade.”

Our support for free trade is not the only thing that marks Britain out on the global stage. Our remarkable financial services sector, which is now back to good health, does so, too. It is not just the City of London; our financial services sector involves the entire UK. All our financial and professional services firms truly are a national asset, employing more than a million people and contributing more than £130 billion to our economy every year. The financial services legislation that we brought forward in the Queen’s Speech will maintain and enhance our position as a world-leading financial centre after we leave the EU.

This Queen’s Speech gets Brexit done, invests more to grow the economy and delivers on the people’s priorities: action on infrastructure, trade and financial services, and a new economic plan for a new decade of renewal.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I am sure that the Chancellor is correct that some parts of the economy will benefit from a number of the changes, but other parts of the economy, particularly in the north-east, will be heavily damaged by the plans that he is outlining and that are outlined in the deal. The north-east exports over 60% of its goods to the EU, and hurting that relationship will be hugely damaging to our region. He does not seem to be taking any account of the disparate regional impacts around the country.

[Sajid Javid]

I do not accept the hon. Lady’s analysis. Once we leave the EU with the close economic partnership that is set out in the political declaration, our economy will continue to be one of the strongest in the world, unleashing many new opportunities for all parts of our country, including the north-east.

Turning to the amendment tabled by the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), let me be clear about one thing: Britain will always be an open, global, outward-looking country. I am proud of living in a country as diverse as this one. We have dropped arbitrary immigration targets and recently announced new highly flexible fast-track visas for scientists; none of that will change as we leave the EU. We will continue to welcome the best and the brightest from across the world. I therefore urge all hon. Members to vote against amendment (h) because it is important that we end free movement as we regain control of our borders.

I turn now to the shadow Chancellor’s amendment. There are no mainstream parties in the developed world with an economic agenda as extreme as the one now proposed by Labour. There is no tax that the Labour party would not hike, there is no business that it would not nationalise, and there is no strike that it would not support. Instead of embracing the future, the shadow Chancellor demands that we turn back the clock on progress. He claims that 95% of people would face no income tax hikes under Labour, but then proposes more than 20 new tax hikes. He claims that he would protect pensioners, but tell that to the millions whose pensions will be smashed by Labour’s threats to renationalise vast swathes of the economy without any proper compensation. He told businesses he had nothing up his sleeve, but then he announced plans to confiscate £300 billion of shares from private investors in the biggest state raid this country will ever see.

The shadow Chancellor has never worked in a business. He does not get business. He even refuses to name a single business that he admires. And guess what? He calls business the real enemy. Given his threats to hike taxes, to renationalise businesses and to load them up with new bills and regulations, I am pretty sure the feeling is mutual.

We have even heard Labour officials suggesting—I am not making this up—the nationalisation of travel agents. It will be free trips to Havana for Labour Front Benchers, and perhaps a ticket to Siberia for the hon. Member for West Bromwich East (Tom Watson). The simple truth is that Labour is not fit to govern. It would wreck the economy and hard-working families would pay the price, just like last time.

These are the fundamental dividing lines in British politics today. We will raise wages; Labour will raise taxes. We will back business; it will smash business. We will get Brexit done; it will dither and delay. A Conservative party that believes in free enterprise and that will get Brexit done and deliver the change people want; or an anti-aspiration, anti-business Labour party led by a pair who would wreck the economy, cancel the referendum and leave Britain less secure and less safe.

I know the shadow Chancellor is a fan of the little red book, but these days he is less Chairman Mao and more Colonel Sanders—too chicken to face an election. Let us back this deal; let us back this Queen’s Speech; and let us have a general election. I commend the Queen’s Speech to the House.

[Catherine McKinnell]

On a point of order, Madam Deputy Speaker.

[Madam Deputy Speaker (Dame Rosie Winterton)]

It had better be good.

[Catherine McKinnell]

Out of respect I did not want to interrupt the Chancellor’s speech, but is it in order for him to impugn the motives of my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) in raising concerns on behalf of her constituents? Is it not unparliamentary for somebody holding his high office to do that, especially when he refuses to appear before the Treasury Committee to answer directly for his plans?

[Madam Deputy Speaker]

I sort of thank the hon. Lady for her point of order. I really do not want to see the debate interrupted by points of order that are, frankly, matters of debate. It is a matter of debate whether people think what the Chancellor said is appropriate. I want to get on with the debate.

--- Later in debate ---

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

This Queen’s Speech is nothing but a wish list, setting out a programme for government that completely ignores the new reality that looms large over our economy: the big unknown that is the post-Brexit world. The Government’s withdrawal agreement marks the most profound peacetime transformation of the economy in our country’s history. That is why, in my brief but timely tenure as interim Chair of the Treasury Committee—I welcome and congratulate the newly elected Chair, the right hon. Member for Central Devon (Mel Stride)—I wrote to the Chancellor last week to ask the obvious question: what is the Treasury’s analysis of the economic impact? Unfortunately, the Chancellor’s reply flatly declined to provide any such analysis. He ended his letter by saying:

“trust in democracy and bringing an end to the division that has characterised this debate over the past three years is something that cannot be measured solely through spreadsheets or impact assessments, important though they”.

What patronising drivel! This Government think they can take us for fools.

The Chancellor does not think there is any need for an economic assessment. He tells us that the previous assessments do not apply, but he will not produce a new one. He says that the new deal is

“self-evidently in our economic interest”,

but it is not at all self-evident. The overwhelming evidence is that any Brexit would lead to a weaker economy compared with staying in the EU. If the Government had evidence to the contrary, they would produce it. The Chancellor is basically telling us to ignore the economics. How can the Government have any credibility when they announce their Budget next month? If the Treasury is not interested in the economics, who in government is? Economic analysis matters. It affects our constituents’ jobs, taxes, spending, prices, interest rates, wages, and imports and exports. Surely we should have the latest and best economic evidence as we make a decision of this magnitude. We must make this decision with our eyes wide open. It is the least the public deserve from us.

As founder and co-chair of the all-party group on the east coast main line, I want to highlight the pressing need for investment in my region. The details of the Government’s proposals on rail reform are still to be finalised, but simply changing the way train operating companies work will not improve our railways in the way we need. The east coast main line is a critical piece of national rail infrastructure. It is one of the country’s most strategically important transport routes, linking the north-east to London, the east of England, the east midlands, Yorkshire, the Humber, and the east and north of Scotland, but the line cannot cope with the demands upon it. Instead of being an asset, it is now holding back the communities and economies it serves. It does not have enough capacity for today’s growth in passenger and freight, let alone for the future. Figures from the Library show a 73% rise in delay minutes on the London North Eastern Railway route connecting Newcastle and London, and around 60% of that is due to Network Rail. The Government must commit additional funding for Network Rail as a matter of urgency so it can invest in the east coast main line and improve reliability.

That is not enough though: we also need HS2 to go ahead. If we want to run more regional and local services, we need the capacity that HS2 will free up, and I am pleased to have had much support from business communities and stakeholders on this. I can understand why fellow northerners might look at the cost of HS2 and think that this money might be better spent elsewhere, but I have never seen this as an either/or choice. London has multiple infrastructure projects at any one time. Do we ever suggest it should only have one? There are worrying rumours that the Government are planning to scrap HS2. It would make a mockery of the Prime Minister’s pledge to empower the north and do nothing to solve the problems on our network. If they scrap the investment in the north, will we really get it back in another form? I do not think so.

Oral Answers to Questions

Catherine McKinnell Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)]

3. What progress the Government have made on establishing a shared prosperity fund.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

5. What progress the Government have made on establishing a shared prosperity fund.

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

The Government will establish a UK shared prosperity fund to spread prosperity and opportunity across all four nations once we have left the European Union and the EU structural funds. The fund will seek to raise productivity, focusing on levelling up parts of our country whose economies are further behind. More details will be announced following the spending review, and the Government will consult widely on the funds.

[Robert Jenrick]

We intend to consult later this year, following the spending review. Officials at the Ministry of Housing, Communities and Local Government have already held 26 engagement events and have met more than 500 representatives from across the United Kingdom.

With respect to the hon. Lady’s very important point about representation on LEP boards, I should say that the LEP review conducted by MHCLG jointly with the Treasury last year did conclude that they needed to have broader representation from the groups that she mentioned—and from private sector businesses, large and small. Those rules and guidelines are now in force.

[Catherine McKinnell]

Shortly after the referendum on Europe, I asked the then Prime Minister David Cameron what would happen to the £726 million of European funding that we were due to receive in the north-east. He could not answer. We are now three years on and none the wiser about the supposed replacement—the shared prosperity fund. How can anyone have confidence in this Government and their handling of Brexit if they cannot give even that basic information to the region that is set to be the worst hit by any form of Brexit?

[Robert Jenrick]

The people of the north-east of England voted to leave the European Union; I know that the hon. Lady takes a different view, but we are trying to deliver on the outcome of the referendum. Had she voted for the withdrawal Bill, these matters would, of course, be progressing. As my right hon. Friend the Chancellor has already said, we are guaranteeing funding to the beneficiaries of all EU structural funds to 2023, so there is a degree of certainty as we move forwards. But the sooner that this House can coalesce on a good deal and that we can leave the European Union in an orderly fashion, the sooner this matter can be cleared up.

HS2: Buckinghamshire

Catherine McKinnell Excerpts

Monday 29th April 2019 Commons Chamber

[Ms Ghani]

HS2 has one budget: £55.7 billion. Constant speculation around the budget undermines confidence in a project that we should be proud of, considering the positive impact it will have on our communities. Tickets will be on sale several years from now, when the line is up and running. I do not doubt that, when the line is up and running, nobody will talk about this moment right here and now when every element of the project is being constantly undermined. It is not a white elephant. It is creating capacity, reducing journey times, creating jobs and increasing productivity. It is a project that we should be proud of.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The Government need a clearly funded plan for HS2, to make sure that it benefits communities in the north, rather than disadvantaging them. When will the Government accept that, without infrastructure investment on the east coast main line, the HS2 project’s second phase risks exacerbating the current capacity constraint and low speeds by increasing the number of trains on this already stretched line? Will the Government confirm when the east coast main line will receive investment, to make sure that it is ready for HS2? That could have the intended benefit of bringing together the north and the south, rather than making the north further away.

Spring Statement

Catherine McKinnell Excerpts

Wednesday 13th March 2019 Commons Chamber

[Mr Hammond]

The hon. Lady is nothing if not cynical. Funding for any bodies will be considered in the spending review, and I would be very happy to have a representation from her.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The Chancellor made a welcome but passing comment in respect of Northern Powerhouse Rail, but when will he bring forward investment in the east coast main line to make it fit for purpose and HS2-ready? Without that investment north of York, the communities on the HS2 east coast main line risk being further away from, rather than closer to, the required connections.

[Mr Hammond]

We are allocating capital funding to our railway at the fastest rate than at any time since the Victorians. The way it works, as I think the hon. Lady knows, is that we allocate the funding for the so-called control periods of investment in the railway and the Transport Secretary then works with Network Rail to prioritise that investment. I will pass on to him the hon. Lady’s concerns.

Oral Answers to Questions

Catherine McKinnell Excerpts

Tuesday 5th March 2019 Commons Chamber

[John Glen]

I cannot give my hon. Friend the exact figure, but we are anxious to crack down on suspicious activity when reports give us reason to believe that further measures are necessary. We have taken action in improving cross-governmental co-ordination, and we are working closely with the Home Office on the suspicious activity reports.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The Financial Secretary was unable to answer this question yesterday, so I shall ask it again. Can the Economic Secretary explain why, although the call for evidence on extending corporate liability for economic crime closed two years ago, we have yet to receive a response or see any action?

[John Glen]

The Ministry of Justice is looking at that, and will present its response to the call for evidence later this year.

Tax Avoidance, Evasion and Compliance

Catherine McKinnell Excerpts

Monday 4th March 2019 Commons Chamber

[Mel Stride]

I thank my hon. Friend, and I take it on the chin. I am bang to rights. I and this Government are guilty of lowering taxes, particularly for the lowest paid in our country. He refers to the increase in the personal allowance, and he is absolutely right that, since 2010, some 4 million people have been taken out of tax altogether—I am extremely proud of that fact.

It is often suggested by the Opposition that the wealthiest get away with it. Well, they certainly do not. Under this Government, the top 1% pay 28% of all income tax; under Labour, it was about 24.5%.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Is not the Government’s decision to pull the Financial Services (Implementation of Legislation) Bill in the face of the amendment on public registers of beneficial ownership, tabled by my formidable right hon. Friend the Member for Barking (Dame Margaret Hodge), reflective of their entire approach to the wider issue? Can the Minister confirm when the Government will finally take decisive action on extending corporate liability for economic crime? Their call for evidence closed two years ago and we are still waiting for a response.

[Mel Stride]

The hon. Lady will know that this Government have an exemplary record when it comes to clamping down on tax avoidance, evasion and non-compliance, including overseas. We have been at the vanguard of the base erosion and profit shifting project, and in 2015 we brought in the diverted profits tax, which has already saved some £700 million. We are very active in this space and I refer her to my earlier answer on why we have delayed the legislation today.

Oral Answers to Questions

Catherine McKinnell Excerpts

Tuesday 29th January 2019 Commons Chamber

[Mr Hammond]

The sting was in the tale. I am delighted to welcome the new jobs that have been created in Harborough through the action of the council, no doubt with strong encouragement from my hon. Friend. The Government are keeping taxes low and are helping start-ups to access the support that they need. That is why 3.4 million new jobs and 1.2 million more businesses have been created since 2010. With regard to his generous invitation, as I visited his constituency and had the pleasure of seeing what was going on there only very recently, if he does not mind, I will offer it to one of my team.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Given that the Government’s own analysis shows that every region and every nation of the country will be poorer under any form of Brexit, does the Chancellor really believe that the lowest paid will be better off as a result of us leaving the EU?

[Mr Hammond]

The hon. Lady’s statistics are wrong. It is not right to say that every region will be worse off. Every region under every scenario will be better off. The UK economy will continue growing. [Interruption.] The UK economy will continue growing. There is no doubt, as the published cross-Government analysis shows, that leaving with a deal will best protect the UK economy and will be in the interests of all our constituents. I urge the hon. Lady to get behind the deal.

Oral Answers to Questions

Catherine McKinnell Excerpts

Tuesday 11th December 2018 Commons Chamber

[Mr Hammond]

First, I acknowledge my right hon. Friend’s tireless work in campaigning to improve infrastructure and boost productivity in the Essex region, including her chairing of the Great Eastern Mainline Taskforce. We expect about £47.9 billion to be spent on the railway nationally between 2019 and 2024. I very much look forward to hearing the outcome of the Great Eastern Mainline Taskforce study. Regarding the A120, the Government are carefully considering Essex County Council’s proposals for a new dual carriageway to ensure that a robust plan is ready should that project secure funding in RIS 2—the second road investment strategy.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

“State of the North 2018”, a report published by the Institute for Public Policy Research North earlier this month, highlighted the fact that public spending in the north of England fell by £6.3 billion since 2009-10 while spending in the south-east and the south-west was up by £3.2 million in the same period. Does this not demonstrate that the northern powerhouse is nothing but a vacuous slogan? What does the Chancellor assess will be the infrastructure funding available once we leave the EU?

[Mr Hammond]

We have had this one before. The Institute for Public Policy Research consistently publishes these figures and they are consistently wrong. I would urge the hon. Lady to look at the Infrastructure and Projects Authority’s figure. The problem with the IPPR is that it needs also to look at central Government funding to the regions. When we look at central Government funding to the regions, we will see a very different picture.

Leaving the EU: Economic Analysis

Catherine McKinnell Excerpts

Wednesday 28th November 2018 Commons Chamber

[Mel Stride]

I would make two points to my hon. Friend. First, this is not a Treasury report, as such, but as I have just outlined, it has involved discussions right across the whole of the Government. Secondly, on future trade deals, he will find buried within the detail that in fact assumptions have been made about future trade deals with countries such as the United States, China and India.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The analysis published by the Government today, while not entirely clear in its picture, does highlight the specific impact that a bad Brexit would have on the north-east region. Today’s figures provide the modelling for the north-east against a Chequers deal and an average free trade arrangement, but uses no deal as a base for that analysis. Can the Minister confirm today the impact on the economy of the north-east of a no deal and the Government’s intended deal as compared with the status quo—remaining in the EU?

[Mel Stride]

As I identified earlier, a no deal, as compared to the Chequers deal and the sensitivity analysis around that, would see every region, country and sector of the UK economy disadvantaged as a consequence. As the hon. Lady will see from the analysis presented, the impact of a no deal would be particularly felt in the north-east. That is the case also with the west midlands and the east midlands, where manufacturing is particularly prevalent. The model also showed potential impacts on agriculture, with a strong impact in areas such as Wales, Northern Ireland and Scotland.

EU Customs Union and Draft Withdrawal Agreement: Cost

Catherine McKinnell Excerpts

Monday 22nd October 2018 Commons Chamber

[John Glen]

It is important that we honour the decision of the British people and that we come out with an arrangement that gives us the optimal long-term relationship with the EU and also a chance to exploit the opportunities in the world economy beyond the EU, which is growing faster.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Last October, I asked the Chancellor in the Treasury Committee whether the benefits of feasible future trade deals outweighed the costs of leaving the single market and the customs union. He could not give me a clear response. Is the Minister any closer to giving a clear response today?

[John Glen]

Such an answer is dependent on so many conditions and the determination of what is in those trade deals, so I am sorry, but I cannot give a precise answer.