Economic and Fiscal Outlook

Debate between Peter Grant and Huw Merriman

Monday 30th April 2018 Commons Chamber

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

It is a great pleasure to speak in this debate. Section 5 of the European Communities (Amendment) Act 1993 requires Parliament to debate the content of this report on the UK’s economic and budgetary position. It is pleasing that although the UK has voted to leave the European Union, we are still complying with our obligation to submit the report.

Via the European Union (Withdrawal) Bill, we are enshrining in law the rights and obligations that emanate from our EU membership. We are building with the European Union a new relationship, which I very much hope will allow our constituents to trade with, work in, study in and visit the EU. Rather than turning our backs on the EU, we are building a new chapter of our working partnership and friendship, albeit on different terms—on our own terms—which will, I am positive, enable us to maintain our positive relationships in mainland Europe.

We are debating the Government’s assessment of the UK’s economic and budgetary position—a position that we have developed since taking office in 2010. Interestingly, while I was researching our economic position, I came across a page on the BBC website from 2010. Boxes on the right hand side of the page contained our key economic indicators, which in 2010 were as follows: UK economic growth would slow to 0.2%, UK borrowing would hit £163.4 billion, UK unemployment would increase to 2.5 million and UK inflation would rise to 3.4%. Those were the key statistics, as reported by the BBC, as the Labour Government left office.

Fast forward to 2018 and—of course, we still have more to do—growth is projected to rise by 1.5% this year, UK borrowing fell to £42.6 billion during the last financial year, UK unemployment has fallen to 1.4 million and UK inflation fell to 2.5% last month. So if Labour Front Benchers want to talk about how things look now compared with how they looked in 2010, those are the key figures that they need to consider. [Interruption.] From a sedentary position, the hon. Member for High Peak (Ruth George) mentions debt. The UK’s total debt is still too high, but we have reduced the amount being borrowed each year from 9.9% of GDP when Labour left office to 2.6% now. We still pay £50 billion a year on our overdraft, and that is far too high. It is larger than the schools budget, and it needs to come down.

[Peter Grant (Glenrothes) (SNP)]

It is vital that we do not confuse reducing the deficit with reducing the debt. Will the hon. Gentleman confirm that according to the OBR’s current forecast, the debt will not start to reduce until 2027 at the earliest? Does he think that that is good enough?

[Huw Merriman]

If we do not reduce the deficit, we will ultimately never reduce the debt. In January, we had a surplus for the first time, so we are getting there. As I say, however, the debt is far too large and needs to be reduced. I applaud the steps that the Government are taking to adopt a balanced approach, whereby we invest in our public services but get the debt down.

The debt causes me a huge amount of concern, because the interest bill will be paid not by my generation or those above me, but by the young. If Labour is serious about adding an extra £100 billion to the debt, the younger generation will be forced to pay back an extra £8 billion a year in interest.

It should not be forgotten that we have focused resources on key public spending commitments, such as health and increasing the amount we spend on the disabled. Opposition Members criticise us for the size of the debt, but when push comes to shove the austerity years, as they are often portrayed, have actually seen spending decreases at about the same rate as those advocated by Alistair Darling in the 2010 Labour party manifesto, so it is either one thing or the other.

My main point on how our economy is working is the fact that an extra 1 million people are now out of unemployment, compared with the last year of the Labour Government. That is crucial. Not only are those people paying into the economy, but they have opportunity, aspiration and hope. That was lost to many people when, yet again, the Labour Government left office with more people unemployed than when they had entered it. We have taken millions out of income tax by lifting the personal allowance from £6,500 to £11,850, reducing bills for 31 million people who still pay income tax. We have introduced the living wage, which will increase pay for 2 million people. One third of my working-age constituents are on the living wage, so it has a huge impact—they are £2,000 better off each year. All those measures make work pay, as seen by the increase in employment to 32 million people—the highest number since records began.

Finally, I would like to make a comparison with our European Union neighbours. Let us consider France. By 2015, we had created more jobs in five years in Yorkshire than have been created by France as a whole. The French are now looking to adopt our welfare reforms. They know that unless they modernise their welfare state, their unemployment rate will never be reduced from a shocking 9.7% to our rate of 4.2%. Some 1.3 million youngsters in France cannot find a job. It is our Government’s policies, in this report, that our EU counterparts are now seeking to replicate. I therefore absolutely recommend the report. I am very proud to stand on the Government Benches on behalf of the party that has delivered it.

European Union (Withdrawal) Bill

Debate between Peter Grant and Huw Merriman

Committee: 8th sitting: House of Commons
Wednesday 20th December 2017 Commons Chamber

[Huw Merriman]

I will not give way because of the lack of time.

This also misses the point that we trade as part of the EU under WTO rules with a number of countries, such as the US, China, Hong Kong, Australia, Russia, and Saudi Arabia. To say that we cannot continue to trade with those countries under WTO rules when we already do so as part of the European Union misses the point.

I now come to the real point that I wish to make. During the referendum campaign, unlike many Members in this place I did not take a view. I chaired debates but I did not take any view. Instead, I listened to the arguments going on from both sides. I dare say that right hon. and hon. Members who took a view were not listening to both sides because they were so passionate about their own. I cannot remember any individual who wanted to leave the European Union arguing, “I fancy a bit of what Norway has got. I would like to leave the European Union and remain within the single market.” The customs union has also been mentioned in that context, but of course Norway is not part of the customs union. It is quite clear to most members of the public—it was certainly made clear by those on both sides of the argument—that the EU is effectively a brand. The substance of the EU is the single market and the customs union. If more people voted to leave the European Union than to remain, which was indeed the case, there is a very fair chance that those people knew what they were voting for, and certainly did not want to leave and then return through the back door, as many hon. Members have suggested.

This is the key part for me. I really believe—I put this respectfully—that many in this Chamber are seeking to re-engineer the arguments to get them on their side because they do not want to leave. Even though most of them voted to trigger article 50, so they have chosen to leave, they now want to redesign the terms. They are seeking to have the public on their side by asking, as the hon. Member for Bath (Wera Hobhouse) mentioned, that the public are asked what they think—as if we have a spreadsheet big enough for that. The reality is that the majority of the public have voted to leave. They now look to the Executive to lead the negotiations, and they look to Parliament to support the negotiations and provide scrutiny, as it is doing. Ultimately, they want us to get on with the job and to be optimistic and ambitious about the future of this country, rather than sitting on our hands.

[Peter Grant]

I am grateful for the chance to contribute to tonight’s debate. First, I will deal with new clause 56, which is in my name and those of many other hon. and right hon. Members from across the House. I am grateful to everybody who supported the new clause, which is designed to give legislative certainty to the people and businesses of Gibraltar. Having heard the Minister’s comments—a long, long time ago now—my understanding is that the Government of Gibraltar are happy that the assurances they have been given provide the certainty they are looking for. On that basis, I do not intend to press the new clause to a vote, but I want to reserve the ability to bring it back at a later stage should the position of the Government of Gibraltar change.

We have heard a lot this afternoon and tonight about the wonderful opportunities for trade that await the United Kingdom if we leave the customs union and the single market. I welcome the fact that although the Minister repeatedly said that we would be leaving the customs union and the single market, he did not say—I listened very carefully—that we had to do so. He did not say that it was impossible to remain in either or both when we leave the European Union, even though a lot of people on the Brexit side have said that. That is simply not true; it is perfectly possible to leave the European Union without leaving those two trading agreements. The Government’s decision to leave them is purely political and it was not part of the referendum, despite what some people say. It is not yet too late for the Government to accept that that is a catastrophically bad political decision and that it should be reversed, even if doing so would come at a high political cost for some.

Earlier, we heard the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) justifying the need to leave the single market because the losing side in the referendum said that we had to. I am quite happy to go through some of the things that were in the losing Conservative manifesto in Scotland about what would happen if people voted SNP. If we are going to be bound by the promises that the losing side made, the SNP is in for a bit of a field day.

I still find it astonishing that there are Labour Members looking for a complete exit from the European Union. Only today, the Court of Justice of the European Union delivered a massive victory to Uber drivers and workers by ruling that Uber is a taxi business—surprise, surprise; that is what it is. The ruling has given Uber drivers massively better employment protection than they would have had without it. I cannot believe that any Labour Member would argue to remove those drivers from the protection of the European Court and leave their employment rights at the mercy of a Conservative Government, but that is what at least one Labour Member, the hon. Member for Vauxhall (Kate Hoey), argued for just now. I know that she is very much in the minority in her party, but I am astonished that a Labour Member can express such views.

The same hon. Member commented on how much of the UK’s trade is done outside the European Union. She forgot to mention that if we include the trade that relies on trade deals that the European Union has already made with big trading nations, more than 60% of the UK’s trade effectively depends on the European Union. When we build in the trade deals that the European Union is in the process of finalising, the figure increases to 88%. In other words, in a couple of years’ time, 12% of the United Kingdom’s overseas trade will not depend on our membership of the European Union. Twelve per cent. of our trade will probably be guaranteed, but the other 88% is up for grabs. Believe me, a lot of other trading nations will be very keen to nibble away at that 88%.

I want to comment on the confusion of the hon. Member for Edinburgh South (Ian Murray). His stamina also seems to have deserted him, although I cannot say that I blame him. He said tonight, as he has said on several occasions, that he cannot understand the contradiction between the Government’s statement that we can have free, open and easy trade across international borders, and their insistence in the run-up to the independence referendum in Scotland—where, by his own admission, he shared a platform with some people who are now on the Conservative Benches—that that would not be possible.

I can put the hon. Gentleman out of his misery. There is no inconsistency. What the Government are saying now is correct, and what they and he said in 2014 was complete and utter rubbish. There is absolutely no need, in today’s modern world, for an international border to be anything more than a line that demarcates the jurisdictions of different Parliaments, Governments and courts. That is how international borders are seen all over western Europe, and that is the kind of international border we should be seeking. It will be difficult if not impossible to maintain open borders, even the open border we want to maintain across the island of Ireland. It will be difficult to deliver what the people of Northern Ireland so desperately want to maintain if we leave the customs union and the single market.