Business and the Economy

Andy MacNae Excerpts

Wednesday 21st May 2025 Commons Chamber

[Jerome Mayhew]

I am grateful for that intervention. I joined this House in 2019, but the original Brexit debate had hyperbole on both sides. We had Project Fear saying we would need an immediate fiscal event as soon as we had the referendum, but that did not take place. Growth has actually continued since the referendum back in 2016. In fact, growth in the United Kingdom has outpaced that of Germany, France and Italy, and, for that matter, Japan. There were a lot of arguments, both one way and the other, over the likely consequences of Brexit. My takeaway is that, overwhelmingly, it has not made that much difference to the world economy or to Britain’s relationship with the world. There have, undoubtedly, been some trade frictions, and those have been particularly acute for SME import/export—I recognise that. But overall, trade has continued, and we have actually outperformed our European big economy neighbours.

[Andy MacNae (Rossendale and Darwen) (Lab)]

The hon. Gentleman suggests that there was no damage done to businesses, yet I have been chairing business roundtables recently with industry representatives—people who run billion-pound businesses; significant businesses—and every single business recognises the impacts of Brexit as a principal drag on their profitability and growth.

[Jerome Mayhew]

As I said, we had a huge change to how our country was governed, which was dictated to us by the people, because we are a democracy. One of the reasons I entered Parliament was that, despite voting remain in 2016, I was outraged as a democrat by the failure of Parliament between 2016 and 2019 to effect the will of the people, as clearly expressed in a referendum. That pushed me from being an activist to being a politician in order to effect the will of the people.

Since then, there have been pros and cons. There are a lot of pros, and over the past five years I have seen for myself how important some of our Brexit freedoms have been. If there were a plebiscite today on whether to leave or rejoin the European Union, I would vote without hesitation to leave, because I have seen some of the benefits. In my area, the common agricultural policy was a disaster, both economically and socially, and had a hugely negative impact on the environment, farms and countryside of Broadland and right across the country. With our Brexit freedoms, we replaced that with the environmental land management scheme, a wholly beneficial policy change—imperfect though it was; it was part of an iterative process to learn from our experience with farmers. That would have been impossible without Brexit.

Similarly, some of the trade deals we have done would have been impossible without Brexit, as would myriad regulations that have been improved just a little in all those Delegated Legislation Committees we have all enjoyed so much over the years. Much of that could not have been achieved without Brexit. None of those regulations will reach the front pages of the newspapers, but iteratively, over the years, they have the opportunity to make our economy and our society stronger.

That is one of the main reasons I was so disappointed by the Government’s capitulation to the European Union on dynamic alignment just a couple of days ago. We have taken on the disadvantages of non-membership of the European Union—we become rule takers—without any of the benefits of dynamic divergence of our regulatory system, which would allow us to bend our rules most accurately to reflect the opportunities of our own economy.

That was an interesting divergence, but I will now come back to the main argument of my speech, which is that Labour misled the people in the run-up to the general election. It said that its policies would be fully funded and fully costed. It said that there would be no taxes on working people, and it expressly said in its manifesto that there would be no increased tax on national insurance contributions. What is reality? Labour chose to use a fig leaf, as the hon. Member for Angus and Perthshire Glens (Dave Doogan) might have said, which is this fabricated £22 billion black hole in the economy—the black hole, by the way, that the OBR failed to find. The former Financial Times journalist, the hon. Member for Earley and Woodley (Yuan Yang), who is no longer in her place, might recall that the Financial Times also failed to find the £22 billion black hole in the economy.

Labour uses that figure as a fig leaf not to raise £22 billion—no, that would be sufficiently unambitious—but to raise £40 billion of tax and another £32 billion of debt. It has done that by focusing the tax on jobs. National insurance contributions are focused on young people, part-time workers, and women in particular. The Employment Rights Bill put another £5 billion on taxation—on the Government’s own impact assessment. The increase in high street business rates is inexplicable in a period of such strain on our businesses, and that is not to mention the effect of agricultural property relief. What is the result? Some 200,000 businesses have closed, which is a 20-year high—a high only beaten by the previous Labour Government.

In January 2025, corporate insolvencies were up 10.7%. That is the highest since the financial crisis when Labour was last in power. Unemployment was up 10% to 4.5%. The Bank of England forecasts that it will go up further to 5%. Youth unemployment was up 11%. This feeds into the well-worn war narrative that Labour always leaves government with unemployment higher than when it arrived. The Government must stop and think again. I know that they were new to government; they had been out of power for 14 years, and they have made some really profound, rookie mistakes, but we must not let our businesses and those employed pay the price for that. The Government should look again and seek to recover their economic reputation.