Oral Answers to Questions

Kwasi Kwarteng Excerpts

Thursday 16th May 2019 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

3. What recent assessment the Government have made of the effect on the UK economy of the UK leaving the EU.

[The Parliamentary Under-Secretary of State for Exiting the European Union (Kwasi Kwarteng)]

In November 2018, the Government published their economic analysis of leaving the European Union. In doing so, the Government delivered on their commitment to provide appropriate analysis to Parliament. The publication provides an assessment of how different exit scenarios may affect the sectors, nations and regions of the UK economy in the long run.

[Ian Murray]

If the rumours are true, the withdrawal agreement Bill will come back to the House shortly. There is no credible analysis, including from the Government, that shows that any form of Brexit will be beneficial to the UK economy, so will the Bill include a detailed economic and environmental impact assessment of its impact on every single sector, region and nation of this country?

[Kwasi Kwarteng]

The hon. Gentleman has been in the House long enough to know that I cannot possibly reveal details of the Bill ahead of its introduction. What I can say generally is that the UK economy is performing strongly—much more strongly than many of his doom-mongers and naysayers have suggested. Employment levels have broken all records, and there are 3.6 million more people in work than there were in 2010. Business investment in the UK stood at almost £47 billion in the first quarter of this year—that is an increase of 30% since we took office in 2010. Generally, the UK is the top destination for inward investment in Europe. Amid uncertainty, the economy is performing well.

[Julia Lopez (Hornchurch and Upminster) (Con)]

Financial services are a critical part of the UK’s economy and one of our top exports. Will my hon. Friend confirm that the withdrawal agreement does not include a specific section on financial services and that access to the EU market after any transition would be a matter of separate negotiation? Will he update the House on his most recent discussions on the issue with his EU counterparts?

[Kwasi Kwarteng]

The withdrawal agreement is not the end state of the relationship between the UK and the EU; it is merely a mechanism to get to that end state. In a free trade agreement, which I hope we get, our financial services will absolutely be able to have more freedom. They have a brighter future outside the EU than within it.

[Thangam Debbonaire (Bristol West) (Lab)]

I refer the House to my entry in the Register of Members’ Financial Interests. The creative industries tell me that their economy is already suffering, with the concerns of musicians in particular, for example, not being addressed in any part of the Government’s negotiations or deal. They will have to move kit and people around the European Union, and they are already losing out on bookings. What discussions is the Minister having with representatives of, for instance, the Musicians Union about this problem?

[Kwasi Kwarteng]

I refer the hon. Lady to the answer I gave just a minute ago. The withdrawal agreement itself does not describe the end state of our relationship between the UK and the EU. It is simply a means to the end. We are discussing all the time with representatives of the creative industries, and we hope that, once the agreement is passed, we can then go on to the second phase of the discussions.

[Andrew Bridgen (North West Leicestershire) (Con)]

The European Union is mired in low economic growth. Many of its countries have eye-watering levels of youth unemployment and its currency has to be constantly supported by quantitative easing. Can my hon. Friend understand why anybody would want to chain us to this rotten corpse?

[Kwasi Kwarteng]

I fully appreciate the force of my hon. Friend’s argument. The idea that the EU simply represented the be-all and end-all of economic prosperity has been completely exploded by his remarks. If those record high levels of youth unemployment occurred in the constituencies of any Labour Member, they would be rightly outraged. We have great opportunities outside the EU, which is why I hope that we can pass the Bill and move forward in these discussions.

[Tom Brake (Carshalton and Wallington) (LD)]

The car industry, British steel and the travel industry are all citing Brexit as a major cause of concern in their sectors. Does the Minister consider that to be project fear or project reality?

[Kwasi Kwarteng]

I urge the right hon. Gentleman to end the uncertainty and back the Bill so that we can move on with this debate and get to the next phase of the negotiations. That would provide the certainty that the industries that he cites are looking for.

[Peter Grant (Glenrothes) (SNP)]

The Minister reminded us that the Government have done an economic analysis of a number of Brexit scenarios, but, very pointedly, they have not given us an analysis of the impact of the scenario that they are going to ask us to vote on in a few weeks’ time. Every analysis they have done of every Brexit scenario has shown that the economic damage to Scotland caused by Brexit is always made even worse if we also lose our rights under free movement of people. How does the Minister justify imposing this additional economic damage on a country that rejected Brexit by 62% in 2016?

[Kwasi Kwarteng]

I fully appreciate the concern of the Members from the Scottish National party. They campaigned for two referendums. They got beaten in both of them and now they simply want to re-run them. The fact is that the United Kingdom voted to leave and this Government—and Ministers—are pledged to deliver on that referendum result.

[Peter Grant]

I want the result of the referendum to be respected. I want the 62% of sovereign citizens in my nation to have their declared will respected. Does the Minister not realise that, every time he or his colleagues say that Scotland has to put up with this because Scotland is part of the Union, they are driving another nail into the coffin of that Union? Does he not appreciate that his comments today will simply persuade more and more Scots that, next week, the way to protect Scotland’s interests is by returning an increased number of SNP candidates to the European Parliament and by making sure that, in 2024, Scotland participates in those European elections as a full sovereign member of a partnership of equals?

[Kwasi Kwarteng]

My right hon. Friend the Secretary of State was in Scotland last week, and the opinion there is very divided on this issue, as it is in the rest of the United Kingdom. The hon. Gentleman will appreciate, as a democrat, that the vote in 2016 was a national vote—a United Kingdom vote—and we are pledged to respect the majority result, which was to leave the European Union.

[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

4. What recent assessment the Government have made of the economic effect of the UK leaving the EU customs union.

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[The Parliamentary Under-Secretary of State for Exiting the European Union (Kwasi Kwarteng)]

In November 2018, the Government published an assessment of the future security partnership as set out in the political declaration. The political declaration itself recognises the shared threats faced by the UK and the European Union and provides a framework to safeguard our security. That framework, as the hon. Lady will know, covers law enforcement, judicial co-operation in criminal matters, foreign policy, and security and defence co-operation in areas where we hope to have mutual co-operation.

[Diana Johnson]

Protecting our national security from organised crime and terrorism is of course the first duty of any Government. My constituents want to know that we will still be able to participate in the European arrest warrant and share criminal record checks if or when we leave the EU, so what further progress has been made on what was put into the political declaration so many months ago?

[Kwasi Kwarteng]

The hon. Lady will appreciate that those matters are for the second phase of the discussions between us and the EU. To get to that second stage, I sincerely recommend that she support the withdrawal agreement. That is the only mechanism by which we will get to phase 2 of the negotiations, where we can discuss some of these matters, which are critically important to her constituents and to the country.

[Janet Daby (Lewisham East) (Lab)]

10. What recent discussions he has had with the Secretary of State for Health and Social Care on the effect on the NHS of the UK leaving the EU.

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[Mary Robinson (Cheadle) (Con)]

13. What steps the Government are taking to support towns after the UK leaves the EU.

[The Parliamentary Under-Secretary of State for Exiting the European Union (Kwasi Kwarteng)]

The Department continues to work closely with colleagues in the Ministry of Housing, Communities and Local Government to ensure that towns and communities across England are supported post Brexit. In March, the Government announced a new £1.6 billion stronger towns fund for England, which will boost growth and give communities a stronger say in their future after Brexit.

[Mary Robinson]

Earlier this year, the Government announced that £55.6 million will be made available to local government to cover the additional expenditure resulting from Brexit, and it is important that councils such as Stockport are prepared from day one after we leave the EU, so that my constituents can have uninterrupted local services. How will my hon. Friend ensure that, as local authorities make their bids for the stronger towns fund, towns and villages such as Cheadle are able to feel the benefit?

[Kwasi Kwarteng]

I congratulate my hon. Friend on her tireless work representing and championing her constituents in the north-west. More than half the allocated stronger towns fund will go to towns across the north of England, and just over £281 million will be allocated to the north-west region. There will be further opportunity to deliver locally led projects, create new jobs and support the Government’s commitment to building a more prosperous economy across the United Kingdom.

[Chris Elmore (Ogmore) (Lab)]

One of the ways that the Government could start moving on regeneration, not just in England but across Wales, Scotland and Northern Ireland, is to set out when the consultation on the shared prosperity fund will start. It was meant to start before December 2018, but Ministers from the Treasury, the Wales Office and the Department for Business, Energy and Industrial Strategy do not know when it will be. Perhaps Ministers from the Department for Exiting the European Union can give us some answers for a change.

[Kwasi Kwarteng]

The hon. Gentleman will have observed that we have not yet reached a deal on the withdrawal agreement. The shared prosperity fund is the pot of money that will be allocated across the UK once we have left the EU. The withdrawal agreement still has to go through. We recognise the importance of reassuring local areas at that point that the shared prosperity fund will be distributed, but it does not make any sense to do that ahead of the ratification of the deal.

[Tom Pursglove (Corby) (Con)]

14. What assessment the Government have made of the potential effect on voter confidence in (a) politicians and (b) democracy of revoking Article 50.

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[Alex Cunningham (Stockton North) (Lab)]

T2. It is three years since the EU referendum and the chemical industry on Teesside and beyond is still nervous about the future. That is having a major impact on jobs and investment. Time and again, I have raised this issue with Ministers, and time and again they have failed to provide the assurances needed; what has the Brexit Secretary got to say now?

[The Parliamentary Under-Secretary of State for Exiting the European Union (Kwasi Kwarteng)]

I am very pleased that the hon. Gentleman has raised that question. I have not visited his constituency exactly, but I have been to Teesport and seen many representatives of the chemicals industry, and the one thing they are very anxious to do is create some certainty: they want this phase of the Brexit process to be completed and feel we should back the deal and back the withdrawal agreement. They have, unlike many Opposition Members, accepted the result of the referendum and want to move forward with this process.

[Jeremy Lefroy (Stafford) (Con)]

What preparations have the Government made to establish a UK investment bank to take over the responsibilities and functions of the European Investment Bank and indeed to do more for investment in the infrastructure and businesses of the UK?