PARLIAMENTARY DEBATE
Leaving the EU: Economic Analysis - 30 January 2018 (Commons/Commons Chamber)
Debate Detail
I can confirm that—I think the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) will want to listen to this. I can confirm that when we bring forward the vote on the final deal that we agree with the European Union, we will ensure that the House is presented with the appropriate analysis that the Government have carried out, so that the House can make an informed decision. All Members must surely agree, however, that the Government cannot be expected to put such an analysis into the public domain before it has been completed. That would misrepresent our views. Furthermore, the Government cannot be expected to publish the analysis while the negotiations continue, which would surely harm the national interest. Parliament has rightfully agreed that Ministers have a duty not to publish anything that could risk exposing our negotiating position.
Let me now turn to the article that prompted the urgent question. It is a selective interpretation of a preliminary analysis. It is an attempt to undermine our exit from the European Union. As I have told the House before, the Government are undertaking a wide range of analysis on our exit from the EU. The next stage of that analysis, summarised in a draft paper presented to Ministers this month, has been a cross-Whitehall effort to support our negotiating priorities. It has not been led by my Department, and it is not yet anywhere near being approved by Ministers. Even the ministerial team in my Department has only just been consulted on the paper, in recent days, and we have made it clear that it requires significant further work. In fact, I saw this report myself only this morning. The analysis to which I believe this article refers is a preliminary attempt to improve on the flawed analysis around the EU referendum. It is there to test ideas and to design a viable framework for the analysis of our exit from the EU. At this early stage, it only considers off-the-shelf trade arrangements that currently exist; we have been clear that these are not what we are seeking in the negotiations. It does not yet consider our desired outcome: the most ambitious relationship possible with the EU, as set out by the Prime Minister in her Florence speech.
Such an agreement is in the interests of both the UK and the EU. Therefore, the scenarios in this analysis continue to suffer from the flaws we have seen in previous analyses of this type. Such analyses have been proved to be wrong in the wake of the referendum, not least because there is huge uncertainty around any forecast, especially in the long run and especially in the context of a major strategic choice.
It is the Government’s job to improve on this analysis, but to do so we first have to understand where it went wrong previously. That is what the analysis to which this article refers is: it is not a forecast for our preferred outcome of the negotiations; it does not yet properly take account of the opportunities of leaving the EU.
Finally, on 23 June 2016 the people of this country took a decision to leave the EU in the context of a wide range of economic information. The purpose of this analysis is not to question that decision, which this House voted overwhelmingly to uphold. I hope all Members of this House will agree that we should continue to respect the result of the referendum.
Here we go again: Brexit impact assessments, take two. For the past year, we have called on the Government to publish Brexit impact assessments. It is a simple argument: on decisions of this significance, Parliament is entitled to know the likely impact of the Government’s approach to Brexit and thus to hold the Government to account. The Government have repeatedly refused our requests.
Last year the Secretary of State initially insisted that these reports existed in “excruciating detail”, but were so sensitive that nobody else could see them. After this House passed a binding Humble Address, the Secretary of State changed tack, telling the Brexit Select Committee just last month that no “economic forecast of outcome” had ever existed. Yet last night we learn that an analysis has been produced after all.
This is now piling absurdity upon absurdity, and there are some pretty obvious questions. When was this new analysis commissioned? In particular, was it before or after the Secretary of State gave evidence to the Brexit Select Committee last month on this issue? Is this the only report that has been prepared on the Brexit scenarios? If not, what other analysis has been done? Does this new analysis model the Government’s Brexit approach? If not, why not? If so, will it lead to changes in Government policy? Finally, and most importantly, will the Secretary of State publish this now—not in nine months, but now, so that we can hold the Government properly to account?
We have been here before. It took a great deal of time last year and the use of a Humble Address to force the Government to release documents relating to Brexit. The Secretary of State has the chance today to avoid a repeat of that exercise if he commits to publishing this new analysis in full; will he do so?
As I said in the opening words of my reply, when the time comes for a meaningful vote, the Government will ensure that the House is appropriately informed. However, we can see what some of this economic analysis could be worth. Let us take as an example the respected Bank of England. What institution could be more respected for its analysis? In August 2016, it made a quantitative forecast of the impact of Brexit, saying that exports would go down by 0.5%, but they went up 8.3%. It said that business investment would go down by 2%, but it went up by 1.7%. It said that housing investment would go down by 4.75%, but it went up by 5%. It said that employment growth would be zero—flat—but it went up to a new all-time high. The public deserve to see the national interest protected in these negotiations and to have a House of Commons of representatives who exhibit a healthy scepticism about economic forecasting.
“have the Government undertaken any impact assessments on the implications of leaving the EU for different sectors of the economy?”
He replied, “Not in sectors.” Now we learn that that work has been done, and it is reported that chemicals, clothing, manufacturing, food and drink, cars and retail will be the hardest hit sectors. Will the Minister offer the House an explanation for the discrepancy between what the Exiting the European Union Committee was told and what we now know?
All of us in this House need to have an eye on the long-term functioning of our democracy and our constitution. With that in mind, I hear what my hon. Friend says. There is clearly a campaign to overturn the referendum result, and it can be seen at work in the media and in this House. We will certainly bear in mind what he says.
If there is indeed no deal, we would likely fall out on World Trade Organisation rules. Will the Minister confirm that in one of the scenarios outlined in the report—the WTO option that is advocated by many Conservative Members—the impact of non-tariff barriers is the equivalent of a 10% tariff slapped across the economy?
It would not be possible to honour the decision of the British people if we allow the European Union to set the UK’s tariffs and if we become people in a political purgatory of perpetual rule taking from the European Union without any democratic say. It is the desire of this Government that our country should continue to be a democracy. For that reason, we will leave the European economic area and the customs union.
We are heading for an open, liberal, free trading future for the UK. Any suggestion of nationalism is quite wrong and quite ludicrous, and the right hon. Member for Wolverhampton South East (Mr McFadden) should retract.
I have here a letter sent by the European Commission, which was received by British manufacturing firms, telling them that after Brexit all products certified for use by UK certifiers will no longer be eligible for sale in the EU. Those companies are now rushing to get their entire product range recertified, often at three times the cost, from European certifying authorities. What advice do the Government give to UK manufacturing firms that have products certified in the UK about what they should do in the run-up to Brexit and the need for recertification?
I must emphasise, on the basis of some little experience in the House, the merits of quantity, persistence and, above all, repetition. Members must—if I may very politely say so—keep at it. I remember one year tabling, I think, a little under 4,000 questions, which somewhat irritated Ministers at the time, although that caused me no concern whatever. I was simply concerned to table the questions that mattered to me. If that caused some inconvenience to other people, it was really beside the point. Democracy costs.
On whether Members will be granted access to analytical studies on the impact of the UK’s withdrawal from the EU ahead of any vote on the final deal, I do not know the answer to that question beyond what we have heard from the Minister today, and the Minister has said some things today on which Members can reflect. If the hon. Lady wants to put further questions on this matter to Ministers, it is open to her to do so.
On whether it is in order for Ministers or Departments to show information to journalists before providing it to the House, I would say that although this is not a matter of order, it would certainly represent a discourtesy to Members, and I would deprecate that. I hope that Ministers will reflect on the matter and consider what information should be provided to the House on this important matter at all stages. I hope that that is helpful to the hon. Lady.
The ministerial code of practice outlines seven principles of public life, one of which is on openness. It states specifically:
“Information should not be withheld from the public unless there are clear and lawful reasons for so doing.”
It sounds as though there is certainly a discrepancy between what was said to the Select Committee in December and what we have heard over the past couple of days and some things that the Minister has said today. What course of action is open to a Member who wishes to pursue the matter at stake if the Secretary of State or a Minister has not provided information that should be available to my constituents and businesses who are deeply affected by it?
Secondly, the hon. Gentleman inquires on what recourse he has if he believes that there is a discrepancy. The short answer is that he can table a question or, indeed, a series of questions on the matter, applying his little grey cells to the formation of such inquiries as he thinks appropriate.
Thirdly, the hon. Gentleman referenced evidence to the Select Committee. He will have heard his right hon. Friend the Member for Leeds Central (Hilary Benn), the Chair of the Brexit Committee, who asked a question on this matter early in the exchanges. The right hon. Gentleman and his colleagues can pursue the matter if they so wish. They have a track record of doing so on previous occasions and might choose to do so on this occasion. I hope that that is helpful to the hon. Gentleman.
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