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Withdrawal from the EU: Economic Impact

Volume 732: debated on Tuesday 9 May 2023

12. What recent assessment his Department has made of the potential impact of the UK’s withdrawal from the EU on the economy. (904825)

17. What recent assessment his Department has made of the potential impact of the UK’s withdrawal from the EU on the economy. (904830)

The UK has grown faster than France and at a similar rate to Germany since leaving the single market. It remains challenging to separate the effects of Brexit and wider global trends on the UK economy, such as the invasion of Ukraine by Russia, adding pressures to trade, prices and the wider economy. We continue to support businesses trading with the EU and help them to seize new opportunities with fast-growing economies around the world, including through our free trade agreement negotiations.

Happy Europe Day, Mr Speaker. In recent months, we have seen tech companies attack Brexit. The world-leading chip company Arm opted to float stock only in the US because of how bad a place the UK is to do business, so we have culture, tourism, the NHS and now tech all suffering because of Brexit. How grateful does the Minister feel that the Leader of the Opposition has dropped his and his party’s principles and are supporting this costly Brexit?

Crikey, I am going to leave it to the Leader of the Opposition to flip-flop his way through that particular policy. What I can tell the hon. Lady is that we are the best place in Europe to invest in tech. We are only the third economy in the world with a $1 trillion tech sector; we are ranked as the world’s fourth most innovative economy; and we have created more unicorns than France and Germany combined.

Unicorns and fantasies are largely what we hear from Members on the Government Benches these days. The reality is that the Music Venue Trust reckons that grassroots venues are closing at a rate of one per week, bands from Europe find it increasingly difficult to travel here, and our hospitality sector more generally is experiencing catastrophic staff shortages. Is Lord Heseltine not right when he says that Brexit has been

“a classic mistake, a terrible”

horrible miscalculation, and the

“elephant in the room of our present economic difficulties”?

I am interested that the hon. Gentleman dismisses these incredibly successful unicorn start-ups in the UK economy. I hope that he will not dismiss their continuing success as we continue to support them through the various tax reliefs we are offering them and investment, including our most recent research and development tax reliefs. I would also point out to him that of course Scotland will benefit from some 73 trade deals secured with non-EU countries—benefits that include control of our fishing waters, something that I know is a matter of great concern to Scottish residents.

I am never quite clear why, if we do not like trade barriers, the answer is to erect even more of them. The Government said that through the Retained EU Law (Revocation and Reform) Bill, they would get rid of 4,000 laws built up during our time in the EU. The Prime Minister even got his shredder out to show us what this would look like, and the Government said there would be a sunset clause to make sure all this happened by the end of the year. Voices from both business and the trade unions have said that this could cause even more chaos and uncertainty and undermine workers’ rights, in breach of the promises made by Ministers at the time of the referendum. Can the Minister confirm whether, after marching their troops up to the top of the hill and getting the Back Benchers very excited, the Government are keeping the sunset clause to have all this done by the end of the year?

I do not know whether I can speak on behalf of the Secretary of State for Business and Trade, who is the portfolio holder for that piece of legislation. What I do know is that the Bill is currently before the House of Lords, and will no doubt be scrutinised very carefully by their lordships. I can also reassure the House that we are taking a careful and considered approach to the benefits—the regulations, the laws—that Brexit presents to us, and we know from our discussions with businesses that business certainty is something that we all want to strive for and achieve. I am sure that once this Bill has been scrutinised by the House of Lords—[Interruption.]

Order. I have got another question to come. The Minister should not worry; there will be another chance.

I think business certainty might be improved by an answer to the question.

Inflation is at 10%, the highest in the G7, and food inflation is at 19%. The former Prime Minister—the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), to avoid confusion, because there are a few former Prime Ministers—promised us that

“there will be no non-tariff barriers to trade”,

but we already know that many small businesses are giving up exporting to the EU altogether because of costs and delays. With inflation already at those levels, the Government have picked this moment to impose a new system for checks on EU goods that is estimated to add £400 million a year to the cost of goods coming into the UK. Can the Minister tell us why the Government are picking this of all moments to add these new costs and price rises to UK consumers who are already struggling to make ends meet because of the biggest cost of living crisis in decades?

Just to clarify, I was being respectful of not just this House, but the right of the other House to scrutinise legislation. I hope the right hon. Member would agree with that, as the fine parliamentarian that I know he is. On business certainty, through this legislation, and also importantly through the measures we are setting out through the Windsor framework and the arrangements at borders, we are seeking to give businesses exactly the certainty they need after Brexit. We all accept that leaving the European Union and the single market was a generational change—a seismic change in how we wish to do business—but unlike the Opposition, we believe in Brexit and the opportunities it can provide our businesses, and that is why we are taking these measures through carefully and considerately with businesses.