Economy: Impact of UK Withdrawal from EU

3. What recent assessment his Department has made of the impact of the UK’s withdrawal from the EU on the economy.

14. What recent assessment he has made of the impact of the UK’s departure from the EU on the economy.

Busy day for me. With permission, I would like to answer this with question 16.

Leaving the EU has enabled the UK to realise an array of economic opportunities—not just the Solvency II reforms, but 71 trade deals with non-EU countries worth £240 billion to the UK economy in 2021.

I thank the Chancellor for that answer, but analysis by Bloomberg estimates that Brexit is costing the UK £100 billion a year in lost output. The Office for Budget Responsibility forecasts the UK economy will be 4% smaller in the medium term, again due to the impacts of Brexit. The Centre for Economic Performance has warned that Brexit has added almost £6 billion on to UK food bills in the two years to the end of 2021. How much more damage will need to be done before this Government take off the red, white and blue goggles and see the reality that Brexit is an economic drag of disastrous proportions for the countries of the UK?

Chancellor, it is 14, not 16, but do carry on.

Thank you for correcting me, Mr Speaker.

It’s for Barry’s benefit. [Laughter.]

And very important, too, if I may say so.

There is a certain irony in the SNP opposing Brexit at the same time as advocating separation for Scotland, which would have a far bigger impact. But as the hon. Member has talked about our economic performance, since we left the single market, our growth has actually been higher than that of France or Germany. There are other things that have happened since then as well, but I do not think it is the doom and gloom that he suggests.

Last week, I was a bit unkind to one of the Treasury team, and can I apologise for that? I shall be very nice this morning.

Does the Chancellor agree with former Home Secretary Amber Rudd? Yesterday, she said that in order to be a Conservative today you have to have a few drinks and then say that Brexit actually works, or if you have really had a few drinks you can admit it does not work. Could we on all Benches admit that we are poorer in this country because of Brexit and do something about it?

All I would say is that, if Labour really are against Brexit, they should have the courage of their convictions and say they want to re-join the EU. That is the problem: because they do not believe they can make a success of it, they will never be able to run the British economy under it.

I welcome the fact that this Government are so committed to making the UK an innovation nation that they have just today set up a whole new Government Department to promote innovation, science and technology. I have about 400 life science companies in my constituency, and there are some reservations about the reform to the research and development tax credit, introduced to try to tackle fraud in the sector. Can my right hon. Friend reassure them that the Government are still committed to supporting research and development companies while tackling fraud?

My hon. Friend is a formidable advocate for that sector and I do want to give him that reassurance. That is why we protected our R&D budget in the autumn statement at its highest ever level. We are continuing to look at how we can support the R&D small companies sector without allowing that fraud to happen. Thanks to his campaigning and the work of this Conservative Government, last year, we became only the third trillion-dollar tech economy in the whole world.

May I thank the Chancellor for awarding Morecambe £50 million for the Eden project? It will transform my whole community. My question is about VAT tapering. When I was David Cameron’s small business tsar—a very long time ago—I came up with a formula for VAT tapering. Would my right hon. Friend like to meet me to talk about that further?

First, I congratulate my hon. Friend on his extraordinary campaigning for Eden Project North, which is a model for MPs standing up for their constituencies; he deserves huge congratulations on that. I will happily look at his proposals on VAT tapering. We already have the highest VAT threshold in the G7, but anything we can do to help small businesses, this Conservative Government always do.

Question 5, Mr Speaker.

Four would be even better.