Chuka Umunna MP writes…Lib Dems are the only party committed to stopping Brexit and tackling the causes of Brexit

As the Conservative leadership contest draws to a close, with both Boris Johnson and Jeremy Hunt putting fresh paint on the impossible red lines set out by the Leave campaign, the threat of a a No Deal Brexit is closer than ever.

Both candidates are disregarding all the facts about the disastrous consequences this would have for the UK, with Boris Johnson even searching for ways to suspend Parliament to circumvent MPs to run down the clock to exit day.

Such a move would not only be a democratic outrage, but herald one of the most destructive acts of self harm on the UK ever willingly committed by our government. 

On Thursday, the Office for Budget Responsibility published its fiscal risks report. Commissioned in 2015, the report sets out to analyse the risks to public finances over the short to medium term. 

This year, the OBR devoted an entire chapter to assessing the risk of a No Deal Brexit to the UK’s finances and the findings were jaw-dropping.

Here are just 10 things the OBR warns would happen under Boris Johnson’s No Deal Brexit scenario:

1) The UK would enter a “year-long recession” at the end of 2019, with real GDP immediately falling by 2.1%.

2) The value of the pound would depreciate by 10% immediately, and remain low until at least 2024.

3) Business investment would drop due to trade costs, economic uncertainty and loss of some export markets.

4) Residential Investment and consumer spending would fall as real household income is squeezed.

5) Productivity growth would become even weaker, and remain below current projections until 2024. 

6) The growth in earnings would slow even further and remain so for the first few years.

7) Real wages would become “significantly lower”, by as much as 2.5% by 2024 compared to the last forecast.

8) Borrowing would be around £30bn a year higher from 2020-21 onwards due to tax receipts falling. This means no fiscal headroom at all for any of the tax and spend promises of Boris Johnson or Jeremy Hunt, or to allow the government to end austerity.

9) The overall impact of a No Deal Brexit and then trading on WTO rules would be a hit to GDP of 5.9%.

10) If a No Deal, WTO Brexit was combined with a stricter immigration policy for EU citizens, this hit to GDP would rise substantially, potentially as high as 9% according to the Government’s own figures.

On top of this, Brexit has already resulted in a weak pound, which has lost 17% of its value against the dollar since the 2016 vote; higher inflation; big falls in manufacturing output, construction, and business investment; and we have not even left the EU yet. 

We cannot hope to fix our broken economy unless we stop Brexit, and the two main parties aren’t up to the task. The Conservatives and Labour are part of the problem, entirely focused on their internal divisions while both clearly intending to implement their particular colour of Brexit in government.

The Liberal Democrats are the only party that can get into Government which is committing to stopping Brexit. We are the only party that can shake up the old two-party system, get into government, deliver a better economy and a better future.

We are the only Remain party with a chance of getting into Government committed to stopping Brexit and tackling the causes of it.

* Chuka Umunna is the Liberal Democrat MP for Streatham.

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19 Comments

  • Michael Cole 22nd Jul '19 - 12:10pm

    “with Boris Johnson even searching for ways to suspend Parliament to circumvent MPs to run down the clock to exit day”
    At the same time telling us how democracy must be defended by ‘honouring’ the 2016 referendum result and how undemocratic it would be to allow a ‘Peoples’ Vote’.

  • This is strong on the effect of Brexit but lacks the policies or even the approaches which we need to adopt to tackle the disaffection that led to Brexit. Not that I have a complete list either but to give a strong example some people believe their children are being squeezed out of family housing by immigration – a strong council housing problem might help. Some people believe our long and proud history is being under-mined by “political correctness gone mad”. Without wanting to debate for the moment whether or not we should be proud or ashamed of our history a weak example of addressing the concerns that led to the Leave vote might be a “United Kingdom Public Holiday” – other countries have their independence day [from the British Empire] public holidays – perhaps we should have one for celebrating our achievements – standing alone against Hitler in 1940 is the one I find most frequently quoted on the doorsteps although it is not normally phrased like that.

  • … of course I don’t mean “a strong council house problem” – what I should have typed is a strong council house programme.

  • Project Fear (v1) didn’t work, Project Smear didn’t really get off the ground, Project Fear (v2) is just embarrassing.

    We were told all this before the referendum – we still voted leave.

    Apart from a flurry of faux concern immediately after the referendum no one has given a damn about the so called left behind and no amount of papering over the cracks changes the simple fact we choose not to have the EU involved in our lives.

  • Dilettante Eye 22nd Jul '19 - 1:52pm

    “We are the only Remain party with a chance of getting into Government committed to stopping Brexit and tackling the causes of it.”

    Is there a Part 2 to this article?

    The second part showing where Chuka puts flesh on the bones of a list of Lib Dem policy plans for “tackling the causes of it (Brexit)”, because there was absolutely zilch in this article to propose how money and resources are going to be re-directed beyond Watford?

  • It is always good to see an article written by one of our MPs or Lords (or even ex-MPs). I hope that Chuka will not do what most of them do, which is write an article and then not respond to the comments. Hopefully, he will post some comments in response to the comments of others.

    It is a bold claim to assert we have the policies to tackle the causes of Brexit. Hopefully in the next few days the policy paper, “A Fairer Share for All” will be published. It should contain how we would tackle some of the causes of Brexit, but it will not cover them all and I expect the solutions put forward regarding poverty will not end relative poverty in the UK.

    Even if we had a programmes to ensure:
    everyone who wants one has a home of their own;
    everyone who wants a job has one; and
    no one lives in relative poverty;
    could we achieve these over five years?

  • We face increasingly hard times, we can retreat into “being nice” or face hard reality and call out the idiots. Being “nice” won’t work, the deluded amongst us take it for weakness, only by pushing their stupidity down their throats can we win. Hard and harsh, yes but unfortunately no other approach will work.

  • The major policy that will help poverty is building affordable social housing. It would drive down rents and housing costs. The problem is it faces many vested interests, the screams from the buy to let industry, the banks and the house builders are likely to drown out that policy. That it should he implemented I have no doubt, that we have the guts to face the vested interests I do doubt.

  • Dilettante Eye 22nd Jul '19 - 6:32pm

    “The problem is it [affordable housing], faces many vested interests, the screams from the buy to let industry”

    Indeed, you make the point very clearly frankie.

    So can we agree that a policy of We must build more houses is not actually a fully formed policy at all, but rather a statement of political desire.?

    Policy is when you can design a method of building affordable houses, but with a strict policy addendum on their ownership and occupancy, to ensure that there are legal or financial constraints specifically designed to keep the buy to let snouts out of the trough ?

    Off the top of my head, I can see only a massive Council House building programme which can fit that brief, of course,.. with NO right to buy.

    The North also needs a rail and bus transport system which befits the 21st Century. That will inevitably need a massive money transfer from South of Watford, to North of Watford.

    Is Chuka,… and the conurbation of London and the South East , plus the Lib Dems ready for that level of massive financial transfer?
    Indeed, let’s see you put your Lib Dem policy where your mouth is. Just how serious are you at tackling the reasons for Brexit, or is it to be yet more warm words and waffle?

  • Mark Seaman 22nd Jul '19 - 7:46pm

    Use GDP per head? naaaaa … Agree that Housing costs will increase the higher that immigration is ? naaaaa… Address if a lower Pound might actually help UK exports? naaaa… Its the same one sided ‘Economics’ that has failed to predict all the significant moves in the UK economy in the last twenty years. ‘Tackling the causes of Brexit’ …from such as Umunna = shut up pleb and know your place 🙁

  • Housing costs rise due to lack of supply and the hoarding of housing. Now we could ban immigration and as the population decreases the cost of housing would decrease and Mark would be happy. You could let the pound plummet and compete with Turkey et al for manufacturing jobs, the problem is those jobs don’t pay for a functioning social safety net, but Mark would be happy and working till the day he died no doubt. Mark identifies we have issues but fails to understand we need to invest in housing, industry and productivity to improve our lives not parroting the Brexiteers playbook.

  • The problem is not just housing. There is sky high property pricing across the board, which is one of the reasons high streets are emptying, why pubs are closing and so on.
    It is not simply a matter of supply and demand and thus will not be cured by building more. The countryside is disappearing precisely because the profits are so high. The notion of “affordable housing” is built on a misconception of the problem and the solution is not a kind of glorified Ponzi scheme reliant on ever increasing numbers of people signing up to it. The other reality is that there is an unfair stigma to social housing,
    Wages have been devalued, work is unstable, pensions are under attack and this means property is increasingly less about having a place to live and more about having an asset one can borrow on or otherwise generate a cash flow.. The more that is borrowed the more the housing costs are inflated. If the answer was building more and having huge population growth then Chinese, Mexican and Indian standards of living would be higher than New Zealand’s or Austria’s. They are not and never will be because the more people there are the less they need to be paid and the less important individual financial stability becomes to GDP.

  • To put in place a new social housing policy you need three things, money, land and skilled labour. The land should be if possible brown belt, the skilled labour should be provided by training UK residents rather than robbing the world for skills and the money well that is actually the easy bit. For the money issue bonds against the housing and guaranteed by the government, yes I know there will be cries of it’s unfair private companies can’t get money that cheap but that’s just tough. As to preventing the sale of houses, well make that a prerequisite of the bond that assets cannot be sold until the bond is redeemed and make the bond a 50 or even a 100 bond.

  • Richard Underhill 23rd Jul '19 - 9:34am

    There may be a vacancy for Deputy Leader.

  • Richard Underhill 23rd Jul '19 - 10:06am

    The Tories have turned their first elected leader into an un-person.
    The news on 22/7/2019 was that a fantasist had been convicted and sentenced.
    Several other prominent people had been wrongly accused late in their lives.
    He was PM 1970-1974 and an important figure in the confirmatory referendum in 1975 along with Roy Jenkins and David Steel.
    He never married. Speculative gossip about marital status happened to other busy political leaders who did marry and have children, including Gordon Brown and Charles Kennedy.

  • @Glenn.
    The countryside is disappearing precisely because the profits are so high.

    It’s also the style of housing; the aspiration to live in houses, instead of apartments eats up green space.

    In Spain where I live, towns are more compact, because the vast majority of residents (including wealthy residents) live in flats.

  • John Littler 23rd Jul '19 - 11:32am

    The UK economy is distorted by the concrete yoke that is an overbearing and failing property market that sucks investment money away from productive areas and impoverishes people to starve the remaining economy
    The main banks have largely given up financing SME companies and instead direct money into the one way bet of property. Cable had to invent banks in the public sector, The British Business Bank and the Green Bank, now sold off.
    The openness of the UK property and capital markets combined with the attractiveness of London make the capital a magnet for property buyers from the rich and companies anywhere in the world, pushing prices to outrageous and unaffordable levels and often to be kept empty, looking great on accountants book for some strange reason.
    The UK’s productive areas of the economy are starved of funds because of the preponderance of the low risk and high returns property market. The UK’s low and now falling productivity and low long term investment levels compared to France and Germany are the seeds of the UK’s low wages and poor quality work. This is also seen in our balance of payments deficit, which is also worsening now.

  • Gordon Lishman 23rd Jul '19 - 1:54pm

    Rather the politics of fear than the politics of sneer. Particularly when there’s something to be afraid about!

  • John Marriott 23rd Jul '19 - 8:33pm

    Affordable housing yes; but NOT if it’s going to be acquired up by the ‘buy to let’ brigade. As Lord Thompson of Fleet said when he bought Scottish TV, many of us have been seduced for decades by the idea that home ownership is, with ever escalating prices, a ‘licence to print money’.

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