ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: The Chancellor’s autumn statement this Wednesday is expected to be pretty low on give-aways, some query whether the economic cost of Brexit means that the UK economy is in for a tough run no matter what Philip Hammond, the Chancellor, announces.  Well Labour MP Chuka Umunna is a former Shadow Business Secretary and a supporter of the Open Britain campaign and Conservative Dominic Raab is a member of the Exiting the EU Committee and was a Leave campaigner of course.  A very good morning to you gentlemen, I’m sure you’ve got different views on what Mr Hammond should do and I want to start with you Dominic Raab and it’s that basic point, do you recognise this figure of £100 billion that the OBR is going to tell us that the Treasury is going to borrow extra over the next five years?

DOMINIC RAAB: Well we don’t know what the OBR is going to say.  What we do know …

DM: Well do you recognise a large figure?

DOMINIC RAAB: No, I don't know, the forecasts have all been proved wrong so far, the IMF, the Bank of England and the official statistics have all gone back on those forecasts so let’s what and see.  What we know, hard developments in the economy, last week alone employment at record highs, inflation dipping below 1% notwithstanding the devaluation of sterling and Google is the latest company to announce a billion pounds of extra investment so let’s not have this endless pessimism. Actually the headline is from all of this that the economy is far more resilient …

DM: Well the Chancellor has just been talking about an eye-wateringly large debt.  

DOMINIC RAAB: Well no, I think those are words that have just been put in … In national debt terms yes of course because until we’ve got the deficit …

DM: But borrowing adds to the debt.

DOMINIC RAAB: Until we’ve got the deficit down we’ve always known, we’ve had this debate since 2010, we’re not going to really get to grips with national debt so he’s right and I support him being a fiscal hawk but the economic resilience of the economy post-Brexit has frankly confounded the pessimists.  

DM: All right, that point Chuka Umunna, this 100 billion that is being floated around, the cost over five years, might be wrong says Dominic Raab.

CHUKA UMUNNA: Well he’s right in the sense of these being forecast but on the Treasury’s own forecast we know that they think that if for example we were to come out of the EU customs union and end up trading with the EU and the rest of the world on WTO rules  we would be looking at at least a £66 billion hit per year on what comes in to the Exchequer.  Now I’ve just quoted a big number but that is far bigger than say what we spend on education.  The priority here in this autumn statement is to ensure that if you work hard, you play by the rules, you do the right thing whatever your background, you and your family see the rewards.  Now even before we voted to leave the European Union …

DM: Hard working families.  

CHUKA UMUNNA: ... this was not happening in the last Conservative led coalition and it’s certainly not happening in this parliament, the question is does Brexit make it more or less easy to resolve that issue?  I would argue …

DM: Less.

CHUKA UMUNNA: .. and you can see it makes less.  I’ll give you a very tangible reason why, if you look at the depreciation in sterling it means that the things that we import are costing a lot more so your viewers when they go to buy things in the shops, imported goods, they are paying more for those and also …

DM: But on the hard figures, which is what I’m looking for, that’s come through in the balance of payments figures hasn’t it so since Brexit not much has changed.  

CHUKA UMUNNA: Well hang on just a minute, since the last autumn statement sterling has depreciated by around 21% but the really big fall, particularly after we left the, we voted to leave the European Union came around October because of uncertainty around the way in which we are going to be able to trade with the rest of the world so that’s a very tangible way in which actually the uncertainty coming from the Brexit vote is impacting on your viewers and I have to say my biggest issue here is traditionally …

DM: Let’s have a debate, go on.  That’s what I’m looking for, we’re throwing some big numbers around but on the business survey, CEBR last week of a thousand businesses, £65 billion of investment on hold.  That’s what businesses have said.

DOMINIC RAAB: First of all by the way in terms of the record of the government, nearly three million new jobs since 2010 and three million of the lowest paid workers taken out of income tax, I think that’s a pretty good record to build on but actually in terms of inflation, there is a risk here because of the devaluation of sterling but what have we just seen last week?  Inflation dipping below 1%.  So let’s not, these forecasts that it would go through the roof have certainly not materialised on the facts yet.  In terms of the City and business confidence, actually I thought it was remarkable hearing both Callum Fairbairn, head of the CBI and John Longworth, former head of the British Chambers of Commerce, on the BBC today both talking about the opportunities of Brexit, particularly around trade.  I think there is a huge amount of evidence that …

DM: But there are plenty of people on the Leave side that do say this, that there might be a short term hit but in the long run it will be worth it, would you endorse those comments?

DOMINIC RAAB: Oh there is definitely some short term risk and some uncertainty, of course until businesses see the contours of the negotiation some decisions are on hold but let’s not turn that into boundless pessimism.  

DM: This is democracy, the people have chosen, they knew that it might take a short hit but in the long run it would be better.

CHUKA UMUNNA: This is ridiculous.  The reason why the forecasts and the data are not as bad as people thought they would be back in August is because of the aggressive monetary policy measures that the Bank of England and the Governor introduced, increasing quantitative easing, reducing interest rates and what happened to the Governor as a result of that?  He had calls for his head, calls for his resignation and the question is what should Philip Hammond do on Wednesday.  First of all he should make good on the promise to many of those who campaigned for us to Leave gave to the country and your viewers, that if we left the European Union we’d be put on a path to putting £350 million extra per week into our NHS, so that’s one thing.  Secondly …

DOMINIC RAAB: We made very clear well before the referendum that the campaign was … this is the problem, this is precisely the problem …

CHUKA UMUNNA: This is the scratched record of the old debate, let’s move forward. I agree with you, I want more money to go into the NHS and you campaigned for that to happen.  

DOMINIC RAAB: But we said £150 million out of it when we were pressed and…

CHUKA UMUNNA: What about the bus?  

DOMINIC RAAB: I said look as a campaign we think this is the kind of thing we could do with the money we’ll get back but of course it’s for the elected government to decide, I still stand by that but what we really ought to be doing…

DM: But that’s jam tomorrow, that’s when the UK formally leaves the EU, you don’t think the Chancellor should act now?

DOMINIC RAAB: On the NHS?  No, I think you’ve got to wait for that money to accrue before we start spending money we don’t have. That was Labour’s original sin if you like.  

CHUKA UMUNNA: On that, we need to …

DOMINIC RAAB: Let me finish.  The country has gone from a very polarised split to three to one in favour of making – according to YouGov this week, to the extent we can trust polls at all – making it work.  So what we should do is not repeat and reheat the referendum debate, we should lock horns, work together, yes mitigate the risk but also seize the opportunities.

DM: The decision has been taken Chuka Umunna, that’s what he’s saying, let’s all work together.

CHUKA UMUNNA: It is but people like Dominic need to deliver on their promises.  If they say they are going to put £350 million extra a week into the NHS, which they all did, then they should deliver it but also look, we are in turbulent economic conditions here, I think you can’t just leave the Bank of England to do all this work, you do need fiscal policy to operate so I think the Chancellor should consider cutting VAT to boost demand in the medium term because we’ve got choppy waters ahead.  He should improve investment and innovation in these things because otherwise we are not going to be able to attack …

DOMINIC RAAB: The IMF has gone from saying we will have recession to saying we’re the fastest growing economy …

DM: Do you know what, we’re going to continue this conversation when we’ve got the figures on Wednesday.  Good to see you, Chuka Umunna, Dominic Raab, thank you very much indeed.