I spoke from the frontbench on the General Debate on European Affairs on 15th March 2018. You can find the Hansard of the entire debate here.
As we mark the halfway point of this general debate, it is worth reflecting on the fact that we have had a number of thoughtful contributions from Members on both sides of the House. Although I welcome any opportunity for Parliament to debate and, I hope, shape Brexit, no one is under any illusions about the fact that over these two days we are doing anything more than filling time to cover the Government’s legislative paralysis. It is just over a year until we leave the European Union. We have a mammoth legislative task ahead of us, but the Government are holding back the Customs Bill and the trade Bill because they are, understandably, afraid of defeat. They have yet to present Bills on migration, fisheries and agriculture; perhaps they are worried about some of the hard truths in those areas.
The Prime Minister was right to say at Mansion House that we need to face hard truths, on the basis of evidence. Not only do I agree with the Prime Minister, but I agree with her former deputy, the right hon. Member for Ashford (Damian Green), who said:
“If analysis is being produced then publish it. And frankly there will be a big political debate about it. Let’s have this argument in public—that’s what democracies do.”
The country faces critical decisions that will define how we live and our place in the world for generations to come. Honesty, openness and hard truths are the very least that people deserve.
That is why the Opposition pressed for the publication of impact assessments and the Treasury analyses of the future of the economy under the different available scenarios. Those analyses, which have now been published, make sobering reading. Ministers have said on several occasions—I think this was repeated yesterday—that the three options that the Treasury modelled do not reflect their desired outcome. But the Minister for Trade Policy, the right hon. Member for Chelsea and Fulham (Greg Hands), yesterday told the House that the Government were seeking an ambitious free trade agreement with the EU. I think that that was repeated this morning. The central model in the Treasury analysis was exactly such an agreement—it was described as the best possible free trade agreement—so it has been modelled. What did that model tell us? Over 15 years, such a free trade agreement with the EU would result in a 5% hit to the economy. That would mean 5% fewer jobs and 5% less money for public services. To paraphrase the right hon. Member for Broxtowe (Anna Soubry), this must be the first Government in history who are setting as their ambition reducing the size of the UK economy.
At Mansion House, the Prime Minister was honest about the fact that her plans would result in downgraded access to EU markets. What she did not make clear, and what her Cabinet has resisted making public, is just how damaging that version of Brexit would be to the economy. Initially—this feels like some time ago—we heard Ministers talk enthusiastically about their plans for an ambitious free trade agreement with the United States, which would compensate for the damage to our trade with the EU. But according to the Government’s own analysis, even if they achieved that deal, it would boost GDP by just 0.2%. Let us be clear that that would be in return for dismantling our food health and safety standards, among other US demands. We could end up with nothing but a hard border in Ireland if we diverged from EU agricultural standards, and a US deal would require us to do so. If the ongoing negotiations on open skies are anything to go by, the special relationship will not count for much in the cold, hard light of trade negotiations.
It is fascinating to watch how even the more extreme Brexiteers suddenly decide, as the hard truth of the difficulties involved in a US trade deal dawn on them, that the US is not that important after all. On 4 March, we witnessed the spectacle of the hon. Member for Esher and Walton (Dominic Raab)—he was speaking as a Government Minister on Radio 5 Live—dismissing the importance of a US deal and saying that
“the real opportunities of the future will be with…emerging markets”.
US trade deals, the Northern Ireland peace agreement and Treasury economic analyses have all been casually brushed aside by those who long for the deepest rupture with the EU. But Labour will not do that.
In The Times today, the Government made a song and dance about this apparent concession by the European Union that the UK would be able to negotiate and sign trade deals during the transitional phase. Does the hon. Gentleman honestly believe that the British Government and the British civil service are going to be able to renegotiate 70-odd EU free trade agreements that we already have through the customs union, negotiate new trade deals with the US and emerging markets or whoever they may be with, and carry out the gigantic task of renegotiating the trade arrangement with the EU?
The hon. Gentleman is right to talk about the difficulties that would be faced, and there was naivety on the part of the Government in assuming that these deals can just be rolled forward. This is one of the arguments behind our approach and our policies on the customs union. We want to face the hard truths that the Prime Minister talked about at Mansion House and it is why we believe, along with the CBI and the EEF, that a new customs union with the EU is best for manufacturing and for our economy, and it is the only way of resolving the Northern Ireland border.
Is it not crystal clear to anyone who reads the Labour manifesto that Labour set out its bold vision for an independent UK trade policy—I agreed with some, but not all, of it—but that that would have been completely incompatible with staying in a customs union? It is completely misleading to suggest that it is compatible.
We could draw some interesting conclusions from the Conservative manifesto at the last election, but we all need to face facts and perhaps the Government need to change views in the cold light of those facts. I always find it interesting to take interventions from the right hon. Gentleman. I do not know whether he is still advising—
Sir William Cash (Stone) (Con)
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I think the Opposition spokesman is still dealing with the previous intervention, and he may in due course come to another intervention.
Thank you, Madam Deputy Speaker. As I say, I always find it interesting when the right hon. Member for Wokingham (John Redwood) talks about the interests of the British economy. I do not know whether he is still advising readers, through the Financial Times, to get money out of the country.
As the hon. Gentleman well knows, I never did that, I made a clear statement to the House and he should apologise.
Well, the right hon. Gentleman’s comment in the column in the Financial Times on 3 November 2017, under the heading
“Time to look further afield as UK economy hits the brakes”,
“I sold out of the general share ETFs”—
“in the UK after their great performance for the year from early July 2016 when I saw the last Budget and heard the BoE’s credit warnings. The money could be better put to work in places where the authorities are allowing credit to expand a bit, to permit faster growth.”
So I am completely accurate in my quote.
The hon. Gentleman should look at the whole portfolio, which still had massively more in the UK than in the general global representation, and this was nothing to do with Brexit.
I was simply questioning the right hon. Gentleman’s commitment to the economy, and he will note the headline—
Madam Deputy Speaker
Order. The hon. Gentleman, and all hon. Members, can question other Members’ political attitudes and what they say in this House. What we cannot have is one Member suggesting that another Member has said something, in writing or otherwise, which he says he did not say. [Interruption.] The hon. Member for Greenwich and Woolwich (Matthew Pennycook) will not question what I am saying. Mr Blomfield might like to consider just closing this down with a withdrawal of his remark about Mr Redwood.
I thank you for that clarification, Madam Deputy Speaker. I apologise for any offence, but I was simply quoting from the Financial Times column by the right hon. Gentleman, which said:
“Time to look further afield as UK economy hits the brakes”.
I hope we can return to the subject we are meant to be debating today. The hon. Gentleman talks about manifestos, and of course his party failed to get elected on its one. Is he familiar with the Conservative manifesto, which some may say we have drifted away from to some considerable extent? It made it clear that the Government’s policy, should they be re-elected to govern our country, was that we would seek a customs arrangement.
I was aware of that manifesto, and the right hon. Lady is right in what she says. I also reflect that the manifesto and the narrative surrounding it sought an overwhelming mandate for a hard Brexit, which the British people failed to give to the Conservative party.
Let me move on to explain why we believe a comprehensive customs union with the EU that replicates the current arrangements also does not weaken our opportunity to develop trade with the rest of the world—certainly not in services. As Germany has shown, we do not need trade deals to develop trade, for example, with China. As the International Trade Secretary acknowledged when he was there with the Prime Minister in February, membership of a customs union will not hold back bilateral trade. Where deals can be done, we think member- ship of a customs union gives us a stronger hand in trade negotiations, as part of a market of 650 million people, rather than just one of 65 million people, and in maintaining strong EU standards.
Members of this place and the Government must be honest about the fact that any trade agreement—
I am listening carefully to the hon. Gentleman and I understand that he is asking to have a customs union with the EU. I listened to the Leader of the Opposition’s speech less than three weeks ago, where he also asked for an exemption on state aid and competition law. Does the hon. Gentleman agree that no country has a customs union with the EU and also has an exemption on state aid and competition law—even Turkey has to apply all EU treaties in this regard?
I recognise that the hon. Lady has enormous experience as a former MEP, but she did ask that question yesterday and my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook) replied. I think she is confusing a customs union with a single market requirement—[Interruption.] Let me answer the point in any case. The Leader of the Opposition did raise a concern that we would want assurances on competition policy, but we are absolutely confident that those assurances would be very easy to get and would not be problematic. As I believe was pointed out yesterday, the Leader of the Opposition said on the Peston show in January that we are absolutely confident that nothing in our manifesto would be thwarted by state aid rules.
I ask the hon. Gentleman to withdraw his accusation that I am somehow confused. It is very clear in reading Turkey’s customs union arrangements that it has to comply with all EU treaty rules on state aid and EU law on competition.
I thank the hon. Lady for that clarification, but we are not seeking a customs union comparable with Turkey’s. We are seeking a comprehensive customs union which replicates the current arrangements that we enjoy with the EU.
Let us move on to another area. We need to be honest about the central issue on which many of those who campaigned to leave focused their campaign and which influenced the votes of many—immigration. Taking back control of our borders was a powerful promise, creating expectations that the Government really have no plan or intention to deliver. The Government have had control of non-EEA immigration for the past eight years and in every one of those years it was greater than EEA migration.
The Government know that things will not be changing significantly. Two weeks ago, that ardent Brexiteer, the Secretary of State for Environment, Food and Rural Affairs, told the National Farmers Union that
“agriculture needs access to foreign workers.”
He promised to maintain that access, for both seasonal and permanent workers. He was echoing the Secretary of State for Exiting the European Union, who said in Estonia last year that it will take “years and years” for British citizens to fill the employment gaps, and that in the meantime Estonians would be welcome to come to work in the UK. At Mansion House, the Prime Minister talked about a future labour mobility scheme with the EU.
The difficulties of squaring the expectations unleashed by the leave campaign with the interests of the economy are no doubt the reason why the Government have delayed the immigration White Paper, yet again, and do not look set to have a new system in place by the time we depart in March 2019.
When the hon. Gentleman referred to the numbers of non-EEA migrants, I was a bit concerned that he almost sounded as if he was sympathetic towards the Government’s obsession with treating immigration as a number that should be brought down rather than as something that benefits our nations economically and socially. Will he comment on the speech made by the Leader of the Opposition at the Scottish Labour party conference in Dundee last weekend, in which he referred to the EU as something that allowed low-paid workers to be brought into the UK, thereby driving down wages? Does the hon. Gentleman agree with a growing number of Labour Back Benchers that the Leader of the Opposition was wrong to say that and should apologise?
We have always been clear—as indeed, have the Government—about the benefits of migration. That was not what the Leader of the Opposition said in Scotland. There is no evidence that migration drives down wages. There is an issue, which Labour would tackle—it has been in our manifesto for the past couple of elections—on the exploitation of European workers, and those from other countries, in the UK. We need tougher labour-market rules and enforcement to tackle those issues.
The Prime Minister was right to say in Munich and at Mansion House that she was ready to cross her red lines on the European Court of Justice in relation to security, because of the importance of security to this country. She is clearly right: security is vital. I think she was influenced by the fact that, as a former Home Secretary, she had an intimate understanding of the issues and recognised the consequences of failing to reach an accommodation. If security is vital to this country, as it is, is not the economy, too?
The Prime Minister was right to talk about hard truths, because the British people, whether they voted leave or remain, will not thank politicians who deliver a damaging Brexit on the basis of a false prospectus. The former Prime Minister John Major was right, too, when he said that it is right not only to speak truth to power, but to speak truth to the people. Let us face up to the hard facts: there will be no Brexit dividend for public services, as the Chancellor confirmed again on Tuesday; there will be no significant change to migration; there are no real red lines on the European Court of Justice; and there will be huge damage to the economy, according to the Government’s own analysis.
It does not have to be like that. If the Prime Minister had said, “This country voted to leave the European Union, but it was a close vote. It was a mandate to go, but not a mandate for a deep rupture”, and if she had said, “We will leave, but stay close: in a customs union, as close as possible to the single market, a member of the agencies and partnerships that we have built together over 44 years”, she would have had the overwhelming support of this House. Instead, she has let a tiny band of extreme Brexiteers in the European Research Group set the agenda. It is not too late: she could reach out to the majority of the House and the majority of the country to adopt a sensible approach—to adopt Labour’s approach—and I hope that she will.