European Affairs

Baroness Chapman of Darlington Excerpts

Wednesday 14th March 2018 Commons Chamber

[Phil Wilson (Sedgefield) (Lab)]

I want to raise two areas of European affairs this afternoon.

The first is the potential impact of Brexit on the north-east of England. Some 60% of north-east trade is with the EU and 50% of the cars manufactured in the north-east are exported to the EU. Nissan employs about 7,000 people and more than 30,000 jobs through the supply chain. I have never been one to say that, for example, after Brexit the Nissan plant will close, but I am concerned about future investment in the plant. As the Business, Energy and Industrial Strategy Committee said in its report on the impact of Brexit on the automotive sector:

“It is difficult to see how it would make economic sense for multinational volume manufacturers—the bulk of the UK automotive sector—to base production in the UK in a no deal or WTO tariff scenario. The shift of manufacturing to countries within the customs union and single market will be inevitable.”

The cost to UK jobs could be in the hundreds of thousands and to inward investment in the hundreds of millions of pounds. That is another example of why many of us on the Labour Benches call on the UK to remain a member of the single market and the customs union. The same report made it explicit that the UK cannot expect an expansion of trade overseas to outweigh the loss of trade to Europe arising from a hard Brexit. It seems senseless to me to walk away from one half of the north-east’s trade without a strategic means of replacing it other than through wishful thinking.

The impact assessments the Government tried to keep to themselves reveal the potential impact on the north-east. They identify that three of the major sectors to be hit by Brexit will be the automotive, chemical and pharmaceutical sectors—all major industries in the north-east of England. The impact assessments determine that of all the regions and nations of the UK, the north-east of England will be the worst hit. This is due to the region’s strong manufacturing and industrial base, which would be exposed most to the changes and trade barriers, and because we have the greatest dependence on exports as a proportion of the regional economy.

The impact assessments say that the north-east would see a decline in its GDP by as much as 16% over 15 years. We can talk about a new customs arrangement, frictionless borders and non-divergence as much as we like, but all we will end up doing is reinventing the wheel only to discover it will not be as round as the original. It is no surprise that the north-east of England chamber of commerce issued a statement following the spring statement. Ross Smith, director of policy for the chamber, said:

“the success or otherwise of negotiations and planning for Brexit could yet render these forecasts largely irrelevant and business still have little detail to base their planning on”.

The second issue, of great strategic importance not only to the UK but Europe, is our response to Russia’s flouting of basic international law and the international rules-based systems by which the community of nations should abide. I do not think we should doubt that Russia’s intent with the continent of Europe is to divide and rule. Putin wants a weak Europe. Brexit, I believe, plays straight into his hands. Russia wants to see Europe divided, introspective and prepared, ultimately, to play the international game by his and Russia’s rule.

Bully-boy tactics are always the result of the weak. The Russian state is weak, economically no larger than Italy. Its population is ageing. Its military strength may be perceived to be great, but it lacks depth.

[Jenny Chapman (Darlington) (Lab)]

I thank my hon. Friend and colleague from the north-east for giving way. I just wanted to point out that, although the north-east voted substantially to leave, it shares his concerns about manufacturing, jobs and security.

--- Later in debate ---

[Jenny Chapman (Darlington) (Lab)]

It is a pleasure to follow the outstanding and thought-provoking speech made by my hon. Friend the Member for Bristol South (Karin Smyth); I am very glad that I was in the Chamber to hear it. At the start of my speech, may I send our best wishes to the Minister, the hon. Member for Worcester (Mr Walker), who is about to embark upon the most challenging and rewarding experience of his life? It is not Brexit; he is due to have a baby—on Friday, I believe—and the thoughts of us all are with him.

This has been an interesting afternoon of speeches—not so much a debate as a collection of MPs’ thoughts on all matters Brexit-related. Excellent though the contributions have been, it seems to me that we have just taken part in what is known as displacement activity—the parliamentary equivalent of scratching one’s head when confused. Why is there no opportunity for the House to express its view in a vote? Because the Government are afraid of this Parliament and their own party.

I have now served in Parliament opposite three Governments. While none of them has been any good, obviously, none has lacked confidence like this one. As my hon. Friend the Member for City of Chester (Christian Matheson) said, the Tory party is utterly riven in government by the task that will define it. How we leave the European Union is the single most important question this generation of MPs is ever likely to face, yet the Government have to be forced to give us a meaningful vote on it.

There is one issue that exposes the miserable inadequacy of the Government’s leadership more than anything else: the Irish border. The Government have no clue about how to ensure that we have a frictionless open border in Ireland, and it is an outrage that our Prime Minister says that she is looking at the example of the border between the United States and Canada. That is one of the worst examples I can think of, so will the Minister confirm that the Prime Minister has finished looking at that particular example and ruled it out? I do hope so.

When will the Secretary of State for Exiting the European Union visit the Irish border? I understand he has never been, but that is unacceptable. I am sure that my hon. Friend the Member for Bristol South, with her excellent knowledge of all things Irish, and I would be happy take him. The hard Brexiteers have no suggestions about how to resolve this issue; they only have red lines and outrage of epic proportions directed at anyone who dares to suggest a sensible way forward. Where is the Government’s legal text of the phase 1 agreement? The EU published its on 28 February; where is ours? The Labour party thinks we should remain in a customs union with the European Union, and there is wide support for that in industry, particularly among manufacturers. That would safeguard jobs, help to resolve the Irish border and give certainty, but the Government have rejected this option because they are buffeted by hot air from their own Back Benchers, not because they are putting the national interest first.

The Government should listen to the hon. Member for Eddisbury (Antoinette Sandbach) when she talks of the importance of services and non-tariff barriers. They should listen, too, when the former top civil servant at the Department for International Trade says that we are rejecting a three-course meal for a packet of crisps. He has a point, but rather than engaging in debate, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) goes around telling him to try a couple of multipacks.

We are just over a year from exit and the Government have so little to say on important issues. Precisely which areas do the Government want to diverge on and deregulate? What do the Government’s intend that the transitional period will look like? Will the European Court of Justice have jurisdiction, and on what? How will the Government ensure that there is an open border in Ireland without a customs union? Where is the immigration Bill; why is it delayed? When will the trade and customs Bills return to the House? As my hon. Friend the Member for Preston (Sir Mark Hendrick) said, the Government are afraid of the House because they know that there is a majority in it for a customs union.

Labour’s approach would be much clearer. We respect the referendum result and accept that Britain is leaving the European Union. My constituency, like that of my hon. Friend the Member for Sedgefield (Phil Wilson), voted to leave, but we understand that our constituents did note vote to be poorer or less safe. Remaining in a customs union makes people safe, and they know that we are putting their jobs first. They understand why the Labour party takes its position.

Unlike some others, we want a close relationship with the EU based on our values of internationalism, solidarity and equality, and on maintaining rights, standards and protections. We would seek a deal that gives full access to European markets and maintains the benefits of the single market and the customs union, holding the Government to what the Brexit Secretary promised in the House of Commons, with no new impediments to trade. We would negotiate a new UK-EU customs union, so that there would be no tariffs with Europe and no hard border in Northern Ireland. We would seek to negotiate having a say on the terms of any new EU trade deal.

Labour does not believe that deals with the USA or China, both of which have weaker standards and regulations, would compensate for a significant loss of trade with our trading neighbours in the EU. Nor do we believe that being part of a customs union with the EU would prevent us from trading extensively with non-EU countries. Germany’s largest trading partner is China. As my right hon. Friend the Member for Leeds Central (Hilary Benn) said, the idea that being in a customs union prevents us from trading globally is nonsense. We will never accept our NHS or any other public services being part of any trade deal with Trump’s America. As my hon. Friend the Member for Streatham (Chuka Umunna) said, just look at what he intends for our steel industry. As my hon. Friend the Member for Cardiff North (Anna McMorrin) said, Labour believes that powers over devolved policy areas currently exercised by the EU should go directly to the relevant devolved body unless the UK Government can make a compelling case for that power to be held at Westminster.

In all these areas, the Labour party has set out an approach to the negotiations that is pragmatic, that respects the referendum result and that puts the national interest first. How long will it be before the Government do the same? As my hon. Friend the Member for Aberavon (Stephen Kinnock) said, how long will it be until the Government start to work to reunite our country? How many days of general debate do they think we need before they dare to present Parliament with an actual decision? The Government have limped along for long enough, and it is time they stopped listening to noisy bluster and pulled themselves together to secure a good deal for Britain.