Future Free Trade Agreements

Debate between Chi Onwurah and Matt Western

Thursday 21st February 2019 Commons Chamber

[Chi Onwurah]

I thank the hon. Gentleman for that intervention, but let us be clear. He gives the example of wine—we are not huge producers of that in Northumberland—and fruit, but I am talking about lamb, sheep and the other products of small-scale farming in the highly temperate climate that drives our beautiful, natural landscape. That is what I want to continue.

British farmers have been able successfully to compete on both quality and price in markets defined by EU food safety rules. For example, British farmers export far more wheat flour to the European Union—approximately 250,000 tonnes last year—than they do to non-EU countries, at approximately 6,000 tonnes, and the same goes for other agricultural products such as barley and oats. The EU is the largest importer and exporter of food in the world, and as part of an EU member state, our farmers have benefited from preferential access to that market through exemptions from the tariffs and quotas that are imposed on non-member countries, and without dropping our environmental and farming standards.

With 85% of seasonal agricultural workers in the EU coming from Bulgaria and Romania, agriculture is one UK sector dependent on freedom of movement. The immigration Bill will clearly do nothing to enable the continuation of what the Government are pleased to call “low-skilled” workers—those who earn below £30,000— but what about the Agriculture Bill? Will it protect our small farmers? It does nothing to address concerns about competition, and it places no duties on the Secretary of State for Environment, Food and Rural Affairs. It offers no funding and no environmental safeguards. The Government are showing yet again that they are not prepared to deliver a farming environment that protects our environment as well as the standard and quality of our food.

Our automotive sector is a global success story, although, as we saw in the sad announcements from Honda and Nissan, it now faces challenges due to technology, climate change and Brexit. It is clear that this is not all about Brexit. As I said, there is technology and there is climate change. However, the automotive sector is one of the most competitive and highly integrated industrial sectors. When there is one disabling factor that is a unique disadvantage for UK producers—Brexit is a unique disadvantage for UK producers—we are more likely to lose in the competition for future investment. The inability or the decision of this Government to not take a no-deal Brexit off the table means that our investment is falling.

[Matt Western]

My hon. Friend not only beautifully illustrates the north-east of England, but she is making very important points about the farming community and the automotive industry. On Honda’s announcement, this is the first car plant it will have ever closed in its entire 71-year history. That is not coincidental. Brexit is, as she says, just one element, but when working with such thin, narrow margins in such a competitive sector, it is what triggers the review and subsequent decision to disinvest.

[Chi Onwurah]

I thank my hon. Friend for that excellent point. The competitiveness of the sector means that margins are narrow, so any such factor—Brexit and access to markets are significant factors—will place us at a continued disadvantage. The Society of Motor Manufacturers and Traders says that no deal could cost the car industry up to £4.5 billion in tariffs.

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[Chi Onwurah]

The Minister knows very well that the business organisations that have said that to me—I speak to them extensively as a shadow Minister—do not wish their names to be given. [Interruption.] They have said it. They do not wish to be named in Parliament, because they fear the negative reaction of Ministers such as himself.

[Matt Western]

Very simply, the reality is that this is not just about no deal. Businesses, the manufacturing sector, the CBI, the Federation of Small Businesses and all the others are saying that they would prefer for us to stay in a customs union and a single market. That has been the Labour party position since February last year. It is absolutely clear. That is where the manufacturing sector wants to stay. The CEOs of Jaguar Land Rover, Airbus and others all want us to stay in a customs union and a single market.

[Chi Onwurah]

I thank my hon. Friend for that important point. Many organisations, such as the Manufacturing Trade Remedies Alliance, have explicitly come out against the Government’s deal and repeatedly said that they want a customs union. That is an implicit criticism of the Government’s deal.

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[Chi Onwurah]

I thank my hon. Friend for that intervention. I had not seen the last set of quarterly figures. I hope that in the annual figures, we are still exporting more than we import, but that is testament to the fact that manufacturing is not safe in Tory hands. In particular, manufacturing would be devastated by a Tory Brexit. The Honda announcement was devastating for families and friends of the employees there and we do not want to see any more announcements like that.

The thing that really upsets me is when the Tories claim that to take a no-deal Brexit off the table would be like someone telling a car dealer that they were not willing to walk away. With Brexit, we are not trying to buy a car in a car dealership. We are trying to build cars across the European Union that will deliver good jobs. Choosing to leave a no-deal Brexit on the table is an act of unparalleled economic sabotage by this Government.

[Matt Western]

To highlight the point my hon. Friend is making so well, has she heard and was she as appalled as I was by the comments made by Matthew Lesh of the Adam Smith Institute a couple of weeks ago on the radio, that this is all about free markets, liberalising trade, 0% tariffs, competency and competitive advantage, and if we lost our manufacturing industry in the process of achieving that, so be it?

[Chi Onwurah]

My hon. Friend raises a very unpleasant memory for me of when, as an engineering student at Imperial, back in the ’80s, I heard Margaret Thatcher say that the UK was going to be competitive on the global stage in finance and other services, and the rest of the world could be our manufacturer. The consequences of the lack of support for manufacturing from successive Conservative Governments are seen in the average wages of our constituents, day in, day out.

I want to talk briefly about negotiating power. The car buyer fallacy is not the only Tory fantasy; the idea that we will do so much better in trade negotiations on our own than with the collective power of the European Union is a total fantasy. The Secretary of State said that on our own, we would be nimble, negotiating deals the clunky 27 could not, such as with the United States. European Union gross domestic product is seven or eight times greater than that of the UK, so it offers greater opportunity for profit. Any trade agreement that delivers 1% improved profitability with the European Union would have to do seven times better with the United Kingdom to be as attractive. The Government are arguing that in the margins of the differences between ourselves and other EU members, without damaging environmental standards or working rights, we will be able to deliver seven times the benefits to any trading partner. That is a fantasy we will pay for.

African and other Commonwealth countries are not part of this debate, but the Secretary of State spoke quite extensively about them in his opening speech. One of the many disingenuous—indeed, deceptive—ways in which the leave campaign sought support during the referendum campaign was to promise better immigration and trade opportunities for Commonwealth and African countries in an attempt to draw in Commonwealth and African diaspora citizens to voting leave. Well, the £30,000 salary threshold for skilled immigrants shows clearly that there are to be no greater immigration opportunities for people from Commonwealth and African countries.

As chair of the all-party parliamentary group for Africa, I know how important trade is to African countries. The subject is raised regularly with me by incoming delegations. It is true that the economic partnership agreements between the European Union and African nations are flawed because they lack transparency and because they limit scope for African Governments to make their own development choices and industrialisation plans, but many—indeed, most—African nations see the UK as the entry point to European Union markets, and they are at a loss to understand why we are abandoning the world’s greatest free market area. What they seek is continuity and fair access to our markets, and clearly this Government can offer neither.

In the almost three years since the Brexit vote, we have learned much more about what Brexit involves and what the choices are. Now it is clear that all forms of Brexit involve an economic hit, but this Government’s Brexit trade policies and, in particular, leaving no deal on the table are a form of economic sabotage, and that is something to which I will not be a party.