EU Membership: Economic Benefits

Adrian Bailey Excerpts

Wednesday 15th June 2016 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I rise to support the motion because, first, coming out of the EU defies all the logic of our emerging global economy. If we look around the world, we see that the emerging global economic superpowers are China—which might well overtake the USA as the major economic power in the world in the next 20 years—India and Brazil. As the former Chair of the Business, Innovation and Skills Committee, I visited Brazil and China to see how our businesses were faring in those countries. Some were doing very well. JCB had opened a joint venture company in Brazil and GKN had a joint venture company in China. The reason they were opening those companies was that the tariff barriers were too high for them to export from their British manufacturing bases into those markets.

We must be realistic about this. If we were to come out of the EU and try to expand our exports to those countries, we would be expanding into countries that are, quite justifiably and understandably, ruthlessly self-interested in what they need to do to develop their own standard of living. The idea that, on coming out of the EU, we could somehow make up for the deficit in our exports to the EU by expanding our trade into those developing countries is, frankly, a fantasy. The fact is that there is nothing we could do afterwards that we are not doing now, and there would be no compensatory boost in exports to those countries after coming out of the EU.

My constituency in the west midlands offers a supreme example of the benefits of globalisation and the international movement of capital. If we go back 10 or 15 years, the car industry—which for donkey’s years had been the mainstay of local manufacturing—was in a terrible state. Since then, however, there has been investment in the motor industry there, which has been mirrored in other parts of the country.

[Mr Jim Cunningham]

My hon. Friend mentioned the motorcar industry. Twenty to 25 years ago, Coventry companies such as Massey Ferguson, British Leyland and Standard were household names. That is why it is vital that we remain in Europe, in order to further develop the recovery of manufacturing in the west midlands.

[Mr Bailey]

Absolutely. My hon. Friend’s experience echoes my own on the other side of the midlands economy.

The fact is that investment, particularly by Tata in Jaguar Land Rover, has transformed the manufacturing economy in my constituency and the surrounding constituencies. We now have the new i54 development, which is a supreme example of what new investment in modern motor manufacturing can do. As a result of that, the local supply chain has been rejuvenated.

We have problems, however. My constituency has more foundries than any other in the country, and they form a vital part of the supply chain that underpins our ability to produce high quality cars and superb manufacturing exports, but they have skills shortages and an ageing workforce. However, they have been helped by the recruitment of skilled workers from eastern Europe through the EU. The companies involved tell me that without those workers, their ability to meet the demands placed on them by the cutting-edge technology that we are producing to expand our manufacturing exports would be hampered and jeopardised.

[James Cartlidge]

Is the hon. Gentleman aware that the policy of vote leave is that, when we leave the EU, we will stop all unskilled migration into this country? Does he think that that is even remotely credible?

[Mr Bailey]

No. Unfortunately, however, I do not have time to address all the issues that would arise from the leave campaign’s immigration policy, or lack of it. I need to focus on the relevance of these arguments to my constituency.

The fact is that without those workers, our ability to sustain this country’s cutting-edge manufacturing capacity would be lost. I would be the first to agree that we should be pioneering better skills, apprenticeships and so on, and I am glad that the industry is looking at that, but it does not have the capacity to recruit those workers at the moment. If those in the leave campaign were to carry out the promises they have made on migration, there would be a real prospect that those companies would be starved of the skills they need, and it could well lead to unemployment among the long-standing indigenous population who have worked in those industries.

As I do have a few moments left, I will address some of the wider issues raised by those in the leave campaign’s migration policy. Andrew Neil got out of Nigel Farage eventually the idea that they would try to reduce net migration figures to 50,000. They then deploy a seductive argument that if they stopped migration from Europe, they could have more from the non-EU countries, which I think is a pitch to our ethnic minority population, without it having an impact on our skills base in this country. The fact is that the sort of figures being quoted by the leave campaign, and by Nigel Farage in particular, would mean there would be no way we could recruit the levels of staff needed both for the manufacturing industries, which we have in my constituency, and the service industries, particularly the care industry, which have been highlighted by one or two Members today. Those in the leave campaign are raising a particular issue to try to inflame local public opinion, but then peddling only a bogus solution. We have one week to expose that and demonstrate to people that their interests are within the EU and in sustaining our current economic and manufacturing base.