EU Membership: Economic Benefits

Alison McGovern Excerpts

Wednesday 15th June 2016 Commons Chamber

[Mr Hammond]

I shall come to that in a minute, but my hon. Friend dwells like an old-fashioned mercantilist on the trade statistics alone. I suggest to him that there are wider issues at stake about the overall impact on our economy and the benefits of the growth, investment and dynamism that being part of a 500 million-strong market of very wealthy consumers delivers to us.

[Alison McGovern (Wirral South) (Lab)]

I have been very happy to campaign in a cross-party way to remain, but as the Foreign Secretary has criticised my party’s record in government, may I ask him whether his Government’s cuts, loaded on to the poorest parts of our country, have made too many people question whether they have anything to lose in the referendum? Their wages have been falling since the crash, which has damaged their confidence in our economy to deliver for them. Does he believe that, when we vote to remain, we need to see real action to help people in the poorest parts of this country?

[Mr Hammond]

Yes, but we will do that only by delivering a robust economy that is soundly based and can go forward in the future. The most effective way of doing that is by being part of the European Union.

Our membership of the EU gives us both the freedom to trade in the world’s largest single market—a market of more than 500 million consumers—without tariffs and the bureaucracy of customs barriers, and access to more than 50 other markets besides, through EU free trade agreements. The benefits of being in that single market are clear for us to see: 44% of Britain’s exports go to the EU. How much of that trade would be lost if we put up the shutters and renounced our EU membership? How many businesses and employees who depend on that trade would go to the wall? How long would it take to negotiate a new trade agreement with our European neighbours? What would the terms be? I am prepared to bet that they would be nothing like as favourable as the terms that we have on the inside.

--- Later in debate ---

[Mr Jamie Reed (Copeland) (Lab)]

I will begin by echoing what the shadow Chancellor said about the rights that the working people of our country have as a result of our membership of the European Union. I am delighted to see the Labour party leadership making a strong, positive case for Labour people to remain in the European Union for strong Labour reasons—but not just for Labour reasons, because remaining in the EU is in the best interests of everyone in our country.

I want to speak directly to my constituents today. I want to speak to them about what they care about, what I care about, what they have sent me here to do for the last three general elections, and why they have done so. First, I want to acknowledge the confusion, the anxiety and even the anger that my constituents will feel about the European Union. I understand that anger, and I understand that frustration, because for more than 25 years my constituents, like those in the rest of the country, have listened to incredible, outrageous lies—damned lies—about the European Union and our place in it, from talk of straight bananas to any number of invented stupidities.

People like me who believe in the benefits to our country of our membership of the European Union are largely to blame for that. We have never taken it on; we have never called it out. We have rolled our eyes, we have shrugged our shoulders, and we have been shy about taking on the lies. Now we are seemingly paying the price, but it will be constituencies like mine, and communities like the one that I represent, that will overwhelmingly suffer the most if we vote to leave the European Union.

There are specific issues that will be of profound concern to the people of Copeland, west Cumbria and Cumbria as a whole if we vote to leave the EU—our local NHS; our economic future, particularly the nuclear industry; our security; and our environment. I shall deal with them all in turn.

[Alison McGovern (Wirral South) (Lab)]

My hon. Friend is speaking with characteristic eloquence about the north-west. Will he explain further why we must pay attention to the parts of our country that are geographically furthest away from metropolitan centres?

[Mr Reed]

In an ever more globalised world and economic marketplace, we absolutely must pay special attention to those peripheral communities, which have contributed so much to the economic strength of our country over many decades, particularly since the end of the second world war, but which have been—deliberately, I have to say, as a result of policy—marginalised and ignored for too long. I have to say, too, that whatever happens in respect of this referendum, the country has changed, fundamentally and permanently, as a result of that policy. The situation in the north-west, the north-east, the south-west and other peripheral economies in the United Kingdom, but particularly in England, must form a pivotal part of the national conversation in future.

Alongside my constituents, I have campaigned for years to protect local health services, including those at West Cumberland hospital, in our local community hospitals, in our general practices and dental practices. We have built a new hospital in Whitehaven and a new health centre in Cleator Moor, and we are improving and expanding the health service in the cottage hospitals in Millom and Keswick, but enormous challenges remain. At the heart of our NHS difficulties are the policies of the Conservative Government, who deprive our community of the necessary resources, investment and recruitment. It is absolutely clear that the economic damage that would be done to our country if we left the EU would be felt throughout the NHS in Cumbria. Make no mistake: an already intolerable situation would become worse. The Conservative Government would have every excuse it could ever want to cut, slash and burn local health services in a way that we have never seen before.

As for our economic future, I have spent more than 10 years on the project to build a new nuclear power station at Moorside, in my community. That has involved writing new nuclear policy with the No. 10 policy unit in 2005, ensuring that my community was chosen as a new nuclear development site—which was never automatic —and attracting NuGen to our area as a power station developer. The project represents the single largest private sector investment that my community has ever seen—more than £20 billion—and thousands of jobs. That is investment that we need, want, deserve and have earned.

I want my constituents to think long and hard about this during the time that remains before the referendum. The United States is pleading with us to stay in the European Union, the Japanese are pleading with us to stay, and France is pleading with us to stay. NuGen, the company that is responsible for the investment in that project, is a consortium of American, Japanese and French companies. I urge my constituents to “do the math”. Brexit would undoubtedly increase the risks to the project, not just because of the financial turmoil that it would create, but because of the damage that it would do to the EU and France in particular. There are potentially profound implications for the Hinkley Point C project as well. So I say to my constituents, “Stick with our plan, stay on course with our project, do not squander more than a decade of work, and do not risk our future.”

Then there is the security issue. Brexit would undoubtedly make us less safe and less secure. With the United Kingdom out of the European Union and with the EU shrinking, contracting and weaker as a result, we will cause profound damage to NATO. What message will that send to an increasingly belligerent and expansionist Russia? Brexit could give no greater encouragement to Vladimir Putin. This is not “Project Fear”, but “Project Fact”. When I went to Chicago recently as part of the delegation to the NATO Parliamentary Assembly, we were told by the former United States ambassador to NATO that Brexit represented

“the greatest threat to the security of the United States, the European Union and the NATO area.”

Finally, let me deal with the environment. My constituency takes an uncommon pride in its natural environment: we have England’s highest mountain and lake, and some of the best beaches in the country. The European Union has helped to deliver massive improvements in our natural habitats, all of which are visited by thousands of tourists from the EU who contribute to our economy every year. Moreover, the EU paid attention to the Sellafield clean-up before the United Kingdom did.

My constituency is special, my constituents are special and we are creating something special. A vote for Brexit would threaten it all.

--- Later in debate ---

[Alison McGovern (Wirral South) (Lab)]

As part of Labour’s in campaign, I spoke to a woman on the phone last night. She was not sure how she was going to vote, and she did not know who to believe. She said that she just wanted the facts, so that is where I begin. We must be absolutely clear: globalisation is happening, and it is not going away. With democracy in eastern Europe and the opening up of China and India, capital, goods and people move freely across borders like never before, creating opportunities but also causing disruption. The globally connected economy means that problems in the American mortgage market can trigger a recession that spreads around the globe in hours.

That is the modern world. For us in Britain, each generation must answer this question: although we accept free trade because of the opportunities it offers, what rules are required to make the market fair? The global economy offers the UK huge potential. We have advanced service sectors, and our creative economy has boomed. Nowhere is that more obvious than in our capital, which is perhaps the most globalised city in the world, but go to Manchester or Liverpool and the story is the same.

We must be honest about globalisation. Although it creates opportunity for many, it causes others disruption and dislocation. Jobs are created, but jobs are also lost. Capital movement can grow the economy, but capital hiding—offshore and untaxed—hits our public services. How do we get maximum gains from this changing world, and how do we minimise the disadvantage? That is the real question to be answered by the EU referendum.

Amid all the misinformation in this debate, there is a deep dishonesty about the campaign to leave the European Union—or perhaps I should say the two campaigns, because there are two completely contradictory arguments up and running at the same time. On one hand, we are told that we must leave so that we can stop the disruptive effects of globalisation, close the borders, introduce protectionism and give British workers preferential treatment.

[Oliver Colvile]

Does the hon. Lady recognise that the Brexit campaign has also led people up to the top of the hill in relation to immigration and could be doing enormous damage to community relations?

[Alison McGovern]

I could not have put it better. Those who are feeling the sharp end of globalisation are presented with a particular suggestion about that as a solution, but as the hon. Gentleman says, it is nothing of the sort. It would sabotage the British economy, destroy even more jobs and reduce revenue for public services.

On the other hand, there is the other set of leavers—the people who think the problem with the EU is, as we heard earlier, that it shuts us off from globalisation. They say we should leave Europe and face the world, embrace non-EU immigration and let the market rip. Even if we ignore the difficulty of facing the world when we have no trade deals, that is not an attractive option. It would mean even more churn in the British economy, even more losers from globalisation and an even greater sense of dislocation.

Those are therefore two bad options and a false choice for Britain, but there is one even bigger deceit: the lie that we can have both those things at once. That is not true, because people are either up for free trade and taking part in the world, working with others to make markets work, or they want to shut Britain off from the world. By allowing that confusion, the leave campaign is misleading people. This dishonesty, which is put across as plain speaking, is about telling low-paid workers that there is an easy remedy for their woes when, in reality, the medicine will only make the patient sicker.

I agree with the Brexit lot on one thing: it is time for plain speaking. The truth is that the world economy has globalised, which brings big opportunities but also brings disruption and loss to many people. We will solve that not by running a siege economy or letting the market rip, but by staying in the single market and taking advantage of the opportunities that will come in the next few decades as we properly integrate services and energy into that market, which is where we stand to benefit. Given that the EU is the market for 47% of our exports, we should help eurozone countries make the economic reforms they need so that they can buy more of our goods, not just leave them to fail.

As we know, co-operation is key to how we maximise our success and central to minimising the negative effects of globalisation. It is only through co-operation in the EU that we will make sure there is no race to the bottom on working conditions. For a low-paid worker, Brexit will mean worse conditions and worse career progression. For a higher-paid worker, Brexit will mean fewer opportunities, less trade, worse pay progression and higher taxes. For a pensioner, Brexit will mean less money to invest in the pensions system. Even pro- Brexit economists acknowledge that there will be a short-term hit.

I have talked about the long term, but let me take a moment to consider the short term. Brexit will mean a recession, as if we needed another recession after the horrors of 2008. Unlike in 2008, however, we would not have a Government willing to work with others around the world to solve the crisis; we would have a recession under the most right-wing Government in living memory, and we would have a closed economy that would make all of us, but especially those with the least, poorer.

This is the question on the ballot paper next week. It is a choice between prosperity in the EU and austerity out of it; between influence in the EU and irrelevance out of it; and between facing up to the modern world economy and making it work for Britain, and pretending that we can solve our problems by quitting, which we will not. Let us vote remain.