European Union (Withdrawal) Act

Gareth Thomas Excerpts

Wednesday 9th January 2019 Commons Chamber

[Stephen Barclay]

My hon. Friend is absolutely right both to draw the House’s attention to the urgency of this issue—we have 78 days before we leave the EU—and in his sectoral understanding of the flow of goods and how that impacts the key industries in his constituency. That is why so many business groups support the deal. They want that certainty.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

Further to the question from the right hon. and learned Gentleman, the Father of the House, to the Prime Minister earlier, and in the context of the House having voted against the Government twice over its concerns about the possibility of no deal, does the Secretary of State accept that it would be the Government’s responsibility, if they were defeated next Tuesday, to bring forward legislation to suspend article 50?

[Stephen Barclay]

The hon. Gentleman raises an important point that many hon. Members have raised, but it does not address the legal position. The position of the courts is that we cannot unilaterally extend article 50. That requires the consent of the other 27 member states, and we do not know what conditionality would be attached, if it were sought. In particular, the courts were clear that the only way would be to revoke on the basis of a permanent decision. Given that more than 80% of the electorate voted for one of the two main parties, and that both parties’ manifestos backed the decision to leave—that commitment is on page 24 of the Labour manifesto—I feel it would be divisive for our country to proceed in that way.

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[Mr Djanogly]

I would not argue with the right hon. Gentleman about promises being made during the referendum campaign that could now be disputed, but the same could be said for a lot of general elections that we have had in the past. To say that elections or referendums are discounted because of what people maintained during the course of them would not, I am afraid, be a line that I would take.

Furthermore, if the deal is rejected by this House, from my point of view I will do everything I can to ensure that we do not leave the EU without a deal, and, to my mind, the next best thing after the Prime Minister’s option would be the Norway-plus alternative. If the Government’s deal fails to pass this House, and assuming that the Opposition’s no-confidence motion fails, I hope that we shall then start to find a new tone of cross-party working. We shall need a degree more honesty in how we describe Brexit issues, where in reality no one is going to win—not us and not the EU. We have the Labour Front Bench changing its position; we have the Brexiteers shouting, “Sell-out”, at every initiative while offering nothing as an alternative; and we have a Government who have frequently made soothing hard Brexit noises to Brexiteers while lining up a deal that clearly has a trajectory of close regulatory alignment to the single market and some form of customs arrangement. I do hope that the Government get their deal, but if not, it will surely be because they have unsuccessfully attempted to be all things to all men.

[Gareth Thomas]

Does the hon. Gentleman accept that if the deal does not pass this House next Tuesday, agreement to extend article 50 will be an urgent priority for the Government to bring forward a measure on?

[Mr Djanogly]

The hon. Gentleman makes a very important point. If the deal is rejected and we start looking at other possibilities—on a more consensual cross-party basis, I hope—then clearly whatever route we take leads to the deadline, and an answer to that may well have to be to extend the article 50 period. I am very pleased, looking back over a year ago now, that some of us in this place decided to ensure that the Government were not able to restrict the timing of the article 50 period, and so that will be a possibility.

Rather than add to the fudge, let me explain why and how, if this deal fails, Members of all parties should coalesce around a Norway-plus option, and why the “plus” element—being in a customs union with the EU—is a good thing. First, most business wants a customs union because it allows free movement of almost half our exports between Union members without tariffs and checks and paperwork. Opponents say that this would stop the UK forging its own trade agreements, but, to my mind, the benefits of the EU customs union are far greater. We must keep in mind that the EU has some 250 FTAs with some 70 countries, and the UK plan is to “roll over” those deals, meaning that, at best, we would have the same—not better—terms as the EU with one third of the world’s countries. There would be no advantage of being outside the EU. That is, of course, assuming that we are able to make those deals happen, which we know is proving somewhat elusive, as the hon. Member for Nottingham East (Mr Leslie) explained.

Secondly, the chances of negotiating better FTAs as a country of 50 million, rather than a bloc of 500 million, is realistically and simply not how it normally works. Thirdly, there will be significant costs of going it alone on FTAs, from being forced to take US genetically modified crops to issuing visas to countries, as currently requested by Australia and India. Fourthly, FTAs take a long time to negotiate—an average of seven years.

Fifthly, the claim that Commonwealth countries will prioritise us over the EU is unrealistic, not least considering that the Czech Republic currently has four times the trade with New Zealand than we do and that the Swiss do much more trade with India than we do. Sixthly, “most favoured nation” clauses in our rolled-over EU agreements and the integrated nature of world trade will significantly reduce our ability to get commercial advantage. Finally, high levels of foreign input into our manufactured goods will create huge problems under the so-called rules of origin.

In conclusion, my view is that we shall be better off with a customs union arrangement with the EU, and the deal on offer presents the best opportunity of securing future prosperity for our companies and employment for our people. We should support it.

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[Gareth Thomas (Harrow West) (Lab/Co-op)]

It is a pleasure to follow my hon. Friend the Member for Pontypridd (Owen Smith). I very much agree with his conclusion that we need to consider the suspension of article 50 and go back to the people of this country.

As others have said, the deal before the House is a bad deal for Britain, and the Prime Minister knows that as well as the rest of us. Her own Government’s analysis shows that there is no Brexit scenario in which we would be better off as a country, and Opposition Members know that it will be the poorest of our country who will be most at risk of losing out further.

Crashing out without a deal is clearly the worst option before us. The prospect of food price hikes due to tariffs kicking in, the supply of key goods being disrupted, and huge transport delays is profoundly worrying. If the Government had handled negotiations better and Parliament had been allowed an earlier vote on this deal, the Prime Minister could have averted much of the huge costs and considerable uncertainty that the country faces. Companies are already transferring assets and jobs, notably services businesses, particularly those in financial services. Car manufacturing industries that are of huge importance to the midlands and the north, such as Land Rover and Vauxhall, have delayed investment, cut jobs and shifted parts of their operations overseas—and that has happened while we are still in the European Union. Many of us know from discussions with those running our public services in our constituencies that the shortages of staff in many of those services have been exacerbated as EU nationals start to believe that they are not welcome in Britain anymore.

The Government would have us believe that the choice is between their deal and no deal, but as others have said in this debate, that is simply not the case. They could take off the table the prospect of no deal. I believe that this deal will be defeated, and I hope that when the Prime Minister comes back to the House, she will move very quickly to rule out the possibility of no deal.

Among the many problems with the Prime Minister’s deal is the fact that we are being asked to commit huge sums of money—£39 billion and upwards—but we will be a rule taker. We will have no say on rules that will continue to have a profound impact on businesses and jobs in the UK. Crucially, none of the detail about our future relationship with our closest trading allies has been locked down. The fact that we have not even begun seriously to negotiate the future trade deal between the UK and the European Union is deeply worrying.

In my seven years as a Minister, from 2003 to 2010, I worked on trade negotiations. I attended numerous meetings of EU Trade Ministers, made many visits to the World Trade Organisation headquarters in Geneva, attended many meetings with ministerial colleagues from around the world and had many conversations with businesses here in the UK, trade experts and non-governmental organisations. Trade deals are immensely complex. Negotiations take years. Each trade deal strand has implications for other trade deals. The House should not underestimate just how lengthy and complex the negotiations with the European Union would be before any signing ceremony for a UK-EU trade deal.

Turning the non-binding wishlist that is the political declaration into a legally binding trade treaty between the EU and the UK will certainly take longer than the 21 months claimed. It is true that trade experts disagree on how long it will take, but Professor Alan Winters of the independent UK Trade Policy Observatory thinks a further two or three years at a minimum is inevitable. Uncertainty will become the new normal for export and import businesses here in the UK.

Not only are the issues at the heart of the future trade deal between the EU and the UK complex, but the process of reaching an agreement will change after exit; the exit agreement has to be approved only by a qualified majority vote, but the trade deal would require the agreement of every EU state, each with its own specific interests. The French have already made clear that they will have demands on fishing, and Spain has made it obvious that it will have Gibraltar once again firmly in its sights.

There is then the question of services, which others have mentioned. Let us take just one example: although reform is still needed to the financial services industry, it is critical to our country’s future, brings huge financial benefit, particularly to my constituents and others in London, and creates thousands of jobs, yet there is little commitment in the political declaration to the UK and the EU trying to provide each other with significant market access for financial services. That is deeply worrying.

Quite apart from any other considerations, it is difficult to see why the UK would be offered better treatment in a trade deal than EU’s existing partners, given the most favoured nation protocol. The EU would be required to extend the same better offer to those partners, without receiving anything in return. It is a dangerous myth to claim that there are huge new trade deals just around the corner to offset the economic damage that people on most sides of the debate accept—at least privately—would be the consequence of our leaving the EU. No country will want to negotiate a trade deal with the UK until we have settled our future relationship with the EU. Indeed, 90 countries already have deals with the European Union that give them a back-door route into the UK market. Worse, the European Union will be in a very strong position in trade negotiations with us, because the backstop will protect its £95 billion surplus in goods while doing little to help us get a good deal on services, where we have the surplus. That backstop will kick in years from now unless we can agree terms.

Once upon a time, a trade deal with the US, too, was touted as easy to agree, the benefits being said to be more generous than anything the EU could or did offer. In my experience, the Americans fight even more ferociously than the French for their trade interests. Donald Trump will demand more access to the NHS for big American companies, and significant reductions in our health and safety standards; chlorinated chicken will be just the start.

Brexiteers will not admit—to his great credit, the hon. Member for Huntingdon (Mr Djanogly) mentioned it—that every trade deal Britain seeks to negotiate on its own will require us to grant immigration access to our country. India will insist on it, Latin America will insist on it, and Europe will insist on it, too.

It is not just the lack of any serious detail about our future trading relationship that I worry about. The country should take seriously the warnings of the cross-party Home Affairs Committee about the implications of the Government’s deal for our future security. The lack of progress in locking down the detail about our future relationship with other security services via Europol, about the European arrest warrant and about how security will operate at our borders in the future is a significant concern.

All the great promises made by the different parts of the Conservative party have, one after another, been revealed to be little more than the emperor’s new clothes. The Prime Minister promised that a deal would be easy to get, yet here we are, years off from knowing what our future relationship with the EU will look like. There will not be millions of pounds extra each week for the NHS as a result of leaving. The claim by the right hon. Member for Haltemprice and Howden (Mr Davis) that there would be no downside to Brexit looks even less believable two years on.

Given that the facts have changed, how divided the House and the country are, and how much more we know now, I remain firmly of the view that we will have to go back to the people. It is not an abuse of democracy to have a further referendum. It would be elitist to think that we in the House know best. The divisions in our country are not a reason not to go back to the people. If anything, they are a major reason why we should. Every serious alternative scenario to the Prime Minister’s deal would take time to achieve. To allow those discussions to take place and to allow serious parliamentary discussion, the Prime Minister should bring forward urgent legislation to extend article 50 for at least 12 months. Every careful independent analysis of the benefits and risks of Brexit overwhelmingly reveals that our country will be weaker; we will be weaker with the Prime Minister’s deal, and certainly weaker without any deal. I will not vote to make our country weaker.