European Economic Area: UK Membership

Geraint Davies Excerpts

Monday 6th November 2017 Commons Chamber

[Stephen Kinnock]

The hon. Gentleman has hit the nail on the head, and I have nothing to add; he is absolutely right.

Liechtenstein is not the only legal precedent. Article 112 safeguard measures were also invoked in 1992 by no fewer than four of the then seven EFTA members—Austria, Iceland, Switzerland and Liechtenstein—which all cited the need to protect real estate, capital and labour markets. To recap: the four freedoms operate in an instrumental, as opposed to a fundamental, manner within the EEA, meaning that EEA membership offers a unique opportunity to combine market access, frictionless trade and reformed free movement of labour.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Will my hon. Friend clarify something? Am I not right in saying that, currently under EU law, some restrictions that could be imposed are not imposed—namely, if someone has not worked for three months, they can be excluded from a country? Thousands of people are thrown out of other countries in the EU, but Britain simply chooses not to do so.

[Stephen Kinnock]

I think my hon. Friend’s point touches on what sort of reforms to the free movement of labour we think we need. Opinion is divided. In terms of the upstream reform, the argument is in favour of a quota-based system; downstream reform would be based on registration, but perhaps that is for another debate. My point is that EEA membership enables a lot more flexibility over both an emergency brake and the use of industry-by-industry quotas.

I turn now to the vexed question of ECJ jurisdiction. Here the position is relatively simple, as EEA-EFTA members are not subject to ECJ jurisdiction. The EEA is administered by the EFTA arbitration court and the EEA joint committee, and disputes are managed by the EFTA surveillance authority. These bodies adjudicate only on matters relating to the EEA internal market and any violations of its principles and have far less clout than the ECJ. Moreover, while EU member states’ courts must refer legal issues to the ECJ, EEA states are not obliged to refer them to the EFTA court.

The EEA model is sometimes criticised because EEA members are cast as rule-takers as opposed to rule-makers, but that criticism does not stand up to scrutiny. EEA members have the right to participate in the drawing up of EU legislation by the EU Commission, and the EEA joint committee determines which EU laws and directives are deemed relevant for the EEA and whether any adaptation is necessary, so EEA membership would in fact provide the UK with a seat at the table when EU regulations and directives are being shaped.

Clearly EEA membership is one step removed from the heart of decision making in Brussels, but the reality of the referendum result is that our influence in Brussels and across the European capitals has, and will inevitably be, diminished. The only valid question now is how to maximise democratic control and influence while minimising economic damage. I contend that an EEA-EFTA-based transition deal would clearly achieve those ends. The stakes are high.

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[Heidi Alexander]

I agree with my hon. Friend. As my hon. Friend the Member for Aberavon (Stephen Kinnock) says from a sedentary position, this is about dogma. It is not about democracy and it is not about our country’s future prosperity.

Last summer, we grafted a massive public plebiscite on to our system of representative parliamentary democracy. I will not repeat my views on how the referendum was conducted—suffice to say I do not think it was our country’s finest hour. There was only one question on the ballot paper:

“Should the United Kingdom remain a member of the European Union or leave the European Union?”

Where were the words “European economic area”? Where were the words “single market”? Now some people say, “Well, everyone knew it meant we’d be leaving the single market,” but that is pure assertion. That is an interpretation of the result. Some people may have voted believing that, but others did not. Many more would not have had any idea where to start if you asked them to explain the difference. I do not say that to patronise; it is a matter of fact. If you asked my mum to explain it, she would run a mile. Taking us out of the single market is a political choice. Prioritising controls on immigration over safeguarding jobs and investment is a political choice. Making a massive issue of the European Court of Justice, even though most people would be hard pressed to tell you what it does, is a political choice. Those choices will determine the future of our country for many years to come, and it is the basic responsibility of each and every Member of this House—irrespective of party—to reflect long and hard on whether the form of Brexit being pursued by this Government is the right one.

[Geraint Davies]

Will my hon. Friend confirm that the 2015 Conservative manifesto said both that if they won, the people would have a referendum on Brexit, and that we would stay in the single market? People voting for Brexit therefore assumed that we would stay in the single market.

[Heidi Alexander]

My hon. Friend is completely right. In fact, the precise form of words used in the 2015 Conservative manifesto was that they would protect

“British interests in the single market”.

We must get a vote on whether we continue to be a member of the single market. We have to determine whether Ministers notify other countries of our intention to leave the EEA. We cannot cobble something together by claiming that provisions within the European Union (Withdrawal) Bill somehow authorise Ministers to do that, but that is precisely what the Government are trying to do. They are trying to pull a fast one. I am convinced that the repeal of the European Economic Area Act 1993 contained in the EU withdrawal Bill will be used by Ministers, alongside the powers they want to give themselves in clause 8, to claim parliamentary authorisation for setting the ball rolling on our departure from the EEA. How many of our colleagues understand that?

Why do the Government want to avoid open and transparent debate? Why will we only have two hours at most in Committee to discuss the issue? The answer is obvious. The Government want to avoid an explicit vote on whether the UK should leave the EEA and leave the single market. They are worried that there might be a parliamentary majority for a so-called “soft Brexit”—one where we put jobs first and worry about immigration second. They are right to be worried but they are wrong to circumvent Parliament in this way. That is why I tabled new clause 22, which would give Parliament an explicit vote on our departure from the EEA, and why I support this motion today. As people who are elected to make decisions on the behalf of our country, we have a responsibility to consider thoroughly and transparently the option of staying in the EEA. We have a responsibility to hold on to the car keys to prevent this Government from driving us off the cliff. That is what this motion is about today, and that is why I support it.

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[Geraint Davies (Swansea West) (Lab/Co-op)]

It is a great pleasure to follow the right hon. Member for Broxtowe (Anna Soubry). She mentioned Margaret Thatcher, who I recall quoting Attlee saying that referendums were the instruments of “dictators and demagogues” because Hitler used them to assume supreme power, militarise, invade and commit atrocities. Of course, the EU referendum—an advisory referendum—was full of misinformation, and every day people are saying, “This isn’t what I voted for.”

We are here to talk about market economics. If the UK leaves the single market—the most developed free market in the world—the EEA and the EU, which has 66 bilateral trade agreements, it will be the greatest withdrawal from free trade in UK history. The reality is that we are not turning towards free trade; we are turning away from free trade and proper trade for the good of our economy.

Hon. Members have talked about the need to restrict migration, but they should know that the EU has enormous powers in its rules to restrict migration. For instance, people are thrown out of other EU countries when they have stayed for three months without getting a job, and there is no automatic right to benefits. What is more, EU migrants contribute to the economy 35% more in tax than they consume in public services. Migration is good. If we can salvage some of the benefits by staying in the EEA, all well and good; it is second best to staying in the EU.

People say that we can turn away and have our own trade relations with, for instance, the United States, but as we have already seen in the case of Bombardier, the United States will not think twice about imposing tariffs. We have heard Donald Trump saying that foreign countries are taking his jobs, making his products and stealing his companies, so we know that we would be hammered. By being in the EEA, we could trade with the US through the single market. We will not get the same terms as the EU has with the US. The firms which have their headquarters here will move into the European zone to trade, because there is no prospect of having any sort of deal with the US in the next five or six years.

We have seen the benefits of migration. If we turn our backs on the EU and the EEA, as people are suggesting, higher-value individuals—people in finance, lawyers, and doctors from our NHS—will continue to move out. All the studies show that the retention will be among the so-called lower-value people. If we swapped the people from Britain who migrate to retire in Spain for Polish workers, for instance, we would be swapping people who take money out of the NHS for those who make a contribution. It makes no economic sense.

My view is that this place should ultimately have a vote on the exit package, and that that vote should be at least three months before exit day. Before that, the people should be given a vote—a final say—on the exit package. The simple reality is that we continue to hurtle towards this cliff edge, and people say, “Tell you what, we’ll give you some rubber shoes to jump over the end”, but an economic and social nightmare is emerging. A few fundamentalists think we should carry on, but the people should have the final say because they are simply not getting what they thought they would get. The ideas about migration were completely misconceived: we may have to turn our back on the EU and open up our trading borders to India, but India is demanding more visas; China does not want us to penetrate that market; and the US will demand much higher terms. We are heading for a major economic downturn.

Being part of the EEA is the last opportunity to save ourselves from some of these problems. If we ultimately decide to leave the warm house and our friends, and to live in the garden, it is better to live in the shed than in the open air. I will leave it there.

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[Jim Shannon (Strangford) (DUP)]

It is always a pleasure to speak in these debates. First, I put it on record that I am a Brexiteer and very proud to be a Brexiteer. People in my constituency also voted to leave, and the matter is very clear in my mind. I may be the lone voice on the Opposition Benches in relation to this issue, but I am not a lone voice in the whole of the Chamber. I think very highly of my colleagues and friends on these Benches, and they know that, but we have a difference of opinion on this. I should make that clear right away before I say any more.

The people of Strangford spoke very clearly and their voice said that they wanted to leave. Democracy has spoken and the decision is made: we should support the Government and get on with the job. I say respectfully and very gently to those who are remainers that the matter is over, the decision is made, and people have moved on. In June 2016, they spoke. We in this House have to listen to that mandate, and we cannot ignore that.

[Geraint Davies]

The hon. Gentleman will be aware of the famous quote by Keynes, who said:

“When the facts change, I change my mind. What do you do?”

The facts have changed. This is not what people voted for.

[Jim Shannon]

Well, the people in my constituency certainly tell me that they did vote for this, and I had the impression that it is what I was voting for as well. Other Members will have a different opinion, and they have expressed that today.

Numerous businesses in my constituency have a great European market, including Willowbrook Foods, Lakeland Dairies and Mash Direct. They are major agri-food employers in my area. I seek to do all I can to help them and will continue to do so. I sought an assurance from the Prime Minister and from a former DEFRA Minister that those jobs in the agri-food sector would be okay, and they gave me that assurance.