EU Membership: Economic Benefits

Helen Goodman Excerpts

Wednesday 15th June 2016 Commons Chamber

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

Madam Deputy Speaker, you, like many of us, might have seen a front-page splash in The Times last week trumpeting the support for Brexit from Lord Anthony Bamford of JCB, the iconic digger maker based in my county of Staffordshire. I was intrigued by the story, mainly because it smacked a little of desperation. It was, as it is called in the trade, old news, because anyone reading The Sentinel newspaper in Staffordshire would have known that when the good lord came out all of a year ago.

Anthony Bamford is part of just a small smattering of industrialists on the Brexit side that includes a maverick knight of the realm, Sir James Dyson, who makes those costly, complicated hoovers—in Malaysia. In reality, their views are not reflective of the large majority of British businesses, investors or economists. Our membership of the EU has been vital to our attracting much needed investment here. Nissan, Toyota and Honda from Japan made that clear very early on, when they urged the UK to remain, and the likes of BMW, Volkswagen, Bosch and Siemens from Germany have since joined them.

[Helen Goodman (Bishop Auckland) (Lab)]

Did my hon. Friend see the story in the Financial Times today pointing out that both Sir James Dyson and Anthony Bamford had been caught breaking competition laws by the European Commission, and suggesting that that was their motivation?

[Paul Farrelly]

I cannot speak for their personal motivation, but I am sure that they are speaking for themselves personally rather than for their own businesses.

German companies here employ 500,000 people. Along with the Japanese, they have made the UK car industry today the most successful in our country’s history—along with Tata of India, of course, with its investment in Jaguar Land Rover. Tata, too, cannot fathom why Britain would want to leave the world’s biggest single market. In this debate, their voices deserve to be heard and listened to, not silenced through intimidation, as was the intention at the beginning of the leave campaign. Then, of course, there are the voices of great British companies—household names such as Rolls-Royce, one of our biggest exporters. My grandad built Spitfire engines at Crewe for Rolls-Royce, and today the company, patriotically, urged its staff to vote remain.

It is not just multinationals that are emphatically in favour of our remaining in the EU. This spring, like other colleagues on the Opposition Benches, I carried out a survey of about 1,000 predominantly small businesses in my constituency, and we had a good response. Some 80% were in favour of remaining. Some wanted reforms, but they firmly believed that we should stay in, to reform from within. The response to our survey reflected the balance within the wider membership of Staffordshire’s chamber of commerce and the views of the British Ceramic Confederation—the industry from which my area of the potteries takes its name. This—particularly for us—vital export-led industry wants us firmly to stay in because it is in its and the country’s interests. It recognises that it is better to have one rule book, rather than 28 different ones for each country in the EU.

Let me take a local example of the new economy. One of our most passionate supporters of the remain campaign is bet365, which is now the world’s biggest online gaming company and the owner of Stoke City football club, which I must of course mention. In little more than 15 years, the Coates family has built that business up into the biggest private sector employer in North Staffordshire, with more than 3,500 highly skilled staff. It is one of the UK’s biggest business success stories of the last decade. Frankly, bet365 can only dream of one rule book, because at the moment it has to contend with not only 28 but far more rules, with each of the German Länder and other different European regions having their own individual regulations. Bet365 is precisely the sort of business that will benefit by staying in and extending the single market to services and e-commerce, which were key topics in the Prime Minister’s renegotiations.

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[Helen Goodman (Bishop Auckland) (Lab)]

Britain stands at a crossroads. The nation has to make a big choice: whether to stay in the EU or to leave. The EU was built on the ashes of world war two once people realised that security and prosperity were linked. Today, again, the world is an uncertain place. Russia has forcibly taken Crimea. Syria is in the throes of a devastating civil war. What is the best approach? Should we pull up the drawbridge or co-operate with our neighbours?

The Labour and trade union movement was built on the principle of solidarity, and what is true for individuals is also true for nations. I believe that, since 2010, this Tory-led Government have set about mending the public finances in the wrong way—cuts instead of investment, austerity rather than growth—and this has led to deep unfairness and economic insecurity. People must now think carefully about what is the best choice in the real world.

On putting jobs first, why has the head of Hitachi said that “jobs would be lost” if we left the EU? Because Britain is a market of 60 million people, whereas Europe is a market of 500 million people. If we leave, next time he invests in a new production line, it will be more economic to build it somewhere else. Today, Rolls-Royce has said the same. Foreign indirect investment creates 85,000 jobs in this country every year, which are all at risk from Brexit.

The Brexit campaign has totally failed to set out how a new trading arrangement would work. It has suggested the arrangements for Norway, Switzerland, Canada and Albania, but even the Prime Minister of Albania does not think that that is a good idea. Why has the head of Glaxo, part of our brilliant pharmaceuticals industry, said that the EU is the best platform for success? Because one system for drug licensing is faster and more efficient than 28 systems. Yet Dominic Cummings, the Lord Chancellor’s former Spad who now runs Vote Leave, told the Treasury Committee that “that is complete rubbish.” Such breath-taking arrogance is putting 93,000 jobs at risk.

Let us look at the car industry. If we leave, it will face tariffs of 10%. It is supposed to cope with that through labour market flexibility, which, translated into English, means wage cuts. Wages account for only a third of total costs, so people would have to take a 30% pay cut or lose their jobs. There are 450,000 jobs at risk.

The hon. Member for Uxbridge and South Ruislip (Boris Johnson) and my right hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) have visited textile factories that, outside the EU, would face a 6.5% tariff. It is hard to cut wages in such factories because the Low Pay Commission reports that most of the workers are on the minimum wage, so another 56,000 jobs are at risk, mainly in the north and the midlands. When I challenged the hon. Member for Uxbridge and South Ruislip about that, he said that

“there is no need for them to worry.”

It is all right for him: on top of his MP’s salary, he takes home another £250,000 every year for his column in The Daily Telegraph. His attitude is flippant to the point of irresponsibility, and this is not a joke.

Let us look at what is happening in the markets: £60 billion has been wiped off the value of shares in London in a week, and people are so desperate to get their money out of London that they are prepared to pay the German Government to look after it. That may be good news for the hedge funders, who make their money betting on volatility and then use it to fund the Brexit campaign, but it is certainly not good news for the millions of people whose pensions depend on the strength of the FTSE 100.

Security and prosperity are linked. The question on the ballot paper is the choice between letting off the leash a right-wing Tory Brexit group that is able to destroy the life chances of millions of ordinary people, and voting to remain in and holding on to the security and prosperity that we have in the EU.