UK’s Withdrawal from the European Union

John Baron Excerpts

Wednesday 13th March 2019 Commons Chamber

[Keir Starmer]

I will in just a moment. Labour has always opposed a no-deal outcome. We have repeatedly warned that it would be catastrophic for jobs, for the economy, for security, and for peace and prosperity in Northern Ireland, and I will come to those points later.

[Mr John Baron (Basildon and Billericay) (Con)]

I thank the right hon. and learned Gentleman for giving way, but I implore him to use the language of moderation when talking about no deal. He will remember the dire economic warnings during the referendum campaign of, for example, 500,000 extra people unemployed by Christmas 2016. Those things did not come about. So bad were the predictions that the Bank of England had to publicly apologise afterwards. He should not rest his case on predictions. Economic reality is dictated by comparative advantage, such as lower tax rates and more flexible labour markets. That is why the economy is doing so well, despite the prospect of no deal.

[Keir Starmer]

Lots of things were said by both sides in the referendum that should never have been said, some of them by Members who have already addressed the House.

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[Mr Baron]

Will the right hon. and learned Gentleman give way?

[Keir Starmer]

I was going to complete my answer to the hon. Gentleman’s question, because I accept that we have to deal with the facts as they are. One of my concerns is that because so many things were said in the referendum, there is now a licence to pretend that real risks and outcomes will not happen by simply saying that other things did not happen. That is a real cause for concern.

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[Hilary Benn]

All I can say to the hon. Gentleman is that I cannot speak for those colleagues. My view has consistently been clear that no deal cannot be a policy for this country. By the way, no deal is not what those who campaigned for leave in the referendum ever argued for, so I do not quite understand why someone should now be arguing for it when they did not argue for it then. No one who has spoken so far—I am not talking about intervening—has stood up and argued why no deal would be a good idea. It is not surprising why they have not. In responding to the schedules that have been published, Carolyn Fairbairn said this morning:

“This tells us everything that is wrong with a no-deal scenario…This is no way to run a country.”

The Society of Motor Manufacturers and Traders said:

“No-deal would be catastrophic for the automotive industry. It would end frictionless trade, add billions to the cost of manufacturing and cost jobs.”

We know why.

[Mr Baron]

rose—

[Hilary Benn]

I will not give way, because time is so short. We know that if there is any disruption to the lorries that keep those car factories going every single day, it will affect the production line. The car industry has had enough bad news in the past two months without it being added to by people standing up saying, “No deal is a jolly good idea.”

A professor from one of our major institutions of higher education, whom I happened to bump into on the underground this morning, said to me that no deal would be “catastrophic” for the institution, its research funding and its ability to recruit staff. The truth is that these conversations are repeated in thousands of workplaces up and down the country, in thousands of sectors of the economy. That is why the twelfth report of the Brexit Select Committee said explicitly that leaving with no deal

“cannot constitute the policy of any responsible Government.”

If Members want to read the argument, they can go and look at that report, but I draw attention to the problem faced by a company that makes signs and exports them to Europe to be fitted by its workers. The company asked me what would happen in the event of a no-deal Brexit. I have referred to that in a previous speech. Since then, I asked a written question, to which I received the answer:

“UK nationals travelling to the EU for the purposes of work may be subject to extra conditions. Businesses will need to check individual Member State immigration rules for whether there are any requirements or conditions around supporting documentation, work permits or visas. Businesses should also check whether there are any restrictions on the provision of services, such as whether a UK professional qualification is recognised in the country in question.”

What use is that reply to a business that has worked hard to create jobs? There are those in this House who will stand up today and argue that that business’s future should be thrown into doubt, but what use is an answer like that? It basically says, “You’re on your own.”

The final point I want to make is this: given what happened yesterday, today’s vote is the next step required before tomorrow’s inevitable decision to apply for an extension to article 50, which the Brexit Select Committee report—it was published this morning with commendable speed after the events of last night—says will be necessary. Given the rather unhelpful coda, if I may put it that way, to the Government’s motion tonight, I think the House will vote to reject a no-deal Brexit on 29 March this evening, but Ministers need to recognise, be aware of and acknowledge that this House will never vote to leave the European Union without a deal, whether at the end of March, the end of June or the end of October. We are not prepared to take that risk with our economy, our jobs and the livelihoods of the people we represent—not today and not ever.

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[Mr John Baron (Basildon and Billericay) (Con)]

I refer Members to my business interests as listed in the Register of Members’ Financial Interests.

Very briefly, I encourage a note of moderation when talking about no deal. Many of us, if not all of us, prefer a good deal to no deal—that is one of the key logics of leaving the European Union—but I suggest that WTO rules are not the so-called disaster that everyone is suggesting. We have to look at economic reality. We trade profitably with the rest of the world outside the EU on largely WTO, no-deal terms. What people can forget is that investment is about comparative advantage and the extent that a country’s corporation tax rates are lower and its labour markets are flexible, how good its top universities are and its financial expertise. In aggregate, those things are more important than WTO tariffs. If proof were needed, we have only to look at how well the country is doing economically in the face of so-called concern that we could be leaving the EU on no-deal terms. Investment decisions over recent years have been made in the full knowledge that we could be leaving on no-deal terms.

[Andrew Bridgen]

Does my hon. Friend agree that the truth is that many of those in this Chamber who wish to take no deal off the table want to stop Brexit, but have not got the guts to admit it to the electorate, because they know that two thirds of our constituencies voted to leave the European Union?

[Mr Baron]

Unfortunately, there is an element of truth to that, but I would not want to label everyone as being in that camp. Many Members have quoted predictions about the future, but I suggest that we have to keep the argument and the debate grounded in reality.

People need to remember that there were many predictions of economic woe and gloom should we vote to leave the EU in 2016. They came from the Bank of England, the IMF, businesses, and the various sector organisations and public organisations. Some of the predictions suggested 500,000 or 700,000 extra unemployed by December 2016. What happened? Actually, we created jobs, and economic growth did well. We now, today, have a record low unemployment rate that is half the EU average, record manufacturing output, and record inward investment. So we need to be careful of predictions, as Mark Carney, the Governor of the Bank of England, recognised. The Bank of England had to apologise publicly for getting it so wrong, as did so many others.

We have been told by our own Government that the preparations for no deal are in full swing. On 12 February, I asked the Prime Minister whether the Government are ready, saying:

“can she reassure the House that should we leave on 29 March on no-deal WTO terms, we are sufficiently prepared?”—[Official Report, 12 February 2019; Vol. 654, c. 752.]

Her response was just three words: “We are indeed.” So the preparations have been made, and I think we should take some comfort from that.

Ruling out no deal makes a bad deal more likely. There needs to be an element of moderation across the House when describing no deal. The economic reality is at variance with the various doomster forecasts that were proved so wrong back in 2016, and we should take note of that fact.