European Union (Notification of Withdrawal) Bill

Julian Knight Excerpts

Committee: 1st sitting: House of Commons
Monday 6th February 2017 Commons Chamber

[Mr Harper]

Let me just finish my point. We would have no ability to influence the rules that we would have to accept. Members who are talking about the EEA are simply trying to avoid the fact that we are going to be leaving the European Union; they are trying to remain in it by the back door.

[Julian Knight (Solihull) (Con)]

Will my right hon. Friend give way?

[Mr Harper]

Let me give way to the hon. Member for Ilford South (Mike Gapes), who I think was first on his feet, and then to my hon. Friend.

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[Mr Harper]

Let me finish answering the point of the hon. Member for Ilford South and then I will of course take an intervention. I did promise to give way to my hon. Friend the Member for Solihull (Julian Knight) first, but I will then give way to the hon. Lady.

The two best options are either to be in the EU and accept everything that comes with that, but with the ability to shape the rules, or to leave and not be in the single market, not have free movement of people and not be subject to the European Court of Justice. Norway’s EEA model is poor, because it is subject to the free movement of people, it has to accept the jurisdiction of the Court and it has no right at all to influence any of the rules. It is up to the Norwegians what model they want to adopt, but it is not one that would work for us or that I would recommend to the House.

[Julian Knight]

I completely agree with my right hon. Friend. Constructs such as the EEA are effectively antechambers. They are entry points into the EU. It would be inappropriate, given our size and our economy, for a country such as ours that is exiting the EU to rest in something that is unsuitable.

[Mr Harper]

I could not have put it better myself. I will now give way to the hon. Lady.

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[Dr Wollaston]

I wish to start by reading something from a letter I have received from a constituent. He talks about his wife, who was born in the Netherlands. He writes:

“She has lived in this country for over 30 years, brought up three British children and is completely integrated into the life of her local town. She is not part of any ‘immigrant community’. She just lives here and is fully at home here. Until now, she has never seen herself as an outsider and has been able to participate fully in local life, thanks to her rights as an EU citizen. In two years’ time, she will lose those rights and be a foreigner, dependent on the good will of the Government of the day.”

I have written back to and met my constituent, because I think it is inconceivable that our Prime Minister would separate this family. However, many people are not reassured, and he and his wife sought for her to have permanent residency. This involved dealing with an 85-page document, including an English language test and a test about life in Britain, which is insulting to someone who has lived here most of her life and brought up three children here. This process is also very expensive, but the final sting in the tail is that she finds she is not eligible, because she has been self-employed and has not taken out comprehensive sickness insurance. This situation is unacceptable. We need to keep our compassion and keep this simple. It is inconceivable that families such as this would be separated, so we should be absolutely clear in saying so, up front.

[Julian Knight (Solihull) (Con)]

I understand what my hon. Friend is saying about her constituency surgeries. I have had a similar experience and it is deeply upsetting in many respects, but will she join me in reflecting that the EU and Chancellor Merkel could have come to a deal on this earlier? The reality is that they have point-blank refused to discuss it before we trigger article 50.

[Dr Wollaston]

I agree with that, and I have also heard from constituents of mine who are British citizens now living in the EU. But my point is that, come what may, it is inconceivable that we would seek to separate families such as this one. There is no doubt that many people are sleepless and sick with worry about this, and we have all seen them in our surgeries. [Interruption.] It is true. I am seeing these people in my surgery. We also need to consider the tsunami of paperwork that we will have to deal with in settling the rights of these citizens if we do not get on with this quickly. We need to keep this simple. There is no way that families such as this should be subjected to vast bureaucracy and vast expense. We all know that this needs to be settled, so in negotiating, surely, making a bold, open offer as a gesture of good will can do nothing but good in this situation.

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[Jim Shannon]

No, I will not give way.

With that in mind, it is clear that we wish to see the Bill make progress. I hope that we will not face more efforts to derail the process today. The train is en route and is going at a steady pace. Our duty and the duty of Government is to set the tracks in the right way—a strong and safe track—to carry us out of Europe and back to independence.

As a Northern Ireland MP, specific issues relating to our border with the Republic of Ireland, our businesses, our farming community and other communities are unique to us. I have every faith in our Prime Minister and her team and the discussions that she had with the Taoiseach in the Republic of Ireland just last week. The body language and the verbal contact were positive, and we should have every faith in what goes forward.

I just want to refer to new clauses 6 and 14. There is an argument that they do not make it clear to whom the protections apply, and that is to do with their scope. I am proud of the fact that I hail from a constituency that has a massive agri-food industry, which includes businesses that not only supply to the UK, but are globally recognised and trusted. I have manufacturers which ship to the middle east, America and Europe, and are now branching out to the far east. Mash Direct, a major employer in my constituency, employs some 40% of its workforce from eastern Europe. For Willowbrook Foods, the figure is 60%. We also have Lakeland Dairies, which covers Pritchitts Foods and Rich Sauces. All those businesses provide some 2,000 jobs in total.

Some of the workers have met and married locals, so there must be no road blocks to their ability to remain and work in this country and live their lives. The Secretary of State for Environment, Food and Rural Affairs visited Northern Ireland a couple of months ago and saw some of those factories and spoke to the people. She told me that she was very keen to ensure that the people working in the factories will have security of tenure and I fully support that.

However, I must underline my opening remarks and say that those who are living, working and integrating in our society and local economy deserve our protection. The Prime Minister is well within her rights to ensure that those who live and work here, or who are married to a British person, should have the ability to remain. None the less, there is no doubt that we must curb migration, which does not enhance life in the UK in relation to economic migrants. We must also ensure that our paramount concern is allowing businesses to continue to retain their workforce without fear and to have the ability unequivocally to offer job security to that workforce in order to keep the workers right here in the United Kingdom of Great Britain and Northern Ireland.

[Julian Knight]

I will keep my comments brief as I am aware of the shortage of time. I was for remain in the referendum mainly because of the potential for short and medium-term economic dislocation, particularly within my constituency, which is likely to have among the highest trade surpluses with the EU, mostly off the bonnet of the Jaguar Land Rover cars that we sell into the single market. The debate was lost, and I still think we face difficult times ahead.

I believe in free trade. We have to strike out as best we can, but it will be tough in a world of growing protectionism. When we leave the EU, the key is to make the best possible deal. For me, that does not mean having membership of the single market. During the referendum campaign and for years before, the message on the doorsteps was loud and clear: no freedom of movement. People do not want freedom of movement, but the single market comes with that requirement so that is off the table straightaway, as the Prime Minister has made clear.

The difficulty with being in the customs union is that we would not be able to have our own trade deals with the rest of the world. We would be hamstrung. The European economic area, customs unions and single market membership are antechambers to entering the EU. We are leaving the EU. We are a country of 65 million people with a sophisticated, large economy, so it is completely inappropriate to have that type of model. We need our own model, and any attempts to frustrate that with amendments or to make the Government expose their hand too early, will damage our negotiations.

European Union (Notification of Withdrawal) Bill

Julian Knight Excerpts

Committee: 2nd sitting: House of Commons
Tuesday 7th February 2017 Commons Chamber

[Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I do not intend to delay the Committee, as most of these amendments are narrow and address the very specific point that the hon. Member for Greenwich and Woolwich (Matthew Pennycook) raised.

I have a simple concern as to why there is such a peculiar sense of the vital importance of these particular forecasts, which give huge credit to the Treasury’s ability to forecast where we may be going in almost every sector. As my hon. Friend the Member for South West Wiltshire (Dr Murrison) said, many of the forecasts have been fundamentally wrong in the past, so I asked the Library how accurate the Treasury forecast of May 2016 turned out to be. It is worth relating exactly how accurate it turned out to be, even when the Treasury had such a huge array of figures and possibilities before it:

“In May 2016, the Treasury published forecasts for the immediate economic impact of voting to leave the EU. It forecast for a recession to occur in the second half of 2016, with quarterly GDP growth of -0.1% in both Q3 2016 and Q4 2016 forecast (a second ‘severe shock’ scenario was also shown with a deep recession occurring; under this scenario growth of -1.0% in Q3 2016 and -0.4% in Q4 2016 was forecast). In reality, the economy continued to grow at its pre-referendum pace, with quarterly growth of +0.6%”.

Now the figure has been adjusted again by the Governor of the Bank of England to close to 2%, with the prospect of further adjustments.

[Julian Knight (Solihull) (Con)]

On the quarterly growth statistics, I understand that even knowing what is happening right now is often very difficult for the predicting entities. In fact, I believe they have had the correct numbers four times in 270 quarters.

[Mr Duncan Smith]

The range of prediction from the Office for Budget Responsibility had nearly a £90 billion margin for error over the previous seven years; that £90 billion went from £50 billion on the plus side to £40 billion on the minus side. The problem we face is the sense that these forecasts give us any strong, real indication of what may happen in the economy. I raise this issue because the new clause and other amendments relevant to it make triggering article 50 contingent; it cannot be done officially until these forecasts are laid. This is not about consulting on them or their being made as a matter of the Government providing information. In other words, the article 50 letter cannot go until these are laid. All they do is inform the debate depending on what the forecasts are. From talking to economists, I am of the general opinion that we have had seven years of growth, and normally within the cycle we would expect to have a flattening at some point after this long period of growth. That would be the normal prospect, but economists will tell us that we are defying the normal prospects. Whether or not we have a natural process of slightly lower growth directly as a result of this longer period of growth, and what happens to the world economy and what is happening in the EU, is almost impossible to forecast with any great accuracy.

My point is that new clause 5 states:

“The Prime Minister may not give notice under section 1 until either HM Treasury has published any impact assessment…HM Treasury has laid a statement before both Houses of Parliament”.

With respect, I say to the hon. Member for Greenwich and Woolwich that this is not just a helpful attempt to get information to the House; it is exactly what he said it was not. It is clearly a back-door attempt to make it almost impossible for the Government to get on and trigger article 50. As my hon. Friend the Member for Dover (Charlie Elphicke) said, the referendum verdict was to trigger article 50. The people were not asked, “Shall we trigger article 50 only after we have laid various reports of notables who believe the economy is good, bad or indifferent?” They were asked, “Do you want to leave or do you want to stay?” They chose to leave and we have to get on with it. The idea that the Government are going to go into a negotiation without any idea about what they favour and what they think will, by and large, on the margins, be better for us is ridiculous.

The House must recognise that it is going to be swamped with information of this sort; every forecasting agency is going to be in the game of telling us where we are, and none will be the wiser. Everybody in the House will take the worst or best one, depending on what they want. If the OBR has a margin for error of £90 billion, people can take whatever position they want. But it does not change anything, because we are leaving. The nature of the agreement that we get with the EU, if we get one, is not going to be based on a bunch of forecasts. It will be based on what those negotiating for the EU think is in their general best interest and what we from the UK manage to persuade them is in our mutual best interest. That is what a negotiation is about.

Anybody who has been engaged in negotiation in business will know that you start with your base, bottom line, worst case for you and try to improve upon that, and the other side does the same. This is not going to be about one side saying, “I tell you what my forecast comes to. It tells me we are going to be better off. What does your forecast tell?” and the other side saying, “Ours says we are going to be better off and you will be better off, so which forecast are we going to take?” The battle of forecasts is a ludicrous and pointless exercise.

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[Mr Duncan Smith]

Thank you, Sir Roger, for that explanatory intervention. May I say to my colleagues that I am still prepared to take interventions should they wish to keep them short?

[Julian Knight]

We have just spoken about the power and the necessity of the City of London. Does my right hon. Friend realise that the other major capitals, Paris and Frankfurt, do not have the same infrastructure? Frankfurt, for example, has only one foreign language school, and Paris has restricted labour laws.

[Mr Duncan Smith]

That is an important point, and it plays hugely into the Government’s hands. It was the head of financial services in Frankfurt who was over here just before Christmas. When he was interviewed by the BBC, he was asked whether he was over here trying to get people to take up jobs in Frankfurt’s financial sector. To the journalist’s utter horror, he said yes. The journalist then said, “Therefore that means, presumably, that you think that after Britain leaves the European Union, the City will be finished, and that Frankfurt is looking to take its business.” He almost laughed and said, “Oh, no, no, no. We absolutely need the City of London to thrive and prosper, because it is the way that we keep our capital cheap. We cannot replace it, as its business will go somewhere outside Europe.” He said that London is the only global city in Europe. The point that he was making was that, although we move around and trade jobs, the expertise and ability to make capital deals lies here in London, and Frankfurt wants to make sure that the United Kingdom Government, the European Commission and the European Council reach an agreement that is beneficial to both sides, with access to the marketplace.

I make no bones about this: I am an optimist. There is nothing in the new clause that would in any way help the Government. Even more importantly, it would not enable the House to reach any kind of measured conclusion, such as letting the Government trigger article 50. I will conclude now unless somebody wants to intervene.

[Mr Duncan Smith]

I agree. The head of the OBR has said that, in the end, most forecasts are wrong. On that basis, it would not really help the House in any way suddenly to have a Treasury forecast, any more than if we had a multitude of forecasters here saying where they think the economy will go. I do not blame them for being wrong, because there are far too many moveable parts in economies as complex as the United Kingdom or, for that matter, the European Union or even the global economy.

Ultimately, if the Opposition are really honest, these new clauses and amendments are really about making sure that the Government’s hands are tied, and slowing down the process in the vague hope that, somehow, people’s opinions will change and it will all look too difficult. These forecasts will then allow everyone to go out and say, “Oh my God, this is so terrible. Look what will happen if we do not get this arrangement or that arrangement.”

[Julian Knight]

My right hon. Friend is being generous in accepting interventions. He has just talked about a sort of buyer’s regret. As I understand it from my experience on the doorstep, most people just want us to get on with the job. In fact, polling shows that Brexit is slightly more popular now than it was at the time of the referendum.

[Mr Duncan Smith]

I will not carry on for much longer, but that is exactly the point. All that will happen if we amend the Bill and tie the Government’s hands so that they are slow in triggering article 50 is that the British people will get frustrated and angry.

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[Michael Gove]

I entirely agree, and my hon. Friend makes two important points. Of course, we had the referendum and some people on the remain side feel sore because they think the result was not just a betrayal of their hopes, but was won by means that, to put it mildly, they do not entirely endorse. I absolutely understand that, and there is a responsibility on those of us who argued for leave to listen carefully and to seek to include in the type of new relationship we have with the European Union the very best ambitions and aspirations that were put forward as reasons for staying. I think that can be done and that this House has a critical role in bringing it about, but it can be done only once article 50 has been triggered and the British people have had the confidence that we are leaving.

[Julian Knight]

I thought that the hon. Member for Streatham (Mr Umunna) spoke powerfully about breaches of promise, but is there any bigger breach of promise than blocking Brexit by supporting these wrecking amendments?

[Michael Gove]

My hon. Friend is absolutely right, and there is a particular element to it, as well. One of the important principles of our constitution, which as a former Justice Secretary I wholeheartedly believe in, is the principle of judicial review. It is absolutely right that Executive action should be subject to judicial review. It is the only way, apart from the exercise of power in this House, that we can be certain that the Executive is following the rule of law. I am one of those people, albeit that I campaigned for and voted for us to leave the European Union, who was pleased that the Supreme Court held this Government to account so that we have this legislation before us now.

Having said all that, and having placed on the record my support for both this legislation and the principle of judicial review, if we accept any of these new clauses or amendments, we will subject the operation of article 50 to judicial review. That would mean that if any single one of these impact assessments were not prepared in exactly the right way, at the right time, with appropriate care, the whole process and the democratic will of the British people could be upended. Different people have different views about experts—I shall come on to them in a few moments—but I know whereof I speak.

As I have said, I made a number of mistakes during my ministerial career—too much for us to be able to run over now, given that our debate has to close at 9 o’clock. One thing I remember is that judicial review on the basis of a relatively small infraction, as admitted by the judge, of an equality impact assessment—one I deeply regret—nevertheless resulted in the paralysis of this Government’s school capital building programme. Now, if we want to create a feast for lawyers and a festival for litigators, we should accept these new clauses and bring in these amendments. In so doing, we will see the tills ching in the Middle and Inner Temples and hands wring up and down the country, as we once again frustrate the will of the people.