UK’s Withdrawal from the EU

Debate between Lady Hermon and Caroline Spelman

Wednesday 27th February 2019 Commons Chamber

[Dame Caroline Spelman]

As an experienced former commercial negotiator—I know that the hon. Member for Birmingham, Erdington (Jack Dromey) is one of those as well—I have learned that, in difficult negotiations of this kind, it is no good harping on about the past. We have to focus on the future and to be relentlessly optimistic and bring good will to the table.

Getting back to the subject that is closest to my heart, I sounded the alarm months ago about the risks to the car industry of a no-deal Brexit. Many workers in my constituency have already lost their jobs, and more recently we heard the sad news about Nissan and Honda. The loss of jobs is devastating, but far more will be risked if auto manufacturers leave these shores. The chairman of Unipart, John Neill, said in the weekend Financial Times:

“If we lose the automotive industry, we lose one of the most powerful drivers of productivity and a powerful source of industrial innovation”.

The UK is now the ninth biggest manufacturing country in the world and we just cannot afford to lose this critical industry.

A no-deal Brexit threatens not only our car makers. Last night, representatives from the CBI, Next, Bosch, Ford, the TUC, Make UK—formerly the EEF—the Food and Drink Federation, the Investment Association and Virgin Media, to name but a few, spoke to a large number of MPs at an event in Parliament. All those organisations fear the chaos of a no-deal Brexit and implored parliamentarians to come together and agree a deal. Those colleagues who think that leaving without a deal is in the national interest must answer the concerns of the industries that millions of jobs depend on.

Chris Cummings, chief executive of the Investment Association, which represents firms collectively managing around £7 trillion, told MPs last night that £19 billion had left the United Kingdom since the referendum. The Investment Association can measure that, because it involves its members. The current run rate of this capital flight is approximately £2.4 billion each month, so the notion that no deal has already been priced into the markets is simply not true. The full consequences have not yet been accounted for.

The human cost of no deal is not just jobs and livelihoods today, which are very important, especially in constituencies such as mine; it will also impact the value of people’s pensions and savings in the future. Having touched on pensions, I want to make a point that is relevant to amendment (b), which my right hon. Friend the Secretary of State has said that the Government will accept. Colleagues might recall that I have also sounded the alarm about the plight of UK pensioners living in other EU countries, and especially about the provisions for their healthcare. If the United Kingdom were to leave the EU without a deal, there are at present no provisions in place to ensure that their healthcare would be paid for. Given the size of the contingency fund of taxpayers’ money that the Government have had to make available for the risk of a no-deal Brexit, I suggest to my right hon. Friends that some portion of that could be used to bridge the gap for UK citizens in Italy, Germany, France and Spain who are already receiving letters from the authorities warning them that their healthcare costs will not be covered from 29 March. That is a source of real anxiety and human cost to the people concerned.

Businesses cautiously welcomed the Prime Minister’s announcement yesterday, which has the capacity to take away the threat of no deal on 29 March, and the director of the CBI described it as a “glimpse of sanity”. She called on the Government to permanently rule out no deal to provide the certainty that business needs. That would de-risk the situation and create the space to secure a pragmatic deal. People often confuse risk with uncertainty, because a binary choice between a deal or no deal with 15 days to go is a high-risk situation, which creates uncertainty. The Prime Minister’s pragmatic response yesterday helped to reduce that risk and creates the space to secure a deal.

The contingency planning for no deal has already cost business millions and the taxpayer billions. Pfizer alone has spent £90 million on no-deal preparations, and that money cannot then be invested or directed to the frontline, so jobs will be lost in the end. The Federation of Small Businesses reports that 85% of its members are not ready for no deal and, as somebody mentioned earlier, very small businesses do not have the capacity to prepare for a no-deal scenario in the same way as some larger ones can.

Last night’s publication of the Government’s assessment of the state of preparedness for no deal did not provide a lot of reassurance on that, so it is time to be pragmatic—the Prime Minister has taken a lead on that—and to deliver an orderly Brexit. We need to come together across parties to try to get a deal over the line. If we cannot do that, we will fail the nation.

If MPs cannot bring themselves to put the national interest first at a time like this, they should consider the risks we face to security, freight delays, air traffic control, visas, food, medicine and energy shortages, healthcare for UK citizens in the EU, scientific research and educational exchange. We have heard more and more about those things, and all that disruption is having and will have an impact on the people whom we represent. As demonstrated on 29 January, there is a clear majority to rule out no deal, and I expect that that majority will increase at the next opportunity. However, we cannot just stand against something; we must urgently build a consensus for a deal that we stand up for in the British national interest.

It is clear that businesses need a deal to deliver frictionless trade and customs co-operation. Are the parties really so far apart on some form of customs partnership? The 2017 Conservative party manifesto mentioned having a special relationship based on a customs arrangement, and the official Opposition are calling for a customs union, so I feel that we are within touching distance if there is a determined effort to reach a consensus.

[Lady Hermon]

I would be delighted to hear the right hon. Lady encourage those on the Front Bench to confirm that she and her right hon. and hon. Friends will be allowed a free vote in the event that the Prime Minister again does not win the meaningful vote if we have one before the middle of March. Will the Conservative Government allow Conservative Members to have a free vote in the event of a significant decision about taking no deal off the table?

[Dame Caroline Spelman]

I cannot commit the Government to that, but it is clear to the House that these are not normal political times. I do not envy the job of my party’s Chief Whip, which must be one of the most difficult jobs on the planet at the moment. The main parties have difficulty in operating as we normally would, and much of what has been achieved has been achieved by building cross-party alliances. I think the public feel reassured when they see that happen, leastways my constituents and members of my party have told me that they like to see us working together in the national interest to try to bring about a resolution to this process, because we need it sooner rather than later.

With good will and determination, I believe we can get there and secure the new relationship with Europe for which people voted. I believe we will enjoy trading on preferential terms with our largest market, while being outside the constraints of the EU institutions to which many object today. That is what more than 17 million people voted for, and that reality is now within our grasp.

Whether Brexit is delivered on 29 March or is delayed for a few months—I am no great fan of an extended delay, as delay means uncertainty and will cost businesses money—it is up to us to back a deal that delivers certainty and protects prosperity and work. I therefore urge colleagues from all parties carefully to consider the amendments before the House today. More than that, as the debate continues in this place, we must now work more closely together than ever before to deliver Brexit.