UK Withdrawal from the EU and Potential Withdrawal from the Single Market

Lord Davies of Stamford Excerpts

Thursday 26th January 2017 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, I shall probably surprise the House by starting my remarks on this subject by saying that I agree very much with the noble Lord, Lord Forsyth. I strongly agree with what he said about the time constraints imposed on us now. I hope that in the months to come the Government, having promised to give Parliament a full opportunity to debate these important issues, will not do so in a way that artificially constrains our debates into periods of two and half hours, one and a half hours or what have you, so that in practice it is impossible for anyone to develop a coherent argument or make an intelligent contribution on the subject.

This is a pressing matter. Personally I have always felt that freedom of movement was a great ideal and an asset that it was important to preserve for our people and for future generations. In my view it has worked extremely well; it is inconceivable that we would have had the growth we enjoyed in the 10 years before the Lehman Brothers collapse and the banking crisis if we had not had the immigration we then enjoyed from other parts of the EU. I think I was the first person to alert your Lordships’ House a couple of years ago to a study done by the University College London economics team showing that the contribution made by eastern European immigrants in this country in the form of national insurance and taxation was far greater, by billions, than their consumption of public services or receipt of any kind of benefits. In other words, every taxpayer in this country was better off as a result of eastern European immigration. That was not true of other groups of immigrants to this country, but it was particularly true of them.

On the whole, the experience has been a very happy one. Of course, it is always possible to say that you can import unskilled labour from any part of the world. That is perfectly true but, if people were to come here in droves from all sorts of places around the globe—from Chad, Eritrea, Somalia, Afghanistan and other places where there is enormous poverty and enormous need—we would find ourselves integrating into this country people who in many cases were almost certainly illiterate in their own languages, coming from countries with traditions of political and religious fanaticism and violence. That would be a problem of a quite different order of magnitude from the integration of people from eastern Europe, which on the whole has been a very happy experience. I speak with some experience locally in Lincolnshire. It has to be said that the great advantage of having that kind of close relationship with neighbouring countries and being in the single market is that the freedom of movement principle is reciprocal, which is not something we get through any such deal with other countries around the world.

Something, however, must have gone badly wrong because the Prime Minister and the Government, far from regarding freedom of movement as an asset, an advantage and an achievement, now seem to regard it as such an evil that in order to escape from it, we should be prepared to pay the enormous economic price of leaving the single market. I do not think the Prime Minister has thought through properly the costs, which will be enormous. Another debate will be required to discuss the economic aspects of Brexit, and I am sure we shall have those opportunities. Still, it is quite terrifying that any responsible Government should even be contemplating such a drastic move as leaving the single market, threatening our position—certainly undermining it—as the financial service capital of the EU. All this in order to get out of freedom of movement.

I wonder what has gone wrong over the last few years. It has been a matter of perception: people have been concerned that there is no limit to the immigration that can result. It is unfortunate that the last Prime Minister did not succeed in negotiating some form of emergency brake; if he had approached matters in a much more communautaire way, he would have been much more successful in that negotiation. A quite different issue has darkened the whole picture: the sense that the whole common external frontier of the EU is not secure. People see on the television pictures of people coming in from Libya across the sea, from Turkey and from Syria. The German Chancellor’s decision to invite 800,000 refugees from Syria to Germany enormously undermined confidence in this country because there was a sense that these people would arrive in Germany tomorrow and be here the next day. That is of course complete nonsense—it is hysteria—but it unfortunately played a critical and negative part in the referendum campaign. Whether we are part of it or not, the European Union will need to look carefully at strengthening the external frontier and to take serious measures, such as the Australians have had to do, to prevent illegal immigration becoming a major social problem.

I hope we have other opportunities to discuss this matter in greater detail, because it really deserves it.