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

Lord Hodgson of Astley Abbotts Excerpts

Thursday 26th January 2017 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I add my thanks to the noble Baroness, Lady Hayter of Kentish Town, for giving us a chance to debate this matter today, but she will not be surprised to hear that I do not intend to follow the line she pursued, nor indeed the line of the noble Baroness who has just spoken. I take this opportunity to urge my noble friend on the Front Bench, who will play an influential part in the negotiations that are about to begin, to take a really tough line on the issue of the free movement of labour because it is critical.

Before going into that in detail, let me make two points. This is not a rant about immigrants or immigration. I recognise that skilled immigration at a high level has been an important part of our country’s dynamism and that it is should continue at a limited level in the future. Secondly, this is not about EU citizens who are resident in this country. I recognise that they have come here on one basis and we should honour it. Like my noble friend Lord Hamilton, I fear that it can only be part of a negotiation and that reciprocity is an essential part of that. The Prime Minister has made our position clear and I am sure that, with good will on both sides, we can achieve the outcome we all desire.

My argument today is that for too long for British industry, British commerce and British public services, immigration has been the default option. It has been, as the Migration Advisory Committee, the government body which speaks on these matters has said, the “Get out of jail free” card. That has had and is having a deleterious effect on members of our settled population. When I talk about our settled population, I mean irrespective of race, colour, creed, religion and ethnic background. Of course, the default makes perfect economic sense for employers. Why take the trouble to train up a member of the settled population when for the same money they can get a skilled or perhaps overskilled individual from, say, eastern Europe? It also makes perfect economic sense for the person to accept the post because it may well pay three or four times as much as is available in their home country.

Governments of all persuasions—indeed, the noble Lord, Lord Livermore, referred to this—say that immigration increases GDP. If you increase your population, you would expect GDP to rise and it is counterintuitive for it to be otherwise. What no one focuses on, or focuses on insufficiently, is GDP per head of population, and here the figures are much more nuanced. The cross-party Select Committee of your Lordships’ House looking into the economic impacts of immigration concluded:

“Both theory and the available empirical evidence indicate that these effects are small, especially in the long run when the economy fully adjusts to the increased supply of labour”.


As a result of the widespread use of the default option, there is a real danger that our settled population is being, as commentators now say, “crowded out”. The noble Baroness, Lady Kennedy of The Shaws, talked about the moral option—this is a moral option which has to be faced as well.

I simply cannot give the House examples of how this crowding out is taking place and look at its impacts in a speech of only three or four minutes, but I would like to quote briefly from Dame Louise Casey’s report published last month, The Casey Review: A Review into Opportunity and Integration. It is a hard-hitting report in which she said:

“At the start of this review, I had thought that I knew what some of the problems might be and what I might report on. Discrimination and disadvantage feeding a sense of grievance and unfairness, isolating communities from modern British society and all it has to offer.


I did find this. Black boys still not getting jobs, white working class kids on free school meals still doing badly in our education system, Muslim girls getting good grades at school but no decent employment opportunities; these remain absolutely vital problems to tackle and get right to improve our society”.


This is stirring up trouble for our society in the future. One important, critical way to improve economic opportunities for these people must be to resist and stop the default option, the “Get out of jail free” card, of recruitment from overseas.

That is why I urge my noble friend, as these negotiations get under way, despite the pressures that will undoubtedly be applied to him and the Government to relax the line, to pursue a really firm line on this issue. It is difficult, sensitive, emotive and frequently misinterpreted, but it is essential that we get it right.