Brexit: UK-EU Relationship

Lord Livermore Excerpts

Thursday 1st December 2016 Lords Chamber

[Lord Livermore (Lab)]

My Lords, I congratulate my noble friend Lord Liddle on his excellent opening speech. I agreed with every word. I also join others in congratulating the noble Lord, Lord Ricketts, on his maiden speech.

I believe that Britain’s membership of the European Union is firmly in our national interest, extending both our power and our prosperity. So while I respect the verdict that was delivered by the British people in the referendum, I genuinely fear that leaving will have disastrous consequences for both our economy and our international standing. Last week’s Autumn Statement gave us the first glimpse of the scale of the economic impact when the Chancellor unveiled an economy that as a direct result of Brexit is worse off in every respect: growth and productivity will be lower, borrowing and inflation will be higher, wages will stagnate and living standards will fall.

It is therefore vital that in the forthcoming negotiations we achieve an outcome that minimises any further harm to growth, jobs, or living standards. As my noble friend said, this surely means that the Government should make a firm commitment to remaining a member of the single market. Ensuring that businesses are able to trade on the same terms as they do now has consistently been shown to be the least damaging future arrangement, offering the greatest opportunities for future growth. Yet the Government are signalling instead that they favour an extreme hard Brexit, taking us out of the single market and the customs union, apparently regardless of the economic cost.

For Britain to achieve an outcome that minimises the harm to our economy and puts growth, jobs and living standards first would require a marked change in the Government’s position, but it would also require a marked change in the nature of the debate in this country. It requires a far greater level of honesty about what it is possible to achieve in the negotiations and about the trade-offs that will be involved. The debate we are currently having in this country is instead a harmful mixture of dishonesty and delusion. Some senior Ministers, maintaining a pattern established in the referendum campaign, continue to pretend that they see no possible downside to Brexit and that the entire economics profession is mistaken. In reality they are ideologically committed to a hard Brexit and would be very happy to sacrifice the living standards of working people to achieve that goal.

Other members of the Government seem to have adopted a more sincere delusion about what the outcome of the negotiations will bring. Holed up in Whitehall, prevented from meaningful engagement with their EU counterparts until Article 50 is triggered, they have convinced themselves that a terrific new deal will be on offer, giving Britain all the things we like about the single market while we give up virtually nothing in return. I am sorry to say that all too often leading members of my own party seem willing to collude in this fantasy, complicit in creating the fiction that our economy can be protected within the single market while at the same time confident that we can achieve some as yet unspecified reforms to freedom of movement.

This is an extremely dangerous fiction to collude in, and at some point in the next two years, this collective denial will collide with reality. As every European leader has made clear, this is not a deal that will ever be on offer. There will be no UK membership of the single market without retaining freedom of movement, so as a nation we will at some point have to confront a stark choice: do we end freedom of movement, or do we stay in the single market?

If the promises made on immigration turn out to be undeliverable, the backlash will be catastrophic for our democracy. Yet how could a democratic Government knowingly and deliberately pursue a policy of leaving the single market that would cause such economic self-harm to our nation? Unfortunately, it is a choice for which the British public have in no way been prepared. Although the referendum was decided by a narrow margin, the Government have sought to govern only for the 52%.

As other noble Lords have said, leaving the single market was not on the ballot paper on 23 June, and those who voted to leave the European Union will have undoubtedly included both opponents and supporters of the single market. Yet the Government have made no attempt to create a national consensus, or to discuss the difficult choices and inevitable compromises we face. When we eventually have to face up to reality, the only way to avoid a political crisis will be with a political solution. Decisions of this magnitude cannot be taken by the Government or even Parliament alone; they require far greater democratic legitimacy. As the details of the choice become clear, the British people must be involved again in helping to make this vital decision.