Queen’s Speech

Lord Monks Excerpts

Wednesday 28th June 2017 Lords Chamber

[Lord Monks (Lab)]

My Lords, as a natural optimist and a former trade union general secretary—and I assure you that the two are compatible—I see no economic upsides at all to Brexit. Quite the contrary: I live in fear of the consequences for jobs, worker rights and prosperity, particularly if and when we quit the single market and the customs union.

We learned yesterday that apparently that will happen by 2019, within the two years. David Davis confirmed that yesterday. When that piece of information penetrates into the minds of company directors in the boardrooms of this country and many other countries, watch for the contingency planning to accelerate. We already know that the lucrative London-based Eurobond market is under grave threat, and many others are weighing up their positions. I have been cheered by some of the remarks all around the House about the attractions of what is set out in the amendment from the noble Lord, Lord Adonis. I hope that people are listening to that argument. Regardless of whether it is achieved through the Norway option, it seems a way of safeguarding at least the essentials of our position, if not everything.

As far back as the 1980s, during the days of the Thatcher Government, I was involved in enticing inward investment to the UK to fill some of the many gaps caused by the collapse of all those British household names at that time. The inward investment initiative was very successful with the arrival of companies such as Nissan and Toyota and many others that wanted their plants to be in the European Union marketplace. They have been of great benefit to our country. We would not have a major manufacturing presence without many of those arrivals from abroad. Unfortunately, they were not homegrown; we have imported them and they have done many good things for us.

However, those companies do not have to be here. If we flop outside the single market and the customs union, and if there are new tariff and non-tariff barriers, will they stay? We do not really know, do we? It is a hell of gamble to take with such an important part of the British economy. Can we really negotiate a comprehensive free trade deal, or even bespoke transitional arrangements, before 2019 is up? I fear it is mission impossible. Anyway, from the point of view of many of us concerned with the position of working people, the question is whether, in any agreements that are made, there will be the same provisions as there are in the single market for social and environmental standards—standards which are Europe-wide, by the way, and stop one country undercutting the others on these particular points.

The Brexit answer to all this is that our future tends to lie outside Europe, in the emerging economies. Perhaps we can roam as free-traders through the rest of the world. But, in case your Lordships have not noticed, it is not 1850 anymore, and there is no British Empire. There is a need to deal with President “America First” Trump and with China and India, which as others have pointed out have their own agendas and some raw grievances about British imperialism in the past. There are not so many other attractive markets to which you can look to replace this huge, rich, single market of which we are currently a member.

Of course we need to do more trade outside the EU, and follow the German example—they do it, the French do it, and their exports are a lot bigger than ours. The problem—of why we do not do rather better—as others have said, does not lie with the European Union but with us. But why are we even thinking of putting in peril our existing trade with the EU, this huge area on our doorstep, and instead setting course for somewhere—sometimes it sounds like anywhere—over the rainbow? I am therefore fully in support of my noble friend Lord Adonis in his amendment. The single market and the customs union should at least be our default position—certainly not flopping out on to WTO conditions.

This would of course involve acceptance of the principle of free movement of labour. I accept that concern about migration was a major factor—probably the major factor—behind the leave vote, certainly among Labour voters. This was very well recognised recently by President Macron in his Guardian interview just last Saturday. I believe that the threat from migration was exaggerated, but there were undoubted problems in particular localities. These could have been addressed earlier if advice given by trade unions had been listened to more carefully. We campaigned for migrants to get the rate for the job, not just the minimum wage. We campaigned for jobs to be advertised at home as well as abroad, for training programmes to steer British workers into available jobs and for local authorities in areas of high migration to continue to receive extra help—that was cancelled by the coalition Government. Other EU countries, by the way, have already adopted these kinds of measures. We could have done the same had we chosen to do so, and we still can—if we choose to do so.

We should therefore hang on to our membership of the single market and the customs union. We can join EFTA. That would not be comfortable and could feel a bit humiliating, but it is a way of doing a job that we need to do. It is not ideal, but we are in the business of making the best of a bad job and avoiding the further vandalism to our economy which I believe Brexit is inflicting. How many plants have to close before the penny drops? How many jobs have to emigrate before the Government realise the folly of their course? Support the Adonis amendment.