UK’s Exit from the European Union

Debate between Martyn Day and Catherine West

Monday 24th April 2023 Westminster Hall

[Catherine West (Hornsey and Wood Green) (Lab)]

The hon. Member is making a very good start to this important debate. Does he agree that one of the worst-affected sectors is the creative sector? Many musicians across the UK have been in touch with us as their representatives to say how they have been negatively affected by the lack of agreement between countries. I hope that he and others will refer to that in their speeches.

[Martyn Day]

That is a good point well made. The problem we have with the debate is that so many areas have been adversely affected that even with the best part of 20 minutes, I will struggle to touch on them all. I look forward to other Members extrapolating from the points we start with.

A public inquiry has been set up to look into the UK’s pandemic response, so it is reasonable—I would suggest sensible—to also hold one on the impact of Brexit. The public have a right to know. Putting aside the fact that support for Brexit is at its lowest since the referendum, the impact of leaving the EU on the UK needs to become common knowledge. We need to know where we are before we can plot our way forward to where we want to be.

--- Later in debate ---

[Martyn Day]

I thank the right hon. Member for that intervention. It is fair to say that the economic impact of Brexit falls well short of the benefits that the UK enjoyed with EU membership; the OBR expects our withdrawal from that to reduce the overall trade intensity of the UK economy by 15% in the long term. The OBR’s latest Brexit analysis assumes that the trade and co-operation agreement, which sets the terms of the post-Brexit trading relationship between the UK and the EU, will reduce the potential productivity of the UK economy by 4%, largely due to the increase in non-tariff barriers.

In rebutting those figures during the CPTPP announcement, the Trade Secretary pointed out that the OBR’s forecasting was speculative. However, the OBR’s economic and fiscal outlook last month highlighted that it had been reviewing and refining its assumptions about the economic impact of Brexit as new evidence arrived and that, two years into the trade and co-operation agreement, the trends on UK trade volumes remained consistent with its assumptions. Additionally, the OBR forecasts stem from out-turn data published by the Office for National Statistics. The latest data from the third quarter of 2022 suggested that UK trade volumes remain 3% below their 2019 level, while there has been an average increase of 5.5% across other G7 countries. Similarly, trade intensity is 2.6% lower than its pre-pandemic level in the UK, yet it is 3.6% higher in the rest of the G7.

A recent study estimates that UK goods trade was 7% lower in June 2022 than it would have been were we still in the EU. All in all, in terms of trading, the Pacific rim trade deal, along with the already-signed agreements with Australia and New Zealand, which have yet to come into force, has limited positive economic impact to compensate for what we have lost due to the UK Government pushing through a hard Brexit deal outside the EU single market and customs union.

In December 2021, the National Audit Office predicted that the macroeconomic benefits of free trade agreement negotiations being carried out by the UK Government at the time would only increase the UK’s GDP by between 0.33%, at best, and 0.17%, at worst, after 50 years. From those projections, the USA was the biggest potential FTA partner. However, although negotiations started nearly three years ago, there is no trade agreement with the USA, and neither is one expected any time soon. The relatively modest economic benefits projected from the secured and proposed agreements by the Department for International Trade have therefore further decreased.

Compare that with where we were: part of the second largest and most-integrated world trading blocs, which also happens to lead the way in global standards and regulations. Maybe the Prime Minister’s idea about mandatory maths for everyone up to the age of 18 holds some credence after all, as the sums certainly do not add up. The Pacific rim trade deal also has wider negative impacts, such as its inclusion of investor-state dispute settlement clauses, which I am totally against, and environmental costs. For example, the UK Government’s own analysis stated that joining CPTPP is estimated to increase the UK’s domestic greenhouse gas emissions. How that complies with the UK Government’s net zero ambitions escapes me; perhaps the Minister can enlighten us on that point, too.

Like the Pacific rim trade deal, Brexit is causing damage on multiple levels, but I will try to confine my remarks to the specific issues that the petition mentions, and move on to how Brexit is impacting on opportunities for young people and on the rights of individuals. Before doing so, let me point out the obvious: the damaging impact of Brexit on trade and the economy undoubtedly has ripple effects on opportunities and rights. That said, I will start with the removal of the right to free movement—not just for work purposes—which puts barriers in place for both UK and EU citizens and causes workforce shortages in key sectors, including the crucial health and care sector, due to the simple matter of travel, which is now much less straightforward and flexible.

We have only to look back a couple of weeks to see the delays at Dover over the Easter break, which were caused by new passport stamping requirements, and we can look forward to worse delays to come when the EU’s post-Brexit entry-exit system, or EES, comes into effect next year. This new border control for non-EU travellers, which Brexit has made us, has been described as “anticipated chaos”—another Brexit benefit for us all to look forward to. Delays at customs are also a major headache for manufacturers, with 31% predicting that owing to new trading rules, customs delays will be the biggest risk to their company’s competitiveness in 2023, and 36% of small and medium-sized businesses are still struggling with the new customs procedures and paperwork.

There are also privacy rights, with the EU’s general data protections regulations thus far serving us well in protecting our personal data. To replace them, the Science Secretary has recently put forward the new Data Protection and Digital Information (No. 2) Bill to supersede its predecessor, which was repeatedly delayed. However, I have serious concerns that the Bill will, first, erode the high standards of data protection rights that UK citizens held as part of the EU GDPR and, secondly, further negatively impact on any review of the UK-EU trade deal if it fails to protect EU citizens. I want to see a commitment to robust data privacy protections and world-beating data protection regulations being maintained. However, on the Bill’s Second Reading last week, my hon. Friend the Member for Glasgow North West (Carol Monaghan) put on the record that, with regards to how this piece of post-Brexit legislation will affect individuals’ rights, the Open Rights Group has said:

“The government has an opportunity to strengthen the UK’s data protection regime post Brexit. However, it is instead setting the country on a dangerous path that undermines trust, furthers economic instability, and erodes fundamental rights.”

Back in 2016, the Vote Leave campaign described EU regulations as excessive red tape. Like it or not, regulation is essential not just for the EU single market to function, but to protect workers. The UK Government’s Retained EU Law (Revocation and Reform) Bill, which was brought forward despite it not being known exactly how many regulations it would affect, will enable the UK Government to abandon vital legislation that has protected people’s rights for almost 50 years. In Committee in the House of Commons, my hon. Friend the Member for Argyll and Bute (Brendan O’Hara) tabled many amendments that targeted multiple issues in that Bill, including about workers’ rights, food standards, consumer safety and the uncertainty facing businesses. It is a disgrace that those concerns were ignored by the UK Government and that all SNP amendments were voted down by Conservative MPs.

On the impact of Brexit on opportunities for young people, it is no exaggeration to say that it has removed their access to a European, if not global, labour market. Instead of prioritising young people, enhancing their opportunities and widening access to positive destinations to ensure that they get the best possible start in life, Brexit has stolen those prospects for success.

[Catherine West]

Does the hon. Gentleman agree that the particular impact on school trips has been enormous and that that does not just have a knock-on effect on our local economy here in London and across the UK, but tends to narrow the horizons in terms of friendship forming and all those other important and intangible benefits of doing school trips abroad?