European Union (Notification of Withdrawal) Bill

Oliver Dowden Excerpts

Tuesday 31st January 2017 Commons Chamber

[Oliver Dowden (Hertsmere) (Con)]

There has been a lot of debate about whether the Government have a sufficient mandate not only to invoke article 50, but to exit the single market and the customs union. Many hon. Members might know that my involvement in that question did not begin when I was elected to this House in 2015. In the five years prior to then, I had the privilege of working in Downing Street. For me, the whole question of our membership of the EU is inextricably rooted in the conflict between control—principally of immigration and our own laws—on the one hand, and our membership of the single market on the other. In the decade that followed Tony Blair’s disastrous decision to allow the new eastern European members of the EU to gain full access to the labour market without transitional controls, net migration from the EU went from being roughly in balance to being in the hundreds of thousands every year.

The application of the single market to the field of labour went from facilitating the free movement of labour around countries of roughly equal development to a mechanism for mass economic migration. That, in turn, was compounded by the fact that the UK had not only no transitional controls, but an open, English-speaking labour market that is much more conducive to migrants. Latterly, the eurozone crisis meant that while much of Europe stagnated, a mercifully free United Kingdom became a jobs-creation engine that sucked labour from stagnant continental countries.

All that led to a growing sense of a loss of control. These were huge changes about which the British people were never asked and to which they never consented. That was why Conservative manifestos repeatedly committed us to reducing migration to the tens of thousands, but our experience in government demonstrated that that could not be achieved.

[Mr MacNeil]

Did the Conservative manifesto commit to staying in the single market?

[Oliver Dowden]

The Conservative manifesto committed us to renegotiation followed by an in/out referendum, which was exactly what we delivered. The whole argument I am making is that the question of EU membership is inextricably linked to that of the single market.

The problem with trying to control migration within the EU is that the Commission rigidly stuck to the doctrine that the free movement of people was one of the immovable pillars of the single market, and that any attempt to favour UK nationals over EU nationals was discriminatory and illegal. That was despite the fact that the whole reality of its application had changed since we initially agreed to single market membership, and that there was no similar perfect purity applied to the other pillars, particularly in services, in which the UK stood to be a major beneficiary of a pure single market.

[Mr Andrew Tyrie (Chichester) (Con)]

Is it not the case that several EU countries now have deep concerns about the consequences of unfettered free movement and that the collapse of Schengen, albeit for different reasons, is further evidence of that?

[Oliver Dowden]

I thank my right hon. Friend for his intervention; what he says is undoubtedly the case. The problem is that the Commission and other EU members move at a glacial speed, so there is unlikely to be a significant change in their approach to this pillar of the single market for some time.

Of course this issue was not the only factor, but it certainly gave strong impetus to the argument that the only way we could resolve the situation was through a policy of renegotiation followed by a referendum, which was what we fought the 2015 election on. Again, the Commission dogmatically refused to compromise on its conception of free movement, which was bolstered by Chancellor Merkel’s experience of growing up as a child of East Germany and innate hostility to any imposition of borders. Going into the referendum, we therefore could not credibly say that significant control had been restored.

Pitted against that strong argument for leaving the EU was the significant economic risk and dislocation that arose from losing unfettered access to a market of half a billion people, which we had achieved through full membership of single market. The decision therefore was about a difficult balance between control and risk, which was why it was absolutely right to put such a profound question to the British people in a referendum. We should be quite clear that the dilemma of EU membership was, in essence, the dilemma of our membership of the single market: the benefits of having free movement of goods, services and capital set against the loss of control over our laws and migration policy. These issues were the essence of the debate.

My innate conservatism favoured not taking that risk, but the British people took an alternative decision—this was whole point of asking them in the first place. So it is clear that not only should I respect that decision and vote to invoke article 50, but that I should also seek to implement it fully, which must mean leaving both the single market and the customs union. For people to claim that the Government do not have a mandate to do that is to completely ignore how we got to this situation in the first place.

Equally, however, we must be clear about the other choices that we have taken. I am glad that the economy has maintained momentum after the initial political decision to leave, and I am confident that in the medium to long term we can make a success of the huge liberation of leaving the EU. We can tailor our laws to meet the economic and trading interests of this country and those with which we choose to enter bilateral deals, rather than being bound by the lowest common denominator interests of a 27-member bloc. Indeed, we are well placed to exploit this position, as we have a centrally placed time zone, the English language, political stability, the rule of law, a competitive tax regime and tremendous creativity. But we should also not forget the risk we took by choosing to leave. I am sure that, in the short term, the depreciation of sterling is likely to lead to price rises this year, squeezing disposable income and consumer spending. The terms of our access to the single market will be different, causing short-term dislocation. Of course, the Commission and member states will initially—

[Ian Blackford]

The hon. Gentleman correctly points out that the fall in sterling will lead to an increase in inflation. This Government have frozen benefits for the next four years, so does not that action and the fact that the autumn statement shows that growth is going to be lower mean that, as a consequence, a lot of people will be very much poorer?

[Oliver Dowden]

Two things: first, record low unemployment means that there is tremendous opportunity for those people; and, secondly, wages across the board have not grown rapidly, so it is entirely right that constraint is applied to benefits.

Of course the Commission and member states will initially resist any deal that is not unambiguously seen as making the UK worse off from exiting the EU. I say that not to refight the battles of the past, but because if we expect the changes I have described, plan for them and manage them as the necessary consequences of the decisions we have taken, we will be better placed to see them through to opportunities in the long run. This is the beginning of a process of historic change in our nation, but it is a path we have chosen with our eyes open, through an exercise of our democratic rights, and we have many reasons to be optimistic. Government Members are now all on the same side, and we should seize the opportunities that this change of direction affords us.