Future Relationship Between the UK and the EU

Owen Smith Excerpts

Wednesday 18th July 2018 Commons Chamber

[Dominic Raab]

I understand the point my right hon. Friend makes. What we are trying to do, and what I think this model does achieve, is to make sure that any potential disruption to businesses through the supply chains is minimised to the lowest degree. That is the aim, but I do understand the point he makes.

[Owen Smith (Pontypridd) (Lab)]

Will the Secretary of State give way?

[Dominic Raab]

I will make a little progress, but I promise the hon. Gentleman I will come back to him.

Alongside the close arrangements for goods, we will negotiate a wide-ranging but different approach on services, including the digital sector, which is one of the fastest growing sectors for the UK. That will protect businesses from unjustified barriers or discrimination. It will cover mutual recognition of professional qualifications and it will also preserve our regulatory freedom.

On financial services, we will seek a new partnership in that area, reflecting the mutual interests of the UK and the EU. This approach to services is based partly on the absence of any of the risks of border disruption that might affect trade and goods, coupled with the distinct advantage of regaining domestic regulatory control and the ability to forge new trade deals with fewer fetters so that we are well placed to grasp the opportunities of the future.

[Owen Smith]

I welcome the right hon. Gentleman to his new position. I hear what he says about the Government’s desire to retain as frictionless trade as possible, but does he share my concern that the chief executive of Airbus has said only today that he is so concerned about the prospect of friction that Airbus is having to stockpile components in this country lest the Government make a further mess of Brexit and we end up unable to have frictionless, just-in-time trade?

[Dominic Raab]

I think that, in the hon. Gentleman’s own elegant way, that was a backhanded welcome for these proposals to minimise any risks in that regard, and what we should now all do in all parts of this Chamber is not call for second referendums or returning to the customs union, but get behind the Government’s plan and show a united front so we get the very best deal for everyone in this country.

[Owen Smith]

Will you tell the former Foreign Secretary that?

--- Later in debate ---

[Dominic Raab]

This is an opportune moment to pay tribute to my hon. Friend for all his work in the Department, particularly on no-deal planning. He makes an excellent point that will be at the forefront of my mind as we continue to step up our preparations.

[Owen Smith]

Will the Secretary of State give way before he moves on?

--- Later in debate ---

[Mr Baker]

As you know, Mr Speaker, I have been asked to keep to a time, and that term is sufficiently familiar to people in this House and across the country so I will not spend minutes defining it. It is the great class of people who govern our country, whether in politics, the civil service or the media, and those who govern our large companies.

[Owen Smith]

Will the hon. Gentleman give way?

[Mr Baker]

No. I am making my points gently and trying to do so in a spirit of co-operation. I heard the hon. Gentleman accuse me from a sedentary position of Trumpism, and I am not willing to go down that path with him.

--- Later in debate ---

[Hilary Benn]

I will not allow the hon. Lady to get away with putting the responsibility for the difficulties that the Government and the governing party are in, which are of their own making, on those of us on the other side of the House.

[Owen Smith]

Or are we the governing classes now?

[Hilary Benn]

I am not going to enter into that debate, either. The fundamental truth is that those in Brussels look at the chaos on the Government Benches, created by the efforts of Conservative Members of Parliament, and that weakens our ability to get a deal that is in the national interest. I do not know whether the hon. Member for Chelmsford (Vicky Ford) voted in favour of the customs union amendment yesterday.

--- Later in debate ---

[Owen Smith (Pontypridd) (Lab)]

For the avoidance of doubt, let me start by saying that I am absolutely campaigning for a second referendum. I am doing so because I want to give the people of this country an opportunity to turn away from Brexit, which I think will be damaging to their prosperity and to the security of all of us in this country. I will continue to make that argument in all sincerity.

Today’s debate and the events of the past 10 days have been edifying and terrifying in equal measure. They have exposed the full horror of the Tory civil war and, more importantly, the gravity of the risks that all the people in this country are now being exposed to as a result of the potential outcomes of that Tory civil war. We have seen resignations and revelations, and even the sinister, though softly spoken, speech by the hon. Member for Wycombe (Mr Baker), who is now not in his place, threatening in effect his Front Benchers—the governing classes, as he put it, by which I think he was coyly referring to the Prime Minister, the Chancellor and other people advising the Conservative party.

Those threats have been heard in the country and they have revealed, as other speeches have today, that some of the Brexiteers have always wanted sovereignty to absolutely trump security or prosperity. They have always wanted an isolated, independent Britain. They have wanted to row back to a fantastical past that cannot deliver in the modern era. We in the Opposition have to acknowledge that, and that the scale of risk that the country faces is grave. The Prime Minister’s White Paper was a brave attempt to try to recognise that, and to at last acknowledge that an integrated, involved relationship with the European Union is not only necessary but inevitable. There are over 100 references in the White Paper to common rules, common partnerships, common objectives, the common rulebook—just about every page is littered with such examples, which is precisely why it sparked the neuralgia on the European Research Group Benches, and precisely why we have effectively seen the coup of the last week and the capitulation of the Front Benchers to the ERG.

We must realise how grave the risks are, because we are now blithely talking about an exit on World Trade Organisation terms, as though that is something that we can countenance in this House. We cannot. The risks are enormous. Calculate what it would cost our country in extra borrowing, which is something that the Tories used to bang on about endlessly when I first came into the House. “You are hanging debt around the neck of future generations,” is what we used to hear from George Osborne and David Cameron. The reality is that the hit that the country will take—the extra borrowing that we will require as a result of the hole in our public finances—if we pursue the Chequers model is around £40 billion per annum in the long run, at 15 years out. We will not, unfortunately, get to a good place in 10 years, as one hon. Member said. The Government’s own analysis says that we will be £40 billion worse off.

What happens if we pursue WTO terms—if we take the no-deal option that is now being openly, terrifyingly advocated by so many on the Tory Benches? We heard earlier that there is ostensibly now a majority among the ERG group for that, and much more than the 40 that we heard from the hon. Member for Wycombe would vote for it. According to the Government’s analysis, the impact would be a 7.7% reduction in our GDP. That equates to about £150 billion less per year. It is more than we spend on the NHS. We are talking as though we are about to throw away the entire annual expenditure of the NHS to satisfy the fantasies of the hon. Member for Stone (Sir William Cash) and others, who have been banging on about this not just in the past few years, but for 30 years.

[Luke Graham]

The hon. Gentleman is making a lot of criticism of the Conservative party, but does he accept that there have been over 100 resignations on the Labour side of the House, and that the customs union amendment failed because Labour Members voted with the Government? It is fine to criticise, but he is wrong to say that this is just a Conservative problem; it is right across the House.

[Owen Smith]

I am criticising, in large measure, a small part of the Conservative party that is currently holding the Treasury Bench to ransom, but I would absolutely condemn the actions of Labour Members who failed to support the amendments this week and so allowed the Tories not to put in place some of the backstops that would mitigate the gravest risks we face—the risks of capital flight, job losses and massive borrowing being hung around the necks of our children; the risk to our manufacturing industry; the risk that our pharmaceutical industry, in which I worked for many years, will be unable to supply medicines; the risk of losing prosperity and security; and the risks in Northern Ireland. How can we countenance allowing any return to violence, which the Chief Constable of the Police Service of Northern Ireland warned would be the consequence of a hard Brexit? How can we countenance being so reckless as to allow that to happen?

We have to fight this at every turn. I hope that my right hon. and hon. Friends on the Front Bench will listen and understand that there is no such thing as a good Brexit or a “jobs first” Brexit. We have to acknowledge that there is just the hard Brexit now being proposed by Members opposite. We have to stand up for the only way in which we can reconsider this—a people’s vote. Trust democracy, trust the people, and ask them to choose between this sovereignty fantasy and the reality and prosperity we need.