European Affairs

Debate between Peter Grant and Chris Leslie

Thursday 15th March 2018 Commons Chamber

[Mr Leslie]

We have to recognise that in so many areas of policy—not just economic or trade policy—we benefit from these alliances and relationships. They do need to be worked on, and we need to somehow give and take a little bit. That is the nature of the global neighbourhood in which we live.

It would be remiss if I did not at this point voice my appreciation for the statements from France and Germany, which have shown their solidarity and fraternity with the United Kingdom in respect of the Russian chemical attack in Salisbury. We are talking about European affairs, and it is important that Europe stands together at an important moment such as this.

But Brexit is bound to dominate this sort of debate, and there are a number of aspects that I want to pick up on. The first is the question of frictionless borders and the trade arrangements that we absolutely have to maintain, not just for our own economic continuance but because of the Good Friday agreement and the need to avoid anything that could diminish the peace settlement in Northern Ireland.

The phase 1 agreement that the Government signed up to said that if they cannot come up with alternative arrangements, full alignment will be the way forward. My understanding is that the Secretary of State for Exiting the European Union has this morning admitted that the notion of a technological option—the “smart borders” option—is just not viable. It is not going to work because it requires hard infrastructure at the borders. You will know, Madam Deputy Speaker, that there are 275 crossing points on the border between Northern Ireland and the Republic of Ireland. The notion of having hard infrastructure—cameras, inspection posts and who knows what else—is clearly not compatible with the Good Friday agreement, so the Government have ruled that option out.

The only option that therefore exists is some sort of magical deal whereby the UK agrees to administer the external tariff arrangements for the rest of the European Union while simultaneously administering our own separate tariff arrangements for goods that are destined just within the UK. That does not happen anywhere else in the world. As well as being a complete bureaucratic nightmare, it would require reciprocity from our European partners with regard to our arrangements. They would have to administer a dual-tariff system for goods destined for the UK and those destined for Europe. It is just not going to happen. When the Under-Secretary of State for Exiting the European Union, the hon. Member for Wycombe (Mr Baker) winds up the debate, he would do well to admit that the phase 1 agreement that he signed up to now means full regulatory alignment and, of course, that a customs union is the best and simplest way to achieve that.

The Government are trying their best and scrabbling around, asking the road haulage industry, trade bodies and other cargo and freight companies, “What are your volumes of traffic and what’s happening in trade?”, and making them sign non-disclosure agreements, to try to gag them if they dare to speak, even to their own trade body members, about their conversations with Ministers. That just shows how desperate the situation is.

[Peter Grant]

Has the hon. Gentleman considered the possibility that the reason the Government want non-disclosure agreements in every discussion is that the next time Labour Front Benchers table a Humble Address motion, they will use the fact that they have signed up to a non-disclosure agreement to prevent Parliament or anybody else from finding out what on earth is going on?

[Mr Leslie]

It is very tempting to table a series of motions to keep extracting documents from the Government. For all the bluster of the Chancellor’s spring statement, I still regard the best documents published by the Treasury for quite some time, albeit reluctantly, to be the 30 PowerPoint slides that show, among other things, a £55 billion black hole in our public finances by 2033 if we opt for the middle scenario—the FTA-style scenario—and cuts to our public services that would result in the imposition of at least another decade or more of austerity. My hon. Friend the Member for Sheffield Central (Paul Blomfield) made an excellent speech and I say to him and my other Front-Bench colleagues that, having got the Labour party to support a customs union, the logic of all their arguments points to supporting retaining our participation in the single market, to avoid that austerity in years to come.

I want to finish on the arguments relating to the single market. We need to remember that the UK is an 80% service sector economy. While being in the customs union is good for the 20% of the economy that is based on physical or manufactured goods, 80% of our economy is based on services. That is why the single market matters—because it applies particularly to trade in services. Many trades and services will not be tariffed, taxed or diminished—they may be banned altogether, particularly in the field of financial services, which the Financial Secretary mentioned in his opening remarks. Financial services alone represent 11% of our economy and contribute £66 billion in revenue to our Exchequer every single year. That £66 billion pays for the schools and hospitals in the constituencies of all hon. Members, but, again, the Government are scrabbling around and trying to find some sort of mutual agreement on financial services. Just getting it referenced in a flimsy, two-sided A4 document on the future trade relationship will definitely not suffice.