European Union: UK Membership

Sarah Olney Excerpts

Monday 24th March 2025 Westminster Hall

[Sarah Olney (Richmond Park) (LD)]

It is a pleasure to serve under your chairmanship, Sir John. I begin by thanking the hon. Member for Colne Valley (Paul Davies) for opening this excellent debate. I also extend my thanks to Mr McMaster for initiating the petition, as well as the 130,000 members of the public who signed it. Their desire for the UK to be once again at the heart of Europe has today brought together Members from across the House.

We can see from the number of Liberal Democrat contributions that this subject is very important to our party. My hon. Friend the Member for Tunbridge Wells (Mike Martin) talked about the impact on defence, and my hon. Friend the Member for Stratford-on-Avon (Manuela Perteghella) talked about higher education. My hon. Friend the Member for Lewes (James MacCleary) spoke about youth mobility and the Pan-Euro-Mediterranean convention, while my hon. Friend the Member for Brecon, Radnor and Cwm Tawe (David Chadwick) talked about the impact on farmers.

My hon. Friend the Member for Bath (Wera Hobhouse) gave a very personal reflection on her own journey, for which I am grateful, and my hon. Friend the Member for South Devon (Caroline Voaden) talked about fishing. My hon. Friend the Member for Wokingham (Clive Jones) spoke eloquently about barriers to trade. My hon. Friend the Member for Wimbledon (Mr Kohler) gave a polemic, which I really enjoyed, and my hon. Friend the Member for Melksham and Devizes (Brian Mathew) made a particularly interesting contribution about health co-operation, for which I thank him.

There were many contributions from Members representing other parties, and I particularly want to thank the hon. Member for Walthamstow (Ms Creasy) for her striking speech and metaphors. I have to say that a night out in Walthamstow sounds somewhat messier than a night out in Richmond, but I am very grateful for her contribution. Members from other parties mentioned impacts on tourism, particularly touring musicians, language schools and international aid, and the hon. Member for Banbury (Sean Woodcock) had some very interesting things to say about supply chains.

It would have been lovely to have heard from members of the Tory party, although we look forward to the speech from the hon. Member for Fylde (Mr Snowden). It seems extraordinary that despite how much time this issue has taken up in the Chamber and across the country over so many years, not a single member of the Conservative party—apart from the poor hon. Member for Fylde, who was not even a Member at the time—is here to defend what it did while in government.

The Liberal Democrats are proud to be the country’s most pro-European party, and we have been vocal in our support for the Government’s warm words on a reset and a rebuilding of our relationship with Europe after the disaster of the botched Brexit deal under the last Conservative Government. We are, however, concerned that those warm words are not leading to action. The wholly inadequate deal with the EU that was negotiated by the previous Government has done enormous damage to British businesses. There have been soaring export costs, increased workforce shortages and reams of red tape creating huge barriers to growth.

Having spent the past five years grappling with the bureaucracy of Brexit and increased trading costs, many business owners across the country will now be deeply concerned by the additional challenges to businesses that are coming from Washington. The returning Trump Administration have fundamentally changed trading relations globally with the introduction of high tariffs, which we already have on steel and are being threatened in other areas, too. It is vital that the UK leads on the world stage again, standing up for our interests by working closely with other countries. Most importantly, we must work with our European neighbours, which is why I am so glad to be speaking alongside colleagues from all parties to advocate for a constructive rebuilding of our relationship with Europe.

The new global security and geopolitical landscape has shifted since the Brexit vote of 2016. With an aggressive Russia, an assertive China and the return of a Trump Administration in the US, the case for closer cross-channel ties with the EU is made far more urgently. The Government are rightly looking to build closer defence and security agreements with Europe, and I am glad that they have embarked on those vital negotiations.

However, recent reports suggest that despite our being part of the European “coalition of the willing”, UK arms companies will not be included in a new €150 billion commitment to an increase of defence capabilities, unless the Government agree to defence and security partnerships with Brussels. We know that European officials are insisting that those defence agreements come in tandem with other partnerships, including a youth mobility scheme, and I urge the Government to take the logical step of agreeing to such a scheme, which is a clear win-win for everyone.

As the Minister knows, the Liberal Democrats believe that a key and pragmatic step in our rebuilding is the introduction of a youth mobility scheme between the UK and the EU. Despite recent press reports that the Government plan to introduce such a scheme, and the encouraging words from the Prime Minister himself just last week in response to a question about that topic asked by my hon. Friend the Member for Epsom and Ewell (Helen Maguire), it has been deeply disappointing to hear the Home Secretary and other Ministers rule it out, despite knowing that an agreement on youth mobility would not lead to freedom of movement.

A youth mobility deal would be good for our economy, especially our tourism and hospitality sectors, and give young British people the opportunity to work and study abroad. It would be a win-win—and not just that, because it is what the British public want. Polling shows that two thirds of the UK population are in favour of a youth mobility scheme, and the scheduling of today’s debate is further proof of the appetite across the country for closer ties with Europe. Introducing a youth mobility scheme between the EU and UK would send a clear message that this country is serious about supporting our young people and backing British business with the labour force that it needs to grow.

The EU is clear that it would welcome a youth mobility scheme. It has signalled that agreeing to such a scheme will be a necessary step before broader partnerships can be established, including on defence. I urge the Government to embark on negotiations so that we expand opportunities for young people across the country, and to acknowledge the broader benefits that the scheme would provide. Will the Minister agree that such a scheme would not cross any of the Government’s red lines regarding a European reset?

More broadly, as the Minister will be aware, the previous Government accepted an agreement to allow EU member state nationals visiting the UK to benefit from a six-month visa waiver, although UK nationals are limited to 90-day visa waivers when visiting the Schengen area. That is a further example of the appalling deal that the Conservative Government secured. Has the Minister considered redressing this imbalance and securing a fair, reciprocal and inclusive mobility agreement with the EU that provides a six-month visa waiver in both directions?

The EU is our closest neighbour and largest trading partner. I sense that the Minister knows that we have to get on with repairing the trading relationship that was so badly damaged under the former Conservative Government. The botched Brexit deal has been a complete disaster for our country, especially for small businesses, which are held back by reams of red tape and new barriers to trade that cost our economy billions in lost exports.

The dismal picture of the financial impact of our withdrawal from the EU has become increasingly clear. A recent survey of 10,000 UK businesses found that 33.5% of currently trading enterprises experienced extra costs that were directly related to changes in export regulations due to the end of the EU transition period. Since 2019, global British goods exports have increased by just 0.3% a year, compared with an OECD average of 4.2%. Small business exports have suffered even more significantly, dropping by 30%, and 20,000 small firms have stopped all exports to the EU. A recent study found that goods exports had fallen by 6.4% since the trade deal came into force in 2021.

I urge the Government to acknowledge the damage that our current trading relationship with Europe continues to do, not just to individual businesses but to the economy as a whole, and to take the sensible step of negotiating a new UK-EU customs union to ease the pressure that so many businesses are under. In the past, the Minister talked of pragmatic negotiations. Surely it would be pragmatic to drop the Government’s red lines and agree to a new UK-EU customs union. That would be the single biggest step that the Government could take to unlock growth. The Liberal Democrats will continue to call on the Government to do the right thing for our businesses.

The Government have made it clear that their No. 1 priority is economic growth, yet any proposal that might involve our European neighbours while contributing to boosting growth is dismissed. A new UK-EU customs union is a pragmatic and mutually beneficial proposal that would help the UK economy and labour market in the long term, stimulating the growth that the country so clearly needs.

The changes to the immigration system implemented in April 2024, which increased the minimum salary threshold for skilled worker visas, shrank the talent pool that hospitality businesses can recruit from and contributed to greater staff shortages in that sector. Around three quarters of the hospitality workforce is filled by UK citizens, but international talent has always been attracted to working in the UK because of our pedigree for hospitality and developing careers. In a 2024 survey of 1,650 employers from across a range of sectors, including hospitality, adult social care and manufacturing, 49% said that a reduction in the availability of migrant workers was one of the main causes of hard-to-fill vacancies.

The Government’s decisions in the Budget added to the overall tax burden on hospitality businesses, many of which are considering whether they remain viable, so we must provide the tools that hospitality needs to help businesses to grow and to boost the wider economy, including access to global talent. I have heard from stakeholders in the hospitality sector, including business owners and supply chain managers, who would welcome proposals that would bring the sector more stability, which would allow them to make longer-term plans within a more predictable and robust regulatory framework.

The Government have been clear on their red lines—no single market, customs union or free movement of people—but I am glad to have heard cross-party support for serious negotiations with our European neighbours. Liberal Democrats will continue to advocate for a fundamental reset of our relations with the EU. That means taking steps to fix the trading relationship, in line with our four-stage road map: first, resolving the low-hanging fruit, such as youth mobility; secondly, taking steps such as establishing a veterinary agreement and achieving mutual recognition of professional qualifications; and then establishing a UK-EU customs union, which would set us back on the path to the single market. In the longer term, our ambition remains that of seeing the UK at the heart of the EU once more.

Rebuilding our relationship with Europe is a fundamental part of making Britain more secure and prosperous. Given the threat of tariffs from the new Trump Administration, it has never been more important for our Government to break down the barriers to trade that were erected under the previous Conservative Government. By repairing our relationship with the EU, we will be able to deal with that unreliable and unpredictable actor in the White House from a position of strength. Does not the Minister agree that taking decisive steps, such as negotiating a new UK-EU customs union, establishing a youth mobility scheme and reducing red tape for high-street businesses, is the best way to achieve the growth that this Government are so focused on and that our country so desperately needs?

[Sir John Hayes (in the Chair)]

Before I call our final two speakers, may I thank colleagues for their brevity, particularly Clive, Paul and Brian—and Jim, whom I did not give much choice in the matter? That has allowed everyone to get in, and while I am in the Chair, I hope that I will ensure that everyone gets their chance to have their say.

Also, may I ask the Minister to leave Paul a couple of seconds at the end to say a final word? I also ask the shadow Minister please to leave the Minister plenty of time to respond to the debate.