UK’s Exit from the European Union

Stella Creasy Excerpts

Monday 24th April 2023 Westminster Hall

[Adam Holloway (Gravesham) (Con)]

It is a great pleasure to serve under your chairmanship, Mr McCabe.

When 65% of the people in my constituency of Gravesham voted in the 2016 referendum, they cast their votes in favour of leaving the EU. They did so in the expectation that their views would be respected and in the hope that the Government would have the guts to make a success of it. In those ambitions, my constituents have not been well served. Their clear instructions to us here in Parliament were not respected. For years the Government, with the collusion of the civil service, treated Brexit as a gigantic, strategic mistake by the people of the United Kingdom, and they saw their role as one of damage limitation. But in 2019 the electorate had the chance to speak again, returning my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) with a huge majority, and he respected that mandate and was finally able to deliver Brexit.

It is faintly depressing to be here again ostensibly debating whether the benefits of Brexit have been delivered and whether there should be a public inquiry. In reality, we are arguing today about whether we should have voted to leave the EU or whether we should rejoin. For me, the single most important benefit of Brexit has been realised, leaving aside some slightly unhappy compromises in the Windsor framework, because our sovereignty has been repatriated. Many remainers seem to view our desire to govern ourselves as at best an outmoded and abstract concept, and at worst a front for baser impulses.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

Will the hon. Gentleman give way?

[Adam Holloway]

I will not. I came in here earlier, took one look at all the articulate advocates of remain or rejoin, and I thought that in the interests of my blood pressure, which I tested this morning, I would not give way—[Interruption.] I am sure the hon. Lady can address that in her speech: we have heard a lot from her on the subject already.

It is easy to undervalue sovereignty if the areas in which it was surrendered to the EU do not actually impact one’s life. It is easy to disdain patriotism if someone is economically and socially mobile and derives their self-worth from a well-paid job, or if their life is made easier by cheap labour as a result of free movement. In my constituency, EU membership has brought social problems, pressures on housing in the social and private sectors, enormous stress on public services and a sense of disenfranchisement. My constituents are not crazed nationalists. They are hard-working people who voted to take back control over the laws that directly affect their quality of life, and to have the right to vote out politicians who make laws that do not work for them. That power is important to them, and it is important to me that we deliver on that promise.

On the economic benefits of Brexit, we should have the courage of our convictions and stop being so cautious. It was encouraging to hear the Chancellor of the Exchequer, my right hon. Friend the Member for South West Surrey (Jeremy Hunt), unveil his post-Brexit reform of financial services, which aims to give us a regulatory framework that meets the needs of our financial services industry and can respond effectively to emerging trends. With the freedom to diverge from EU law, we can now make substantial changes in many areas—for example, in the regulation of insurance firms. The risk margin, the capital buffer that insurance companies must hold, will be cut by 65% for life insurers and 30% for general insurers. The eligibility of assets that life insurers can use to match their liabilities will therefore be broadened. That will free up capital for investment in the UK economy and improve the competitiveness of the important financial services industry, bringing benefits to consumers.

The Government must stick to their promise to make substantial legislative progress in this area during 2023. Reform of the financial services regulations is just one area where we now have the freedom to extricate ourselves from a regime that was not designed with our best interests in mind.

There are a host of opportunities we must now seize. We must make progress with the Retained EU Law (Revocation and Reform) Bill, and we must take advantage of our freedom from EU control of state aid. We must make sure that our immigration system works for the people of this country. It is a difficult task to disentangle ourselves from a heap of legislation that we did not choose, but it is a vital job. We should be bold and move quickly.

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[Stephen Farry]

I agree. We will soon discover that in many respects, by design the UK will have to be a rule taker. It is in the fundamental interest of the UK economy to follow rules that are essentially set at the European level, but we will not have the important say that we had previously.

Like the hon. Member for Oxford West and Abingdon (Layla Moran) and many other colleagues in today’s debate, including the right hon. Member for Leeds Central (Hilary Benn), I sit on the UK Trade and Business Commission. Almost every week we hear evidence from a range of experts and other stakeholders who set out huge concerns about the impact of Brexit on their sectors. It is accurate to say that the UK economy has seen seriously constrained growth as a consequence of Brexit. Of course, there are other issues, but Brexit is by far the major stand-out factor that differentiates the UK from its main competitor nations in the developed world.

The trade deals that are happening around the world will never compensate for the increased trade barriers that we have erected with our closest and biggest external trading partner. It is one thing to say that the European Union is not growing at the same rate in terms of international trade; having a trading partner that represents 30% to 40% of our international market compared with a partner that grows from 0.1% to 0.2%, while maybe a radical change in the level of trade on the surface, does not amount to the same impact on UK business. Also, we have discovered that freedom of movement applies in two directions. Who knew? Constraints on the ability of others to come here applies to UK citizens seeking to move overseas.

I want to focus on the impact on Northern Ireland. In some ways, I feel slightly humbled in this respect because we have had, at the very least, the benefit of the Windsor framework. I put on the record again my appreciation for those who were involved in reaching that agreement, both on the UK side and in the European Commission. At best, the Windsor framework is a soft landing for Northern Ireland, but Northern Ireland will still suffer many of the same problems that the UK as a whole is facing from Brexit, as well as some further particular challenges that are unique to our own geographical situation on the island of Ireland.

Perhaps the most apparent consequence is seen in our governance. I have no doubt that my colleague, the hon. Member for Strangford (Jim Shannon), will express a different view on this when he speaks, but for me our governance worked based on sharing and interdependence. It relied upon the joint membership of the UK and Ireland within the single market and customs union, and that in turn allowed us to have those interlocking relationships, within Northern Ireland, on the island of Ireland and within the UK, allowing a balance of different identities to be expressed without that much encumbrance. Brexit—particularly a hard Brexit—will threaten some people’s sense of identity and create some degree of economic friction. The Windsor framework has gone a long way to mitigate some of that, but it only applies to goods and not to the other fundamental freedoms around services, capital and the freedom of movement.

[Stella Creasy]

The hon. Gentleman is making a powerful point about how important the Windsor agreement is. Does he therefore agree that one of the egregious things about Brexit is pushing things such as the Retained EU Law (Revocation and Reform) Bill, which, in and of itself, fundamentally undermines the Windsor agreement by removing all those alignments of laws around goods and indeed services on which the Windsor agreement is based? It just reflects how Brexit has blinded people to what is in the best interests of people, whether in Northern Ireland or the rest of the United Kingdom.

[Stephen Farry]

I am grateful to the hon. Lady for those comments. I had hoped that wisdom would eventually prevail in relation to that piece of legislation. It is not just pointless but needlessly self-destructive, and it will pose particular problems to Northern Ireland, given that we do currently do not have a functioning Assembly, and if the current sunset clause—at the end of this year—still applies, we do not actually have the space to put in place successor pieces of regulation to cover for all the gaps that may or may not emerge. There is also a very particular challenge to the fundamental freedoms that are set out in the Good Friday agreement, and transposed in terms of article 2 of the protocol, which has now itself become the Windsor framework.

It is important to recognise that we are making these comments today in the context of the 25th anniversary of the Good Friday agreement, which happened earlier this month. Last week, there was a major conference at Queen’s University in Belfast. We had the Prime Minister over there, pledging his ongoing support for the agreement and praising all those who have got us to this particular point, without at the same time recognising that some of the policies that the Government are pursuing in relation to Brexit, including retained EU law, pose a major threat to people’s rights in Northern Ireland.

Beyond the issue around the movement of goods, there are issues in terms of access to labour and skills, which are particularly problematic in our economy. Like everywhere else in the UK, services are by far the largest aspect of our economy. The contrast on the island of Ireland is now becoming incredibly stark. Northern Ireland is going through major difficulties, not least due to our lack of a functioning Assembly and Executive. We are also facing into a budget crisis and we have very sluggish economic indicators. By contrast, our friends on the other part of the island are actually expecting a massive surplus, potentially as much as €20 billion, over the next couple of financial years. They have much higher growth than Northern Ireland; their productivity levels are much higher. And that is creating a major tension for an economy that competes in that all-Ireland context as well as in a pan-UK context.

I want to put another point on the record, Mr McCabe. I have no doubt that other Members will wish to pick up the loss of European Union funding, which was so crucial for some of the more marginalised parts of the UK. I appreciate it is a particular factor in Wales, but also in places such as Merseyside and Cornwall. What has replaced it through the shared prosperity fund simply cannot compensate for what has been lost. It is undoing what the Government are notionally trying to do in terms of levelling up because the money simply is not there.

The same applies to research funding. The UK is internationally renowned for the quality of our research and development, our universities and how we innovate. Again, through not being part of Horizon Europe, we are losing opportunities. It is a matter not simply of funding, as important as funding is, but of the international collaboration and the networks. Speak to any scientist—they will say that all this has to happen at scale, and we have to be part of those networks. The UK is going through a process of needlessly marginalising itself. I very much welcome this petition and would embrace an inquiry. It is only through proper discussion of these issues and having an honest conversation that we can begin to undo the damage that has been done over the past few years. I look forward to a mature reflection on what needs to happen to restore the UK’s place in the world.

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[Stella Creasy (Walthamstow) (Lab/Co-op)]

It is a pleasure to have you join us to chair this afternoon’s debate, Mr Dowd. I am sorry that the hon. Member for Gravesham (Adam Holloway) is no longer in his place, because in his contribution he embodied the challenge that we face in this debate. Indeed, it might be argued that in what he said, he reflected Oscar Wilde’s very famous statement that “patriotism is the virtue of the vicious”.

In the absence of the hon. Member, let us correct the record on what he said about insurance and use that as an example of why we need better information in this debate. He said that leaving the European Union would somehow mean that we could deal with the level of risk that insurance companies have to account for. Actually, the European Commission is already looking at and reforming those rules, so we could have done that work with it. As ever with the idea that the benefits of Brexit will appear, the benefit that he talked about with the matching adjustment is something that those in the financial sector have expressed caution about. Although it may benefit the shareholders of insurance companies and lead to higher fees, those policyholders and pensioners who are dependent on insurance policies may well face higher charges. That in itself embodies the difficulties that we face in this debate—the messy reality of what Brexit is doing.

I have no desire to rerun 2016, when the damage in 2023 is so apparent. The hon. Member for Gravesham talked about parliamentary sovereignty and mentioned the Retained EU Law (Revocation and Reform) Bill. My right hon. Friend the Member for Leeds Central (Hilary Benn) will be pleased to hear that I absolutely agree with him about the reality of what will happen to the laws, but I’ll be damned if I will take lectures about who is more patriotic! Who is better at standing up for parliamentary sovereignty than those of us who are fighting a piece of legislation that will lead to 5,000 areas of law being transferred not back to this Parliament to make decisions on them, but to the Executive behind closed doors in No. 10?

The truth is that we know what damage Brexit is doing to our country, and we have seen it for years. Members have already talked about many of the impacts, including the shortages of people working in our hospitality industry and in health and social care; the blunt economic damage; the thousands of small businesses in constituencies across this country that have just given up trading—one of the truisms here is that people can fight many battles in life, but they cannot fight geography—because being able to trade just as easily with 500 million consumers on our doorstep does make a difference; the supply chains that have been severed by our leaving the European Union; the wealth of paperwork that so many people now face; and the impact that it has had on the cost of living.

That is the second truth in this debate. The public know when they are being gaslighted. They can see that other countries have experienced the impact of Vladimir Putin but are not facing the same challenges as we are. We have higher food costs because, oddly enough, there are longer queues at the border to get things here. There are problems with production lines, as the hon. Member for Arfon (Hywel Williams) articulated so well. People can see that their kids are sitting in coaches at the border for hours on end and they know that that is not going to stop any time soon.

The London School of Economics estimates that leaving the European Union added £210 to household food bills, costing UK consumers a total of £5.8 billion pounds, so we cannot be a world-beating international leader if we are only doing it in our own backyard. We cannot do competitive trade deals when we are a smaller nation—not part of a bigger conglomerate—negotiating with others. That is why the Americans are not going to put us first in the queue. Every single industry, whether insurance or manufacturing, is facing a choice between following UK regulations or European regulations if it wants to be able to trade with the bigger market.

The damage is clear. People can see the disruption. They can see the disruption in Northern Ireland. That is why I am not surprised that fewer than one in 10 among the British public claim to see a personal benefit to Brexit. When asked what that benefit is, only a third felt they could actually name something. It is the same for the national interest. We know that this is not going well, and we cannot see how it will get any better. We also know that time is of the essence and that the damage being done grows every day. Jobs that were here are going overseas. Businesses are relocating. They are retraining people in Belgium, Germany and France so that they can continue trading.

Why, then, am I frankly ambivalent about this petition and the idea of a public inquiry? First, there is no formal mechanism for following up on an inquiry. We have seen the track record of this Government when it comes to public inquiries and listening and learning, and it is not great. As of last November, there are 14 open statutory public inquires, covering everything from covid to Grenfell to the Edinburgh tram system. The inquiry into undercover policing has gone on for eight years and cost £60 million, and we still have no idea when it will make recommendations. For me, politics has always been about priorities. I cannot ask the people in my community, who are struggling with the cost of living rises that have been fuelled by Brexit and can see opportunities slipping from their hands, to wait any longer to see the benefits of Brexit.

I am a patriot. I love my country, and that is why I will fight for its future, for those jobs and for those industries. That means being ruthless about what we spend our time and effort on now, and it means absolutely holding this Government to account for their failure to recognise that Brexit cannot work; it is just a series of problems to be sorted. The sooner they are sorted, the sooner we will stand a chance of offering our kids a future.

How do we do that? We must work out how to get direct access to the single market. We must work out how we deal with the paperwork. Whether as part of the pan-Euro-Mediterranean convention or a bespoke customs union, we have got to get on and start talking to the Europeans about it rather than questioning whether they are friends or foes.

We must get on with getting the visa system sorted out, so that the creative and touring industries and our healthcare and hospitality sectors do not fall apart and so that young people do not lose opportunities. Those who work for businesses are being told, “Look, do you have a European passport? If you don’t, forget about it; we’ll go to someone else in the business.”

I will now turn to the importance of the freedom to work to our economy. Brexit will already reduce long-run productivity by 4%, according to the Office for Budget Responsibility. The truth is that this country was struggling before Brexit, but Brexit is like going on holiday and setting fire to the hotel room because you realised on the first day that there is no pool in the complex. It is making things fundamentally worse. The honest truth—for those of us who care about the truth and who care about this country—is that we should not let the Government get away with spending hours talking about whether the last seven years have been any good. We have to be focused on what can happen in the next seven years.

I will hold every Government to account for what they are doing to sort out access to those jobs and to that trade, and to help the small businesses that are looking at the pile of paperwork and thinking, “I just cannot cope with it any more.” It is too important not to. We can have a public inquiry—we can go down that alley—but, frankly, I would much rather solve the problems that Brexit has created. The people in this country—those of us who are real patriots—need and deserve nothing less.

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[The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Leo Docherty)]

It is a pleasure to serve under your chairmanship, Mr Dowd. I am grateful to the hon. Member for Linlithgow and East Falkirk (Martyn Day) for presenting this debate, and to all right hon. and hon. Members for their contributions. It has been an interesting and thought-provoking debate, and I will seek to cover the main points raised.

The UK and the EU are still hugely important allies. We are trading partners and old friends. We have left the European Union but not Europe. We want our friends to thrive, and I know—from my personal visits and many ministerial visits—that they wish the same for us. We must respect the democratic decision of our own people. The UK’s departure from the EU was a result, as has been described today, of a democratic choice by people across the nation to restore our sovereignty; and I pay tribute to the eloquent speech made by my hon. Friend the Member for Gravesham (Adam Holloway).

In 2015 the Government were elected with a mandate to hold a referendum. In that referendum, the British public voted to leave the EU. We must remember that the Government have since been re-elected twice with a clear mandate to pass the necessary legislation to leave the EU and negotiate a trade agreement. The resounding endorsement of that proposition in 2019, with a significant majority, is a case in point.

Parliament approved the withdrawal agreement—the terms for the UK’s withdrawal from the EU—in January 2020 and the trade and co-operation agreement in December of the same year. The Government’s policies on our new relationship with the EU are therefore subject to robust parliamentary scrutiny. We have agreed arrangements with the European Scrutiny Committee, the European Affairs Committee and the Protocol on Ireland/Northern Ireland Sub-Committee. We have regular and extensive correspondence with those Committees, with which I am personally familiar. Under the terms of the arrangement, Ministers must regularly appear before them. Indeed, I appeared before the European Affairs Committee on 7 March, and the Foreign Secretary will appear before the Protocol on Ireland/Northern Ireland Sub-Committee on 10 May.

Of course, we are grateful to those Committees for their ongoing scrutiny. Both the European Scrutiny Committee and the European Affairs Committee are holding inquiries into the new UK-EU relationship, to which the Government have provided evidence that can be read online. The inquiries will be published in due course. For all those reasons, the Government do not believe that it would be appropriate to hold an inquiry into the impact of Brexit.

Let me dwell on the theme of seizing the opportunities of Brexit, which has been raised this afternoon. Restoring our sovereignty was just the start of what the British public voted for in the referendum. Britain left the EU to do things differently and make our own laws, but this was not just political theory: our laws and tax framework and the way we spend our money all make a real difference to people’s lives. The Government are committed to capitalising on the opportunities of Brexit, which is why we intend to end retained EU law as a legal category by December 2023, which will ensure that the UK’s rules and regulations best serve the interests of our country as a whole and support workers and businesses to build a thriving economy.

[Stella Creasy]

The Minister talks very passionately about parliamentary sovereignty and raises the Retained EU Law (Revocation and Reform) Bill. Whatever the whys and wherefores of how we thought the European Union listened to the UK public through its democratic processes, can the Minister explain how transferring direct power over 5,000 areas of legislation not to this place but to Ministers through the use of statutory instruments—or Henry VIII powers, as we might call them—is taking back control? I see the opposition to those measures from those who supported Brexit in the other place or this place. It does not look to me like this did what it said on the side of the bus.

[Leo Docherty]

The Retained EU Law (Revocation and Reform) Bill will be yet another expression of our renewed democratic sovereignty. The hon. Lady’s constituents should be reassured by that, because colleagues in this House will decide which laws stand, which are absorbed and which are repealed. The hon. Lady should be reassured by this more direct expression of our democratic sovereignty.

A range of major reforms are therefore already under way, including to data protection, artificial intelligence and life sciences regimes. We are capitalising on our new-found freedoms outside the EU to attract investment, drive innovation and boost growth and recently announced the Edinburgh reforms to drive growth and competitiveness in the financial services sector. However, laws will not be abolished for the sake of it. We will not jeopardise our strong record on workers’ rights, for example, which is among the best in the world, nor will we roll back maternity rights or threaten the high environmental standards we maintain.

Turning to trade, it is worth remembering that the trade and co-operation agreement agreed in 2020 is the world’s largest zero-tariff, zero-quota deal. It is the first time the EU has ever agreed access like this in a free trade agreement. The TCA also guards the rights of both the EU and the UK to determine their own policies while not regressing in ways that affect trade between the two sides. The UK remains committed to being a global leader in those areas.

As the Office for National Statistics has previously noted, there are a number of factors beyond Brexit that have influenced global trading patterns, including the war in Ukraine, most recently, global economic forces and continued strain on supply chains. Despite this, we must remember that the UK remains an attractive place to invest and grow a business as a low-tax, high-skilled economy.