UK’s Exit from the European Union

Stephen Doughty Excerpts

Monday 24th April 2023 Westminster Hall

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

It is a pleasure, Mr Dowd, to serve under your chairmanship, as it was to have served under Mr McCabe before.

I thank the hon. Member for Linlithgow and East Falkirk (Martyn Day) for presenting the petition today, and acknowledge the people who have signed it—over 180,000 people in total—including a number in my own constituency.

I am profoundly aware that this is an issue about which there are passionately and sincerely held views. I thank colleagues from across the House for their contributions to the debate, although I note the stark absence of Conservative Members, with one exception; they are clearly not willing to defend their record.

In contrast, we in Labour will not shy away from engaging constructively in debates about the impact of the Government’s handling of Brexit on people, communities and businesses across the UK. Many of those effects have rightly been highlighted and exposed today, including by my hon. Friends the Members for Hornsey and Wood Green (Catherine West), for Gower (Tonia Antoniazzi), for Battersea (Marsha De Cordova), for Putney (Fleur Anderson), for Walthamstow (Stella Creasy) and for Leeds North West (Alex Sobel), and by my right hon. Friend the Member for Leeds Central (Hilary Benn).

We want to focus on some of the most important tasks today: making our relationship with the EU work; growing our economy; defending our security; and tackling common challenges, from energy to climate change. We will not seek to rejoin the EU, the single market or the customs union, but it is imperative that we make our future relationship with the EU work, fix the holes in the Government’s deal, deliver stability, trust and mutual benefit in our relationships with partners across Europe—both in and out of the EU—and make use of new forums, such as the European Political Community. Indeed, I had fruitful discussions today with friends from Norway, as I know the Minister did too.

I must say from the outset that we do not believe that expending scarce financial resources on a public inquiry that would take years to complete would be the right step forward. We already expose the many impacts and failures of the Government’s policy in this area on a weekly basis in this place, and this is a topic that should rightly be the focus of robust and democratic parliamentary scrutiny, as we have seen today, whether or not we agree with all the points that have been made. I would far rather see the millions that could be spent on an inquiry being used instead to address practically some of the many flaws and holes that we have been exposed today, but this is not just about cost; it is about bringing people together and looking forward rather than dividing them once again by looking back.

We are now almost seven years on from the referendum, and the world and our country have both changed considerably since the day of that vote. The impact of our departure from the EU is, of course, a contributing factor to where we stand today. Indeed, there is consensus among economists that the Government’s poorly negotiated deal with the EU, compounded by 13 years of economic stagnation, has contributed to the UK lagging behind the rest of the G7, as we have heard today.

For seven years, we have watched the Government pick fights with our closest European allies, allowing dogma to override pragmatism. All the while, we have seen investment down, growth sluggish, 45% of businesses saying they have difficulties trading with the EU, and, as we have heard, exports down by a third. We have seen an approach that has often left us isolated, less secure and stuck in the binaries of the past at a time when co-operation was needed more than ever: on security when we face war in Europe; on energy when we face an energy price crisis and the challenge of climate change; and on economic co-operation as we face inflation, the cost of living crisis and the challenge of responding to geopolitical competition and threats to the resilience of our supply chains.

We would completely change the tone and tenor of our relationship with the EU and form the basis for an ambitious partnership based on common interests and mutual respect—clear about our position outside the EU but optimistic about what we can do together in a critical strategic partnership. Fundamentally, that is something the Conservatives are inherently incapable of delivering. Let us take the Retained EU Law (Revocation and Reform) Bill as an example. The Conservatives are doubling down to appease the hard-line fringes by introducing an irresponsible piece of legislation that will only prolong uncertainty for businesses nationwide. The Bill is opposed by business organisations, trade unions and environmental groups, and it undermines the proper role of Parliament by handing Ministers, as we have heard, yet more unaccountable powers, placing hard-won rights at work, environmental standards and consumer protections at the whim of power-hungry Ministers. Frankly, we do not need an inquiry to tell us that this is a grave error or to expose the wider impacts of Tory Brexit policy.

Across the country today, the questions people are asking are, “How do I pay the bills?”, “How do I secure cheaper and greener energy?”, “How do I put food on the table when prices are going up?”, “What jobs and opportunities are there for my children?” and “How do we keep our country safe?” We do not need an inquiry to answer those questions; we need a Labour UK Government. Labour has a clear plan to make our relationship with Europe work and to address the broader concerns that have been raised in the context of the petition. My right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer) has set out a clear plan to secure this: securing a deal on the Northern Ireland protocol, which we called for and then supported; tearing down unnecessary trade barriers; supporting world-leading services and scientists; keeping Britain safe; and investing in Britain. Looking forward not back, let me touch on some of those points and address some issues that have been raised in the debate.

Starting with trade, let me be frank: this Government have no clear trade strategy. It is little wonder that the OBR forecasts that UK exports are due to fall by 6.6% this year, which is a more than £51 billion hit to the UK economy. The Government’s last manifesto promised that by the end of 2022, 80% of UK trade would be covered by free trade agreements, including an agreement with the US, but the reality is that these deals are far from complete. Indeed, the UK’s trade deficit with the EU widened to a record high in the final quarter of 2022 as imports from the bloc jumped. The shortfall in the balance of trade and goods ballooned to £32.9 billion in the three months to December—the largest gap since records began in 1997.

The trade barriers put in place by the Tory Brexit deal are accentuating the economic burden being shouldered by our businesses and constituents, and toning them down would be a priority for a Labour Government. Outside of the single market and the customs union, we need to be candid and frank that we will not be able to deliver completely frictionless trade with the EU, but there are things we could do to make trade easier, and we have heard many of them today.

We should build on the positive elements in the Windsor framework. We would expand agrifood and veterinary agreements to cover all of the UK, seeking to build on agreements and mechanisms already in place between the EU and other countries. We would negotiate a long-term deal for UK hauliers to ease the supply chain problems that are holding us back. We would put forward a supply chain working group within the G7 and use the 2025 TCA review to increase the UK’s prosperity. We would seek to agree mutual recognition of conformity assessments across specified sectors so that our producers no longer need to complete two sets of tests or two processes of certification. We would seek mutual recognition of professional qualifications to bolster our world-leading services industry and would sort out data adequacy to allow our digital services companies to properly compete.

Although we do not support the return of freedom of movement, we will seek to find flexible labour mobility arrangements for those making short-term work trips and, as has been mentioned by a number of colleagues, musicians and artists seeking short-term visas to tour within the EU.

On science and research, I want to discuss the opportunity that has been squandered by the Tory Government, about which we heard time and again during the debate. Many of our constituents feel that departure from the EU has restricted them from pursuing education and employment opportunities to which they otherwise would have had access. Of course, departure from the EU did not need to mean an end to Erasmus+ or, indeed, to Horizon. I recently met representatives from Universities Wales who told me of a triple whammy: the end of Horizon and European structural funds and the failure to replace Horizon has meant that 1,000 jobs are now at risk in crucial high-tech, high-skilled jobs across Wales.

The Conservatives made a manifesto promise that they would associate with Horizon. They have repeated that 50 times since, but we have seen instead years of delay and uncertainty, with jobs, projects and inward investment lost, and still no deal, despite the resolution of issues around the Northern Ireland protocol. We would unblock the UK’s participation in Horizon and bring about the co-operation that we need when it comes to science, technology, education and skills across the UK—in key regions and of course our nations.

Let me turn to security. Strong and smart British foreign policy has always started with secure alliances in Europe, but since 2016 our relations with Europe have been characterised by bluster, bombast and brinkmanship by the Conservative party at a time when the security of our country has faced some of its most severe threats. We would negotiate a UK-EU security pact, predicated on the defence of democracy and ensuring, with NATO as our bedrock, that we also see close co-operation and co-ordination with our European allies on foreign, defence, development and security policy, whether on sanctions, our energy resilience, our support for Ukraine, our co-ordination on cross-border crime, our efforts against terrorism, our response to instability on our own continent and near neighbourhood, or indeed our approach to China. We could have had a security pact when we left the EU, but the Tories failed to agree one. We would seek arrangements to share data, intelligence where appropriate, and best practice with our closest allies.

I understand calls from the many petitioners for a rigorous assessment into the Government’s failings when it comes to the Brexit deal that they secured and the impact that it has had on this country. The Labour party will not shirk from addressing those failings or denying their existence, but relitigating old arguments does not build a plan on which to base the future or set a new course for an ambitious partnership with our closest neighbours and allies. We have a plan to move the country forward, resetting our relationship with the European Union, and taking common-sense and practical steps to redefine that relationship to withstand the challenges of the present and the years and decades to come.

--- Later in debate ---

[Leo Docherty]

The hon. Lady should take encouragement from looking to foreign direct investment. FDI stock in the UK increased from $2.2 trillion in 2020 to $2.6 trillion in 2021. That is the highest foreign direct investment stock in Europe and the second highest in the world, behind only the United States, up from our ranking in 2020. That is just one measure of the expression of confidence in the future. Of course, there have been headwinds, but taken in the round the economic future of the UK is one of terrific dynamism and confidence. The hon. Lady should share that confidence, and be confident in the future prospects of the British economy.

Outside the EU, we are creating the best regulatory environment to drive economic growth and develop a competitive advantage in new and future technologies, where terrific growth lies. From artificial intelligence and gene editing to the future of transport and data protection, we are building a pro-growth, high-standards framework that gives business the capacity and the confidence to innovate, invest and create jobs.

[Stephen Doughty]

The Minister is talking about innovation and future technologies. He will have heard Members from both sides of the House raise concerns about the lack of funding outside Horizon. Even if a new deal is agreed, that will not be for a significant period. Does the Minister think that the challenges being faced by the university sector will boost growth, innovation and investment, or reduce them?

[Leo Docherty]

I foresee a future where we have a very dynamic innovation sector, supported by the Government but working in partnership with our European friends. I will not give a running commentary on our negotiations on the Horizon programme, but colleagues will know that they are under way. Our approach is one of buoyant confidence about the benefits of future co-operation—that is all I will say. I hope the hon. Member shares my confidence.

To give another example, we must also remember that the Chancellor’s work on financial services will see more than 30 regulatory reforms unlock investment and turbocharge growth across the UK. A new approach to regulation will make meaningful change for the British public, with, for example, faster access to new medical treatments.