Parliamentary Scrutiny of Leaving the EU

Stephen Timms Excerpts

Wednesday 12th October 2016 Commons Chamber

[Chris Bryant (Rhondda) (Lab)]

It is a delight to follow the right hon. Member for Basingstoke (Mrs Miller) Like her, I was a remainer—not only that, but I am a remainer, and will remain a remainer until my dying day.

I first want to make a constituency point: last Friday, I visited a business just outside my constituency, in Llantrisant: Markes International, a high-tech company worth about £15 million in turnover a year. It started with two people fewer than 20 years ago, and now has 120. It makes mass spectrometers and thermal desorption—things that I did not really understand. It is all very technical. That is precisely the kind of high-end business that we really want to prosper in this country. The company made two points to me. First, it is really worried about staff recruitment, because a lot of the people whom it recruits are at PhD level. If, after Brexit, the arrangements for EU people coming to this country are the same as those that we currently have for non-EU people, it will find it phenomenally difficult to continue recruiting in the way that it has done, and therefore to grow the company. That is particularly because those people may be here for only five years on a short-term deal. It is very difficult to get a mortgage in this country at the moment, and that makes it much more unlikely that people in areas such as mine in south Wales, where there is not much of a rental market for people at that level, will think it is an option to move to this country.

Secondly, the company is passionate about us staying in the single market, as members of the single market, because it wants full access, as members, to all the organisations that establish the technical standards for the things that it makes. Otherwise, the company is absolutely certain that the Germans, French and Italians will make sure that those things are made in the way that German, French and Italian companies make them, and that we do not. They are anxious because, if this goes wrong, they will simply have to move all their business to Germany to continue growing the company. That will be an enormous loss to the local economy.

[Stephen Timms (East Ham) (Lab)]

I very much agree with the points that my hon. Friend is making. Is it not also the case that manufacturing of that kind is integrated across the EU, with an EU integrated supply chain? If the UK is not part of that, that is another reason why a lot of jobs will be lost.

[Chris Bryant]

That is an extremely good point. It is often Europe that enables people to think of opportunities in the UK because of cross-border co-operation on education and research skills.

I would like to come on to the process. The Government have to take the 48% with them. It will not be good enough if, when we leave at the end of the process it is still only 52% of people who think that we have made the right decision. That will be a recipe for disaster and lack of confidence in this country. I would also say to the Government that I have never believed royal prerogative to be absolute. We have fought wars—quite a lot of wars—about this. Even on the question of going to war, the royal prerogative barely exists any more. One could argue that, after the war of American independence, when Parliament, rather than the Government, decided to stop fighting the war, we abandoned the royal prerogative on war-making powers on 22 February 1782. In recent years, it has become absolutely established that we do not send troops to war, except in extreme situations, without the permission and say-so of Parliament. Mr Cameron and William Hague explicitly agreed as much when they lost the vote on Syria in the House and decided not to proceed with the action they had intended to take.

Prerogative is not absolute in relation to war, and it is certainly not absolute in relation to treaty making. The 1713 treaty of Utrecht had to go through Parliament, and only got through the House of Lords because Queen Anne was persuaded to introduce 12 more Members of the House of Lords. The Government are rapidly increasing the number of Members of the House of Lords, but I hope that they do not do that.

--- Later in debate ---

[Stephen Timms (East Ham) (Lab)]

I very much agree with what the hon. Member for Stroud (Neil Carmichael) has just said about the existential risks ahead for the UK economy.

A number of speakers in this very helpful, valuable debate have suggested that the negotiations should aim, on the one hand, for barrier-free access to the single market, to use the Secretary of State’s phrase, and, on the other, for us to no longer apply the current free movement rules in terms of people coming into the UK. I agree with that; that is the objective we should be setting. I hope that it will be set out and developed and that we will have the chance to vote on it before article 50 is invoked.

A number of us took part in an all-party visit to Germany last month. My hon. Friends the Members for Wrexham (Ian C. Lucas) and for Scunthorpe (Nic Dakin) were there; the hon. Member for Monmouth (David T. C. Davies) was also there from the Conservative Benches and the leave campaign. We met businesses, politicians and civil servants, and they all wanted to talk to us about Britain’s departure from the EU. They told us they were great admirers of Britain. They said Germany would be Britain’s best ally in the EU as the negotiations go forward. They were very sorry that we are leaving, but they accepted that we are.

We said to them, “If the British Government come to Brussels and ask for barrier-free access to the single market and to no longer apply free movement, would Germany argue for that settlement?” and they said, “No, Germany wouldn’t.” The reason is that to do so would be to invite many other European countries that do not like some bit or other of the four pillars of the European Union also to come forward with requests to opt out of those bits. The result would be an unwinding of the European Union, which would not be in the interests of Germany or German manufacturers. That is why the right hon. Member for Wokingham (John Redwood) is wrong to suggest that because lots of German cars are sold to the UK, we will readily get barrier-free access to the single market. I do not think we will. It will be a difficult negotiation.

For much of our discussion in Germany, it was very difficult to see any glimmer of a resolution that would allow us to continue to trade in the way we do. Finally, however, we had a meeting with Dr Markus Kerber, the director general of the BDI—the Federation of German Industries, the equivalent of the CBI—who suggested the possibility that we might be able to redefine free movement so that it applies only to people with a contract of employment in the UK or something very close to that. Arguably, that is what free movement has always meant. It is supposed to be free movement of labour, not the free movement of just anybody.

Dr Markus Kerber suggested that it might be possible to persuade the other EU member states to change the meaning of free movement in that way—that pillar among the four pillars would remain in place, but it would mean something rather different for the UK—and, if that was done, to negotiate barrier-free access to the single market. The idea would clearly need a great deal of work, but it may at least be a glimmer of something that could be delivered to avoid what otherwise seem to me to be very serious threats for the future of the UK economy.

Manufacturing across Europe is integrated—aerospace, cars—so if, as the right hon. Member for Wokingham suggested, we start to impose tariffs on sub-assemblies made in another country before they come to the UK to be turned into cars, that would be an impossible position for manufacturers, and it would pose great risks for financial services as well. I hope that that might be a way forward for Ministers to consider.