European Union (Withdrawal) Bill

Tanmanjeet Singh Dhesi Excerpts

Committee: 8th sitting: House of Commons
Wednesday 20th December 2017 Commons Chamber

[Mr Leslie]

We are doing our duty by at least trying to comb over these issues now.

I wish to commend the Labour Front-Bench team on their amendment 348, which seeks to ensure that impact assessments are made properly and thoroughly before we take many of the decisions in this whole Brexit process. We already know enough about what has happened with the Brexit Secretary promising impact assessments and their turning out to be sectoral analyses. Many of us will have gone to the reading room and looked at the hastily written 50-odd documents, which would be good if someone was writing a master’s degree dissertation on the aviation sector—they are full of facts and information—but do not really provide much more analysis than people can already get off Google.

Where we did get an insight, although it may have been a slip of the tongue, was when the Chancellor of the Exchequer appeared before the Treasury Committee on 6 December and said that he has

“modelled and analysed a wide range of potential alternative structures between the European Union and the United Kingdom”

and that

“it informs…our negotiating position”.

So obviously there does exist within government some level of impact assessment and analysis that has not yet been placed in the public domain. It might be that the Brexit Committee wishes to explore that further or that the Treasury Committee wishes to do so, but it is important that we know whether this is simply a reference to the pre-referendum work that was done under the former Chancellor George Osborne or whether further assessments have taken place, independently undertaken by the Treasury. We need to know what analysis the different Departments have undertaken and what sort of modelling on the different sectors of our economy has been done.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

My hon. Friend is making an excellent speech. Does he agree that the Government produce assessments, whether or not they are “sectoral assessments”, on issues that are a lot more trivial than such an important thing befalling our country as Brexit? It is therefore imperative that we have detailed assessments on how this will affect our country.

[Mr Leslie]

Yes. That again gets to this question: are we accidentally bumbling our way through, where nobody has thought about doing an assessment, or, worse, is this work being done but then hidden, covered up and held back from Members of Parliament and from the public at large? I suspect that any serious analysis worth its salt will show that there are some damning consequences of exiting the single market and customs union, and I think that needs to be shared with the wider public.

--- Later in debate ---

[Mr Dhesi]

I rise to speak in favour of amendment 348 and new clause 21. The vote to leave the European Union was an unanticipated shock to the UK economy that increased uncertainty and reduced our country’s expected future openness to trade, investment and immigration with our neighbouring partners, the EU. The pound depreciated by approximately 10% immediately after the referendum. The depreciation raised inflation by increasing import costs of both final goods and intermediate inputs.

Today, according to Citibank analysis, long-run inflation expectations are up to 3.3%, but by June this year the Brexit vote was costing the average household £7.74 per week through higher prices. That is equivalent to £404 per year. Higher inflation has also reduced the growth of real wages; that is equivalent to a £448 cut in annual pay for the average worker. To put it another way, the Brexit vote has already cost the average worker almost one week’s wages owing to higher prices—and we have yet to leave the EU. Amendment 348 refers to impact assessments. We need clear impact assessments to ascertain how such things as well as hard-fought workers’ rights, shared values and environmental protections will be safeguarded.

Several promises were made. Post Brexit, UK Governments will be expected to fulfil the promises made during the referendum campaign. Immigration was, without doubt, a major reason for the result, but at least half of immigrants to the UK every year are from south Asia, Africa and the Caribbean, and they are unaffected by EU laws. It would also be difficult to reduce the number of EU citizens in the UK unless there was a misguided programme to expel them and the UK was prepared to countenance similar expulsions of its citizens from the continent. The challenge will be not how to limit in-flows—something that featured so prominently in the leave campaign—but rather how to sustain the much needed flows of EU nationals to fill jobs in sectors such as agriculture, services and construction, an industry I have been involved in for over two decades.

[Kate Hoey]

I am following my hon. Friend carefully. Does he agree that my constituents’ relatives from the Caribbean should have the same opportunity to come to this country as those from the European Union, who can come here by right? That is part of the reason why many people from ethnic minorities voted leave: they saw that there would be a fair immigration system, not one that was biased towards 27 other countries.

[Mr Dhesi]

I have listened closely to my hon. Friend, but we will need to wait until the immigration Bill is introduced to see exactly how we will be affected.

Many British voters believe that by favouring Brexit they were voting for greater spending on the national health service and the rest of the British welfare state. Those voters will become even more dissatisfied when they discover that Brexit will not, in fact, provide anything close to the additional £350 million a week for our NHS that was claimed.

New clause 21 refers to clear explanatory statements about what is happening across this entire process. After Brexit, the UK and devolved Governments will need to carry out many functions that are currently the responsibility of Brussels, including everything from customs checks to determining agricultural subsidies. Before that happens, however, much of the civil service will be consumed by managing the leaving process between now and the end of any transition period.

Ultimately, the UK is undertaking an enormous administrative challenge in a very short space of time. The Government are reportedly seeking to employ an extra 8,000 staff by the end of the 2018 to help manage the process, with Departments recruiting heavily in recent months. However, it should be noted that they are starting from a very low base. Public sector employment, as a share of people in work, was below 17% in June 2017, the lowest level since records began in 1999, which suggests that the civil service will be unable to manage Brexit alone and will therefore increasingly need to rely on external actors to undertake many of its functions.

On amendment 348, if the Government cannot even compile impact assessments or sectoral analyses—take your pick—in “excruciating detail,” as the Secretary of State for Exiting the European Union said, how will they effectively manage the process? Our Parliament should be sovereign, and collectively we all need to take back control, but the implications for democratic accountability will be quite profound if and when outsourced services fail to meet public expectations.

If the 3 million EU nationals currently in the UK decide to apply to remain after Brexit and those applications are not processed properly by a private contractor, for example, who will be held accountable when people are wrongly forced to leave? On top of that, the sheer complexity of the Brexit process means there will be a range of convenient scapegoats whom the Government could blame when things go wrong.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

I draw my hon. Friend’s attention to the National Audit Office report, published yesterday, on the Brexit work of the Department for Environment, Food and Rural Affairs. It is already clear that the Department is under pressure, and it is making significant use of external consultants. With no promise of finances, much of the work programmed for Brexit is at risk. Does he agree that could be a significant problem?

[Mr Dhesi]

My hon. Friend corroborates what I have been trying to outline.

Rather than taking back control of public services, Brexit is likely to result in more public services being run at arm’s length from directly elected representatives, who will seek to avoid being held responsible for poor performance. It is also vital that our trade agreement with the EU does not prevent economic growth and the growth in jobs and prosperity that comes with exporting our goods.

New clause 21 is all about information, but where is the information for businesses and workers in my Slough constituency? Large businesses in my constituency such as Mars, the confectionary producer, have interconnected sites and factories across Europe, making up an integrated network in which raw materials are moved across borders. Finished products made in one country are packaged, distributed and sold in others. Representatives of Mars are concerned about the return of barriers to the supply chain and about the possible impact on jobs. During visits to their factory in my constituency, I was told:

“It is a fact that Europe after Brexit will remain a critical market for UK exports and likewise the UK will remain an important market for goods produced and manufactured in other European states. There can be no economic advantage from either side restricting trade with a large market situated on its doorstep. In simple terms, if the UK and the EU fail to agree on a new preferential deal, it will be to the detriment of all.”

[Ian Paisley (North Antrim) (DUP)]

Does the hon. Gentleman accept that a large company such as Mars is able to import cocoa, chocolate and nuts from African and Latin American states and get over all the trade complexities in that import business, so it is very easy for it to get over some minor issues that he is concerned about with regard to the EU trade?

[Mr Dhesi]

I thank the hon. Gentleman for that, but I would point out to him that we already have trade agreements, which is why in a previous exchange in Parliament I pointed out that we need to ensure that we have increased access arrangements and that we continue with the existing access agreements for developing countries.

[Tom Brake]

Does the hon. Gentleman share my concern that Mars is clearly able to make an assessment of the impact of the different types of economic arrangements we might have with the EU after we leave, whereas the Government are not? We heard this in an intervention from the hon. Member for Gloucester (Richard Graham), who is no longer in his place; he completely disregards any value in impact assessments whatsoever. Why can Mars do it but the Government cannot?

[Mr Dhesi]

I thank the right hon. Gentleman for making that intervention, because if Mars can do it, I am sure we can do it within Parliament. The Government’s approach is, in essence, keeping business in the dark.

In conclusion, a cliff edge scenario, with us sleepwalking into no deal, which is where this Government seem to be heading, would be severely damaging to us and our economy. We need to change course and avoid this fate of no deal. A starting point on that would be clear and detailed impact assessments.

[Mr Leslie]

I thank the House for going into much more detail than we perhaps initially expected on these clauses and amendments. It is has been a worthwhile investigation of schedule 5. The right hon. and learned Member for Beaconsfield (Mr Grieve), in particular, raised pertinent points about rules of evidence, and we have heard good speeches from many of my hon. Friends, too. The Minister says that schedule 5 allows those explanatory memorandums to be produced by Government to help the House to sift through these potentially 12,000-plus statutory instruments that are going to come, so I will take his word on that and we will hold him to account on it. In those circumstances, and as we have many other issues to discuss, I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

Clause 13 ordered to stand part of the Bill.

Schedule 5 agreed to.

New Clause 13

Customs duties

“A Minister of the Crown may not make regulations to appoint exit day until Royal Assent is granted to an Act of Parliament making provision for the substitution of section 5 (customs duties) of the European Communities Act 1972 with provisions that shall allow the United Kingdom to remain a member of the EU common customs tariff and common commercial policy.”—(Mr Leslie.)

This new clause would ensure that provisions allowing the UK to remain a member of the Customs Union, as currently set out in section 5 of the European Communities Act 1972 but set to be repealed by section 1 of this Act, will be enacted ahead of exit day.

Brought up, and read the First time.