Leaving the EU: No-deal Alternatives

Vicky Ford Excerpts

Wednesday 21st February 2018 Westminster Hall

[Antoinette Sandbach]

I am interested by my right hon. Friend’s comments. The quote that I referred to at the beginning of my speech—

“Britain will have access to the Single Market”—

came from the Vote Leave paper, “‘Leave’ looks like...”. So I would argue that the British public were promised that we would stay in the single market by Vote Leave.

[Vicky Ford (Chelmsford) (Con)]

I recall listening to the wonderful BBC’s “Today” programme on the eve of the referendum and the leading Brexiteer Daniel Hannan MEP describing the EEA as an economic free trade area that stretched from Iceland to Turkey, and how possible it would be for the UK to consider staying part of that even if Britain voted leave. Does my hon. Friend recall that type of message?

[Antoinette Sandbach]

I certainly do recall that type of message. It was one of the big messages that was being sent out: our prosperity would not be threatened, we would be able to stay in the single market and we would have the “exact same benefits” as before.

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[Vicky Ford (Chelmsford) (Con)]

I had not intended to speak in this debate. The Prime Minister has set out her intention to have a smooth, orderly Brexit, delivering stability on security and maintaining trade. That is key for many jobs in the UK, but it is challenging to deliver.

In my constituency of Chelmsford, people voted 50:50—almost exactly—and I have always said that we need to try to find an outcome to the EU-UK negotiations that works for both sides, respecting those who voted to leave but also reassuring those who voted to remain.

Delivering that deep and special partnership is important for my constituents, many of whom work in the service sector. The insurance sector is the largest employer in the city and many of my constituents commute to work in the City of London, but we also have people involved in science, research, advanced manufacturing and other areas.

I was prompted to speak this morning after reading the letter signed by some of my colleagues last night, because instead of helping the Prime Minister it seeks to tie her hands. I genuinely believe that some of the people who put their names to that letter did not fully understand the potential consequences, particularly the limitations and restrictions that would be imposed on an implementation period, which would make it much more difficult to have a smooth bridge between where we are today and that deep and special partnership.

Let me be clear: no deal is not an attractive deal. Falling back on the WTO pushes up tariffs, which pushes up the costs for consumers for food and shopping, and it brings in checks at customs, and I am fearful especially for Northern Ireland and Ireland. WTO rules would bring delays for producers, and they do not cover key areas, such as aircraft.

The Canada deal is also not an attractive deal. When I talk to key sectors of the British economy about what they want from a new UK-EU relationship, they tell me that it is about much more than just eliminating tariffs. A year ago I wrote that,

“for the digital entrepreneurs, it is access to cross-border data flows; for the car manufacturers, it’s knowing that once a vehicle has passed its safety…tests”

in this country, they can sell it across Europe;

“for the creative sector, market access includes being able to have a joint action to stop…infringements of copyright; for pharma companies, it is being able to continue to run cross border clinical trials”

and, once a drug has passed, to sell it across Europe;

“for scientists, it is being able to take part in collaborative research”.

Banks and financial services want to know that once a product has been approved by the regulators here they can sell it across Europe, and high-value manufacturing wants to be able to source parts “from all across Europe” and to sell and manufacture them easily. All of those are covered by our current trading relationship with the EU, but not by the Canada free trade agreement. We need to be able to put the pluses on CETA.

The Norway EEA-EFTA option is also not particularly attractive, because it would mean that we would need to have common rules in many areas to keep a frictionless border. Having said that, I believe that Britain will want to continue to have high standards on many products. There will be very few areas where we would be likely to choose to diverge, because I do not see it being a race to the bottom in standards. That is not in our interest or that of consumers. The WTO is not attractive. CETA does not have enough pluses. The EEA is not perfect, but let us at least use it as a starting point. Fundamentally, any new trade deal is not in our hands alone. We need to agree it with all 27 other countries, and we need to give our negotiators space to talk.

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[Paul Blomfield (Sheffield Central) (Lab)]

It is a delight to wind up for the Opposition with you in the Chair, Mr Sharma. I join other Members in congratulating the hon. Member for Eddisbury (Antoinette Sandbach). A large majority in this House respects the outcome of the referendum, but wants to ensure that we leave the EU on terms that protect the economy and people’s jobs and livelihoods, as well as the rights and protections that we gained through 43 years of membership. It is a majority that recognises our future lies in a close and collaborative relationship with the European Union. The hon. Lady is very much part of that majority, and she has done us all a service by securing this debate and in the way she opened it.

There is a heavy responsibility on this Parliament, on all our shoulders. We face the most important choices in our lifetimes that will affect generations to come. That demands that we are honest and open in evaluating the decisions we face. That is why Labour has consistently pushed for the publication of impact assessments and economic analyses so that we have the information we need to inform our decisions. We need to avoid what the Prime Minister’s former deputy, the right hon. Member for Ashford (Damian Green), described on Monday as the

“problem of politicians who won’t accept evidence.”

He was also right when he said:

“If analysis is being produced, then publish it. And frankly there will be a big political debate...Let’s have this argument in public, that’s what democracies do.”

The referendum was a clear decision, but it was a painfully close vote that we should implement in a way that unites the country, which involves the sort of compromise that many Members have talked about. Whether people voted remain or leave, they will not thank politicians who lead them into a Brexit on a false prospectus that fails their expectations and damages their prospects. We need to be honest about the expectations created by the referendum. Everybody now recognises that £350 million will not be released for the NHS, or for anything else, as the Chancellor confirmed in his 2016 autumn statement.

Nor will taking back control mean a significant change in migration. As the Environment Secretary told the National Farmers Union yesterday,

“agriculture needs access to foreign workers...both seasonal and...permanent.”

He echoed the Brexit Secretary who said in Estonia last year that the door will not “suddenly shut” on EU immigration, as it will take “years and years” for British citizens to fill the employment gaps.

On the ECJ we need to recognise that any trade agreement will involve ceding sovereignty to bilateral or transnational bodies. People need to know that trade deals will have consequences. The US Commerce Secretary, Wilbur Ross, has made it clear that a

“critical component of any trade discussion”

with the UK would be the scrapping of EU food rules. And for what? For 0.2% growth anticipated by the Government. So open discussion of all the options is vital as we move forward.

I have been to the reading room and I should make it clear that I am complying with the confidentiality requirements, so I quote from information in the public arena. We should pay attention to the Government’s own analysis that EEA membership would see 2% lower growth than otherwise projected over 15 years. A comprehensive free trade agreement with the EU would result in 5% lower growth, and no deal would almost double that: an entire 8% lower growth.

No deal is, of course, the most damaging of all the options. The hon. Member for Eddisbury made that case extremely clearly and well. We should look at everything. The Labour party wants to keep a customs union and a new relationship with the single market on the table. We want to consider the EEA-EFTA model, as my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook) argued when we last debated the issue.

[Vicky Ford]

Did the hon. Gentleman say he wants to keep membership of “a” customs union or “the” customs union on the table?

[Paul Blomfield]

I really love the pedantry of this. I was clear that we are talking about a customs union that serves the needs of the British economy and British manufacturing.

As my hon. Friend the Member for Greenwich and Woolwich argued previously, the EEA-EFTA model raises challenging issues and would need to be supplemented by customs arrangements, but it should not be lightly discounted, because there are features of the EEA-EFTA model that we would want to see as part of any final deal.

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[Suella Fernandes]

I disagree with the hon. Gentleman because Norway, although part of the EEA and EFTA, does not have much say on rules and regulations that come to it through the EEA agreement.

[Vicky Ford]

Will the Minister give way?

[Suella Fernandes]

One last time—I am running out of time and need to finish my comments.

[Vicky Ford]

Norway does have a say on rules and regulations. It sits in various standard-making bodies, for example, and contributes to legislation. It does not have a full vote, but then we are leaving the single market so we will need to have a new relationship with that single market. It gives market access, which is, as the Minister has said, so attractive. Will she again consider that that may be worth investigating—perhaps not in its entirety, but elements could be of interest?

[Suella Fernandes]

Norway does not have a seat in the European Parliament. It does not have a vote on whether regulations coming through the EEA agreement apply to it or not. It generally has to follow those obligations in line with its obligations under the EEA agreement. To diverge from that agreement would be a breach and would therefore lead to questions about its membership and subscription to that agreement. That is a fundamental point that makes membership of the EEA and the Norway option not attractive for the UK.

In response to calls from business, the implementation period is there to benefit businesses and individuals, so that they avoid the need for two sets of changes. It will also give them more time to adjust to the new future partnership.