European Union (Withdrawal) Act

Seema Malhotra Excerpts

Monday 14th January 2019 Commons Chamber

[Dr Fox]

As usual, my right hon. Friend makes her point concisely. The argument has come from a wide range of business sectors that, while they can price in risk, they cannot price in uncertainty, and certainty is what they are looking for.

It is a matter of fact that the relative importance of the European Union as an export market for the United Kingdom has been declining over the last decade, falling from 48.9% of the total in 2010 to 45.2% in 2017. Of course, the importance of the UK to EU trade varies from country to country. Figures compiled by Japanese investment bank Nomura show that Belgium’s economy is the most reliant on trade with the UK, with around 8% of Belgian GDP dependent on trade with Britain. That is the highest level within the EU27. Belgium exports over £30 billion-worth of goods to the UK, which is Belgium’s fourth largest export market. Belgium’s Finance Minister has previously called for a quick trade agreement with the United Kingdom post-Brexit to protect thousands of jobs in that country. When trade is looked at purely in terms of exports, Ireland is the most exposed country—about 13% of all Irish exports end up in Britain—and the Netherlands also has a large reliance on the UK for exports and GDP.

At the same time as the proportion of Britain’s exports to the EU has fallen, we are trading more with other partners around the world. We export a huge variety of commodities—for example, we sold £22 billion-worth of food, feed and drink abroad in 2017. In the year to November 2018, we sold £33.7 billion-worth of cars, £25.2 billion of medicinal and pharmaceutical products, and £24.6 billion of mechanical power generator products—from aircraft engines to gas turbines, and from steam generators to nuclear reactors. So much for Britain not producing anything any more; we are actually experiencing a renaissance in manufacturing in this country.

We also export a great many services. We are, in fact, the world’s second largest services exporter. In the year to September 2018, we sold some £82.4 billion-worth of business services, £61 billion of financial services and nearly £38 billion of travel services. Here, across the sectors, the UK has huge comparative advantage. Services account for almost half of all our exports—42.4% going to the EU and 57.6% to non-EU countries.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Will the Secretary of State give way?

--- Later in debate ---

[Dr Fox]

I give way to the hon. Member for Feltham and Heston (Seema Malhotra), who was the first to stand up.

[Seema Malhotra]

The Secretary of State is making a very important point about our need to increase trade deals and trade relationships across the world. He has mentioned India, and on Friday I had a very good meeting with businesses in the Indian Business Network that are keen to increase trade with Britain. Does he agree with me that the relationship we have with the EU in trade is not just about our trade with the European Union? We use about 70 trade deals that the EU has negotiated with other countries for about £150 billion-worth of trade. Will the Secretary of State assure this House that there will still be access to those trade deals after we leave the European Union?

[Dr Fox]

I am grateful to the hon. Lady for raising a very important point. Yes, the Government’s intention is, of course, that we will get this deal through, in which case, when it comes to an implementation period, we will have the opportunity for automatic roll-over. However, as the House would expect us to do, the Government are also preparing, in case there is no deal, to be able to have continuity of these trade agreements. A number of them are close to being signed, and when they are signed, the Government will put them to the House so that the House can make a judgment on them.

--- Later in debate ---

[Kirsty Blackman]

Things were a bit different in 1993 from how they are now. We have customs checks that are required to be done. We have these production lines, and the storage time is much shorter because we have frictionless movement. If frictionless movement is so unimportant, why have the Government been prioritising it in the potential future relationship with the EU?

This is not just about the EU. The UK Government have also failed to set out exactly what the future relationship with Turkey is going to look like, for example.

Will widgets still be able to come in from Turkey in the event of a no-deal scenario?

The Secretary of State for International Trade was pressed earlier on whether free trade agreements with third countries will roll over. The UK Government have absolutely failed to let us or businesses know which countries have agreed to sign up for their free trade agreement to be rolled over in the event of a no-deal Brexit. Given that the largest manufacturing companies are preparing for a no-deal Brexit, the Government need to be up front and honest about how many of those free trade agreements will actually roll over. I have heard that, potentially, only 10 of them are ready to be rolled over. If that is the case, the Government need to tell us which 10 so that the companies exporting to or importing from those countries can make plans.

[Seema Malhotra]

Does the hon. Lady agree it is surprising we did not have a clearer answer on that from the Secretary of State? This is of paramount importance for businesses like those in my constituency that are trading under multiple trade agreements and exporting across the world.

[Kirsty Blackman]

I agree that it is absolutely vital. It is interesting that the Secretary of State was unable to give that answer. I have a named day question on this subject and am expecting a response tomorrow. I am aware of at least one organisation that has been asking the Secretary of State for Business, Energy and Industrial Strategy for the list since November and still has not received it. If the Government intend us to leave the EU on 29 March, and if they intend that we leave with no deal if this deal is not voted through, they need to tell companies about the scenario in which they will be operating after we leave the EU in those circumstances. The Government are wilfully making the situation worse by their refusal to come forward with this information.

--- Later in debate ---

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

I am grateful for this opportunity to speak in today’s debate, because the prosperity of our country, our regions and our nations is at stake. I will be voting against the Prime Minister’s deal tomorrow for two main reasons. First, on the Government’s own analysis, it will make every region and nation of this country poorer, and that is not what people voted for. It is set to give less opportunity to our young people than we grew up with. The economic assessment of the Prime Minister’s draft agreement with Brussels estimated that the British economy would shrink by 3.9%, which is equivalent to the loss of £100 billion by 2030. Trade barriers could equal 10% of the value of trade in services, meaning that the economy’s biggest sector would suffer to the tune of more than £44 billion a year.

Secondly, it is a blind Brexit. We have no idea what the future will look like. No one leaves their home on the promise of a great new home with no guarantees about where it is, what it looks like, how many rooms it has or what condition it is in. However, that is what the Prime Minister is asking us to do, like an estate agent who then scarpers, leaving us standing with our suitcases. The political declaration gives no certainty or clarity about the direction of our future relationship with the European Union, and it is a gamble that I will not take.

Hundreds of residents—young and old alike—and businesses in my constituency have contacted me over the past few weeks and months. Businesses report stockpiling and concern for the future—perhaps not the immediate future, but the medium and longer term—and they should be planning production, not employee leave during April, May and June while they work out what the future looks like. Some 60% of those who have contacted me back a people’s vote, and a further 20% back remain in some form. Only 10% say that we should vote for the deal or leave with no deal.

All too often I find myself scratching my head in disbelief at where we are and at the Government’s kamikaze attitude towards no deal. For generations, we have had an assumption of progress—a promise as a nation about what the next generation should have and that they should do better than the last—but we find ourselves now breaking that promise. The Government are set to take our nation’s prosperity backwards while turning to the country and saying, “This is what you voted for.” Contrary to the “sunlit uplands” of the most eloquent speech of the hon. Member for North East Somerset (Mr Rees-Mogg), under the deregulated, free-market future that many hard Brexiteers will look to, we know that the rich will get richer and the poor will see less and less of the wealth of their nation.

We cannot take progress for granted. It is something that we in politics have a duty to fight for and to protect. However, time is running out and we have choices to make. It would be my preference to remain and reform, and I would support a second referendum between remain and a deal as agreed by this House. If we are to leave, we should do so in a way that delivers on the referendum, but with the least damaging economic impact, such as a single-market and customs-union solution—a common market 2.0—as a base from which to build our future relationship.