Exiting the EU and Workers’ Rights

Jonathan Edwards Excerpts

Monday 7th November 2016 Commons Chamber

[Hilary Benn]

I have consistently made clear my personal view—the Select Committee has not yet considered this—that it is wise to separate out the issue of triggering article 50 and the Government publishing their negotiating objectives, for the reason the right hon. Lady gave in her speech. Those of us who campaigned for remain lost the referendum, and we have to uphold the result. I fear that bringing the two things together—conflating them—would inevitably turn any vote on the triggering of article 50, if it is allied with conditions, requirements or whatever, into what the public would see as a vote about whether we are going to uphold the outcome of the referendum. We should deal with the two things separately.

When the time comes, I shall, as I have already said, vote in favour of triggering article 50. The referendum decision having been made, the only way in which we can honour that—the only way for us to leave—is for the article 50 button to be pressed; there is no other mechanism. We are therefore bound to vote in that way. I know that not all Members will share that view, but I believe that the vast majority will accept the logic of the argument. We should keep separate our request to the Government, which we will hear increasingly in all parts of the House, to tell us what the plan is. I am sorry that earlier today we were still hearing the argument that in asking the Government to publish a plan we are somehow trying to undermine the outcome of the referendum. No we are not—we are accepting the outcome of the referendum. We are leaving, and it is therefore really important that the House and the public know what the plan is. This is a serious business with very important consequences for the nation.

The reason for announcing that transitional arrangements will be sought in the event that this cannot all be tied up within two years is that, in particular, it will offer some reassurance to industries that are thinking, “Crumbs, we might tumble out in as little as two years with no agreement.” We know what that would mean for trade under World Trade Organisation terms. Some businesses—one thinks of parts of the financial services industry—will say, “We can’t face that possibility because it creates huge uncertainty and might affect our ability to carry on doing our business.” They will therefore start working backwards and say, “We can’t possibly get into a situation where we tumble out and we can’t do the business we are doing at the moment so we need to make contingency plans now.” That may lead them to decide to do things that have consequences for jobs and employment here in the United Kingdom.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

I am grateful to my Committee Chair for giving way; he is making a sterling argument. Are not transitional arrangements so important because there are strong noises coming from Europe that it will not even begin discussing the new relationship until the exit procedures are completed?

[Hilary Benn]

The hon. Gentleman makes a powerful and important point. The question in these negotiations will be the extent to which the 27 are willing to talk informally about tying up these arrangements. If the argument in Europe is, “We should leave that until later”, the need for transitional arrangements becomes even more urgent because otherwise we are left with a cliff edge, as many people have described it. If one is going to fall off the edge of a cliff, which is not something I have ever done, it is probably wise to plan where it is one is eventually hoping to land. That is a very strong argument for this.

It is not seeking to undermine the referendum result, it is not unpatriotic, it is not demanding a running commentary, it is not trying to tie the Government’s hands, and it is not trying to box in the Prime Minister and the Ministers who are going to negotiate this to say to the Government, “Please share your plan with this House.” Parliament would like to be a participant in this process, which is the most important task that we have faced as a nation for decades. I sincerely hope that it will not be too long before we get a chance to see that plan.

--- Later in debate ---

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Every single MP I have spoken to since the referendum respects the result, but there is considerable disquiet about the Prime Minister’s hard Brexit rhetoric. She seems intent on severing not only all political ties but economic ones as well. Such a reckless Brexit would be disastrous for the economy, with a negative impact on the financial wellbeing of those we have been elected to serve.

Following the referendum, there is a clear ideological divide in this House between those who favour a hard Brexit and those who prefer a soft Brexit. I do not find the sort of rhetoric we heard following the High Court judgment—that we who prefer a soft Brexit are backsliders—particularly helpful. Since the High Court’s decision, the UK Government have been briefing heavily that if the House of Commons tries in any way to undermine the chosen path of the UK Government, they will hold a snap election. A general election could be triggered by a simple majority of MPs if the Government decide to bring forward a no confidence motion in themselves. As parliamentarians, our foremost duty is to look after the interests of our constituents. It is clear that, following the referendum, a softer Brexit is the best outcome we can hope for. A hard Brexit, whereby the UK leaves both the single market and the customs union, would be fraught with economic danger, even if the UK Government were miraculously able to negotiate a comprehensive new bilateral trade deal before the completion of exit procedures.

In the event of the UK Government cynically engineering a vote of no confidence in themselves, under the terms of the Fixed-term Parliaments Act 2011, an election will be held unless an alternative Government with the confidence of the House of Commons can be formed within 14 days. The Prime Minister could risk being challenged by an alliance of MPs from all political parties who oppose her hard Brexit trajectory. At such a pivotal moment in the UK’s constitutional history, pragmatic MPs should come together, rise above party politics and negotiate a soft Brexit for the UK.

The UK Government find themselves in this position because there was no plan for Brexit if the leave side won the referendum. By contrast, during the Scottish independence referendum, the Scottish Government published a 300-page White Paper on what independence meant. The UK Government effectively have a blank canvas, which is why we find ourselves having such debates and trying to work out the Government’s intentions on vital issues such as workers’ rights.

Following the result, the absence of a clear plan has meant that irresponsible politicians have been interpreting the result to fit their own ideological priorities. There is now apparently a mandate to leave the single market, despite the clear pledge in the Tory general election manifesto to protect our membership, to introduce draconian immigration targets, and to force companies to produce official lists of foreign employees. There is no mandate, however, to destroy the economy, which would cost jobs and affect people’s financial wellbeing. The overriding priority for all decisions should be to choose the Brexit option that minimises that impact.

Wales is, alas, more exposed because it has an exporting economy. Wales turns out a £5 billion annual surplus. Some 200,000 jobs in Wales are sustained by membership of the single market. Our great trading success is driven by our relationship with the European Union, not least the 53 deals we have with countries across the world as a result of the customs union. In answer to my parliamentary question, the UK Government disclosed that 15% of UK exports are dependent on those 53 international trade deals. The key question, therefore, is this: how long will it take to renegotiate all those international trade deals if we choose a path outside the customs union?

A trade deal with the EU might not even solve the wider issues around trade barriers, as they often just focus just on tariffs. Tariffs are, of course, a concern, but a blinkered focus on these obvious obstacles to trade detracts from the greater impediment of non-tariff barriers. On average, non-tariff barriers are over six times more costly than tariffs in the EU, and there is only one way to ensure that these non-tariff barriers are kept to a minimum—full single market membership.

Very simply, the terms of debate around Brexit are being driven by what is most important—economic concerns or concerns over immigration—and it appears that public opinion is already shifting. A poll earlier this month said that the economy was far more important than controls on immigration as people began to focus on the impact of Brexit on their jobs and wages. Perhaps the big driver has been the fall in the pound. I am someone who is normally seduced by arguments around devaluation, but the 20% fall that we have seen has been driven not by deliberate central bank policy, but by currency markets that are now betting heavily against sterling, affecting future confidence in the economy of the UK. That means that the sterling zone is now up there with the Nigerian naira, the Azerbaijani manat and the Malawian kwacha as one of the worst-performing currencies in the world. The impact of devaluation on people’s lives is, of course, that disposable income gets compressed as prices for food and fuel increase.

We should also be concerned about the extra costs that the UK Government will face if they want to borrow. We urgently need direct capital investment in infrastructure to drive economic growth, but the cost of putting that in place will be far dearer because of the fall in the pound. That is not to mention the £66 billion deduction in revenues that has been leaked by the Treasury. As the hon. Member for Swansea West (Geraint Davies) mentioned earlier, supply-side reforms in the economy could endanger workers’ privileges, protections and rights. The end result of these reduced revenues will be to smash the Treasury’s deficit targets, so we await the autumn statement, and not least the Office for Budget Responsibility report, with great interest.

The Prime Minister has triumphantly proclaimed that existing workers’ rights will continue to be guaranteed in law as long as she is in office. However, as the House of Commons Library and other legal experts have pointed out, many workers’ rights stem directly from EU treaties—the right to equal pay between genders, for example—and once we leave the EU, those rights would cease to exist, so new primary legislation would be needed to reinstate them. Do the UK Government intend to bring forward primary legislation to ensure that all rights currently enshrined at EU level are secured in domestic legislation? Rather than bringing in a repeal Bill, should we not be bringing forward a continuity Bill? As events proceed, people will become increasingly angry about the way things are going.

We have heard good points from SDLP Members about devolved competencies, but I do not think we had a clear answer to how the great repeal Bill envisaged by the UK Government will work with the devolved nations. As we know, there is a hugely diverging agenda between the Welsh Government and the UK Government when it comes to workers’ rights, as was evidenced by the recent court case over the agricultural workers dispute.

Returning to trade, we have heard a duality of messages from Brexiters since the referendum. There was supposed to be a protectionist paradise. Such arguments held considerable sway in the steel industry in south Wales in the face of Chinese dumping. Of course, dairy farmers face competition from Ireland and hill farmers in Wales are challenged by lamb coming from New Zealand. Yet the rhetoric that we currently get from the UK Government is that Brexit will lead to a free trade bonanza.

Given the time constraints, I shall finish now. If there is to be a future outside the customs union—as envisaged, I fear, by the UK Government—it is vital that the devolved nations have a veto and a direct say in discussions about international trade deals.