EU-UK Summit

Sarah Olney Excerpts

Thursday 22nd May 2025 Westminster Hall

[Sarah Olney (Richmond Park) (LD)]

It is a pleasure to serve under your chairmanship, Mr Vickers. I thank the Backbench Business Committee for securing time for this debate.

The Liberal Democrats were clear about our ambitions for the summit. We repeatedly pushed the Government for a youth mobility scheme between the UK and the EU, we called for a defence and security pact with our European neighbours, and crucially we urged the Government to be much bolder on trade and the economy by seeking a bespoke customs union with the EU.

The Brexit deal was a betrayal. The leave campaign promised that businesses would be able to trade more freely, that farmers would benefit from a new approach to their payments, and that fishing communities would thrive once again. Instead, businesses are caught up in red tape, farmers have seen their payments slashed, and the deal on fishing was a total sell-out. In fact, it has been amusing to hear Members berate the Government this week for an extension on exactly the same terms as the deal that Boris Johnson agreed.

[James McMurdock]

Would the hon. Lady clarify whether she believes the deal is a good thing for fishing or not? She seems to be bashing it, but also remarking on the 12-year extension.

[Sarah Olney]

I am assuming that the Conservative Government were happy with the terms that they were able to negotiate, so what is the problem with extending it? I simply reflect on the comments of the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier), who is no longer in her place: the new agreement enables so many more opportunities for exporting to the EU, and that is something that will be very much welcomed by many of our industries, not least our fisheries.

[Sir Bernard Jenkin]

It is quite extraordinary that the hon. Lady does not understand the different between a bitter concession that was forced out of the previous Government, wisely or unwisely, that we deeply resented and was time-limited to five years, and an extension of 12 years, which is at least 2.2 times worse, for something freely given away. I remember when the Labour party used to deride the common fisheries policy as an ecological and social disaster. Now it is embracing it, and so is the hon. Lady. I can only assume that she does not represent any fishermen in her constituency.

[Sarah Olney]

I am so sorry to hear about the resentment that the hon. Gentleman feels at the deal that his Government negotiated. However, he must accept that that is the basis on which the new deal has been struck. That was the starting point for the negotiation. I am sorry to hear it was so terrible, but that was the starting point.

The betrayal by those who advocated for the opportunities of Brexit did not end there. Of course, it was not just the Conservatives, but the leader of the Reform party. The public were promised that immigration would fall. Instead, it has risen to record levels. Far from the economic liberation that the Brexiteers pledged leaving the EU would bring, the OBR has estimated that barriers to trade with Europe will reduce the output of our economy by 4% over 15 years.

More than that, we know how much public opinion has shifted on this issue, as many have come to realise that the promises of the leave campaign were so detached from reality. The leave campaign promised £350 million a week to the NHS, but the truth has become painfully clear. The hon. Member for Boston and Skegness (Richard Tice) gave the game away in an interview in December. Speaking about America, he said that

“it’s got cheap energy, because it ‘drill baby drills’, they’ve got lower regulations and they’ve got lower taxes.”

That is the real Brexit agenda: environmental vandalism, stripping away regulations that keep us safe and cutting taxes for the rich. I hope Members will acknowledge the extent to which that campaign misled the public.

[Richard Tice]

We have heard lots about reducing bills, but the hon. Lady has just confirmed that the greatest bill, which affects so much, is the cost of energy, and America enjoys energy prices that are a third of ours because it uses its own domestic energy treasure.

[Sarah Olney]

I am so glad that the hon. Gentleman raised that point, because what he will need to accept in time is that the way forward for cheaper electricity bills in this country is to invest in renewable energy. That, more than anything else, is what will reduce the cost of energy for consumers and businesses. The more renewable energy we have, including from wind farms off the east coast, the quicker we can get to reduced bills for our constituents.

The Liberal Democrats welcome many parts of the new agreement. It marks a distinct and positive step towards reversing the damage caused by the Conservatives’ pitiful negotiations with Europe, and I welcome the progress on those issues. I am sure that the hon. Member for Mid Buckinghamshire (Greg Smith) will welcome the fact that the Liberal Democrats would echo his call for a return of the European Scrutiny Committee; I agree with his comments on that.

According to a recent study from the London School of Economics, the Brexit deal reduced goods exports by £27 billion, or 6.4%, in 2022. Smaller firms were the most affected. The Government say that the new deal will add £9 billion to the UK economy, and we welcome the decisive step to address the disastrous damage that Brexit brought to our economy.

However, ahead of the last general election the Labour party drew itself some self-defeating red lines. The timidity in negotiations with Europe seems to be driven more by a fear of the Reform party than a commitment to bring forward proposals that would benefit the British people. Joining a new customs union with the EU is one such line. However, they are acting less like lines and more like chains weighing down on UK growth and prosperity.

[Sadik Al-Hassan]

It seems that the deal is both too much and too little. Perhaps if it were porridge, it would be just right. Does the hon. Lady agree?

[Sarah Olney]

I disagree; it is too little. Whatever the Government have said, it is too little for the Liberal Democrats. We would have gone further, although I certainly welcome the progress that has been made.

Times change. We know that joining a customs union would unlock vital new opportunities for British businesses and boost our economy in a meaningful way. In fact, even a deep alignment deal would boost growth by 2.2%, which could result in a £25 billion windfall for the public purse, and that would fall short of the benefits that a customs union would provide.

In the years 2020 to 2024, the net change in the number of small and medium-sized enterprises in the UK decreased by 25,495. Since 2019, UK businesses have also had an average closure rate of over 12%, outstripping the rate of new businesses starting up. I have heard about the challenges that businesses have experienced due to Brexit red tape, which is a direct impact of the Conservatives’ pitiful negotiation. Successful high street businesses that have operated for four decades tell me that the last 18 months have been the hardest period that they have experienced, due to the exponential increase in import duties and registration fees.

I have also been told time and again by small businesses in my constituency about the damage of Brexit. Far from seeing the freedom promised by the Brexiteers, we have instead seen an exponential increase in bureaucracy, resulting in business-owners spending many arduous hours sorting through additional paperwork, including complex regulatory differences for animal products such as wool.

Those are not isolated cases. Over a third of surveyed UK businesses have reported extra costs that are directly related to changes in export regulations due to the end of the EU transition period. We are glad that some of these issues will be addressed with the new trade agreement. However, the Government must be bolder. We will continue to urge them to be much more ambitious with regard to trade and the economy, and we will ask them to use this agreement as a first step in seeking a new customs union with the EU.

While we know that the long-term wellbeing of the UK is about being back in the heart of Europe, that requires strengthened trading agreements and a customs union. Closer ties with Europe are also key to our national security. We have long argued for closer alliances on defence in the face of Putin’s imperialism and Trump’s unpredictability, and we welcome the fact that the Government have committed to a defence agreement. However, I hope that the Minister will agree that that must be just the beginning, and that we must be far more ambitious in strengthening our economic and security ties with our nearest neighbours.

The Liberal Democrats have also repeatedly pushed the Government for a youth mobility scheme between the UK and the EU, so we are glad that the Government have seen sense and will look to introduce a similar scheme, whatever it might be called. We know that a youth mobility scheme is good for business, good for education and good for opportunity. Polling shows that two thirds of the UK population are in favour of a youth mobility scheme.

Red tape at the UK-EU border has prevented schools and children across the country from taking part in overseas educational trips. I think many Members would agree that such trips are a memorable and enriching part of a school career; however, according to the School Travel Forum, between 2019 and 2023 such opportunities reduced in number by 30%.

There are so many reasons to welcome and champion a new programme for young people. Given that the scheme the Government have indicated they will support would mirror existing capped arrangements that the UK already has with 13 countries, including Australia, New Zealand and Canada, I urge them to move with more urgency and to bring forward details and a timeframe for the implementation of such a scheme.

The Minister and I both know that a youth mobility scheme is not a return to freedom of movement. Will he confirm that the Government, who have shown good intention in introducing such a scheme, will not be sidetracked by scaremongering from the Conservative party and the Reform party, and that he will give his full commitment to the introduction of the scheme?

When I asked the Prime Minister on Tuesday for a timeline, he assured me that the Government will move quickly. However, given the thousands of students who hope to travel to Europe to study, the thousands of small hospitality businesses in this country that are struggling to recruit short-term staff and the musicians burdened with huge levels of bureaucratic paperwork, I reiterate my call here today. Will the Minister set out a timeline for the introduction of such a scheme, which will ease travel?

[Sir John Hayes]

I believe in British jobs for British young people. Should the hospitality industry not first be looking to employ the very large number of young British people who are not in education, work or training?

[Sarah Olney]

That is an excellent point; the issue is that the hospitality industry frequently seeks to recruit people for short-term work, which is often seasonal. Those jobs are not the kind of jobs that young people who are looking to build a career are necessarily interested in taking up, because come September or October they would be out of work and would have to look for something else. That is the barrier to young people in this country taking up some of those roles. There is no doubt that those industries are experiencing huge shortages of workers and a youth mobility scheme could go some way towards addressing that, thereby helping to ensure the viability of businesses in those industries and keeping them going, and keeping the jobs that they provide in our local communities.

Over the last five years, the empty promises spouted by the leave campaign have become increasingly clear as the damage caused by Brexit has unfolded. The Liberal Democrats welcome this step towards reversing some of the damage caused by the last Conservative Government, and we will continue to urge the current Government to go further and to be bolder in their ambitions for our country.