Manufacturing Industry

Exiting the European Union – in the House of Commons at 12:00 am on 6th December 2018.

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Photo of Liz Twist Liz Twist Labour, Blaydon 12:00 am, 6th December 2018

What assessment he has made of the potential effect of the proposed withdrawal agreement and political declaration on the manufacturing industry in the UK.

Photo of Mohammad Yasin Mohammad Yasin Labour, Bedford

What assessment he has made of the potential effect of the proposed EU withdrawal agreement and political declaration on manufacturing industry in the UK.

Photo of Kwasi Kwarteng Kwasi Kwarteng The Parliamentary Under-Secretary of State for Exiting the European Union

The Government’s analysis shows the deal that the House is considering will deliver for every section, region, nation and sector of our country, including the manufacturing sector. I assure Liz Twist that it has grown by 9.5% since 2010.

Photo of Liz Twist Liz Twist Labour, Blaydon

The Attorney General’s legal advice on the backstop states:

“any GB goods crossing the border into the EU will be subject to third country checks”.

How much damage does the Minister think that will cause to manufacturers, like those in the north-east, where my constituency is based, who rely on just-in-time supply chains?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Parliamentary Under-Secretary of State for Exiting the European Union

The prospects for manufacturing under the Government’s policy are actually very strong. [Interruption.] I will answer the hon. Lady’s question. I think the House will be very interested to learn that Sir Roger Carr, the chairman of BAE Systems, which has locations near the hon. Lady’s constituency, said that the deal is

“something that had the key elements of what people were looking for, particularly in the sense of a pathway to frictionless trade, control of our borders and preservation of the UK.”

Manufacturing has nothing to fear from this deal.

Photo of Mohammad Yasin Mohammad Yasin Labour, Bedford

Dunbia Cardington is a major employer in Bedford. Despite years of trying to recruit staff locally, the business relies on workers from the EU, who make up 90% of the workforce. Does the Minister agree that the Government’s future immigration policy, which restricts the low-skilled workforce that the factory depends on, puts the future of the company at risk?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Parliamentary Under-Secretary of State for Exiting the European Union

I completely reject that idea. As we have stated very clearly, the rights of EU citizens who are already here are absolutely guaranteed under the terms of the withdrawal agreement. We look forward to having a skills-based immigration policy that will absolutely guarantee that the talent we need can come to this country.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

Will the Minister confirm that the proportion of the British economy that is dependent on EU-linked supply chains is just 3%?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Parliamentary Under-Secretary of State for Exiting the European Union

Those are my hon. Friend’s figures, and I know what his views on the subject have been over many years. The deal under consideration will be a sure footing on which we can grow the economy. I think the scare stories are misplaced and we have a bright future ahead, particularly in relation to our exports and our trade policy.

Photo of Desmond Swayne Desmond Swayne Conservative, New Forest West

Why would the world’s eighth largest manufacturer want to leave 20% of its economy subject to the acquis?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Parliamentary Under-Secretary of State for Exiting the European Union

My right hon. Friend has well-known views about these issues. Many manufacturers and businesspeople in Britain seek an assurance that they will be able to trade freely with the EU, and I think the acquis communautaire is something that they value.

Photo of Vincent Cable Vincent Cable Leader of the Liberal Democrats

The Minister will be aware that engineering employers and the CBI have given cautious support to the Government’s proposal on the basis that the transition and the common customs area will protect their supply chains. What further reassurance can he give them that these arrangements might be long term, or even permanent?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Parliamentary Under-Secretary of State for Exiting the European Union

The right hon. Gentleman is absolutely right, and I commend him for his honesty in suggesting that many businesspeople think the deal is a very good one. Certainly, businesspeople in my constituency want the deal to go ahead. I think that we will secure a frictionless or very good free trade arrangement with the EU, and I think that our businesses will grow and be encouraged by the free trade agreement that we get.

Photo of Jenny Chapman Jenny Chapman Shadow Minister (Exiting the European Union)

Labour’s policy of a permanent customs union is supported by, among others, the TUC, the CBI and the Engineering Employers Federation, which said:

“Loss of access to both the single market and the customs union would condemn the manufacturing sector to a painful and costly Brexit.”

On 17 July, this House came within six votes of accepting a customs union as a negotiating objective. Is it not obvious that if the Prime Minister supported it and ignored the empty threats of the European Research Group, there would be a majority in this House for a customs union?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Parliamentary Under-Secretary of State for Exiting the European Union

The hon. Lady makes a fair point, but she will also appreciate that the deal under consideration is supported by businesses for that very reason. It can secure ongoing relationships with the certainty that we need. The problem with the Labour proposal of permanent membership of the customs union is that it completely destroys any idea that we can have an independent trade policy, which is set out on the first page of the political declaration. The Labour proposal is unambitious and completely constrains our ability to do the independent trade deals that will drive our economy in the future.