The Economy

Part of the debate – in the House of Commons at 2:45 pm on 24th October 2019.

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Photo of Richard Burden Richard Burden Labour, Birmingham, Northfield 2:45 pm, 24th October 2019

Last week, union representatives from Rolls-Royce came to see my hon. Friend Jack Dromey and me. Rolls-Royce is one of the main anchors of the UK’s aerospace sector and has operations in no less than nine EU member states. They came to tell us about their worries, the most direct and immediate being the disastrous impact that a no-deal Brexit would have on their sector. They were also clear that avoiding a no-deal Brexit was not enough, and they left us in no doubt about the importance to the long-term health of their company and their sector of preserving the frictionless trade that is key to their sector’s success and which prevents the dislocation of the integrated operations of that company and its supply chains across the EU. In short, they echoed the very issues that the aerospace, food and drink, pharmaceuticals and automotive sectors had put to the Government in a letter just the week before.

Together those sectors employ more than 1 million people in this country and contribute £98 billion to the UK economy every year. They are very concerned about the downgrade that the Prime Minister’s political declaration will mean for the economic relationship between the UK and the EU—a downgrade not only from the close alignment we already have with the EU, but even from that envisaged in the political declaration brought forward by Mrs May. That downgrade was forensically exposed by my right hon. and learned Friend Keir Starmer in Saturday’s debate.

I will give a few examples. The first is aerospace. Post Brexit, the UK will either be part of the European Union Aviation Safety Agency or it will not. EASA is a mechanism for aligning standards that ADS, the aerospace industry body, describes as “vital” for the sector. But we still have no clarity at all about whether the UK will remain a member.

Chemicals is not only a key industry in its own right, but an essential part of the aerospace supply chain. Sixty per cent. of UK chemical exports go to the EU and 75% of the UK’s chemical imports come from the EU. Chemicals or products containing them are bought, developed and sold backwards and forwards repeatedly between the EU and the UK. That can only happen without checks and delays and because they are governed by a common set of regulatory standards held in place by the UK’s being part of the EU’s REACH—registration, evaluation, authorisation and restriction of chemicals—safety programme. Will we stay part of that after Brexit? We simply do not know and the political declaration leaves us none the wiser.

The automotive sector is the UK’s biggest single exporter of goods. We know that WTO tariffs, which would immediately kick in in the event of a no-deal Brexit, would be a hammer blow for the industry. However, it is not just avoiding no deal that is important; it is also about having a common rulebook of regulatory standards that remove the need for checks on goods that move over national borders.

I say to Ministers that constantly repeating the mantra that they are looking to have a “best in class”—their words—free trade agreement just will not cut it. That will not cut it, unless they provide the real and specific answers that are needed to the real and specific questions that UK industry has put to them. Unless they do that, either we will be back to the disaster that a no-deal Brexit would mean for our economy, or we will end up with something so half-baked that UK competitiveness will end up in a not very slow- motion car crash.