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European Union (Withdrawal) Bill - Report (6th Day)

Part of the debate – in the House of Lords at 6:00 pm on 8th May 2018.

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Photo of Baroness Verma Baroness Verma Chair, EU External Affairs Sub-Committee 6:00 pm, 8th May 2018

My Lords, I will also speak to Amendment 112. I have followed this debate closely in your Lordships’ House and the other place. This is the first time that I have spoken in this debate, and to find myself opposing the Government is a decision that I have not taken lightly. But, as other noble Lords have said, this is an argument based not on ideology but on the pragmatic reality of what faces our business community, our employers, our wealth generators, if we do not get the right outcomes. They all need certainty, they all need to plan, they all need to look at their current business models and they all need to look at what disruption they will face. I have spoken to many businesspeople, particularly those in the supply chains—the small and medium-sized businesses that are the backbone of our country. Whether it has been privately or in the many discussion forums that I have attended, the main concern of the business community is the Government’s rigid position on exiting the EU.

We all know that 52% of the voting public voted to leave the European Union. That debate has been had. What nobody voted for was for us to be poorer because we were unable to get our basic building blocks right. Indeed, my honourable friend Mr Stephen Hammond, in a Westminster Hall debate in the other place, recently articulated very eloquently that,

“we need an exit and a deal that allow us to trade freely with our former partners and to sign new free trade agreements, and that provide a level of economic certainty to businesses and economic and security certainty to our citizens”.—[Official Report, Commons, 7/2/18; col. 545WH.]

For the sake of clarity, as a member of the EU we are members of the EEA, along with the other 27 EU partners. A strong message was sent out last week to the other place to look very carefully at the need to remain in the customs union. Our concern is that 80% of our economy is service-led, which is not covered by the customs union, so while hugely important for our goods sector, what about the 4.3 million businesses in the services sector? As 79% of our employment is in services, that is 24 million people contributing to 33% of turnover last year. Issues such as non-tariff barriers will have an enormous impact on business, particularly SMEs and supply chains. As the noble Lord, Lord Alli, said, in 2016 trade in services with the EU had a surplus of £14 billion. Why would we want to put barriers in the way of our vital and successful services sector?

The EEA is not the same as the single market. It excludes, as the noble Lord, Lord Alli, said, the common agricultural policy and the common fisheries policy. It is not under the jurisdiction of the European Court of Justice. What we are asking, through this amendment, is to continue as a member of the EEA. The referendum had one question: whether to leave the EU. Remaining a member of the EEA offers business certainty and will enable us to influence through the many committee networks that exist for non-EU members in the EEA.

Leicestershire, the region of the east Midlands that I call my home, spans industries and sectors in both goods and services, from manufacturing to transport, with our rail, air and freight links transporting goods around the world, to top universities, pharma companies and creative services, to professional and business services and retail, to name a few. The Government’s own impact assessment set out the following Brexit scenarios for the east Midlands: remaining a member of the EEA would mean a 1.5% fall in GDP; a free trade agreement would mean a 5% fall in GDP; a no deal and reverting to WTO rules would result in an 8% fall in GDP.

We have to be pragmatic. In this region, the fallout from the 2008 economic crisis has been incredibly hard on people in the east Midlands. We are a fantastic region, where our confidence is emerging. Austerity has taken its toll, and while we all knew we had to really tighten our belts for the last few years, we must not now embark on a path of uncertainty on which businesses cannot make decisions. I have been in the SME sector and supply chains for 40 years, and my family since the 1950s, I have taken UK businesses overseas to explore emerging markets on many occasions. I, like others, want the UK to remain at the top of investors’ minds as a place to do business, but the recent rhetoric is not helping. The PM, for whom I have great respect, has said her sense of duty is towards her country and its people. My commitment and my duty to my country is, I believe, just as strong.

For those who believe this House does not have the right to ask the other place to revisit legislation they want Parliament to put through, that is not how I see our role in your Lordships’ House. I have received lots of communications, spoken to lots of people and listened carefully to all sides of the debate. There is support for these amendments in your Lordships’ House and in the other place. There is an opportunity for the democratically elected other place to discuss and debate this properly in the interests of our country.

I genuinely believe that we send a strong message to our EU partners, and to others with whom we want to pursue FTAs, that we take all our relationships seriously and are not in the habit of turning our backs on our friends old and new, and that we are trusted partners—a nation looking outward, and stronger for our relationship within the EEA. For business, good news is great and bad news is manageable, but it is the uncertainty that persists from the Government that is forcing UK businesses to look as if they are facing a cliff edge.