My Lords, Amendment 4 is sponsored also by my noble friend Lord Monks and the noble Lords, Lord Oates and Lord Wigley. Since I hope to divide the Committee later, I will be briefer than I thought I would be before proceedings went on.
The hard Brexit the Government seek will be the worst possible outcome for the United Kingdom, for which the referendum gave them absolutely no mandate whatever. Cutting us off from our largest market and seeking new trade partners elsewhere will cause huge job losses and many business closures. Over the 10 years or so that it will take to adjust to the shock of exiting the single market, we must expect a pound of pain for every ounce of gain.
When the country voted by a narrow margin to leave the European Union, the single market was not on the ballot paper. Voters were never asked about it. In fact, in the run-up to the general election of May 2015, the Conservative Party manifesto promised to,
“safeguard British interests in the Single Market”.
The manifesto said:
“We say: yes to the Single Market. We want to expand the Single Market, breaking down the remaining barriers to trade and ensuring that new sectors are opened up to British firms”.
There were further contributions.
“Absolutely nobody is talking about threatening our place in the single market”,
said leading leave campaigner Daniel Hannan MEP.
“Only a madman would actually leave the market”,
said ardent Brexiteer and Tory ex-Cabinet Minister Owen Paterson MP. Some leave leaders said that the UK could quit the EU while remaining a member of the biggest, richest single market in the world, accounting for nearly half our trade. Others talked variously of Norway, Switzerland, Canada and even, bizarrely, Albania. There was the very opposite of clarity on this issue. I know because I knocked on many hundreds of doors in the referendum campaign and people voted to leave the European Union, not the single market.
Reaching an agreement on withdrawal from the single market within two years of triggering Article 50 will be difficult, if not impossible—and extremely complex. In my drafted speech, I was going to go into the many complexities. It will also need to be followed by subsequent trade agreements, and not only with the remaining 30 EU and European Economic Area member states; new agreements, under WTO rules, will be required with around 52 third countries outside the EU with which we have existing trade deals through the EU.
Trade deal outcomes are about relative economic power and weight. Contrary to breezy and I think complacent claims by government Ministers and their Brexit acolytes, the UK and the EU will not somehow be equal partners in any negotiation of new trade
agreements. The UK depends on the EU for 45% of its exports, whereas the EU exports only 8% of its produce to the UK. We have a trade surplus in services, mainly financial, with the rest of the European Union of £17 billion.
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The Chancellor has said that if the United Kingdom loses access to the single market, it would consider abandoning a European-style social model with European-style taxation and regulation systems and becoming “something different”. Not only would this clearly mean lower labour and environmental standards, it would mean even further and more savage cuts in public services. That is why leaving the single market poses a threat to the social progress and increased prosperity which we have seen in this country over the last 40 years.
Fears about immigration were undoubtedly one of the main motivations for Brexit, as I discovered—if I did not know it already—on the door-step. However, the right to free movement has never been unconditional. Even under current European Union rules, the UK has a number of effective tools that are used by other countries in the EEA to manage migration effectively if we wished to do so. Rather than turning our back on our largest export market by leaving the single market, would not a more constructive approach have been to try to agree a new interpretation of free movement of labour?
It is quite possible to impose restrictions on immigration, reflecting a country’s needs, while remaining in the European Economic Area and therefore in the single market. Belgium, for example, does precisely this by returning to their European Union country of origin each year thousands of migrants who no longer have jobs or never did. Leaving the single market will cause untold harm to the economy and people’s jobs, which will be felt most keenly in the already disadvantaged nations and regions: for example in Wales, where I live. A hard Brexit will therefore have damaging consequences for the union of our United Kingdom and also for the island of Ireland.
I will just address a paradox that we find ourselves in. Both the Government and, sadly, my party leadership in the other place have effectively put the migration issue ahead of jobs and prosperity. That is fundamentally mistaken. Of course human rights and migration issues have to be addressed, and I will of course vote for our amendment on European Union citizens, but to put migration first, ahead of the jobs and prosperity which depend on the single market, is perverse in the extreme.
Then it is said that if we remain in the single market we will effectively have no representation. That is true—which is why it is not as good an option as remaining in the European Union. But we are where we are, and you have to go for the least worst options. Norway, for example, which is in the single market but outside the European Union, has considerable unofficial influence when new single market rules are drawn up. It may not be in the Council of Ministers—you need to be in the European Union to be in the Council of Ministers, making the rules and influencing the Commission—and it may not be in the European Parliament for the very same reason. But it has
considerable unofficial influence. Is anybody telling me that the United Kingdom, with its massive economy, the third-largest in the European Union, as we have heard in this debate and previously, will not have substantial influence on shaping the rules of the single market? I do not think that that is credible.
Of course it is not ideal to stay in the single market without the benefits of being in the European Union and on the central, inner-core decision-making bodies, but it is the best solution, given that we are due to leave the European Union. Turning our backs on the single market could be catastrophic for prosperity and jobs, and especially for the most vulnerable citizens in our country. That is why I will, with the permission of the House, put this amendment to a vote later on.