THE EU, CUSTOMS UNION AND THE SINGLE MARKET: REFLECTIONS ON THIS WEEK’S DEBATES IN PARLIAMENT
In this week’s votes in the House of Commons on amendments to the EU Withdrawal Bill, all MPs, irrespective of Party, had a duty to cast our votes in a way that we genuinely believe is in the interests of the country. These votes were not about whether or not Brexit takes place. The decision to take the UK out of the European Union was made at the referendum and by triggering Article 50 Parliament has set that process in motion.
This week’s votes were rather about the kind of Brexit the UK Government should be trying to negotiate. Two of the key issues under debate were whether, after Brexit, the UK should remain in a customs union with the EU, and whether we should remain able to participate in the Single Market. As a member of the EU, Britain is currently both in a customs union with the EU and part of the EU’s Single Market. However, neither rely on EU membership. Norway, for example, is neither in the EU nor in a customs union with it. As a member of the European Economic Area (EEA) however, it participates in the Single Market.
My judgement is that it is in the interests of jobs in the UK and our country’s economy to both remain part of a customs union with the EU and to have continued access to the Single Market after Brexit.
Let me give a couple of examples about why I think this from the automotive industry – a sector that I know well and which still employs 814,000 people in the UK. In our own region, major manufacturers such as Jaguar Land Rover and the many other companies making components in the automotive supply chain are critical to the wellbeing of the economy of the West Midlands.
But it is an industry which also critically depends on trade with the EU. Every day, trucks come from countries inside the EU delivering £35 million worth of parts into the UK to build 6,600 cars and 9,800 engines. The competitiveness of the UK automotive industry depends on what is called “just in time” delivery. Any delay to the delivery of those parts will undermine that competitiveness and hit jobs here in the UK.
Being in a customs union with the EU guarantees that there is no need for customs checks at UK ports when goods are imported into the UK, nor are there customs checks at EU ports for the finished vehicles and other goods exported from the UK onto the continent. That means just in time deliveries are protected from delays. Not only that but being in the customs union also means companies do not have to pay tariffs or duties when they import and export goods between the UK and other EU countries. That again minimises delays and keeps costs down, protecting our industry’s competitiveness.
Having looked at the evidence I do not see any reliable way of safeguarding the frictionless trade with the EU on which so many UK jobs depend on without remaining part of a customs union with the EU after Brexit. That is why I think the Government is misguided in ruling out membership of a customs union with the EU. The alternatives which Theresa May has floated are either half-baked, hugely bureaucratic or both. That is why I voted to commit the UK to negotiating continued membership of a customs union with the EU. Not only will it be good for our trade with countries inside the EU, it will also provide the UK with continued access to the 36 trade agreements which the EU has negotiated and which span over 60 other countries. This is access which the UK would have to renegotiate from scratch if we ceased to be a member of a customs union with the EU.
Important though a customs union is, however, on its own it is not enough for the UK economy. Let’s take another example from the automotive industry. 56% of the cars built in the UK are exported to the EU. Remember, though, that all vehicles for sale have to comply with safety and other regulations which are not identical in all countries. As a Single Market, however, the EU has a common set of vehicle regulations. Currently as a member of the EU, the UK is part of that Single Market and the Vehicle Certification Agency (VCA) here in the UK is authorised to approve vehicles tested here for sale anywhere in the EU. Post Brexit, we need to make sure the authority vested in the VCA remains in place. Negotiating the closest possible relationship between the UK and the Single Market after Brexit is going to be vital to achieving that. The VCA is just one example. There are many others which illustrate the importance of common regulation with the EU and why participation in the Single Market will remain a key part of the picture.
Again, I think the UK Government is wrong to have ruled out being part of the Single Market after Brexit. In the votes this week, I backed a Labour amendment which called on the UK government to negotiate a deal with the EU that can retain the benefits which our membership of the Single Market brings us. One option there would be for the UK to be part of the EEA framework which gives some counties outside the EU access to the Single Market. If we are to go down that route, we will probably need to negotiate some modifications to the way EEA rules would apply to the UK – including on the question of freedom of movement of labour across the Single Market. These things are not easy but there are aspects of the EEA framework that give us the opportunity to raise them. In any event we should not rule out the option of EEA membership at this point. To do so would risk cutting off our nose to spite our face. That is why in addition to backing Labour’s own amendment on access to the Single Market, I also voted to retain the option of the UK remaining part of the EEA.
These then were the economic reasons why I voted this week to stay in a customs union with the EU and to retain as close a relationship with the Single Market as we can. There are other reasons too. Our membership of the EU to date has facilitated and guaranteed the disappearance of a “hard” border between Northern Ireland and the Republic – something that everyone acknowledges has played a key part in building peace, understanding and interdependency on the island of Ireland. With Ireland remaining in the EU after Britain has left it, however, keeping both Northern Ireland and the Republic part of the same customs union will be important to avoiding the reappearance of a “hard” border that would undermine the progress that has been made in the past two decades.
The importance of preserving peace on the island of Ireland weighed heavily on my mind, alongside the interests of jobs in the West Midlands, when I cast my votes in the House of Commons this week. The arguments are not yet settled. There will be more votes on all these issues – and more – in both the House of Commons and House of Lords over the coming weeks. Whichever way the votes go though, it is important that our elected Parliament has a meaningful say over the shape of Brexit. Neither Theresa May’s Government nor any other should be given a blank cheque to do as they please on matters so important to the future of our country.