The Conservative Party prides itself on the belief that greater competition leads to better outcomes. Apparently, this does not apply to their own leadership contests. Although no fewer than ten candidates found their way on to the original ballot of MPs, incredibly, not one of them seemed to possess a credible plan for delivering Brexit which recognises one fundamental fact about the situation we find ourselves in; that the EU has said there will be no renegotiation of the withdrawal agreement without a shift away from Theresa May’s red lines.
Rather than confronting this reality, those who hope to become the next Prime Minister have preferred to indulge in the fiction that they can somehow succeed where their predecessor has failed by bringing back a withdrawal agreement that will free us of the Northern Irish backstop, and thus unite the Conservative Party around a Brexit deal that all sides can accept.
Three years after the referendum result, it is dispiriting to see politicians who hope to lead our country continue to sell these fantasies, when they ought to be showing leadership by telling their members the truth; that Brexit is only deliverable through hard nosed pragmatism and compromise.
Unfortunately, these qualities seem to be deserting the Conservative Party just when they are most needed; the membership is becoming increasingly extreme on the question of Brexit; recent polling shows that 84% of party membership would be happy to have a leader who supports no deal, and 61% would be willing to see the UK sustain significant economic damage in order to deliver Brexit. For Conservative members, it seems that the cause of Brexit has been elevated to the status of a faith, which must be delivered in its purest possible form-regardless of the damage it would cause to the country, and their own party.
This fervour is all the more baffling when you consider that there is little evidence to say that a hard Brexit would fulfil the ‘will of the people’ as they frequently claim. The possibility of a no deal was hardly ever mentioned by the Leave campaign in 2016. In fact, securing an agreement on a future relationship was a central point of their arguments. The official Vote Leave manifesto pledged that we would “have a new UK-EU Treaty based on free trade and friendly cooperation” before going onto say “There is a European free trade zone from Iceland to the Russian border and we will be part of it”-an apparent endorsement of the kind of soft Brexit that has subsequently been denounced as ‘Brexit in name only’.
Following the referendum, there was a clear opportunity for leave supporters to reach out and unite the country around a deal that would take us out of the EU, but keep us closely aligned in key areas. This compromise would have reflected the narrowness of the referendum result, and could have attracted the support of MPs like myself who had voted Remain, but felt an obligation to my constituents to respect the outcome by ensuring that we left the EU in an orderly and sensible manner.
Instead, leading Brexiteers have attempted to redefine the outcome of the 2016 referendum so that only a total break from the EU is seen as reflecting the view of the majority. Even now, there is very little evidence to support this view. A no deal is very clearly not the preferred option of the British public, according to virtually every poll that has been taken.
In these volatile political times, predictions are increasingly hazardous. However, it is not difficult to suggest what will happen over the next few months; the triumphant new PM will go to Brussels looking to renegotiate the backstop; and return empty handed, just as Theresa May did before them.
After that, it is only a matter of time before a ‘no deal Brexit’ becomes official Conservative Party policy. This outcome has often been talked of by Eurosceptic politicians as if it were some kind of liberating experience-a gateway to a world where we are free from the Brussels and its bureaucracy.
The inconvenient truth about what would this mean for many of the UK’s key industries is blithely ignored, as if somehow, the problems that countless experts have pointed will evaporate once British business breathes the invigorating air of a no deal, WTO based trade environment.
I would like to use this post to explain why I totally reject this view.
The first and most important reason, as a Black Country MP, are the grave consequences that trading on World Trade Organisation (WTO) terms would have for manufacturing. WTO rules are the default terms on which trade is conducted between countries who do not have special agreements with one another. They have often been portrayed as a safe haven that would enable us to weather the storm of a no deal Brexit. In truth, there is little hiding from the fact that they a significant downgrade on our current trading arrangements. They would mean that UK businesses would lose preferential access to EU markets, and instead have to pay tariffs which would damage the competitiveness of their products. Cars and car parts, for example, would be taxed at 10% every time they crossed the UK-EU border. Under the WTO’s ‘most favoured nation’ rules, the EU cannot not lower these tariffs without also doing so for every other country with whom it does not have a trade deal.
The last few decades in the UK have been marked by the decline of traditional industries, and the rise of a new, service-based economy, centred primarily on London and the South East. The Black Country has been one of the few areas to retain its strong manufacturing tradition. I am proud to say that this continues to be the backbone of our local economy; but I fear that a no deal Brexit would jeopardise this.
This is no longer a hypothetical suggestion. The motor industry plays a key role in the West Midlands economy, but since the Brexit vote, investment in this sector has plummeted; falling by a staggering 80% since the referendum, according to the Society for Motor Manufacturers and Traders (SMMT). At the same time, production has fallen to a five year low.
These struggles have human consequences; Jaguar-Land Rover, who have plants at Solihull and Castle Bromwich, have cut 4,500 members of staff, as part of a wave of job losses and closures which have been sweeping the UK motor industry. Beneath these headline figures, reduced production will also mean that more people will lose their jobs further down the supply chain.
Campaigners arguing for a hard Brexit say that these setbacks can be put down to other factors-such as changes to the tax regime for cars in the wake of the ‘Dieselgate’ emissions scandal. As someone who has regular contact with the motor industry and its representatives, I agree that this has been an important contributor to the present downturn. In fact, I made this issue the main focus of the Commons speech that I made in response to last year’s budget.
To say that this is the only reason for the current troubles that the motor industry is facing is nothing short of absurd, particularly as this flies in the face of the repeated warnings that key groups in the industry have made about the problems that the prospect of a no deal Brexit have created for car companies in the UK. At the start of this process, we were repeatedly told that Britain would be able to leave the EU and still enjoy many of the economic benefits of membership because Angela Merkel would be unable to ignore the demands of the German motor industry, who would not tolerate barriers to selling into our lucrative market. But in truth, it has been our own car industry that has been delivering the starkest warnings about the dangers of no deal, and they have been repeatedly ignored.
It is true that the motor industry is in experiencing a global downturn. But it also true that no other country is seeing the level of lay-offs and closures that Britain is currently experiencing. Car companies invest in the UK because it enables them to export vehicles to the rest of the EU without paying a tariff. This key selling point has been placed at risk because of Brexit, and as a result, the UK has felt the brunt of the cutbacks that car companies have made to counter their recent fall in income.
The struggles of the motor industry are just the tip of the iceberg when it comes to examining the dangers that no deal poses to manufacturing. I have been in contact with a number of manufacturing firms that exist in the Black Country. They will often differ vastly in terms of size and what they produce, but they have been united in their concerns about no deal, and the loss of the frictionless, tariff-free trade that it brings.
Unfortunately, their fears are now being realised. After artificial growth caused by stockpiling, declining confidence in the UK market has resulted in industry reducing both investment and day to day spending. The purchasing managers index, a reliable indicator of future investment intentions, has recently fallen to its lowest level in six years, and Make UK has warned that the future prospects for manufacturing ‘shows little sign of improvement’ as we edge ever closer to crashing out on WTO terms.
Hard Brexit hasn’t even happened yet, but UK industry is already struggling to cope. This is perhaps unsurprising, when you consider that the decline of manufacturing due to Brexit is something that has been predicted by even some of the most ardent leavers. Indeed, Patrick Minford, one of the leading economists for Vote Leave, who has been regularly praised by prominent Brexiteer politicians, such as Jacob Rees-Mogg, has repeatedly claimed that leave the EU would ‘eliminate manufacturing’ and that the car industry would have be run down “in the same way we ran down the coal and steel industries”, leaving an economy even more dependent on services than it is at present. He doesn’t care about industries who contribute to our economy by boosting exports, and providing good quality jobs to millions of people.
For many leading Brexiteers, this outcome is integral to their vision for Brexit. For them, leaving the European Union is just the first step in a wider project of repudiating the European economic model, with its robust protections for consumers, workers, and industry. The decline UK manufacturing will just be collateral damage in their ideological drive toward an ultra free-market economy.
Both Tory leadership candidates are peddling tax cuts whilst making promises to improve our public services. This will drive up debt and make this country even weaker when it has to compete outside the EU against the current and emerging economic super powers of the United States, China, and India. More responsible figures such as Chancellor Philip Hammond, have made it quite clear that this poses a huge problem for the country and the Conservative Party.
This potential disaster for the country will hit leave constituencies such as my own particularly hard. The only way the UK will be able to compete with other countries is by reducing taxes on business to attract foreign investment, whilst at the same time cutting wages and lowering employment standards to reduce business costs. Low pay, poorer working conditions, and further cuts to our already underfunded public services will result.
Those who are prepared to support a no deal are, of course, entitled to their view, but as an MP for an area where manufacturing remains bedrock of our local economy, I have to ask-why should I support this when even the experts advocating for it freely admit that it would devastate my constituency in the same way that Thatcherism did during the 1980s?
What is more, it is clear that the effects of no deal will not be confined to industry. The sudden end of frictionless trade would be highly likely to cause delays at our borders-putting an end to the seamless flow of goods between us and the EU 27. This has the potential to cause food shortages, particularly in the case of produce which is harder to stockpile due to short shelf life-such as fresh fruit.
The government has said they would aim to minimise disruption at the border by applying no tariffs to a range of food stuffs. But the flip side to this is that it would leave our agricultural sector having to compete with imports rest of the world without protections, whilst at the same time having to pay new tariffs to export to the EU. This double whammy could combine to put many British farmers out of business.
Delays to our trade with the EU will also cause considerable issues for the pharmaceutical industry. In May, a leaked cabinet note warned that it would still be 6-8 months before adequate stockpiles were in place to withstand the potential disruption to trade in the event of a no deal-suggesting it is highly unlikely that the government will be able to guarantee current access to medicines will continue uninterrupted in the event of a no deal on 31st October- particularly in the case for drugs prescribed for relatively rare conditions, such as Motor Neurone Disease.
On top of this, the head of the Healthcare Distribution Association has recently told the Brexit Select Committee that leaving the regulatory structures of the EU would leave the UK open to smuggling in substandard or fake drugs from abroad-and the UK medicine supply would become ‘less safe’ as a result. When I asked Brexit Minister James Cleverly about this issue in the Commons recently, it was telling that he was unable to provide anything substantive in response my question.
The first duty of any government is to protect the safety of its citizens. Pressing ahead with a chaotic exit from the EU without being able to guarantee that some of the most vulnerable members of our society will have access to the medicines they depend on would be a clear violation of this. It is in my view reprehensible that we would even consider taking this step.
Let me be clear; I wish to respect the result of the referendum-hence why I voted to trigger Article 50 back in 2017; but I do not accept that this can only be accomplished by plunging our country into a chaotic exit on WTO terms.
As I have made clear before, I believe the best way forward would be a compromise ‘soft Brexit’ centred on a permanent customs union with the EU. This is not without its drawbacks, but it would maintain the frictionless free trade in goods which our manufacturing is dependent on, and go some way to guaranteeing an open Irish border-thus eliminating the need for the controversial backstop. At the same time, it would also deliver on the referendum result by taking us out of the EU, and to opt out of the vast majority of EU legislation; including on freedom of movement.
However, I accept that there is a need to compromise if we are are to avoid no deal, and for this reason, I have been willing to support other ideas which wouldn’t necessarily be my first preference. When the indicative votes on our future relationship with the EU were last held on Wednesday the 1st April, I supported three other options alongside the customs union motion; specifically Common Market 2.0; the Beckett amendment, which provided for a confirmatory public vote on the PM’s withdrawal agreement, and revoking Article 50. I believe there are downsides to each of these proposals, but crucially, each would have the benefit of avoiding a calamitous no deal exit on the 31st October, which offers nothing to the people of this country, and to the Black Country in particular.
We will not know the identity of our next Prime Minister until the end of July, but regardless of who succeeds Theresa May, it seems that a no deal Brexit now looks more likely than ever. However, there is still time for the next PM to walk away from the cliff edge and instead seek a cross party compromise around a soft Brexit that can unite the country after years of bitter division, and protect us from the worst effects of a hard Brexit. If they do, I would be more than willing to work with them to achieve this.