European Union (Notification of Withdrawal) Bill — House of Lords, 2017-02-27
Topic: Foreign Trade
Dafydd Wynne Wigley (Plaid Cymru, Centre-left to left): My Lords, I have put my name to Amendment 4, which was so effectively moved by the noble Lord, Lord Hain. Amendment 5, which is in my name and grouped with it, covers some of the matters that have already been discussed in the debate on Amendment 1 The issue here is vital to much manufacturing industry in the UK and I am grateful to the noble Lord who spoke a moment ago emphasising that. The EU market is absolutely critical for manufacturers. This is generally true throughout the UK, but it is particularly true in Wales, where manufacturing represents a significant part of the economy and where the service sector is somewhat smaller than it is in other parts of these islands. I note the points made by the noble Lord, Lord Howell, and I respect them, but those arguments do not carry so much weight in Wales, given where we are now That is why the Welsh Government, led by Labour First Minister Carwyn Jones, jointly with the official Plaid Cymru Opposition led by Leanne Wood, have taken the unusual step of publishing a joint White Paper, Securing Wales’ Future, which has been endorsed by the National Assembly for Wales as a body. The White Paper calls for us to have, "a new relationship with Europe", so it obviously accepts that, as a result of the referendum, we are leaving the EU as it is presently composed. That is something that I greatly regret, but it seems to be the reality. The central theme of the White Paper is encapsulated in the following summary paragraph: "We believe that full and unfettered access to the Single Market for goods, services and capital—including our key agricultural and food products—is vital for the forward interests of Wales and the UK as a whole and we urge the UK Government to adopt this as the top priority for negotiation with the EU" The reason for putting so much emphasis on this dimension is simple. When the old heavy industries in Wales declined as a source of employment, the replacement strategy adopted by successive Labour and Conservative Governments in London, and thereafter by Governments of Wales in Cardiff—and central to the highly successful work of the WDA—was to maximise inward investment to Wales by companies from America and Asia wanting to secure a manufacturing base in order to sell to the EU market This approach has been the key strategic element that has helped Wales to build a new manufacturing economy over the past three or four decades. I personally saw the merits of this at first hand, having worked before entering politics with three American corporations—Ford, Mars and Hoover, which was at Merthyr Tydfil at that time—and then having helped to set up a small company, Alpha-Dyffryn, which I chaired for nine years. This company was the sprat that caught the mackerel and secured the Siemens factory at Llanberis, which employs some 400 people and was established to sell to the European market What I know about all American companies coming to be based in Wales—companies such as Ford at Bridgend—is that they do so in order to sell to a European market of 500 million customers. If such companies had to overcome tariff or technical barriers, they would think twice before locating in Wales—or, indeed, in north-east England, Merseyside or the Midlands. They would certainly think twice about increasing their existing investment. Such unhampered access is equally relevant to key Welsh industries such as agriculture: 90% of our exports of beef and sheepmeat go to the European market The Welsh Government are not blind or deaf to the outcome of the referendum. They recognise that two elements that influenced some, though not all, of the out voters were, first, migration levels from the EU to the UK—although this amounts to only 2.6% of the population in Wales—and, secondly, the wish to avoid what some saw as unnecessary regulation. Those two elements may militate against our continuing full membership of the single market—although we note that, as has been mentioned, this is a price that Norway finds worth paying. Indeed, as has also been mentioned, some of the campaigners to leave the EU argued during the campaign that we would be able to seek a Norway-type relationship The Assembly White Paper states explicitly that the Welsh economy, "will continue to need migration from EU countries to help sustain our private sector economy and public services" This is true of the tourist sector, of food processing, of the university sector and of much more. It is in the interests both of Wales and of the EU to reach an agreement that allows barrier-free access to the single market in return for an agreement to allow EU migrants to come to Wales to work. I emphasise the words "to work". That is the key element in the approach of the Assembly White Paper, which explicitly states that, "freedom of movement of people is linked to employment" That is the requirement and it should be acceptable both to EU countries and to ourselves What we ask in the amendments is that the Government commit to such an approach in their negotiations with our 27 EU partners. Equally, with regulations that may be needed to avoid market distortion, it should be possible to agree, and for the UK to legislate, for such regulations as may be needed to maintain a level playing field. In fact, the European Union Committee recognises this in its report Brexit: The Options for Trade, which, in paragraph 43 of the summary, on page 76, says: "The notion that a country can have complete regulatory sovereignty while engaging in comprehensive free trade with partners is based on a misunderstanding of the nature of free trade. Modern FTAs involve extensive regulatory harmonisation in order to eliminate non-tariff barriers, and surveillance and dispute resolution arrangements to monitor and enforce implementation. The liberalisation of trade thus requires states to agree to limit the exercise of their sovereignty" In the context of these amendments, that is a very pertinent paragraph What is being sought by the cross-party approach in Wales is neither unreasonable nor impractical. Indeed, the wording of the Government’s White Paper leaves a small chink of light that suggests that they may in their heart be amenable to such an approach. Indeed, in paragraph 8.3 of the White Paper they say that a new negotiated agreement, "may take in elements of current Single Market arrangements in certain areas as it makes no sense to start again from scratch when the UK and the remaining Member States have adhered to the same rules for so many years" Precisely. So why will the Government not accept one or other of the amendments as a token of their sincerity in that approach, or at least table their own amendment along these lines on Report? Industry, business and agriculture would then sleep much more easily—and so would the Government of Wales.