European Affairs — House of Commons, 2018-03-14
Topic: Foreign Trade
Philip Wilson (Labour, Centre-left): I want to raise two areas of European affairs this afternoon The first is the potential impact of Brexit on the north-east of England. Some 60% of north-east trade is with the EU and 50% of the cars manufactured in the north-east are exported to the EU. Nissan employs about 7,000 people and more than 30,000 jobs through the supply chain. I have never been one to say that, for example, after Brexit the Nissan plant will close, but I am concerned about future investment in the plant. As the Business, Energy and Industrial Strategy Committee said in its report on the impact of Brexit on the automotive sector: "It is difficult to see how it would make economic sense for multinational volume manufacturers—the bulk of the UK automotive sector—to base production in the UK in a no deal or WTO tariff scenario. The shift of manufacturing to countries within the customs union and single market will be inevitable." The cost to UK jobs could be in the hundreds of thousands and to inward investment in the hundreds of millions of pounds. That is another example of why many of us on the Labour Benches call on the UK to remain a member of the single market and the customs union. The same report made it explicit that the UK cannot expect an expansion of trade overseas to outweigh the loss of trade to Europe arising from a hard Brexit. It seems senseless to me to walk away from one half of the north-east’s trade without a strategic means of replacing it other than through wishful thinking The impact assessments the Government tried to keep to themselves reveal the potential impact on the north-east. They identify that three of the major sectors to be hit by Brexit will be the automotive, chemical and pharmaceutical sectors—all major industries in the north-east of England. The impact assessments determine that of all the regions and nations of the UK, the north-east of England will be the worst hit. This is due to the region’s strong manufacturing and industrial base, which would be exposed most to the changes and trade barriers, and because we have the greatest dependence on exports as a proportion of the regional economy The impact assessments say that the north-east would see a decline in its GDP by as much as 16% over 15 years. We can talk about a new customs arrangement, frictionless borders and non-divergence as much as we like, but all we will end up doing is reinventing the wheel only to discover it will not be as round as the original. It is no surprise that the north-east of England chamber of commerce issued a statement following the spring statement. Ross Smith, director of policy for the chamber, said: "the success or otherwise of negotiations and planning for Brexit could yet render these forecasts largely irrelevant and business still have little detail to base their planning on" The second issue, of great strategic importance not only to the UK but Europe, is our response to Russia’s flouting of basic international law and the international rules-based systems by which the community of nations should abide. I do not think we should doubt that Russia’s intent with the continent of Europe is to divide and rule. Putin wants a weak Europe. Brexit, I believe, plays straight into his hands. Russia wants to see Europe divided, introspective and prepared, ultimately, to play the international game by his and Russia’s rule Bully-boy tactics are always the result of the weak. The Russian state is weak, economically no larger than Italy. Its population is ageing. Its military strength may be perceived to be great, but it lacks depth.