This briefing was written for use during the upcoming two-day General Debate in the House of Commons on European Affairs. The debate will take place on Wednesday 14th and Thursday 15th March 2018. The debate will not include any binding votes, but will be a chance for MPs to debate many of the important issues around Brexit, as well as the UK’s relationship with the EU in general. The first day of debate is 4th on the order list on Wednesday, and the second is 3rd on the order list on Thursday.
In this paper for the APPG on EU Relations, Open Britain have highlighted five suggested arguments for pro-European MPs to focus on. These arguments are outlined below. On the subsequent pages, Open Britain have provided statistics, quotes and evidence in support of each argument. Finally, there is an op-ed by Anna Soubry and Chuka Umunna, co-chairs of the APPG, outlining some of the core arguments.
- This is the first time a UK government has knowingly embarked on a policy that it knows will make our country poorer.
- The EU have put options on the table that could limit the damage of Brexit but the Government has repeatedly ruled them out.
- New trade deals will not come close to compensating for the enormous costs of Brexit.
- We were promised more money for the NHS but Brexit is looking more like a threat to the NHS.
- The Government has failed to provide any serious or credible solutions to avoid a hard border in Northern Ireland.
1. This is the first time a UK government has knowingly embarked on a policy that it knows will make our country poorer.
Brexit is already damaging the economy
- Before the referendum Britain led the top G7 economies in economic growth; now we are bottom.
- The latest OECD economic forecast shows the UK projected to be the worst performing of the world’s leading advanced and emerging economies in both 2018 and 2019.
- The Government is presiding over what promises to be the worst five years for our economy since the war.
- Growth: In its latest Economic and Fiscal Outlook, the OBR made clear that Brexit is impacting on growth: “the vote to leave the European Union appears to have slowed the economy”.
- Economic growth has been revised down from pre-referendum forecasts. The OBR predicts growth decreasing to 1.7% in 2017, 1.5% in 2018, and 1.3% in 2019 and 2020, respectively. This contrasts with pre-2016 referendum forecasts of 2.2% for 2017 and 2.1% for all three years in the 2018-2020 period.
- Additionally, in comparison to the 2017 Autumn statement, the long-term forecasts for 2021 and 2022 have each been revised down from 1.5% and 1.6% to 1.4% and 1.5%, respectively.
- Investment: Investment is also down, in comparison with previous forecasts, with the OBR noting that “by the end of 2017, business investment was almost 6% lower than our March 2016 forecast and the Bank of England has estimated that Brexit uncertainty has directly lowered business investment by 3-4%.”
- Moreover, the OBR expect investment growth to “remain subdued in the face of Brexit-related uncertainty.”
- Inflation: Inflation remains at 3%. Wages aren’t going up but prices are so families are worse off. The cost of food and other goods is soaring as a result of the fall in the value of the pound, which remains around 15% below pre-referendum levels.
If we leave, our economy will be severely hit
- All the Government’s Brexit scenarios in its secret analysis have one thing in common: we will all be worse off if Brexit takes place.
- It finds that, under a comprehensive free trade agreement with the EU, UK growth would be 5% lower over the next 15 years compared to current forecasts. The softest Brexit option of continued Single-Market membership would lower growth by 2%.
- The Government’s own secret impact analysis shows that leaving the Single Market means the UK will need to find an additional £55bn in borrowing by 2033.
- The Brextremists promised us an additional £350 million for the NHS paid for out of our contributions to the EU yet in his Spring Statement the Chancellor revealed that if Brexit goes ahead we’ll be paying money to the EU until 2064 and there won’t be an extra penny for our heath service.
- Leaving the Customs Union could cost the UK an estimated £25 billion every year until 2030, according to the Brexit Secretary’s Special Adviser, Raoul Ruparel.
- Annual household shopping bills would increase by £930 in their if Britain walks away from Brexit talks without a trade deal, according to research published in the National Institute Economic Review.
- A Canada-style FTA would be deeply damaging to the UK economy, as the Prime Minister knows. She said in Florence that it would create “such a restriction on our mutual market” that it would damage our economy, and the Chancellor said during the referendum that the Canadian trade deal “does not even remotely replicate the access we have as an EU member.”
2. The EU have put options on the table that could limit the damage of Brexit but the Government has repeatedly ruled them out.
The Government’s position
- In her 2016 Conservative Party Conference speech the Prime Minister recklessly ruled out membership of the Single Market and Customs Union.
- But she doesn’t have a mandate for this hard and destructive Brexit – she put this proposition to the public at the 2017 General Election and it was wholly rejected.
- Since the referendum, the Government have made a number of promises about our future trading relationship with the EU:
1. The exact same benefits as today
“What we have come up with—I hope to persuade her that this is a very worthwhile aim—is the idea of a comprehensive free trade agreement and a comprehensive customs agreement that will deliver the exact same benefits as we have.”
David Davis, Hansard Vol 620, 24 Jan 2017
"It will be a different relationship, but I think it can have the same benefits in terms of that free access to trade."
Theresa May, BBC interview, 29 March 2017
2. No hard border on the island of Ireland or across the UK
"We have both stated explicitly that we will not accept any physical infrastructure at the border."
Theresa May, Florence Speech, 22 September 2017
"The United Kingdom also recalls its commitment to the avoidance of a hard border, including any physical infrastructure or related checks and controls."
UK-EU Joint Report on Phase 1, 8 December 2017
3. Fully negotiated by March 2019
"I believe that we can get a free trade and customs agreement negotiation concluded in the period."
David Davis, Evidence to Lords EU Committee, 18 January 2017
4. No payment for access to the EU market
“We would not expect to pay for access to their markets any more than they would expect to pay for access to ours.”
Boris Johnson, The Telegraph, 17 September 2017
“We will not be paying for market access.”
No 10 spokesman, 11 January 2018
5. A complete end to EU rules and regulations
"So we will take back control of our laws and bring an end to the jurisdiction of the European Court of Justice in Britain."
Theresa May, Lancaster House speech, 17 January 2017
"I mean firstly in 2019 we will leave. We’ll come out from under the – the jurisdiction and the law-making of the European Union."
David Davis, BBC Andrew Marr Show, 24 September 2017
6. Continuation of all EU trade deals and new deals ready to come into force
“When we leave the European Union, it is the intention of the Department for International Trade to carry over the existing trade deals that we enjoy through our membership of the European Union.” Mark Garnier, House of Commons, 23 March 2017
"I hear people saying 'oh we won't have any [free trade agreements] before we leave'. Well believe me we'll have up to 40 ready for one second after midnight in March 2019."
Liam Fox, Conservative Party conference fringe event, 2 October 2017
The EU’s position
- The EU’s position has been clear from the beginning. They would like us to remain in the Single Market and/or the Customs Union to retain frictionless trade and avoid a hard border in Ireland.
- The EU Council’s draft guidelines, published last week, are the direct consequence of the Government’s unnecessary and reckless decision to take membership of the Single Market and the Customs Union off the table.
- The ‘cherry-picking’ approach being pursued by the Government is, and always was, a fantasy.
- The EU’s position implies that a Canada-style free trade agreement is the only option left thanks to the Government’s red lines.
- Participation in key EU agencies, which the Prime Minister is now seeking, will require an adherence to the rulings of the ECJ.
- Michel Barnier has been clear that the UK could stay in the Single Market if it chose to:
“If the UK wanted to go further than the type of free trade agreement we have just signed with Canada, there are other models on the table. Norway and Iceland have chosen to be in the Single Market, to accept the rules, and to contribute financially to cohesion policy. But one thing is sure: it is not – and will not – be possible for a third country to have the same benefits as the Norwegian model but the limited obligations of the Canadian model.”
Michel Barnier, 27 September 2017
- He has also said that a country cannot have “partial” access to the Single Market.
“This Single Market, which is our main economic asset, is a set of laws, rules, standards chosen in common - and the United Kingdom knows them well since, for 44 years, we have been deciding them together - and we respect them together, with common institutions and jurisdiction.”
Michel Barnier, November 2017
Brexit is reversible is the public change their mind
- Lord Kerr, the civil servant who drafted Article 50, has been clear that: "It is not irrevocable. You can change your mind while the process is going on."
- Theresa May is reported to have received legal advice to the same effect.
- Numerous European leaders have said that Article 50 is revocable if the UK decides to change its mind. For example:
- Leo Varadkar, Irish Taoiseach: “The door remains open for the UK to stay in the European Union.”
- Emmanuel Macron, President of France: “Until negotiations come to an end there is always a chance to reopen the door.”
- Donald Tusk, President of the European Council: “Of course the door remains open, always open until the Brexit negotiations come to an end.”
- Antonio Tajani, President of the European Parliament: “If the UK, after the election, wants to withdraw [Article 50], then the procedure is very clear. If the UK wanted to stay, everybody would be in favour. I would be very happy.”
- The OECD said in October 2017: “In case Brexit gets reversed by political decision (change of majority, new referendum, etc.), the positive impact on growth would be significant.”
Our trade with Europe
- The EU is, by some distance, the UK’s largest trading partner. In 2016, it was the destination for some 43% of UK exports in goods and services.
- This largely due to the frictionless-nature of trade within the Single Market and the Customs Union. It is also a matter of simple geography – Europe is on our doorstep.
- In addition, the EU has 37 trade deals with more than 65 countries around the world covering a further 15-17% of UK trade in goods, according to the University of Sussex UK Trade Policy Observatory.
- The EU has trade deals in place with more countries than the US (20), China (23) and Australia (19) combined.
Benefits of new trade deals
- Many of the countries often talked up as targets for future free trade agreements are on the other side of the world, eg, Australia accounts for just 1.7% of UK exports, India 1.7%, Indonesia 0.2% and New Zealand 0.2%.
- The Government’s own secret analysis shows that they believe new free trade deals will add just 0.2% and 0.7% to UK GDP, compared to a 5% hit from leaving the Single Market.
- The long-term benefits of a free trade deal with the US are said to be between 0.1% - 0.3%. This is despite the repeated claims by ministers that a free trade deal with the US is the great prize of Brexit.
- According to analysis by NIESR, the estimated increases in trade from free trade agreements with Australia, Brazil, Canada, China, India, Indonesia, New Zealand and the US would be less than 5%. By contrast, leaving the Single Market will be associated with a long-term reduction in total UK trade of between 22% and 30%.
- In its latest Economic and Fiscal Outlook, the OBR predicted that export growth will slow this year and flatten off altogether by 2022 “as growth in UK exports eases and Brexit weighs on the UK export market share.” They also anticipate that imports will slow due to Brexit.
- Sir Martin Donnelly, former Permanent Secretary at the Department for International Trade, has described leaving the Single Market and Customs Union to seek new trade deals as “like giving up a three course meal for the promise of a packet of crisps in the future.”
Impediments to signing new trade deals
- Trade deals take many years to negotiate – an analysis by the Peterson Institute for Economics found that it takes the US on average more than 3.5 years from beginning trade talks with a country to implementing the agreement.
- Big countries with large markets have the whip-hand in negotiations. For example, the Switzerland-China trade deal signed in 2013 gives China immediate access to Swiss markets but Switzerland has to wait 15 years for access to Chinese markets.
- In talks with the US, negotiators will demand that the UK lowers its environmental and food standards and accepts products like hormone-treated beef, GM crops and chlorinated chicken.
- US Commerce Secretary Wilbur Ross said in London last year that any deal with Brussels to maintain European standards and regulations might “hinder development of a closer post-Brexit US-UK relationship”.
- US healthcare companies will again lobby for the right to bid for NHS contracts.
- During the TTIP negotiations, legal advice showed the NHS was not protected, and the Prime Minister has declined to rule out putting it on the table.
What Ministers have said in the past
- Vote Leave said on 15 June 2016: “After we Vote Leave, we would immediately be able to start negotiating new trade deals with emerging economies and the world’s biggest economies (the US, China and Japan, as well as Canada, Australia, South Korea, New Zealand, and so on), which could enter into force immediately after the UK leaves the EU.”
- In July 2016, the Brexit Secretary said that these talks would begin on September 9 2016, and that: “I would expect that the negotiation phase of most of them to be concluded within between 12 and 24 months. So, within two years, before the negotiation with the EU is likely to be complete, and therefore before anything material has changed, we can negotiate a free trade area massively larger than the EU.”
- Since the Brexit vote, the % of EU health workers joining the NHS is going down, the % of EU health workers leaving the NHS is going up.
- In June 2017, news broke across the UK that new EU nurse applications had dropped by 96%.
- In February 2017, the GMC surveyed over 2,000 EEA doctors practising in the UK: 1,280 out of 2,106 doctors (60%) said they were considering leaving the UK at some point in the future. Of those 1,280 doctors, 91% said the UK’s decision to leave the EU was a factor.
- In November 2017, a BMA survey of 1,720 EEA doctors working in the UK, found that almost a fifth of those EEA doctors have made plans to leave UK following the Brexit vote.
- In Jan 2018, figures obtained through the Freedom of Information Act by WalesOnline showed that for every EU nurse who joined the NHS in Wales, two left.
- EU Nurses are leaving. The Nursing and Midwifery Council (NMC) has seen a 67% jump in the number of EU nurses leaving. That spike is not seen in UK or non-EU nurse numbers. It’s because of Brexit. It’s not the English Language Test (IELTS) because nurses already here don’t have to do the test.
- The Royal College of Nursing (RCN) has said “the challenge facing international recruitment in the UK stems in part from a weakening of the overall EEA supply, which is being driven by complex factors including Brexit, worsening conditions for the UK nursing workforce as well as improved economic prospects in the EEA. While IELTS may not be helping this situation, it is unlikely to be the root cause.”
- At the current rate of change, the The Royal College of Midwives fears that there will be no EU midwives left in the NHS within a decade.
- In the 12 months from Oct 2016 to Sept 2017: 51 EU-trained midwives joined, and 237 left, leaving a net loss of 186. (That left 1,773 EU midwives on the register at the end of that period. 1,773 divided by 186 is 9.5, hence the 10-year reference).
- Rather than £350 million extra a week for the NHS promised by the Vote Leave campaign, the Government’s own secret Brexit impact analysis shows that, even if the UK secures a free-trade deal with the EU, the Government will need to borrow an extra £55 billion over the next 15 years, wiping out any ‘Brexit dividend’.
- There are concerns that the Government’s decision to withdraw from Euratom, the European Atomic Energy Community that deals with nuclear-related programmes within the EU, will negatively impact the time-sensitive transfer of radioactive isotopes to the UK that are used in cancer treatments.
5. The Government has failed to provide any serious or credible solutions to avoid a hard border in Northern Ireland.
- Vote Leave promised no change to the Northern Ireland border as a result of Brexit.
- Theresa Villiers said on 18 April 2016 "There is no reason why we have to change the border arrangements in the event of a Brexit.”
- Boris Johnson said on 29 February 2016 that "I think the situation [in Northern Ireland] would be absolutely unchanged."
- The Government’s self-imposed red lines on leaving the Single Market and the Customs Union mean that a return to a hard border is now inevitable.
- The issue is so complex because maintaining an open border is so important in the context of the Good Friday Agreement. The border is also hundreds of miles long and in some places people’s houses or land cut across the divide. Some 34,000 nurses, farmers and business people commute across it each day.
- The Government’s most substantial contribution to avoiding a hard border in Northern Ireland so far was in their position paper on Northern Ireland published in August 2017. This proposed two possible solutions taken from a previous Government paper on future customs arrangements:
- A ‘highly streamlined customs arrangement’, relying primarily on vague technological solutions.
- A new ‘customs partnership’, which the Government itself acknowledges is ‘untested’ and which the Brexit Secretary described as ‘blue-sky’ thinking, shortly after the position paper was published.
- Neither of these solutions would prevent a return to a hard border. Except for countries in a customs union, there are no examples of any borders between countries anywhere in the world that rely entirely on technology with no physical infrastructure or checks at the border.
- The Government has taken to using the US-Canada border as a possible model for the Northern Ireland border, but this is quite obviously a hard border, with checks, armed guards, physical infrastructure, spot-checks and bureaucracy. The Irish Government have already rejected such an outcome.
- The Government seems to be shifting in its commitment to maintaining an open border on the island of Ireland: they will now only commit to keeping the border “as frictionless as possible.”
- Brexiters often refer to a report by the European Parliament called ‘Smart Border 2.0’, which sets out a possible model for a technological border on the island of Ireland. But the report itself acknowledges this would require physical infrastructure such as vehicle registration cameras and smart-gates at the border.
- Just two days before the referendum, Theresa May herself admitted that leaving the EU would necessitate some kind of hard border on the island of Ireland. “If we are out of the European Union with tariffs on exporting goods into the EU, there’d have to be something to recognise that, between Northern Ireland and the Republic of Ireland. And if you pulled out of the EU and came out of free movement, then how could you have a situation where there was an open border with a country that was in the EU and has access to free movement.”
- It is shocking that the Brexit Secretary David Davis and the Foreign Secretary Boris Johnson have not visited the Northern Ireland border to see the issues for themselves.
- For Boris Johnson, this is especially shocking as he reportedly wrote a secret letter to the Prime Minister which struck a decidedly relaxed tone about the possibility of a hard border re-emerging.
- He previously compared the border between Northern Ireland and the Republic of Ireland to the boundaries between different London boroughs, a comparison quite staggering in its level of ignorance.
The Brexit generation will never forgive our parties if we fail
Anna Soubry and Chuka Umunna, Evening Standard, 13 March 2018
We reside in different political parties and rarely inhabit the same voting lobby in the House of Commons but on Brexit we are as one.
An issue that continues to divide our country also forges new alliances and a determination to put the interests of the country over and beyond traditional tribal politics and party loyalty.
It is frustrating to be urged on in private by ministers and those who should know better in the dark corners of Westminster’s long corridors, muttering “well done — keep on going”, without this being matched by public action.
We assure you we will, but the time has now come for them to say in public what they whisper to us in private.
Given a free vote, we believe our colleagues would support Britain staying in both the single market and customs union — not just because that is what they believe in but because their constituents are desperate for an outcome that secures the economic future of their children and grandchildren.
We also believe that if we don’t get this right there will be profound adverse consequences not just for our economy and place in the world but also on the way we do politics in Britain.
Too many government ministers bury their Brexit fears under piles of ministerial papers, shy away from debate in interministerial groups and get whisked away from difficult discussions in cosy cars. Too often their excuses for ducking the difficult decisions are parroted by the Opposition frontbench.
For the first time ever, a Government is set upon a course which, on its own admission, will make us less prosperous. We were promised the “exact same benefits” by David Davis, but now in a welcome blast of Brexit reality Mrs May admits we will have reduced access to the single market and there will be no passporting for London’s financial services. And that, of course, is her opening pitch.
The EU’s response has brought no surprises. They have always been clear. We will end up with only a free trade agreement unless we have the good sense to take the single market and customs union options the EU put on the table at the outset.
Last week, the select committee of MPs which oversees the Department for Exiting the European Union published part of the Government’s own analysis of the various Brexit deal options.
The Government’s preferred and overly ambitious option was not modelled — perhaps because ministers know that in reality it is not achievable.
The analysis shows growth would be reduced by some four per cent if we secure an free trade agreement, by two per cent if we remain within the customs union and single market and the “no deal” scenario pressed for by some senior ministers, would cut growth by some eight per cent.
Our constituencies voted differently in the Brexit referendum. One of us is the Conservative MP for Broxtowe, in Nottinghamshire, a key marginal seat in which the incumbent MP is almost always a member of the party in power.
We calculate the leave vote in Broxtowe was about 52 per cent, which pretty much matched the national result. The other is the Labour MP for Streatham, which is estimated to have scored a 75.9% remain vote, the highest in the country. But as Brexit unfolds and we have the debate we should have had long before June 23, 2016, many Leave voters are becoming increasingly concerned.
Leaving the EU is more complicated than any of us was ever told, it will make us less prosperous and they can see how damaging a hard border between Ireland and Northern Ireland would be.
Many of our older constituents remember with respect, the original “Common Market”. It never fell out of favour, but the perceived power grab by huge bastions of bureaucracy annoyed them.
It wasn’t long before the economic benefits were forgotten as Eurosceptic sections of the media stoked up antagonism towards the EU.
The name change from European Economic Community to European Union rather confirmed the shift. In short, many Leave voters are not so much regretting their vote as wanting to be sure we now do the right thing — they are worried we won’t and so they are right to want, along with the rest of us, a vote on the final deal.
There was, of course, a democratic deficit in the EU and it extends to our country. The disconnect between huge tracts of our country and the politicians and parties that claim to represent them was a significant factor in the Leave vote.
This deficit will grow, on whatever basis we leave the EU. Not just because the vote to “take back control” will not, in reality, give them more control over their lives, but because Brexit exposes the failings of our two main parties.
It’s an uncomfortable truth that many millions of voters feel neither represent them. On Brexit, the Labour leadership has shifted to support “a” customs union whereas the Conservative Party manifesto at last year’s election pledged a customs arrangement. You may conclude there is little real difference.
History will not be kind to those who led us into the referendum on the EU — and that includes us given we voted for the legislation as MPs.
It will chide those who have led us since the vote for Brexit for their failure to build a consensus on how best to make it happen.
And it will condemn those who stand by and say nothing. But the biggest condemnation will come from voters and especially the generation that will bear the cost of Brexit more than any other — the young. They will declare a plague on both of our parties.
Anna Soubry is the Conservative MP for Broxstowe and former Minister of State for Business. Chuka Umunna is the Labour MP and former shadow business secretary. They are the co-chairs of the All Party Parliamentary Group on EU Relations.
 Ibid p 10
 Ibid, p 74
 Ibid p 74