Dianne Hayter on why the government must build a national consensus around its Brexit plans
The House of Lords will today discuss the options open to the government as it negotiates the UK’s future relationship with the European Union. A debate led by my colleague Roger Liddle will explore the issues the Prime Minister has to consider – although photographed handwritten notes are the closest we’ve seen to a plan.
The cold fear around the City of London, the CBI, economists, industrialists, investors, trade unions and others is that the government is heading for a hard Brexit. One where the UK is removed from the Single Market, and detached from common regulations and minimum standards that help our businesses, their workers and our natural environment. Labour is clear that a hard Brexit would be hugely damaging for our economy, climate and wider politics. That’s why we’re working for a Brexit that prioritises jobs and living standards, with no watering down of existing protections.
The service sector is crucial to our economy. But even if a new free trade agreement with the EU is secured, this sector’s exports could drop by 60% if it is operating outside of the Single Market. Financial services are vital for the earnings they generate but also for the businesses, financial flows, insurance and re-insurance needs of umpteen sectors. As has become increasingly clear however, in my discussions with colleagues from across the EU, it will be very tough for the City of London to get a good deal.
EU passporting rights allow UK-regulated bodies to do business across the EU without being regulated separately in other member states. Continued access to this is linked to membership of the Single Market.
Britain is also a global hub for legal services – with businesses choosing to use our laws in their contracts. Withdrawal from the current regime would impact on US law firms operating in London, along with 36 of our top 50 firms with offices in other EU countries. EU Directives enable our lawyers to represent UK clients in those countries. And because our judgments are recognised and enforced abroad, and because parties in contract law can choose widely recognised English law, we have become the preferred seat for arbitration. So, the government must give our world-leading legal sector a fighting chance, by retaining access to the Single Market.
Many other sectors also rely on close cooperation with the EU. Our excellent pharmaceutical industry needs access to European markets to promote life sciences, ensure access to the best researchers, and allow collaboration with scientists in other countries. The government must prioritise participating in EU research frameworks and allowing UK firms to access much-needed funding and networks. Ministers must also listen to the Higher Education sector, which should be included in the negotiations framework to continue our close relationship with the remaining member states. Only then will it be able to attract and retain students and academics in the way it does now.
These issues are complex. Unwinding 40 years’ worth of trade, co-operation and interdependence was never going to be easy. But our peers will do what the government is failing to do: engage with the stakeholders, debate the complexities and work to ensure our departure from the EU does minimal damage to our economy and futures.
Along with the economy, jobs and living standards must be the UK’s priorities in the Brexit negotiations. The government needs to accept this, outline a clear plan that works for everyone and seek to build a national consensus.
Baroness Dianne Hayter is Shadow Minister for Brexit in the House of Lords. She tweets @HayteratLords
Published 1st December 2016