Left Case for staying in the Single Market

The Beluga aircraft is a familiar sight above the skies of Wrexham. It shifts parts, daily, from the huge Broughton Airbus site in Flintshire, where the company employs 6,000 people, to Toulouse as part of the integrated production process which has led the business to become the world’s premier aerospace player.

Airbus is a European business – constructed and managed following the European social model. Trades unions have a close relationship with management and deal with difficult circumstances together. Hundreds of my constituents from Wrexham work for Airbus and thousands in north east Wales and north west England work in its long supply chain.

There is real danger that Brexit will threaten the long-term future of Airbus in the UK. If Airbus does not have unfettered access to the EU single market from the UK, then the long-term appeal of other EU countries as a base for manufacture will increase.

After decades of investment and growth, and with a great tradition of innovation, the UK is Europe’s premier aerospace nation. Governments of all colours have supported the business since the 1970s through schemes such as Repayable Launch Aid and recent support in the composites sphere.

Yet, despite the success of Airbus and its importance to the local economy, 59% of Wrexham voters supported leaving the EU. Why?

Until 2004, Wrexham had never experienced substantial immigration from outside the UK. However, since that date, when the EU expanded to take in new members from central and eastern Europe, , Wrexham has had many new workers come to the town. This has had a big impact locally. Rented housing has replaced owner occupation in parts of the town, creating a new dynamic between established residents and newcomers. Wrexham schools have had to teach children with English as a second language for the first time and have managed very well – but they have received few additional resources.

Those of us who campaigned to remain in the EU must accept that the Labour Government did not manage the impact of the 2004 decision well. The numbers were underestimated, no transitional controls were put in place, and the migration of labour was not matched by migration of resources to manage the social impact in the areas affected.

The result was that voters in towns like Wrexham gave a clear signal in the Referendum that immigration from the EU needed to be managed.

The Tory government has overdone its response. It has made control of EU immigration so important that it has ruled out continued membership of the EU single market because that would mean continued respect for freedom of movement.  This represents a huge threat to the success of the UK as an exporting economy. The task is more complex. It is both to find a way of managing immigrant flows and retain access to the single market.  Britain needs to use the two year transition that Mrs May proposes to lay the foundations for a more permanent settlement that balances these twin needs.

For a businesses like Airbus, unfettered access to the single market is essential. Ralf Speth, the CEO of Jaguar Land Rover (JLR), another of the UK’s most successful manufacturing businesses, has said, “it would be a disaster if there was no transition arrangement in place” and a that hard Brexit, relying on WTO rules, would cost his business £1 billion and ‘a lot of jobs’ more widely.

Businesses like Airbus and JLR provide highly paid, highly skilled jobs across the UK. They work with government and trades unions through, respectively, the Aerospace Growth Partnership and the Automotive Council. In areas like north Wales, the north west of England and the west Midlands, these businesses are the foundation of the local economy.

It is extraordinary that the Tories, who supposedly stand for free trade, have announced unilaterally, withdrawal from the world’s largest free trade zone. Since its creation in the 1980s, the single market has attracted inward investment from businesses like Nissan and Toyota - now essential elements of the UK exporting economy.

We need to keep these jobs in the UK. It was a terrible mistake to say that we would leave the single market. The UK voted to leave the EU, but now we must secure a Brexit deal that does not threaten the future of the UK’s most successful exporting businesses. This was the policy Labour put forward at the 2017 general election and is the basis of its current position to remain in the single market in a period of transition and, if it can be negotiated, beyond. But this has to be done whilst allowing the UK to control its borders.

Labour must set out the importance of the single market to the UK as an exporting nation and propose a new immigration system that respects the outcome of the Referendum while not compromising our ability as a nation to generate prosperity.

We know that countries like Norway have access to the single market from outside the EU. We also know that the position of the UK is unique – no other country has ever withdrawn from the EU in this way. We now need to create a new relationship with the EU, maintaining a mutually beneficial trading relationship and also the environmental and labour standards which have allowed the single market to operate for the benefit of ordinary EU citizens. We will not join in the Tories’ race-to-the-bottom on environmental standards and workers’ rights. Freedom of movement of labour between the EU and a post-Brexit UK can be managed in a way that allows the UK to cut immigration but facilitates close contact between EU and UK businesses. The proposed  transition period, allowing time for detailed negotiations in a less febrile atmosphere, will give space for imagination, co-operation and reflection for both the EU and the UK and for the creation of a new relationship which can be close and mutually beneficial.  The Brexit right see the transition as a stepping stone to “global” Britain and a myriad of trade deals with the Anglo-American economies and BRICs. It is a fantasy. The deals will not deal with the non-tariff barriers to trade so crucial now and in the future. Wrexham will lose Airbus – but gain nothing. Instead the transition must be used to create a framework in which Airbus and companies like it continue to stay and export from Britain.

To date, the approach of the Tory Government has been inept. It has closed-off avenues in negotiation before negotiations started, alienated its negotiating partner and created an atmosphere of confrontation. It does not have to be this way. A re-set of negotiations, under a Labour government, establishing a different dynamic, can help create a new relationship between the EU and the UK for the long-term. This re-set is essential if we are to preserve the UK jobs underpinned by EU markets.