7. 7. UKIP Wales Debate: Brexit and the Economy

Part of the debate – in the Senedd at 5:46 pm on 14 September 2016.

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Photo of Carwyn Jones Carwyn Jones Labour 5:46, 14 September 2016

Diolch, Lywydd. I'll try to add something different to a debate that's been running since yesterday afternoon and run again in an earlier debate in the Assembly. I listened carefully to what Neil Hamilton had to say. The first point that has to be emphasised is that nobody is arguing that tariffs should be imposed, but he places faith in German car manufacturers. I have to say to him that the negotiations are not with BMW; the negotiations are with the EU Commission, with 27 member states and the European Parliament. We have to convince them all to have a free trade agreement and not just BMW, Volkswagen, Audi and Mercedes-Benz. And they will continue to sell to the UK market because the tariff won’t affect them. They are a prestige marque; people will pay an extra £3,000 or £4,000 for a BMW because they can afford to do so. It doesn't affect them as much as it does Ford.

Fifty per cent of the exports that the UK sends out every year go to the European Union—50 per cent. It is by far our biggest trading partner. Anything that interferes with our access to that market per se is bad for the UK. Now, when I was in the US last week, all they wanted to talk about was what was going to happen to the UK. They do not see the UK as big enough as a place to invest in of itself. The EU is 440 million people. India and China, Russia are much, much bigger than the UK. We've got to get away from this idea that, somehow, the world owes the UK a living and the UK is somehow very, very important. To be very, very important, you need to have lots of people or lots of oil, then you get listened to. It's important to have friends in the rest of Europe and around the world to make sure that you can trade with them. The European Union gave us that ability to do that, but the people of Wales have spoken.

And in terms of other things he mentioned, food and drink—we will never have food security. It is impossible for the UK not to import food. We do not have the climate to actually feed ourselves. The war would have taught people that, surely. And so, if tariffs are imposed on food, people will still have to buy the food, but they will be paying the tariffs on top of that. If you look at the fruit and veg that comes into the UK, much of it comes from the European Union. If there are tariffs attracted to that, there's no UK producer who can replace that; you can't replace the import of tomatoes all year round, because the UK can't do that. So, at the end of the day, it's not possible to say that this is all to do with food security, because food security is mythical as far as the UK is concerned and it always will be. It's where we are in the world and it's to do with our latitude and our climate.

Now, there was one issue that troubled me particularly, but I suspect this is something that we will see over the next few months from some of the harder Brexiteers, and that is how we deal with all these pesky regulations: herbicides, pesticides, employment rights—all these things that have got in the way of the UK being competitive. You’ve talked of the environment. The UK had an appalling record on the environment in the 1980s. We were major polluters; we were causing acid rain around Europe. Some of our rivers were inflammable if you threw matches into them, and the UK had to be dragged into a better environmental policy by the rest of Europe. Under no circumstances would we permit as a Government our environmental standards to slip. Our people deserve better than that.

He talks about the £10 billion that's going to come. No-one believes that anymore. No-one uses that figure anymore, this mythical £10 billion. I look forward to the £620 million that we would be entitled to coming straight to Wales, no questions asked. I don't believe that that will happen.

He mentioned the 1981 budget—the most disastrous budget ever produced by any Government ever in Europe since the end of the second world war, which created 22 per cent inflation, 3.2 million people unemployed. One of the reasons for people feeling annoyed enough to vote to leave the European Union is because of that budget, because people saw manufacturing being decimated in the UK, saw a Conservative Government that didn’t care about manufacturing—and we see the echoes of that in some economists who say that service industries are more important than anything else. I have to say that London is indeed a financial centre as far as world finances are concerned, but if financial services in London cannot operate in the European Union, it won’t be for very much longer. The Swiss will tell you that they don’t have access to financial services in the rest of the European Union, and that means, of course, that they’re not able to operate there.

Now, we have to recognise these problems in order to get to a better position. The world is not as simple as some speakers might like to make out. Caroline Jones said—perhaps I’m doing her a disservice—‘Let’s get out now-ish’. What happens in Northern Ireland? What happens with the Republic? The great unanswered question is what happens to that border. People on the doorstep said to me, ‘We want control over our borders’. That’s never going to happen, because the UK doesn’t control the border with the Republic of Ireland. You start putting border posts back there, or security, and you break the Good Friday agreement. There is only one consequence of that, and it is serious.

These things have to be handled carefully. Not even the DUP wants to see a hard border back in Ireland. If you do these things without thinking carefully about the consequences and there are very, very serious consequences for the people of Northern Ireland, the Republic and indeed the rest of the UK. So, these things have to be considered very, very carefully.

In terms of what Mark Isherwood said, much of what he said is in keeping with his seating position in the Chamber, I might suggest, in terms of what he was saying. But again, he has to understand—I mean, some of the things he said were, frankly, naive. What the Treasury have said—let’s make no bones about it—is that, if a project is signed off before the autumn statement, it will get funding. That’s true. After that, they give no guarantees at all. Nothing. It’s all case by case and ‘We’ll decide whether you get funding or not’. It means that money that would have come to Wales will now face a barrier in London rather than the money flowing directly to us. That’s what they’ve said. [Interruption.] Of course.