Raising concerns on customs union in ports debate

I made the following contribution to a debate tabled by Simon Clarke MP on free ports. I used my contribution to alert the House to my concerns at the potential for the UK to be locked indefinitely into the EU's customs union, and to highlight my campaign to have Havering selected as Heathrow's top choice of location for a logistics hub from which to construct components relating to the third runway.

Julia Lopez (Hornchurch and Upminster) (Con)

It is a pleasure to serve under your chairmanship, Mr Hanson. I appreciate the fact that my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) has injected some much needed energy into post-Brexit planning.

Brexit should be a moment of creative opportunity, when we begin to tailor our nation better to fit our citizens’ needs and ambitions. Leaving the EU was never going to be easy—I am not naive—but we in this House have spent two years engaged in a series of infertile, factional war dances, unable to unify around a vision that would allow us to plan properly for the future. Let us have more debates like this in which we set out fresh ideas that can deliver results for the people we represent.

Freeports, as other hon. Members have said, are special trading zones that are considered to be outside a country for customs purposes. Goods can enter and exit a freeport without incurring tariffs and the need for import procedures. That makes way for the import of semi-finished products, such as car parts, from other countries into the UK on special terms. Such parts can be modified or stored, to be re-exported as UK products. By themselves, initiatives such as freeports will not spark a manufacturing renaissance, but when integrated with local enterprise zones, they can help to create the conditions for manufacturing to thrive—particularly in northern towns, which for too long have lived in the shadow of our industrial heritage. The idea deserves consideration as part of a dynamic new trade strategy.

However, let us be truthful: we cannot have a meaningful, independent trade strategy if we remain in a de facto customs union with the EU. The notion that we can sign trade agreements worth having while contained within an indefinite backstop arrangement is, I fear, misguided. Time and again in the International Trade Committee, of which I am a member, and in meetings, international partners have expressed a genuine eagerness to engage in new trading arrangements and initiatives with the UK. They are excited about the re-entry of a major G7 player as an independent trading nation that can push an agenda on global standards and free trade. However, they advise us that it is impossible to start much of that work without a clear sense of the UK’s future trading arrangements with the EU.

Meanwhile, businesses tell us clearly that they simply want clarity, and then they will deal with whatever new arrangements come to pass. The outcome of our withdrawal negotiations must not leave us in a state of perpetual uncertainty. That would be hugely damaging to our nation’s economic interests, and I dare not contemplate ​how the public would feel if we advised that we had delivered on the referendum result while subcontracting regulatory policy making to our EU competitors. Contempt for the political class would surely deepen, with consequences for our democracy.

The EU has been criticised for vigorously protecting its own interests in this negotiation. Of course, it does not want a more dynamic competitor on its doorstep—I understand that—but we should be equally vigorous in defending our own interests. Freeports, free trade agreements, regulation and trade facilitation measures should all be part of a modern global trade strategy, but infrastructure investment and the manner in which we connect it coherently is also critical.

It may not be fashionable to champion investment in London in a Chamber full of non-London MPs, but the capital should be understood not as one rich haven but as a collection of very different regions, not all of which are thriving and not all of which have seen sustained investment over the years. Before containerisation and offshoring, London’s docks and manufacturers provided east Londoners with a range of opportunities for blue-collar work. By the ’60s, however, the docks began to close, leaving in their wake high levels of unemployment and the depopulation of docking boroughs. The redevelopment of the Isle of Dogs into London’s second financial hub, Canary Wharf, has been a staggering success, but many communities to Canary Wharf’s east still see the glittering office blocks as something very distant from their lives.

Today in Barking and Dagenham, one third of people are paid less than the London living wage. Meanwhile, parts of my own borough of Havering have a very low skills base. More than half of the adults in the borough do not have A-level-equivalent qualifications. Ford in Dagenham, which was once London’s biggest employer, stopped car production in 2002, and a workforce that was 40,000 at its height has diminished to 1,830.

Exciting things are happening in east London and the Thames Gateway, including the newish London Gateway port, Chinese investment in the Royal Albert dock, planned film studios in Dagenham and the arrival of the Barking continental freight railway. All these developments require a catalyst to bring them together and help the region and its people fulfil their huge potential. Perversely, although it is west London’s airport, that catalyst could be Heathrow, which is the UK’s biggest port by value, handling over £106 billion-worth of goods each year. Now that its expansion has been given the green light in Parliament, the airport’s executives want to build large chunks of the new expanded airport offsite at so-called logistics hubs, and then transport those components of the third runway to the site as and when they are required. With infrastructure projects like HS2 and Sizewell contemplating sharing those hubs, the bid that makes the final cut can expect an influx of cutting-edge engineering, research and manufacturing jobs to the area.

Havering has put together an exciting plan for a logistics hub at an 86-acre brownfield site next to the Ford Dagenham plant, which is a stone’s throw from Canary Wharf. As one of the borough’s three MPs, I am extremely excited by the opportunity that the plan presents for reigniting manufacturing in the capital. Superbly connected by river, rail, road and air, the site is next to an industrial estate with 70 logistics companies already there. It is near the ports of Tilbury and London ​Gateway, as well as the Barking terminus of the intercontinental railway, which, as I have said before, is part of China’s belt and road initiative. A housing zone is planned nearby and the adjacent Centre for Engineering and Manufacturing Excellence, as well as Havering College’s expanding construction campus, could train up local jobseekers.

The Havering-Heathrow hub could therefore have a profound impact in tackling deprivation, crime and unemployment in an area that has struggled to replace the kinds of blue-collar jobs that were formerly provided by the docks and the motor industry. Once the runway is built, the logistics hub could become a cargo processing centre.

We need to do imaginative things which will rapidly and effectively signal what kind of nation we seek to be as we leave the European Union. For instance, could a Havering hub be turned into an east London check-in point for Heathrow itself, taking thousands of car journeys away from the M25 and removing luggage from tube trains as passengers catch organised shuttles or dedicated rail services to the main terminals? A rail line already connects Ford’s Dagenham plant to Stratford, and the Abbey Wood branch of Crossrail could be extended by one stop to provide a direct route to the airport. The Thames could reclaim its glory days of transporting cargo—taking countless lorries off the roads—and acting as a link between air and sea freight terminals. All this would help reduce pressure on the communities around Heathrow airport. We could even explore the creation of a free trade zone from the cargo processing hub at Beam Reach—the logistics hub site—to the ports at Tilbury and Thurrock, which would finally unlock the regeneration aspirations of the Thames Gateway and supercharge the eastern region as a global trading portal that links London and the UK to the rest of the world.

The capital may have been thriving for those working in the service industries, but that has not been the case for many in blue-collar professions. As we leave the European Union, why not use the opportunity of the expansion of our biggest port, Heathrow, to restore east London’s illustrious heritage as a cutting-edge manufacturing centre?

No one aspect of our trading policy can be a panacea in diversifying our economy and making it deliver for people who feel left behind. Realigning our country to global ambitions will take time and cannot be done through free trade agreements alone—it is about infrastructure investment, trade facilitation measures, tax policy, regulation, freeports and other ideas coming together in one coherent strategy. But to maximise that strategy, we need control of our own regulatory and customs tax policy. Please, let us not pretend otherwise.