The U.K. must maintain “free and unfettered access” to the European market to ensure it continues to be a gateway for Indian businesses to the EU, Wales First Minister said on Thursday.
Carwyn Jones, the head of the Welsh Government, was also critical of the U.K.’s immigration policy, warning that history has shown the detrimental impact that closing off a country from the rest of the world could have on its economy.
“It’s important that Wales and the U.K. are seen as an important gateway to the EU market for Indian businesses. The U.K. is just 60 million, the EU is 440 million and there are many many companies that use the U.K. as their base for accessing the single market. If that advantage is lost, then other countries will profit from it,” he told The Hindu in an interview.
Mr. Jones acknowledged that the majority of Welsh voters had voted to leave the EU in the Brexit referendum earlier this year, but said there had been a number of reasons for this. While his government will not vote against triggering Brexit, it is adamant that the Welsh legislature should have a say over the nature of Brexit, he added.
“There were so many different reasons for [the vote] — we had people who said they wanted to ‘kick’ the U.K. government and this was an opportunity for them to do so. For some, they were protesting against globalisation, though they might not have put it in those terms. But you must not think that people voted the way they did because they wanted a lightly regulated free market economy.”
Impact on steel sector
Mr. Jones added that while a “soft Brexit” that gave access to the single European market would not have a negative impact on the steel industry, the “hard” Brexit of the variety some U.K. ministers had spoken of would be damaging, with the industry facing tariffs of up to 16 per cent.
Much of Tata Steel’s U.K. operations are centred in Wales — it currently employs 6,800 in Wales, including 4,000 at its integrated site at Port Talbot. Sanjeev Gupta’s Liberty House also has operations in Wales. “At the moment, the exchange rate is such that it is helpful for exports, but it’s a short-term thing. The U.K. is too small a market to absorb any market loss as a result of the imposition of tariffs.”
Mr. Jones welcomed the news that Tata Steel has reached an agreement with unions over the future of the Port Talbot facility. “We are fortunate that it was owned by Tata and not some company that would have closed it down at the slightest sign of hardship. They have kept a very open line to us.”
Challenging times
However, the First Minister warned that the situation remained challenging for the industry and that it was important that the government did not use the excuse of the Port Talbot news to stop it from addressing structural issues such as high energy costs in the U.K., and the need for anti-dumping tariffs at the EU level.
While the U.K. government had been one of those that had opposed such action, Mr. Jones said was optimistic that the situation might change under Prime Minister Theresa May with the recognition of the need to “mitigate the full-blown effect of a free market”.
He was also strongly critical of the U.K. government’s toughening immigration policy towards citizens of non-EU countries. Welsh universities had suffered a sharp drop in student numbers from India as a result of U.K. government policies, The government’s announcement that Britain would strive to be self-sufficient when it came to doctors gave the impression that the country did not want foreign medical staff, he said.
“They have picked soft targets that nobody mentioned on the doorstep at the referendum. Their approach to immigration is wrong. The NHS (National Health Service) has always relied on doctors from other countries and in Wales we have a vibrant Indian community who are based largely around doctors who are huge contributors to the Welsh society,” said Mr. Jones.
“But the impression was given [by the U.K. government] that it was trying to close itself off from the rest of the world. We know from the history when countries do that, they go into decline. My message to India is that we in Wales have a strong relationship with India — we encourage entrepreneurs from India and investment. We are still open and welcoming.”
