Trade and Customs Policy

Baroness Henig Excerpts

Tuesday 5th December 2017 Lords Chamber

[Baroness Henig (Lab)]

My Lords, it is not always an unalloyed pleasure to be the last speaker in a long and serious debate such as this one, but being sandwiched between the former Trade Minister and the present one is a great honour. It gives me the opportunity both to welcome the noble Baroness, Lady Fairhead, to her role in this House and to pay tribute to the noble Lord, Lord Price, for all the hard work he has put in and for his indefatigable global networking on behalf of the UK. The noble Lord, Lord Horam, referred earlier to his northern origins, and I think I am right in saying that both the noble Lord and myself are alumni of Lancaster University, so that continues the northern theme that we have heard about.

My interest in, and knowledge of, trade matters stems in part from an inquiry I was involved in as a member of the EU Sub-Committee on External Affairs into the Transatlantic Trade and Investment Partnership. That opened my eyes to the fundamental and often brutal realities of trade negotiations: the vested interests to be accommodated; the complex range of issues to be managed; and the balancing of producers’ and consumers’ interests. Most important of all was formulating a coherent communications strategy to explain all the bargaining and concessions to domestic interest groups and to the general public. When we reported, we noted that despite the great benefits that TTIP was likely to bring to Europe and the UK, members of the EU were comprehensively losing the publicity war to critics of the deal. We said at the time that the Government needed to take action to counteract this.

After what happened yesterday, no one can be in any doubt about the difficulties which lie ahead, and it is therefore really important, as the noble Lord, Lord Price, has just said, that the Government should take a realistic view of trade deals and what needs to be done to negotiate them successfully. Thus far in the Brexit negotiations, as we have heard, a lot of wishful thinking has been on display, along with an obstinate refusal to face facts and acknowledge difficulties. I am afraid I have to say that there is an awful lot of wishful thinking in this White Paper. The noble Lord, Lord Kerr, described it rather aptly as Panglossian. An effective trade policy means being very clear about what is involved and what the risks are. I would therefore like to ask the Minister first of all how the Government, and specifically the Department for International Trade, are going to build a broad consensus to support their policies.

Trade negotiations, as is now abundantly clear to us, are hugely political affairs. They involve backing some interests over others, some groups over others—such as farmers over consumers, or perhaps tomorrow’s industries over today’s—protecting some industries and exposing others. A wide range of consumer and producer groups will have their views, as well as social media experts and the Twitterati. As the noble Lord, Lord Cope, reminded us, we are in a new age of communications and all of this is going to be in the public sphere. We have already had a taste of it with the widespread disparagement of chlorinated chicken and hormone-treated beef which a deal with the United States might bring into the UK. There has already been a lot of discussion about that.

How do the Government intend to handle such controversies, because they are bound to arise? The White Paper is not actually much use. It states that we want to be “transparent and inclusive”. I would say to that: get real. The Government will need a good communications strategy and the ability to build a consensus to support its proposed trade deal objectives. I would go further and say that such a consensus will need to span the political parties. If it does not, countries with which we are negotiating will be able to exploit internal divisions to their advantage. How is such a consensus to be achieved? What has happened so far in the Brexit negotiations and in the way the Government have dealt with their parliamentary and other critics does not inspire any confidence. Yet trade experts such as members of the UK Trade Forum, people with first-hand experience of putting together trade deals, are in agreement that establishing such a consensus is fundamental to success.

Were we, for instance, to make the US our first negotiating partner, as my noble friend Lord Liddle suggested we might, we would be running considerable risks of the sort we saw with TTIP, perhaps of the deal being undermined by a campaign of orchestrated opposition focused on the threat of big United States drugs cartels holding our NHS to ransom, or of cheaper food undercutting British agricultural output and lowering food standards. That could in turn torpedo the success of future deals. What does the DIT propose to do to counter this threat? All we learn from the White Paper is about the importance of ensuring that,

“concerns are heard and understood, and the right facts are available”.

I do not think, in this social media age, that such wishy-washy sentiments are going to cut much ice.

My second set of questions, which are not covered in the White Paper at all, relate to parliamentary scrutiny. What will the process be for overseeing trade negotiations and scrutinising emerging agreements? We know that trade agreements are liable to be long and complex. The agreement between the EU and Canada runs to some 30 chapters, with 454 pages of text plus annexes. Will Parliament have any input and powers, for example, in terms of agreeing the negotiating mandate at the beginning of the process? Which parliamentary committee will be able to see draft texts and get regular briefings from the negotiating teams? Obviously, there will be the need for some confidentiality, but at the same time it is absolutely crucial that when the deal is finalised, Parliament and the public they represent are broadly happy with the outcome. Can the Minister tell us what plans have been made in terms of enabling Parliament to oversee trade policy, to be able to raise issues as negotiations proceed, and then to ratify the deals when they are concluded? There are many experts in this House who would want to know how all that is going to work.

My third area of concern relates to the devolved Administrations. It was pretty obvious, long before yesterday’s debacle, that there are serious issues to be faced in this area. Again, the White Paper casts no light on the really crucial questions such as what powers in terms of trade policy will be devolved to Scotland, Wales and Northern Ireland. To what extent will the UK be negotiating on their behalf? Will they have the same powers in terms of negotiations as the UK Parliament? Will they be able to exercise a veto, particularly in the areas in which they have delegated powers? Not long ago we saw how Wallonia in Belgium threatened to derail the Canada-EU deal. How will the Government ensure that this will not happen with United Kingdom trade deals while at the same time respecting devolution powers? The White Paper sheds no light on this. What it talks about, I think rather platitudinously, is building,

“support for our vision across all four nations”,

and seeking their input. Perhaps the Minister could explain in a more tangible fashion how relations with the different devolved UK Governments, in terms of the specific elements of trade negotiations, will operate.

My final point concerns the domestic context within which trade policy is being developed. We know that the UK is facing some serious economic problems. We know about low productivity and the lack of some essential skills in the workforce, along with the ever larger gap between London and the south-east on the one hand and the rest of the country on the other in terms of output and contribution to the national economy. The White Paper talks blithely of delivering wealth and opportunity across the country. How will that be done? What will change? There is agreement, even from those who want to leave the EU, that in the short to medium term, coming out of the single market and customs union will make us poorer before the new trade deals, such as they are, are negotiated. How will that economic pain be distributed?

The White Paper talks of taking views from “the English regions”. How will that be done? Many areas are already—perhaps rather belatedly—recognising the big problems that Brexit will bring and formulating solutions. We have already heard from my noble friend Lady Golding about the concerns of the ceramic industry in her area. The fishing industry in Grimsby has raised the issue of establishing a free port. Who will decide such measures? How will the Department for International Trade avoid all-out war between different parts of England fighting for an economic edge in this brave new world? We have already heard that the mayors of Liverpool and London are asking for a Brexit opt-out. Different parts of the country will obviously push for their own interests; it is not clear to me how those different regional interests will be reconciled. We do not have a coherent regional strategy, as far as I can see.

If we are going to be successful as an independent trading country, we need far more realism about what success entails than what is in the White Paper, which skirts around and avoids all the hard choices and contentious issues that will inevitably arise. I hope that the Minister can reassure me that thinking has moved on since the White Paper was produced and I hope that she can answer at least some of my questions.

It strikes me that, when we were a member of the EU, a lot of the politicking and contentious lobbying went on in Brussels. Of course, the UK was shielded from a lot of that and was able to blame Brussels when it was not possible to accommodate a lot of the interests. That will no longer be possible; the Government will have to face the full force of all the lobbying and competing business interests from all quarters. I want the Department for International Trade and the Government to give some realistic answers and I want some assurance that the Department for International Trade is ready to take on the big challenges that we all know we will inevitably face.