(6 years, 6 months ago)
Lords ChamberPerhaps I could make a suggestion to the noble Lord. If he were to go to 100 Parliament Street and sit and read the assessment, he would indeed see the comparison between being in a customs union and being in a free trade agreement. If he were to look at Hansard again and read about the damage to the economy that my noble friend Lord Newby described, he would find a great deal of that detail which explains that the free trade agreement route still leaves an unbelievably damaged country, in every region, especially the north-east, and in virtually every single industry sector.
There are calculations that say that. No doubt when the noble Baroness comes to make her speech, she will give arguments. I am not going to be persuaded by just a piece of paper with a statistic.
I do not know whether the noble Lord misheard me, whether I misspoke or whether he misunderstood. I was not talking about having a free trade agreement with Korea but about the free trade agreements that Korea has signed with other countries across the globe.
Another point about a customs union is that it is not just a question of collecting tariffs. A lot of regulations go with it and there is a vast range of non-tariff controls on goods—you obviously have to have definitions. We would not be able to divert from these at all if we remain members of a customs union, or even to depart from them in our own domestic market. If we did that, the goods that were allowed in which had circulated in the other countries of the customs union would be in contravention of them. Again, I put it that there are some advantages which have to be put into the balance of the argument for leaving the customs union.
One mystery about this amendment is that if you are in the customs union, there is the collection of the tariff revenue where the individual countries are allowed to retain only 20% of the revenue. The rest of it goes to the EU, so would we be outside the EU and paying 80% of the revenue on the external tariff to the EU? That does not seem to make a lot of sense.
It is also possible to be outside the customs union and to have a free trade agreement with the EU. That is precisely what Norway, Iceland and Liechtenstein do but of course, to come to the noble Baroness’s point, if that is regarded as a cost you have to offset against it the fact that you have rules of origin. People have pooh-poohed the technology argument but is that really going to be such an insurmountable thing to do? Switzerland exports per capita five times as much to the EU as we do, and it has to operate rules of origin on many sectors when it sells goods to the EU. That does not seem to have had any inhibiting effect.
I would like to make a little more progress, as this is taking rather a long time. The rules of origin are one of the points for consideration. I know that a lot of British industry is worried about this but I noticed what Mr Azevedo, the Secretary-General of the World Trade Organization, said in a newspaper interview that he gave the other day. He pointed out that a large part of Britain’s trade, because we have a bigger percentage of trade with the rest of the world than some other European countries, already has to observe these requirements of documentation and rules of origin. He did not see that there would be a big problem in switching the rest of our trade to a similar regime.
I have also met representatives of some of the companies that run ports in this country, some of which operate on a WTO basis and some of which obviously operate on an EU basis. But when I talked to the management—I do not want to name them because they would not want to be too involved in political controversy—I was told that they did not see a huge difficulty in moving from one administrative system to another. Whether people agree with that or not, I put it to your Lordships that that is what the argument is all about: a trade-off between that and a free trade agreement with access to the market. It is not clear that the advantage is all one way.
My Lords, I do not think that the noble Lord should intervene to cut short this debate. There are many amendments that have not yet been spoken to and my noble friend on the Front Bench has not had a chance to speak. Many other noble Lords seek to speak, too. The Minister should speak at the end of the debate after noble Lords who wish to speak have had a chance to do so. These are the most important issues that will face this country over the next generation and I do not think that we should be told by the Government Chief Whip that we have been speaking for too long.
My Lords, I shall speak to Amendment 89 to which I had the privilege of adding my name. I want to draw the House’s attention to that amendment because it addresses a constitutional issue. We are back to the issue of Henry VIII powers. This is to prevent the Government using Henry VIII powers in statutory instruments in order to drive through a separation from the customs union and from the single market rather than bringing those issues directly to this House for its decision. That is exceedingly important.
In supporting that argument, I want to underscore the importance of the customs union and the single market in response to the arguments put forward by the noble Lord, Lord Lamont. He said that without the customs union we can achieve what we need through a free trade agreement. What he did not say is that free trade agreements do not include services—or do so only at the margin. Our economy is an 80% service economy and a free trade agreement along the pattern and lines of other free trade agreements across the globe would leave us without the ability to sell our services freely as we do today across the European Union. Now the single market in services is not yet complete, but it is fairly close to completion and there is a great deal of opportunity.
The Government turn and occasionally say that there will be a mechanism to do this called mutual recognition. But within this House there are Members who will remember in the early days of Thatcher the development of the single market. This country thought that the route to be able to open up the single market and access across Europe was mutual recognition. But it was not effective, which explains the move towards regulation and harmonisation that currently overwhelmingly underpin our trade with the EU.
The EU has been very clear that it cannot see a way forward along the lines of mutual recognition except in fairly narrow terms. We have an example that the Government often cite with Switzerland where there is in effect mutual recognition through an equivalency agreement. But in December, when that agreement needed to be extended to provide for MiFID II, the EU would agree only to a one-year arrangement because it needed to be underpinned by a great extension of institutional arrangements to deal with disputes and a whole range of other issues.
Perhaps I may make a brief point. The noble Baroness is absolutely right about India. What is missing from this discussion, and the noble Lord, Lord Davies, referred to it, is that in the future we will be able to substantially reduce migration from the European Union, much of which is low paid and therefore of less value, and that will give us some leeway when talking to countries such as India.
The answer that I give to the noble Lord, Lord Green, is one that would be given by many people in this House. To reduce immigration to the tens of thousands means not only drastically and dramatically reducing European migration; it means drastically and dramatically reducing migration from elsewhere in the world. That is the reality that our employers in the various industry sectors face.
I will tell the noble Lord one more thing if we are talking about inconsistencies. Let me go back to the point I made to the noble Lord, Lord Lamont, about going to 100 Parliament Street, which I recognise. I will attempt to ensure that I do not breach the confidential content of the papers, but in the various scenarios, every one of which is frankly quite scary, there is a discussion about potential mitigations. Without breaching confidentiality I cannot define those mitigations—as I say, noble Lords should read the papers for themselves—but if one were to follow them, the speech that Michael Gove gave to the National Farmers Union is in absolute and complete contradiction to the mitigations. The speech given by David Davis about rising to higher standards is in complete contrast to the identified mitigations. The speeches or the comments that Theresa May has made about not weakening the rights of the workforce of the UK are completely contradicted. That is one of the reasons I recommend that people from this House should read the papers because all the contradictions in the statements being made are finally pulled together.
My Lords, at this stage of the debate and with the indulgence of the Committee, I wish to return to the debate on Amendment 6 in the name of the noble Lord, Lord Wigley. I thank him for his eloquent introduction to the debate.
The amendment calls on the Secretary of State to lay before Parliament a report outlining the effect of the UK’s withdrawal from the single market and customs union on the UK economy. That the Government have tossed away the UK’s commitment to the single market and customs union without seeking an impact assessment or providing evidence for this has to be a cause of real concern. There can be no doubt that membership of the EU single market and customs union has been of benefit to Wales. If the noble Lord, Lord True, will allow me, I wish to refer to my Second Reading speech in which I pointed out that it has given us tariff-free access to a market of 500 million people, it takes more than two-thirds of our exports and the freedom of movement for citizens and goods has led to the success of many of our industries.
The creation of a single market was at the UK’s insistence. We helped to create it, we have benefited from it and, until recently, we have wholeheartedly supported it. The Government’s position on the single market and customs union is confusing, to say the least. They appear to want all the advantages of both while rejecting the institutions themselves. I have to say that I find the attitude of the Government and of the hard Brexit supporters to be almost anarchic. There is a certain gung-ho, jingoistic element to their desire to crash out of the EU, the single market and the customs union with no parachute or safety harness to protect the country—straight into the arms of the WTO.
Those who advocate the WTO option have, according to experts, made a basic but fatal mistake. Their obsession with tariffs has blinded them to the difficulties presented by non-tariff barriers such as border checks, visual inspections and physical testing. Industries that now rely on integrated supply chains working to a “just in time” regime could find that their systems start to snarl up and eventually grind to a halt.
We would be turning the clock back to the world of 1988, the year that Margaret Thatcher made her speech opening the single market campaign. It makes for interesting reading:
“We recognised that if Europe was going to be more than a slogan then we must get the basics right. That meant action. Action to get rid of the barriers. Action to make it possible for insurance companies to do business throughout the Community. Action to let people practise their trades and professions freely throughout the Community. Action to remove the customs barriers and formalities so that goods can circulate freely and without time-consuming delays. Action to make sure that any company could sell its goods and services without let or hindrance. Action to secure free movement of capital throughout the Community. All this is what Europe is now committed to do”.
All this we have succeeded in doing, so what has changed? It seems that the advantages we have gained by being members of this massive free trading bloc have been sacrificed on the altars of two perceived problems: lack of control of immigration and loss of sovereignty. But in reality, the Government have failed to control immigration from outside the EU, which they have always had the power to do. They have also failed to use the powers available under EU guidelines to control immigration from within the EU, and they have failed to admit to the benefits to this country that have come in the wake of immigration over the years. The Government have themselves admitted that there was never a loss of sovereignty. Along with 27 other nations, we pooled our sovereignty to come to common decisions on policies.
In throwing away all the benefits of the single market and customs union without providing the evidence to support their case, the Government are adding to the sense of injustice felt by many and to the concerns that this decision has been based on politics and preconceived views rather than what this amendment calls for, which is what is proven to be beneficial to the people of Wales and the UK.
(6 years, 11 months ago)
Lords ChamberMy Lords, as I listen to the noble Lord, Lord Blencathra, I begin to understand why so little progress is being made. From the perspective of the Brexiteers, this is a war scenario, whereas I thought that we were trying to negotiate a long-term partnership. Indeed, I thought we were the people who had decided to leave the EU and so initiated and required this whole process of negotiation, and therefore it was us who were going to establish how we thought the relationship should be structured in the future. But clearly that is not the Brexiteer view, and I thank the noble Lord, Lord Blencathra, for making clear why David Davis is, frankly, proceeding so slowly and inadequately in this negotiation.
I want to focus on financial services, an industry which underpins this country. It contributes 7% of GDP, £76 billion in annual taxes and 2 million jobs across the UK, a third of it or so arising from clients or activity in the 27. To quote Catherine McGuinness, policy chairman of the City of London Corporation, this week,
“the sector is approaching a precipice … The sector needs clarity on immigration policies, agreement now on transitional arrangements and a clearer idea of how it can continue to trade post-Brexit”.
That lack of clarity in this crucial arena is becoming a critical problem.
Your Lordships will have read today that Chubb, the US insurer, has just announced that it will move its European headquarters from London to Paris; it has been in London since 1930. That is the 16th major insurer to announce its move to one of the 27—including Lloyd’s of London.
I have great concerns about the small and medium-sized players in the industry. The big companies are making provision; they have adopted a “save ourselves” policy, because they are tired of lack of clarity from the Government. The small companies, however, lack the resources to make such contingency plans, but they are critical to the ecosystem of financial services in our country, and for their sake alone the Government need much clearer communication.
There is something that the Government could help us with, and I hope we shall get some response from the Minister on the subject. The only one of the papers that seems to have any application to the financial services industry—even that is only a slight application—is the interesting paper on enforcement and dispute resolution. I hope the Minister will produce more papers focusing on that critical area. In February the Government were enchanted by the idea of an enhanced equivalence arrangement with the EU for financial services. It would be unique: long-term equivalence agreements would be underpinned by a dispute resolution mechanism.
The word on the street is that the idea has now been abandoned. Perhaps the Minister could tell us more about the status of enhanced equivalence as a potential strategy. It was supposed to replace the parts of MiFID, including passporting, that currently permit cross-EU business in financial services. We understand that the industry has expressed fears that such a framework would be a recipe for almost permanent dispute, and that it is very dissatisfied with the proposals for dispute resolution that the Government have trialled in trial balloons. Is that accurate? Can the Government confirm today that some key firms have been telling them that in any equivalence arrangement they need to be free to opt to select the European regulator as the regulator for their non-domestic UK activity, as the only way to keep the current pattern of business that underpins so much of the industry?
Is it also accurate to say that various regulators across the globe have now entered the fray, and that to retain London’s regional and global roles, the Government are now considering the creation of a sort of international college of regulators—European, US and Asian—which, together with the UK regulator, would have joint supervision and monitoring roles as well as providing dispute resolution across a wide range of financial services? Is that the interpretation that the industry should put on the paragraph in the paper that I described a moment ago, which discusses a joint committee structure as a mechanism for monitoring, supervision and dispute resolution? In such a case what would be the role of the UK regulator, when sterling is such a small part of the market, and how would such a college of regulators relate to British institutions—for example, Parliament? I should make it clear that I do not oppose the idea; I just want to understand how it would work, as would the industry.
There are also critical issues involving clearing. Can the Government update us, as the European Central Bank has now taken powers from the European Parliament to remove euro-denominated clearing from third-party countries—essentially at will, and salami slice by salami slice—which is creating a great deal of uncertainty and difficulty, particularly for client securing here in the UK?
On immigration, I want to make a couple of very quick comments. In the leaked paper there was no discussion of entrepreneurs, who are critical to the development of the financial services industry in this country. Critical, too, are not just high skills and low skills, but mid-level skills such as coding. Among all those players, almost nobody is interested in coming to this country unless their spouses and partners can also be given work permits—an issue that is never addressed. I am afraid that workers in this industry, so much in demand across Europe, even with the kind of reasonable provisions that the Government may be considering, will often hesitate to bring their skills to the UK because here they face restrictions, whereas they will have great opportunities in 27 other countries with no restrictions whatever.
(7 years, 5 months ago)
Lords ChamberI am sorry to say that I dispute what the noble Baroness is saying. The British people voted to leave. There was a very loud and passionate discussion, with lots of people issuing lots of papers about what it would mean to leave, and the British people made a decision.
My noble friend raised the issue of a “neverendum”. This brings me to certainty. One thing we all agree on is the need for certainty. Therefore, let us think of European families here, of British families in Europe and of the thousands of businesses right across this country that are listening to our debate. For them, the prospect of another referendum at some unknown date years ahead, with a Bill—as the noble Lord, Lord Grocott, said—and a question we do not yet know, would simply create more uncertainty.
Let me say here a word about business in particular, given that my noble friend Lady Wheatcroft edited the Wall Street Journal. I would like to draw the Committee’s attention to a report just issued by the Institute of Directors. It recommends:
“A … measure to boost both political confidence and certainty for business would be for all parties to rule out a second referendum over the next parliament—either a repeat on EU membership or on the final terms of the deal”.
The IoD represents 35,000 businesses which employ hundreds of thousands of people. Those businesses are saying that they want certainty.
Perhaps I might press the Minister for clarification. He says that people want certainty. Is he saying that if that certainty is, to a business, “Yes, you must move your headquarters, you must take jobs out of this country”, and to people that, “You will face higher prices and fewer opportunities for your children”, that is what the Government will choose to make the British people live with—and with no voice to challenge it?
The noble Baroness and I have many interesting discussions, but I dispute the grounds on which she is approaching this. We have set out very clearly, to provide clarity and certainty, a view regarding what we wish to achieve in the negotiations. That has provided a considerable amount of certainty and clarity to many of the businesses I have spoken to and in nation states across Europe. That is exactly what we now need to deliver on.
I will turn quickly to the issue of parliamentary scrutiny, which the noble Lord, Lord Newby, slightly dismissed. Parliament will be heavily involved in the process of our leaving the EU. This Bill, the Bill to repeal the European Communities Act 1972, primary and secondary legislation, Statements, Select Committee appearances—the list is quite long. On top of that, the Government will bring forward a Motion on the final agreement to be approved by both Houses of Parliament before it is concluded. So the nub of the matter is very simple. On 23 June people voted to leave the EU. It was a choice that this Parliament gave them and it is a decision that, now it has been made, we must obey. So I hope that the noble Lord will withdraw his amendment.
My Lords, it would be difficult to respond to that without tying myself in circles, because the noble Lord has got it slightly wrong. But I will come on to the point about people saying we could access the single market. At one point during the campaign, it may have been my right honourable friend Boris Johnson who said, “We could leave the EU and still access the single market”. What happened? All hell broke loose. It is not that we were shot down but the Government and their advisers dropped the equivalent of all their bunker-busting bombs on us. “No, no”, said the then Prime Minister, the Treasury and the BSE campaign. “If you vote to leave the EU, then you are out of the single market. You are out of the customs union. You can’t have one without the other”, said all the government spokesmen. “You can’t have your cake and eat it”, they said. On that occasion that is what the Government said. Opposition Members have quoted various leave spokesmen who have said, “Oh yes, we want to be in the single market and leave the EU”, or, “We want to access the single market and be in the EU”, but the response from the official BSE campaign, the Prime Minister and the Government was, “No, you can’t. Leaving the EU means leaving the single market too”. On that occasion, the remain campaign was not economical with the truth.
I just make the point that the argument that leave made was that the remainers were exaggerating and they were wrong. To their credit, people believed them and voted on that basis. So if you were a leave voter and you had listened to Daniel Hannan, if you were a leave voter and you had listened to Boris Johnson, if you were a leave voter and you were at any one of the many hustings that I went to, you would have heard the leave campaign saying absolutely clearly that you would have identical access; indeed, you would be in the single market even if you voted leave. That happened over and again and there are witnesses to it throughout this House.
If the leave campaign tried that early on in the campaign, it was certainly shot down by the Government, the Treasury and all their spokesmen very early on.
My Lords, I do not know what the Conservatives are worrying about. I have listened to the noble Lord, Lord Forsyth, saying the same thing again and again. We need to have open government, as my noble friend Lord Kerslake has just pointed out. We are helping the Government by moving probing amendments. The noble Baroness, Lady Quin, has given a direct reply and that should surely be satisfactory. I am not going to waste too much time but will speak about developing countries, because I believe we should have an impact assessment relating to the effects on those countries. I have spoken to the Minister and know that he is kindly going to reply to this. I will be as quick as I can and will not repeat what I said at Second Reading.
Amendment 28 reflects my concern about the effects of withdrawal on the least developed countries and countries recovering from conflict. I have consulted the Overseas Development Institute and Traidcraft, the experts in this field. I know one of the answers the Minister will give is that we really cannot tell what the effects will be in numerical terms at this point. It might be of interest to him that the ODI estimates that the least developed countries could lose approximately £323 million annually if current preferential access in the UK is discontinued.
I accept that there will be pluses and minuses. On the one hand we may be sacrificing the interests of the ACP countries that currently benefit from their association with the EU, especially the smaller states and islands that are vulnerable to climate change. On the other hand, some countries—sugar cane producers, for example—will have suffered from the EU’s protection of its own markets and may well want us to abandon fortress Europe in favour of bilateral agreements through the WTO, or a new version of the generalised system of preferences, and I accept that.
But not yet knowing the maths does not mean that we can take no action. The interests of LDCs have not been mentioned in any of the documents relating to withdrawal. The Government must surely undertake a review of some kind and assess whether these countries will be damaged; how we respond to that must be part of the negotiations. We may well have to introduce or reintroduce aid policies to make up for any losses in trade and investment. Aid agencies generally see fair trade agreements as more beneficial than aid, but they fear that Brexit will mean new free trade agreements or EPAs that could disadvantage poorer countries. They would like to see trade policies which are linked to the sustainable development goals, so crafted that they are lined up with those countries’ own objectives. I quote Sir Simon Fraser’s Tacitus lecture. He said,
“these EU trade agreements are vital for their development goals. The UK will no longer be able to champion their access to the EU market as we have in the past. We have a moral responsibility to address the concerns of these countries, which illustrate how Brexit may have unforeseen repercussions well beyond Europe”.
Finally, I mentioned security and enlargement in eastern Europe, another area in which we may need to use our aid programme to make up for shortfalls left behind. NATO membership will not be enough. If we withdraw from the EU the economies in those countries will suffer. We need to know the effect of our withdrawal on aid programmes as well.
These are my concerns and it is not asking a lot of the Government to say that they need to make some assessment. We have a considerable reputation as a trading and aiding nation and we must take care not to damage our relations with countries that respect our values and traditions, both in the Commonwealth and in the rest of the world.
My Lords, it is getting late and I will therefore try to be brief. First, I congratulate the noble Lords and noble Baronesses who put their names to the various amendments in this group, because probing amendments are an entirely appropriate part of our process. Every one of these amendments reflects an underlying anxiety that exists in different sectors and in different regions of our country. People engaged in activities, from universities to working with less developed countries, feel that their issues are not being considered by the Government at this crucial time as they choose to trigger Article 50 and that, if those issues are not considered at this time as the Government consolidate their negotiating position, they will never be properly considered anywhere in this process, so I see this as entirely appropriate.
My Lords, I fear that this is an entirely spurious argument. We have wonderful Select Committees in this House which have produced outstanding reports; we have had debate after debate on these matters; we have opportunities for many other such debates; and we have other legislation coming. What we have before us is a one-clause Bill. We have had seven hours of debate and we are on only the fifth group of amendments. We have probing amendments which people say they have no intention to carry. There are other fora in this House to have those kinds of discussions. We should get on with delivering what the people and the House of Commons have asked us to deliver.
I say to the noble Lord, Lord True, that there is a real difference of opinion within this House. For many, the point at which Article 50 is triggered is one at which they need that reassurance, and I hope that the Minister will take that on board because we have quite a range of amendments that have come forward. The amendment of the noble Baroness, Lady Jones, stands rather separately because it focuses on issues around the regulation and enforcement of environmental protection under whatever will be the new regime. However, nearly all the other amendments call for an impact assessment because there are regions of the country and sectors of our economy that are concerned that the Government have not taken their issues on board and do not understand the impact that the shape of their negotiations will have on those regions and sectors. My noble friend Lord Shipley is exactly right to say that the Government have thought that impact assessments were entirely appropriate for some sectors and regions, including London, the region that is closest to my heart. That does not mean that the same degree of attention, engagement and dialogue is not necessary for other parts of the country and those many varied sectors. As I say, I hope the Government will take that very much to heart.
The noble Lord, Lord Hannay, told us earlier of a specific example of where our impact assessment was completely different from that of the EU.
You can have differences, but the point is that those differences become relevant in the process of negotiation. The noble Lord, Lord Hannay, pointed out that by being clear about our impact assessment we gained strength and opportunity and were able to position ourselves far more effectively in the negotiation. As someone who has spent a lifetime in negotiation, one thing that bothers me is constantly hearing negotiation discussed as if it were some sort of poker game. It is not; it is a grown-up activity. Making sure that our negotiators fully understand where they stand and what the issues are, and that that is done best by transparency, is fundamental. I say to those who simply dismiss the idea that we need to deal with our weaknesses as well as our strengths that that strikes me as just an extraordinary situation. If we do not recognise, discuss and understand our weaknesses, I do not know how we will put together a negotiating position.
I am not going to continue because these are only probing amendments. I look very much to the Government to take on board the underlying message, which is that many parts of the country and many sectors feel disengaged. The Government have said that they have certain priorities. When I talk to those in the financial services industry, they say, “We’ve been guaranteed top priority. Others will be sacrificed for us”. If that is the message, it is one that leaves people genuinely, and appropriately, worried. That discussion has to take place; we need to know on what basis all this will move forward.
Impact assessments are a normal part of a normal process. Transparency around such assessments is also a normal part of that process. I hope that the Government will recognise that and not try to pretend that they are entering into a poker game rather than a mature negotiation.
My Lords, Amendment 22, on impact assessments, seeks to put us on a level playing field with the Government. We want the information that has already been published—the impact assessments that may have taken place, or have taken place, since the referendum in the various departments listed: nothing more, nothing less. Others have commented on other areas of the work of the European Union where we stand to suffer a loss, and they are right to make those comments. They referred to the north-east, the environment, equalities and so on.
In the Commons the big issue was how to deal with confidentiality. We have made provision for that by the subsection of the proposed new clause in Amendment 22 that defines the right of the Government to hold back from publishing anything that they feel would harm our negotiating position in any way, for any reason, and to restrict it to a few wise heads. We do not even define how that should happen. It could be on Privy Council terms or whatever other terms the Government wanted. That seems to me an entirely sensible way to proceed. I shall not detain the House any longer, but I ask the Minister to respond to these requests in the spirit in which they have been made. These are probing amendments, which we expect to be useful, and we look forward to a positive outcome to the discussion.
(7 years, 6 months ago)
Lords ChamberOn the first point, I have little further to add. The Government have clearly said—I answered on it a moment ago—that, as the negotiations continue, we will continue to provide to this House and the other place what information we can without undermining our negotiating position. That is not only the right thing to do, but the right thing if we are to build the national consensus that I said at the start we wished to build as we go forward. On my noble friend’s point about financial services, which is a very valid one, I would like to think that we are moving into a slightly new era as regards the understanding of the challenges and issues we face. There is a greater understanding of the mutual benefit that will be achieved if we come to an understanding with our European partners on financial services—not only to avoid a cliff edge in these negotiations, but to ensure that European companies and European Governments continue to have access to the global capital markets and the wonderful services provided in the City.
My Lords, the Government will be very aware that in the Korn Ferry survey of FTSE 100 chairmen, 88% are convinced that, as it has been decided to leave the single market and the customs union, no trade agreement could possibly provide the current level of access. Does the Minister accept that consensus is now growing that, under the best terms we can get, we will see a drop in exports to the EU of something like 22%—nearly a quarter—and that no deal with the United States, no matter how favourable, could do more than claw back a very small portion of that loss?
I hope the noble Baroness will forgive me, but she is approaching this from a somewhat pessimistic point of view. I approach it from a more optimistic and ambitious point of view. I believe that the United Kingdom has a very strong economic record on which we can build. I believe that we already have fantastic networks, right across the world, on which we can also build. Therefore, while I understand the challenges that lie ahead, I believe that when we put our mind to it and approach it in the way that my right honourable friend the Prime Minister has set out, there is no reason to take the somewhat pessimistic approach that the noble Baroness has outlined.
(7 years, 7 months ago)
Lords ChamberThe noble Lord raises an extremely good point. As I intimated earlier, we are taking due steps to ensure that the views of the Northern Irish people are heard in this lull. I am happy to meet the noble Lord and discuss that—with my ministerial colleague, Robin Walker, who is also intimately involved—and to explain exactly what we are doing.
My Lords, can the Minister explain to me why his Government are so afraid to put the final deal agreed back to the British people for their vote? If the Government were confident that it would be a deal that the British people felt fulfilled the promises and commitments made, and was good for the future of the country, they would be confident of an overwhelming victory in that referendum. Is it because they believe the British people would be so disappointed and feel such a sense of betrayal that they dare not put the final deal back to them? Is that the rationale?
No, my Lords, I dispute that, because I do not think the British people will feel a sense of betrayal, given the approach that the Prime Minister set out in her speech last week.
(7 years, 7 months ago)
Lords ChamberI am sorry to say that I think the noble Lord’s assessment of where we are currently is not strictly true. There are various regulations that are not part of our law but, again, we will outline more as regards this when we set out an approach to the great repeal Bill. There are two clear reasons why we are doing this. First, as I said in the Statement, it is to provide certainty for everyone—be they businesses or organisations in any walk of life—as regards the state of play on day one when we leave. Secondly, it is because the Government believe that it should be for Parliament to decide on what then to do. It can then be free to keep, amend or repeal EU law, once it has been transposed into UK law, as it so wishes.
My Lords, can I ask the Minister about the financial services sector, which is about 7% of our GDP? As he will know, if we are leaving the single market and the customs union, most of the financial services sector can essentially no longer operate across Europe unless it redomiciles something like a third of its operations. The Minister says that he wants a bespoke agreement and an implementation transition period. But how long does he think the industry can wait for those to be confirmed before it has to decide to relocate in order to meet the needs of its clients?
The noble Baroness makes a valid point; we have had good discussions about this issue and I thank her for that. I understand the needs of some parts of the sector and the fiduciary duty that certain businesses will be under to make contingency plans. I can only hope that they will look at the remarks made today and see that while we are coming out of the single market, we are intent on negotiating as free and as frictionless access to the markets as possible. Once again, I repeat my earlier remarks: we are obviously starting from a unique position here, in that we are not just equivalent to EU law but absolutely identical to it. This puts us in a good position.
The second point is that, as the Governor of the Bank of England made clear yesterday, once again it would be to our mutual benefit—that is, our benefit and Europe’s benefit—to ensure that we avoid a cliff-edge. It was interesting to see that the German Finance Minister said today, “London as a financial centre will play an important role for Europe, even after Brexit”. I hope that those in Europe and in our financial institutions will be looking at these remarks and planning with due respect for what is happening and mindful of the fact that we are looking for this free and frictionless approach.
(7 years, 10 months ago)
Lords ChamberThe noble Lord comes to this with a certain track record and position. I will not comment in detail on what he said. I have read the Civitas paper by Mr Justin Potts. I cite from the document for noble Lords who have not read it. It says that the findings of its analysis,
“highlight the importance of a trade deal for both the UK and for EU countries”.
In other words, a trade deal, not falling back on WTO rules, which I think may be where the noble Lord is coming from.
I think the noble Lord is accusing me of being Humpty Dumpty and saying that the word,
“means just what I choose it to mean—neither more nor less”.
However, I will not add further to what I said or breach the Prime Minister’s commandment and start issuing running commentaries.
My Lords, the Minister will be aware that the financial services industry contributes in excess of £66 billion a year to the Treasury. If the British Bankers’ Association is correct in its recent predictions of departures and transfers out of the UK thanks to the Government’s Brexit attitude, what cuts are expected in public spending on the NHS, schools and infrastructure?
I am sorry but I disagree somewhat with the assumption behind the noble Baroness’s point. I have met many financial service companies the length and breadth of the country, and it is clear that like many parts of the UK economy they are looking at Brexit and what it means for them. The noble Baroness takes a somewhat pessimistic view of things as they stand. We are talking to the financial sector as we are talking to all sectors, to ensure, as I have said before, that the outcome to the negotiations leads to a smooth and orderly exit from the EU.