European Union (Withdrawal) Bill

Debate between Baroness Kramer and Lord Lamont of Lerwick

Committee: 1st sitting (Hansard): House of Lords
Wednesday 21st February 2018 Lords Chamber

[Baroness Kramer (LD)]

Perhaps 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.

[Lord Lamont of Lerwick]

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.

--- Later in debate ---

[Lord Lamont of Lerwick]

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.

[Baroness Kramer]

My Lords—

[Lord Lamont of Lerwick]

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.