European Union (Withdrawal) Bill

Debate between Baroness Ludford and Viscount Ridley

Monday 19th March 2018 Lords Chamber

[Viscount Ridley]

My Lords, it is a great pleasure to follow the noble Lord, Lord Bilimoria, as I did at Second Reading, and to answer some of his points. The noble Lord, Lord Newby, did not like it when I quoted the words of his current leader to him, for some reason. He said that I should quote from my own party.

[Baroness Ludford]

I remind the noble Viscount, Lord Ridley, of the words of Jacob Rees-Mogg, who has said:

“Indeed, we could have two referendums. As it happens, it might make more sense to have the second referendum after the renegotiation is completed”.—[Official Report, Commons, 24/10/11; col. 108.]


The Brexit Secretary, David Davis, has said:

“Referendums should be held when the electorate are in the best possible position to make a judgment. They should be held when people can view all the arguments for and against and when those arguments have been rigorously tested. In short, referendums should be held when people know exactly what they are getting”.—[Official Report, Commons, 26/11/02; col. 202.]

[Viscount Ridley]

I was going to quote David Cameron because I was asked for the words of a Conservative. On 10 November 2015, after announcing the referendum, he said:

“It will be your decision … Nobody else’s. Not politicians’. Not Parliament’s. Not lobby groups’. Not mine. Just you. You, the British people, will decide … And it will be the final decision. So to those who suggest that a decision in the referendum to leave … would merely produce another stronger renegotiation and then a second referendum in which Britain would stay … I say think again … There will not be another renegotiation and another referendum … Think very carefully, because this choice cannot be undone”.

Brexit: Deal or No Deal (European Union Committee Report)

Debate between Baroness Ludford and Viscount Ridley

Tuesday 16th January 2018 Lords Chamber

[Viscount Ridley (Con)]

My Lords, I have to say I got the impression on reading this report that the committee mostly started with its conclusions. I do not imagine there was a lot of changing of minds, or indeed challenging of minds.

I will focus on the assertions in the report that:

“It is difficult, if not impossible, to envisage a worse outcome for the United Kingdom”,


than no deal, and that,

“the Government’s assertion that ‘no deal is better than a bad deal’ was not helpful”.

With respect to the latter claim, I point out that saying the opposite, during the early months of 2016, was what was not helpful. It is now clear that the failure of the renegotiation prior to the referendum was guaranteed by the Government’s insistence that they would recommend a remain vote however little the EU conceded. So we should have said, “Change or go” at that point. In any case, I find it far from impossible to envisage a worse outcome than no deal if no deal means no free trade agreement. A deal in which we agree to giving Brussels continuing control over our borders, our money and our laws indefinitely without any say, so that we are effectively stuck inside the EU for ever but with no say and no rebate, would be worse than no deal.

No deal means no free trade agreement, and it is not the same as “walking away” and failing to settle administrative issues such as mutual recognition agreements on goods and aircraft landing rights. No one is advocating that, and it is not going to happen, because under international trade law, discrimination is illegal. EU denial of “equivalence” to our banks when the same is granted to US banks would be illegal. Customs formalities and mutual standard recognition have to be provided seamlessly by both sides under WTO rules; any failure to do this is, again, illegal. Say what you like about the EU, but it is not about to start breaking the law on that scale.

The report cites evidence of problems at customs and ports if there is no deal. However, it ignores the evidence given by Jon Thompson, the head of HMRC, to both the Public Accounts Committee and the EU Committee in the Commons that 99.5% of non-EU imports are not physically inspected. Mr Thompson could not be goaded by members of the committee into the kind of doom-mongering that we have heard this evening about what would happen at ports.

If we were to fall back on WTO terms, then, according to no less an authority than the director-general of the World Trade Organization himself, Roberto Azevedo, speaking last November to Liam Halligan of the Telegraph,

“it’s not the end of the world if the UK trades under WTO rules with the EU … About half of the UK’s trade is already on WTO terms—with the US, China and several large emerging nations where the EU doesn’t have trade agreements”.

He concluded:

“If you don’t have a fully functioning FTA with the EU, there could be rigidities and costs”,


introduced into that trading relationship,

“but it’s not like trade … is going to stop. There will be an impact, but … it is perfectly manageable”.

The committee report says that,

“no deal would also have a damaging impact on the EU”.

This is the understatement of the century and it is a pity the report did not explore this in great detail. As others have said, it is baffling. According to Professor Patrick Minford’s calculations, under no deal, the EU loses around £500 billion in net present value. That is because, first, it loses our financial support during the implementation period; secondly, the tariff revenue levied by us would be effectively paid by EU producers, who must keep their UK prices in line with world competition to sell anything here; and thirdly, we would conclude free trade deals with the rest of the world earlier than otherwise. In contrast, according to Professor Minford’s calculations, the UK would gain around £650 billion in net present value from this outcome, mainly through lowering the external tariff—a point largely ignored in the report.

You can dispute these actual numbers, but it is hard to argue with the general point that this would hurt them more than it hurts us. Claims to the contrary are almost always based on models that fail to assume current government policy; for example, that we will agree free trade agreements with non-EU countries that account for 60% of our global trade. Despite 60 years of trying, Brussels has failed to sign free trade agreements with China, Brazil, India and America. Many of its 50 or so trade deals are with tiny entities such as Jersey and the Isle of Man. Again, Mr Azevedo, the director-general of the WTO, explains why this is:

“Trade deals are difficult but there is an additional complicating factor for the EU, which is agriculture … Once you start negotiating with a big agricultural exporter, they want market access—and, for the EU, that’s a sensitive sector, both politically and economically”.

[Baroness Ludford (LD)]

Is it not the case that an EU agreement with India was prevented by the UK’s objection to issuing more visas for Indian workers?

[Viscount Ridley]

It is still at the early stage of negotiation. It is a long process and the agreement with India is nowhere near ready.

Do not get me wrong. Of course I think we should strive for a good trade deal with the EU. If we fail, it will not be for lack of trying on our part. But look across the table. Mr Juncker and Mr Barnier refuse even to talk about a trade deal until March, showing no urgency on behalf of the people and businesses of the European Union. We are in a very odd situation here. The party that needs the deal most wants it least. Punishing the UK seems to be a higher priority for Mr Juncker than looking after the interests of the EU 27 economies and people. How do you negotiate a deal with the other side when it is interested not in what is best for its side but only in causing pain?