Trade Bill

Debate between Lord Bishop of Chester and Lord Purvis of Tweed

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 23rd January 2019 Lords Chamber

[The Lord Bishop of Chester]

My Lords, it is always a pleasure to listen to the noble Lord, Lord Patten of Barnes, especially when religious imagery creeps into his speech with gospel truth and sacerdotal approaches. His opening remark reminded me of Trollope’s definition of hell: an eternity of listening to one’s own sermons. I do not know whether the noble Lord, Lord Patten of Barnes, has similar feelings about his speeches, but they are always wonderful to hear.

I wonder what this amendment really means. The noble Lord, Lord Patten of Barnes, said that happiness is a relative concept, but it seems to me that the term “customs union” can mean more than one thing. The very fact that the amendment refers not to “the customs union” but “a customs union” prompts me to ask what it means precisely. If one looks, as I just have, at the WTO website and how it defines a customs union, it is not a hard-and-fast term and allows for exceptions, up to a point, to be made in an agreement. It refers to “substantial agreement” on issues of trade.

When one comes to the political declaration, what is the real difference between the following aspiration in the political declaration and a customs union?

“The Parties will put in place ambitious customs arrangements, in pursuit of their overall objectives … making use of all available facilitative arrangements … ensure no tariffs, fees, charges or”,


so on in the trading arrangements. It seems to me that that is not far from describing what might be called a customs union. No doubt the devil will be in the detail as to precisely what is included or excluded, but it seems to me that the Government’s intentions, and the agreement’s intentions in the joint political declaration, are not far off what one might describe as a customs union.

[Lord Purvis of Tweed]

My Lords, I hope that the Government will listen to what the noble Lord, Lord Patten, said in his contribution. The difficulty is that, even those in Government who listen to such a sensible case, find themselves locked into a situation where even sensible ways of maintaining a relationship with the European Union outside the European Union have been defined by many as “not leaving”. So the scope for leaving the European Union has become narrower and narrower.

One of the slight advantages of the delay to this legislation and the opportunity to debate a customs union now is that many of the prior assertions have been utterly debunked. Many of the valid concerns raised about leaving the European Union and its customs union have now emerged in reality. The then proposed “max fac” solution has been laid bare as simply unworkable. The Chequers agreement would not pass any definition of a sensible way forward. The White Paper which was then published had major deficiencies, and we saw the result of the Commons vote on the agreement. So we are left with a number of differing perspectives on the future trading relationship and customs arrangements on which we will need to find some form of common ground.

In previous discussions, we have heard from the Government that all these concerns can be set aside because of our positive relations with our trading partners—Dr Fox said that on the radio today. Canada has often been cited as a country which finds it very straightforward to have a positive trading relationship with one of our closest possible allies, especially as CETA has already been agreed by this Parliament. No doubt, there will be good will on both sides in these discussions. This is beyond question. We will trade with our close allies. However, Canada has prevented our schedules application at the WTO from progressing. It has lodged an objection. It is looking after the interests of Canadian farmers and industry—the United Kingdom would do exactly the same.

If we leave without any agreement, and if Canada, New Zealand and Australia do not withdraw their objections to our goods schedules at the WTO, then not only will we leave the European Union without an agreement, we will leave without any certified WTO schedules. We will not only be trading on WTO rules, but we will not have certified rules with which to trade with the rest of the WTO. The same has happened this past week over our services schedule—services are two-thirds of the UK economy—because Taiwan has lodged an objection. So the dawning reality must be that a change of course is necessary.

It is of no surprise to anyone that Liberal Democrat policy continues to be, as it always has been, to retain membership of “the customs union”. It is Labour policy currently to negotiate “a customs union” with “the customs union”, such as Andorra and Turkey have. It is the Government’s policy, or at least the Prime Minister’s though not necessarily the whole Cabinet’s—it is difficult to determine, between the Chancellor and Dr Fox, who speaks for trade now; it is significant that, at Davos, in one week, you have two Cabinet Ministers from one Government saying two different things at a critical time in our country’s history—that we negotiate a deep and comprehensive free trade agreement with a customs arrangement as part of it.

We propose that, ultimately, the people will have to decide on our preferred option. Under Labour, Article 50 would need to be revoked and a new negotiating mandate would have to be agreed at EU level, as the Prime Minister’s letter activating Article 50 is not competent—it states that withdrawal would be supplemented by a free trade agreement, not a customs union. The Commission’s negotiating mandate has not been on that basis. The Government’s position was defeated by the biggest majority in Commons history.

The Government’s position is predicated on making agreements with all other countries with which the EU has a trading relationship but without them knowing what our trading and customs arrangements will be. Reflecting on the previous debate in Committee, perhaps the biggest reason why those agreements will not be brought forward before exit day is the very sensible position that third countries are taking. They will not enter into agreements with us, even if we say they are simply a rollover, because these could well become permanent without them knowing what our relationship with the European Union is. Who can blame them? Perhaps Dr Fox can, but who really can blame them?

We know that the withdrawal agreement and the political declaration state that the future relationship will be based on the Northern Ireland backstop, which means that we would not deviate from the EU in our trading. It seems that the Prime Minister’s course of action now, in order to get an agreement through, is to remove the very thing that would offer reassurance to countries with which we have a third-party trading arrangement. The backstop would clearly break the “taking back control” mantra, so to some extent it is not surprising that many on the government side, in the Conservative Party, have said that this is actually not leaving the European Union at all. So it is hard to see how they move forward now.

Labour’s position is based on Turkey, where agriculture is excluded and where the country is obliged to use EU rules and abide by the European court’s interpretation of them. To some extent, this also means having the European court’s remit over our future relationship. Turkey’s agreement with the European Union explicitly excludes Turkey deviating from the EU’s internal regulations; it is bound by them. If negotiating “a customs union” with the European Union were to have any preferential terms over participation in decision-making, the European Union would then be bound to offer them to Turkey and Andorra, which it will not do. This is one of the difficulties about which we have to be open.

Labour’s position of being aligned with the single market but not part of it means that with the movement of goods comes the movement of capital, which also means some form of people movement. It has not said this so far, but I think we now have to be in a period of openness and honesty. This is clearly within the scope of the European Court of Justice—which Jeremy Corbyn has ruled out. Many people also say that this is not leaving the European Union. It does not remove the need for border checks. Some of the longest delays in border checks in Europe have happened between Turkey and Bulgaria—two countries which are part of a customs union. So, if we want British representation in a customs union, with British oversight and decision-making, and a seamless trading relationship with 49% of our trading partners and a further 17% of other countries with which we have trading relationships without tariffs, we have to retain membership of the customs union.

If the impossible government position is termed “not leaving”, and if Labour’s position is termed “not leaving”, then I think not leaving would be better done after the people have agreed it. Now the reality that we are embarking on is clear. For the first time in history, a country is seeking a trading arrangement with new barriers, additional regulations and enhanced restrictions. It is the first arrangement ever knowingly entered into that would reduce prosperity. This is the Government’s course of action outside the EU’s customs union.