Outcome of the European Union Referendum

Lord Cavendish of Furness Excerpts

Wednesday 6th July 2016 Lords Chamber

[Lord Cavendish of Furness (Con)]

My Lords, it is a pleasure to follow the noble Baroness. I find myself in agreement with some of the comments she makes regarding agriculture, although I think she should not be surprised that farmers voted in the way that they did, having spoken to many of them myself. My decision to intervene in this debate came to me when I reflected on the fact that I was in a minority in your Lordships’ House by virtue of supporting the leave cause and campaigning actively to achieve its objectives. I feel the need to explain myself.

If there is any advantage in lying 97th on the speakers list, I suppose it is in looking back and reflecting on a long and fascinating debate. Four things stand out for me. First, I think noble Lords have been completely united in their calls for ending the uncertainty facing EU nationals living here, and of course I endorse those calls.

Secondly, I fully appreciate that many noble Lords are seriously and sincerely upset by the outcome of the referendum. Even if I do not understand their sense of loss, and I do not, I appreciate that it is real, and today and in future I will respect that feeling. I have, however, been struck by how many senior Members of your Lordships’ House have hedged their acceptance of the public’s verdict, to the point of not really accepting it at all. Unless I misread him, I gained the impression that the noble and learned Lord, Lord Wallace of Tankerness, went further and quite simply repudiated the result on his own behalf and that of his party. I am very relieved to see him shaking his head, and of course I will accept his denial of that even if it is silent. The general feeling of not accepting the vote takes us into dangerous territory.

Thirdly, with very few notable exceptions, I have been struck during this debate by how very little I have heard by way of advocacy on behalf of the EU. I found myself wondering, “What is there to love about the European Union?”. With such experience and eloquence as to be found in your Lordships’ House, I had expected to find my own thought processes challenged and in that I have been disappointed.

Fourthly—I think there has been a tradition of not giving way, unless the noble Lord really wants me to.

[Lord Davies of Stamford (Lab)]

The noble Lord said he was going to have respect for the other side of the argument, and I appreciate that. I hope he might realise, therefore, that we have not in this series of debates been talking up the virtues of the European Union because that would have been to fight the referendum campaign all over again. It is not very germane to today’s debate, which is on what we do now. That is precisely the reason we have not spoken about the merits of the European Union, not because of any loss of conviction.

[Lord Cavendish of Furness]

I have no doubt about the noble Lord’s enthusiasm for the European Union; it has been plain over many years.

Fourthly, we are indebted to the most reverend Primate the Archbishop of Canterbury for an immensely powerful speech. It is for all of us to reflect long and hard on an intervention which redeemed an otherwise rather sad day.

Of the many facets of the EU debate, nothing has driven me so much as the conviction that failures of accountability are a principal cause of much of humanity’s wretchedness and pain. I have long feared that our centuries-old settlement, under which government is conducted with the consent of the people, is under threat and is in total conflict with the EU’s direction of travel. As I enter old age, I was stirred into action these last few weeks to protect my children and grandchildren from the possibility of arbitrary rule, perhaps even tyranny, if an unreformed European Union persists in turning its back on the democratic process.

Many motives have been ascribed to those who voted to leave. It would be a mistake to underestimate the sense of anger British people feel about the undermining of their democracy. I found it to be an ever-present theme during the campaign. The perception of national identity being stolen was also identified and articulated in various ways.

That brings me to the more prosaic fears I encountered. Of the many civilised, but often passionate, exchanges, I suppose the most common anxiety I met with had to do with our alleged access to the ineptly named single market. After so many years, I find it deeply shocking how many barriers there still are to trade and how damaging they are, especially to our national interest. What has become known as the single market should more accurately, I am told, be called the single regulatory zone. I continue to think of it as a customs union. Whatever it is called, it is protectionist in character and morally questionable in its impact on the poor of EU countries and even poorer citizens of countries outside the European Union.

Brussels plays host to tens of thousands of lobbyists, more than in Washington. Large multinational companies effectively purchase laws and regulations, first, to benefit themselves and, secondly, to disadvantage their smaller, often more innovative, rivals. This horrible kind of venality seems to be comfortably at home in Brussels. Perhaps a product of globalisation so much talked about is the appearance of giant organisations, whether institutions or corporations, whose very size destroys any semblance of a morality. It is a problem that we need to address, as has been said today and yesterday.

In the matter of trade, it becomes daily clearer that non-EU countries export more successfully to the EU than we do. The reason is not hard to find. The WTO tariff averages out at 3%, which compares with the cost of our membership equivalent to a 7% tariff. Our trade deficit with the EU has risen in recent months and now runs at a record £100 billion. It really is hard to see how it would be in the EU’s interest to damage this, its most important market.

Looking ahead, rather than obsessing about trade deals, why do we not just quietly and politely walk away? We might or might not have to pay the modest tariffs permitted under WTO rules until free trade agreements are in place. Or might we not explore the proposal that we unilaterally declare ourselves a free trade country? Those putting up barriers against us will soon discover that they are harming themselves more than they harm us. Surely a nation with its independence and democratic integrity restored, its identity recovered, its tradition of free trade renewed, truly internationalist in character, amounts to a vision that can inspire and unite us all.

European Union Referendum Bill

Lord Cavendish of Furness Excerpts

Tuesday 13th October 2015 Lords Chamber

[Lord Cavendish of Furness (Con)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Dubs. I always enjoy his breadth of interest, although I would probably hesitate to cite the European arrest warrant as the EU’s high-water mark.

I rise to support the measure before us and do so with enthusiasm. I congratulate the Government on its introduction; the time has surely come for this hugely important issue to be resolved. I have read most of the debates in another place. There were impressive interventions and the outcome was unambiguous. Since there is nothing obvious that I want to change about the Bill, my few remarks will be devoted to the nature of the debate that follows the Bill becoming law.

I have never made a secret of my Euroscepticism. However, I still believe that it is just conceivable that enough in the way of reform could be achieved to persuade me to vote in favour of remaining in the EU. To that extent, my mind is not closed. In fact, many of us have more open minds than has been acknowledged in the debate today.

One possible avenue for such reform might originate with our EU partners rather than with ourselves. Might it not be the case that a combination of factors could conspire to persuade our partners that Britain’s aspirations are not, after all, so very far removed from their own? Might it not also be the case that consensus develops among those partners that our leaving might be the last straw for such a troubled and dysfunctional enterprise, whose competence, economic performance and direction of travel have in reality ceased to inspire confidence?

Those of us who lean towards the Brexit outcome need of course to understand the downsides and costs, and not to underestimate them. By that I do not mean absurd and dishonest statements, such as the one that claims that 3 million jobs are dependent on our staying in the EU. That claim rests on the ridiculous assumption that this country, outside the EU, would cease to trade with its former partners. Anyone who persists with such an argument, as I think the noble Lord, Lord Davies, was, must surely need also to concede that, by the same measurement, 4.5 million EU jobs are dependent on trade with the UK.

I am after serious and detailed analysis of the implications of staying as well as leaving, as other noble Lords are. When my noble friend the Minister comes to wind up, could she try to tell us a little more about how people will be able to access authoritative and independent research on these issues? Whitehall analysis and comment on its own will not command public trust without what one might term some kind of independent review. I thought that my noble friend Lord Inglewood, who is not in his place, put this in context very well. I hope that the Minister will read his remarks with some care.

The debate, I believe—and this has not been touched on—should take account of a problem of the modern age, which is the increasingly corporatist nature of all activity throughout the western world and the resulting political fall-out. The state, perhaps inevitably a little bit corporatist, feels more comfortable dealing with large corporations than with small ones. The corporatist world—industry and commerce—meanwhile has to a great extent ushered in what I might call extreme politics, mentioned here by the noble Lord, Lord Liddle. The anger we see on the streets here and elsewhere is less directed at free-market capitalism, which in my lifetime has lifted literally billions of people out of poverty, and more towards corporatism, which has in the last few years cheated and disenfranchised many of the most vulnerable people in the world.

I am not arguing that the leaders of big business are all venal and bad; of course they are not. There are many admirable business leaders, and they are very well represented in your Lordships’ House. However, huge corporate size, wealth and power are almost inevitably corrupting, and in the end self-defeating, because they undermine competition, and those that they are meant to serve become lost to view. As it currently functions, the EU is the personification of corporatism and a denier of freedom and democracy. The link between the rulers and the ruled has faded almost to the point of invisibility,

I have always held that a much neglected problem with Britain’s relationship with the EU stems from the simple incompatibility of our legal systems. I am convinced, for example, that it accounts for much of Whitehall’s infamous gold-plating, which is so dementing for those of us who try to run a small or medium-sized business.

I remind your Lordships that such businesses generate 95% of the British economy and more attention needs to be addressed to their concerns. We have had many lectures today, led by the noble Baroness, Lady Morgan, about trade. I make the point that many of those lectures come from people who have never traded. I have spent my entire adult life trading with the rest of the world, and I can assure your Lordships, in spite of what the CBI says, that neither I, nor any of my colleagues or people whom I know, have any fear of our future outside the European Union.

Crucially, the debate should—and I fervently hope will, following the passing of this Bill—concern itself with how we are governed and how our people want to be governed. Our system of government can be traced back 2,000 years, when the inhabitants of these damp islands decided to put an end to unaccountable power. The ensuing constitutional journey, which included such milestones as Magna Carta, celebrated this year, has not always been smooth, but the version ultimately bequeathed to us gave us the rule of law, an independent judiciary and democracy. It was exported to the whole of the English-speaking world and seems to me to have stood the test of time quite as well as other systems adopted by countries that, in the main, are very much younger than our own. Europe is a young concept, as the right reverend Prelate the Bishop of London reminded us.

I would not think of offering advice to other countries as to how they should govern themselves; nor, out of good manners, would I claim that our system of government is better than theirs. However, there needs to be a very compelling case indeed to give up our tried and tested form of government in favour of another. But with some 60% of our laws already being decided outside of this Palace of Westminster, and with the persistence of the mantra of “ever closer union”, that is precisely what is being asked of us if we are to remain members. As was eloquently pointed out in another place, “ever closer union” leads to only one destination and that is Union.

As my right honourable friend the Prime Minister pointed out in his Bloomberg speech:

“It is national parliaments which are, and will remain, the true source of real democratic legitimacy and accountability in the EU”.

For me, the preservation of our ancient freedoms and our democracy will ultimately be the test that trumps all others.

UK Industry: International Competitiveness

Lord Cavendish of Furness Excerpts

Thursday 5th July 2012 Lords Chamber

[Lord Cavendish of Furness]

My Lords, I am pleased to join others in thanking my noble friend Lord Jenkin of Roding for introducing this debate with such skill and clarity. His reputation brings an enormous amount to this House.

My purpose in intervening today is to draw attention to the obstacles that prevent SMEs, in particular, from being competitive. Since those obstacles are real, in my view, I see no merit in being mealy-mouthed about them. It should be recognised that during the years of financial services hubris, those of us who do things, make things or grow things became highly unfashionable and only slowly are we emerging from those dark days and those perceptions. It appears to me that Governments used to ask bankers how the economy worked. When their fallibility became apparent, advice was sought from the owners of supermarkets and big business. It is my contention that the people that Governments should have been talking to are those who work in the sector of small and medium-sized businesses that make up such a very high proportion of this country’s productive capacity. It is they, and perhaps only they, in the short term, who can deliver growth and investment and they stand ready to do so if only this coalition Government have the will and the courage to unshackle them and let them take flight.

I know that the Minister will point to measures he has implemented and plans to implement in the future. Of course, there are improvements and they are appreciated. I do not mean to underestimate the challenge that this coalition faces or ignore the real achievements in the face of these challenges. It has brought onto the statute book three very major reforms, the main benefits of which, as with many reforms, lie in the future.

I operate, as I have done for the past 40 years, in that very sector which I so passionately believe is crucial to national recovery, investment and growth, and that brings me to declaring an interest. I have beneficial interests in a landed estate based mainly in south Cumbria. The estate’s activities include farming, forestry, property management, leisure, tourism, minerals and housebuilding. We also own and run a racecourse and have 250 people on the full-time payroll, 150 of whom are engaged in extracting, processing and selling slate, a significant proportion of which goes to markets around the world. On the question of exporting, I believe that a successful exporter has a mindset, more than anything else. If I can dig stone out of the Cumbrian hills and send it to the other side of the world, it ought to give encouragement to other exporters.

Let me remind your Lordships what the SME sector comprises. There are 4.5 million small businesses in the UK. They account for 58.8% of the private sector and nearly half of all private sector turnover. In 2010, family businesses contributed £81.7 billion in tax receipts to the UK Exchequer, or 14% of total government revenues. The barriers to growth and investment under generic headings are well known to the Government; perhaps less well understood is the disproportionate impact they have on the sector where I have some experience. The burden of reporting to government departments on such things as PAYE, VAT and national insurance not only grows remorselessly, but those departments do not work to the same standards and timescales as is the norm in the private sector. All entrepreneurs in this sector will rightly point to employment and health and safety laws and their implementation; a lack of credit, widely rehearsed in this debate; and planning delays and regulation as being among the main factors that inhibit growth and job creation. I shall say a word on each and address some other considerations that are sometimes overlooked. I was hoping that other noble Lords would cover the importance of broadband, which I know is a very important aspect of this.

Decent people believing in the rule of law have always defended the principle that justice is worthless unless it is accessible to all. People need and deserve protection from unscrupulous employers and I suspect that the reputation of tribunals for being one-sided in favour of claimants is sometimes exaggerated. However, something is very wrong—I suspect that it is the law itself—when I consider how attractive the system seems to be to vexatious claimants. It is also cumbersome and pitifully slow and therefore costly in terms of time and money.

Charities are particularly vulnerable, made worse perhaps by the Charity Commissioners’ understandable but strong guidance that claims should be settled rather than defended. I have personal experience of this through my local hospice, which I co-founded and was involved with for nearly 20 years, which was nearly ruined by a vexatious claim. I especially ask my noble friend Lord Green to take note of this. Charities play an ever-increasing role in society and I emphasise that they are significant employers and, as such, are very much part of the national economy.

It is above my pay grade to suggest how the law might be changed, but it is plainly true that the impact of employment laws on a small enterprise is different, and by magnitudes greater, from what it is on a large one—a point made eloquently by my noble friend Lord Brooke. In the matter of planning, authorities have apparently cut back on resources; that is something which they had to do and it seems right to me. However, they have done this without changing their methodology. I ask myself this: when all of us have found ourselves forced to do things more smartly and efficiently, why has so little been done in the public sector to do likewise? The effect is plain enough. Nearly 70% of those seeking planning decisions are having to wait longer than the legally required eight weeks. What makes this so scandalous is that about a quarter of such applications are for change of use and a quarter for minor improvements. Every planning permission generates economic activity and all delays costs jobs.

Across my own business, as I speak, 20 jobs are being withheld pending delayed permissions that have been agreed to in principle. Only today I heard that the retirement of a person in the highways department was given as the reason for a local housing development being delayed for six months. Just imagine the effect that that has on employment. My family business is at an advanced stage of considering installing an anaerobic digestion plant to generate green energy. As a consequence of government prevarication on several fronts, together with an estimated two-year delay in securing permission to connect, this project is now on hold. Again, although we can all applaud the intentions of the national planning policy framework, I am bound to say that I reserve my position until I see how it is interpreted at the local level and by the planning inspectorate.

In reaching a view as to the impact of regulation, I have relied on my own experience and that of my neighbours in Cumbria. By the time someone employing three people has completed all regulatory compliance, by my estimation he or she has lost in a working week the best part of a full day. On top of that, there will be the direct cash costs of compliance to be earned. I will cite two examples. I know a brilliant self-employed precision engineer who does work building submarines in the shipyards at Barrow and also in the nuclear industry. He is the sort of person this country really needs. He has an order book that would merit his taking on two or three additional people. He would be willing to train young people. He cannot and will not employ anyone until he sees at least some of the burdens removed and the high personal risk of employing people reduced.

My second example, moving from the sublime to the ridiculous, goes down to the farm. Under Defra’s electronic tagging system, if a sheep tears a tag out, as frequently happens—there is an animal welfare issue there—the farmer is obliged to identify it by reading the tags of every animal in the flock. Did anyone think to consult a farmer before such a crass regulation was introduced?

Another, largely ignored, casualty of all this suffocating red tape is civic involvement. I notice this especially among the farming community who, in my part of the world, have a strong instinct to participate in local affairs. I harbour the suspicion that among the official class the squeezing out of such people who possess a deep understanding of their communities is not entirely unwelcome. I can almost hear Sir Humphrey saying, “Intelligent and experienced people interfering in local government, Prime Minister? That is the very last thing we need”.

One other factor playing an increasing part in eroding our competitive edge is the utilities. I cannot imagine what possessed our predecessors when they created these powerful private monopolies. As one neighbour says, “You have to pay them a huge cheque before they get out of bed”. They are more statist than the state; more statist even than the BBC. In the countryside, all of us have no option but to engage with them. They are completely unresponsive to customers, ruthless in their financial dealings and the services they offer are often exorbitantly expensive. I will go so far as to say that unless the worst offenders are compelled to change their ways, they will continue to exercise a baneful effect on the British economy.

With some honourable exceptions, the utilities culture actually pervades all the agencies of the state to some degree or other. I sit on these Benches basically because I believe in a small state. I hold to the view that I have always held: whatever the state does, it does badly and expensively. As an example, the famous NHS IT system budgeted at £2.3 billion was abandoned when it passed, according to some figures, the £20 billion mark. I do not remember anyone being shot at dawn. All I heard was some tut-tutting and talk about lessons being learnt and lines drawn.

It was therefore slightly offensive for those who are law-abiding to be told by Ministers that there was no distinction between tax evasion and tax avoidance and that both were equally reprehensible. One is legal and the other is not. With the record all Governments have of husbanding our hard-earned money, one might reasonably conclude that the more I keep for reinvestment and the less the Treasury gets its hands on, the better for everyone and the better for the country. Besides which, most of us are willing to pay taxes for the public services we value.

I finish with an experience from last week. My company is considering the purchase of a struggling business in a remote part of Spain that might add to the diversity of our operations. Negotiations are at a very early stage and I cannot even guess at what might be the outcome. Despite that, at all levels, Spanish public officials are going to enormous lengths to facilitate these negotiations with the unambiguous purpose of saving a Spanish business and the Spanish jobs that go with it. Compare and contrast that with the culture of our own public sector. We simply do not have the right culture.

I see that my time is up. I do believe that we have the wrong culture. Unbelievable expenses are placed on SMEs. It may take a generation for the culture to change and become what it should be. But at this time of severe crisis when most of Europe has rendered itself uncompetitive, now should be the moment to change the way we do things; now would be the moment for Ministers to insist that public servants put themselves at the disposal of the public, as some of us older people remember that they used to. Even if a start was made at removing the worst of these burdens, even if the flawed culture begins to move in the right direction, then the SME sector stands ready to respond and will, I am confident, lead us out of these dark days to growth, prosperity and full employment.