Outcome of the European Union Referendum

Lord Chidgey Excerpts

Wednesday 6th July 2016 Lords Chamber

[Lord Chidgey (LD)]

My Lords, I congratulate the noble Lord, Lord Low, and the preceding speaker, my good and noble friend Lord Clement-Jones, on the salutary contributions they have made to this debate.

It is even more difficult at number 101 on the speakers list to find something novel to say but what I may try to do is to emphasise some of the key issues as I see them and underline the thoughts of people who spoke earlier. My work since the 1970s has engaged me with the EU institutions one way or another. Those institutions can be aloof, inefficient, expensive, micro-managing control freaks. They are long overdue for reform. However, over the decades they have created the world’s largest single market, cemented peace, and united a continent. They have raised standards, advanced scientific and medical research and improved the environment. There is serious concern that studies are showing that over 80% of all referendum stories in our press were negative. There is concern that most newspapers apparently chose wilfully to deceive and help to hoodwink the millions of poorer and disadvantaged and most vulnerable citizens. The referendum campaign, particularly for the outs, sank to depths of mendacity rarely seen in our press, while an opinion poll taken after the result showed that seven out of 10 Brexit voters thought the referendum did not matter very much. As events unfold, the outcome most certainly will.

The economic case for leaving the EU presented by the Brexiters makes much of an assumption that the UK would then be free to trade with whoever in the world, unshackled from EU regulations. However, the most cursory examination confirms this assumption to be blatantly false. The EU is the largest trading partner with the rapidly expanding markets of Africa and the same applies with India and China, which have both made clear their reluctance to see Britain leave the EU. Both are on record as being far more interested in negotiating comprehensive trade deals with the EU of 28 nations as one rather than with the UK singly, even if it is the second-largest economy in Europe.

President Xi Jinping, on his recent visit to the UK, said:

“China hopes to see a prosperous Europe and a united EU”,

with Britain as an important member playing,

“an even more positive and constructive role in … the … development of China-EU ties”.

He could not put it more plainly than that. Asia’s leaders have, without exception, encouraged the UK not to withdraw from the EU. In India, where the UK is seen as its entry point to the EU market, there is widespread concern that leaving would create considerable uncertainty in the economy and have an adverse impact on investment. With the pound falling to its lowest level for more than 30 years this morning, that concern is well justified.

Across the Commonwealth, which Brexiters cling to like an economic get-out-of-jail card, it is a similar story. The Prime Ministers of both Australia and New Zealand are on record as supporting continued British membership of the EU, welcoming our strong role in Europe. John Key, the New Zealand Prime Minister, said that,

“if we had the equivalent of Europe on our doorstep … we certainly wouldn’t be looking to leave it”.

Although Australia and New Zealand have strong and natural links to the UK, we cannot turn the clocks back 50 years. As trading opportunities, their markets, at some 20 million souls together, are a fraction of those in the African, Pacific, Caribbean and Asian regions, not to mention the 500 million we are already joined with in the EU. I often wonder where the pundits suggesting there is a cornucopia of trading deals just waiting for the UK to leave the EU get their rationale from.

On visiting the African Union headquarters in Addis Ababa just a few months ago, I found that without exception the diplomatic corps, the United Nations agencies and government Ministers from across Africa could not fathom the logic behind Brexit. They feared that influence between the EU and the African Union would be weakened and that security intelligence in Africa currently shared with the UK by EU states would be compromised, undermining our soft power in the continent.

The impact on trade between Africa and the UK will be immense. With African economic growth rates at double or even triple those in Europe, demand for high-quality goods and services booming and unprecedented investment levels, Africa is a long-term market of choice. The latest figures available record that annual trade flows between Africa and the EU, including the UK, reached $350 billion. The projection for China was $200 billion. For the US, it was $100 billion. That sequence of figures spells it out. The projections are that with trade between Africa and the EU already double the sum of the other major markets, it will continue to expand rapidly. This is partly because economic partnership agreements—EPAs—have been negotiated between the European Union and five African economic regions, comprising 33 countries, as well as the Caribbean and Pacific regions.

The EPAs are designed to remove trade barriers and tariffs that impede trade and economic growth between developing regions and the EU countries, bringing direct benefit to both. For the UK, this apparently amounted to some 15% of the uplift. Such is the complexity of the arrangements and negotiations, it has taken 15 years to reach the EPAs’ signing and implementation stage. Outside the EU and outside the EPAs, the UK loses the benefits of these tariff exemptions to these huge markets and, one must assume, faces years of tortuous negotiation to regain entry, while our competitors entrench from their favoured positions.

For some years now, I have been representing the UK Parliament on the governing council of AWEPA, which some colleagues will remember was the organisation of European parliamentarians established to support the so-called front-line states bordering the then apartheid South Africa. Today, AWEPA members, including the UK, are working in 10 African countries, the African Economic Community and the East African Legislative Assembly. They are developing the skills to strengthen these institutions, which are essential to the effective oversight and monitoring of development projects in line with the sustainable development goals. With some 30% of the UK’s aid budget disbursed through the European Union, one can only wonder what will happen to this strategic exercise in soft power in the future.