Brexit: Domestic and International

Lord Razzall Excerpts

Thursday 27th October 2016 Lords Chamber

[Lord Razzall (LD)]

My Lords, the House clearly owes a great debt of thanks to the noble Lord, Lord Leigh, for bringing forward this extremely important and topical debate. The topicality and importance of it are clearly indicated by the number of noble Lords who have put their name down to speak. We all look forward of course to the maiden speech of the noble Lord, Lord Gadhia, which will follow my remarks.

As other noble Lords have indicated, the political world is now obsessed by the negotiations to come out of the European Union. Will it be a hard Brexit or a soft Brexit? What will the trade-off be between our business relationship with Europe and the restrictions on European immigration? We have not really had any answers from the Government. We have been told by the Prime Minister that we have to accept that Brexit is Brexit—but I am not quite sure where that gets us. The Prime Minister had an opportunity yesterday at Questions, in response to a question from the Leader of the Opposition, to say whether, like Baldrick, she had a cunning plan. I am not sure that her reply—that Baldrick was a member of the Labour Party, which seemed to confuse the political views of the actor with the political views of the character—was terribly relevant. Of course, I do not think she appreciated that the whole point of Baldrick’s cunning plan was that ultimately there was no cunning plan. Some of us on this side of the House think that is where we are.

Apart from the creation of the Brexit ministry under David Davis, we also, as noble Lords know, have a new ministry under Liam Fox, who has been given responsibility for all our trading relationships outside the European Union. But until today, there has so far been very little debate about the issues that now face the Liam Fox ministry. Apparently he has two responsibilities. The first is to improve our trading relationship throughout the world. In this regard, he has inherited the policies of the previous Government and the team of trade envoys now led by Mark Price, the former chief executive of Waitrose. Sensibly, it seems that he is leaving this structure alone to continue its good work. I am glad that he has agreed that it should remain cross-party.

The other issue that has not really been discussed publicly is that apparently we are to negotiate trade deals with our most favoured partners—which, according to some government statements, will need to be concluded within the next two years. There are serious issues to be discussed here. First, how are we going to negotiate trade deals outside the European Union while we remain a member of it until the expiry of the two years following the triggering of Article 50—particularly when we do not and will not know the restrictions we will have to accept as part of any retention of access to the single market? Secondly, how can we put in place the trade negotiators to provide assistance in these negotiations? I suspect that most negotiators with this experience are still working in Europe, and we do not want to have to rely on law firms and firms of accountants to provide our negotiators. Do we seriously anticipate that we will be able to negotiate these deals within two years? The recent Canada experience demonstrates those difficulties.

There is a more fundamental point. We are all agreed that free trade is beneficial, as the noble Lord, Lord Leigh, indicated. Protectionism—either by tariffs or quotas—has costs, makes imports more expensive and depresses the incomes of consumers. By shielding domestic industries, protectionism diverts scarce resources to less efficient uses. This concept of free trade was advanced initially through the General Agreement on Tariffs and Trade after the Second World War and subsequently, as the noble Lord, Lord Leigh, indicated, through the World Trade Organization. But this is not what Liam Fox seems to be advocating. Bilateral trade agreements favour some countries over others and are, by definition, discriminatory and preferential. The danger is that we confuse bilateral trade deals with free trade. Basing policy on finding partners such as Australia or South Korea will secure preferential access for our exports there and may increase trade flows between us and them. But will it enhance efficiency and improve British living standards? That is the question that Liam Fox, the noble Lord, Lord Leigh, and their colleagues need to answer.