Outcome of the European Union Referendum

Lord St John of Bletso Excerpts

Tuesday 5th July 2016 Lords Chamber

[Lord St John of Bletso (CB)]

My Lords, in my 37 years in your Lordships’ House, I have never known a time of so much uncertainty and public division as in the run-up to the referendum. Now is not the time for post-mortems—judgment has been passed—but now is the time to address the future with a positive approach. While I was firmly in favour of remaining, despite my many misgivings and the many failings of the efficacy of the European Union, I respect the result and feel that it is highly unlikely that we will have another referendum. I share the concerns of many of your Lordships—especially those of the most reverend Primate the Archbishop of Canterbury, who made a most moving speech—about the need to stand united to counter threats of xenophobic behaviour and hate crimes. Now is the time to promote unity and tolerance, provide a clearer road map for the future, attempt to dispel the many uncertainties and consider all the viable options—not that there are many.

The choices facing the United Kingdom form a spectrum. Clearly at the one end is sovereignty and control of immigration and at the other end is full access to the single market. There is no perfect solution. Everything depends on what the UK regards as vital and what the European Union is prepared to agree. I agree with noble Lords who have cautioned about being in no rush to trigger Article 50. We should not forget that we are the fifth-biggest trading country in the world and the second-largest economy in Europe.

On 9 September, our new Prime Minister will face an epic balancing act to interpret the meaning of the referendum, weigh it against what is economically desirable and politically workable and turn it into a negotiating plan. In the past week, among the mass of media coverage, we have heard of various options before we potentially trigger Article 50. There is the Norway option of joining the European Economic Area; there is the Swiss option of being a member of the European free trade area; there is the third option of trading with the EU as a member of the World Trade Organisation, creating a relationship similar to that which the United States, Australia and China have with the European Union; and finally, there is the option of leaving the single market, with the UK negotiating a preferential trade agreement with the European Union, which is sometimes referred to as the Canada option after the comprehensive economic and trade agreement negotiated between the EU and Canada. Each of these options has its major shortcomings, and clearly there are no easy choices, but we should not underestimate the value of passporting for international companies that have decided to have their headquarters in London and the United Kingdom. I understand that several major law firms have been working around the clock providing contingency plans for many international companies that have their headquarters here, are seriously concerned about what will happen if we trigger Article 50 and are potentially looking to move their headquarters to Frankfurt, Paris or Dublin, which will obviously result in thousands of job losses.

I hope that, in addition to the reassurances given by the Governor of the Bank of England, the Chancellor will deliver on his hint to reduce corporation tax and encourage more multinationals to invest in the United Kingdom. Concerns have also been expressed about the collapse of the property market. To this end, I hope the Chancellor will consider the option of reducing stamp duty, which has had a major dampening effect on property trading.

A point that has not been discussed much today is how will Brexit impact on the United Kingdom’s technology sector. The United Kingdom has been a leader in promoting a digital economy, and so much has been achieved in job creation with Tech City and the digital single market. Big data, artificial intelligence, and the internet of things, as well as nanotechnology and robotics, are all set to change the workplace of tomorrow and the future of skills, employees and managers. I declare an interest as advisor to the board of Silicon Valley Bank. It is well known that, since the Brexit vote, many international investors have hit the pause button. Confidence is seeping with this uncertainty. It is imperative that, just as the Governor of the Bank of England has given assurances to the financial sector, so too should there be a lot more reassurances to the tech sector.

Coming so far down the batting order, most of the points that I wanted to address have already been covered by other noble Lords. My children, except for my stepdaughter, all voted to remain in the EU. They were, and are, all concerned about the younger generation’s job prospects after they leave university. They were all concerned about the impact that Brexit would have on university funding and grants—a point that has been raised by my noble friend Lord Bilimoria and the noble Baroness, Lady Royall.

I would like to reinforce the strong calls by my noble friend Lady Kidron and the noble and learned Lord, Lord Wallace of Tankerness, that our Government need to promote hope for our youth, who need their voices to be heard.

In summary, I repeat my call at the beginning of my speech, that while we have taken a large step into the unknown and into uncharted waters, now is a time for promoting tolerance and unity, for a more considered and realistic roadmap for the future and for strong leadership.

In the words of the late Jo Cox in her maiden speech,

“we… have far more in common than that which divides us”.—[Official Report, Commons, 3/6/15; col. 675.]