Brexit: Preparations and Negotiations

Lord Tugendhat Excerpts

Monday 23rd July 2018 Lords Chamber

[Lord Tugendhat (Con)]

My Lords, I begin by associating myself with the remarks of the noble Lord, Lord Kerr, about Lord Carrington. I think at this time we are all very conscious that, in the Conservative Party, we miss Lord Carrington’s wisdom and his sense of honour.

The noble Lord, Lord Birt, was quite right when he said that, while one might regret the result of the referendum—as he and I do—the Government have a duty to seek to carry out the instruction of the majority of the British people. The Prime Minister deserves credit for the efforts she is making to do that in a manner that mitigates the economic damage that might flow from the decision and seeks to puts us in a position from which we can compete successfully under a new regime. Her document may not be perfect, but I agree with the noble Lord, Lord Butler, and my noble friends Lord Bridges and Lord Jopling, that it provides a basis for negotiation and should be treated in a positive fashion in that light.

What I find so hard to understand about so many members of my party—in particular Boris Johnson, Jacob Rees-Mogg and others who think like them—is their refusal to recognise the practical difficulties in leaving the EU. They attack the Prime Minister’s plans with grandiloquent verbosity, ludicrous historical analogies and sweeping generalisations, but they put nothing in their place. They also talk only to the British people, with no consideration of how our departure from the EU involves negotiating with the Commission and the EU 27, and that they too have legitimate interests to defend and aspirations to pursue. The right reverend Prelate had something sensible to say on that score.

As the White Paper points out, the nature of our trade with the EU is quite different in many important respects from our trade with the rest of the world because of the supply chains and the just-in-time processes that link our manufacturing industry inexorably with plants in other EU countries, and they with us. This is the result in part of the EU system that has been built up over the past 40 or more years, but it is also a result of geography. It is very important that we should seek to maintain frictionless trade in Europe, because the arrangements we have in Europe cannot be replicated elsewhere in the world. I hope very much that the ambitions—although rather unquantified—of the great free-traders who support Brexit are realised. I hope that we achieve the success that they promise us. However, it is very important to preserve what we have as far as we can within Europe, because those arrangements cannot be replicated elsewhere. The noble Lord, Lord Mandelson, dwelt wisely on these issues, and I suspect that what he said may be a harbinger of the future.

Whatever happens, our Prime Minister is not going to be able to negotiate successfully on the issues in the White Paper, or on any other issues, unless she enjoys the support of her colleagues in government and in Parliament. For as long as the Commission and the EU 27 have good reason to believe that she cannot get a deal through Parliament, they will be reluctant to make concessions or to compromise. There is a direct correlation between the strength of the Prime Minister’s position at Westminster, and among public opinion, and her strength at the negotiating table. Those who constantly seek to undermine her, while pleading patriotism, are doing the country a great disservice.

I have one final issue to raise about those who look forward so blithely to working under WTO rules. My first point—and I stand ready to be corrected—is that there is no significant trading partner of the European Union that relies solely on WTO rules in its trade with the Union. Secondly, this is a particularly bad moment to become wholly dependent on WTO rules, as its dispute arbitration mechanism is on the verge of breakdown, owing to the fact that President Trump is unwilling to appoint a judge to the panel, and, very shortly, it is unlikely to be quorate. Thirdly, there is all the difference in the world between a carefully prepared and transitioned change on the one hand, and an overnight crash out on the other. Fourthly, given the nature and intensity of our trade with the European Union, and the role of the supply chains and the just-in-time processes, we in any case need something much better than WTO rules. The Prime Minister deserves our support in trying to achieve it and I believe that, with the White Paper, she has at least thrown the ball into the lineout. I hope it comes out in a satisfactory way.