Trade Bill

Baroness Altmann Excerpts

Report: 1st sitting: House of Lords
Wednesday 6th March 2019 Lords Chamber

[Viscount Trenchard]

I do not disagree with the noble Lord—but the point I was making is that in the period since 1998 goods exports to the EU have grown by only 0.2% per year, or 3.7% over those 20 years, reaching £164 billion in 2017. However, the UK’s goods exports to countries outside the EU customs union have grown in the same period by 3.3% a year—over 60% in total—to £175 billion. So the customs union has not been quite as marvellous for this country as noble Lords opposite suggest. I very much hope that the Government will stick to their policy of leaving on a basis whereby we will have our own independent trade policy, which will enable us to do more trade and enter into trade agreements with the economically faster-growing parts of the world.

[Baroness Altmann (Con)]

My Lords, I support the amendment. I hope we will send back a clear message to the other place that it needs to reconsider the importance of having a customs union—for our integrated supply chains, for the success of our manufacturing industry and, indeed, for peace in Northern Ireland and security on the Northern Ireland border. I am afraid that a number of colleagues in the other place do not seem to understand how international trade deals work. The idea that we would have rolled over all 40 trade deals that we had through the EU by now has been shown to be fanciful. I do not believe that it is safe, in the 21st century, to assume that operating as a medium-sized country outside a customs union will deliver us more and better trade than remaining within it.

[Baroness Falkner of Margravine (LD)]

My Lords, I would like clarification from those who tabled this amendment: they refer to “a” customs union but other speakers have used the expression “the” customs union, as the noble Baroness, Lady Altmann, has. For the purposes of what I am going to say. I will assume that they mean remaining in the EU’s customs union and common commercial policy.

If that is the case, I understand the motivation for seeking a halfway house between leaving and remaining, which is what this implies. However, being in a customs union and being entirely subject to the EU’s common commercial policy, which is the overarching umbrella under which the customs union sits, is the worst of all options. That is why Switzerland and Norway—two countries with different arrangements in the EU—have chosen not to be part of the customs union. So while the idea may be attractive to protect trade in goods—and I admit that is important—given that we have an economy where trade in goods is a relatively small part of our exports, the sting of the common commercial policy, although it is encroaching into services, is primarily about trade in goods, not trade in services.

Being under the umbrella of the CCP without membership of the EU will mean that we will not be present in the European Council, which has the ultimate say over trade deals; we will not be present in the European Parliament or in regional parliaments. Noble Lords may remember the Canada-CETA story and the Parliament of Wallonia. We would not even have the status of the Parliament of Wallonia in future trade deals were we stay in the customs union. We would be a rule taker without a seat at any table. It would also render the previous amendment, which the House overwhelmingly passed, entirely redundant.

Turkey feels so disadvantaged by its current arrangement in the customs union—which, incidentally, was only agreed as a stepping stone towards full membership—that it is seeking to change those terms. However, I suspect that by now it is not seeking to change the terms because it accepts that it is not going into membership of the European Union.

The CCP is designed to serve the interests of member states—and so it should—but it is not designed to serve the interests of the fifth biggest economy in the world. Even those who feel that the United Kingdom will be much diminished if it leaves the EU must surely recognise that we are a more significant economic power than Turkey. So when the EU rightly seeks to advance its own interests, who will speak for UK interests? When the EU moves to use trade remedy laws—we have had a great deal of discussion during the passage of this Bill about trade remedies—to protect its own industries, and when that does not cohere with the United Kingdom’s interests, while we remain a member we can say something about it; we can indicate our preferences. If we are out of the EU but within the customs union, we would have no say over our interests being disadvantaged in the interests of any of the 27 member states which would be at the table.

--- Later in debate ---

[Baroness Altmann]

I think what the noble Baroness is doing for the House is eruditely explaining the trade-offs that the country is facing as a result of the decision that was taken and the red lines that were imposed. What this House is talking about—and what the amendment seeks to achieve—is to protect the manufacturing success, jobs and the integrated supply chains that we have built up in this country on which so many people’s livelihoods depend, as well as protecting the border in Northern Ireland. That is entirely accepted. Indeed the House has already passed the amendment which would also require us to have some kind of regulatory alignment in order to better achieve the aims we are trying to set out. However, that does not mean that we should not have and do not need a customs union.

[Baroness Falkner of Margravine]

The noble Baroness has just told your Lordships that the House was trying to protect manufacturing through being in “the” customs union. So we have on one side “the” customs union, which is the EU customs union, and on the other side we have a bespoke customs union. That in itself illustrates the problem with those who want to reverse where we are today.

I urge the House to look at the common commercial policy carefully, not only in the light of Articles 206 and 207 of the TFU, and to look at the jurisprudence. The jurisprudence on the part of the CJEU expounds the EU’s common commercial policy into foreign direct investment rules way beyond common commercial policy and into the EU’s external action policy. Some of us may have no problem with that, but the jurisprudence will continue while we are outside the room and not at the table. The jurisprudence will reflect the EU’s priorities, not ours. It would leave us in a vulnerable position going forward whether we were in “a” customs union or the bespoke customs union, which would potentially give us bargaining rights and some say in jurisprudence. Certainly that customs union would give us no rights at all.

I am not used to evoking Mr Blair in support of any cause—I suppose it will have the same impact here as it does elsewhere in the country—but even he has gone public to say that the worst of all worlds would be for us to stay in the customs union. If noble Lords want to support trade in goods they need to move either towards the withdrawal agreement and the FTA that is likely to come with it, or to move to simply remain in the EU. This amendment is an ambush to try to achieve that latter aim. I am pro that latter aim—I am pro remaining in the EU—but I can see, with 20-something days to go, that either we have to agree with the withdrawal agreement, as I voted the last time, or we have to go the other way, as I said in my previous speech, and ask the Prime Minister reconsider our position. A customs union is not going to do that and, on that basis, I will be voting with the Government.

Trade Bill

Baroness Altmann Excerpts

Report: 2nd sitting (Hansard): House of Lords
Wednesday 13th March 2019 Lords Chamber

[Lord Bruce of Bennachie (LD)]

My Lords, I rise briefly to support this amendment, to which I have put my name. Sadly, we have arrived at a point where a deeply divided Conservative Party has deeply divided the nation. The irony of that is that it is the Conservative and Unionist Party that currently presents the biggest threat to the integrity of the United Kingdom. Just over two weeks—15 days—before we are due to leave the European Union, the Government, if they do not take action or accept this amendment, present the greatest potential threat to the Good Friday agreement. This hard-won agreement was forged in the understanding that the UK was and would remain in the European Union, and that the UK and the European Union would be its joint guarantors. We are now moving into a new situation where it is unclear who the guarantors would be.

People talk about a deal, but there is no deal. There is an agreement, twice rejected, on how we leave the EU. The deal comes afterwards and has to be negotiated: we have not even begun to address that. Yesterday the Government published two guidance statements on trade and tariffs—one of them specifically for Northern Ireland. Yet this guidance acknowledges only what the UK Government can or will do. It cannot by definition legislate for any EU measures.

The Northern Ireland guidance states:

“Because these are unilateral measures, they only mitigate the impacts of exit that are within the UK government’s control. These measures do not set out the position in respect of tariffs or processes to be applied to goods moving from Northern Ireland to Ireland”.


So will the EU impose tariffs on agricultural products from the UK to Ireland or to the rest of the EU, just at the beginning of the lamb sales? Is that what we would be facing? And that is just one sector and one example.

That is why this new clause is needed. It is a clear and unequivocal statement that nothing can be done and nothing should be done that undermines in detail the terms of the Good Friday agreement. As long as the Government stand by their position, there is no agreement that conforms to this clause—because the House of Commons has rejected the agreement twice. So we are in danger of being in default. Parliament either has to accept the backstop, which was the means of securing acceptance—twice rejected by the House of Commons—or the Government have to abandon the red lines and seek more time to pursue a softer strategy built around the customs union. Better still, in my view—I guess my colleagues on these Benches will agree—we should suspend Article 50 and put the deal, which would have to come with a backstop, to a vote of the people, with the option to rescind Article 50 altogether, on the basis that there is no agreement that either commands a majority in Parliament or is consistent with the Good Friday agreement. Currently there is no such agreement on the table.

I commend this amendment to the House on the basis that adopting this new clause would give the House of Commons a building block for squaring the circle, which the Government and the House of Commons have so far utterly failed to do.

[Baroness Altmann (Con)]

My Lords, my name is also on this amendment and I echo every word of the excellent speeches from the noble Lords, Lord Hain, Lord Kerr of Kinlochard and Lord Bruce of Bennachie, and the noble and right reverend Lord, Lord Eames. We have an international obligation. We have signed the Belfast agreement—a long-standing, deep and binding international agreement—and somehow it seems to have been forgotten or overlooked in the frenzy of focus on some kind of “pure Brexit”, as it is called. The noble and right reverend Lord, Lord Eames, called this the “hidden element”. It has become frighteningly clear that the Brexiteers did not understand Brexit properly. They imposed impossible and inconsistent red lines which have left us in the position we are now.

While the economics imply that staying in the customs union and single market will protect frictionless borders and supply chains and our manufacturing industry and services, it makes us a rule taker, and forces us to have some connection with the ECJ. On the political side, this has led to the drive towards dropping the backstop, as if it was a problem we should not care about—actually, we should care about it deeply—or even considering no deal, which clearly leaves Northern Ireland high and dry.

Leaving the customs union and single market cannot support an open border. Nor can no deal, or Canada-plus-plus. It saddens me that so many of our colleagues on these Benches are willing to countenance playing fast and loose with the hard-won peace achieved in Northern Ireland, for the sake of some kind of trading advantage which may or may not occur. I appeal to my colleagues on the Front Bench, and to my fellow Peers on the Conservative and Democratic Unionist Party Benches alongside me, to accept this amendment. It has already been accepted as part of the withdrawal Act. Surely we cannot, and must not, abandon the frictionless border in Northern Ireland, or cut Northern Ireland off from the rest of the UK.

[Lord Alderdice (LD)]

My Lords, I want to address something in this amendment that is important, but which has not been picked up so far. In saying so, I support the amendment, which proposes to support the Good Friday agreement. People tend to think of that in terms of the structures within Northern Ireland and between north and south. However, a key part of the agreement was the arrangement of the British-Irish Intergovernmental Conference between the United Kingdom and the Republic of Ireland. For 10 years, it did not meet. The British and Irish Governments were in default of the Good Friday agreement for a decade. The European Union supported the Good Friday agreement, as did our friends in the United States.

In the context of the Good Friday agreement and addressing our difficulties, the suggestion that Ireland should be with the 27 countries which are negotiating with the UK, or having negotiations on their behalf, actually ignores the Good Friday agreement. If Britain and Ireland were not fulfilling it, the European Union should have been pushing the British and Irish Governments to come together to reach agreements that they could bring to Brussels together. There have been suggestions that this would be a breach of European Union understandings; it would not. However, not doing it is a breach of the Good Friday agreement.

If the British and Irish Governments have already agreed, or would agree over the next few months, on the main north-south economic and transport issues—agriculture, agri-food business and electricity—and agree that they would approach Brussels and request that these issues be dealt with on an all-Ireland basis, because they already largely are, it is highly likely that Brussels would accept that, whatever the other issues. It would not require a backstop; it would be a frontloading. The key thing is that the British and Irish Governments need to work together on this. That is what the last clause in the amendment says. In some ways, this ought to be the first clause, and the first stop, not a backstop: that the Governments come together and propose something.

People have repeatedly said that it is not appropriate for Ireland and the United Kingdom to negotiate together, because this is something between the UK and the EU as a whole. However, that simply does not work if people believe that they and the EU support the Good Friday agreement, which requires and mandates direct negotiations between London and Dublin on all joint issues. This has not been happening and I appeal to the Minister, as I appeal to Ministers in the Republic of Ireland, to come together on this issue. Ireland should be a bridge between the UK and the EU, not a bulwark for the EU against the UK.

--- Later in debate ---

[Lord Hain]

Perhaps I may say to the noble and learned Lord that, while we may all want it—in fact, we all say we do—unless we will the means we cannot actually ensure and guarantee it. That is what the amendment does in respect of future trade agreements. The same wording was accepted by this House and by the Government in the other place, and has become part of the withdrawal Act—but that is part of, if you like, the divorce settlement. What we need to do is ensure that the same principles apply to our future trading relationship.

[Baroness Altmann]

My Lords—

[The Earl of Courtown (Con)]

My Lords, with apologies to the House, we are on Report and we should get on with it.