EU Referendum and EU Reform (EUC Report)

Baroness Armstrong of Hill Top Excerpts

Wednesday 15th June 2016 Lords Chamber

[Lord Pearson of Rannoch]

My Lords, I do not see that anything the noble Lord has said alters what I said. The Dutch Prime Minister recently went so far as to say that he thought a large proportion of the Dutch economy was afflicted by EU regulations. The noble Lord will simply have to wait until we are out of the European Union and then he will see how we set ourselves free.

As I was saying, we would go on exporting to the rest of the world as we do now. We would meet the conditions required by the rest of the world, just as it pays to put the steering wheel on the left if you are selling a car to the United States.

The Government’s ONS Pink Book reveals that our growing trade deficit with the single market reached £85 billion in 2015. This means that manufacturers in the EU sold us £85 billion-worth more in goods than we sell them. If we accept the Government’s suggestion that some 3 million jobs support the 10% of our GDP which exports to the single market, this means that there are around 5.5 million jobs in the EU which support exporting to us. So if the politicians in Brussels try to impose tariffs on our trade together, that would hit 2.5 million more jobs in the single market than it would here and would not be tolerated by EU manufacturers.

Let us take the specific example of our car trade, which the Prime Minister and other Europhiles pretend would suffer a 10% tariff on its exports to the single market if we leave the political construct of the EU, with consequent job losses here. That must be nonsense, because we import twice as many cars from the EU as we export to it—1.7 million cars in and 700,000 cars out—while EU manufacturers also enjoy having 64% of our domestic car market. So those powerful manufacturers, with their suppliers and employees, will simply not tolerate a tariff which would damage them so much more than us, however much Herr Juncker and Herr Schäuble and sundry other mischief in Brussels might wish to punish us for leaving the rest of the EU.

[Baroness Armstrong of Hill Top (Lab)]

I wonder if the noble Lord will reconsider what he has just said. Nissan in the north-east exported 800,000 cars in 2014, largely to the EU and all of them through EU agreements. It exports one in three of the cars exported from this country, so he has his numbers wrong somewhere. Nissan may well be thinking, given that its major owner is actually Renault, that if we in the UK are not in the EU, it might as well move to France.

[Lord Pearson of Rannoch]

My Lords, I do not, with all due respect to the noble Baroness, withdraw a word of what I said. The fact is that 1.7 million cars come into this country from EU manufacturers—they have 64% of our market. I was about to say that anyone who wants to read the detail of what I have just said should consult the globalbritain.org briefing notes, particularly Nos. 114 and 118, which give the detail which is supported by the Society of Motor Manufacturers and Traders.

Time moves on, but the noble Lord, Lord Lamont, made another good point in yesterday’s Daily Telegraph. The tariff which we might suffer on our goods going into the single market would be around 3%, if the Brussels politicians get their vindictive way, but the net £10 billion we pay to Brussels every year is equivalent to a tariff of around 8%. Whichever way you look at it, tariffs will not be imposed to our detriment, so the whole economic scare story falls away.

In conclusion, I am often asked what happens if we vote to leave the EU next Thursday. The answer is: nothing much in a hurry. For a start, it will take the Conservative Party until its conference in September to elect a new Prime Minister, who would start withdrawal talks, so there will be plenty of time for the Eurocrats—

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[Baroness Armstrong of Hill Top (Lab)]

My Lords, this is a very timely debate. As a fairly new member of the European Union Committee, I thank the chair, the noble Lord, Lord Boswell. He makes sure that we approach these things in a measured way and has been incredibly inclusive and supportive of all members, particularly the new members. I thank him for that.

I will concentrate on the short report on the process of withdrawing from the EU. There is a lot of other business in the House today, and I am very tempted by more general matters, but I am going to confine myself to that. As the report makes clear, the only mechanism for withdrawal in all the treaties and the international agreements is Article 50. The process of withdrawal, therefore—as is made very clear in the report and in Article 50—will not be determined by the minds of the Brexiteers. No one group will have the whole say in how things are developed and progressed.

That is very important. I was a bit astounded to hear one of the Cabinet Ministers this morning speaking about the Bills that would be brought in immediately. As the noble Baroness said, there is—as in a divorce—more than one party involved. What Britain decides will have an effect on the rest of Europe; it has the right to have a say, and we have to acknowledge that. One side cannot determine both the terms of the negotiation and the end point of the negotiation.

The Commission, as the report makes clear, will be responsible for the day-to-day negotiation, but it will be the EU member states, all of them, through the Council, that will have control over the terms of the negotiation. The European Parliament also has to give its consent. The idea that we can be totally in control of that is, to put it mildly, somewhat naive. Those giving evidence to us said that, as far as the negotiating terms were concerned, they thought that there would have to be near unanimity in the UK Parliament about these terms. I agree with previous speakers today that the debate externally has been horrendous and has shown the worst of Britain and its politicians and everyone else. It is certainly not the right way to enter a referendum debate or to enter negotiation should a particular outcome occur.

We can therefore only be relatively pessimistic, and I do not like being pessimistic because I want to see the best of this country and not what I think is the worst. The debate has revealed incredibly strong divisions and differences which are not just about European Union membership, yet of course what the report demonstrates clearly is that there will have to be good, firm relationships which demonstrate trust. At the moment, that is quite difficult to see, not just here but between this country and the other members of the European Union as well as the other institutions.

The agreements will also need the support of individual parliaments in the European Union. If we are not going to work in a more positive way, how on earth are we going to improve those relationships? It is only through good relationships that we will get a good outcome. Governments will have to work well together, as all the key decisions will continue to be taken by the Council.

The other thing that our inquiry made so clear to me was that the UK Parliament will be trapped in unpicking legislation and in deciding which piece of legislation we might want to keep and which piece we have to unravel in order to uphold a decision to leave the Union. My great fear is that the real anxieties of the British people during this time will be squeezed because we will be so busy unpicking the relationship with the European Union that we will not understand what the vote was about. I know that the vote is ending up being about whether we remain a member of the Union, but actually it reflects a deep fear and uncertainty about the experience of globalisation and how different people in our country are being greatly affected in different ways.

I spoke last week about my own region, and I am not going to repeat that. We would be the greatest sufferers because of our dependence on European trade. Through that dependence, we bring a balance of trade surplus to the region; we are the only region to do so. The people out there really feel that, whatever we are doing, we are not reflecting their needs and their ambitions. In that way, I agree with the noble Lord, Lord Howell, that there can be no ending of the debate on the referendum and that we have to rediscover the ambition to reconfigure things in this country and in our relationship with the world if we are to make sure that everybody in this country is able to benefit from the effects of globalisation.

The battle for Britain’s future, as it is being played out, should not be seen as the end point, whatever the result next week. It should be seen as a staging post for that new phase of globalisation that the noble Lord, Lord Howell, was talking about, one that offers hope to those who feel disenfranchised by the changes of recent years and a sense of purpose to every part of the country. Whatever the outcome, that is our challenge; but we know from this report that, if the outcome is that we leave, there will be a very painful and difficult negotiation. We will have to up our game in a way that, quite honestly, we have not done over the period of the referendum to date.