European Affairs

Bill Esterson Excerpts

Thursday 15th March 2018 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

First, I apologise to the House for missing the start of the debate, which was entirely beyond my control.

I also thank my hon. Friends for their contributions: my hon. Friends the Members for Nottingham East (Mr Leslie), for Lewisham East (Heidi Alexander), for Bridgend (Mrs Moon), for Ellesmere Port and Neston (Justin Madders) and for Brentford and Isleworth (Ruth Cadbury). I will just mention the comment of my hon. Friend the Member for Lewisham East, who described the Government’s approach and their fantasy trade deals as a dog’s breakfast; I have to say that my dog would turn up his nose at these fantasy trade deals on offer from the Government.

It cannot be right that the Government have so little regard for the sovereignty of this House that they provide little more than a two-day general debate and offer no meaningful vote, when most of this debate was always going to be about the single biggest issue to face this country in generations. As my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook) told us in his opening remarks yesterday, the Government are attempting to look like they are doing something when in fact they are not only doing nothing, but have no idea what they even should be doing. Instead of filling two days of parliamentary time on this general debate, the Government should be bringing back the Trade Bill and the Taxation (Cross-border Trade) Bill and introducing the other Bills that they promised, including those on fisheries and agriculture.

Yesterday, the Minister for Trade Policy, the right hon. Member for Chelsea and Fulham (Greg Hands), congratulated the Government on bringing forward the trade and customs Bills and suggested that

“they have been designed to prepare us for every eventuality, although they will be needed regardless of the outcome of our negotiations with the EU. They will give us a strong trade remedies regime.”—[Official Report, 14 March 2018; Vol. 637, c. 915.]

However, they have not prepared us for every eventuality. In fact, they prepare us for no eventuality whatsoever as they fail to set out any legislative procedure for future trade agreements or for the protections of our rights and standards. As for the trade remedies authority, it has been described by the Manufacturing Trade Remedies Alliance, the industry body representing our manufacturing sector, as being the weakest in the world. The Opposition recognised the need for a trade remedies authority in our reasoned amendment on Second Reading. In Committee, we tried to strengthen the powers and the contribution that the authority will need to make, but the Government voted against and defeated every single one of our amendments. The Government know that they are in trouble with those Bills, which is why they are afraid to bring them back here. As many right hon. and hon. Members have pointed out, significant matters remain unresolved, and no credible solution has been presented by the Government, but they are none the less eager to rule options out.

The UK’s trade with the EU accounts for 44% of our total exports—some £229 billion. A further 16% of our exports go to those 70 or so countries that are party to some form of a trade agreement with the EU, including South Korea, Norway and Switzerland. In short, the majority of our trade is with EU or countries with which the EU has a trade agreement. The EU is of course the largest trading bloc in the world, and it is inconceivable that any trade agreement that the UK might be able to conclude with countries outside the EU would make up for the potential loss of trade once we leave. Of course, the UK will have to conclude new agreements with those countries that have an agreement with the EU, and the Government have attempted to spin the Trade Bill as being simply about that.

However, some of the agreements may well be significantly different from existing arrangements. South Korea, Chile and the other countries involved may well want an agreement with the UK after we leave the EU, but the question is why those countries would want to agree to the same terms that we currently enjoy as EU members. Furthermore, they will want to ensure that there is no overall disruption to their current trade with the EU. Of course, they will want a clear picture of what our future agreement with the EU looks like. Everybody is out for the best they can get for themselves. Every opportunity to take a little more and give a little less will be capitalised upon.

We already know that some of these countries, such as South Korea and Chile, have told the EU that they want to revise terms of their existing deals once the UK has left. Meanwhile, other countries have publicly called for changes to their trade with the UK after Brexit, calling for divergence from EU standards or liberalisation of tariff rate quotas. They do not want the same terms as before; they want better terms—for them, not for the UK. It will come down to who has the upper hand and the benefit of experience in trade talks.

Investors want to know whether they will be able to continue to participate in European supply chains and how rules of origin will apply after Brexit. Will they have to complete arduous customs declarations and advanced screening applications? Will their goods be held up at ports and train stations? It is clear that the Government have absolutely no idea what to do about the border on the island of Ireland. The Government have repeatedly told us that they will not have a hard border, nor will they have a border at sea. They have told us there will be no infrastructure on the border, yet they have also suggested that a digital border will be put in place and have hinted that it will involve CCTV and automatic number-plate recognition technology. Quite how CCTV and ANPR can exist without infrastructure, I do not know; that is a step even further in the Secretary of State’s blue-sky thinking. That proposition is untried and untested, and it has been dismissed categorically by businesses, the Irish Government and the European Union. Even if that were not the case, it would require a substantial systems overhaul across the European Union as well as in the UK, and HMRC has already said that it would not be in a position to roll that out by the time the UK leaves the EU.

Further, the success of any border arrangement, if such an arrangement could be found, would depend entirely on the extent to which UK regulations and standards were compatible with those of the EU. Those are fundamental questions, but despite 20 months having passed since the referendum result and a year since article 50 was triggered, the Government are no further on with answers to them.

Many of those issues would be substantially resolved if, as the Opposition have suggested, the Government were to negotiate a new, bespoke, comprehensive UK-EU customs union. Such a customs union would allow existing trade arrangements to be rolled over with minimal changes. That is what the Government say that they want. Disruption to trade, such as changes to rules of origin requirements and diagonal cumulation, would also be avoided.

Under Labour’s suggested approach, we would work alongside the EU in new trade arrangements. It is shocking that the Government have drawn a red line of not being in a customs union, without modelling the effects either way. If we agreed an EU-UK customs union, the EU would be enhanced by having the strength of the world’s sixth-largest economy joining it in negotiations, and we would be strengthened by negotiating alongside the largest trading bloc in the world.

Our approach would also remove the need for customs checkpoints and accompanying infrastructure on roads between Northern Ireland and the Republic of Ireland. Our approach recognises that the EU is the largest market in the world, and that we are stronger in future negotiations alongside it. The Labour party seeks solutions to the problems that the Government have presented to the country.