EU: Withdrawal and Future Relationship (Motions)
Debate between Greg Hands and Lord Clarke of Nottingham(5 years, 7 months ago)
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Mr Clarke
My right hon. Friend and I are in complete agreement. As he quite rightly says, we must avoid no deal occurring by default in a fortnight’s time simply because the House of Commons could not agree on anything. In fact, 400 Members of the House of Commons have voted against no deal, and it would be calamitous just to collapse into it because we cannot reach any compromise among ourselves about what we actually wish to put forward.
I am trying to illustrate that my motion, which is for a permanent customs union, is perfectly compatible with a wider look at the subject but sets a basic agenda. I think it will help to minimise what I regard as the damaging consequences of leaving the European Union, and enable us to reassure the business and other interests in this country—some of them are absolutely panic-stricken—who view the great unknown and the end of the common market with great concern. I hope that the public, who are as polarised as this House in their opinions, will begin to be reassured. I hope that people will be reconciled to a compromise of leaving the political European Union but staying in the common market, to use the language of Eurosceptics over the years.
Mr Clarke
No, I will not give way. As I have said, we have just had two hours of filibustering, and I do not want my speech to be spun out.
Let me illustrate why I think motion (C) does not conflict with the body of opinion in most of the political parties in this House, starting with the Conservative party. My motion does not conflict with the Prime Minister’s withdrawal agreement. Indeed, it slightly complements it, and it deals with a different subject. Motion (C) deals with the political arrangements—the non-binding political declaration and the nature of the later negotiations that will have to take place to determine our long-term future.
As I said last week, the motion answers the concerns of the Labour party, which has supported it. The Labour party says that it will not vote for the withdrawal agreement, not because of its contents, but because it represents a blind Brexit in which we have absolutely no idea what the Government are going to do. To approve the withdrawal agreement would be to give the Government a blank sheet of paper and allow them to carry on arguing inside the Cabinet about what objectives to seek in the negotiations that would follow. What this motion suggests is that the House mandates the Government—whatever shape they take and whatever the Government—to make a permanent customs union one of their foundations in the negotiations. I will come back to the only reason that they have ever given for being against the customs union, which is the only basis for voting against it.
Mr Clarke
No, I am not going to give way. It would be unfair to other Members who have had this whole debate crammed into three hours. In 1972, we used to have all-night sittings on much smaller issues than this. I do not recommend going back to that, but I object to listening to my colleagues having to speak on three-minute time limits because chaps want to get to dinner and will not sit after 7 o’clock in the evening in the middle of the week, which is where this rather pathetic Parliament has got itself recently. That is my last digression from my theme. [Interruption.]
Mr Clarke
No, I am sorry; I will go back to being strict, though when I refer to parties or people, I feel it is courteous to let them respond.
Let me now deal, finally and very briefly, with the only substantial argument that has been raised in the House against the customs union from the beginning to the end of our debates. That argument is that it will stop us having our own customs arrangements with third party countries, and it is repeated by Ministers over and over again.
Mr Clarke
No, I will not, in the interests of other Members who wish to speak.
First, that argument is not actually accurate. It is true that trade agreements with other countries would mean that we would not be able to make changes in external tariffs. Of course, we would have the benefit of no tariffs at all: totally tariff-free entry into the rest of the EU. What we would be able to have trade agreements on is the service economy, service industries, which constitute the vast majority of this country’s GDP.
I have been involved in trade negotiations quite a lot over the years. It is not vanity, but simply my longevity, which leads me to say that I have probably had more experience of trade arrangements and dealings than any other Member. In every Department that I have occupied, I have led trade delegations to somewhere or other. During my spell at the Department of Trade and Industry and my spell at the Treasury, I became heavily involved in trade deals, particularly with the Americans, China, and large parts of Latin America. I led for the last Government—the coalition Government—on the EU-US TTIP negotiations. Although the Commission conducts the negotiations on a mandate that it has been given by the 28 member states, certain of the bigger ones—such as Britain—remain a constant presence, and go backwards and forwards to try to ensure that the process is going smoothly. So I have been involved in many attempts to secure trade deals, some successful and some not. Opening up the Chinese market is a very slow business: I could have told President Trump that.
Some of my right hon. and hon. Friends ascribe great weight to an American deal. TTIP failed. It was given that strange title—the Transatlantic Trade and Investment Partnership—because Obama’s officials said that it would not be possible to get anything called a free trade agreement past America, which is quite a protectionist country. Certainly Congress is protectionist, and that was under Obama. The problem with the Americans was, first of all, that we wanted to open up access to services. Tariffs do not matter much in European-American trade. They are vestigial. All the Europeans, including the British, are quite content to abandon tariffs in both directions, because they are fairly small. The auto industry, on both sides of the Atlantic, did not really want tariffs. It is regulatory differences, and getting regulatory equivalence, or convergence, that stand in the way.
We wanted the Americans to open up public procurement, which they would not do—and, anyway, it is a state-by-state process, which makes it more difficult—and to open up the service sector, particularly financial services. The lobbies in Congress are too strong for that to make much progress. The present President has given no indication that he would open up any market to us. The approach that he has taken to trade negotiations, when he talks about a trade agreement and takes on the Mexicans, the Canadians and the Chinese, is that he wants America to export more to them and wants them to export less to America. We have a large trade surplus with America, and that is what he has in mind. It is perfectly plain. His obsession is with food and agricultural products, and that means giving up our standards of animal welfare and food quality—which, owing to British lobbying, are very high in Europe—and accepting America’s lower standards involving hormone-treated beef and chicken.
If any Members think we can influence that—if they think that with such a trade agreement we can somehow start tightening up American food standards and animal welfare—I can only tell them that the agriculture lobby in Congress is extremely powerful, and would not take the slightest notice of British interests in such matters. The Australians would probably agree to a deal, but we would have to face the problem of hormone-treated beef, because that is what they want to export to us. The New Zealanders would want a deal as long as the quotas were lifted from their tariff-free exports of lamb. I am sure that they would be happy if we could think of anything that we wished to sell to New Zealand that we do not sell at the moment. But those negotiations will not compensate for the loss of our European markets if we stay outside the customs union and the single market and erect great barriers in our way.
I have made a modest case—it is modest compared with my own views; nobody in this House is a greater supporter of the European project than I am and nobody in this House wants Britain to remain in the EU more than I do, if that were in the realm of the possible. To reject motion (C) again would run the risk of the adverse reaction outside that we got when—as I think we all anticipated—there were minorities for every motion last week. Now is the time for hon. Members to get behind motion (C). If they wish to get behind common market 2.0, they should feel free to do so, and those who want to reinforce the revocation argument if otherwise we would crash out with no deal should vote for that.
So far, the process has been a shambles. The public hold their political parties and politicians and the institutions of Government almost in contempt. Today, we must start to bring that to an end. All I propose is a modest step compared with most others on the Order Paper. It is perfectly compatible with the wider ambitions of a large majority of this House. It is fitting that I should open the debate because my motion is the basic, obvious beginning. If the House wishes to add more, I shall probably vote with it.
Greg Hands (Chelsea and Fulham) (Con)
I will begin by answering my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), who said that he had not heard a single argument against a customs union. I credit him for staying for the whole debate, because I am going to give him plenty. He also said that I had been involved in a filibuster, but my contribution to the business of the House motion lasted for one minute and 13 seconds. That must be the shortest filibuster that there has ever been. I did once speak for one hour and 43 minutes on beer duty, but I do not think that one minute and 13 seconds really counts.
Why is a customs union a very bad idea? Broadly speaking, it would mean a huge loss of control over our economic policy, a decline in our foreign policy influence and a huge democratic deficit. Trade policy is not just about trade deals. It is about much more, which we would be handing over to the European Union without a seat at the table. There are tariffs, remedies and preferences as well as trade agreements, and these would all be given over. The House of Commons would abrogate its responsibility in relation to the UK’s trade policy. This is not Andorra or San Marino, which are currently in customs unions with the European Union. This is the world’s fifth largest economy.
My right hon. and learned Friend the Member for Rushcliffe and I were on the same side in the referendum in 2016, so I am approaching this debate not as some kind of Brexiteer, but from the position of what makes sense for the UK’s trade policy. It makes no sense in our democracy for the House of Commons to vote tonight to hand over control of UK trade policy to Brussels. It would mean that a Maltese Commissioner, a Latvian MEP, a Portuguese Commissioner and a Slovene MEP would all have more say over UK trade policy than any elected politician, including the UK Prime Minister. That is not democratically sustainable, nor is it sustainable for our foreign policy.
My right hon. and learned Friend and I served in the Government together. At that time, I went into various rooms in foreign countries to speak to foreign Governments, so I know that trade is one of the aspects of leverage that we have. As a member of the European Union, the UK has influence on EU trade policy. That will obviously be gone when we are no longer a member, but under a customs union we would also have no influence over our own trade policy. We would be unable to have those conversations with the Government of the United States when we can say, “Well, if we can do this on some other area, we will have a word in Brussels on this particular trade issue.” All of that would be gone.
Mr Kenneth Clarke
I am grateful to my right hon. Friend for giving way because I did not have time to give way to him in the end. I think he would acknowledge that it is a slight exaggeration to say that the British Government would have as little influence over deals being negotiated by the EU as a Latvian MEP if we moved into a customs union. As the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) just said, a big economy such as ours would add to the attractions of the EU market for a negotiating partner, so surely we should put in place a structure giving us far more consultation and involvement in the negotiations than my right hon. Friend is describing—not as good as now, but perfectly adequate.
Greg Hands
I think that is wishful thinking. The European Union is highly likely to prioritise the interests of its members versus the interests of non-members. That has always been the case. There are also serious arguments as to whether European Union rules would even allow a non-member to have an influence on EU trade policy. I am afraid that that is just a fact.
Entering into a customs union would be democratically unsustainable. Tariffs would be set by people who are not accountable to this House or to our constituents. That could be damaging for goods coming into the country, if those people were to set high tariffs on goods that our consumers would quite like access to. It could also happen the other way around with things such as trade remedies, as has been briefly mentioned. All these incredibly important aspects, including trade defences, would be handed over to Brussels. Now, Brussels might look after our trade remedies, but it would not give them priority. It would give the defence of its own industries—the fee-paying members of the European Union—priority over countries such as ours. This would mean that those all-important WTO investigations into, say, the ceramics industry, would be relegated below investigations to protect, for example, the German or Dutch steel industries.
On trade deals, the Turkey trap has been mentioned; this is about the asymmetry. The EU would offer access to our 65 million consumers without necessarily being able to achieve anything in return. I can guarantee that the UK asks would be the ones that would be dropped first, and that the UK items of defence would be the ones that the EU would concede first. It is inevitable because we would not be a fee-paying member of the European Union, so we would not be a priority.
EU: Withdrawal and Future Relationship (Motions)
Debate between Greg Hands and Lord Clarke of Nottingham(5 years, 8 months ago)
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Mr Clarke
I will not give way to my fellow collaborator on revoking.
I will support common market 2.0 and anything that resembles it, though I will not dwell on it further, as I have already dealt with it. I come then to my motion (J). As I have already indicated, it is not my first preference—the two I have already named are my preferences—but it is tabled to maximise support in the House so that we can move on Monday towards our really taking control and actually putting the Government, though they do not accept it, in a much stronger position than they are today when it comes to the future negotiations.
Motion (J) advocates a customs union only—a permanent customs union, I point out to the hon. Member for Leicester West (Liz Kendall), who intervened earlier on this point—and would keep the minimum needed for frictionless trade and an open border in Ireland. We would also need some understanding or moves on regulatory convergence, but that does not need to be dealt with at this stage. If we started with the premise that we will be permanently in a customs union, it would bring greater clarity to the next stage—the really important stage—of the negotiations. I think that every other EU member state would be ready to accede to that, and it would improve the climate of the negotiations.
The motion is designed to appeal in particular to Labour Members who are demanding it and to my more cautious right hon. and hon. Friends in the Conservative party. Those who have hang-ups about rule making and use medieval language about vassal states and all the rest of it are talking about the single market. Motion (J) does not include the single market. The customs union guarantees a reasonably frictionless relationship and the possibility of completely open trade in the future, and leaves all the other things to be decided in the negotiations.
Mr Clarke
No, I will not.
That is the basis on which I tabled motion (J), and I commend it to the House. Members may prefer a different motion; I shall vote for several. I think that we should all vote for as many of the motions as we can, and then we will see which is the strongest. We will not be dismissed by the more fervent members of the Government saying that they have all been defeated, and none of them secured an individual majority. On Monday, we could move on to how we sift them out.
Above all, for Labour Members this will, I hope, pave the way for allowing the withdrawal agreement to go through, because their main argument is not about the contents of the withdrawal agreement but about the “blind Brexit” that worries them so much. Even in motion (J)—if we cannot get a stronger one—there is not a blind Brexit any more. Labour Members could at least abstain, so that we could secure the withdrawal agreement and then move on to what really matters—the serious long-term negotiations on the big issues, which we shall have to handle much better than we are doing now.
My last word is this. If we fail, and if we are faced in a fortnight’s time with no deal, I think the feeling in the House is so strongly against that outcome that we must all vote to revoke at that stage. A great many members of the public will probably think that we have got ourselves into such a mess that it might have been sensible to do that anyway. We should stop now, sort out what we are doing, and perhaps start again if the House is still enthusiastic about leaving. However, I hope we can avoid that conclusion by demonstrating that Parliament is capable of orderly debate, reasonable conclusions, and contributing to the better governance of this country as part of this process—including, I hope, my motion (J).
European Affairs
Debate between Greg Hands and Lord Clarke of Nottingham(6 years, 8 months ago)
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Greg Hands
We have been absolutely clear that we will of course abide by the December agreement in full. Let me remind the hon. Lady that the three priorities we laid out include a strong commitment to avoid a hard border, but also to preserve the integrity of the UK market—I remind her that having access to the UK market is very important for the people of Northern Ireland. No UK Prime Minister could accept a new border down the Irish sea.
We are also making strong progress on our trading relationships outside the EU, which is my primary responsibility as Minister for Trade Policy.
Mr Kenneth Clarke (Rushcliffe) (Con)
To follow on from that point, my right hon. Friend has repeated two points from December, and at Prime Minister’s questions the Prime Minister repeated her full commitment to the December agreement on Ireland. When he says there will be no hard border, I assume that means there will be no physical infrastructure. I of course recognise that we will not have a border down the Irish sea, but does he accept that, if there is no other way of achieving it, we are going to have the full regulatory convergence to which the Government signed up in the December agreement?
Greg Hands
I reiterate that what the Prime Minister said at Mansion House and at Prime Minister’s questions this week still stands. I refer my right hon. and learned Friend to the papers published last summer by the Department for Exiting the European Union on how a proper border between the two parts of Ireland can be effectuated through the two possible types of customs agreements between the UK and the European Union.