Future Relationship Between the UK and the EU

Debate between John Baron and Wera Hobhouse

Wednesday 18th July 2018 Commons Chamber

[Mr Baron]

I think it is quite straightforward. We had a referendum on the question of whether people wanted to stay or leave. The decision was to leave, and the political parties woke up to that fact and put that decision at the heart of their manifestos, on which we then went to the country. I remind the House that it is there in black and white in both manifestos: we will leave the customs union, and we will leave the single market. My concern about the Chequers agreement is that having gone to the country on that basis, there seems to be a bit of a fudge that needs explaining by the Government.

Let us take the common rulebook and the customs union. It is no accident that the EU has had a problem negotiating free trade deals with countries outside the EU. It does not have a free trade deal with the US, with Australia or with New Zealand. It struggles on emerging markets—big economies like Brazil, India and China. The reason for that, in large part, is that it has protectionist non-tariff barriers that a lot of countries cannot abide. If we incorporate those protectionist non-tariff barriers into our own regulations, that will make our task of negotiating trade deals that much more difficult. It will therefore take away from us one of the key upsides of Brexit, which is to negotiate our own trade deals.

We all have our own views of President Trump, but one thing that he was very direct about, stating the blindingly obvious, was that if one incorporates protectionist non-tariff barriers as part of one’s own regulations, it will—surprise, surprise—be more difficult to negotiate trade deals. That is why there is concern among Conservative Members about the common rulebook. If we incorporate those rules, it makes trade deals more difficult.

[Wera Hobhouse]

Is that not exactly what President Trump is currently doing—building trade barriers, because he is putting up tariffs?

--- Later in debate ---

[Mr Baron]

There are pluses and minuses with President Trump, perhaps, but I think he is trying to be a very good friend of the UK. Unlike President Obama, who said that the UK would be at the back of the queue, it is quite clear that President Trump does want to do some form of trade deal with the UK. He is stating the obvious when he says that incorporating protectionist non-tariff barriers is going to make trade deals much more difficult.

Let me move on to freedom of movement. The SNP spokesman said that racism is on the rise in this country. There is a sort of implication that if somebody voted to leave, they were somehow anti-immigration. That is completely wrong. Under the current immigration policy, because we are members of the EU we discriminate against people wishing to come to this country from outside the EU. We cannot say no to immigrants from Europe or from the EU, but we have to say no to immigrants coming in from outside the EU. That, in any language, is discriminatory. One of the main benefits of Brexit will be that we will be able to forge an immigration policy that will be not only controlled but fair—it will not discriminate on the basis of nationality as the current policy does.

On the second big idea, we are being told that with a mobility framework, freedom of movement will end. However, I worry slightly that it is not being clearly explained how a mobility framework will be any different from freedom of movement. That needs fleshing out by the Government. If I know anything about my constituents and constituents across the country who voted for Brexit, we want a controlled but fair immigration system, and the Government need to better explain how the mobility framework is going to deliver that. Without that explanation, I think they are going to struggle in selling this package to the country, because we no longer want an immigration system that discriminates against the rest of the world.

I want to make a final point about leaving on WTO terms. There has been a little bit of nonsense spoken about this issue. There have been too many lawyers in this debate and not enough businesspeople. Whoever has been exposed to business will know that one can have frictionless supply chains crossing customs arrangements. It happens right across the globe, particularly in the far east.

[Wera Hobhouse]

rose—

[Mr Baron]

No, I have taken one intervention from the hon. Lady and I am not going to take another. I have taken my two.

There are these arrangements right across the globe, and they are not a hindrance to trade. We trade profitably with many countries outside the EU on such terms, and that trade is prospering. Those countries are often faster growing than the EU.

The idea that we must protect the supply chains and that leaving on WTO terms would disrupt them is utter nonsense. Look around the world and at the far east in particular, where a number of complex supply chains cross customs arrangements without any friction. A particular example of that is Japan, which has outsourced much of its manufacturing capability to countries such as China because of the strength of its yen. The bottom line is that that has made for good trade and actually it has helped to lower costs.

If we ignore the wishes of the British electorate as expressed at the referendum, I really do worry that we will push the mainstream in this country towards the extremes of the political spectrum, because people will have lost faith in this place to deliver what they clearly believe they voted for, which is to leave the EU, and that meant leaving the customs union and the single market. Anything less than that will be seen as a betrayal by the British electorate.