European Union (Withdrawal) Bill

Lord Forsyth of Drumlean Excerpts

Report: 1st sitting: House of Lords
Wednesday 18th April 2018 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords—

[Lord Forsyth of Drumlean (Con)]

My Lords—

[Noble Lords]

Front Bench!

[Lord Forsyth of Drumlean]

I am most grateful to the noble Baroness. I will keep my remarks very brief. Whoever sent me the briefing for Labour Lords, I thank them and I am happy to pass it on to any other Member of the House who would like to see it. I found it extremely useful because I was rather puzzled by this amendment and others in the name of the noble Lord, Lord Kerr, and was also puzzled when looking at the Amendment Paper to see a number of other amendments supported by noble Lords from all parties. On reading the briefing for Labour Lords, the explanation became clear. What we are witnessing here is an attempt to create division and confusion in the House of Commons with a view to preventing Brexit going ahead. That is what is going on, and it is carefully orchestrated, as set out in the briefing to Labour Lords.

I was puzzled by this amendment because, like the noble Countess, Lady Mar, I wondered what it had to do with the Bill. The Bill is a simple, technical Bill which sets out to ensure that European law is translated into UK law when we leave the European Union. The amendment makes the commitment that Clause 1, which is the repeal of the European Communities Act, which was central to what the British people voted for, should be subject to some conditions about a customs union, or whatever. The Bill has nothing whatever to do with a customs union. What is going on here is an attempt to get the House of Commons to look at this issue again and create division among those people who wish to support the views of the British people.

I say to colleagues in this House: have a care with what we are doing. We are an unelected House, and this amendment and the other amendments are part of a campaign which is putting Peers against the people—

[Noble Lords]

Oh!

[Lord Forsyth of Drumlean]

Yes, it is. The people set out very clearly that they wished to leave the European Union, which meant leaving the customs union as well. As my noble friend Lord Lawson pointed out, it was central to the whole campaign. What is going on here is an exercise by remainers in this House—who are the majority—who refuse to accept the verdict of the British people, and I believe they are playing with fire. I hope that, on reflection, the amendment will not be carried.

Perhaps I may just pick up one point which was made—

[Noble Lords]

Oh!

[Lord Forsyth of Drumlean]

This is a debate. If I may, I will pick up one point as a point of information to my noble friend Lord Ridley, which was the suggestion that the customs union does not discriminate against African countries. Why is it that Germany exports more coffee than the whole of Africa? Answer: because there is a tariff barrier on any finished products. If African countries wish to export coffee beans, that is fine, but if they wish to turn them into an added-value product and create jobs and industries, they are subject to, I think, a 7% tariff. I would have thought that the noble Lord, with all his experience, would have known that, but it is typical of the way in which this campaign has been organised by the remainers: misleading the British public and trying to overturn the decision which the people made with the full knowledge of everything involved.

The noble Lord says, “Calm down”, but I believe in this House. I believe it has an important duty to carry out and it is quite outrageous that people are trying to use this House to overturn the wishes of the British people.

[Baroness Hayter of Kentish Town]

I am so delighted that I gave way to the noble Lord, Lord Forsyth, because he has exposed that it is not the Labour Party, nor is it this House, spreading disarray over Brexit: the Government are doing that quite well by themselves in the other House. We are saying that the Bill is a part of what started with Article 50: looking at how we leave the European Union. As we know, a part of what will come at the end will be our future relationship with the European Union. That is why it is absolutely correct that this House discusses it in this Bill.

On the particular amendment—of course the meat of it is Amendment 4 rather than Amendment 1—it is right for us to cover it, and it is right for us to support it today. It is right for the country. It is demanded, as we have heard, by industry and by trade unions. It is vital for the future of Ireland—although not repeated again today, we have heard that before. It will also get the Government off a hook of their own making: their adoption of the red line of leaving the customs union, which was taken without any impact assessment, without any consultation with business, investors, farmers, exporters or importers, and when the Prime Minister had a Commons majority. Come election night in 2017, soon after 2 am, David Davis admitted on air that the Government might have lost their mandate to exit the customs union. As he said,

“that’s what we put in front of the people, we’ll see tomorrow whether they’ve accepted that or not”.

They did not. There was no majority for that red line. There was no mandate for a hard Brexit.

This amendment is good for the governance of this country. It reflects the rejection of that part of the Government’s manifesto. It would save the economy £24 billion over the next 15 years, which ejection from the customs union would otherwise cost. The amendment would allow full access to European markets, no new impediments to trade, no reductions in standards, no tariffs on goods traded with the EU and common tariffs on goods imported from other countries. This presents no problems for increasing trade outwith the EU; as the noble Lord, Lord Patten, has already said, Germany exports more than we do to China. Even Liam Fox admitted that a customs union self-evidently does not prevent us from increasing bilateral trade with countries such as China. The CBI, as we have heard, stresses that the EU is businesses’ preferred market by far. Three-quarters of exporting companies are selling into the EU and the vast majority of them are SMEs. We have already heard the Japanese ambassador warning that Japan’s firms will leave Britain if Brexit makes it unprofitable to stay—that is a real risk with new tariffs, if we are outside the customs union. As we have heard, there is a high level of integration between the UK and EU supply chains, so checks, delays, and VAT charges all challenge the bottom line. Rules of origin, which we have heard about, could cost up to 15% of trade.

There are also physical challenges. The British Ports Association says that, with 95% of imports and exports handled by its ports, if we have anything like the customs checks that we now have on non-EU imports, it could take 45 minutes per lorry. A quarter of trade between the UK and continental Europe goes through the Channel Tunnel, as indeed does most of the Republic of Ireland’s road freight into mainland Europe. Folkestone—there is a bad joke coming—would look more like stone than folks. We had to have one—I warned your Lordships it was bad.

Last year, the CBI, the Institute of Directors, the British Chambers of Commerce, the EEF and the Federation of Small Businesses all called for tariff-free goods trade between the UK and the EU, in preference to the Government’s slightly weasel words of “as tariff-free as possible”. The CBI stresses that frictionless trade with the EU is businesses’ number one priority and that some form of a customs union is necessary to ensure frictionless trade and no hardening of the Irish border. We have heard already about Airbus, Boeing and Rolls-Royce all saying that a customs union would best support the free flow of goods. Ford, the biggest car manufacturer, argues that any sort of border restrictions or customs friction will be an inhibitor for us continuing to trade the way we have done. The Food and Drink Federation wants a tariff-free customs union. And so it goes on.

We have heard it from industry, we hear it from trade unions, we have heard it from Northern Ireland, and indeed southern Ireland, and it is the same for our regions. Those particularly identified by the Government’s impact assessments will be of interest to the Minister: the north-east and the West Midlands. Those are the areas that will be most affected by Brexit if we have more customs and less trade. They are major exporters of cars, food and other goods.

This amendment is not about us playing politics; it is not about us unscrambling Brexit: it is about how we leave the EU. It is about our future relationship once we are outside. All it asks is for the Government to seek to negotiate our participation in a customs union with the EU. We will support this for the sake of the economy and for the sake of the country.