Brexit: UK-EU Relationship

Lord Haskel Excerpts

Thursday 1st December 2016 Lords Chamber

[Lord Haskel (Lab)]

My Lords, at last the final Back Bencher. I would like to emphasise the importance of trade. My noble friend Lord Livermore reminded us that forecasters and the OBR told us to expect lower growth, higher inflation and little increase in productivity. This is considered to be sheer ill-judged pessimism by some members of the Government and by the noble Lord, Lord Blencathra, but I would advise everyone else to listen to the words of trusted institutions and not to the voice of dogma.

Yes, we are in for a time of uncertainty not only because the outcome is very much dependent on the process—how it will be managed—but also on events: elections in France, Holland, Germany and Italy and the incoming US Administration, who lean towards protectionism. All of this means that people will have less time for our concerns and many politicians will want to ensure that Britain is not rewarded for Brexit. Added to that is the fact that the nature of trade is changing. Companies are less concerned about tariffs than they are with supply chains, marketing, distribution, services and protecting the specialist knowledge on which all of that depends. That is why many trade agreements now focus on protecting rights and setting standards. They are unpopular because people are afraid they reduce their protection as consumers, cut their wages or destroy their jobs. Such arrangements are seen as giving power to corporations that have lost our trust in recent years. This only adds to the uncertainty.

Where do we stand? In money terms, we have always been a net contributor to the EU. We have walked out, as my noble friend Lord Desai put it, but we are still paying the bills. This could continue until 2021, unless we make some transition arrangement. In view of these contributions, we must seek to continue the same high-standard, rules-based, zero-tariff trade arrangement with the EU and, most importantly, all the other markets where the EU has preferential access instead of negotiating these ourselves. The EU would benefit by continuing its trade surplus with us and avoid the need to unwind the many cross-border supply and service arrangements that have been in force for years.

Yes, the City of London remains the financial centre of Europe. It is in nobody’s interest for London to become yet another offshore financial centre. As my noble friend Lord Liddle explained, the non-financial services are a larger and more important part of our economy. It is a sector where generally we excel and show a trade surplus, but it is heavily dependent on workers from overseas. Our determination to suppress EU immigration must damage that sector. I am not sure whether the plan mentioned by the noble Lord, Lord Green, would allow for sufficient movement so we can continue to attract the world’s best scientists, skilled workers, and, in particular, to retain our own and international centres of excellence, such as Euratom. Let us exclude students from the figures. Let us be generous and say foreign workers can stay here because we need them.