Trade Bill

Lord Horam Excerpts

2nd reading (Hansard): House of Lords
Tuesday 11th September 2018 Lords Chamber

[Lord Horam (Con)]

My Lords, my knowledge of European politics and institutions is obviously much less extensive than that of the noble Lord, Lord Kerr of Kinlochard, but I remember that, when I was Science Minister in the Major Government in the 1990s, I went to a meeting of European Science Ministers to hear presentations from eastern European countries—they were not then part of the European Union, of course—as to why we should give them a lot of money; they were rather short at the time. I noticed my Danish colleague—the Science Minister from Denmark—making ticks after every speech. I asked him what he was doing and he showed me his note. It read: “Goethe 4, Molière 2, Shakespeare 10”. Those were the languages which the Ministers from the eastern European powers were using to make their case to us. Even then, in the 1990s, English had almost become the lingua franca of the European Union, much to the chagrin of the French.

It is rather sad that just at the point when that is indisputable, we are leaving the European Union. I still regard that as a fundamental error and regret it very much. However, as the noble Baroness, Lady Hooper, said, we are where we are. We have the Bill in front of us. As others have said, the Minister presented it clearly. An important part among the four elements that constitute it is that it gives the Government power to collect data from exporters for the purposes of trade promotion. Heavens, that is needed. As the Minister said, as a nation we have been great traders, but our performance in recent years has been extremely poor. Only 11% of companies in this country do any exporting at all: 89% do not export outside the United Kingdom.

The Minister made the point that we are the 10th-largest exporting nation in the world. Yes, but about 10 years ago, we were the fifth-largest. In the past 10 years, we have been overtaken by South Korea, France, Italy and the Netherlands, and Belgium, Canada and Mexico are snapping at our heels. This is a major cause of our continuing trade deficit. We have never had a surplus, apart from two years, in the past 15 years. Those trade deficits are getting worse. The only way we balance it is to sell off our assets—as Harold Macmillan might have said, selling the family silver. That cannot go on for ever and is very dangerous in many respects.

Brexit will make this worse, at least in the short term, because you always do more trade with your neighbours than with distant countries for obvious reasons. If there is any disruption to that, we will suffer. I am glad that the noble Lord, Lord Lilley, made the point that trade deals are no panacea in this area. Trade deals are not that important. He made the point that it is really trade in goods and services and having the right kind of goods and services that matters. Therefore, in or out of the European Union, export success will require hard work over a long period: more companies involved in exporting and investing overseas in existing markets and new ones, forming long-term relationships, which will really count.

I therefore welcome the one good thing which has come out of Brexit, which is a dedicated Department for International Trade, with all the elements in one pair of hands. They are good hands: I am grateful that the Minister comes with her interesting and important experience, as did her predecessor. One thing that the House of Lords can contribute to the Government is people with real experience of business—much greater, I suspect than we have in the other place.

I also take the point made by the noble Lord, Lord Risby, that this needs to be properly resourced. The killer facts which he spelled out about the relationship between the overseas aid budget, the Foreign Office and the Department for International Trade must be looked at. That must be remedied because it is completely out of kilter. The trade promotion aspect of the Bill is very important and I wish the Government and my colleagues well on all of that.

Finally, I will say a brief word about Brexit itself. The people have spoken and it is the Government’s job to deliver on Brexit as competently as possible. I totally accept that a lot of time has been wasted, though it is not entirely surprising given the strong feelings involved. We now, belatedly, have the Chequers proposals. I flag up the report from the External Affairs Sub-Committee of your Lordships’ European Union Committee—of which my noble friend Lord Risby and I are members—which will come out in 10 days’ time, more or less the same day as the Salzburg meeting. It goes into the customs aspect of this and is well worth a read, as many House of Lords Select Committee reports are.

The Government’s Chequers proposals are, without question, hideously complex. They have received a very poor initial reception both in the UK and, more importantly, in Europe. However, pushing aside for the moment the politics of the matter—difficult to do, I agree—they have very considerable merits in terms of trade in goods. The proposals deliver frictionless trade; there are no tariffs, cumbersome customs controls or rules of origin. There is no halt in the just-in-time arrangements which we have come to rely on in this country for the manufacture of motor cars and so forth. There is no hit on inflation because there are no tariffs and, in that respect, little disruption to trade in Ireland. Although they are not liked by hard-liners on the Brexiteer side or the relentless remainers on the other, that may be an advantage, given that the vote was 52% to 48%. People on all sides, whatever their opinion, should begin to realise that there comes a time when you have to compromise. If we expect Brussels to compromise and we have to too, people in the UK should begin to realise that they have to do it as well.

Latterly I have noticed that Brussels has begun to change its tone. I agree that it is only a change in tone, not in the content, and that is therefore less good, but the dogmatic legalism which my colleague Mr Raab pointed out is less obvious. There is a sense of a more pragmatic political approach. I agree with my noble friend Lord Tugendhat that it would be almost miraculous if some sort of agreement came in the way that we hope. Many, many hurdles have to be overcome, but it can be done and I hope it is. If the Prime Minister does achieve an agreement along these lines, it would be a great triumph for her and would deserve support from inside Parliament as well as outside.