Covid-19: Economy

Lord Lang of Monkton Excerpts

Thursday 4th June 2020 Lords Chamber

[Lord Lang of Monkton (Con)]

My Lords, I declare my interests as per the register. My right honourable friend the Chancellor is surely right to stress the urgency of getting his recovery plans under way as quickly as possible, as lockdown gradually becomes unlocked. He has a major challenge as he seeks to balance between borrowing, spending and taxation while retaining confidence in the stability of the public finances and seeking to liberate private enterprise.

It will be a rough ride. Business needs confidence to invest; we would prefer certainty. It is hard to guarantee that in the present circumstances, but one way in which the Government can help is by standing firmly behind their commitments to conclude Brexit by the end of this year. The pressure to extend negotiations for two more years with the Barnier blockade—incidentally, costing many billions of pounds or euros—must be resisted. We would like a good deal but, more than that, we need finality. We have already left the European Union, whose share of world trade has fallen from around 40% when we joined to around 15% now. Europe is the slowest-growing continent in the world. We cannot accept continued servitude to regulations. We should have no part in trade deals, continued membership of the common fisheries policy or the outreach of the European Court of Justice. That could mean leaving without a deal—not the best outcome, but one that could quickly be built on.

Anyway, WTO rules are very familiar to many, as most of our foreign trade is conducted in this way. Tariffs are low and falling, and I was glad to see my former department produce a commendable new UK global tariff, under which more than 60% of incoming goods will be zero rated. It is regulations and euro-bureaucracy, not tariffs, that damage trade.

Of course, the EU countries will remain important markets to us, and we to them, but we must also focus more urgently on the global scene. With trade deals with the US and Japan already in negotiation and membership of the Trans-Pacific Partnership beckoning, overseas trade is one of our routes to recovery post Covid-19.