Trade and Customs Policy

Lord Liddle Excerpts

Tuesday 5th December 2017 Lords Chamber

[Lord Liddle (Lab)]

My Lords, first, I apologise to the noble Baroness, Lady Fairhead, for not being present for the opening of her speech. That is a great breach of protocol in the House, and I feel very apologetic for it. Secondly, I welcome the Minister to her new role. I am afraid that it is a bed of nails, being a Trade Minister, particularly as we move into the era of trying to negotiate our independent trade deals—and I am afraid that the thrust of my brief remarks will be to try to make those nails a bit sharper so that she realises some of the awful responsibilities that she has taken on, in my view.

My view is that the Government are prioritising the creation of an independent trade policy when they have no need to do so to respect the referendum vote. We could remain in the customs union and leave the European Union, but the Government are determined that we must leave the customs union in order to be able to conduct this independent trade policy. We know already what the downsides of it are, and we know that it raises the risks of chaos at the ports, because the customs arrangements are not in place—and we know that it could potentially set off a chain of events in Ireland that could lead to a serious threat to the Northern Ireland peace process. We already know that, so why are the Government continuing doggedly to pursue that objective?

I am going to ask a series of questions, although I am obviously not expecting a set of instant answers. I would like in due course to receive from the Minister some answers to the questions that I am going to put.

First, have the Government carried out a full economic assessment of the benefits and costs of their decision to have an independent trade policy? Have they compared staying in the customs union and relying on the EU to negotiate trade agreements as against having an independent position?

Secondly, if they have done that analysis, will they please let us all see it? I remain unconvinced that the losses that we will suffer from essentially giving up a free trade arrangement that we have for the 40%-odd of trade with the European Union will be made up, or more than made up, by the gains from trade deals that we can do with the rest of the world. So let us have a proper analysis of this—and is it available?

Thirdly, our trade comes in three categories. This is very broad, but there is the 40%-odd that is the European single market, the 30% or so covered by deals that the EU has negotiated on behalf and the other 30% or so where there are no arrangements at present between the EU and those countries. Where there are no trade agreements, can the Government tell us which of the countries they will prioritise? Is the United States at the top of the list and, if so, can the Government tell us what their negotiating objectives are for their deal with the United States?

When I worked at the European Commission for the Trade Commissioner, they always used to ask, “What are our offensive interests?”. This gives you a flavour of the world of trade, with the bitter battles between offensive and defensive interests. I would like to know what our offensive interests are in relation to the United States and how far they differ, if at all, from the offensive interests that the EU had in the TTIP negotiations. My instinct is that they would be pretty much the same.

How do our defensive interests differ from those of the rest of the EU? At one time, I think that there probably was a real difference, in that Britain would have been less concerned about agricultural protection and would have been prepared to give more on agriculture to get more from the Americans than, say, France, Italy and Spain would have been. However, I am not so sure about that now, as Michael Gove seems resistant to the idea that we should accept agricultural goods into this country that do not comply with our very high standards. Parliament has a right to know where the Government stand on this. Is it their policy to maintain EU standards and not relax them, and therefore exclude this bargaining chip from their negotiations? If that is their policy, it undermines why we are undertaking all this separately from the rest of the EU.

Second in line is India, or it might be, anyway. Would India come near the top of the list? I suppose that it would. Do the Government really believe that Britain has some kind of special relationship with India? If so, can they explain to me why the Germans export three times as much to India as we do? I am very sceptical about a trade agreement with India. I know from my Brussels experience what India’s offensive interests are in terms of trade negotiations with Europe. There is one simple answer—lots of visas for Indian workers to come and work here. How does that square with the Government’s commitment to take back control of our borders and cut immigration? Where is the consistency in the Government’s policy? How does this square with Mrs May’s refusal to abandon the target of cutting immigration to 100,000 a year? I do not see why anyone in India should take seriously a British negotiator who turns up on their doorstep unless the negotiator can state clearly what the Government’s policy is. I bet that we will not hear what it is, as I do not think that the Government know what it is because it is contradictory and all over the place.

The EU has all these agreements with countries that we must now, somehow or other, turn into agreements that we have, as the noble Lord, Lord Kerr, said. The Prime Minister went to Japan with great fanfare. The great triumph of that visit on the trade front, as far as I could see, was that the Japanese Prime Minister said, “We will give you exactly what we have negotiated with the EU”. If that is the limit of what we are likely to get—setting aside all the complications which the noble Lord, Lord Kerr, mentioned about how you renegotiate quotas and all that—is it really worth while having this independent trade policy? I am very sceptical about that. Therefore, can we have a proper analysis? Can the Minister say what the gains will be, as against the losses we know about, in terms of the barriers to free trade with our European partners as they are now?

The phrase of the week is “regulatory alignment”. Do the Government accept that if we depart from regulatory alignment with the EU in order to negotiate independent trade deals with other countries, we will inevitably face tighter customs controls and more difficulties in trade with the EU? How has that trade-off been assessed? I do not think that there has been any proper analysis or reasoning of this decision to have an independent trade policy. I believe that it is all based on religious faith and ideological obsession with the idea of a global Britain that can rule the waves in economics in the 21st century as we ruled them in politics in the 19th century. We are sacrificing the free trade we have for a set of very uncertain benefits. I would like to hear a coherent statement from the Government on where they stand, as that has been completely lacking.