European Union (Withdrawal) Bill

Lord Liddle Excerpts

Report: 4th sitting (Hansard): House of Lords
Monday 30th April 2018 Lords Chamber

[Lord Bilimoria]

My Lords, I put my name to this amendment and back up what the noble Lord, Lord Berkeley, has said. In today’s economy, business is integrated and transactions are global, with goods moving across borders every minute of the day. Our biggest customers are right on our doorstep in the EU—27 countries and half our trade. It is not just finished goods, but ingredients and components. In food and drink, my industry, I can give an example. Bailey’s Original Irish Cream is made in Dublin and goes across the border into Northern Ireland. It is bottled there, comes back into Dublin and is exported to the EU and around the world absolutely seamlessly.

Some 2.5 million lorries pass through Dover. How will we cope if there is any disruption over there? Some 70% of the UK’s food imports by value are from the EU, and 60% to 65% of agricultural exports are to other member states. Any delays on these goods, many of which are perishable, would raise food prices. Some 1.5 million trucks go through the Channel Tunnel. The list of border operations is so complex. What preparations have been made if there is to be a hard Brexit to put up all the infrastructure required, prevent any delays and have a frictionless border?

Some 69% of freight transport goes to the EU as lorry traffic. The FTA has spoken out very clearly for the whole industry. It represents 50% of the UK’s lorries and 90% of rail. It has warned very clearly of 15-mile queues at Calais if border checks are introduced. We need to remember what happened in 2015 with the French ferry workers’ strike. If trucks coming from the EU are treated like non-EU trucks, the ports will be in permanent gridlock. Does the Minister agree? The other aspect is Ireland. From Ireland, goods go to Europe across the UK. It takes trucks 10 hours from leaving Dublin to get to Europe. If they had to go around, it would take them 40 hours, with considerable disruption.

I conclude with a point made by the noble Lord, Lord Berkeley. Yesterday, in the Sunday Times there was an article in which a company boss said:

“We suddenly caught Brexit blight”.


The article says that:

“A wrinkle in international trade rules is scaring away companies in Europe from British suppliers”.


It talks about a Bristol-based company where the customers which used to give orders well in advance—in Germany and Scandinavia—are suddenly stopping the orders because of rules of origin. The supply chain is worried about this. The local content will not be of 50% value. With many industries such as the car industry, components that are made in the UK are well below 50%. There are companies here that just do not have the capability to move from under 50% to 50% or 60%. It will take many years to be able to have that capability domestically, and we will not be able to do it competitively.

The article concludes by saying that companies like this one in Bristol,

“will gradually be ‘evolved’ out of the supply chains of EU manufacturers that do not want the hassle of providing paperwork for components bought outside the bloc”.

It will, says the company,

“be death by a thousand cuts”.

That is what we are facing. We had a vote on the customs union in this Bill and it is critical because it marks the frontier between hard Brexit and a soft Brexit.

In the Financial Times recently, one leading British political analyst was asked to predict what would happen. He said that Brexit will not happen because there is no version of Brexit that can get a parliamentary majority. There will be no parliamentary majority if we cannot handle this particular situation in this amendment.

[Lord Liddle (Lab)]

My Lords, I rise briefly to support my noble friend and the noble Lord, Lord Bilimoria, on their remarks. We know that the Government do not have a policy on this issue. We can read in the Financial Times that there will be a great debate tomorrow. The Minister smiles, but he knows perfectly well that it is true that the Government have not resolved the question of what customs model they will go for. This is an extraordinary situation. It is now 22 months since the Brexit vote and yet the Government have not got a policy on the fundamental point of how we will make Brexit work. It is a failure of massive proportions on the Government’s part. I want to hear an apology to business from the Minister for the fact that the Government’s political divisions have basically led to a situation in which business is facing a serious cliff edge. They call themselves the “party of business”. What serious claim have the Benches opposite to be the party of business, given the way they have behaved since the EU referendum?

I also say to my own side that I fully support the amendment we passed on the customs union. I was greatly cheered up by it. It is a breach in this wall of stupidity that the Government have erected, but it is not a complete solution to the business problems that people have talked about. It does not solve entirely the problem of customs checks because of rules of origin and issues with agricultural produce and all the rest. It certainly does not solve the Northern Irish border problem on its own. It does not address the fundamental economic point that it completely neglects services—the dynamic part of our economy where our exports are growing, where we have a strong surplus and which is our economic future. This is a terrible, woeful neglect on the part of the Government of the key, dynamic, entrepreneurial sectors of the British economy. How can they claim to be the party of business?

[Baroness Hayter of Kentish Town]

My Lords, the issue raised by the amendment is key to how we depart the EU. Indeed, the urgency of sorting out the logistics, costs and procedures of being outside our current trading arrangements has already been made clear. It should not need repeating that 44% of our goods exports go to the EU, with more than 50% of imports coming from the EU, making the mutual case for continued tariff-free trade unanswerable.

As the CBI says, should the current arrangements—a simple single form for our exporters—change to,

“a 12-page form for each batch of goods”,

where,

“Every consignment will also need a VAT registration and certificates of origin, declaring how much of each product has been made where”,

costs will rise disproportionally. Indeed, one major retailer foresees,

“a five- to ten-fold increase in border documentation”,

should Britain leave the customs union, with a possible extra 200,000 UK businesses having to make customs declarations for the first time.

As we have said, the high degree of integration between UK and EU supply chains means that any new friction—bound to be slow and costly—would force businesses to adapt the way they do business, including over choice of supplier and extra storage space for just-in-time models and such issues. We have already heard of the food and drink industry: 90% of imports and exports of food and non-alcoholic drink are with the EU or those countries with whom the EU has trade arrangements. For manufacturing, according to the EEF, agreeing a preferential set of rules of origin with the EU will be crucial given the complexity of the supply chain and the origin of component parts.

We know all that; we have heard about it in this House before and have heard it again this evening. What I did not know until last week—maybe the Minister can correct what is being said—is that not one single Minister from his department has been down to the Port of Dover to see the problems that will arise there. Lorries coming from outside the customs union are currently subject to about 45 minutes of checks and the same would happen if we were outside the customs union. We understand that neither he nor any of his colleagues has been down there to witness that. Perhaps he could put us right.

The concentration on solving the issues highlighted by the agreement are real ones which we support. Clearly, as I think those behind me know, we might have a little difficulty with some of the words in this amendment but the issues raised by it, which the Government must solve, are ones to which we clearly would add our support.