EU: Trade in Goods (European Affairs Committee Report)

Lord Liddle Excerpts

Thursday 2nd February 2023 Lords Chamber

[Lord Liddle (Lab)]

My Lords, from this side of the House, I join in the tributes to the noble Baroness, Lady Chalker. She was one of the Conservative Ministers in the Thatcher and Major Governments whom I most admired, particularly for her work on overseas development. We are going to miss her a great deal and I thank her for what she had to say.

I also join in the tributes to our committee. I am a member of the committee; I regard it as one of the privileges of being a Member of this House to be able to be a member of its European committee, and I certainly think the chairman has done extremely well since I became a member. He chairs the committee with consistent charm and grace; he can occasionally be tough but is always intelligent and wise in his judgments and I think we would lose a lot from his absence. I also pay tribute to the staff who have managed the adjustment from the grand European Union Committee that we once had to the lesser European Affairs Committee that we are now members of. They have been very helpful, worked very hard and put an enormous amount of effort in: we owe a great deal to them.

I feared that this debate might be something of an unproductive battle of statistics, and I do not intend to go there: I am not going to get involved in doppelgangers, the noble Lord, Lord Lamont, will be pleased to know. I think there are two facts that come out of the analysis of our trade position since Brexit. One is that, although UK trade has recovered in the last year, it has not recovered as fast as other countries’ trade has from 2019. Trade intensity, a measure of trade in GDP, has declined somewhat. We are suffering a bit on trade, but one fact that the noble Lord did not mention, which is one of the most worrying things about the trade position, is that small companies have been particularly hard hit. I regard small companies as the entrepreneurial future of Britain. From those small companies should grow big companies, but one-third of small companies, I think, have dropped out of trading with the European Union. That is an extremely serious problem. I do not quite know, and I would like to ask the Minister, whether the Government recognise that to be a major issue and what they are trying to do to help small companies compete more effectively in the EU. In that regard, I think the fact that European companies can come here without any control, while small companies in Britain face all these controls at the borders, is bound to put them at a competitive disadvantage.

Also, the SPS issue is very important for small companies. We have heard of all the problems with Scottish seafood, plant growers and all that stuff: some of the eminent Members of this House own companies in the plant-growing area. They have faced very considerable problems, yet the Government are taking what I regard as a dogmatic position on SPS. Again, it would be good to hear whether there is any shift from the view taken by the noble Lord, Lord Frost, in the negotiations, which was that, in any circumstances, dynamic alignment with the EU was completely unacceptable. I am not suggesting dynamic alignment in all areas, but it seems to me that to say it could never be acceptable, you have to look at the price you are paying, and I think quite a lot of small businesses are paying a very high price for a bit of Tory dogmatism, to be quite honest. Are the Government going to reconsider that position in the future?

The debate on Brexit is moving on. I was passionately opposed to it, but I regard my position now as asking how we make the best of where we are. I do not see any prospect of an early return to the European Union; for that to happen there would have to be a settled political consensus in the UK—in other words, a very significant shift of opinion in the Conservative Party about its attitude to the European Union. I do not think that our partners would be in the slightest bit interested in a British reapplication while the political debate in Britain is so heated and divided. We had better accept that and try to make the best of it we can. I have detected a sense in which the debate is moving on. For instance, we have moved away from the position where a lot of people who were in favour of Brexit claimed that we would not suffer any problems in trade as a result of leaving. There are undoubtedly bureaucratic barriers that have been erected, and the TCA is the result, and that is now more admitted than it was two years ago.

It is six years since the referendum; it is three years since we left. The Government have been presumably working very hard on trying to define a policy of divergence which would demonstrably improve our competitive position. In my view, they have not as yet produced much of a positive result; this is a very significant failure on the part of those who were the strongest supporters of Brexit. I am unimpressed by the trade deals that we have managed to deliver, in terms of their economic benefits. I am convinced that there are areas where regulatory freedom would be beneficial, particularly, as the noble Lord, Lord Lamont, said, in the new high-tech industries, digital trade and all that. However, we do not see much coming out of the Government, and what I fear about the Bill we are going to debate next week is that there is again a sort of ideological presumption that if we abolish all EU law, somehow this is going to result in a great revival of the British economy. If you are serious about this, you have to do detailed sectoral analysis of where divergence might be beneficial. I see very little evidence of that on the Government’s part, with the possible exception of financial services, and most experts on financial services think that the Government are exaggerating the extent of the divergence that they are recommending. We have to make the best of it, and I hope the Government recognise that this is what they are trying to do.

I would be interested to hear what the Government feel their policy will be for the future of regulation; what their policy will be for the revision of the TCA in two years’ time—we have to start thinking about that—and where they see the possibility of what I would call sovereign alignment. If it is in our interests to align with EU rules, that is a sovereign decision of ours, not the EU imposing anything on us. It is up to us, so we should allow for that possibility. At present, it is just ruled out. I think that is a very big problem.

There we are: we must do our best to improve things. I will always remain a passionate pro-European. I believe that events since 2016, particularly in Ukraine, have underlined the importance of close engagement and friendship with our European friends and partners. While we cannot be members of the European Union in the foreseeable future, I will certainly never give up campaigning for a united Europe.