Trade Bill

Debate between Lord Purvis of Tweed and Lord Lansley

Report: 2nd sitting (Hansard): House of Lords
Wednesday 13th March 2019 Lords Chamber

[Lord Lansley]

My Lords, I profoundly believe that we should not leave the European Union without a deal in place, but making this amendment to the Bill would not prevent that. Such an outcome would have to be stopped in another place with legislation or through the revocation of Article 50, and this amendment does not bear on that. Unfortunately, in that unhappy event, the amendment would remove from us the power to implement, for example, the agreement that has been reached with Switzerland. It is not ideal, but it is there. It has been entered into in good faith by us and by the Swiss on the basis that, in the event of no deal, we have to have that measure available.

I am afraid that it is also not true, as the noble Lord, Lord Purvis of Tweed, suggests it is, that the Bill is entirely occasioned for the eventuality of no deal. It enables us, for example, to establish the Trade Remedies Authority—we have just heard about the valuable work that it is doing—and it implements the Agreement on Government Procurement, which is a very large-scale issue for British services companies and others which want to be able to bid internationally under the WTO for such contracts. The amendment would stop this Bill coming into force, and we would therefore be unable to ratify the international Agreement on Government Procurement in the way that we were intending, and it would deprive businesses of the opportunities that that would provide. Much as I heartily concur with the intention behind the amendment, it would not have the effect that is sought.

[Lord Purvis of Tweed]

I just want to make a point about the ability to have the regulations on the Swiss agreement. The Government are not using the likely regulatory powers under this Bill to ratify the Swiss agreement, so I do not think that the noble Lord is accurate on that point. They are using the CRaG process, not this Bill.

[Lord Lansley]

My noble friend the Minister may know what their intentions are but, as I understand it, in a number of instances—and I think the Swiss are among them—they will use what are effectively not just bilateral agreements with the Swiss but the opportunity to roll over the EU-Swiss agreements into UK-Swiss agreements, and the power here is available for that purpose.

Trade Bill

Debate between Lord Purvis of Tweed and Lord Lansley

Report: 1st sitting: House of Lords
Wednesday 6th March 2019 Lords Chamber

[Lord Purvis of Tweed]

My Lords, in Committee there were a number of amendments, including one in my name, which sought to make the case that some of the agreements that we are party to by virtue of our membership of the EU are significant for the economy as a whole and certain sectors of the economy. Some have a greater impact on some of the nations and regions of the UK and, therefore, to understand the impact of our trading policy it is necessary to have the report. So I welcome the Government’s position, as outlined by the Minister.

However, there are a couple of areas where I would wish to press for further information. One area relates to comments I made earlier about the status of the vast majority of the agreements to which we are party and have signed prior to exit day but which we are looking to replicate or agree after exit day. These will not necessarily be considered as continuity agreements—a point made by the noble Baroness, Lady Neville-Rolfe.

The agreement with Japan is a good example. It has been in force since 1 February and, given all the powers under this Bill, is a candidate to be considered as a continuity agreement. The Japanese Government have said that they do not wish it to be a continuity agreement but a new trade agreement. Under the Government’s amendment, how would that be reported on? It would not come under its remit. That is one of many examples.

[Lord Lansley]

I declare an interest as the UK co-chair of the UK-Japan 21st Century Group. My understanding of the Japanese Government’s position is that they have made it clear that the procedures that are required by the Japanese Diet for a treaty would make it impossible for them to bring this forward as an agreement between the United Kingdom and Japan in the event of a no-deal exit. They would require it to be considered as a new treaty because we were no longer members of the European Union or covered by the withdrawal agreement. Were we, however, to sign the withdrawal agreement and to have a transition period, the Japanese Government, in their view, could consider it to be a rollover agreement during the transition period.

Trade Bill

Debate between Lord Purvis of Tweed and Lord Lansley

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 23rd January 2019 Lords Chamber

[Lord Purvis of Tweed]

It is. Ultimately, I believe that the choice is going to be that we either stay in the customs union and the single market of the EU or we leave, either with no agreement at all, which I hope is ruled out in short order very quickly, or with some form of government agreement, which did not secure majority support in the other place, where one-third of those voting against it did not believe that it was leaving the EU at all. I think where the people will now be informed in the decision is as I started: many of the issues are now laid bare about the consequences of leaving.

I am very happy to be a co-signatory to this amendment. I am very pleased that we in this Chamber are debating what the consequences of the actions will be. We are also clear that we want to do the least damage to the British economy and to secure for the future all the relationships that we have at the moment without the extra burdens of regulatory addition.

My final point, which the OBR report in October made very clear, is that if we went down the Government’s course and left, then there would be at least five years of adjustment to a worse scenario for GDP, even on the basis of the agreement. I am seeking to avoid that. I hope there will be consensus, at least in the first instance, that a customs union is necessary. There is no doubt of our position on these Benches that the customs union is preferable to all of those. I hope that will ultimately be the future of our country, and I believe that that is up to the people, who ultimately will have to decide this.

[Lord Lansley]

My Lords, I do not want to go on at length about this issue, not least because I agree so wholeheartedly with what my noble friend Lord Patten of Barnes has already said. I am always loath to do it and I hope to make it a very rare event, but I voted for the amendment to the withdrawal Bill last April. To that extent, I think this House has made its view perfectly clear: it thinks, in the context of leaving the EU, that to retain membership of a customs union with the EU would substantially mitigate what would otherwise be the damaging economic effects of withdrawal.

I do not want to get into a debate about “the” customs union or “a” customs union but, on the face of it, if we are negotiating to leave but we are negotiating to have a customs union relationship with the EU, it behoves us to negotiate without necessarily subscribing to the customs union because the customs union is a product of the treaty. We would no longer be bound by the treaty, so we have the flexibility to think otherwise. That does not turn us into Turkey, because we might choose to do things quite differently. The EU has chosen not to have agriculture within the customs union with Turkey because it is in its own interests not to do so. We have very different interests and we might choose to pursue them differently. Indeed, as one can see from the structure of the backstop, we might choose to have an arrangement with the EU that was, as Ministers are fond of saying, a “bespoke arrangement” for the management of a customs union. And why not? If we could have such a thing under the backstop, surely we could have it without the backstop.

I do not want to go on at length. I hope that those in this House and beyond who are thinking next week about what is needed to make progress from the impasse that we appear to be in at present will read this short debate. While it exposes some of the difficulties in negotiating a future customs relationship with the EU, two things should become immediately apparent. First, many of the negative consequences of leaving the EU—most especially, leaving without a comprehensive agreement in place—will be dramatically mitigated by being in a customs union. When I talk to businesses, that is absolutely at the top of their wish list, and it is true for manufacturers as well. Secondly, I hope people will realise that this does not preclude us having a trade policy of our own. What are trade policies nowadays? They are generally called comprehensive economic partnership agreements because by and large they are not about tariffs; they are about broader relationships. Especially for the UK, given that we are predominantly a services economy, for the future those agreements should be about services. We should be negotiating trade agreements about services, the movement of capital and investment, and indeed we should have a negotiation with India that includes a discussion about the mobility of workers between India and other countries. That is happening in a very powerful way: the Indians are exporting skilled young people all over the world very successfully, and we should have that in mind as part of an economic partnership agreement with other major economies. If that is true and it also gets us out of having a hard border between the Republic of Ireland and Northern Ireland, but without creating a new border between Northern Ireland and Great Britain, why would we not want to do this? That is what everyone is trying to arrive at.

For the purposes of next week’s debate there are, therefore, essentially two questions. First: does offering to be party to a customs union with the European Union, as part of the future political declaration, enable us and the European Union to agree in a way that would—as they say in Brussels—have legal force? Would it enable us to put into the political declaration, and have agreed by the European Council, the kind of language and commitments that would allow it to be said that we will not enter into the backstop, if we go down that path in the future treaty? That is what it is all about: not going into the backstop in the first place. We need some reassurance that that will happen. That will automatically solve the essence of the problem associated with the backstop. If we do not have to go into it, we will have solved that issue. We will also have solved the question of unilateral withdrawal or otherwise. If we are in a customs union, we have a right to leave it. If we go into the backstop, we have no right to leave it—as it is currently constructed— and that is a very unhappy place for many who are against the withdrawal agreement at the moment.

The second question is: can we avoid the Turkey situation? It is a bit like when people talk about entering the Norway situation: we do not want to be in a position where we are simply rule-takers. With a customs union, at least we are not rule-takers on financial services and our service industry, but we are none the less rule-takers. We do not want to be in that position. Can we arrive at a customs union where we genuinely have a shared responsibility? I hope we can.

The trouble is, I entirely agree with my noble friend Lord Patten. Nearly a year ago, if only the Government had listened and put into the negotiation—at the time that led up to the White Paper and after it—a discussion about a customs union. Instead they put into the White Paper the suggestion that we could have a customs union, without calling it that, where the rules of origins are effectively waived so that anything that originates in the United Kingdom is treated as if it is European, and anything that originates in Europe is treated as if it is British. This, of course, is a nonsense; the European Union would never accept it. It would never accept that it would raise the money—