Outcome of the European Union Referendum

Lord Suri Excerpts

Tuesday 5th July 2016 Lords Chamber

[Lord Suri (Con)]

My Lords, it has happened: Project Fear, for which my side was mocked and sneered at, has become Project Fact. The pound has plunged, with terrible short-term consequences for businesses which import large quantities of stock. The FTSE 100 and FTSE 250 both took hard knocks. The vast overseas operations of the former have brought it back up but the FTSE 250, far more indicative of our economy, is still being battered by the markets. However, I will not dwell on this. I fully accept that the will of the people is sovereign, and the power that this and the other place have is entirely sourced from them. There can be no talk of a second referendum or of overturning the result. That would be a democratic outrage and poison British public life for generations. The people have spoken and it is up to us as lawmakers to implement their decisions. That said, there are important choices to make ahead.

We will need to renegotiate our position not just with Europe but with the world. We are now free to make trade deals and should move quickly to get into contact with our Anglosphere colleagues and the Commonwealth, so that we can make up more of our trade with countries that are proving to be channels of global growth. Having been in the EU so long, and not in control of our trade policy, our own departments responsible for trade have been run down. We will need to take on far more trade negotiators, up from the 40-odd that we currently have. A sensible idea would be to have the trade department set up a training scheme in conjunction with friendly countries, so that we can get negotiators learning the skills from those with experience.

I noted recently that yields on our 10-year gilts have fallen under 1%. Now is not the time to be making swingeing cuts to the trade department and Foreign Office, which will be crucial to our future success. I encourage the next Prime Minister to rethink these savings and recognise that investment in diplomacy yields significant economic rewards, not just political capital. Furthermore, we will need to rethink our European policy. The people voted to leave the EU but they did not vote for a recession. If we were to leave the single market, which was pushed for by the late Member for Finchley, we would do tremendous damage to our economy. I have heard numerous friends in this place say that the single market is an anachronism, shrinking and burdensome. This may be right but an essential fact remains: the single market is the only existing free-trade bloc built for the demands of the British economy and designed to cover high-value service industries. Without financial passporting, the City of London would suffer huge movements of banks from the UK to those jurisdictions with access. Frankfurt, Amsterdam and Paris are already making overtures to banks domiciled here.

Since we have only two years to negotiate a new deal before our time expires under Article 50, it makes sense to go through a stop-gap while we negotiate a more comprehensive settlement. The EEA is off the shelf and can be an effective placeholder. We would have uninhibited access to the single market and regain control over our own agricultural, fishing and trade policies.

I will make one final point. Now is not the time to turn away from the world. Global challenges face us which can be faced down only by governmental co-operation. In a way, I am glad that we have left the EU. The new European integration will be characterised by more governmental co-operation. The age of integration, meaning ceding powers and sovereignty to Brussels, is over. We must be a part of that change and work with our European allies for a better future for all our citizens.