EU: Trade in Goods (European Affairs Committee Report)

Lord Tugendhat Excerpts

Thursday 2nd February 2023 Lords Chamber

[Lord Tugendhat (Con)]

My Lords, like my noble friend Lord Lamont, I was shocked to learn that our noble friend Lady Chalker is to leave us. I had not realised that that was going to happen, and I am extremely glad that I should be here on the occasion of her valedictory speech. I remember her well as a radical and disruptive influence in the Young Conservatives back in the late 1960s and 70s. Since then, she has had a most distinguished career; she has combined idealism with energy and vision with practicality. This House, and particularly the Conservative Benches, will be sadly diminished by her departure.

For me, too, this is something of a valedictory speech because, to my great regret, I have been rotated off the European Affairs Committee; indeed, I think I ceased to be a member two days ago. I wish to say how much I have enjoyed serving on the committee; how very much I have appreciated the wisdom, fairness and deliberations of our chair, the noble Earl, Lord Kinnoull; and how much I have enjoyed the company of the other committee members. Although we have not all agreed on everything at all times, it has been a model of noble Lords of different parties working constructively together. I hope that my successors on the committee will find it as enjoyable as I have and will continue to produce reports of the quality that the noble Earl has made possible. I also wish to say how very well served we have been by the committee staff. They have had a considerable amount of work to cope with and have done so in a very efficient fashion.

Very often, the time that elapses between the publication of a report and its debate in this House is a disadvantage but, on this occasion, it is an advantage. As other noble Lords have said, when the report was published, it was still unclear what the effects of both Brexit and Covid were and it was difficult to disentangle them. However, now, after the effluxion of time, we can see how perceptive the committee was in disentangling those factors and identifying the problems that have been created by the terms under which we left the EU.

The Government’s response is a very singular document. It is basically a list of their efforts to overcome obstacles to Britain’s trade with its principal trading partner that the Government themselves are responsible for creating. It is a very unusual situation. In saying that, I am not trying to reopen the Brexit debate; as the noble Lord, Lord Liddle, said, that issue is settled. What I am doing is drawing attention to the consequences of the terms on which Mr Johnson and my noble friend Lord Frost negotiated our departure from the EU. It did not have to be this way. The country took the decision to leave the EU, which I personally regretted very much, but the manner in which we did so has created a range of problems that could well have been avoided had we adopted different negotiating tactics and objectives.

As we know, all countries have been hit by the effects of Covid and the consequences of the war in Ukraine. In explaining the problems facing the British economy, Ministers harp to a great degree on these matters but, in those respects, the United Kingdom is in the same position as everybody else. The reason why we are facing additional problems is, as I have just said, the terms under which Mr Johnson negotiated our departure.

Their manifestations are clear for all to see: the fact that the UK is the only major economy still at pre-pandemic levels; the hit to our exports, to which other noble Lords have referred; the fact that business investment has been growing by so much less than the G7 average; the shortage of workers, which all European countries are suffering from but our problems have been made worse than they need have been; and the IMF forecasts that suggest that we will be alone among the major economies in going into recession.

As my noble friend Lord Lamont pointed out, forecasts are not always right and the UK has defied pessimistic forecasts in the past. However, this accumulation of factors is significant. I agree with those who say that Brexit is not the only factor behind them but the terms on which it was negotiated are a very important factor. All these problems were foreshadowed in the committee’s detailed questioning of witnesses and the responses that they received. From the evidence we collected, it was clear that the totality of the individual issues that we identified would cause major problems to the economy.

My party devotes a great deal of time to debating growth and how best to achieve it. Growth is a difficult thing to achieve but one way in which we could certainly contribute to growth would be, as the noble Lord, Lord Liddle, has pointed out, making Brexit work. As this report and the government response shows, one of the best things we can do is set about resetting the relationship between this country and the European Union. It is not a question of returning to the EU. That is not something we should be thinking about at all at the present time. We should be thinking about how this country can deal with the EU on a constructive, equal and mutually beneficial basis. I very much hope that an agreement on the Northern Ireland protocol might prove to be the first step on that road.