Customs and Borders

Norman Lamb Excerpts

Thursday 26th April 2018 Commons Chamber

[Mr Clarke]

With great respect to my close ally and friend, I must make a little progress and finish making this point. I might already have had my 10 minutes.

The theory is propounded to the British people that we somehow have nothing to do with these EU trading arrangements and that somehow, when trade deals are done, grey men in the European Commission secretly impose upon us all sorts of restrictive terms. Indeed, the right-wing press give the impression to all their readers that that is what we are facing now. They suggest that Jean-Claude Juncker and Michel Barnier are somehow plotting against us, that the whole thing is being done by unaccountable Eurocrats who are trying to take revenge on us, and that the trouble with our EU trade deals is that we have no say in them and they happen mechanically. That is complete rubbish, and it is rubbish that has been propounded for the last 30 or 40 years.

The Commission does have some roles that our civil service does not have, but basically it can negotiate only if it has the approval of each and every member state’s Government. It negotiates only within a mandate that the states have agreed. In my own ministerial experience of EU trade and economic affairs, the bigger countries —particularly Britain—have a huge influence on what is being negotiated. In my last job in the Cameron Government, when I was in the Cabinet Office without portfolio, I was asked by David Cameron to lead for us on the EU-US Transatlantic Trade and Investment Partnership deal. I spent time in Brussels and Washington doing that. I cannot say that I played a key role, but the whole point was that the British were keen advocates of that, along with the Germans, the Italians and the French. We were all close to what was going on, and seeking to find out where things were going and whether we could push it. No deal has ever been done by the EU with any other country that anbody has ever objected to in the United Kingdom. For example, no British Government ever protested about the EU deal with South Korea, which is one of the better ones that we have achieved recently. No one ever told me they were against it.

[Norman Lamb (North Norfolk) (LD)]

Will the right hon. and learned Gentleman give way?

[Mr Clarke]

I really should not, because the Speaker will get extremely annoyed. I must come to a quick conclusion and I wanted to touch on Ireland. I apologise to the right hon. Gentleman, but other people must get in.

It is an utterly ludicrous idea that it would somehow be better if we do things on our own. The countries always cited are the United States, Australia and New Zealand, and they will do deals with us because they all want to sell us foodstuffs. There is not a great deal of trade that we can add between us and New Zealand and Australia, and the Americans are desperately keen to sell us their beef and their chicken. As someone has already said, all trade deals are not done by a sovereign country saying, “Of course we are not binding ourselves to do anything.” They involve the agreeing of market regulations and of the trading rules that will apply. We would not say, “It’s all going to be decided by the British courts.” There would be an international arbitration agreement to which businesses and countries could look if one side started breaking its treaty obligations. The Americans will say, “Give up these European food safety and environmental regulations, and we will trade with you on ours.” If we let in chlorinated chicken, hormone-treated beef and genetically modified crops— personally I am not convinced that they are the health hazards that most people in the country seem to believe they are—that means new barriers with Europe, which will not let those products go straight through, and we will probably lose a large part of our biggest market, for food and agricultural products, which is in Europe.

I have one final point to make on international trade and about where the debate is unrealistic. WTO rules have suddenly been elevated to some mystic world order that means that our new trade agreements will somehow be much better. I wish that were true. This country does abide by WTO rules, but they are nothing like as comprehensive as they ought to be because the Doha round failed. The Americans take no notice of the WTO. The Americans and the Chinese are about to start a trade war, and everything that they are doing is in total breach of WTO rules. We will not get a deal with Donald Trump subject to WTO rules. He will not even appoint judges to the WTO court, because otherwise it might do what is usually its major duty, which is settling disputes between states.

Going back to what the right hon. Member for Normanton, Pontefract and Castleford said, we want trade with Europe that has no barriers between ourselves and Europe. It will require some ingenuity to find some basis on which we might still be able to do trade deals with other people, but the idea that some marvellous new global future with fantastic new trade deals is about to open up is hopeless. If someone can get the Americans to open up their public procurement to international competition and give up the “Buy America” policy or to open the regulatory barriers that they have put in the way of professional and financial services, they will be a miraculous negotiator, because we could get nowhere when Obama was in power. I do not think that the present Administration are offering us anything; they just want their beef to come here.

Finally, on Ireland—I will be much shorter on this because it is a big question that has been touched on already—it is absolutely critical that we do not break the Good Friday agreement. It is quite obvious that most people on this side of the Irish sea had never thought about Ireland when we were debating during the referendum and when they were propounding their policies. The problem of the Good Friday agreement has been addressed by most Brexiteers by them saying, “Surely that’s all over now? Isn’t it a nuisance? What an irrelevance. Let us break it now, because it no longer matters. It is far more important that we get the kind of hard Brexit that we want.” That is very dangerous.

The Good Friday agreement is one of the major achievements of the British Governments of my time. It was negotiated with the Americans, with the Government of the Republic of Ireland and with every section of opinion in Northern Ireland. It brought an end—almost; it is the end, I hope—to 200 years of the troubles in Ireland after they erupted into violence. When the troubles were under way in the ’70s and ’80s we lost more policemen and soldiers in Ulster than we did in Iraq and Afghanistan put together. The agreement was a splendid achievement for John Major and Tony Blair, so to say, “What an inconvenience. It is getting in the way of our leaving the customs union,” is very dangerous.

I thought that the Government had accepted that. Indeed, I think they have done so formally on two occasions. First, we had the Prime Minister’s Florence speech, which addressed the matter. Talking about the discussions she had had with Europe about Northern Ireland, she said that

“we have both stated explicitly that we will not accept any physical infrastructure at the border.”

That was solemnly agreed. It was the agreed Cabinet policy. The Foreign Secretary made a strange speech before the Florence speech and a statement shortly afterwards that gave the impression that he was trying to undermine the speech, but I am sure he was not. That statement is already agreed Government policy.

Secondly, we finally managed to make progress by finishing the withdrawal agreement, and we published the texts of what had been agreed. As people have said, there are all these other possible solutions involving using congestion charge cameras and things to avoid issues at the border, but I do not think that they will get very far. We have already committed ourselves to the following:

“In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation”,

which I think means pretty well full regulatory convergence. As someone has already said, the chief constable of Ulster has said that we cannot have infrastructure at a new hard border. It would outrage nationalist and republican opinion across the whole island and take us right back to all the problems we had. Symbolism is huge in the politics of Ireland and always has been, and it would be grossly irresponsible to put a hard border in the middle of the island of Ireland again. We have never been on such good terms with the Government of the Republic of Ireland since the Republic was founded.

If we have those arrangements at the Irish border, the same arrangements will of course apply to Holyhead and to Dover. That is what I want to see. We want no new barriers and no customs processes. We want the necessary level of regulatory convergence. Obviously, the easy way to do that is to stay in the customs union and stay in the single market. If not, we will need what I think the Prime Minister described as a “customs procedure”, which will be something that looks remarkably like the single market and the customs union.

The customs union is what today’s business is about, and it would do terrible damage to this country if, for strange ideological reasons in the confused aftermath of a misguided referendum, we were to take such a foolish step as not to replicate the customs union in any future arrangements.

--- Later in debate ---

[Owen Smith (Pontypridd) (Lab)]

I begin by thanking my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) for securing today’s debate, which has been incredibly important, and my right hon. Friend the Member for Islington North (Jeremy Corbyn) for liberating me to speak. It was extremely generous of him, and I intend to make full use of it.

I want to do something unusual in my new free-speaking, freewheeling role and agree with one of the things said by my hon. Friend the Member for Vauxhall (Kate Hoey). She said that there has been a great deal of dishonesty in this debate, and she is completely right. It is pretty much the only thing that I agree with her on, but dishonesty has been the hallmark of the Brexiteers’ arguments before, during and after the referendum. I am sorry to break with the more consensual, collegiate tone that many Members have struck, but we need a bit of truth telling in this debate. We need to be clear about the risks that we face as a country and clear about some of the fibs that were told to the country during the process.

As a former shadow Secretary of State for Northern Ireland and as someone in the Labour party who feels a huge degree of pride about all we did to bring about an end to 30 years of civil war in a part of our country, we cannot countenance any return to any hard border in Northern Ireland. It would be utterly unconscionable for this place to allow that to happen. When the Chief Constable of the Police Service in Northern Ireland is warning us all publicly—a pretty remarkable thing for him to do—that we risk the return of a hard border that would jeopardise the safety and security of his officers and of the people of Northern Ireland and when that view is shared across the political divide in Northern Ireland, this place must listen.

The situation was not discussed prior to the referendum, when it was not clear that we were going to jeopardise peace in Ireland. If there is to be any sort of harder border in Northern Ireland, it is now clear that we run the risk of jeopardising that peace. That is the first and most important thing that I have to say, and that alone should cause us to pause and say, “We must stay in the customs union and the single market.” The truth is that staying in the customs union is insufficient to guarantee that we will not, over time, have a return to a hard border on the island of Ireland. Regulatory divergence unfolding over a longer period will be the one thing—more than the short-term effect of customs tariffs at the border—that will guarantee the return of the hard border, which cannot be countenanced by this place. If we allow it to happen, we would be betraying the people of the Northern Ireland and the national interests of this country

Let me turn briefly to the economic effects of Brexit, because we need some truth telling there, too. Brexit is already damaging the economic this country’s wellbeing. The International Monetary Fund said just this week that the only G7 country that will not grow at anything like the almost 4% that the world is predicted to grow at over the next period is the UK, and its view is that that is due to Brexit. The Office for Budget Responsibility, the OECD and the Government hold the same view. The Government’s own projections clearly show that with the very best outcome, which is staying in the single market and the customs union, we will still see a reduction in GDP of around 2%, which is equivalent to the change we saw after the 2008 crash.

[Norman Lamb]

Does the hon. Gentleman agree that the Brexiteers’ claim that we have to leave the customs union to grow our trade with the rest of the world is just grossly misleading? Germany exports £77 billion to China against our £22 billion, so we have every opportunity within the customs union to grow our trade wherever we want. It is down to us, not the rules of the customs union.

--- Later in debate ---

[Tom Brake]

Thank you, Mr Speaker.

It is a pleasure to follow the hon. Member for Totnes (Dr Wollaston). I agree that we need a dose of Brexit reality. In fact, I agree with everything she said. I am sure she will share my concern about the recent figures on the number of EU nurses who have gone off the register, and indeed the number who have left the country, just at a time when we have significant vacancies.

Just as I agree with everything the hon. Lady said, I disagree with everything said by the hon. Member for Vauxhall (Kate Hoey), who is no longer in her place. However, at least she had the courage to be here to present that hard Brexit line. Where are the hard Brexiteers on the Conservative Benches? Where is the Foreign Secretary? Where is the Secretary of State for International Development? Where is the Leader of the House? [Interruption.] Oh, there is one. They should be here to hear what they are inflicting on the country. Perhaps the reason they are not here is that they did not want to hear some very well-judged, measured contributions from Members on their own Benches explaining precisely the damage that they are causing.

[Norman Lamb]

I agree with everything my right hon. Friend is saying. Does he share my complete confusion that many of those hard Brexiteers have spent their political lives fighting to cut red tape, yet here they are gratuitously proposing to massively increase red tape? What sense does that have?

[Tom Brake]

Absolutely, and I will come on to that very strong point shortly. The chaos those people have caused is being added to on a daily basis. Today, for instance, we have the Home Secretary refusing to confirm that the UK will come out of the customs union, and on the same day, we have the Foreign Secretary threatening to resign if we do. Well, there you are—what a well-run Cabinet delivering Brexit for us in this chaotic manner.

Why does the customs union matter? Before I touch on that, I should point out that, if people look at the literature circulated during the campaign, they will see that it was about spending Britain’s cash in Britain, it was often about immigration, it was about posters such as Nigel Farage’s poster scaring people with that picture of all those refugees. He did not have a massive poster saying, “What do we want? To come out of the customs union. When do we want it? Now.” Of course that was not a major feature of the campaign. Anyone who suggests otherwise is speaking somewhat remote from the truth.

Why does the customs union matter? Many Members have referred to the Irish border; it is a real pity that the Secretary of State only went to the border for the first time a couple of days ago. It also matters for the Dover border. I understand that “BBC South East Today” has confirmed that, so far, not a single Minister from DExEU has been to the port of Dover. I find it incredible that they have not managed to visit the port of Dover. If they had, they would have been able to see directly the impact of the customs union on our largest port.

I could touch on the impact on BMW and its ability to manufacture cars in Oxford, or indeed the issue of red tape for small businesses. There is also the cost of roughly £30 for every small business that exports to the EU to process electronic paperwork that it does not have to process at the moment.

What have the Government offered in return? What is their solution? Under a customs partnership, the UK would collect duties “on the EU’s behalf” for goods destined for the European Union. Think about what would happen if the EU put the reverse offer to us, whereby the EU collected duties on the UK’s behalf for goods destined for the UK. Would the Brexiteers on the Conservative Benches say, “That’s a brilliant idea. That’s exactly what I want the EU to do for us”? Of course they would not, because it is absolute nonsense to suggest that and they would not possibly support that if the EU suggested it.

The UK has recently been threatened with a nearly £2 billion fine for failing to handle imports at its ports effectively, leading to significant VAT losses in other EU countries. I cannot see the EU queuing up to give us responsibilities for something that we are not handling very well at the moment. As for the highly streamlined customs arrangement, no one has been able to identify the technology for it, and that technology needs to be in place, I suggest, by the end of 2019 to be properly run in and tested.

On the position of the Labour Front-Bench team, I do not know whether seeking a final deal that gives “full access” to European markets and “maintains the benefits” of the single market and the customs union is anything other than having your cake and eating it, but the Liberal Democrats still think we are better off in the European Union, in the single market and in the customs union, and we want to secure a final say on the deal for everyone in the country, to do this democratically.