If I start giving way, we will go back to where we were before.
Similarly, on trade deals with the rest of the world, if anybody can devise a method of trading with other countries on our own that is consistent with a sensible customs arrangement and better than the deals that we have now used very successfully for a long time—with our being the leading nation pushing for EU deals with the rest of the world—that is fine, but let us not accidentally drift into a position in which we are making absurd demands of the EU that mean our leaving not only the customs union and single market, but losing all the advantages that particularly the best and most competitive sectors of our economy have by way of their existing access to the European market.
Some people seem to think that we can have an altogether different and better type of trade deal with other parts of the world. Quite irrelevant statistics are
misused to make the case, such as that growth is faster in the rest of the world than it is in Europe. It is an underlying truth that growth in emerging and developing markets, which was very poor until we got going with the rules-based order in the 1990s, is faster than that of developed countries such as our own, and it is always going to be faster. There is also the argument that there is more of the outside world than there is of Europe. That is indeed the case, but for the past 20 years in particular, the United Kingdom has been the most influential player in the European Union in insisting on the steady attempt to negotiate trade deals with the world in general, and the numbers keep growing.
On the British Government’s behalf, I was involved on the fringes of the constant efforts to get an EU deal with the US—the so-called Transatlantic Trade and Investment Partnership. It did not fail because there was something wicked about the EU; the fact is that, unfortunately, protectionist influences in America are very strong, and were even under the Obama Administration. One cannot get any response. I have been involved in all these things—I have talked about trading openings with India and Brazil, which are of course where the population is. It is absolutely absurd to think that there are no protectionist pressures in India and Brazil and that it is simply a question of our present Foreign Secretary walking in, with his bonhomie, and saying, “You will of course now throw your markets open to us”.
It is also absurd to argue that somehow this approach will produce deals with less damage to our sovereignty and fewer constraints. I do not understand those arguments. What is the nature of a treaty embodying a trade deal—or any other treaty, come to that? Both sides agree mutually binding obligations. They agree on tariffs, and remove them where they can. But what is far more important in trade with developed countries, such as the US—I personally think that the few tariffs left there could be abolished both ways with no disadvantage—is talking about regulatory alignment.
In the EU, we have achieved regulatory harmonisation. What one wants is mutual recognition. We agree to say, “We will abide by arrangements on regulatory standards, on which we both agree, and we, the British, will not change them in our House of Commons. We will not go back on them, and you won’t go back on them.” If we listen, again, to the more zealous Eurosceptics, they seem to think that the world will throw open its doors when we arrive saying, “We want a trade deal with you—open trade.” “Fine”, say the Australians. So we say, “The rules are that you agree to this, this and this, and you take this, and we take that.” But then we say, “Of course, we may change the rules—we may change the scope occasionally. We do not, of course, undertake to fetter ourselves by any lasting obligation to what we have agreed with you.”
There are no such deals. It is fanciful, as the Secretary of State for International Trade discovered when he went to America. He no doubt believed, as they all did just after the referendum, that the doors were about to be thrown open and that we would get a deal with the Trump Administration by Christmas. He found, as indeed I did in my dealings with America, that things are different. The current President is hopeless. He wants to reduce the amount that we and others export
to America, and he wants to use force in what he says are easy-to-win trade wars to get us to open up more of our markets to exports from the United States in sensitive areas. That is what he is about.
What is a constant in America—it is also true in Australia, New Zealand and Brazil, thinking of some of the bigger and easier markets—is that they are always anxious to have access to our market for their farmers. They produce food on an industrial scale to lower standards of animal welfare and food regulation than we have. President Trump will say, “We are going to sell you our beef and our chicken and some of our cereals on a bigger scale.” What will those countries want us to get rid of? They will want us to abandon the European regulations on animal welfare and food standards and take up theirs. It would cost us the European market if we did that, and we would have to have border guards everywhere because nobody would let us export to the rest of Europe or to Ireland, or be a route for, chlorinated chicken and hormone-treated beef. Australia has hormone-treated beef; it is not just the Americans. I will not go on, because I think I have made my point.
People are of course dismissed any time they try to point out the consequences of our ignoring reality in the modern world and what might happen to our economy—to Scotland and the rest of the UK—if we accidentally put all kinds of new barriers in the way of our trade. Unfortunately, the public have been persuaded by the Eurosceptics to ignore the Bank of England, the Treasury, the CBI, chambers of commerce, and people from key sectors of the economy such as the car industry and pharmaceuticals. It is all scaremongering, apparently —so we are told.
Actually, I do not see how anybody can argue that erecting new barriers between ourselves and the biggest, richest international free trade market in the world can do anything other than make us poorer than we were. That is why I do not understand why the Government are resisting the not very strong or compelling Lords amendment 1, on customs union, at all. They are only being asked to report on what efforts they are making to get there, and I think they are going to have to make efforts to get there.
The amendments in lieu are an attempt to devoid substantial amendments of any meaning. I would not vote with the Government on the meaningful vote yesterday, because I could not see that any commitment had been given; nor could I see any argument against what was on the amendment paper. I was very worried, because I thought that some of my close hon. Friends and colleagues were going to be very angry when they discovered that they had been fobbed off with an agreement just to discuss the possibility of changing the provision. They may yet have the last laugh on me—I am getting to be a cynic in my old age—as this morning they appeared to be getting somewhere in getting a more substantial system put in place, but we have yet to see the Brexiteers mount their full counter-attack. I will wait and see.
I will come back to the subject of this particular debate, as you will want me to do, Mr Speaker. What is being offered as an amendment in lieu, to use the jargon, is pathetic and utterly meaningless. We could save a bit of public money by saving the paper involved
in putting it in the amendment paper and printing it. That probably explains why the amendments in lieu have been tabled by an extraordinarily wide range of Conservative MPs. As well as the Secretary of State, the list includes my hon. Friend the Member for Stone (Sir William Cash), my right hon. Friend the Member for Loughborough (Nicky Morgan), my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) and so on. I know all these people and I do not believe that they agree on anything that has anything to do with the European Union, so what has induced them all to do this? I quite accept that there is a sense of deep loyalty to our party, which I assure the House I actually feel in every other way myself. I think that this is an excellent Government if it were not for their policy on leaving the European Union, but there we are.
What are we being asked to sign up to? The amendment says that it is “a customs arrangement”. Well, that covers anything. It is a phrase that the Prime Minister, for reasons that I have always understood, has slipped into several times because she cannot get the members of her Cabinet to agree on her using any other form of words. So for the time being she has been obliged to slip into talking about “a customs arrangement”. But that includes absolutely everything, from the kind of arrangements that would suit my hon. Friend the Member for North East Somerset to those that would suit my right hon. Friend the Member for Loughborough, but everything in between as well. It is a bit of a waste of a statement, coming back to say what efforts they have made to reach that extremely amorphous destination. Of course, that takes us back to the root of the whole problem, which is trying to arrive at a border policy.
To end on a more optimistic note, I think that most of us have noticed that a most important stride was made yesterday, as I have said, with an amendment tabled by the Government that was described as the Irish amendment. It is part of dealing with the argument about the Belfast agreement, and actually embodies the Belfast agreement in law. It goes further by reinforcing what the Prime Minister has actually been saying for some time, if we have been listening to her—that we are going to have a customs union, in effect, in Ireland, because there is going to be nothing new and no checks on the border. We are, in effect, going to be in the single market as far as Ireland is concerned, because we are having regulatory alignment. We agreed that. I think that the Cabinet agreed it—although some of them do not seem to have noticed—not too long ago, back at the time of the draft withdrawal agreement, which the Government are now trying to finalise. I actually think that that is where we should go.
The Government are still talking about frictionless trade. Unfortunately, thanks to the rows there have been, the slogan is now “as frictionless as possible” trade, which no doubt cheers up the Foreign Secretary. The truth is that we will have to have genuinely frictionless trade through arrangements on customs and regulatory alignment that preserve the benefits of all this for Ireland. Actually, the one thing that I think every Member of the House agrees on is that we do not want new barriers down the Irish sea. Northern Ireland is part of the Union—I am as Unionist as anybody here—and we are not putting up new barriers between the mainland and Northern Ireland when we leave.
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That means that what we all signed up to yesterday as a legal obligation on the Government actually applies to Holyhead, as was raised by the hon. Member for Arfon (Hywel Williams), to Dover and to the whole United Kingdom, and we would make better progress if we enabled the Government to be a little more open and to settle down to that process. Having wasted two years, we might even be able at least to begin the serious negotiations with the other member states of the European Union, because we have to persuade 27 other Governments, 27 other Parliaments and the European Parliament that we have come back to reality on the subject and are prepared, in our mutual interests, to accept open borders, customs alignment and regulatory alignment, and to trade in the modern world.
I was prepared to listen and go along with the idea of a customs partnership, which was meant to be a way of combining customs union with trade deals with other countries, if we can get them. The difficulty is that “customs union”, unlike “customs arrangement”, has a meaning. Put simply, it means that we have no tariffs or other barriers between us; we have a common barrier around the outside, of tariffs and customs procedures for things coming in. That is why, in principle, we cannot have deals with anybody else, because we cannot have each member state punching a hole in the barrier because it wants to have a trade deal with Brazil on different terms. That is why the sensible thing—it is what we have always done whenever I have been in government—would have been to encourage more EU activity to get deals for all 27 member states.
If the customs partnership—all this stuff about collecting different tariffs and refunding British businesses if theirs are lower—can be made to work, fine. I have my doubts about that. I think the “max fac” idea is utterly ridiculous, because it is incompatible with any open border, and it will not even be invented for some years anyway. I might welcome the backstop if I thought that the present system would continue for 10 years while Brexiteers search for the new technology, but I think that they are unlikely to go along with that too happily. Serious negotiations have to be on the basis that we have described, which for some reason the Government are trying to push away in the Bill with their so-called commitment to an absolutely amorphous customs arrangement.
As I said yesterday, in the present situation this House must give some signals, some messages and some steer. It is not only the Government but the country, businesses and our economy that need us to have a policy on exactly what our patterns of trade will be once, sadly, we have left the European Union, which I am afraid we are doomed to do.