European Union (Withdrawal) Act — House of Commons, 2019-03-12
Topic: Foreign Trade
John Vincent Cable (Liberal Democrats, Centre to centre-left): It is a privilege to follow the right hon. and learned Member for Beaconsfield (Mr Grieve). I very much agree with what he had to say. Like him, we have no objections to the Irish backstop. It is one of the redeeming features of the Government’s agreement—their having foolishly and unnecessarily drawn red lines around the customs union and the single market, it was an inevitable and necessary measure to protect Ireland from a new, disruptive frontier. Our concern is much more fundamental—the fact that Brexit, as currently devised, will make this country poorer, weaker and less secure We have all heard a lot of general rhetoric about this issue, so I want to home in one particular aspect of the economics of it—the nature of the single market and how it originated. Thirty-five years ago, there was an insight in this country around the Prime Minister of the time, Mrs Thatcher. I do not know whether it was her or her advisers who saw that the future of business and trade rested on two s’s—standards and services—and that the traditional preoccupation with tariffs and quotas was of course very relevant, particularly for agriculture and manufacturing, but the future lay in another area For three decades, successive Governments—Conservative, coalition and Labour—have beavered away trying to create this structure of a single market, recognising the importance of those key drivers. That has been done on two levels. It was attempted at a global level through the World Trade Organisation, which is often called in aid by Government Members. That achieved virtually nothing, because the World Trade Organisation is essentially a weak organisation that brings together countries with massively divergent standards. It was also pursued through the European Union, with very great success One of the central problems of Brexit is that it potentially unravels much of the regulatory framework that has been put in place over those three decades. I have a very simple example, which gives us an indication of what is coming down the track. It actually relates to one of the Government’s success stories. The Government have been trying to roll over the 30 or 40 association agreements we have with the European Union. It would be disastrous if they were not rolled over. Quite a few important countries, including Japan and Korea, are making it very clear that they are not willing to get a move on, as the Foreign Secretary instructed them to, but one of the countries that did is Switzerland Switzerland is an interesting case. It is a British success story, with rapid growth in exports of 40% over five years. Britain has a big trade surplus with Switzerland. That is all under the existing arrangements. The Secretary of State for International Trade presented the roll-over agreement as a great success, and indeed it was. It is one of the few things that has actually worked for the Government in this area. But when some of the trade federations affected by the agreement started unpicking it, they noticed that it is not the same agreement that the European Union had Central to the European Union agreement was that it brought together about 19 key technical standards across the European Union and Switzerland, which enabled European countries to trade on a common basis. In the revised agreement, there are only five such standards. The companies in the UK that will have to deal with Switzerland in the future will do so at a competitive disadvantage. I have no way of knowing how important that is or how many jobs are at stake, but that small experience will be reproduced on a massive scale as Brexit proceeds, and we should take note of it.