Brexit: Trade in Goods (EUC Report) — House of Lords, 2017-07-18
Topic: Foreign Trade
Greville Patrick Charles Howard (Conservative, Centre-right): My Lords, I congratulate my noble friend Lady Verma and the committee on such a comprehensive and useful report containing much valuable information. I declare an interest as chairman of a Midlands manufacturing business and in farming Rightly, the report focuses on the impact on British businesses as Britain leaves the EU, but what must also be borne in mind is that the same problems exist for EU businesses. Indeed, their problems are worse because, as the report makes clear, the gain to the EU on trade with Britain is £90 billion a year. As such, it is even more important for the EU to have a sensible agreement with Great Britain than it is for us. European bureaucrats might throw tantrums and wish to be vindictive but, ultimately, politicians are responsible to their electorate and elected representatives will not wish to suffer the consequences of damaging their economies Clearly, it was right for the committee to call the witnesses that it did, and it is to be congratulated on calling so many able people, but reading the report I was from time to time reminded of the comment of the late Marquis of Salisbury, who wrote in 1877: "No lesson seems to be so deeply inculcated by the experience of life as that you should never trust experts. If you believe doctors, nothing is wholesome: if you believe the theologians, nothing is innocent: if you believe the soldiers, nothing is safe. They all require their strong wine diluted by a very large admixture of insipid common sense" To use a more modern saying, people talk their own book, and it would have been peculiar if, when giving evidence, spokesmen for an industry did not make those points which benefit their sector Anyone listening to the debate this afternoon would think that leaving the European Union would create a most terrible financial disaster. Yes, there are complications, but when listening to the defeatist tales of woe noble Lords should remember that in connection with the European Union it was ever thus. Noble Lords will recall the many prophecies of doom made before the referendum, which in the event were shown to be mistaken, from the Bank of England, the Treasury, American bankers and our old friend the CBI, whose record of forecasting makes Mystic Meg look like the prophet Elijah. It has gone from advocating price controls to Sir Terence Beckett, director-general in September 1980, saying: "We have got to take the gloves off and have a bare knuckle fight", with the Thatcher Government. The CBI’s record of getting things wrong is outstanding Your Lordships may also recall the many predictions from all quarters that the only way forward was for Britain to join the single currency and that it would be a disaster if we did not. Then there was the amendment introduced by John Major to the debate on the Bill to join the ERM, saying that the, "Exchange Rate Mechanism membership will reinforce the Government’s counter-inflationary strategy and help to strengthen the framework for a sustained improvement in economic performance. Sterling’s entry into the exchange rate mechanism is undoubtedly an important economic event and, moreover, an event which has long had the general support of the House, industry, commerce, the City and most, although inevitably not all, economic commentators".—[Official Report, Commons, 23/10/1990; col. 195.] When we joined the ERM, the Stock Exchange rose and interest rates fell—all to end in ignominy I could produce endless other examples—and it is quite fun looking them up—but I do not wish to waste more of your Lordships’ time. The point for your Lordships to bear in mind is that the abundant forecasts of disaster by the great and good if we did not join this or that European project were almost without exception completely wrong, in general more from stupidity than wickedness. As I said earlier, there will inevitably be difficulties, but they should be seen in the context of the profit of £90 billion a year that the European Union makes when trading with Great Britain. It is in all our interests, theirs and ours, to come to agreement on trade, but more to the EU’s benefit than Great Britain’s Some of the dangers if we do not come to an agreement are exaggerated. Not having tariff-free access to European markets is not the end of the world. On the whole, if European Union tariffs are imposed, they will amount to rather less than the benefit from the exchange rate movement since the referendum. There are some heavier tariffs, such as agriculture, but I imagine that British families will be happier to get food cheaper when Britain is free to buy food in world markets. Overall, the average tariff is not excessive. Tariffs and not being in the single market do not prevent the rest of the world trading perfectly satisfactorily with the European Union. Britain already trades under World Trade Organization rules with over 100 countries, and it trades very successfully with no trade deals with many countries; indeed, we have no trade agreement with the US, which is our largest single-country trading partner The report has done an excellent job in highlighting the difficulties we face, but they are not insuperable, and noble Lords should bear in mind not only how the record of forecasting doom and gloom has been so very wrong but that some of the arguments in the report are from vested interests One other thing to remember is that, however long is the period for negotiating our exit—two years or 20 years—a deal will be completed only in the last few weeks and days, as the time for haggling runs out and negotiators are forced to make compromises. It is pointless to extend the period of negotiations.