Brexit: Domestic and International — House of Lords, 2016-10-27
Topic: Foreign Trade
Susan Kramer (Liberal Democrats, Centre to centre-left): My Lords, I join in welcoming the noble Lord, Lord Gadhia. I also echo what has been said around this Chamber that the welcome to immigrants is something that we need to keep living today and not just think of as a quaint achievement of the past. I am conscious that this debate is time-limited and we are well over the anticipated time for the beginning of the winding-up speeches, so I shall reconstruct what I had hoped to say—partly because so many people have said almost everything of importance—into a series of questions to the Government. I hope that the Government will feel that they have time to reply I come, as we know, from very much a free-trading party; that is one of the reasons why we backed Mrs Thatcher in developing the single market. That took the concept of removal of barriers even further, and I shall be astonishingly sad to lose it. Perhaps the Government can tell us what priority they give to non-tariff barriers. We hear constantly about tariffs but almost no comment on non-tariff barriers, until we talk with companies and discover that they are very often a larger part of the problem than the tariffs themselves Does the Minister agree with the noble Lord, Lord Bamford, who basically took the view that tariffs are simply something that we have to live with? Is that what our companies now need to expect? They are making decisions about their future and, if WTO tariffs are the future they are looking at, they need to know now so that they can make their adjustments. They may not all have the noble Lord’s view towards living with tariffs on that kind of scale There has been a lot of talk about free trade. As I say, I am inherently a free trader and so is my party, but what is the Government’s view on the general momentum across the globe on free trade? Many would say that the momentum has turned against free trade. The pace of increase has slowed and now we hear a strong language of protectionism. The United States, probably the most protectionist country on the globe, now speaks a protectionist language. The trade deal with the Pacific looks likely to die on the vine and it looks like there will be very little progress on TTIP, and NAFTA is at risk. We hear Hillary Clinton—it is not just the Republicans but the Democrats—criticise free trade extensively Part of the issue is that free trade and globalisation are linked together in both the mind and experience of many people, and it is the rising of the people who feel they have been hurt by globalisation that is creating a very fundamental problem. If we are relying on a free trade mood and say that we will lead free trade and it is the only and essential route to saving our economy post Brexit, we need to know the Government’s assessment of where the free trade movement is in countries today. I fear—some have said this, and I want to know whether the Government agree—that those most likely to enter trade agreements with us are relatively small countries such as New Zealand, Australia and Canada Also on that subject, I talk now with companies based in small Commonwealth countries—the Bahamas is one example. They are absolutely in a state of shock because their access to the EU market is, as I understand, through the agreements that we signed up to when we joined the European Union. They need to know that, if those agreements fall away and their access to that market disappears when we leave, whether that is being encompassed in the work that we are doing. As well as talking about them as free trade partners for us, it seems to me that we have to answer the question of where they will stand in their trading relationship with the European Union Does the Minister agree with Priti Patel that we should take the aid budget and use it largely to promote UK exports, or does she accept that, according to the 2002 Act, we are committed to using that DfID budget to support the poorest and the most vulnerable, not to promote ourselves? Those who want to go back and read the discussions around the creation of the 2002 Act will discover that that was a much-discussed issue. At that time, there was a real recognition of the importance of an approach to international aid that supported the poor but was not looking to create a benefit for us as an important part of its process I talked about the issues around tariff and non-tariff barriers. We are being told constantly that there can be no running commentary from the Government. I understand that, but the Government have been quite vocal in saying that they have agreed a deal with Nissan in order to immunise it completely from any negative effects of Brexit. Can we be told what the costs of that will be to the British taxpayer? It seems to me that, since that has been spoken of openly, it is not an issue that needs to be withheld in any kind of free trade discussions Will the Minister say what the Government will do with small businesses? I was on the Select Committee on small businesses and exports that was inspired by the noble Lord, Lord Popat. It was absolutely clear when we talked to small businesses that, first, exporting is difficult and, secondly, exporting to China is extremely difficult—the phrase often used is "one sale only" because of the risk of loss of intellectual property. Exporting to South America and Latin America was extremely difficult because obtaining letters of credit to ensure that payment was received was near impossible for any small company and non-payment was a very primary problem. Exporting to the US was exceedingly difficult because of its protectionist rules—most small businesses have to link up with and find a joint-venture partner in the United States, which then takes most of the upside of the revenues and profits that are generated. Perhaps the Minister can tell us much more Does the Minister accept that the structure of businesses in the UK is very different from that in many other countries? We have a few large major international exporters. I forget which noble Lord made the point that many of those do not necessarily export because they have an overseas base from which to sell into various markets. Many of our small businesses export and we want more of them to do so. That is a very different profile from somewhere like Germany, where most of the exporters are at the large end of medium-sized enterprises, or are large companies, that can overcome the various obstacles that have been described Lastly, will the Minister talk about the hiatus period that potentially will follow actual Brexit? Where do we stand with the WTO? It has been said that we retain our membership, but I understand that the effectiveness of that membership—the ability to make use of it—depends on our schedules being approved by 163 countries. That is a matter of fact, not opinion, and I hope that the Minister will clarify it Others have said that, if we do not have a deal, we can continue trading with the European Union just as we do today. I understand that, under European law, it would be a criminal offence for a company within the European Union to trade with a company in the UK on current terms unless an actual trade deal was in place. That again is a matter of fact, not opinion, and I wonder whether the Minister will clarify that, as well as tell us as much as she can beyond simply the words, "Brexit is Brexit".