Trade and Investment
Motion to Take Note
3.06 pm
Moved by Lord Maude of Horsham
To move that this House takes note of Her Majesty’s Government’s support for trade and investment and the contribution such support makes to economic growth.
Lord Pearson of Rannoch: My Lords, it is an honour for me to speak in this debate because it was opened by the noble Lord, Lord Maude, with his maiden speech. I have had a nodding acquaintance with the noble Lord for many years, which from my side has always been respectful, although I suspect that the noble Lord may have sometimes regarded my views on the EU as coming from a rather unruly lower boy at the bottom of the lower fourth. So it is a privilege to be allowed to join the grown-ups today and I promise to be on best behaviour in his honour. Even so, I must pick on one central tenet of the Government’s position on trade and investment in this country, and that is the Government’s support for the
idea that our free trade with the EU and the rest of the world is best secured from within the single market and that that trade and the jobs which depend upon it would be in danger if we left the EU. I suspect that this question—what I call the “3 million jobs” question—will be one of the key battlegrounds in the forthcoming national debate about our EU membership. I have wearied your Lordships several times over many years as to why, given political will, jobs will be created if we leave the EU, if we get rid of the unnecessary EU regulation in our domestic market which comes with that membership, if we keep our trade with the single market and if we expand it in the growing markets of the future. So I will not repeat all the facts and arguments of us “come-outers” as to why we would indeed be better off out of the EU; I suspect that there will be time for that in our coming debates on the referendum and other matters.
However, I would like to take this opportunity to refer the Minister to the briefing notes on the globalbritain.co.uk website. I have recommended these to your Lordships before but I am not sure that Ministers or their officials in the Department for Business, Innovation and Skills have yet concentrated on them with the enthusiasm which they deserve. They have the advantage of being very brief, as they are designed for businesspeople, who do not have time for lengthy papers and, using official statistics, they constitute most of the economic case for the UK to leave the EU.
To make the noble Lord’s task easier, I shall pick out just a few of those briefing notes now. For instance, there is No. 82, entitled “Post-withdrawal, agreement on free UK-EU trade is inevitable”. This deals with the central fallacy of those who wish to stay in the EU because they fear that jobs might be lost if we left. These Europhiles, if I may refer to them as such, often give our car industry as a key example of one in which we would face new tariff barriers and so on, and thus lose trade and jobs.
If the Minister reads only one Global Britain briefing note, I recommend that he reads No. 96, entitled, “Post-Brexit, tariff-free UK-EU trade in cars will continue”. It is only one page long, well-spaced out, and most of the print is quite large. Its facts speak for themselves. We import twice as many cars from the EU as we export to it—1.4 million cars are imported and 0.6 million are exported. Of the 1.7 million cars imported into the UK in 2011, 83% were from the EU. EU manufacturers own 53% of the domestic UK car market, the Germans having 32%, with Volkswagen alone having 19%. The Renault Nissan Sunderland plant is the UK’s biggest car exporter, with 37% of all UK car exports. Our case—us Eurosceptics—is that these EU manufacturers will ensure that EU-UK free trade in cars will continue tariff-free in both directions, whatever politicians now pretend.
The EU is of course a customs union, not a free trade area. Briefing note No. 101 shows how customs unions have become an expensive and redundant relic from the 1950s, which is why there are now no significant customs unions left anywhere else in the world. The Minister and his officials might care to absorb, together with briefing note No. 101, briefing note No. 98, which reveals “The Hidden Cost of Exporting to the EU Single Market”—costs borne by an EU member state, such as ourselves, but not by countries outside the EU, such as the USA, China, Japan, South Korea and many others. This note sums up the 10 more respectable cost-benefit analyses over recent years, including one from the French Government’s leading think tank, one from the Swiss Government and even one from our own Treasury in 2005, which between them all put the costs of our EU membership at anything between 4% and 10% of GDP.
For those noble Lords who want to go more deeply into the subject, there is briefing note No. 92, which deals with global supply chains, through which much of modern international trade now passes, which take time to set up between suppliers and clients all over the world and which cannot be replicated overnight. We say that existing world trade arrangements will continue under the World Trade Organization, whatever we do about our EU membership. It is in the EU’s interest to continue existing arrangements with us because we are its largest client.
A number of your Lordships have suggested that we benefit from the weight of the EU’s account when it makes free-trade agreements on our behalf. We Eurorealists reply that, as the world’s fifth or sixth-largest economy, we would do better on our own in this area. We mention in passing that Singapore has had free-trade agreements with Japan, Russia and India for over 10 years, which we, as EU members do not enjoy. We point out that Switzerland has an FTA with China, which we do not, as indeed does Iceland—not exactly a vast economy.
In conclusion, I would be most grateful for some assurance from the Minister that he will look at the Global Britain briefing note No. 96—the one-pager—and encourage his officials to look at those that I have mentioned and the others on the Global Britain website. Their author, Mr Ian Milne, and I will be happy to meet the Minister or, if we are not grand enough for him, perhaps his officials, for any elucidation that they may require. I trust that we could thus inform the forthcoming national debate in this vital area.
In the meantime, I wish the noble Lord well in his new appointment.