EU-UK Trade and Cooperation Agreement: Lord Purvis of Tweed
My Lords, on behalf of my colleagues, I also welcome the noble Lord, Lord Wharton of Yarm, to the House.
Until now, this country has never signed a “reverse” trade and partnership agreement, as the Financial Times put it today. Because of the unfinished businesses laid bare in the 15 joint declarations of intent, which still need to be fully implemented, by the time they are, the first review period will be approaching the agreement overall. Therefore, it is our duty to provide post-legislative scrutiny, and it was unacceptable for the Government’s Explanatory Note to the Act last week to state that it was not appropriate to do so.
In winding up that debate on the legislation, the Minister afforded himself one amusingly hyperbolic mention of my party, saying that it
“represents a clear and present danger to the national weal.”—[Official Report, 30/12/20; col. 1915.]
Hitherto unaware of the puissance of the malign influence of simply our scrutiny of government legislation, I thought the line was telling. The Minister felt that questioning and challenging the Government equated to denying and thwarting the will of the people; this is an intellectually lazy argument, but I do not deny that it has potency. It was used to good effect in 2019, and it will be north of the border in May. It is lazy because I have had it used against me by the SNP since it took office in 2007: question it and you somehow question your own country.
Incidentally, this Government use it inconsistently. Manifesto commitments are sacrosanct in this area, but other commitments, in their 2015, 2017 and 2019 manifestos, and the law on development support to the world’s poorest, can be jettisoned. The mandate from the will of the people is a pick-and-mix one for this Government, it seems.
In this agreement, how successful were the Government in delivering what they set out in their own negotiating objectives? They secured an ability for lawyers to practise in the EU, but not EU law. There is an agreement on electric vehicles in relation to rules of origin but just for five years, which is not long enough for investment planning, and the EU knows this. There has been great UK fanfare over the absence of EU court supervision over UK subsidies, but this was never in doubt because the EU never sought it. There is a small increase in quota for fishing but, as my noble friend Lord Teverson indicated, it is no surprise that fishing communities feel betrayed in the south-west and the north of Scotland.
The undeliverable red-line promises on the whole of the UK leaving on the same terms were discussed by the noble Lords, Lord Trimble and Lord Empey, and all those Peers who spoke in this debate literally from Northern Ireland, asking the Government to be honest that there is now a border within the United Kingdom. Reference to Gibraltar was well made; for the first time in three centuries, we could see Spain have the last word on who enters Gibraltar.
I did go through the negotiating objectives of May that the Government published and then looked at the agreement made in December—as in, what we sought and what we gave up. We gave up extensive trade facilitation areas. We gave up mutual recognition on conformity. We gave up on full sovereignty over our fishing waters. We gave up on demands for services in the agreement—this had been a red line for inclusion, which turned into a white flag—and, because we gave up on services, we have created a reverse incentive for providers to be based in the EU.
We gave up on adequacy on data, and we are awaiting their judgment and will be beholden to it. We gave up on securing mutual recognition of qualifications, as my noble friend Lord Shipley indicated. The surrender on this has been compounded, as we now know, by the fact that not only is there not mutual recognition between the UK and the EU but this is an area where we now need separate procedures in each of the 27 countries. We sought duty free and quota free across the board, but did not get it—not on processing, distribution or diagonal cumulation. Steve Rowe, chief executive of Marks & Spencer, said yesterday:
“Tariff free does not feel like tariff free when you read the fine print”.
As Professor Alan Winters indicated to the British Chambers of Commerce yesterday, we now have in Article 9.4 the rebalancing procedure—or, as he said, “dynamic alignment in disguise”. This approach, we remember, was such anathema to the Boris Johnson Administration compared to the May Administration. What that means is that the EU can unilaterally trigger trade restrictions straight away and then allow an appeal. He cited new forthcoming EU regulations in 2022 which will raise standards and, if they believe that their raising standards will mean that trade with us will be diminished, they can take rebalancing measures against us unilaterally, which we will then have to appeal.
It is not a new phenomenon that those who seek to use the concept of sovereignty to supersede the economic development of our own people also bring about degrees of protectionism, either by tariff or non-tariff burdens. The new element, of course, is the approach to raise them with Europe but, at the same time, to say that they will reduce it for new markets elsewhere in the world. But this is not working, and it will not work. For example, during the six months to October, Italy became a larger exporter of goods to the United States than Britain for the first time since records began. In the six months to November, Germany and Italy on a combined basis exported $6 billion more to China than in the same period—a 9% increase. Chinese imports from the UK fell by 18%.
If it is all going to be good from the Government’s point of view, why do they not publish an impact assessment? The Minister said last week that there had not been time for it, but this surely cannot be the case. He wrote to me on 19 May, when I asked him what the Government’s intentions were for an economic impact assessment of the conclusion of the European negotiations. To quote from his letter, he said that “a call for evidence will open in the coming months”—he wrote this in May—“and we will provide further details in due course. The call for evidence will capture the complexity and represent the varying impacts that will be felt across different parts of the economy.”
I cannot find that call for evidence; I asked the Lords Library, which could not find it either. Could the Minister state what happened to that call for evidence for an economic impact assessment of this agreement? We need to know whether I am right—or independent academics or economists are right—in indicating that there will be pressure on the UK economy because of this agreement, or whether the assertions of the Government are correct that there will indeed be benefit. The Government need to publish an economic impact assessment to show which regions and sectors will be impacted, because we cannot shape our future economy, as the noble Lord, Lord Bridges, asked us to, if we do not know the impacts on it.
Finally, the Scottish concept of the common weal includes social justice as well as economic prosperity. We on these Benches love our country as much as anyone on the Government Benches, and we wish to see it prosper. In particular, we want to see our businesses export more, and we will campaign to cut costs for our businesses. We want to see more women entrepreneurs in the service sector, and we will campaign against the barriers that have been raised against them, as my noble friends Lord Oates and Lord Tyler and others indicated. We do not settle for a reverse trade and co-operation agreement, and we will work in the months and years ahead to make it positive. The Government’s approach going forward is engaged in perhaps a relentless shift of moving our biggest trading partner to be our biggest trading competitor. But that is not inevitable, and we need to commence the work to reconnect the networks that we had done so well, as a free people, to build with our European partners.