Outcome of the European Union Referendum - Motion to Take Note (Continued)

Part of the debate – in the House of Lords at 4:56 pm on 6th July 2016.

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Photo of Lord Howard of Lympne Lord Howard of Lympne Conservative 4:56 pm, 6th July 2016

My Lords, the main reason why I want to leave the European Union is because I want to restore as the supreme constitutional authority in our country the Parliament and the Supreme Court of the United Kingdom, both of which are at present subordinate to the institutions of the European Union, including the European Court of Justice. I greatly look forward to the day when we become an independent, self-governing country again, in common with practically every other country in the world except the remaining members of the European Union.

I want to concentrate my remarks on my view of the objectives we should seek to achieve in the negotiations for our exit. I am very confident that our country has a bright future—a much brighter future—outside the European Union than inside it, but to secure that future we first have to sort out our relationship with the European Union. I do not believe that that process need be anything like as complicated nor take anything like as long as is sometimes predicted.

This whole subject has been bedevilled by the confusion which exists over the single market. The term “access to the single market” is often used to mean participation in or membership of the single market, but the two are of course quite different. We do not need nor should try to remain participants in or members of the single market. The advantages of membership have been greatly exaggerated, as was pointed out yesterday by my noble friend Lord Lamont. In any event, it seems as though the European Union would not agree to our continuing membership without requiring the continuation of freedom of movement.

Access to the single market is a very different matter. Everyone has access to the single market. The Foreign Secretary was quite wrong to say in his article in Monday’s Telegraph that there is a range of outcomes between no access and full, unfettered access. No one has no access; the question is on what terms this access is to be agreed. The range available to us extends from access on WTO terms—probably the worst available option, but not a disaster—to access with a no-tariffs free-trade agreement.

A free-trade agreement is eminently achievable. In fact, all non-EU countries in Europe, except Belarus, have free-trade agreements with the European Union. It is manifestly in their interests as well as ours, and not just because they have a large surplus in their trade with us. Consider a company such as BMW. BMW not only exports very large quantities of cars to us; they also export large quantities of Minis from the United Kingdom into the European Union. BMW, which is very important to the German economy, is hardly likely to allow the German Government to agree to a deal which impedes this two-way flow.

Of course, any exports into the European Union would have to comply with the regulations of the single market, just as exports to the United States or Japan or China have to comply with their regulations. The vast swathe of our economy which does not export to the European Union would be freed from the regulations of the single market. That would be a considerable advantage. It would also mean that we could decide for ourselves whether and to what extent we should change or abolish the tariffs we currently charge, under European Union rules, on goods from the rest of the world.

Concern has been expressed about the position of the City of London, but, as Barnabas Reynolds, partner and head of financial institutions and regulation at the prominent law firm Shearman & Sterling, has said:

“The vast majority of banking and investment banking activity should be largely unaffected even in the worst scenario, and the ultimate situation is likely to be considerably better than that.”

One of the reasons is that the UK is currently compliant with the regulations and directives which govern the provision of financial services in the European Union. This makes the basis of a trade deal simple: so long as neither party changes the relevant rules, passporting will continue after exit in the same way as before. This would give both parties the right to change the rules in a relevant area, bearing in mind that a rule change might affect the continuing passporting rights of those businesses which export from the UK to the EU or vice versa. There is every prospect of a negotiation which would reach an outcome which is perfectly satisfactory to both sides.

I will say a word about immigration. During the debates on the referendum, I frequently made the point that the referendum should not have been about the level of immigration into our country. It should have been, and to a large extent was, about who should decide the level of immigration into our country. There are those who think we need our current level of immigration. Others differ. Let us argue it out and decide it here in this country as does every other country in the world except the members of the European Union and Norway and, for the moment, Switzerland.

As so many of your Lordships have said during this debate, let us not begin to entertain any suggestion that immigrants who are here legally, including those from the European Union, should be used as bargaining chips. That is a matter of common, simple decency. I do not believe for a moment that any of our European neighbours will want to round up and deport citizens of the United Kingdom who live and work within their borders. If I am wrong, and they do, let them wear the badge of shame which will for ever be associated with such actions. Let such a badge of shame never be allowed to besmirch the reputation of Her Majesty’s Government.