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Queen’s Speech - Debate (5th Day)

Part of the debate – in the House of Lords at 8:36 pm on 28th June 2017.

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Photo of Lord Horam Lord Horam Conservative 8:36 pm, 28th June 2017

My Lords, as they review their tactics in the negotiations with the European Union after what, it must be said, has been a rather inauspicious start, the Government could do worse than thumb through The Art of the Deal, written or perhaps ghost written by President Trump. A central point he makes is this: never take anything off the table unless you absolutely have to. Unfortunately, in her Lancaster House speech the Prime Minister took off the table the single market and the customs union. I think he would regard that as a rather serious opening error. Fortunately, all is not lost because the Prime Minister also said that she wanted a “deep and special relationship” as well as a frictionless non-tariff arrangement with the European Union.

When the trade negotiations start in earnest this autumn, I suggest to the Government that they should lead off with this point. How do we keep what is obviously in the interests of both sides? How can we retain the essence of what has been examined so laboriously and achieved over many years by both the European Union and by ourselves? As the noble Lord, Lord Kerr, said earlier in the debate, if we want a positive result, we have to make a positive suggestion. Obviously at some stage we will have to make the point that we have concerns about immigration and the position of the European Court of Justice, but that can come in after we have established a positive framework for carrying on to our mutual advantage. I sincerely believe that such a constructive approach will be more likely to evoke a more serious response than harping on about what we will not do. That will simply put people’s backs up as well as put them in a negative and defensive mood.

The second point I take from the Trump manual of how to do deals is always to have a plan B. Fortunately, there is a plan B. As my noble friend Lady Finn said earlier, it is widely thought on all sides that it will be nigh on impossible to complete a full deal before March 2019, so we will need an interim deal which keeps things moving and minimises disruption. The recommendation of the European Union Committee of the House, on which I am delighted to serve, made in its report published in December last year on the trade options for Brexit, is that we should stay inside the customs union. Remaining in the union would give certainty to business, it would help with the time-limited supply chains that are now common in the car manufacturing and aerospace industries, and it would deal with the Irish question. It appears to have the support of the Chancellor of the Exchequer and the Labour Brexit spokesman, Sir Keir Starmer, as well as, expressed in the course of this debate, that of the noble Lord, Lord Adonis, whose amendment I think is extremely sensible. Let us also say that global Britain can thrive within the existing framework. There is no need to make new trade deals because we can thrive as it is; look at Germany, which is doing rather well.

My final point taken from the Trump manual of how to do deals is to make a realistic assessment of your strengths and weaknesses by comparison with your negotiating partner. It is clear that in this case we have the weaker hand, but the European Union has one weakness—it needs money. A Commission paper published today points out that Brexit will leave a very big hole in the budget. We are, unfortunately, in debt to the tune of £1.8 trillion at the moment, but as a country we can borrow long, over a period of 20 or 30 years, at low interest rates. We have just forked out £1 billion to the Northern Ireland Government, so in those circumstances another £40 billion to £50 billion to the European Union would, frankly, be a steal for a good trade deal. It would cause apoplexy at the Daily Mail, but that would only add to our fun, would it not?

Obviously, I hope profoundly that the Government can get a deal, even if it is only an interim agreement. I am sure that that is where the centre of gravity of opinion is both in Parliament and among the people. They accept Brexit, but they want as seamless a Brexit as can possibly be achieved. There are those who want a hard Brexit or even no deal at all, but does anyone seriously imagine that, after seven years of belt-tightening, the British people are in a mood for the disruption and chaos that that would cause? Any Government which went down that path would quickly find themselves deeply unpopular. It is certainly not a route that a Government with no majority in Parliament can seriously take.

I wish my colleagues all the best in their negotiations, and particularly now that she is back in her place in the House, my noble friend Lady Anelay, who is reprising her position as a Minister of State. We all know in what high regard she is held, and we wish her well. But the Government must up their game and show far more skill and flexibility if they are to bring home the deal that Britain so badly needs.