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European Union (Withdrawal) Bill - Report (1st Day)

Part of the debate – in the House of Lords at 4:15 pm on 18th April 2018.

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Photo of Lord Howarth of Newport Lord Howarth of Newport Labour 4:15 pm, 18th April 2018

My Lords, I listened to the noble Lords, Lord Kerr and Lord Patten, with much interest and even pleasure. They are virtuosi—but as I sometimes find when I listen to virtuosi, they are not entirely convincing. Amendment 4 is simply too vague for us to send it to the other place. If those who tabled it insist that the Government should seek to negotiate membership of a customs union, it behoves them to be specific about the features of the customs union that they believe would be appropriate in the interests of our country.

Let us be clear that we all want continuing free movement of goods between this country and the European Union. That is not in contention; it is a major objective of the Government in their negotiations. Those who support the amendment, which refers to “a customs union”, not to the existing customs union, should explain how the alternative customs union that they envisage would differ from the existing customs union.

For example, how would it differ with regard to the common external tariff, which the noble Lord, Lord Lamont, has just mentioned? At what level do those who tabled the amendment think the CET should be pitched? A common external tariff is protectionist, and as such is bad for the efficiency and productivity of our industries. It puts up the prices of goods imported from outside the European Union into the United Kingdom, to the disadvantage of our consumers and our producers: 21% of household incomes in this country are, on average, spent on food, clothing and footwear. Indeed, a higher percentage is spent by less well-off households. The existing customs union puts high tariffs on these essentials: 26% on food, 11.8% on clothing and 11.4% on footwear, on average. Also objectionable about the common external tariff is the fact that, as a barrier to imports from developing countries, it impairs their economic development. The European Union’s average external tariff is 5.1%. That is high compared with the USA’s external tariff of 3.5%. Noble Lords insist that the Government should state their precise objectives in negotiation. Will they state theirs? What should the common external tariff be? Do they envisage a customs union without a common external tariff? That would be very good, but is it in the realm of possibility? Is it not, in fact, better to seek to negotiate a free trade agreement?

If the new customs union to be negotiated differs from the existing customs union, how would it solve the problem of the border between Northern Ireland and the Republic? Noble Lords should explain that. How would the two sets of rules of the new customs union and the existing customs union of the EU interact? What dispute resolution mechanism do they intend?

Do they think that the European Union would accept a radically liberalised form of customs union with the United Kingdom and allow us such enhanced freedoms? It would be lovely, but it seems unlikely. However, unless they do and can say how their alternative customs union would work, we have to conclude that the amendment is tabled simply for tactical reasons, a device, as the noble Lord, Lord Wigley, candidly acknowledged, to enable the House of Commons to have a debate and vote on a customs union. Actually, what they clearly want is for us to stay in the existing customs union.

If we send an amendment to the other place, it will be amendable. Amendments to a vague amendment could go anywhere. Some noble Lords—I certainly exonerate my noble friends on the Opposition Front Bench—entertain the hope that a cross-party combination of remainers could force the Government to commit to staying permanently in the existing customs union, with all the disadvantages that the noble Lord, Lord Lamont, and others have described, including our inability to strike free trade agreements with other countries. As the noble Lord, Lord Lamont, reminded us, a customs union is in practice inextricable from a single market and from compliance with a whole mass of European Union rules on which we would have no say. I fail to see how that is reconcilable with our democratic values.

Only today in the Times it is reported that there is just such a manoeuvre of Members of Parliament to form a cross-party alliance and to force this issue. Noble Lords who support this amendment should come clean and say what the game is. It is not appropriate that we should write into statute vague amendments and tactical devices.