Brexit: Preparations and Negotiations - Motion to Take Note

Part of the debate – in the House of Lords at 4:03 pm on 23rd July 2018.

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Photo of Lord Hunt of Wirral Lord Hunt of Wirral Conservative 4:03 pm, 23rd July 2018

My Lords, in declaring my interests as set out in the register, I welcome the progress embodied in the new White Paper. As the Prime Minister said in Belfast on Friday, a new approach was needed, an approach that,

“needs to honour the Belfast Agreement, deliver on the referendum result and be good for our economy. And for the EU to consider it, it needs to be a proposal that they can see works for them as well as us”.

I wholeheartedly agree that the White Paper will indeed prove to be the foundation of such a proposal and I congratulate all those involved in crafting it.

I turn now to the words of the right reverend Prelate the Bishop of Leeds. I am also concerned about the points he made about culture. As a one-nation politician, I find the continuing talk of the 48% versus the 52% insupportable as well as divisive and dangerous. We must never allow that crude device of a binary referendum to blind us to the complex, nuanced and continuous kaleidoscope that is public opinion. A so-called hard Brexit did not feature on the ballot paper. Equally, not everyone who voted to remain was a devout believer in the concept of ever-closer union as set out in the treaties. Millions of our fellow citizens voted not ideologically but rationally, according to where they perceived the balance of advantage to lie for them, for their families and for the nation. In this debate, as with all political arguments, there is a middle ground, a common ground where surely people of good will can come together and build a mighty coalition around a reasonable and constructive set of propositions. I am sure of one thing: no one voted in June 2016 to be poorer.

The White Paper does much to reassure us that the importation and export of goods will be protected, but as we have already heard, the services sector is not sufficiently dealt with. It now represents around 80% of the UK economy. The UK financial services sector is one of the jewels—perhaps the pre-eminent jewel—in the crown of our modern economy, with insurance at its heart. It is therefore of considerable concern that the White Paper should suggest that the UK might no longer operate under the EU passporting regime. I speak, of course, as chairman of the British Insurance Brokers’ Association. There are almost 3,000 UK insurance brokers with passports to trade in the EU, accounting for about £8 billion of business.

In his HSBC speech on 7 March, the Chancellor of the Exchequer appeared optimistic about the chances of securing a suitable new arrangement, saying that,

“it is hard to see how any deal that did not include services could look like a fair and balanced settlement. So I am clear not only that it is possible to include financial services within a trade deal, but that it is very much in our mutual interest to do so”.

In paragraph 49(d) of the White Paper, there is a commitment to negotiate a,

“new economic and regulatory arrangement for financial services”.

There is also encouragement to be found elsewhere—for instance, in paragraphs 63 and 65. But are vague words enough, at this rather advanced stage? Equivalence in insurance relates to standards for capital, supervision and reinsurance, and there is now a fear within the industry that it might retain EU regulation and rules while losing market access—the worst of both worlds. It is still not too late to seek a bold new agreement that would preserve tariff-free access and/or authorisation for UK brokers.

Even after Brexit, the City of London can, must and will continue to be a vital, pivotal asset—and a vital, pivotal European asset. Furthermore, as we build this new relationship with the EU, we must not only signal our determination to protect the jobs and welfare of our people, but reaffirm our continuing leading role in the western alliance as a proud, free and outspoken people, standing shoulder to shoulder with our neighbours, friends and allies, in good times and in bad. It is very much in all our interests that the voice of financial services should continue to be heard and heeded as that relationship begins to take shape.

I conclude by quoting the excellent Ruth Davidson, who wrote over the weekend:

“We have a duty to serve the public in the national interest, to deliver the Brexit referendum result in a way that mitigates risks and maximises opportunities ... That means compromise, whichever side of the debate we were on two years ago”.

To paraphrase the celebrated sentiments of that great Englishman and proud European Winston Churchill, the situation demands rather less defiance from those who lost the referendum and more magnanimity from those who won it. For many of us on these Benches, compromise is not a dirty word: it is the necessary foundation of any approach that will heal the ugly scars that the referendum has left behind it, and the one and only way to restore one nation.