My Lords, it is a pleasure to follow the noble Baroness, Lady Randerson. I congratulate the Prime Minister on publishing the White Paper, which could at last enable us to talk meaningfully with the EU. We all recognise that the White Paper is a compromise, designed to ensure that the UK position is more realistic than the previous strict red lines, often mutually exclusive, which seem to have been imposed upon the Prime Minister by the extreme wing of our party.
As a starting position, the White Paper is an achievement, but Cabinet reticence and changes to legislation forced through in the other place last week undermine even that position. I am afraid that it becomes clearer by the day that there are some, such as members of the ERG, who will never accept any reasonable deal with the EU. The ideologues have no plan of their own, just threats, obstructions and impossible demands. Indeed, the UK’s approach to Brexit has been rather like Gareth Southgate going to FIFA during the World Cup and saying, “We would like to continue playing in the competition but some of our players don’t want to participate any more as they don’t like the rules. However, the players have agreed that they will play in a few matches as long as England can choose its own referees, ditch the offside rule and play with 12 men sometimes if they want to”.
Such unreasonableness is not helpful. Therefore, I believe that if the Prime Minister wants to make progress in our Brexit negotiations—and I believe she does—she must accept that some in the party will never agree to any position that the majority in Parliament recognise to be vital to protecting our national interest. She needs to proceed with the more sensible, softer approach that this White Paper alludes to—no more fudge, no more bluff, no more stringing everyone along and hoping it will be all right; no more threats against our partners and fighting among ourselves. To thrive in the 21st century requires open arms, not raised fists. The time has come to face down the fantasy of cake and eating it. In the words of Abraham Lincoln:
“You cannot escape the responsibility of tomorrow by evading it today”.
Some key issues of concern have already been brilliantly exposed by previous speakers. Many noble Lords have insisted that democracy requires that the 2016 vote is sacrosanct. We must of course respect the will of the British people, but Parliament has respected the result of the referendum. It has triggered Article 50 and is now trying to negotiate a good outcome for the whole UK from a new EU relationship. However, the referendum did not specify a date on which we must leave, nor did it give a direction of travel.
This is about the ordinary people of this country who are trusting us to look after their future as best we can. Therefore, the current threats of no deal fill me, like so many other noble Lords, with horror. I fear that some are determined to obstruct progress in the negotiations for the next few months just to get to March 2019 when we will be out, due to the two-year limit, no matter the consequences.
People did not vote for no deal. By countenancing this, we are betraying most of the 17.4 million people who voted to leave in order to be better off, as the leave side promised, and all of the 16.8 million people who did not want Brexit at all. The referendum did not ask whether people wanted to leave the single market, the customs union, ECJ jurisdiction, all the agencies, and abandon the Good Friday agreement. People did not vote for that. The impact of no deal would be catastrophic. Indeed, the light at the end of the Brexit tunnel that so many leavers have told us about is really, I fear, an oncoming train.
The Japanese embassy has said that no deal is impossible for it to accept—the normally polite, understated and inscrutable Japanese have expressed their outrage with unusual forcefulness. London is a hub for European, Middle Eastern and African banking, but this would be at risk. The Chinese embassy itself has said that London risks losing its status as a banking hub if there is no deal.
No deal would mean the end of our manufacturing success, as integrated supply chains collapse, with workers’ jobs at risk. Car manufacturers have profit margins between 3% and 10%. Under WTO rules, car exports to the EU face 10% tariffs and car parts a 5% tariff. Indeed, the WTO has 135 different tariff rates on imports from third countries and 150,000 goods classifications to determine those tariffs. How do we think UK firms will cope with that? Much of our manufacturing is of intermediary goods: 70% of UK goods exports are intermediate inputs for manufacturers in the EU, which they then sell to the rest of the world. If the UK does not count in the EU rules of origin, EU firms will have to go elsewhere and will look to EU firms for their inputs.
Even in trying to negotiate new trade deals with other countries, the benefits have been overblown. The UK is no longer a hub to the rest of the globe as it was in the days of our Empire. We are a medium-sized country, dwarfed by the US, China, Russia, India and the EU. Countries of our size cannot define their own terms of trade when negotiating with whole continents. Those who naively hope for a trade deal with the US should wake up. The US has a vested interest in weakening the EU. Encouraging the UK to break away will increase American power and, once the UK is out, the US will be in a stronger position to give us a deal that is much more in its interest than ours.
Leaving the customs union and single market are acts of economic vandalism against both our own industry and that of the EU. Our negotiating position has asked the impossible. The EU cannot and will not give us the advantages of being in the EU, including security co-operation and membership of all the agencies that are so important to our way of life, while we do not have to obey its rules. It seems that many Brexiteers are willing even to put peace in Northern Ireland at risk—surely the Conservative and Unionist Party cannot accept that.
Something hardly mentioned is the enormous cost we have already imposed on the EU and on other EU countries. Domestic firms have also had huge costs imposed on them, and so have UK taxpayers. Our Government have taken no responsibility for this, and there has been no acknowledgement of the impacts of our decision. This has already resulted in a loss of respect for the UK on the international stage.
British values of decency, fair play and tolerance have been subsumed in the Brexit mania. If we do not retain EEA membership and a customs union or partnership, British people will be poorer as a result of the vote they were told would make them better off. To quote Cicero: “the welfare of the people is the highest law”.