Trade Bill - Second Reading

Part of the debate – in the House of Lords at 8:01 pm on 11th September 2018.

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Photo of Lord Cavendish of Furness Lord Cavendish of Furness Conservative 8:01 pm, 11th September 2018

My Lords, however much I disagree with the noble Lord, it is always a pleasure to listen to him and I admire enormously his commitment.

I thank and congratulate my noble friend the Minister on her elegant opening speech explaining to the House the purpose of the Bill. It is a technical Bill, in my view. I recognise that it is important and I wish it safe passage, but I will leave it to others better qualified than me to comment in detail on its contents.

I have grown accustomed to addressing your Lordships as part of a minority whose members believe, as I do, with some passion that it is in the best interests of this and future generations that my country is out of the European Union. However, today’s debate is about trade and I share with others a burning interest in the subject. Although I believe that becoming once more a self-governing country trumps all other considerations, I also say with absolute conviction that, with or without a deal, Britain will prosper mightily outside the EU, and I shall give your Lordships my reasons for saying so.

I speak today as a minority in one other respect. I have listened patiently over many months, and even years, to lectures about trade from the large cohort of people who lay claim—many with some justice—to having made significant contributions to Britain’s trading performance. However, for the most part, these very clever people have never traded so much as a brass button in their long and distinguished careers. That they make a contribution is beyond doubt, but it is one, I venture to suggest, that should be kept in perspective. As with previous debates, the mandarin class told us all how the country was not clever enough to understand the issues, and I will come back to that in a moment.

Meanwhile, I declare an interest. Although I relinquished chairmanship of my family’s business, I remain involved, and details of my interests appear in the register.

The SME sector, to which my family business belongs, accounts for some 90% or more of UK businesses. It is a sector that has difficulty in making its voice heard; we are usually too busy to go to those seminars and conferences so well attended by officials. Personally, I have traded goods and services for more than half a century and have operated in a huge array of markets around the world, including some quite challenging ones—at least, I remember thinking as I was trying to secure an important export order that being kidnapped at gunpoint in a South American jungle was a little out of the ordinary. I succeeded in securing it, as it happens.

I agree with my noble friend Lord Risby that the role of our ambassadors is hugely important. Looking back over some years, from my perspective a good ambassador meant that you did trade, certainly in Latin America, and a bad one meant that you did not. It was as simple as that.

My main point, however, is that the endless and often tedious debate about trade deals tends to obscure the fact that there would be no trade without British companies being able to produce goods and services that overseas customers want to buy at prices they can afford—a point made very forcefully by my noble friend Lord Lilley. To those who wag their fingers at me and say ad nauseam that business needs certainty, I shall respond as gently as I can and tell them that they are talking tosh. Conceivably there are some big tier 1 companies that, without fail, and without much effort, receive a monthly order from Her Majesty’s Government and operate at negligible risk, but never—literally never—in my working life have I woken up to certainty; nor have I wanted to. Certainty is not a feature of normal commercial life.

I have made the point before that I find little evidence that the Government and their official class place much value on the SME sector. Regulation, high taxation—much of it stealthy—and a generally hostile environment among the numerous public bodies that impact on our lives combine to erode margins and discourage investment. My own family business recently deferred—perhaps indefinitely—a £13 million local investment that only a few years ago would certainly have gone ahead. That may sound like small beer but if others do likewise as real returns diminish and risks increase, then I fear for the future.

However, that is as nothing compared with the hostility that the SME sector faces from EU institutions. Brussels plays host to tens of thousands of lobbyists paid for by big business. Their job is to influence officials so that regulation is framed to benefit their companies and, more importantly, harm their smaller competitors. Lobbyists become especially active and vindictive when they spy a small competitor coming over the horizon. I have personal experience of that and I am pleased to put on the record that, after a seven-year battle, we fought off a significant fiscal injustice with the valuable support of Her Majesty’s Treasury.

We all understand and accept the need for regulation. However, I can think of no regulation that does not entail cost, and that cost will always fall disproportionately on the smaller enterprise. It will also curtail innovation unless the burden is kept to a minimum.

In economic terms, the real benefit will accrue to Britain outside the EU from policies of free trade. History teaches us that this path is not always painless—and I do not expect this one to be—but it is always successful where the political will exists to see it through. Precisely because the European Union is a protectionist organisation, one of the great benefits of leaving it is that the consumer—that person whose cause is so rarely championed in Brussels—will be substantially rewarded by not having the common external tariff. Benefits will ultimately flow from abandoning the indefensible CAP and the morally loathsome fishery policies.

Another advantage for trade will be escaping from the corruption that is endemic in the EU. In 2014, the Commission reckoned that corruption cost the EU €129 billion—not far short of the EU’s annual budget. The promised update from the Commission never materialised. However, a study commissioned in 2016 found that those costs might be as high as €990 billion —that is, eight times higher than previous estimates. I have not invented those figures; they were commissioned by the European Parliament. Therefore, it can hardly come as a surprise to hear Mr Drago Kos, chairman of the OECD working group on bribery, say:

“It is obvious that the fight against corruption has never been a priority for the EU”.

EU officials lecture us interminably about the importance of rules while, without blinking, driving a coach and horses through their own rulebook whenever it suits them. If you add to that the squalid scandal of the recent promotion of Mr Martin Selmayr, I wonder whether there is any limit to the Commission’s bad practice, which does not fall short of that of the worst kind of banana republic.

The party opposite, not being the party of government, is entitled to the luxury of not having to explain too precisely its policies. Given that a large number of its supporters voted to leave and given its manifesto commitment, I think it is time we had a clearer idea of where it stands. I have asked over the years whether the Labour Party cares about the inhuman impact of the EU on real people, and I shall probably address these questions particularly to the noble Lord, Lord Grantchester, who brought up the human qualities of the EU. Do its members care, I wonder, as professed internationalists, about the Europe-wide astronomical levels of youth unemployment or the fate of the Greeks? Does the impact of the common external tariff on the poorest in our society bother them at all, with a tax of between 18% and 20% on clothes, footwear and food? Are they concerned about the protectionism implicit in a customs union that damages poor developing countries? Finally, do they look at the EU and not see the huge risk of remaining in that dreadfully flawed construct, that lurches from crisis to crisis studiously ignoring the suffering of its citizenry? No, I fear that the party has morphed from a movement that once championed the poor and the vulnerable into a smug, self-satisfied elite that feels most comfortable talking to itself inside the borders of the M25.

More generally, given that this House is so strongly remain, I wonder if noble Lords ever reflect on the strange fact that this is probably the first time in modern history when the expression “Peers and people” has lost its meaning: gone for ever, I fear, is the public perception that the House of Lords is on the side of the people. Aside from the class—and the individuals within it—that benefits from EU largesse, and socialists who love to redistribute our hard-earned cash without needing to account for it, I remain utterly baffled why normally sensible people should want to bind themselves to the midden of corruption and venality that is the modern EU.

The people understand, as we all do, that the consequence of unaccountable power is not sometimes a car crash: it is always a car crash. They understand, as we all do, that uncontrolled corruption has appalling social and political consequences, and its chief victims are always the poor and vulnerable. I hope that they understand, as most of us do, that the rule of law that evolved in this country over 1,000 years, and was exported successfully to the rest of the English-speaking world, has held citizens in good stead and guaranteed their freedom. The institutions of the EU have become terminally infected with all the most pernicious viruses that one associates with rotten self-serving governance. The country voted for a new and glorious dawn. It understood perfectly what it was voting for. It is not just time that we left: our departure is long overdue.