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Trade with the European Union

Volume 820: debated on Monday 21 March 2022


Asked by

To ask Her Majesty’s Government what their priorities are for future trade between the United Kingdom and the European Union.

My Lords, Her Majesty’s Government are focused on implementing the trade and co-operation agreement, which is the world’s biggest zero-tariff, zero-quota, free trade agreement. We are making good progress. Teething problems have largely been dealt with, and I am pleased to say that trade flows are stabilising. Where delivery of the agreement needs to be accelerated, we are engaging with the European Commission. We are also helping businesses to trade effectively with Europe, including through one-to-one advice offered by my department’s free to use export support service.

My Lords, the Minister will no doubt have seen the recent report published by the House of Commons Public Accounts Committee. It showed how our trade with the EU has declined and how British businesses have had to contend with increased costs, increased paperwork and increased border delays. However, when the Prime Minister announced the trade deal two years ago, he said that there would be no non-tariff barriers. In the light of the overwhelming evidence to the contrary, is it not clear that the Prime Minister’s claim was completely untrue?

My Lords, with all due respect, I sometimes feel that perhaps noble Lords hope that these arrangements will not work smoothly. However, I can confirm that we want a positive relationship with the EU and that we want this to be underpinned by trade and, of course, by our shared belief in freedom and democracy.

My Lords, if we want these things—and I am quite confident that my noble friend does—would it not be wise to cease making stupid analogies, such as comparing those who, by a narrow majority, voted for Brexit with those who are today laying down their lives for democracy?

My Lords, I of course respect my noble friend’s opinion on that, but it is not something with which I agree.

My Lords, the Government have vaunted freeports as one of the benefits of the new EU-UK trading relationship. The owners of P&O, who sacked 800 workers in one go, Emirati-based DP World, has been given the operation of Solent and Thames gateway freeports. The Prime Minister said that we were in a transition. Does the Minister agree that it is regrettable that it is towards an awful, potentially illegal, and unacceptable face of capitalism?

My Lords, perhaps it goes without saying that we are deeply concerned about the news from P&O Ferries. Ministers are speaking to the company to try to understand the impact on workers and passengers, and to do all we can to ameliorate it. Speaking personally, having formerly been a chairman of some of Britain’s largest companies, I would never have behaved in the way that P&O has.

My Lords, I declare that I am co-chair of the all-party parliamentary group on trade and investment. Judging from the Minister’s previous response, do figures indicate that the UK has aligned its trade interests away from the EU, with businesses calling for a reset along the more advantageous terms that Norway enjoys, such as, for example, the British Chambers of Commerce underlining the impediment of requiring a fiscal representative based in the EU for VAT-related issues? Alongside trade sits investment. Could the Government outline their strategies to strengthen investment flows to and from the European Union specifically?

My Lords, the noble Viscount includes a number of points in his question. As Minister for Investment, one of my top priorities is securing increased investment flows with Europe. On trade, I am pleased to say that he is right: over the past two years, there have been noticeable changes in UK trade. Of course, factors associated with the Covid pandemic, global recession and EU exit do not always make it easy to disentangle that, but I am confident that both trade and investment will increase in due course.

My Lords, given that the EU committee found that the significant barriers that remain despite the trade and co-operation agreement will particularly affect smaller businesses, what steps are the Government taking to ensure that their trade priorities take these businesses into account?

My Lords, one of the reasons the Government have launched the export support service is to support UK businesses—it turns out that is primarily SMEs—with one-to-one advice on exporting to Europe. They can find all this information in one place. It is working well. There is a good volume of inquiries coming through, but I agree with the noble Lord that we have to do all we can to help SMEs in this important area.

My Lords, will the Minister please reassure the House that he is going to take into account Brexit freedoms as part of his negotiations and ensure that we maximise the opportunities in this country?

My Lords, to mark the two-year anniversary of delivering Brexit, the Government have set out new plans to maximise the benefits of Brexit. I mention my right honourable friend the Minister for Brexit Opportunities; I think the House will recognise that this is a subject extremely close to his heart. A Brexit freedoms Bill will be brought forward to end the special status of retained EU law and ensure that it can be more easily amended or removed. This is very much to be welcomed.

My Lords, the Department for International Trade did a fantastic job in rolling over the 66 bilateral trade agreements the EU had with other countries. It is now starting to make them bespoke to our country. Does the Minister agree that, with the TCA with the EU, we have the opportunity to build on the agreement we have now? There is a “but”: when does the Minister think we will resolve the issues with the Northern Ireland protocol? The sooner we do, the sooner we can build on the TCA.

My Lords, first, I thank the noble Lord for referring to the hard work being done by officials in the department. As to Northern Ireland, the Government’s absolute priority is to protect stability and the peace process. We believe that there is a deal to be done with the EU that protects the sovereignty of the UK and the integrity of the EU single market. This would deliver the stability that business and communities in Northern Ireland need. I know this is a subject very close to my right honourable friend the Foreign Secretary’s heart.

My Lords, the Minister talks about exports and I am sure he would like to recognise the challenge facing our energy-intensive industries. They are competing internationally on an entirely different playing field, as the cost of their energy is substantially higher than that of their competitors. Will the Minister recognise that and undertake to once again go back to the Chancellor before this week’s Statement to make sure something is done about it?

My Lords, I absolutely recognise the issue that the noble Lord refers to, and we have the energy-intensive industries scheme to help certain industries. This is important, and I believe the longer-term solution is more renewable energy in this country; we are working very hard to achieve that.

My Lords, the north-east of England is the region which has had the most trade per head of population with the European Union. It is still largely a manufacturing economy. The chamber of commerce tells us that companies in the region are having real problems with supply chains and levels of bureaucracy.. Has the Minister been to the north-east to discuss with them how to make sure that manufacturing can prosper in future? It feels constrained at the moment.

In my capacity as Minister for Investment, I regularly visit the north-east. I am very proud that we are now reindustrialising parts of the north-east which lost their industry some time ago. We should welcome that across the House. The only sustainable levelling up is through the creation of sustainable private sector jobs in regions such as the north-east, and I am pleased that we are making good progress with this.

My Lords, a moment ago, when referring to Northern Ireland, the Minister said that there was a deal to be done. I thought we had a deal—one which we negotiated for years. What is this new deal he is talking about?

My Lords, sometimes pragmatism is needed once these agreements are worked through in practice. Pragmatism is now the watchword. My right honourable friend the Foreign Secretary is making good progress in achieving a pragmatic answer to some of the issues that we all know that we face.