Lord Frost (Non-Afl)
My Lords, I am delighted to follow the noble Lord, Lord Offord. As he says farewell to this Chamber, I congratulate him, on behalf of the whole House, on his forthright but reflective valedictory speech. We overlapped only very briefly as Ministers in the last Government, but, as I think we all know, the noble Lord served that Government with an energy and determination that were very much needed at times.
If I may say so, not least because it was a step that my own party stopped from me taking at the last election, I admire the noble Lord for having the courage to relinquish his seat in this House and move properly to elective politics. I have little doubt—and, having heard what we have heard, I am sure that none of us can have any doubt—that he will be an effective and tenacious campaigner in Scotland. I wish him personal fulfilment in this new project and whatever follows it.
I turn to the subject of this debate. Here we are again. This is nth instalment of the long-running box set series of the British establishment’s obsession with being in customs union with the European Union. This has lasted 10 years. We saw it straight after the Brexit referendum, and, as early as January 2017, the noble Baroness, Lady May, in her Lancaster House speech, spoke of a “customs arrangement”, rather than leaving the customs union properly. By 2018, the then Cabinet Secretary, Jeremy Heywood, had invented the Heath Robinson-style dual customs arrangement—a Schrödinger’s customs union that apparently left us both in and out of the customs union at the same time. The 2018 withdrawal agreement would, of course, have kept the whole country in a customs union with the EU and given the exit keys to the European Commission.
Finally, the then Prime Minister, Boris Johnson, and I, did what had to be done. We took Great Britain out of the customs union—Northern Ireland, as we then hoped, was to follow later—giving us freedom of trade and the ability to set our own regulations. Until that point, we had seen nothing but a complete lack of confidence in Britain’s ability to trade with the EU, as we did, and do, successfully with the rest of the world.
However, here it is again; the obsession has returned. Just as everyone has got used to the new situation, with remarkably little difficulty, the same voices return. It seems that the Government increasingly want to wind the clock back. This is simply a grasping after nurse—a search for a refuge from hard decisions in the warm and deadening embrace of the Brussels institutions.
The arguments against doing this are just as strong as they have always been, and we have heard many of them today. First, trade deals under the customs union give third countries preferential access to our market but do not give us preferential access to theirs. Secondly, we get no say in EU negotiating positions and no assurance that our interests will be protected. Thirdly, as we are told, we do not get even proper friction-free participation in the EU’s market unless we join the single market as well. I am grateful to the noble Lord, Lord Newby, for at least being honest in saying that that is also his policy objective. Fourthly, we lose our ability to lower our own tariffs, which we have done for third-country food that we do not produce ourselves. Even the Government reduced some tariffs last year, and they made a point of saying so. Fifthly, we would have to undo our own trade agreements. Is it seriously suggested that, having joined, we should now leave the CPTPP and our trade deal with India to join the EU’s putative deal, which will have been negotiated with none of our interests in mind? It makes no sense.
The Lib Dems know this. They know more. I think that is why they claim to think they can negotiate some sort of special customs arrangement—oddly enough, one that excludes agricultural goods, even though that is the area in which, under the reset, we will be joining the single market. I can tell them that the EU does not do this sort of bespoke agreement, and we should have learned that in the years after the referendum. As for the Government, they are already dipping a toe in the customs union water by agreeing to follow the CBAM rules of the EU. Some Ministers appear to be for, some against, and I hope the Minister will be able to clarify.
This is all displacement activity. Being part of the customs union again makes sense for only one reason: if you want to start going back towards the EU. It is the Monnet method of one thing leading to another. That is why we hear the calls to rejoin the customs union. I urge its proponents to be honest: if they want to rejoin, they should admit it. They should make that case to the British people and see how far they get. Meanwhile, I hope—although not with great expectation, I am afraid—that today will be the last we hear of the nonsense on the customs union.
Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)
My Lords, I thank the noble Lord, Lord Newby, for securing this timely and important debate. It must conclude at 15.02 pm, so I will get through as much as I can. I will obviously look at Hansard. I think I will write a great deal to noble Lords—I apologise.
Before I respond to the substance of the debate, I want to recognise some of the extraordinary contributions we have heard today. Four maiden speeches and one valedictory is quite something in one debate. The thoughtful final contribution to your Lordships’ House from the noble Lord, Lord Offord, was as expected. I understand the business that he founded in 2013 was called Badenoch & Co; I wonder whether the noble Lord is planning on renaming it “Farage & Co”.
I turn to my noble friends who made their wonderful, brilliant maiden speeches today. I was so pleased to see my noble friend Lady Gill join our Benches. I campaigned with her in the West Midlands when she was first elected, which I have now realised was 27 years ago. I am delighted that she was able to use her mother’s Gutka to take her oath.
Turning to my noble friend Lord Docherty’s one-vote win: for many of us, a win is a win. What a wonderful example of how small our world is that Mr McFall—who is now the noble Lord, Lord McFall—has been part of his journey and remains, at least for a time, the man standing at the front.
I have known my noble friend Lord Doyle for more than two decades. I know his family is proud of him because his friends are too. I know that his sister is looking down on him today as she does every day. We are lucky to have him.
My noble friend Lord Pitt-Watson is a child of the manse. He gave us such a thoughtful and considered speech. We are lucky to have him, and I look forward to his contributions.
Moving to the subject at hand, this Government were elected with a clear manifesto commitment to reset relations with our European partners, to tear down unnecessary barriers to trade, and to increase national security through strong borders and greater international co-operation, all without returning to the single market, the customs union or freedom of movement, the red lines in the Labour Party manifesto. That is exactly what we are doing.
In May last year, the Government agreed a new strategic partnership with the EU, which the Government announced at the historic UK-EU summit, the first since Brexit. The deal we secured with the EU is good for bills, good for our borders and good for jobs, and, most importantly, it delivers on what the British people voted for. We now move on with the detailed negotiations. We are making good progress on talks with the EU since the summit to implement the joint commitments made, and I confirm to the noble Lord, Lord Newby, that we aim to reach detailed agreements by the next summit.
As we discussed in your Lordships’ House last month, the UK and the European Commission have agreed a new deal for the UK’s association to Erasmus from 2027, opening up opportunities for students and professionals that will be good not just for young people at university but for those at colleges and in workplaces across the country, who will now have the opportunity to study abroad, broaden horizons, experience other cultures and have a better understanding of the people who are some of our closest allies.
Noble Lords will be aware that we have also concluded exploratory talks on the UK’s participation in the EU’s internal electricity market and are proceeding swiftly with negotiations on a UK-EU electricity agreement. These are important steps in delivering tangible benefits for the people of the United Kingdom, making it clear that rebuilding our relationship with the EU is engagement with a purpose. This closer co-operation will bring real benefits that will be felt by businesses and consumers in the UK and across Europe—the same businesses and consumers who will also feel the benefits of the food and drink agreement which we are negotiating with the EU, boosting our exports and cutting costs for importers.
In part in response to the genuine concerns of the noble Lord, Lord Dodds, I say that an SPS agreement will be highly beneficial to Northern Ireland. It will remove a broad and wide-ranging set of requirements for goods and plants moving from Great Britain to NI because the same regulations will be followed across the UK. Agreement will smooth flows of trade, protect the UK’s internal market, reduce costs for businesses and improve consumer choice in Northern Ireland. The same businesses and consumers who will benefit from that will also feel the benefit of linking our carbon markets—cutting costs, making it cheaper for UK companies to move to green energy and, once agreed, saving the EU carbon border adjustment mechanism charge being paid on £7 billion-worth of UK goods exported to the EU.
By the time of the next UK-EU summit, we aim to have concluded the negotiations not only on a food and drink deal but on linking our carbon markets, and to have agreed a youth experience scheme. The food and drink and ETS linking measures alone are set to add up to £9 billion a year in the UK economy by 2040 in a significant boost for growth, bringing down bills for British people and opening up new opportunities.
I have 30 seconds left. I have a great deal more to say, but I will undoubtedly discuss these matters repeatedly in your Lordships’ House in the coming months and years. The one thing I will say is that this Government, within the red lines we have outlined in our manifesto, are committed to delivering for the people of the UK and resetting our relationship with the European Union.