EU Membership: Economic Benefits

Debate between Lord Lilley and Bob Stewart

Wednesday 15th June 2016 Commons Chamber

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

It is a great pleasure—a nostalgic pleasure—to follow the right hon. Member for Sheffield, Hallam (Mr Clegg). He reiterated the fears he first enunciated in relation to our leaving the exchange rate mechanism, and those fears proved to be wrong. He next enunciated those fears in relation to our not joining the euro, and they proved the reverse of the truth. It is nostalgic to hear him recycling his damaged goods again today.

It is even more of a pleasure to follow my right hon. Friend the Member for Wokingham (John Redwood). He and I worked together at the Department of Trade and Industry. I think I am the only serving Member of Parliament, apart possibly from the right hon. Member for Sheffield, Hallam, who has experience of successfully negotiating an international trade deal and of introducing, with my right hon. Friend the Member for Wokingham, the single market programme into this country.

We have that experience, and I want to apply it to some of the arguments because on this issue, as on most issues, I find that when we in politics do not have that experience, we simply adopt the most plausible argument that supports our case. By and large, that is what happens on matters of trade and economics in this House, because there is so little experience of them. In a way, I am a member of an endangered species as one of the few Members who has such experience.

Let me first take the very idea that trade agreements are necessary and essential for trade. I hate to say this, because I have a vested interest in claiming to have experience of these things, but trade agreements are less important than people imagine. That is particularly the case for agreements between developed countries, largely because of the success of the Uruguay round, which brought down tariffs between developed countries to negligible levels. The average WTO tariff that would apply to British exports to the EU, in the almost inconceivable circumstance of our having no free trade agreement with it, would be 2.4%. It is better not to have it and I would rather not have it, but compared with the movements in the exchange rate, it is negligible or much less important than it is made out to be. The only important trade deals are those with fast-growing markets in Asia, Latin America and Europe that still have high tariff levels, and we ought to be looking to negotiate trade deals with those markets.

[Bob Stewart]

I entirely agree with everything my right hon. Friend has said. We have not so far discussed the fact that people want our market just as much as much as we want their market. It takes two to tango in any trade deal, and trade deals will go on regardless.

[Mr Lilley]

My hon. Friend is absolutely right. Trade deals take place because they are in the mutual interests of both parties; they are not military conflicts. They take place between two parties, like trade itself.

A very plausible but incorrect argument is that trade agreements always take a long time. When the Secretary of State for Foreign Affairs was asked whether Ministers had done any study of trade agreements, he sidestepped the question. A freedom of information request has actually revealed that neither the Treasury nor the Government have done any study of the trade agreements about which they talk so knowledgeably. However, such studies have been done. I refer to the study by Professor Moser of the Centre of European Union Studies in Salzburg of every single trade agreement in the past 20 years. There are 88 of them. They took an average of 28 months, but the time for each varied greatly. The deals that took a long time were those that involved lots of countries, which certainly concurs with my experience. Of course, by definition any EU treaty involves 28 countries and takes a long time, because all 28 have vetoes. A lot of EU treaties are being held up now, but bilateral treaties take less than that average of 28 months. We should not start deluding people into thinking that it will take a long time to negotiate bilateral deals with countries that already have bilateral deals with Switzerland, for example.

The right hon. Member for Sheffield, Hallam asked rhetorically whether anyone was queueing up for trade deals with us. Well, look not for what they say but what they do. Switzerland has trade deals with countries whose total GDP is four times that of the countries with which the EU has trade deals. Chile has trade deals with countries whose collective GDP is even bigger. Switzerland has a trade deal with China. We are told that it is a bad deal for Switzerland, but clearly the Swiss did not think so. The Swiss published the details of the deal online; Members can look at it themselves. By the time the EU even gets around to negotiating a trade deal with China—which by the way will never succeed because the EU will always insist on human rights terms the Chinese will not accept—the Swiss will have zero tariffs on the vast majority of their exports to China.

Transatlantic Trade and Investment Partnership

Debate between Lord Lilley and Bob Stewart

Thursday 10th December 2015 Commons Chamber

[Mr Lilley]

I would like to hear my hon. Friend say that this House is going to exercise democratic control rather than relying on the American Congress.

Partly because Ministers were so little accountable to this House on this issue—I cannot remember having to respond to any debates on it—officials were very reluctant to be accountable to Ministers. In almost every other area where I was in Government, I thought that British officials were wonderful and that the caricature of them in “Yes Minister” was false, but where an international bureaucracy was involved and there was limited democratic control, they were extremely reluctant to respond to Ministers’ requests about what they were up to or to explain the compromises they were making. I had to argue very hard and strongly to reassert my control over officials. Ultimately, of course, it is up to Ministers to do that.

[Bob Stewart (Beckenham) (Con)]

Does my right hon. Friend think that TTIP will be in any way accountable to this House? It does not look as though it will be.

[Mr Lilley]

There are aspects where I think we are in danger of unnecessarily handing over unaccountable powers, and we should be very careful about doing so.

Negotiations, then and now, are aggravated by the fact that we are negotiating at second hand through the EU and at arm’s length. I campaigned for continued membership of the EU in 1975, and I have accepted that we have to make some sacrifices to have a common market, but we should be aware that we have only second-hand control. My hon. Friend the Member for Stafford (Jeremy Lefroy) thinks that we should probably rely more on the American Congress.