UK and EU Relations

Lord Davies of Stamford Excerpts

Tuesday 12th September 2017 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, I always enjoy debating this matter with the noble Lord, as we have done on a number of occasions over the last year or two, but a tone crept into his speech this afternoon that rather worried me: the suggestion that those of us on our side of the argument are either politically irresponsible or maybe not entirely patriotic. I must tell the noble Lord very forcefully that those of us on this side of the argument regard ourselves as being every bit as patriotic as those who are on the Brexit side. We think of Brexit as a great threat to this country’s interests and are prepared to argue specifically why we believe that to be the case. That is why most of us are here this afternoon. We believe it is our patriotic duty not to go through with Brexit, and if we do have to go through with it, to go through with it as far as possible in a way which enables us to remain inside the single market and the common customs area.

I will direct my remarks this afternoon specifically to the common customs area. It is very important for two reasons, which I think the House recognises. First, it is a matter of existential importance to a number of industries that there should not be unpredictable customs delays at the frontier. That includes, obviously, anything to do with perishables—fresh food, cut flowers and so forth—some quite interesting parts of the pharmaceutical industry and nuclear materials, such as radioactive isotopes, many of which have half-lives of a few days or even a few hours, such that timing is absolutely vital. It also includes those manufacturing industries which depend on just-in-time inventory replacement. They have already expressed a lot of concern about the prospect of our leaving the common customs area.

Secondly, there is a whole political dimension to the threat involved in our leaving the common customs area, which is the Ireland issue. We debated that last week in great detail, so I am not going to go into it now, but I think the Government recognise that staying in the common customs area is the only way of reconciling our commitment not to have a hard border in Ireland with their determination to leave the European Union.

This is very important, and the great question is whether we can leave the common customs area in such a way that those businesses that I have just enumerated could continue to survive here. Many of them are making contingency plans at the moment to leave this country, which is a matter of very great concern. The implication of those who are happy to go ahead on that basis, including the Government, is that there is enough slack in the system to accommodate customs controls without causing undue delays. Representatives from the Port of Dover came here yesterday and kindly entertained a number of us at a reception in the House of Commons—I dare say Members of this House who are present in the Chamber at the moment went there—and I was able to have some interesting discussions with them. On an average day, 16,000 lorries go through Dover or the Channel Tunnel to the continent. Noble Lords can do their own maths, but that means about 700 an hour, or 11 or 12 every minute. That is a pretty tight schedule. if you hold up a lorry by two minutes by reading the driver’s certificates of origin or talking to him about that or something, that means you immediately have two dozen lorries held up. If you hold them up for half an hour, you have a backlog of 3 miles, I am told. If you have an hour’s delay, that means a backlog on the motorway of 6 miles. If you had a 24-hour hold-up for any reason, you would have trucks backed up the M20, around the M25 and out to Hemel Hempstead. It is a very serious matter; there is no slack in the system.

The Government have produced a paper, which of course I have read, which says, “Oh, there are all kinds of new technologies which mean there won’t be any delays at all”. But those new technologies, which are described I must say in a very vague fashion and not necessarily always very persuasively, are all based on leaving out three very important issues. One is the fact that there must always be spot checks in any system. It is no good having just an electronic system: if you never have spot checks, the whole thing will become a farce in no time at all. The second thing is that you always have to take account of human error and delays. For example, a truck may not work, so at the last minute the cargo is put on to another truck, which has a different number plate which is not recognised by the computer system, and there is a big hold-up. That sort of thing can happen the whole time. Thirdly, and very importantly, all those systems described in this new paper all involve prior clearing and a connection to a computer system and so forth—a lot of prior arrangement and registration. They are not suitable for, and do not accommodate, people who move across the Channel or the frontier at the last moment—which they should be entitled to do if their business drives them to do that—or small businesses that have not yet managed to get round to registering or are not regarded as being sufficiently large scale to be worth taking on. None of those issues are dealt with in the paper at all, so I am very much less than convinced by it.

I have very little time left. The great question arises of why we are taking these risks with these potentially enormous costs. The Government have a simple answer, which I think shows up the compete falsity of their logic. They say, “Well, we are going to be leaving the European Union, so we shall no longer be able to trade in that area on the present favourable terms”. That is 45% of our trade. When we leave we shall also leave preferential access to the other markets which have free trade agreements with the EU, which represents about 22% or 23% of our total exports. That leaves about 30%, and the Government say, “Well, that’s all right: with the 30% we are going to do so well, and so much more incremental business will come as to compensate us for the loss of business from the 70% where we shall be at a disadvantage”. That is completely implausible and unrealistic—not to mention the fact that it takes many years to negotiate a free trade agreement with anybody; it has taken seven and a half years already for the EU to negotiate with Japan, for example.

The whole of this potential threat to very important industries, to employment and to our relations with Ireland is all based on a very flimsy assumption, and it really is about time that the Government looked at these assumptions again. At present, I do not believe that those assumptions would get through the board of directors of any half-competent or half-viable business in this country. It would be very frightening indeed to think that this country is being managed on that sort of basis.