Tuesday 15 January 2019

Some excerpts from the parliamentary debate

Stephen Gethins, a Scottish Nationalist, reminded us that the European Union is not an undemocratic tyranny nor a monolithic super-state.
I have found utterly baffling and really quite depressing the lack of knowledge about the European institutions in this place. The EU is made up of independent and sovereign states, which reach agreement and compromise in what is truly a partnership of equals. There is democratic oversight from the European Parliament—Ministers here have attempted to stifle democratic oversight—and there is a Court, not to impose anything on anybody but to resolve disagreements, which will arise in any democracy with 28 independent and sovereign member states.

Conservative Jonathan Djanogly demolished the arguments for leaving the EU "on WTO terms"
First, most business wants a customs union because it allows free movement of almost half our exports between Union members without tariffs and checks and paperwork. Opponents say that this would stop the UK forging its own trade agreements, but, to my mind, the benefits of the EU customs union are far greater. We must keep in mind that the EU has some 250 FTAs [Free Trade Agreements] with some 70 countries, and the UK plan is to “roll over” those deals, meaning that, at best, we would have the same—not better—terms as the EU with one third of the world’s countries. There would be no advantage of being outside the EU. That is, of course, assuming that we are able to make those deals happen, which we know is proving somewhat elusive, as the hon. Member for Nottingham East (Mr Leslie) explained.
Secondly, the chances of negotiating better FTAs as a country of 50 million, rather than a bloc of 500 million, is realistically and simply not how it normally works.
Thirdly, there will be significant costs of going it alone on FTAs, from being forced to take US genetically modified crops to issuing visas to countries, as currently requested by Australia and India.
Fourthly, FTAs take a long time to negotiate—an average of seven years. Fifthly, the claim that Commonwealth countries will prioritise us over the EU is unrealistic, not least considering that the Czech Republic currently has four times the trade with New Zealand than we do and that the Swiss do much more trade with India than we do. Sixthly, “most favoured nation” clauses in our rolled-over EU agreements and the integrated nature of world trade will significantly reduce our ability to get commercial advantage. Finally, high levels of foreign input into our manufactured goods will create huge problems under the so-called rules of origin.

Vince Cable, speaking from personal experience, expanded on the WTO difficulties
long before I came into the House, I was part of a small community of international trade specialists and got involved in negotiating the so-called Uruguay round and then the Doha round as part of the World Trade Organisation—or, as it was then called, the General Agreement on Tariffs and Trade [GATT]. I saw at first hand the way in which the WTO system operates. I realise that there is no longer just a small community of anoraks, which is what we were. A large number of people now consider themselves experts on trade policy, but the glibness with which the term “WTO rules” is applied leads me to believe that there are probably not too many anoraks, because there are some very real difficulties in applying WTO rules.

The World Trade Organisation is to trade what the United Nations is to peace. It has some admirable principles, but I think most Members, and certainly those on the Government Benches, would consider it seriously negligent of us to make our national defence dependent solely on the rules of the United Nations. Rules have to be enforced, and they have to be effective.

We need to look back on what the World Trade Organisation is and what it is trying to achieve. In the post-war world, it has established one central principle, and actually it is not free trade; it is something called the most favoured nation—MFN—rule. It is about non-discrimination. It has one big waiver, which is to allow common markets and customs unions such as the European Union to function on the basis of total free trade within themselves, but its whole objective is to stop the proliferation of bilateral agreements.

Such agreements were common in the inter-war period, and they are becoming fashionable again. Many people who are in favour of Brexit say that they are the whole purpose of trade policy. Those people want deals with numerous countries, but the whole purpose of the WTO was to stop this happening. It was supposed to be a multilateral organisation. In that capacity, the WTO achieved a great deal. It cut tariffs to single digits on most manufactures except agriculture, and it got rid of quantitative restrictions, except for the quotas that still exist for agriculture and textiles. It also began to establish a set of rules around intellectual property and various other intangible non-tariff barriers regarding, for example, government procurement.

The problem is that the WTO reached the zenith of its authority about 10 years ago, when the Doha negotiations collapsed and multilateral trade negotiations ceased to make any progress. This was largely due to the obstruction of India, Brazil and, to some extent, the United States. The European Union was actually the main liberalising force, but anyway, the negotiations collapsed and the WTO’s authority is now much less strong. Where does that leave us in terms of what the WTO rules now mean? If they mean anything, it is the application of the rule of law. In the WTO, the rule of law operates through dispute panels, which in theory have the same force as the European Court of Justice in settling disputes. It baffles me that Conservative Members ​are so affronted by the intrusiveness of the European Court of Justice, because it was designed to achieve precisely what the dispute panels of the WTO were designed to do.

However, like the United Nations, the WTO is not a desperately effective body, and many of its rulings are not carried through. Because it is a weak organisation, it is possible for big countries to bully weak ones. A celebrated case some years ago involved a trade dispute between the United States and Costa Rica—over men’s underpants, as it happens—and Costa Rica won the dispute. The United States felt deeply humiliated and refused to comply. A face-saving compromise was eventually reached, but that dispute sowed the ill feeling that in due course led to President Trump, who has made it absolutely clear that he does not believe in the World Trade Organisation. He does not want it to work, and he is doing everything he possibly can to stop it working, including not sending judges to sit on the dispute panels. It is now a very weak organisation. If we were to crash out of the EU under WTO rules and found ourselves in a dispute with the United States—or, indeed, with the European Union, which we had left—we would not be able to rely on the WTO dispute panels to settle the dispute in an orderly manner.

That is one of the WTO’s central weaknesses. Another is that, throughout its history, it has been overwhelmingly concerned with getting rid of tariffs. The main problem in international trade these days is the divergence of standards, which is of course why we originally entered the single market under Lord Cockfield and Mrs Thatcher. That was perfectly logical. If we are trying to liberalise trade, we attack the non-tariff practices that obstruct trade, hence the harmonisation of rules on mutual recognition. However, the WTO does not do that. It has very weak rules covering government procurement and all the barriers that are dealt with in the European Union through the rules on state aid, competition and the like. That, in turn, means that there is very little in the WTO that covers the services sector, which, as we have been reminded, accounts for 80% of our economy. We have a fair degree of liberalisation in the services trade in the European Union, which benefits our high-tech industries, financial services and so on. No such arrangement exists in the WTO. Those sectors are completely unprotected.

Finally, and not least, the fact is that some tariffs remain, and they are on agriculture. We have the problem that if we leave the European Union with no deal, on WTO terms, the European Union’s tariffs on dairy products, lamb and various other items, which are quite high, immediately kick in. The problem with that, as we discovered when we had the foot and mouth epidemic, is that if we cannot export, prices crash. The only logical response from the farming industry, in order to maintain the value of the stock, is to slaughter large herds. This will happen. We know there is a paper at the moment in the agriculture Department—the Department for Environment, Food and Rural Affairs—setting out a plan for slaughtering a third of all British sheep in order to maintain the integrity of the market. That is an inevitable consequence of a high tariff obstructing British exports.​


I sympathise with Sir David Crausby (Labour, Bolton North East)
When critics say that there should be no second referendum, the fact is that we have already had two. In advance of the second vote in 2016, those who wanted to leave the EU claimed that the public did not understand the consequences of the common market when we first voted in 1975 so, as was their right, they argued for another referendum. Now, the same group who want to leave argue that another referendum—a third one—would be an insult to those who voted three years ago, because it would be tantamount to saying that those who voted to leave did not know what they were doing.

The truth is that nobody knew what they were doing in 2016—if indeed they did in 1975. Only a few anoraks, mainly in this place, actually thought they knew what they were doing, and I have to say that some of them—unfortunately, scarily—still think they know what they are doing. If there has been a mistake in this sad saga it is that we should never have had either referendum in the first place, and that is the fault of nobody but us politicians. We are responsible for this self-inflicted chaos, not the electorate, and we have a duty to resolve it.​

If I have learned anything from all of this it is that yes/no referendums are not the right way, not even the honest way, to make complex policy in the interests of our country. They have been deviously misused by politicians to win general elections: the promise of a 1975 referendum won the election for Labour, just as the proposed 2016 referendum won the election for the Tories. What we should honourably do in the future is make it clear in our manifestos what we stand for and then put that to the public in a general election. I reluctantly have to say that Ted Heath was right in 1970 when he put in the Conservative manifesto that he would negotiate to take us into the common market and did so. That is what we should resolve to do in the future.

David Lammy (Labour, London Tottenham) impressed observers from all parties with his passion.

Owen Smith reminded us of what the Labour party used to be
Any Brexit is irreconcilable with Labour’s traditional social democratic mission and its twin foundations of providing equality and freedom. Throughout history, different wings of my party have always understood that those tandem aims were at the heart of what we stand for. Bevan said that there is no freedom without an end to poverty. Crosland said that our job is to pursue equality and freedom. There cannot be one without the other, just as there cannot be a cake-and-eat-it Brexit. If we are to be true to that mission, we surely cannot accept any outcome that will limit the ability of our people to live and work in this country or elsewhere. What have we come to that we have a Prime Minister who tells the country to celebrate curtailing the rights of our citizens to work and live abroad? It is plainly out of kilter with reality, and it is plainly wrong for our people.

Nor should we in Labour give any succour to a policy that is fuelling the hard-right politics of hatred and repression, the enemies of the social democracy that we all believe in, not even if—I wish to emphasise this point—there is electoral advantage for us in so doing. If there is seen to be electoral advantage for our party letting the Tories carry the can for a Brexit deal that diminishes the living standards of our people and that extends austerity such that we might contest an election and win it on that basis, it would be shaming for my party to pursue that strategy. We would be sacrificing the lives and livelihoods of the people we came into politics to represent.

In conclusion, we have to be clear: Brexit is a terrible mistake for our country, and the only way in which we can reverse that mistake is by asking the people to do so. We have had two years of exposure to the failures, flaws and risks that Brexit entails. Now is the moment for my party to show leadership, to lead the people away from the brink of Brexit, to offer up the proposal that we revoke article 50 and then, crucially, to campaign and win a people’s vote and to stay in the European Union.

And, finally, Sir Edward Davey. I have frequently on this blog, and in Facebook postings, tried to get across that UK's accession to the European Common Market, soon to become the European Community, was pushed through by men who had commanded army units with distinction in the Second World War. (An earlier attempt to had been made by Harold Macmillan, a decorated officer from the First World War.) That accession was endorsed in 1975's referendum by hundreds of thousands of men and women who had either served in that war or seen the devastation that it had brought in our great cities and across Europe. They knew damned well that they were voting for closer economic and social ties which would make future wars between nations in Europe virtually impossible. Ed Davey reminded us of a post-war warrior.

My friend, Lord Ashdown—Paddy—is being buried today in Somerset, so I hope that the House will allow me to speak about this deal as I think Paddy would have done. [...] I worked for him for nearly 30 years, beginning as his economics adviser, and when he talked about Europe, he talked about the way in which countries needed to co-operate and work together. Internationalism was in his liberalism. He talked about how, working with other countries, this country could regain sovereignty and regain control over global capitalism, and the multinationals that sought to undermine the interests of individual countries, people and corporations. His view was that we were stronger and had more control. That was his approach to the European Union.

However, things went much deeper than that. Paddy was a soldier and a diplomat, and he brought that experience and those beliefs to the European question. It was his commitment to peace and to patriotism—he loved his country—that made him such a strong pro-European. We see that in his books and his speeches when he talks about the dangers of rising nationalism and protectionism around the world. He worried about Trump, Bolsonaro and Brexit, and he thought that Britain being in the EU was one of the best ways of combatting those rises in nationalism and protectionism. In his work in Bosnia, he talked about how the EU’s institutions were bringing peace not just within that country, but within the Balkans. Indeed, if we look at what is happening, the EU is one of the magnets that is ending the hostility between those countries, and it can play a key role. It is an engine for peace, as it has been across Europe.

Of course, as man who was born in Northern Ireland, Paddy would look at the threat to the Good Friday agreement with serious concern. Nearly 3,600 of our countrymen and women died in the troubles, but few have died since the Good Friday peace agreement. People inside and outside this House should think carefully about anything that puts that at risk. Paddy certainly did, believing that the EU was a way of gluing people together and moving away from past hostilities.

I was Secretary of State for Energy and Climate Change when Putin invaded Crimea and the Bolsheviks went into eastern Ukraine. There were crisis summits. The European Energy Council got together to work out how to deal with the matter, and one way of undermining Putin was to reduce Russia’s oil, coal and gas exports by ​ensuring that the EU became more secure by going green and by trading within itself, making it less dependent on Russia. That meant less money into Putin’s pockets and therefore fewer soldiers and rockets. That was how the UK could exercise soft power through the EU. Europe’s energy security strategy was written in my office in Whitehall, because we were able to use soft power to try to promote security and peace. That is what the EU is about, and that is why Paddy supported it.

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