Oral answer (Lords) on UK-EU Trade - Mar 18

Friday, 19 March 2021 08:34

Asked by

Lord Adonis
To ask Her Majesty’s Government what assessment they have made of the impact of the United Kingdom– European Union Trade Cooperation Agreement on the reduction in trade with the European Union since 1 January.

The Minister of State, Cabinet Office (Lord Frost) (Con)
My Lords, the Trade and Cooperation Agreement provides for 100% tariff-free and quota-free access to each other’s market for the UK and the EU. It is first trade agreement in the world to do so. A unique combination of facts has made it inevitable that we would see a reduction in trade with the EU in January, and we should use caution in drawing any conclusions from the initial figures released on 12 March.

Lord Adonis (Lab)
My Lords, I thank the Minister for that Answer. We are, of course, where we are, but I am sure he would agree we have a particular problem at the moment with the export of animals, meat and shellfish, where exports are down by between 56% and 83%. Will the Minister agree to meet me and other noble Lords from across the House who are acutely concerned about this issue and wish to see it sorted, including the possibility of the Government negotiating a sanitary and phytosanitary agreement similar to that which Switzerland currently enjoys with the European Union?

Lord Frost (Con)
My Lords, I am always happy to meet anybody to talk about the issues relating to the Trade and Cooperation Agreement. We have, of course, pulled out all the stops to help businesses deal with the changes to our trading relationship with the EU, whether they are operating in these fields, whether they are SMEs or whether they are working in the agri-food or any other area.

Lord McNicol of West Kilbride (Lab)
My Lords, new figures released last week, as the Minister touched on, show that UK exports to the EU have plummeted by 40% since the transition period. Do Her Majesty’s Government take responsibility for that and, more importantly, will the Minister elaborate on the plans to rectify that reduction in trade?

Lord Frost (Con)
My Lords, there are several potential factors affecting trade with the European Union, as well as any direct impact coming from the TCA. There is clear evidence of stockpiling at the end of last year, which will of course affect the flow of trade, and obviously there is the general economic impact of the coronavirus pandemic, which has depressed economic activity in many ways. That is why we must be cautious before drawing any firm conclusions from the January figures.

Viscount Trenchard (Con)
My Lords, the TCA gives us the freedom and the opportunity to develop our own regulatory regime for the City, to maintain and enhance its position as the leading global financial centre. Does the Minister agree that we should be bold and swift in making necessary changes to our EU legacy regulatory framework, while taking a proactive leadership role in international fora such as IOSCO in developing proportionate principles-based rules at the global level? Does he also agree that it will manifestly not be the EU’s interests to continue to try to prevent European companies raising capital and accessing services provided in the UK’s financial markets?

Lord Frost (Con)
My Lords, I very much agree with the thrust of my noble friend’s question. I endorse his view that we should use our freedom to develop our financial services industry, and the framework that regulates it, over time in a way that suits us, and build the City’s huge advantages as a global financial centre.

Lord Purvis of Tweed (LD)
My Lords, last year I asked the noble Lord, Lord True, what work the Government were doing to forecast an assessment of the various complexities that the Minister referred to. He wrote to me on 19 May, saying:

“A call for evidence will open in the coming months, and we will provide further details in due course. The call for evidence will capture complexity and represent the varying impacts that will be felt across different parts of the economy. We will continue to keep Parliament informed.”

There was no call for evidence, and the Government have not kept Parliament informed. Does there exist any forecast from the Government that shows that by value to the UK economy, UK trade with the EU will grow?

Lord Frost (Con)
My Lords, the question of the economic benefits or disbenefits of our relationship with the European Union has been extensively debated over the last few years. There have been many publications on the subject, including from this Government. The economic situation last year, the impact of the pandemic and the huge uncertainties made it very difficult to conduct an analysis. We of course continue to keep this question under very close review.

Lord Lucas (Con) [V]
My Lords, there are clearly problems with companies not being used to the new procedures. I know from experience how helpful BEIS and HMRC can be to a European company that has made a pig’s ear of its paperwork. Are their European equivalents being similarly helpful to British companies which have not got the procedures right?

Lord Frost (Con)
My Lords, it is true that there have been some problems and some overzealous enforcement in isolated cases, which have been well publicised. However, I take this opportunity to say that generally the European authorities have been very supportive and pragmatic in the way they have dealt with issues at the border, and we welcome that fact. Operational co-operation with member states, in particular our closest neighbours, has been excellent.

The Earl of Clancarty (CB)
My Lords, the Minister will be aware of the huge problems in relation to work in Europe confronting our valuable music sector. Jobs have already been lost and tours cancelled as a result of the lack of suitable arrangements in the TCA. Is the Minister aware that the main ask of the performing arts is for a separate, bespoke visa waiver agreement, which would go a long way to resolving key concerns? Will he promise to discuss such an agreement with MaroÅ¡ Å efÄ