Lord Bilimoria’s fourth contribution discusses the issue of trade with the European Union. He points out that the UK’s biggest customers are in the EU and constitute half of our trade in finished goods and ingredients. He goes on to add that approximately 70% of the UK’s food imports by value are from the EU, and 60% to 65% of agricultural exports are to other member states. Any delays on these goods, many of which are perishable, would raise food prices. Furthermore, he argues that if trucks coming from the EU are treated like non-EU trucks, the ports will be in permanent gridlock. To this he questions what preparations have been made if there is to be a hard Brexit to put up all the infrastructure required, prevent any delays and have a frictionless border.
Lord Bilimoria also discusses Ireland and shares that goods from Ireland go to Europe across the UK. It takes trucks 10 hours from leaving Dublin to get to Europe. If they had to go around, it would take them 40 hours, with considerable disruption.He concludes by quoting from an article in the Sunday Times which stated that “A wrinkle in international trade rules is scaring away companies in Europe from British suppliers”. It goes on to say that “the UK will gradually be ‘evolved’ out of the supply chains of EU manufacturers that do not want the hassle of providing paperwork for components bought outside the bloc”.
European Union (Withdrawal) Bill
30 April 2018
Lord Bilimoria:
My Lords, I put my name to this amendment and back up what the noble Lord, Lord Berkeley, has said. In today’s economy, business is integrated and transactions are global, with goods moving across borders every minute of the day. Our biggest customers are right on our doorstep in the EU—27 countries and half our trade. It is not just finished goods, but ingredients and components. In food and drink, my industry, I can give an example. Bailey’s Original Irish Cream is made in Dublin and goes across the border into Northern Ireland. It is bottled there, comes back into Dublin and is exported to the EU and around the world absolutely seamlessly.
Some 2.5 million lorries pass through Dover. How will we cope if there is any disruption over there? Some 70% of the UK’s food imports by value are from the EU, and 60% to 65% of agricultural exports are to other member states. Any delays on these goods, many of which are perishable, would raise food prices. Some 1.5 million trucks go through the Channel Tunnel. The list of border operations is so complex. What preparations have been made if there is to be a hard Brexit to put up all the infrastructure required, prevent any delays and have a frictionless border?
Some 69% of freight transport goes to the EU as lorry traffic. The FTA has spoken out very clearly for the whole industry. It represents 50% of the UK’s lorries and 90% of rail. It has warned very clearly of 15-mile queues at Calais if border checks are introduced. We need to remember what happened in 2015 with the French ferry workers’ strike. If trucks coming from the EU are treated like non-EU trucks, the ports will be in permanent gridlock. Does the Minister agree? The other aspect is Ireland. From Ireland, goods go to Europe across the UK. It takes trucks 10 hours from leaving Dublin to get to Europe. If they had to go around, it would take them 40 hours, with considerable disruption.
I conclude with a point made by the noble Lord, Lord Berkeley. Yesterday, in the Sunday Times there was an article in which a company boss said:
“We suddenly caught Brexit blight”.
The article says that:
“A wrinkle in international trade rules is scaring away companies in Europe from British suppliers”.
It talks about a Bristol-based company where the customers which used to give orders well in advance—in Germany and Scandinavia—are suddenly stopping the orders because of rules of origin. The supply chain is worried about this. The local content will not be of 50% value. With many industries such as the car industry, components that are made in the UK are well below 50%. There are companies here that just do not have the capability to move from under 50% to 50% or 60%. It will take many years to be able to have that capability domestically, and we will not be able to do it competitively.
The article concludes by saying that companies like this one in Bristol,
“will gradually be ‘evolved’ out of the supply chains of EU manufacturers that do not want the hassle of providing paperwork for components bought outside the bloc”.
It will, says the company,
“be death by a thousand cuts”.
That is what we are facing. We had a vote on the customs union in this Bill and it is critical because it marks the frontier between hard Brexit and a soft Brexit.
In the Financial Times recently, one leading British political analyst was asked to predict what would happen. He said that Brexit will not happen because there is no version of Brexit that can get a parliamentary majority. There will be no parliamentary majority if we cannot handle this particular situation in this amendment.