It is a pleasure to follow the noble Baroness, Lady Donaghy. I will focus on three business consequences of this treaty. First, the deal creates an ocean of new paperwork. The Financial Times reports that each year British companies trading with Europe will have to fill in an extra 215 million customs declarations, at a cost of about £7 billion per year. At best, each delivery to and from the EU will take an average one day longer. Can the Minister explain how the Government will ameliorate this fettering of British trade?
Secondly, there will be double regulation. Any UK company wishing to export to the EU will now have to comply with both the new UK regulations and standards and the EU ones—an extra set of design, testing, certification and administration costs. For example, UK chemicals regulation requires British-based companies to reregister every chemical that is currently legal in the EU. Double regulation means double cost. In the case of chemicals, that is about £1 billion of extra cost. What are the Government doing to alleviate the millstone that is hanging around British industry?
Thirdly, on rules of origin, traders can self-certify the origin of goods sold and then enjoy what is called cumulation. That is good, but the deal does not allow for parts imported from regions outside the UK and EU to be counted towards local content—what is called diagonal cumulation. This will make it hard, or impossible, for our more complex manufacturers to avoid being hit by heavy tariffs from the EU. What are the Government doing about that?
These are undeniable issues. The Minister and the Government should face up to them. This Conservative treaty makes things worse for investors, workers and consumers.
Finally, it is clear that, despite its size—no skinny treaty here—this deal is actually a master framework. As the House has heard, from the noble Earl, Lord Kinnoull, and other noble Lords, there are many further deals to be made. As the noble Earl set out, there is a welter of committees to hammer out these details— 32 committees and working parties by his count. Noble Lords should remember that, if either party is not happy, the entire deal could be terminated with just one year’s notice. The UK and the EU will be arguing about our relationship for years. So much for this deal giving certainty to business. Business will soon realise that things are not fixed; they are still moving. Without certainty, capital takes flight.
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