My Lords, I thank the Minister for his generous allocation of time the other day to discuss some of the issues; I am very grateful for that and to his officials. I apologise for missing the debate on group 1 because of train delays for hours, but I rise now because my Amendment 6 cannot be called if Amendment 4 is agreed. I will speak to Amendment 9, which would disallow regulations that disadvantage the UK under its trade treaties. I will highlight the CPTPP and the UK’s main bilateral trade agreements with Australia and New Zealand. I support Amendments 15 and 37 in the name of my noble friend Lord Frost, and I add my Amendment 39 to prevent dynamic alignment with the EU.
The aim of these amendments is to ensure that the UK can help shape and promote free trade globally to the benefit of free trade under a rules-based agreement at international level. That is inconsistent with locking the UK into the EU’s protectionist arrangements, even on a case-by-case basis, I fear. They are different; they are under code-based legal systems and they are shaped by different legal thinking from that underpinning UK law, which is more pro-entrepreneurial and innovation-open. I do not believe we should saddle UK producers and consumers with the cost of complex EU protectionist law rather than be open to the best and most similar arrangements elsewhere—foreign laws—or our own laws that can benefit our economy.
I shall give an example of what I mean by protectionist and inward-looking EU law and then look at how it affects growth figures and jobs; I disagree with noble Lords who suggest otherwise. One illustration comes from the EU’s digital commerce and AI sector. The damage was annotated in a September 2024 study, Rules Without End: EU’s Reluctance to Let Go of Regulation, by two EU-friendly economists, Guinea and du Roy. They concluded that,
“the EU rulebook added 562 new pages and 511 new articles on Data & Privacy; as well as 271 new pages and 247 new articles on E-commerce and Consumer Protection”,
amounting to nearly 2,500 new restrictions for data and privacy and 1,200 for e-commerce and consumer protection. The cost was highlighted former MEP Luis Garicano, who concluded that this coincided with a 50% drop in the number of new apps coming onto the market. Meanwhile, the report said, a study by the Bank of Spain,
“found that each additional regulatory provision was associated with a 0.7 percent decline in the employment rate of the affected sector”.
Other noble Lords with whom I disagree have tried to draw our attention to employment rates. The Ernst & Young investment monitor for 2024 indicated that the UK had the largest number of jobs created by FDI in 2023. The UK was at 52,000, France was at 40,000 and Germany was at 14,000. Project numbers in the UK were increasing; in France and Germany, they were falling.
The other indicator to which I would like to draw your Lordships’ attention—I hope the Minister will look sympathetically on these amendments—is GDP share. The EU’s declining share of global GDP is mirrored in its recent growth figures. Whereas UK growth in the year ending June 2024 was 0.7%—yes, that is disappointing—the eurozone’s was behind that, despite having three G7 members among its number. In the third quarter—that is, since June—figures for UK growth are up by 0.5% and the eurozone’s by a disappointing 0.2%. For those reasons, there is a strong economic case for not locking us into the EU’s protectionist arrangements. Despite the best will in the world in Brussels to move out of them, the EU seems to get stymied each time by ever greater protection, as these studies suggest.
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Moving on to my other point, we need to open ourselves much more to possible laws—international laws, our own laws or foreign laws—where we share a similar arrangement and where they are transparent, enforceable in our courts and mutually agreed. It would
be better for the UK economy to be open on an equal basis, given the opportunities with other trading partners.
I should mention the CPTPP before I close. It is a trading bloc of 11 countries with global trade now shifting to the Indo-Pacific. It accounts for around 12% of today’s global GDP. With the UK coming in as its 12th member, it is estimated to increase the CPTPP share of global GDP to 15%. By 2050, the estimated proportions will be 25% of global GDP for the CPTPP, by contrast with the EU’s, which is declining from a current 12% or 15%, depending on which figures and the year, to 10% in 2050. For these reasons, I hope that the Minister will reconsider closing our opportunities worldwide by linking us to a shrinking market, where growth and jobs are declining. This is in contrast to the great growth opportunities that Brexit allows us with our new trading partners.