EEC: Exports Customs Tariff and Job Loss (Hansard, 19 October 1981)

§ Baroness Trumpington
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers)
My Lords, it is not possible to predict exactly by how much United Kingdom exports to the Community would fall if they were subject to the commons customs tariff, nor precisely to quantify that fall in terms of job loss. However, last year the United Kingdom exported some £20,000 million of products to our Community partners, and clearly many jobs depend on these exports.

§ Baroness Trumpington
My Lords, while thanking my noble friend for his illuminating reply, may I ask him what alternative markets are there and whether we are fully exploiting those that may exist?

Earl Ferrers
My Lords, I have no doubt there are a number of alternative markets, but if we were to withdraw from the Community it is a matter of speculation whether those markets would be taken up. What I would tell my noble friend is that since we joined the Community the percentage of our exports which go to Community states rose from 30.6 per cent. in 1972 to 43 per cent. in 1980 and now West Germany takes the largest percentage of our exports, 10.7 per cent. of the total, and has superseded the United States of America which only takes 9.6 per cent.

Lord Bruce of Donington
My Lords, is the noble Earl aware that the assumption made in this Question, that our exports would be subject to a unilaterally imposed common customs tariff, is a very fanciful one indeed? Is the noble Earl aware that any examination of the figures will show that, in effect, the boot is on the other leg; that we take from the Community over £1,000 million more in manufactured goods than we export to the Community, and that a customs tariff against fuel supplies to the Continent would be extremely unlikely? Will the noble Earl please bear in mind that it would, perhaps, be better if these very important EEC matters which involve us all, and concerning which the facts are fully known, were discussed in a completely dispassionate atmosphere, as distinct from being on the basis of an emotional spasm?

Earl Ferrers
My Lords, I am not quite sure who was having the spasm. I rather thought that it was the noble Lord opposite. But my noble friend is entirely entitled to ask this Question. She is entirely entitled to ask what would be the position if we were subject to a common customs tariff on all our exports. The noble Lord ought to bear in mind that the current export/import ratio in manufacturing with the European Community is far more favourable than with alternative trading partners which we have, such as North America and Japan.

§ Lord O'Hagan
My Lords, is my noble friend aware that even the National Executive Committee of the Labour Party, in their latest document about the consequences of withdrawal in the agricultural sector, recognise that considerable unemployment would arise in agriculture, and that our own exports of agricultural commodities, which are now a great success within the Community, would be diminished? Would my noble friend therefore consider lending a copy of this document to the noble Lord, Lord Bruce of Donington, to assist in a more calm discussion of this subject?

Earl Ferrers
My Lords, I realise that the party opposite are entirely at sixes and sevens over our membership of the Community. All I would tell the noble Lord is that we believe that we should remain members of the Community and that we have a great trading future with it.

§ Lord Mayhew
My Lords, since withdrawal would disrupt not only our own economy but also the economies of our partners, can we rely on them renegotiating with us in a thoroughly dispassionate spirit?

Earl Ferrers
My Lords, I do not think that the position will arise.

§ Lord Orr-Ewing
My Lords, has my noble friend seen two estimates from very responsible political leaders, which show that the consequential effects on unemployment might add between 2 million and 2¼ million to the total now existing?

Earl Ferrers
Yes, indeed, my Lords, I have. But, of course, the net amount of jobs lost would depend on the quantity of trade which might, or might not, continue despite our withdrawal, and what new trade links could be negotiated as a result of our withdrawal. My noble friend is entirely right about the effect on the number of our jobs. If I may, I should like to quote what my right honourable friend the Prime Minister said, which was: Over 2 million jobs depend on our trade with Europe. 2 million jobs which will be put at risk by Britain's withdrawal", She then went on to say: And even if we kept two-thirds of our trade with the Common Market after we had flounced out—and that is pretty optimistic—there would be a million more to join the dole queue. That is only the beginning".

§ Baroness Llewelyn-Davies of Hastoe
My Lords, may we say how much we have enjoyed this exchange between the various members of Her Majesty's Government?

Earl Ferrers
My Lords, I was not aware that the noble Baroness was a member of Her Majesty's Government, and I am entirely delighted to carry on any such conversation if she so wishes.

§ Lord Gridley
My Lords, is it not a fact that exports to the European Community, which stood at £11,848 million in 1977, have now reached £20,541 million in 1980, and if we left would it not be catastrophic?

Earl Ferrers
My Lords, my noble friend is entirely right; it would be catastrophic. If he cares to take himself back to when we joined the Community, our exports to the Community when we joined in 1972 were only £2.9 billion and they are now, as he said, £20.4 billion. That is a very substantial increase and a very substantial amount of exports.

§ Lord Jenkins of Putney
My Lords, since the noble Earl has given the figures about exports to the Community, would he care to give similar figures about our imports from the Community?

Earl Ferrers
My Lords, I should be delighted to do so if the noble Lord would care to put down a Question.

§ Baroness Gaitskell
My Lords, may I ask the Minister, if we are doing so well from the Community, why is it that we have 3 million unemployed? It is a very simple question.

Earl Ferrers
My Lords, there is such a thing as a world recession. I will tell the noble Baroness, if I may, that the United Kingdom has a higher percentage of its population in employment than any other member state of the Community, with the exception of Denmark.

Lord Bruce of Donington
My Lords, in view of the noble Earl's reiteration of the prophecies of unemployment, with which he has been kind enough to regale us, will he bear in mind that the Government have no credible record in the whole business of forecasting and that it would be wise for them to be extremely cautious?

Earl Ferrers
My Lords, that is precisely what I was trying to be. In furtherance of the noble Baroness's question, I would remind the noble Lord that we are not the only country which is suffering problems of increasing unemployment, and that between August 1980 and August 1981, while the United Kingdom's unemployment increased by 46.9 per cent., West Germany's increased by 49.1 per cent. and that of the Netherlands by 55.6 per cent. So we are not alone in the difficulties.