Former UK chancellor Lord Norman Lamont says the UK should trade on WTO terms if it can’t agree a deal with the EU
Britain should be prepared to walk away from trade talks with the European Union if the deal on offer is unsatisfactory, according to the UK’s former chancellor of the exchequer, Lord Norman Lamont.
Speaking at the London Business School Asset Management Conference 2017, Lord Lamont said it was “perfectly possible” for the UK to deal on World Trade Organization (WTO) terms.
“I don’t think it would be very sensible to have 9.7% tariffs on cars going in both directions across the channel, but Britain could survive,” he said. “Many countries that trade with the EU do so on WTO terms.”
But Lord Lamont insists a mutually beneficial deal is the best outcome for all parties.
“Anything that is a cost to the UK is a cost to the EU,” he said. “The EU runs a large trade deficit with the UK and anything that lessens trade between the union and the UK hurts them as well as us. It is manifestly in the interests of both sides to secure a deal.”
Lord Lamont, a pro-leave supporter, believes striking trade deals with countries around the globe will be easier and more profitable for Britain once it exits the EU.
“It used to be argued that one of the reasons we ought to remain in the EU was that the size of the union meant it was easier to negotiate trade deals as part of a larger unit. But that doesn’t take into account the fact that a group of 28 countries, including the UK, actually finds it very difficult to negotiate trade deals.
“Britain will [after leaving the EU] be in a better position to negotiate free trade deals,” he added.
When talking about the future of financial services, Lord Lamont referred to recent comments made by Germany’s Wolfgang Schäuble. The German finance minister said that a weakened London would be to Europe’s disadvantage, as financial services firms might move to New York or Asia rather than Paris or Hamburg.
The fate of EU citizens was also discussed. Lord Lamont believes that British Prime Minister Theresa May and Europe’s chiefs want to protect the rights of British people living in EU countries and of Europeans from EU nations who reside in Britain.
“If we look at the official documents that the European Commission has put forward, the guidelines for the EU’s negotiations have a huge amount in common with the approach adopted by the British government.
“One of the European Commission’s concerns is that EU citizens resident in Britain should have full rights to live here. That can very easily be agreed. Mrs May wanted to agree that up front before the negotiations began.”
On the controversial £84 billion divorce bill for Britain’s exit, Lord Lamont said that the UK almost certainly had no legal obligation to “pay a penny” once it left the EU.
“Why is this argument put forward? It’s much more a problem for the EU than Britain,” he said. “The problem for the EU is that 13% of its budget comes from British contributions and that will leave a huge hole for them.”