View from Westminster

There is huge outrage that the contract to produce our new, blue, British passports will be awarded to a French Dutch company after we leave the EU. How can a foreign company take work away from British firm De La Rue? It flies in the face of all we have been working for after we leave the shackles of the EU.

Or does it?

Aside from the fact that the tender submitted by Gemalto is potentially £120 million cheaper than De La Rue’s (don’t forget, we have a duty of care to provide tax payers with best value for money), this contract is part of the globalisation of Britain.

The reality is that De La Rue boast on their website that they are the biggest manufacturer of banknotes and passports across the globe. As a member of the EU, we sign up to WTO rules, including the Government Procurement Agreement (GPA). This allows British companies, in return for opening up our government tenders to the world’s businesses, our companies can bid for other countries’ government tenders. After we leave, we will be part of the WTO in our own right and will be signing up to GPA.

So, if we turn to protectionist measures and block Gemalto from delivering our passports, we run a very serious risk that De La Rue will lose its business across the globe producing banknotes and passports for other countries. De La Rue will be far worse off as a result – and so will Britain.

The US is embarking on serious protectionist measures on steel and aluminium, to the benefit of their steel and aluminium industries, but the detriment of their construction, automotive and manufacturing industries. If the EU responds by introducing tariffs on American goods, we will all have to pay more for US goods that we buy.

Protectionism destroys free trade and all that it brings. Consumer choice, price competition, income to developing nations, all these will be lost to us in the UK and our economy will slow. Creating capacity from the high value products we make and sell to the globe, to the basic, low value things we import leads to lower productivity. At a micro level there are winners and losers to free trade (but more losers): but the big picture for our country and our place in the globe will grow as we become champions for free trade after we leave the EU.