Rt Hon Lord Lilley

    Peter Lilley: Did my right hon. Friend note the comments by President Hollande that the United Kingdom should be made to pay a price for leaving the EU, presumably by having tariffs imposed on our trade with it? Did he respond to the President that clearly he feels that, in the absence of such punishment, leaving the EU would leave the UK manifestly better off? Such punishment would fall primarily on French exporters, as they export far more to us, whereas our exporters are benefiting from a 14% improvement in their competitiveness—three times the likely tariffs, on average, that may be imposed on them.

    David Davis: My right hon. Friend—and erstwhile Trade Secretary, if I remember correctly—is exactly right. The damage done by a supposed punishment strategy would be primarily to the industries and farmers on the continent who export to this country. I am afraid that Mr Hollande, Mrs Merkel and others will experience pressure from their own constituents that says, “This is not a good strategy to pursue.” In this country, we believe in free trade because it is beneficial to both sides. I do not see the logic in exercising a punishment strategy against one of their strongest and most loyal allies.