(8 years ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Liddle
That this House takes note of the best options for the United Kingdom’s future relationship with the European Union following the referendum vote to leave.
Lord Liddle (Lab)
My Lords, I declare my interests as co-chair of Policy Network, a member of Cumbria County Council and Pro Chancellor of Lancaster University, all of which stand to lose as a result of Brexit.
In opening this debate, I am aware that in your Lordships’ House I have somewhat predictable form on Europe. I do not resile from the judgment I made earlier that Brexit will be the worst disaster for the United Kingdom since appeasement. But my focus for today’s debate is forward looking: given where we are, what would be Britain’s best possible relationship with the EU in future?
It is a particular pleasure to have the benefit of the advice of the noble Lord, Lord Ricketts, today. When I was in No. 10, it was a great privilege to work with Foreign Office officials of Peter Ricketts’ calibre. He joins a long and distinguished line of former diplomats who in their candour make a remarkable contribution to the work of this House. I look forward to his maiden speech today.
On the substance, I hope the House will allow me to be specific, clear and at times blunt. For the economy, there is no better solution in the national interest than Britain’s continued full participation in the single market. With Brexit we can no longer be members with voting rights—but forget the vague waffle about access. What matters is: first, that we stick to the EU rules and standards and update them as new rules are made; secondly, that we continue to make payments to the EU budget—forget that £350 million a week for the NHS; if Brexit goes bad, we will be cutting the NHS—and thirdly, that we accept directly, or, if the Prime Minister insists, indirectly, the jurisdiction of the European Court of Justice as EFTA members largely do through their separate EFTA court.
Such a course is overwhelmingly in the interests of jobs and living standards in the UK. Remaining a member of the customs union would be very much second best. While the customs union secures tariff-free access for manufacturing and food exports and avoids the complex bureaucracy of rules of origin, it leaves out services. In other words, it secures free trade in goods, where we have the largest balance of payments deficit, and fails in that objective in services, where we have our largest surplus. The future of the services sector would then depend on negotiating a comprehensive free trade deal with the EU, which would have to be far broader in scope than either Canada or Switzerland have been able to achieve.
I say to my Labour friends: when talking about services, do not imagine that this is just about protecting the interests of bankers—and when you talk about bankers, remember that they produce a lot of tax revenues that go towards the NHS and the welfare state. Services, where we excel, are much bigger than the City. Brexit threatens our position as a centre of TV and film distribution, our lawyers’ rights to represent clients in European courts, and the commercial strength of a whole range of services where free movement and the mutual recognition of qualifications are huge benefits to Britain—especially the ability to send highly qualified people on client assignments anywhere in the EU.
Free movement may be politically poisonous within the UK but it is the rock on which the business models of many of our most successful and advanced companies in digital, creative and professional services are built. Ending up as a member of the customs union would therefore be very much second best. Yet even that is threatened by the vanities of Dr Liam Fox, because being members of the customs union would greatly restrict our ability to cut new trade deals with the rest of the world. Dr Fox has convinced himself of this strange logic: it is in the national interest to forgo membership of the single market, which secures free trade for nearly half our exports, in return for the highly uncertain prospect of negotiating new British trade deals with the rest of the world, with all the complexities and political constraints that come with them. In my view, the so-called opportunities of Brexit are largely delusional vistas.
Similarly, we must stop talking nonsense about becoming an offshore Singapore, or a haven of social dumping, as many on the continent believe that the Government plan. Full participation in the single market on fair rules should be the aim. Corporate tax policy will be the big test. There is no way the EU will agree to our full participation in the single market if Great Britain, the second-largest market presently in the EU, sees itself as a Cyprus, an Ireland or a Luxembourg. Rather, we should be offering full co-operation with the EU to fight corporate tax avoidance.
People did not vote for these outcomes on 23 June. There is no mandate for making these choices. The leavers say that in the referendum they always made clear that Britain would be leaving the single market. Yes, they did say that—but at the same time they assured voters that Britain could have its cake and eat it and enjoy unrestricted free trade with the rest of Europe. The reason leave won on 23 June was that not enough people were convinced that there would be a real economic downside to leaving the EU. Therefore, they voted to “take back control” because they believed that it would be largely cost free.
However, we can see the downsides emerging already: a sharp sterling devaluation that will cut living standards in every year of this Parliament; widespread investment uncertainty; and a grave loss of tax revenues forecast by the OBR. For all those reasons, full participation in the single market must be the top national priority, and it is the job of the Prime Minister to show leadership in the national interest and spell out the realities to the Redwoods and Foxes on her own side. That message would echo positively around Europe and completely change the atmosphere for the Brexit negotiations, which I fear on the continent is rapidly becoming poisonous.
Many people on our Benches, here and in the other place, will say, “What about free movement? What about immigration? Haven’t the British people given a clear instruction to the political class—most of all to the Labour Party, with its claim to represent working people—that something must be done?”. I take that point with two crucial qualifications. First, any new policy must be based on clear evidence, not simple prejudice. As Hugh Gaitskell once famously wrote of Evan Durbin, the nature of social democratic politics is,
“the pursuit of truth to the bitter end”.
Secondly, we must never ever stigmatise migrants in the way that some leavers did. The rise in hate crime and social media abuse and the fact that many people feel they are no longer welcome in our country since 23 June is appalling and offends our basic values of equality and humanity. This is the slippery slope that leads to the end of tolerance and the end of an open society. But, yes, migration, both internal and external in the EU, must be better managed.
Free movement is not a uniquely British problem. Several member states accept the need for reform, including eastern Europeans, as long as we are prepared to continue to assist them financially with their economic development. Britain should have taken a lead on these questions in 2012, but that would have involved as a quid pro quo a greater willingness than the present Government were prepared to show to share the burdens of the refugee crisis. Regrettably, we did not take that lead and it may now be too late. However, the UK should still put its weight behind arguing for a Europe-wide rethink, not just British exceptionalism—although the EU’s current negotiations with the Swiss on free movement may give us a peg on which to hang our coat.
Nationally, we could do much more to manage migration better. Our national approach to it has fallen victim to the besetting British preference for laissez-faire. So let us have a bigger migration impact fund that acts quickly, and let us bring in proper enforcement of minimum wages and labour standards. However, I believe that the core of the problem in Britain lies in our highly flexible labour market, with too many businesses locked into a dependence on low-skilled migrant labour. Let us explore how we might reregulate our labour market, particularly where the problems are worst—in agriculture, food processing, hospitality and social care. We should consider setting up statutory tripartite bodies, on the models of the wages councils and training boards, with responsibility for raising skills, productivity and wages in those sectors. And why not give such bodies a mandate to recruit young trainees from parts of our country where decent training places and job opportunities are in short supply? Employer reliance on migrant low-skilled labour needs to be cut—but, in my view, it will take a dose of market interventionism to achieve it.
Finally, we must present ourselves as sincere, committed partners of our friends and allies across the Channel. Britain has so much to give on security and defence. I accept that the Government stress their commitment to NATO, and NATO remains crucial—but NATO is not enough. In today’s circumstances, of all circumstances, we cannot give the impression that we will prioritise the United States over our allies and friends in Europe. I want to believe President Obama’s assurances about President-elect Trump, but I fear that, for once, Obama’s fundamental decency and respect for the office he holds are obscuring his real fears. I really want to be proved wrong—but to be seen to kow-tow to a maverick Trump will only isolate Britain further in Europe.
The common security challenges that Britain and Europe face are broader than defence in the classic NATO sense: failed states, religious extremism, terrorism, climate change, the social and economic consequences of desertification in Africa, and structural pressures from tens of millions of young unemployed people in the emerging world searching for a better life in Europe. We need a common partnership with our European friends to address these questions. Outside the EU, that will be far more difficult.
Does Brexit then require a fundamental rethinking of the European security architecture? Perhaps it does. How about a revival of a western European union, with decision-making executives consisting of Britain, the big EU member states and the highest-level representation of NATO and the EU institutions? I do not have a clear answer—but, my goodness, I wish we had an Ernie Bevin at the Foreign Office and not a Boris Johnson.
We have to ask ourselves where we want to end up as a result of Brexit. Today, Britain is a European power with some considerable global reach. By all means, let us be global, but let us not delude ourselves. This nation has never for long been able to cut itself off from the continent—and when it has tried, the results have been disastrous, as with the two world wars in the last century. The best option for Brexit Britain is that we remain a European nation with the closest possible economic and security ties with our European friends and neighbours. That is the reality of Britain’s position in the world. With Brexit—and despite Brexit—let it remain our patriotic destiny as well.
Lord Howell of Guildford (Con)
My Lords, like the noble Lord, Lord Liddle, I greatly look forward to the comments of the noble Lord, Lord Ricketts, who has been at the centre of these matters for many years. We will learn a lot from him. I do not disagree with all that the noble Lord, Lord Liddle, said, although I must say I thought that the reference to Hugh Gaitskell was quite amusing—I do not remember that Hugh Gaitskell was a particularly strong fan of the European Community, as it was then.
In the very brief time available to me, I want to make three quick observations. First, like many others, I was appalled, frankly, at the weak government defence of our judges against the Stalin-like denunciations that we saw in the press. They were a chilling reminder of the past, and perhaps the journalists who wrote the articles are too young to remember what went on in Europe in the middle of the 20th century. Nevertheless, I do not think that the judges’ decision, whichever way the appeal goes, made very much difference. Either way, it is absurd to try to keep Parliament out of the process of Brexit, just as it would certainly be very unwise for Parliament to attempt to block or delay the triggering of Article 50. A much better approach by the Government would have been and still would be to flood both Houses of Parliament with a really deep analysis of what is actually going on in this area. So many generalities seem to skate over the actual processes of reforms and changes that are going on in the European Union and indeed in the world at this time, so instead of giving Parliament too little information my recommendation would be for the opposite. Give us too much. Let us debate it at enormous length and then approve going forward with Article 50.
If a really deep analysis were put before Parliament, it would show straightaway that the binary arguments between soft and hard Brexit are pretty good nonsense. I know they are beloved of columnists—one in the Times is at it again today—and a number of colleagues in the other place and even members of the Cabinet still seem to think that there is some hard and fast division. The reality is quite different. In fact, on the control of our borders, there are dozens of ways of controlling immigration and tightening present processes. Some are already in use by the European Union. We are told that the free movement of labour is a fundamental principle, but the world has moved on. Those fundamental principles are no longer fundamental, nor are they a great freeing and liberating force for Europe.
Secondly, on the question of whether we can possibly be in the single market or not, I beg noble Lords opposite to understand that the single market is a totally transformed creature today, perforated by new supply chains in this digital age and by interglobalisation not only of products but of processes. There are a lot of practical sector arrangements to be set up, and they are complex. Indeed, informal discussions are going on now with many new markets outside the European Union—the place where 60% of our exports go. These so-called fundamental principles that are said to present such dilemmas are not fundamental at all. There never has been much freedom of services; it has only partially existed.
A new path is opening out for both the UK and the rest of Europe—a new common partnership to quote the noble Lord, Lord Liddle. It is a new relationship with an open Union. The peoples of Europe are becoming increasingly and restively aware that this new path is opening out and I hope that our leaders have the wisdom to see it, understand it and now follow it.
Lord Rooker (Lab)
My Lords, the hand dealt to the Prime Minister is not of her choice. The nation is split. The vote of 52% to 48% was not overwhelming and 63% of the electorate did not vote to leave. The referendum was a simple question, leave or remain, but one lesson learnt from the poll tax is that simplicity can lead to gross unfairness.
We have been in a legal framework which, after over 40 years, is complex to say the least. It is therefore not simple to exit and those who imply that it is are misleading the public of the UK. The vote was to leave, not how to leave, nor was it a future roadmap after leave. Can exit be cost-free? No is the honest answer, and I for one will not support the economy taking a hit as a price.
The coalition Government commissioned 32 reports on what membership of the EU meant for the UK’s national interest. These balance of competences reports showed that the UK benefited from membership of the EU, which is why we hear so little about those reports. I had first-hand experience of one related to food safety and animal health and it was clear that membership produced,
“real benefits for the UK”.
What on earth does “taking back control” mean in this area? We are not going to leave the United Nations, the World Trade Organization or the Codex Alimentarius Commission. We will not leave the World Organisation for Animal Health, the OIE, we will not tear up treaties on the law of the sea or climate change. Our rules relating to food production, food safety, animal health in food production animals, food import and export rules and labelling are all set by those other organisations and will not change, so we are not in control. We have to co-operate with others to function as an island nation and the world’s fifth largest economy. Keeping it simple and quick is dangerous and will ruin our country.
At this point I still support and trust the Prime Minister on this issue. The plans must remain within government because the negotiations will be very public—the 27 will see to that. However, the Government must involve Parliament to which they are accountable.
Given the narrowness of the vote on 23 June I would have supported the Prime Minister reaching out in the national interest beyond her tribe, but when she looks across the Dispatch Box, I can see why she did not choose that path. As a nation we are in enormous uncertainty and that is affecting our economy and social cohesion, and all because her predecessor gambled the nation for peace in his party and lost. She must not do that. Those at the centre of the 27 will not want other members to see a large exiting member succeed in being better off out than in. It is crystal clear that that will not be allowed to happen. But so much needs changing in the EU that change while the UK exits is inevitable. Exiting cannot be done in two years. We will waste six months at the start after March and we will need six months at the other end to finish off the European Parliament, so as I say, it cannot be done in two years. The change will have to be agreed and paid for with transitional arrangements so as not to damage the 27 or the United Kingdom. Calamity for the UK will result unless this is agreed and therefore there comes a time when the outline for the future is clear or clearer for the UK outside the EU. We will then have two marked routes that were not available on 23 June.
How can anyone claim that the final decision was made in a 15-hour slot on 23 June 2016? That was the start decision and no mandates flowed from it. It is perfectly reasonable, responsible and indeed democratic to consider how, at some time in the future, the final decision should be made. Another referendum could well be needed and justified, so it must include the future of the UK by including 16 and 17 year-olds in the decision. Yes, I was a remainer in 2016 but I was a non-joiner in 1975. I am a Delors convert from the 1980s and I am also a free man. I am not a prisoner of the Brexiteers, the Government or the Opposition, and I will not vote to invoke Article 50 unless the points I have made are accepted.
Lord Shipley (LD)
My Lords, I agree with the noble Lord, Lord Rooker, in a number of respects. This referendum was a decision to leave the EU but it was not a decision to leave the single market or the customs union. I accept that many people who voted to leave wanted it to be but, as a substantial number of subsequent polls have shown, the thinking is in terms of a future relationship that gives access to the single market outside full EU membership. Membership of the single market is essential for investment, jobs and future growth, as the noble Lord, Lord Liddle, explained so fully.
It is now more than five months since the referendum and there is still no clarity on the Government’s strategy. Instead we seem to have a confusion of strategy with objectives. The Government have said on several occasions that they want the “best possible deal” with the EU. However, that is an objective, not a strategy. I am beginning to wonder whether the Government have a strategy at all because different Ministers say different things. The Government have a duty to tell Parliament what they want our relationship with the EU to be and for Parliament then to examine that proposed relationship. It cannot be kept secret. It would be far better to have a Green Paper with options to consider before Article 50 is triggered, and perhaps it is still not too late.
Nevertheless, we need first to secure an outcome that enables us to stay in the single market and the customs union and avoids non-tariff barriers. Secondly, we need an agreement that continues inward investment into the UK from those seeking access in turn to the EU. Thirdly, we need to acknowledge that immigration is important to drive enterprise, growth and productivity while at the same time committing more resources to the training of UK employees, along with an EU-wide review of migration policy, as the noble Lord, Lord Liddle, has just suggested. Fourthly, we need to enable UK citizens to live, work and learn securely elsewhere in the EU, with similar rights for EU citizens. Finally, we have to maintain the integrity of the United Kingdom. If there is a final decision to leave, it should be with a transitional period of, at the very least, two years to permit some negotiation of individual trade agreements.
I have never understood why the Government chose March 2017 to trigger Article 50. Currently, EU leaders seem to be aiming at a hard Brexit, but it is just possible that that position could change once the French and German elections have been held and the policy of those countries has become clearer. We need to maintain flexibility, but the timing is now not on our side. We should remember that this is not just a trade issue. There is a huge number of issues relating to EU law, justice, agriculture, fisheries, defence, home affairs and the environment among many. Two years’ negotiation will not be enough.
It is vital that we do not end up out of the EU on World Trade Organization rules. The World Trade Organization will require detail of our tariffs and quotas. That process could take several years. Outside the customs union, business and our wealth creators would be bogged down in red tape, coping with the rules of origin and non-tariff barriers. We do not want that.
I have concluded that whenever the Government conclude their negotiations they should give the British people the right to decide in a referendum whether they wish to leave the EU on the terms negotiated. Parliament must have a role during those negotiations, but the British people must be empowered to make the final decision.
Lord Green of Deddington (CB)
My Lords, I declare a non-financial interest as chairman of Migration Watch. This is a massive topic, but I will stick to that part of it I know about. It is quite clear that immigration was a major factor in the outcome of the referendum. Some would say it was the major factor, but it is clear that a satisfactory outcome on immigration is essential if we are to have a good future relationship with the European Union. This needs a calm approach. We should try not to attack the motives of people who disagree with this.
What might be an outline? I mentioned to your Lordships yesterday that Migration Watch has recently published a clear and simple proposal. I will set that out, because so much of the debate on immigration is generalities. There are some specific things we can easily achieve, and other things that will be at the heart of the negotiation and intersect with the trade matters that the noble Lord, Lord Liddle, raised.
We believe we should continue to have free movement for all EU citizens, unless they wish to work. That would mean that tourists, students, business visitors and the financially self-sufficient, such as pensioners, would continue to have visa-free access. The same would apply to senior staff transferred between international companies. There would be no need for restrictions on marriage, provided that all this was reciprocal. There is no reason why our fellow members of the EU should not agree to that. The overarching purpose is that we should retain to the maximum possible all the social and historical links we have with Europe, which we greatly value and I am sure they do, too.
The crunch comes to the question of workers. That is what lies behind the problems we have had in the UK. Happily, the facts are rather helpful. If noble Lords look at the numbers, 70% of migrants from the EU—people coming for more than a year—are coming to work or to seek work. Secondly, 80% of those are in low-paid work.
We therefore propose that anyone from the European Union who wants to come here to work should first be required to get a work permit on terms similar to those that now apply to non-EU migrants. There are plenty of things around the edges: do you have a quota—probably not—and do you have the same conditions? We can talk about that. Essentially, we suggest that we let them all come, but if they want to work they will need a work permit. The effect of that would be remarkable. It would reduce net migration from the European Union by something of the order of 100,000 a year. That is a big advance in terms of what the public want to see in our immigration policy.
Of course, there is a lot of detail in this that I will not go into. I look forward to giving evidence to the EU Sub-Committee on Home Affairs next week. For today, I just suggest that we have a guiding principle: namely, that we are leaving the EU but we are not leaving Europe. That is so obvious that one should hardly need to say it. It is surely fundamental to how we approach our continued relationship in terms of the movement of people. By achieving some substantial reduction in the numbers, we will be able to reduce the strain on our society that we have been feeling in recent years. Indeed, today’s immigration figures are a reminder of how much more needs to be done.
The public clearly want this dealt with. It is now for the Government and Parliament to get it done.
The Lord Bishop of Chester
My Lords, the Motion before us is not limited to economic issues, although the debate so far has understandably concentrated on them. I would like to take a slightly broader look at our future relationship with the EU. Of course, the social and economic issues associated with the four freedoms will inevitably take centre stage over the next few years, and it will be an anxious time for many. I hope it will also be a time of opportunity for at least some, perhaps many; we will see. The as-ever excellent Library Note for this debate usefully sets out the options as they might be understood on the economic front. Inasmuch as I have any confidence as to what will emerge after the present cat-and-mouse phase unfolds, I suspect it will be nearer to the Singapore, Turkey or Canada end of the spectrum, as opposed to what is hoped for—perfectly properly and rightly—by the noble Lord, Lord Liddle. We do not know; I claim no divine insight into this. But amid the uncertain labyrinth of discussions and negotiations that will have to take place, I hope that our sights can be raised above the purely economic horizon.
The original concept of “Europe” was never primarily economic or, for that matter, geographical. Geographically, there is not really a continent of Europe; it is simply a peninsula at one end of the great Asian landmass. We speak of Europe because a great civilisation developed there, shaped by Christianity and other forces ancient and modern—a civilisation that gave birth to modern science, in any serious sense of that word. While the original founders of the EU in the immediate post-war years had a certain economic view, they were also concerned to lay down foundations to avoid future conflict and were influenced by Catholic social teaching at the time. More recently, a more secular spirit has been to the fore that has left Europe rather ill equipped to deal with the new religious presence in its midst, and the growing presence of Islam in particular.
My plea is simply that, alongside the inevitable concentration on what promises to be a difficult economic negotiation and transition, we should especially promote the continuation and deepening of the educational, artistic, scientific and—yes—religious ties that over the decades and centuries have made European civilisation what it is today. Whatever we mean by “soft Brexit”, that would precisely promote a soft Brexit beyond the mere economic understanding of the term. The riches of our cultural destiny will continue to be European, whatever our precise future economic relationship with the EU proves to be.
Lord Blencathra (Con)
My Lords, it is a pleasure to follow the right reverend Prelate and I look forward tomorrow, in the debate led by the most reverend Primate, to discuss in more detail the cultural aspects of our European heritage. I will stick to the economic arguments today. The options for the UK’s future relationship with the EU are straightforward. As an independent country in Europe, the fifth largest economy in the world and the second largest contributor to NATO, we will be indispensable to European security and prosperity, as Mark Carney pointed out yesterday. We are a powerful country and getting more powerful as the discredited EU empire stagnates and begins to crumble.
This week the OECD, which has consistently got every forecast wrong, now agrees with the Bank of England, the Office for Budget Responsibility and the IMF, which also has an appalling track record of forecasting, that we will be the fastest-growing economy in the western world this year. So why do some embittered remoaners suggest that we do not have a strong hand to play against EU countries whose economies are suffering? I think their objective is clear—they want to stay in the EU and ignore the referendum result. They have largely given up on the ploy of a second referendum, except for some noble Lords, and will now try to make the case that the single market is essential to our future and that the people did not vote to leave the single market, just the EU. It is not so. People voted to take back control of our money, our borders and our laws and staying in the single market completely thwarts those aims. If we stay in the single market, the ECJ decides our law, we will have to pay in to the budget and accept freedom of movement. That is not taking back control.
Since the referendum, we have had nothing but good economic news. Countless businesses have voiced confidence in a UK free of the dead hand of Brussels. Nissan and Aston Martin have announced massive new investment. Jaguar Land Rover has just announced that it wants to double UK car production and make the UK the centre for electric vehicle technology. I hope that the Government will find the £400 million infrastructure investment needed for the Midlands to make that happen. Facebook, Apple and Google are expanding their UK operations. Massive new office blocks are going ahead in the City. Employment is at a record high, retail sales have rocketed and exports are surging, thanks to a lower pound. The pound needs to fall a bit more, in my opinion, if we are to boost our manufacturing industry.
Therefore, as a pre-eminent economic power in Europe we need not fear the end deal. We are in a position of strength. I hope that our opening bid to the EU will be, “We will not put tariffs on you if you do not put tariffs on us or try to freeze out the City of London”. We want a free-trade deal between us and the EU. If they do not accept that view then we should move quickly to World Trade Organization rules, since that is the only alternative. As my right honourable friend Peter Lilley said at the weekend,
“it is better to end uncertainty by reaching a second-best outcome speedily than haggle endlessly over a better deal that may never materialise”.
So we either have tariff-free trade or WTO rules—rules which benefit us.
The EU exports about £80 billion more to us than we do to them. Yes, that includes German cars, French cheese and Italian Prosecco, as Boris pointed out recently, perhaps not in the most diplomatic way. If they impose tariffs on us then we can reciprocate and we will make a huge profit out of it, but we do not need to go down that route. Of course, the EU is desperate to save this failed project at empire building. It has to keep the political project together even if that means accepting huge economic losses to make a political point. However, it could be a very different EU we face in 12 months’ time, and it may be one which is in no position to punish the United Kingdom.
We are a great country and we should have confidence in our ability to go from strength to strength, working economically and militarily with all our friends in the whole world who share our value systems, our culture and our belief in freedom. That is what the British people voted for, and the Government must deliver full and fair Brexit.
I conclude with this point. I am a passionate defender of this House and the role we perform. However, the Daily Mail, which may not be favoured reading among noble Lords, put it in its own unique way last week:
“If the Lords tries to sabotage such a move, that house of washed-up cronies and dodgy donors will be signing its own death warrant”.
I am one of those, too. The people have spoken and we should know our place.
Baroness Royall of Blaisdon (Lab)
My Lords, I fundamentally disagree with every word that the noble Lord spoke, apart from the fact that we are a great country. I disagree not as an embittered remainer but as someone who cares passionately about the future of my children and my country. My sense is that we still have absolutely no idea of our destination, let alone how to navigate the journey towards Brexit, and it is clear that whatever the result of the negotiations, it is simply not possible to have a better deal with the EU than we have now.
I did not want Brexit but I respect the result of the referendum, which was clearly not a mandate for a hard Brexit. However, like John Major, I feel that we, the 48%, are subject to the tyranny of the majority. I reflect that Mr Farage and Mr Nuttall would not have exercised the same restraint had they lost by the same margin. This is the most profound change for our country since the war and it is imperative that the Government’s plan should be presented transparently and be subject to proper scrutiny. I trust that at the very least the Minister will be able to tell us when we can expect a Green Paper.
The negotiations will be extraordinarily complex and the timescale uncomfortably tight. The EU is not a monolithic block and once Article 50 has been triggered the leaders of the other 27 member states will have to agree a position at various points in the process, from the initial guidelines through to ratification. They will all have their specific views, as well as a common view about the need to retain the integrity of the EU, and throughout this time many will be preoccupied with national elections. The timing is excruciating, all the more so because it is determined by party politics rather than pragmatism.
The actual period of negotiation will be an absolute maximum of 18 months and, if there were no agreement, falling over the cliff edge would be a disaster. In the debate on Article 50 last week, there was general agreement about the need for a transitional bridge, as long as we know the destination, but I am unclear about the Government’s position so I would be grateful for clarification from the Minister. Transition also relates to funding. In August the Chancellor said that British businesses and universities would have certainty over future funding and that the current level of agricultural funding would be guaranteed until 2020. What would happen if there were a lengthy period of transition? What would the funding settlement be then?
There has been speculation over the past few days about whether or not it would be possible for us to remain a member of the EEA and therefore the single market during a transitionary period, which would provide stability, although I am advised by experts that sectoral agreements, mentioned by the noble Lord, Lord Howell, will not work. Like my noble friend Lord Liddle, I believe that to secure our future prosperity we should remain in the single market, full stop, but until all the negotiations are properly concluded it is an absolute necessity and I wonder if this is the Government’s plan.
The negotiations will determine the future of our country and our position in Europe and in the world. Our relationship with other member states is of the utmost importance and to get the best possible outcome, good relationships and good will are imperative, but they are currently in short supply. Everything that leading members of the Government do or say seems to exacerbate the tensions. The views of our partners are hardening, including, sadly, over the status of EU nationals living in the UK and vice versa. No doubt the most fervent Brexiteers will say that this demonstrates how right we were to leave but I believe that this could have been very different if Mrs May, back in July, had made a unilateral gesture in enabling all EU nationals living here before the referendum to remain. This would have set the tone for the whole of the negotiations, rather than seeking to use human beings as cards to be traded. I am glad that my friend Keir Starmer is still urging unilateral action, which would stand us in very good stead in the negotiations.
Our politics, policies and the economy will be dominated by Brexit for years but it is also a critical issue for the whole of the EU and the deal that is ultimately concluded will have a far-reaching effect on defence and security—especially crucial in the light of the US election. These are areas where we bring much to the table and it is necessary for the peace and stability of our continent that close security co-operation with our partners continues, including enhanced intelligence-sharing. What role do the Government envisage for the UK in the EU’s common security and defence policy? It is crucial for the UK but also for the EU that we get these things right. Our fragile world needs a strong EU and confident member states in which democracy is underpinned by liberal values. We must not forget our history.
Lord Ricketts (CB) (Maiden Speech)
My Lords, I am delighted and honoured to join your Lordships’ House. I am grateful for the overgenerous comments made in my direction this morning and not a little daunted to be speaking after such experienced parliamentarians as the noble Baroness, Lady Royall of Blaisdon.
I will start with a word of sincere thanks to the staff of the House for their professionalism and thoughtfulness at every stage, and to my sponsors. I have known the noble Lord, Lord Patten of Barnes, since he was appointed Governor of Hong Kong. In fact, I was the official who met him on the steps of the FCO on his first day. He bounded up to me and said, “Peter, I am not going to wear that hat”—and indeed he did not. The noble Lord, Lord Jay of Ewelme, has had to play the role of sponsor and mentor before, since I succeeded him in the Foreign Office as Permanent Under-Secretary. I am thinking of wearing a label around my neck saying, “If found wandering, please return to Lord Jay, thank you”—like Paddington Bear.
My career in the FCO began in the year after we joined the European Economic Community and it ended in the year that we voted to leave. I have to confess to the House that I am left deeply worried about the longer-term damage that that decision will do to this country. The mood I find in Europe is not one of wanting to punish the UK but of great sadness that a country that has done so much for peace and prosperity on the continent should be turning its back on this project, at a time of such turbulence and danger in the world. The European countries see the European project as still being a great deal better than the alternatives of narrow nationalism on the continent.
I was keen to make my maiden speech in this debate because the noble Lord, Lord Liddle, is absolutely right to put the focus on the key issue: the future relationship of this country with the EU. The Brexit negotiations and the transitional arrangements, which I personally am sure will be necessary, are means to an end. The end will be the future enduring relationship that we have with our neighbours on the continent. In last week’s excellent debate on the EU Select Committee report I heard the noble Lord, Lord Kerr of Kinlochard, quote Article 50, which refers to the need for a future framework for the relationship. I found that an important insight. I am sure that Parliament should be consulted over the terms of our proposition to our other EU partners, to muster as much national support for that as possible—but, along with the noble Lord, Lord Liddle, and other noble Lords I think it is now urgent to begin to assemble the building blocks of what that future relationship will look like.
The most important element is the one where there is still the least clarity—and other noble Lords have already referred to it. It is where we are going to strike the balance in our proposal between the freest possible access for goods and services to the European market and whatever controls on immigration are judged to be necessary. Those shark-infested waters are probably not ones for a maiden speech, but I will make one observation: while you can, in the excellent catering outlets of your Lordships’ House, have your cake and eat it—provided you pay for it—I am not sure that that is a sufficient basis for our policy towards future relations with the European Union.
Without going into the detail of trade, I will take up what other noble Lords have said about the scale of our trade with our EU partners. I will take France, the country I know best, as an example. We export £32 billion-worth of goods and services a year to France. That is twice our total exports to China and five times our total exports to India—and that is to France alone. So, although it is clearly vital to have “new and dynamic trading agreements” with parts of the world beyond the EU, as the Prime Minister put it, surely it is a top priority to ensure that those arrangements apply to our trade with the European Union.
I will touch briefly on four other building blocks of our future relationship, all of which I think have already come up in the debate. First, there is the importance of close co-operation on fighting terrorism and organised crime. As ambassador to France, I was there at the time of the appalling terrorist attacks this time last year and I know from experience the importance of our co-operation on these matters, not least for the security of British citizens in Europe. I know that the intelligence, security and law enforcement communities in Europe respect the professionalism and capacities of our own security and intelligence agencies. It seems vital that we maintain the operational co-operation with our European partners, which means being part of the information exchange networks, and instruments such as the European arrest warrant.
Secondly on foreign policy, my personal judgment is that we will want to continue to co-operate with European neighbours in a whole range of foreign policy areas. I note, for example, that the UK votes more often with France in the UN Security Council than it does with the United States—so I hope we can have a continuing forum for active co-operation on foreign policy, not just a place where we passively align ourselves with EU decisions.
Thirdly, on defence, which is a complex subject that I shall not go into in detail today, I believe that our know-how and the professionalism of our Armed Forces are greatly respected around Europe, as other noble Lords have said. I believe that the European Union does some useful work in its relatively modest missions around the world, civilian and military, and that we ought to have the opportunity to continue to be part of that. It will be positive if the EU finally decides to invest more in defence research and equipment, as recent reports have suggested. I think we can be completely relaxed about the prospect of a European army; it is never going to happen. Nations with serious military forces, such as France, will never agree to put them under supranational European control. The noble Lord, Lord Liddle, posed an interesting question about future European security arrangements, and I am sure that the House will come back to debate them.
Finally, and following the noble Lord, Lord Green of Deddington, there is the position of EU migrants in this country and of British citizens in EU countries. It is clearly vital. There is obviously an ongoing argument about how quickly an agreement can be made, but I do not think that there is opposition to the principle.
Establishing a list like this seems to be a useful part of building a consensus around what our offer should be.
I shall say a brief word in conclusion on bilateral relationships with our European neighbours. Although they cannot replace formal co-operation, as ambassador in Paris, I was constantly struck by the depth and breadth of the web of relationships between our countries. Of course, there is a relationship between the two Governments—defence is an example—but the web goes but far beyond that. There is the sheer movement of people. We counted 12 million British visits a year to France and a similar scale of visits to other European countries. Within that are exchanges: parliamentary, educational at all levels, cultural, artistic and sporting. All areas seem to contribute greatly to the strength of the relationships across the channel, and history is never far behind. During my four years as ambassador in France, we commemorated the 70th anniversary of D-Day, the 100th anniversary of the start of the First World War, the 200th anniversary of Waterloo—that was a tricky one—and the 600th anniversary of Agincourt. So history is always there.
I believe passionately that the future of this country will remain inextricably linked to our neighbours across the channel and will continue to be influenced by what happens there, and I look forward to continuing to contribute to debate in your Lordships’ House on those issues.
Lord Monks (Lab)
My Lords, I think I speak for all noble Lords when I say that the House very much appreciates the benefit of speeches and advice from distinguished former diplomats. The speech of the noble Lord, Lord Ricketts, shows that he will be a worthy addition to the ex-diplomats Bench and to the House more generally. He has, as he hinted, filled most of the top jobs in the FCO. His last three jobs have been Permanent Secretary, National Security Adviser and our man in Paris, making for an enviable and attractive CV and a stellar record of achievement. Originally from the West Midlands, he now sits as Lord Ricketts, of Shortlands, which is in Bromley, for those who do not know. Coincidentally, that is just up the road from where I live, so we are not far off being neighbours. His speech today will have whetted your Lordships’ appetite for more, much more, and his advice will be invaluable as we go into the difficult waters we are debating today: our relationship in future with the European Union.
That is what I turn to now. I want to deal briefly with two things. First, I shall take on some fantasies which are around in the current debates and secondly I shall talk a little about the responsibility of the Government to combat them. First, the cake-and-eat-it approach still seems to be alive, judging by the photograph in the press this week. Of course, it is ridiculous. This is a divorce. We are divorcing the rest of the European Union. I know there can be amicable divorces, but from my experience with friends, acquaintances and family, there are not many, and most have a considerable degree of bitterness. As the noble Lord, Lord Ricketts, said, the sense among the Governments in the rest of the European Union is that we are inflicting damage on a great and noble project which they have invested a tremendous amount of their lives in. That feeling is very powerful, and they are not going to roll over easily and give us the deal we would like. This is a two-way process, and what exactly do we have to offer? What exactly are we saying that we will do for them when we are asking them to do things for us?
That brings me to the next fantasy: that we have a choice between a hard and a soft Brexit, and that somehow it is in our gift which particular route we take. In fact, we are unlikely to obtain a soft Brexit, which I very much regret. Unless we are prepared to succumb to the jurisdiction of the European Court of Justice and to accept free movement of labour, I do not believe that we will get it. The stance of some of the Ministers concerned on this side of the Channel is not conducive to building the kind of sensitive, close relationships that would be needed to get a deal like that. By the way, it will be very difficult to get a transitional deal, too, unless you are clear what you want to transition to and people can see the steps on the way. Unless you have the end destination clear, you are not going to get the transition very clear either.
The other fantasy I want to touch on, which I think has been mentioned by others, is that somehow, if we are out of the European Union, we are free and will trade with the rest of the world. There is nothing in the European Union holding us back from trading with the rest of the world. Belgium does more trade with India than we do, last time I looked. Nobody in Germany is complaining about being held back from being one of the world’s premier exporters. Our problems are self-inflicted, and if our balance of trade is not good, it is down to us to fix it rather than blaming others for it.
My final remark is that as the options of what is open to Britain post-Brexit become apparent, the Prime Minister should keep open the option of changing course. There is a chance that when all the other things have proven too difficult, too expensive and too complicated, we will find that this is not a good thing and that the best deal we can get is membership of the European Union. Perhaps the Minister might comment on whether we will keep that option open as well as the others that are on the table.
Baroness Valentine (CB)
I will limit my remarks today to the impact of our relationship with continental Europe on London’s talent mix. London is possibly the most successful and concentrated service-sector economy in the world, and given that it contributes nearly a third of the nation’s tax take, it is important that it continues to flourish.
There are roughly 1 million mainland Europeans in London, but only 19% of them would have the right to stay under existing visa rules without their EU rights. Two things worry me: first, our moral duty to these people, and secondly, the impossibility of running the economy in the absence of willing and able workers such as these. The official Vote Leave campaign proposed that there should be,
“no change for EU citizens already lawfully resident in the UK. These EU citizens will automatically be granted indefinite leave to remain in the UK”.
Polling from ICM for British Future found that 84% of the British public supports letting EU migrants stay, including three-quarters of leave voters.
I am concerned about the impact on the economy of removing European workers both now and post-Brexit. In some of London’s high-growth small businesses, particularly in technology, often one-third to one-half of staff come from all over Europe. Research from Oxford University’s Migration Observatory found that around two-thirds of European workers in the financial and professional services sector across the UK would not have the right to stay under existing visa rules.
My contention is that not only do we need to continue to welcome the global talent, including students, that supports London’s position as the most highly skilled city in the world, we also need for the foreseeable future to attract those with medium-level skills in cyclical industries such as construction, and in sectors where the majority of the labour force is currently foreign-born. Today we do not have enough people to build the houses we need, even with European workers. Furthermore, London attracts more international visitors than any other city, and global tourism is growing. However, EU citizens make up half the labour force.
In the long term, there is no doubt that we can train more locals—for example, now that we have the somewhat overdue but welcome decision on airport capacity, the noble Lord, Lord Blunkett, is leading a taskforce to develop talent from all around the country, and HS2 has its training college at Doncaster—but none of this can happen overnight. Business needs time to plan, invest and resolve challenges, and the education system needs to do better at providing people with the right skills. In the meantime we need transitional arrangements with Europe that recognise that there will be a continuing need for overseas workers with a range of skills while we seek to train sufficient willing and able people to meet our economic needs, and we urgently need to clarify the status of those continental Europeans already here.
Lord Livermore (Lab)
My Lords, I congratulate my noble friend Lord Liddle on his excellent opening speech. I agreed with every word. I also join others in congratulating the noble Lord, Lord Ricketts, on his maiden speech.
I believe that Britain’s membership of the European Union is firmly in our national interest, extending both our power and our prosperity. So while I respect the verdict that was delivered by the British people in the referendum, I genuinely fear that leaving will have disastrous consequences for both our economy and our international standing. Last week’s Autumn Statement gave us the first glimpse of the scale of the economic impact when the Chancellor unveiled an economy that as a direct result of Brexit is worse off in every respect: growth and productivity will be lower, borrowing and inflation will be higher, wages will stagnate and living standards will fall.
It is therefore vital that in the forthcoming negotiations we achieve an outcome that minimises any further harm to growth, jobs, or living standards. As my noble friend said, this surely means that the Government should make a firm commitment to remaining a member of the single market. Ensuring that businesses are able to trade on the same terms as they do now has consistently been shown to be the least damaging future arrangement, offering the greatest opportunities for future growth. Yet the Government are signalling instead that they favour an extreme hard Brexit, taking us out of the single market and the customs union, apparently regardless of the economic cost.
For Britain to achieve an outcome that minimises the harm to our economy and puts growth, jobs and living standards first would require a marked change in the Government’s position, but it would also require a marked change in the nature of the debate in this country. It requires a far greater level of honesty about what it is possible to achieve in the negotiations and about the trade-offs that will be involved. The debate we are currently having in this country is instead a harmful mixture of dishonesty and delusion. Some senior Ministers, maintaining a pattern established in the referendum campaign, continue to pretend that they see no possible downside to Brexit and that the entire economics profession is mistaken. In reality they are ideologically committed to a hard Brexit and would be very happy to sacrifice the living standards of working people to achieve that goal.
Other members of the Government seem to have adopted a more sincere delusion about what the outcome of the negotiations will bring. Holed up in Whitehall, prevented from meaningful engagement with their EU counterparts until Article 50 is triggered, they have convinced themselves that a terrific new deal will be on offer, giving Britain all the things we like about the single market while we give up virtually nothing in return. I am sorry to say that all too often leading members of my own party seem willing to collude in this fantasy, complicit in creating the fiction that our economy can be protected within the single market while at the same time confident that we can achieve some as yet unspecified reforms to freedom of movement.
This is an extremely dangerous fiction to collude in, and at some point in the next two years, this collective denial will collide with reality. As every European leader has made clear, this is not a deal that will ever be on offer. There will be no UK membership of the single market without retaining freedom of movement, so as a nation we will at some point have to confront a stark choice: do we end freedom of movement, or do we stay in the single market?
If the promises made on immigration turn out to be undeliverable, the backlash will be catastrophic for our democracy. Yet how could a democratic Government knowingly and deliberately pursue a policy of leaving the single market that would cause such economic self-harm to our nation? Unfortunately, it is a choice for which the British public have in no way been prepared. Although the referendum was decided by a narrow margin, the Government have sought to govern only for the 52%.
As other noble Lords have said, leaving the single market was not on the ballot paper on 23 June, and those who voted to leave the European Union will have undoubtedly included both opponents and supporters of the single market. Yet the Government have made no attempt to create a national consensus, or to discuss the difficult choices and inevitable compromises we face. When we eventually have to face up to reality, the only way to avoid a political crisis will be with a political solution. Decisions of this magnitude cannot be taken by the Government or even Parliament alone; they require far greater democratic legitimacy. As the details of the choice become clear, the British people must be involved again in helping to make this vital decision.
The Earl of Caithness (Con)
My Lords, I was fortunate, when a Minister in the Home Office, to benefit from the clear thought and wise words of the noble Lord, Lord Ricketts, who was my right-hand man for much of my work. Today, your Lordships have benefited from those same clear thoughts and wise words. I was delighted to hear from the noble Lord—he is not my noble friend, but he is my friend—and we welcome him here.
Much has been said about the involvement of Parliament in the whole of this process. This is the 15th debate on the EU since we had the referendum result. It rather reminds me of the Maastricht treaty debates. This country spent three times as long debating Maastricht as any other country in the EU. I hope that we will allow our Ministers to get on with their jobs at their desks and get us the best deal, rather than constantly bringing them to Parliament.
The four freedoms of Europe have been mentioned. Of course it is right that our friends in Europe have been promoting the idea of freedom of movement as being absolutely sacrosanct, but I hope my noble friend will remind them that they did not think that the free movement of capital and services were equally sacrosanct, as my noble friend Lord Howell said. They dragged their feet and prevaricated, however much we tried to push them. It has been a long and painful process to bring the EU forward on that front.
I am an inherent free trader. Some have said that when we leave the EU, we will be the beacon of free trade for the world. I am not so sure about that. Bilateral trade does not equal free trade. I would like it to, but it does not. Let us look at what is happening in the USA. President Obama is a protectionist. He raised tariffs with China. Mr Trump is going to take that further. Some in the press today say that that will be good because we can do a bilateral deal with the USA more quickly. The USA is protectionist and, as the noble Baroness, Lady Royall, said, we will never get a better deal with the EU than the one we have at the moment. That is a sadness for those of us who believe in free trade. We will all be the poorer for future President Trump ripping up the TPP. It affects us as well: without free trade we will be poorer throughout the world.
I echo what the noble Baroness, Lady Valentine, said about the importance of London. It is incumbent on us all to stress to our European friends that London is the financial centre of Europe—not just the EU, but the whole of Europe. Indeed, in some respects—look at the London Metal Exchange—it is the financial centre of the world. It is hugely important that that continues for the trade of metals throughout the world.
I ask my noble friend the same question that I have asked before. Is she confident that we have the right quality of negotiators? We have not negotiated a free trade deal for more than 40 years. What is she doing to bring in expertise from the private sector and, indeed, perhaps to use the experience of the noble Lord, Lord Ricketts? It would be helpful to know.
I would like to question just one point made by the noble Lord, Lord Liddle, in his Motion. He refers to the EU; I am not certain that we can look at the EU as a single entity anymore. I can see quite massive changes in the EU. Let us just take the example of Ireland—we are going to have a different relationship with Ireland than with the rest of the EU.
So my closing words to my noble friend are: let us be innovative and let us be flexible. I hope that the Government will take that approach, because that is what will get us the best deal with all the other countries.
Baroness Crawley (Lab)
My Lords, it is indeed a delight to hear from the noble Lord, Lord Ricketts. He is most welcome to your Lordships’ House. While thanking my noble friend Lord Liddle for the opportunity that he has given the House today, I am tempted to respond to the Motion by simply saying that the best option for the UK’s future relationship with the EU is to revisit the whole decision, either through a second referendum or as a manifesto pledge at the next general election.
When the leave campaign beckoned a small majority of the British people to vote with them in the referendum, they were effectively organising Royal Assent for the law of unintended consequences. For instance, only this week, it was revealed that leaving the EU means leaving Euratom, the body that regulates the nuclear industry and the safe disposal of nuclear waste across the continent. This might not seem a big story in itself, until one wonders—as the Financial Times did this week—what is to happen to the 3,000 cubic metres of radioactive waste to be left in the European Torus project in Oxfordshire? I declare an interest: I live near there. I must admit that I had not realised that there was going to be a problem with nuclear waste if we left the European Union. Euratom is a perfect example of how Europe shares risks, skills and costs and it is now yet another asset to be thrown on to the Article 50 bonfire.
Brexit is indeed becoming a learning curve—a curve of the vertical take-off variety. Every day brings a new Brexit-based challenge to our national interest that simply was not foreseen. I can understand why the Prime Minister is having sleepless nights about Brexit right now. The trouble is, British businesses and British workers will be having sleepless nights about Brexit for the next decade, in all probability. To carry on from my noble friend Lord Liddle, the only person who will never have sleepless nights is President Putin. For him, the possibilities are Shakespearean: “Brexit, pursued by a bear”, a Russian bear.
The complexity mounts. From this side of the House we can see the astonishing sight of our British Government having their policy on the verge of being completely paralysed by a Brexit process that no one can fully understand, no one can perfectly define and no one can realistically manage. Even some leading leave voices must now at least privately acknowledge that they never understood just how many concentric circles of complexity would ripple out from a national decision to leave the European Union, but too many of those voices are what I will call Brexit Bennites—noble friends on our Benches will know what I am talking about. They are acting as if cancelling our membership of the EU is simply a matter of political will. There is no point in anyone any longer saying that “Brexit is Brexit”. It is not and never has been as simple as that.
There is no such thing as a clean Brexit break. There are always going to be unexpected items in the Brexit bagging area. Transition is essential. The Labour Party is quite rightly resisting the hard and fast Brexit and has called for full, tariff-free access to the single market. The democrat in all of us will, of course, say that the referendum result must stand. But I, for one, do not know what that really means anymore. The events of the last six months have shown that there are as many forms of Brexit as there are shades of grey.
Let me be clear: I believe that all parties, including my own, must keep the option on the table of the British people changing their mind and thinking again about the decision of 23 June. It may be an unpalatable call but I believe that it is emphatically where we are.
Lord Maclennan of Rogart (LD)
My Lords, I welcome this debate initiated by the noble Lord, Lord Liddle, who spoke for many in this Chamber when he talked of his respect for the European Union’s contribution to peace. We have had 70 years of peace in western Europe and I believe that the European Economic Community very much contributed to that.
I congratulate the noble Lord, Lord Ricketts, on his forceful maiden speech, in which he made powerful points in respect of security, foreign policy and defence. We must remain in a relationship with our European neighbours. We must feel that we can get together with the 27 other countries to formulate policies in these areas.
The debate has focused to some extent on the single market in recognition of the fact that nearly half our exports go to the European Union, and a substantial amount of goods comes from the EU. The free trade negotiations will be a strong part of the Government’s policy, but unfortunately we have had no indication from them of their objectives. They speak in general terms. I support the concept of a Green Paper spelled out by the noble Baroness, Lady Royall. Setting out the Government’s objectives in a Green Paper would not undermine the negotiating procedures. If Parliament is to play a significant part in this, as the High Court has suggested—and we will hear from the Supreme Court fairly soon—it must be given information on what the objectives are.
The consequences for European security initiatives are significant. Europol, the European arrest warrant and Prüm are very valuable in our battle against invasions of our security, and particularly against terrorism. We must recognise that terrorism is a plain fact with which we have to deal at this time. ISIS is not the only object of this.
The European Union has made a considerable contribution to our research. Nuclear fusion might be a casualty if we do not get significant funds from the European Union towards this research. The process of transition over several years ought to be spelled out. I think that we can adapt our objectives over that period.
Lord Judd (Lab)
My Lords, I thank my noble friend Lord Liddle for giving us the opportunity to have this debate. I thank him most warmly for the passionate conviction and hard-headed analysis with which he introduced it.
I think that all of us, if we are honest, know that one of the problems with the referendum was that it was not about the European Union but about a lot of alienated and disenchanted people who are bewildered and frightened by the challenges of globalisation and do not see how they fit into the pattern. We shall have to go on working very hard indeed at tackling that perception in this country because we failed as a political community to bring home the reality that we are inescapably locked into an international community in terms of climate change, terrorism, crime, trade and culture. Those issues are all interdependent across the world. History will judge us by our success in mastering the governance of those realities. But at the same time people feel personally less and less significant and they feel left out. If we are really to learn lessons from the predicament we are in, the challenge we all face is how we enable people to rediscover a sense of identity and significance within our society, and lead them in that context to an understanding of the realities of an international community. For example, we will not be able to solve the problems of climate change on our own. We shall, of course, have to continue to co-operate with the Germans, the French and the Americans—that is absolutely clear. The same goes for terrorism and international crime. As has been well argued, the same also goes for the economy.
There is one other issue which I want to discuss briefly in the time available. At the time of the Maastricht treaty something very significant happened for people living in the European Union—they acquired European citizenship. Going back to my school days, when I studied ancient Rome, I learned that citizenship is a very serious concept. People will in effect be stripped of their citizenship and will wake up to the implications of that only when it has happened. That is why, in my view, it is important to insist that we reach an understanding with others in the European Union on citizenship, and all that flows from that, before we activate Article 50, because after we activate that article this will be just another issue for negotiation. However, it is not just another issue. Thousands of British people across Europe and thousands of people in this country have in good faith built a future for their families and their relatives, their home and their work—everything—on the understanding that they were European citizens who had the rights of European citizenship. That is no small matter—we are taking all that away. We ought to be absolutely clear, before Article 50 is activated, how we will replace what has been taken from the people.
Lord Craig of Radley (CB)
My Lords, one issue, little debated, is a presumption in discussions about Brexit that the EU is a known, unchanging quantity—an edifice of predictable structure. Is that so? Preparing for promotion exams way back in the 1950s, I was taught to view world affairs through three windows, labelled military, economic and political. Let us glance at the EU thus.
On the military aspect, will the 27 go forward with their European army? That has not found favour with any Administration in this country but it has been discussed, and championed, again recently in Brussels. How might that impact on NATO, our security and our military relations with the EU countries?
Economically—my second window—attractive as the European currency is, there are enormous difficulties with the concept of one size fits all; for example, in Greece. The underlying problems are unresolved and a fix for the resulting strains is a known unknown. Will it impact before Article 50 negotiations end?
On migration, there is less press coverage this year than last, but it—and the root causes of the crisis—are unresolved. Turkey may renege on its undertaking to take back illegal immigrants. Alongside that, high numbers of unemployed youth—for example, in Italy and Spain—also makes for potential unrest. The EU of today will not be the same economically in two or five years’ time.
My third window—political—is the most important. At one extreme is the “ever closer union” mantra; will it make progress in the immediate future? More immediate are the possible changes in the faces of the 27 at future EU summits. The known is that national elections in EU countries will bring new faces and maybe changes to the collective view of the 27. An unknown: might it not be 27 any longer if another country were to follow the UK into the “out” lobby?
Therefore is the EU of 27 as solid or predictable as is assumed? All empires throughout history rise, then fall. The European “empire” will one day have to tread a similar path—maybe, but probably not yet. To borrow Zhou Enlai’s comment, speaking of events that took place two centuries previously, “It is too early to say”. But will tomorrow’s historians be idle for all of two centuries before writing the definitive tale of the European project? I, for one, doubt it. I hope that my glances through these three windows will not mean I totally fluff my EU exam paper. Whatever happens on continental Europe needs greater debate and consideration.
Lord Selsdon (Con)
My Lords, when I first joined your Lordships’ House, I think 50 years ago, I was grabbed by the Leader of the House, Lord Jellicoe, who said, “My dear chap, there’s going to be a lot of development in Europe and this European lark is going to take a long time to come about. We’d like you to think—would you be willing to serve on the Council of Europe?”. I had a full-time job and I was not highly paid. I assumed that if I went and did this, my pay would be deducted. But then I found myself on the Council of Europe, and everyone was rather kind to me. Shortly after that, Lord Shackleton came up to me and said, “I wonder if you’d join the EETC?”—he was chairman of the East European Trade Council. I said yes, and before long I found that I had been absorbed by other people far more intelligent than me, and that my job was that of a pen-pusher. When we had the original referendum, I was secretary and treasurer of the Conservative Group for Europe, and we introduced the slogan: “Britain in Europe: it’s our business to be there”. We were thinking about trade—exports and imports. Now, suddenly, we find that from a relatively weak economy, we are in a rather strong position globally and able to trade globally. I wonder where we go next.
In simple ways I suffer a bit because, legally, I am a French peasant farmer. I have a vineyard in Provence, where I produce rosé, although the grapes are generally eaten by foreign wild boar—I have a permit to shoot the wild boar but no gun with which to do so—so, with all the local ingredients, I suffer from that. However, I also produce olives. Wild boar will eat the olives when they drop off the trees but have not yet worked out that if they shake the trees hard enough, they will fall down. There is always an element of history in these relationships. In the second century BC the first wines from Provence were shipped to the United Kingdom. They went to Hengistbury Head—I am not quite sure how to spell it—which leads to Stonehenge. You therefore realise that in trade matters there are historic relationships between countries. At the moment we have a good relationship with France—we heard an excellent contribution from my noble friend. We have to decide what we do next, and with whom.
In the whole concept of Europe we obviously have to look at economies, which are in general more privatised than they were before, and at defence. We look here, too, to France, with its ownership of Airbus and the relationships it has. I have a love of the sea, having served in the Navy in the Mediterranean; afterwards I followed in a private boat the travels of St Paul. I nearly drowned everybody, but it must have been the same for him in those early days. That taught me about the business of immigration. I had not realised how many migrants there were—I am going back 10 years or more—moving from one country to the other. I made a point about taking people into slavery. One day a pirate decided that for the slave market in the Mediterranean islands they could do with some white slaves instead of black ones, and then raided one of the churches in Penzance or around there and took away the entire population of the church, which was then pushed into slavery in the Mediterranean. All these are little stories you get told and do not necessarily believe.
We have a close relationship with France, and they are becoming less French and more willing to co-operate internationally. Here, I look at this debate and think: it has come at the right time, but what do we do next? Trade is the key issue, but what do we trade in? When I was secretary of the Conservative Group for Europe we had that phrase, “Britain in Europe: it’s our business to be there”—it was meant to be about business. But we trade successfully with most of the countries of the EU and with France in particular. When you look at the co-operation with Airbus, we have some friends and partners. I cannot work out what we do next, but we need to enter into new treaties or alliances with as many people as we possibly can, and we should not try to plough a lonely furrow. When you have the wild boar about, lonely furrows do not work.
Lord Berkeley (Lab)
My Lords, I congratulate my noble friend Lord Liddle on this debate, because it provides opportunities for yet another time when we can discuss the future, or not, of Brexit. I spend a lot of time on the continent talking about railways and transport, particularly in Brussels, and I share the view expressed by my noble friend Lord Monks and the noble Lord, Lord Ricketts—whom I certainly welcome to this House—that they are sad that we are leaving. However, it is not a question of how we leave; it is either hard Brexit or no Brexit. The approach that some of our Ministers and other commentators seem to be taking, which I term arrogant, will not make the negotiations any easier at all. We will not be able to pick and choose what we can have. We have had many discussions today and in previous debates about picking and choosing, and we will probably go on doing that for a long time. We really need to focus on what we want to get out of it.
We read reports daily in the press of UK business and industry sectors expressing concerns and alarm about job losses or economic problems if we have a hard Brexit. To name but a few, they include research, agriculture, the building industry, finance and transport. I suppose one could add to the list regional aid. It is not an industry but it dramatically helps jobs and so on.
I have looked at transport in a certain amount of detail. There could be problems in the air sector over agreements with the EU on designated routes. Will we continue to be part of the EU open skies policies? There could also be problems regarding ownership of some of the airlines. Would UK carriers be excluded from certain routes? Then there are the possible problems concerning extra customs formalities. Some noble Lords may remember the pictures of queues of trucks trying to cross the Iron Curtain. That could happen again.
There is also the issue of Calais. The camp of the potential immigrants has been removed, so the situation at the moment is much better, but if the French Government got a bit angry with us—although not as the noble Lord, Lord Selsdon, suggested—there is no reason why they should not say, “If you’re leaving the EU, you can sort out your own immigration problem. And not only will we not allow the British immigration people to work in Calais any more but we’ll send anybody with a problem across to the UK, where they can claim asylum and it’ll be your problem”. I know that the treaty is not part of the European Union agreements but that could still happen. So my worry is that there will be a risk of a lack of compliance without any ability to make representations and participate if we want to stay in the single market.
I am sure that there is a solution to sorting out the immigration problem—if it is a problem—and it worries me that the Government have already decided what they are going to do. Yesterday, the noble Baroness, Lady Williams of Trafford, said in answer to the first Oral Question:
“The Government have been clear that as we conduct our negotiations it must be a priority to regain more control of the numbers of people who come here from Europe”.—[Official Report, 30/11/16; col. 195.]
We are still in Europe—we have been in Europe for 40 years—and if she is assuming that we have already left, that is probably why we are getting into the trouble we are in.
I suspect that over the next few months, when all the job losses have been added up, people will appreciate the threats much more. If there were another referendum, we would probably have at least 52% in favour of staying in rather than 52%—a very small majority—in favour of trying to get out. As other noble Lords have said, the referendum was advisory. I hope that the Government accept that the will of Parliament has to be tested and that Members of Parliament, having taken the views of their constituents, will be able to vote, as will we in this House, on whether they like the terms of the negotiations and, if necessary, reject them.
Lord Dykes (CB)
My Lords, I warmly thank the noble Lord, Lord Liddle, for initiating this debate and for his words. As a previous speaker said, the passion as well as the contents of his remarks make his speech worth reading again in Hansard. It set out all the awful implications: not just “A Nightmare on Elm Street”, or on all the Elm Streets in the United Kingdom, but “Nightmare in Downing Street”, “Nightmare in the whole of Whitehall”, “Nightmare around Parliament Square” and all over London, in particular, when this escapade and nonsense gradually unfold. Without being complacent, I like to think that the number of speakers in this debate alone who have argued for and endorsed our continuing membership of the EU reflects—I am optimistic about this—what British public opinion will be in about 18 months’ time when all these nightmare implications are considered.
I also thank my noble friend Lord Ricketts and congratulate him on his outstanding maiden speech. With his distinguished Foreign Office background, we thank him for all he has done for this country. When I was an MP, I became rather unpopular among some colleagues because I defended the Foreign Office in the House of Commons, which is always a tricky thing to do. One reason was that, as the Foreign Office became more successful, it was disliked more and more by Mrs Thatcher. I remember that vividly and, to my mind, it was an important test of what view one ought to take about our most excellent foreign service.
Timothy Garton Ash, a very distinguished historical journalist and historian who worked in Oxford and other places and travelled extensively, said on Friday, 25 November in the press:
“These days, I never travel without my Brexitometer. It measures two things: the time elapsing from the opening of any conversation”,
with anybody,
“to the first mention of Brexit”—
the average so far has been three minutes—
“and the proportion of all those I encounter who think Brexit is a good idea. Over the past two months, I’ve been in America”,
and about half a dozen other important countries,
“and the second metric is currently running at about 1%”—
that is, 1% in favour of Brexit. He continues:
“The other 99% think that we Brits have gone stark staring bonkers”.
He goes on to say that maybe he was just mixing with the wrong kind of people—the international elite, who naturally like the European Union—but, no, he was talking about a wide cross-section of people.
I commend my noble friend Lord Kerr of Kinlochard as a sober witness to this continuing and unfolding ghastly nightmare, and reiterate his words in the debate on 22 November. He referred to the way in which the Government are busily and clumsily alienating our friends in Europe before the negotiations even begin. My noble friend is not known for his histrionic utterances—far from it—and that is why we respect him so much. He said that,
“the sense that the Government are talking only to themselves, making policy in an echo chamber, the gratuitous insults from the Foreign Secretary, the random pronouncements of various Ministers, usually immediately followed by a slap down from No. 10, leave our friends … in Brussels close to despairing. They fear that there is no plan, and that when one emerges it may be rather unrealistic. They see a growing risk that the Article 50 negotiation will fail, and we will go over the cliff edge into legal chaos”.—[Official Report, 22/11/16; col. 1864.]
This immense damage to this country has been unleashed by former Prime Minister David Cameron. It is far more reckless than anything done in Suez by Anthony Eden and far more dangerous than other hysterical acts of previous Prime Ministers over the long history of unfolding British democracy. When we see David Cameron, we have to ask him again why he tore this country apart so recklessly in favour of keeping his party in order. However, it can be resisted. If, with or without the support of the Supreme Court, this matter eventually goes back to Parliament—mainly to the House of Commons—as it should, then MPs must really face up to resisting the right-wing firestorm that has been unleashed by this nonsensical decision. I quote from an article in the Guardian on 29 November. It says that,
“we can’t go on like this. If the courts give MPs the right to vote to stay in the EEA and the single market, they will need nerves of iron, reserves of courage and every possible verbal weapon to confront the right’s angry entitlement, its brutish selfishness, its mean-spirited nativism. It won’t be easy; some won’t have the stomach for it. But they surely have a duty to stand up for the only kind of Brexit that might save us from ruin”.
Lord Desai (Lab)
My Lords, this is about the fourth time I have spoken on the result of the referendum and I shall say the same as I did in the first debate: I voted to remain but out means out. I do not think that we do any good by demeaning those who voted for Brexit or describing them as—to use Hillary Clinton’s word—“deplorables”. In England, 28 million people voted out of 34 million, and the margin for Brexit was seven percentage points—53 to 46. The difference in England of two million votes was also the national difference. In all the devolved regions, three million voted for and three million voted against. So this is very much an angry English decision—and we should listen to it carefully.
My noble friend Lord Monks described it as a divorce, and so did I. The point of a divorce is to get it over with quickly. Then, you want to cohabit, but you cannot begin the discussion on cohabitation until after the divorce. We have walked out of the house; now we have to proceed with the divorce. If we are going to go through with this divorce, it is neither a hard nor soft Brexit but a quick Brexit that is of the essence. Once you get a quick Brexit, then you can have a smart framework agreement for cohabitation. Much more time should be spent on discussing cohabitation than on either delaying the invocation of Article 50 or making it very complicated.
I know that I am in a minority on this side of the House in that respect, but I sincerely think that, to end the uncertainty, we have to have a quick Brexit. It is no good hoping that, somehow, the world is going to change, the British people are going to change, France is going to break down and Germany is going to go up in flames—none of that is going to happen. The 27 other member states are not going to treat us nicely, whether we insult then or not. They have their own interests to protect. We have walked out and so we have to take the consequences.
The important question now is: what role does Parliament play in this, whatever decision the Supreme Court makes? It would be good to have a discussion in Parliament like the ones we have been having more or less continuously since June before Article 50 is invoked—a much more extensive discussion, along the lines of the one we are having today, with different views. However, as I have proposed before, once Article 50 is invoked we should have only a Select Committee of both Houses of Parliament to get detailed information from the Government on a Privy Council basis so there can be interaction between Parliament and the Executive. Finally, when the decision has been made, Parliament can come back into the decision-making process and vote either to approve or not approve the package that has been agreed. If Parliament does not approve it, I do not know where we go from there—but that is the way we should conduct our business.
As I have said, there should be much more interest in what happens after the Brexit negotiations. Everybody else deals with WTO. We can do that as well—it is not a miracle and we should not be frightened of it. That is what others do, so we will do it as well. We have to be prepared for that and not wait for some miracle reversal of our decision.
Baroness McIntosh of Pickering (Con)
My Lords, I am the product of a particular European union, as the daughter of a Scottish father and a Danish mother who met in Hamburg and married in 1948. My mother recalled vividly how she lived in Copenhagen under German occupation, so I have long taken a close personal interest in the European Union—but this is the first occasion on which I have spoken in this place on the subject.
I have always considered Europe to be a continent of opportunities: to study, to trade, to work, to set up business or a profession, and to export. However, as a democrat and a patriot, I accept the result of the referendum. As one chapter ends and another begins, what might the next chapter look like? As recently as yesterday, during Prime Minister’s Questions, Theresa May in the other place said,
“specifically about the single market and trading with the European Union … we are ambitious in getting the best possible deal for trading with and operating within the single European market”.—[Official Report, Commons, 30/11/16; col. 1511.]
So I congratulate the noble Lord, Lord Liddle, on calling this debate at this time. I also congratulate the noble Lord, Lord Ricketts, for making the first of what I am sure will be many excellent contributions to this House.
I would like to rehearse some of the pitfalls that lie before us on this rocky path ahead. The options appear to be remaining in the single market, remaining part of the customs union, being part of a free trade area and possibly a member of the European Economic Area, or reverting to World Trade Organization rules. I do not think that we begin to understand the complexity of what even the basics of World Trade Organization rules or free trade would be. We forget that we have been part of a single market, which was very much a Conservative concept pressed home by the late former Prime Minister, Margaret Thatcher, and her commissioner at the time, Lord Cockfield. However, we have been part of that only since 1992. As an MEP at the time for parts of Essex and what is now South Suffolk, I remember receiving panicked phone calls from local businesses whose goods were impounded by Customs at the borders asking what on earth I was going to do to release them. It is not just the tariffs but, as I said, the non-tariff barriers, and even trying to agree the nomenclature for every product, whether it is agricultural or non-agricultural.
We also have to have regard to the incoming US President, who, as has been said previously today, has tendencies that are even more protectionist than what we have seen in the past. That may lead to fewer opportunities for free trade for this country and aggravate already slowing free trade in the world economy, hitting the UK economy hardest because we are a more open trading nation than many others.
I would like to say a word of caution about the great repeal Bill. Most EU law has already been transposed into UK law. Environmental directives have been transposed through statutory instruments. It is regulations that are directly applicable that we have yet to identify and decide which we wish to keep. As regards the jurisdiction of the European Court of Justice, there may be some cases on which we would wish to follow its rulings. The early rulings of Costa v ENEL or Cassis de Dijon related to the free movement of goods and services, meaning that exports from this country would still be freely available in the European Union. No one has yet explained what this concept of equivalence would be. I remind the House that for architects, it took up to 21 years to achieve mutual recognition.
It is also worth remembering that when the former Soviet satellite states threw off the shackles of the iron curtain, they looked to the European Union, and still do, to give a blanket of security. We need an assurance that the European Union initiatives on co-operation in the security field will continue. Hearing that Russia is placing missiles on the borders of Poland and the Baltic states brings with it more than a hint of the pre-war years of the 1930s. Although it is clear that the UK may be leaving the European Union, we need to send a clear message that we remain within the broader bosom of the European family.
Lord Soley (Lab)
My noble friend Lord Liddle, in his very powerful speech, made the all-important point that our aim now must be to have a very good and close relationship with the European Union, albeit a different one. I start from that point. There is no point, in my view, in trying to negotiate the situation here or decide whether we go back in or stay out. We have simply got to create a relationship between the United Kingdom and the European Union that works for both of us.
The first thing I would like to happen is for Ministers to stop talking slightly negatively about Europe. We should be saying that we want the European Union to succeed and we want the United Kingdom to succeed, and that we want to have a close relationship with it because it is in both our interests to do that—partly because, as the noble Baroness has just said, the relationship with Russia matters here and the future of defence and foreign policy matters. A splintered European Union would be bad news for the United Kingdom. Similarly, if the United Kingdom goes into some sort of economic crisis, that is not in the interests of the European Union—they know that and we know that.
I have a word of caution for some of my honourable friends and other people who think that we can get back into the European Union easily or quickly. That is cloud-cuckoo-land. Those who voted for Brexit did so for many reasons. Migration was a big one, but it was not the only one, as my noble friend Lord Judd said. The feeling of being excluded as a result not just of the global economy but a distancing from political institutions and politicians was also a critical part of that. My fear would be that, if we were to try to go back in any time soon, either by a parliamentary vote or another referendum, we would get a big thumbs down from the British people. It is far better to have a successful economic and political link growing with the European Union because that leaves open the door, as we should do, to going back in if we so wish at some future date. It also enables us to make a success of the present position.
I say again to some people who think that we can easily come out that, by and large, if things go wrong, as many people have been saying, people tend to vote negatively. That would not induce people to say, “We’ve made a mistake; we’ll go back in”. It would induce them to say, “Typical—the foreigners and politicians are all a problem and we do not want it”. By and large, people will vote for a positive change like going back into the European Union if they have a positive relationship and are getting wealthier and stronger. People vote positively when things are going well for them and negatively when they are not. We have had enough lessons of that. We in the Labour Party need to remember that a very large number, possibly a majority of the people who used to vote Labour, voted Brexit. If we do not understand and talk to those people, we will not solve any of the problems that confront us.
I have one final point in this very short debate. I was in Brussels on Monday as a member of the EU sub-committee dealing with Europol, policing and security. The work that we are doing there is immensely important. The majority of people running that outfit are British. If you look at aviation, the majority are British. The fascinating thing is that the British have been incredibly successful at managing aspects of the European Union, but the British public have felt totally disconnected from that experience. We need to get the security issue right, which the Minister knows. But we can do that. It is possible to negotiate agreements that are in the European Union’s interest and ours. No one has an interest in making life easier for terrorists, criminals or others. The same applies with the rules and regulations in aviation, where Britain also dominates, and in other areas too.
The big difficulty is trade. I have not commented on that because we do not have time, but it is important that we work positively with Europe. It is in Britain’s interests and in the European Union’s interest for us to have a close and positive relationship. We must start from there and continue. Please can Ministers stop saying negative things about Europe because we should be positive about it? We want them to succeed because we also want to succeed.
Lord Jay of Ewelme (CB)
My Lords, it is a great pleasure to follow the noble Lord, Lord Soley. It was also a great pleasure to hear the maiden speech of my noble friend—in both senses of the word—Lord Ricketts. We look forward to many other contributions to your Lordships’ debates in the future.
I voted to remain on 23 June, as I believed that continued British membership of and influence on the European Union was very much in Britain’s economic and political interests, and the surest way to exert our influence in the world. But I do not believe that the right course now is to try to go back on the result of the referendum. Nor would I argue for another referendum. The noble Lord, Lord Blencathra, may regard that as a tactical retreat, but the crucial thing now is to start the negotiations as planned in March and get on with them as quickly as we can.
I will focus on three aspects of our longer-term relationship with the European Union—and I congratulate the noble Lord, Lord Liddle, on initiating this debate—regarding trade, security and foreign policy. On trade, I do not for a moment disagree with the substantive arguments put forward by the noble Lord, Lord Liddle, but I am inclined to agree with the right reverend Prelate the Bishop of Chester that the chances of ending these negotiations inside the single market are slight. But that does not mean that we need to leave the customs union. Indeed, staying in the customs union would continue to give us tariff-free access to the single market, which is crucial for investment and for jobs, and enable us to continue to benefit from the free trade agreements between the EU and other countries. I know that there are arguments and interests involved that point in a different direction, but to leave the customs union and seek to negotiate bilateral trade arrangements with our major trading partners at a time when the principle of free trade is under attack as never before, would be, I must say to the Minister, very courageous.
On security, I very much follow the line taken by the noble Lord, Lord Soley, and agree with what he said. I only stress that the evidence given over the last few weeks to our EU Home Affairs Sub-Committee by, for example, the Director of Public Prosecutions, the police and other experts, has been overwhelmingly in favour of staying in Europol, Eurojust and the European arrest warrant, because they are crucial for our security. I have to conclude that to sever our links with those organisations would be a massive exercise in self-harm. I ask the Minister to assure the House that, in considering our relationship with the EU’s police and security institutions, the Government’s prime consideration will be the safety and security of the British people.
On foreign policy, outside the European Union NATO will be crucial to our interests, but close and effective co-operation between NATO as it evolves and the EU’s common foreign and security policy as it evolves—alas without us—will be crucial, too. I would be grateful if the Minister could assure us that outside the European Union we will work not only to maintain and strengthen NATO, but to work with our erstwhile EU partners to ensure a constant and close co-operation between NATO and the European Union.
I am very glad that my noble friend Lady O’Neill is in the House. Very little has been said in the debate so far about Ireland. But the prospects of Brexit for the north of Ireland, the Republic of Ireland and indeed the peace process, are potentially hugely serious. I would be grateful, finally, if the Minister can make clear to us that during the negotiations the interests of Ireland, north and south, and our relations with Ireland will be at the top of the Government’s concerns.
Viscount Chandos (Lab)
My Lords:
“The UK will intensify its relationship with its friends across the channel at an inter-governmental level”.
Those are not the words of a diehard supporter of remain but of the newly appointed Foreign Secretary on 14 July this year, fresh from his leadership of the campaign that secured the referendum vote to leave. What, then, should that relationship be? Five months after the referendum, as other noble Lords have said, the Government have offered no clue as to the nature of the relationship that they would like to achieve. There has been much talk of not compromising our negotiating position by showing our hand but, in reality, the truth is that the Conservative Government were totally unprepared for the outcome of the referendum.
In January 2013, the Conservative Government committed to a referendum on the UK’s membership of the EU by the end of 2017 in the event that they won the next general election, and to its inclusion as a condition for any new coalition. They committed to honouring the outcome of the referendum and the then Prime Minister committed to staying on to implement whichever decision the referendum mandated. The Government may ultimately have campaigned for a remain vote, but it was still their responsibility to prepare for either eventuality. Three and a half years after committing to the referendum—nearly twice the length of the negotiating period provided for under Article 50—the Conservative Government had made no preparations of any sort. This casual and negligent arrogance made the Royal Bank of Scotland look by comparison well prepared for the great financial crisis. This is the vacuum that needs to be filled and in the circumstances the Government should welcome and constructively engage with the ideas of others both within Parliament and elsewhere.
I should like to use my remaining time to draw your Lordships’ attention to one such idea—a proposal for a continental partnership put forward by Sir Paul Tucker, the former Deputy Governor of the Bank of England, and his co-authors, under the sponsorship of the economics think tank Bruegel, and described by the economics commentator Hamish McRae as,
“the most convincing sketch yet of how this relationship might look”.
I believe that the importance of this proposal is not so much its specific suggestions—although they are pretty compelling, in my view—as the signal given by the identity of Sir Paul’s co-authors. They include, writing in a personal capacity, Jean Pisani-Ferry, the Commissioner-General for Policy Planning for the French Prime Minister, and Norbert Röttgen, chairman of the Committee on Foreign Affairs of the Bundestag. The proposal envisages membership of the single market for,
“an outer circle of countries involved in a structured intergovernmental partnership”—
words that echo those of the Foreign Secretary, and an—
“intergovernmental form of collaboration, with no legal right to free movement for workers but a regime of some controlled labour mobility and a contribution to the EU budget”.
Time does not allow for a more detailed summary, and as Hamish McRae suggested, we should perhaps regard it as a good sketch rather than a finished picture. I do not pretend either that the personal views of the authors can be interpreted as a fast track to a done deal, given that we are facing, as the Secretary of State for Exiting the EU has said in his characteristically understated way, the “most complex negotiations” of all time. However, I am more optimistic than my noble friend Lord Livermore that behind the hard-line initial positions taken by EU leaders, mirroring and indeed responding to our own leaders’ rhetoric, there is among the key thinkers at the heart of the EU an understanding of the concerns lying behind the referendum vote and a desire to find a constructive solution of potentially wider relevance. I have no doubt that the Government have this proposal in their in-tray, not least as a founding member and funder of Bruegel.
My honourable friend Keir Starmer has asked the Government 170 excellent Questions but I will ask only two. Do the Government regard the model set out in the proposal as a good sketch from which a final picture could be derived, and will they engage, perhaps through Sir Paul Tucker, in discussions about it?
Baroness Goldie (Con)
My Lords, I have to point out that we have a fairly serious overrun. Perhaps I may respectfully remind noble Lords that when the Clock shows “four” they are over time. It does not matter how anxiously noble Lords continue to glance at the Clock, that will not minimise the time by which they run over, it will simply defer and exceed the run-over. I ask for your Lordships’ co-operation so that the moment the Clock shows “four”, they conclude their remarks.
Lord Wigley (PC)
My Lords, I have taken note of that stricture.
I believe that it was an absolute disaster that electors voted to leave the EU, but I accept that the vote cannot be ignored. People voted out for a variety of reasons. Some did so to redirect £350 million a week to the NHS. Many farmers protested against CAP bureaucracy, while some small business owners wanted a reduction in EU regulations, and others of course wanted to see a reduction in immigration levels. What they did not have an opportunity to state was what they wanted in place of our membership of the EU. Different Brexit campaigners advocated different options. Some wanted a Norwegian or Swiss model which would retain our access to the single market. Some saw Albania, Turkey or even Ukraine as possible models. Some based their case on securing a Canada-type deal while others were happy to advocate trading under the World Trade Organization rules—accepting that that may mean tariffs for customers within the EU market.
The referendum may have given a mandate to quit the EU but it did not provide a mandate for which alternative option the Government should seek, nor do the present Government have a mandate from a general election. That brings us to the central role that Parliament, along with the Scottish Parliament, the Northern Ireland Assembly and the National Assembly for Wales, must play in deciding on the preferred option that the UK Government and their devolved partners should aim to negotiate for.
For both the agricultural sector and manufacturing industries the overwhelming case is for the UK to retain its place within the single market of 500 million people free from any tariff barriers. There are some 200 companies in Wales from the United States and 50 from Japan, many of which have located in Wales to sell their products to the European market. For us to lose our tariff-free access to this market would be industrial suicide. Likewise for agriculture, where more than 90% of Welsh lamb and beef exports go to the EU. If they were to face a 14% tariff barrier, as has been suggested would be the case if we traded under WTO rules, it would mean the kiss of death to the industry that is the backbone of the rural Welsh economy. Continuing our trading relationships within the single market is an essential for both manufacturing and agriculture. That must be the fundamental objective of the Government’s negotiating position, and they should say so quite explicitly.
To secure our free involvement in the single market for manufactured goods and agricultural products, we need to accept the free movement of people. I would argue that we will largely have to do that in any case because of the open border the UK has with the Irish Republic. I believe that before an Article 50 application is made, the Government must tell Parliament what their broad objectives are in their negotiations with the EU, and they should be subject to a parliamentary vote to ratify them. If the Government refuse to allow Parliament to have such a vote, Parliament must retain the right to refuse to endorse the outcome of the negotiations if they are deemed to be inadequate, and in those circumstances to direct the Government to withdraw their Article 50 application, which we can see is now legally possible. If the Government refuse, the objectives should be put to the people in a further referendum. In that way the people who took the decision to quit the EU will have the final say on whether they are content to do so under the terms that the Government have negotiated. What could be fairer than that?
Lord Haskel (Lab)
My Lords, at last the final Back Bencher. I would like to emphasise the importance of trade. My noble friend Lord Livermore reminded us that forecasters and the OBR told us to expect lower growth, higher inflation and little increase in productivity. This is considered to be sheer ill-judged pessimism by some members of the Government and by the noble Lord, Lord Blencathra, but I would advise everyone else to listen to the words of trusted institutions and not to the voice of dogma.
Yes, we are in for a time of uncertainty not only because the outcome is very much dependent on the process—how it will be managed—but also on events: elections in France, Holland, Germany and Italy and the incoming US Administration, who lean towards protectionism. All of this means that people will have less time for our concerns and many politicians will want to ensure that Britain is not rewarded for Brexit. Added to that is the fact that the nature of trade is changing. Companies are less concerned about tariffs than they are with supply chains, marketing, distribution, services and protecting the specialist knowledge on which all of that depends. That is why many trade agreements now focus on protecting rights and setting standards. They are unpopular because people are afraid they reduce their protection as consumers, cut their wages or destroy their jobs. Such arrangements are seen as giving power to corporations that have lost our trust in recent years. This only adds to the uncertainty.
Where do we stand? In money terms, we have always been a net contributor to the EU. We have walked out, as my noble friend Lord Desai put it, but we are still paying the bills. This could continue until 2021, unless we make some transition arrangement. In view of these contributions, we must seek to continue the same high-standard, rules-based, zero-tariff trade arrangement with the EU and, most importantly, all the other markets where the EU has preferential access instead of negotiating these ourselves. The EU would benefit by continuing its trade surplus with us and avoid the need to unwind the many cross-border supply and service arrangements that have been in force for years.
Yes, the City of London remains the financial centre of Europe. It is in nobody’s interest for London to become yet another offshore financial centre. As my noble friend Lord Liddle explained, the non-financial services are a larger and more important part of our economy. It is a sector where generally we excel and show a trade surplus, but it is heavily dependent on workers from overseas. Our determination to suppress EU immigration must damage that sector. I am not sure whether the plan mentioned by the noble Lord, Lord Green, would allow for sufficient movement so we can continue to attract the world’s best scientists, skilled workers, and, in particular, to retain our own and international centres of excellence, such as Euratom. Let us exclude students from the figures. Let us be generous and say foreign workers can stay here because we need them.
Lord Campbell-Savours (Lab)
My Lords, I want to speak briefly in the gap to say that this debate has been, in time, allocated to the Labour Benches. We have sponsored the debate. When we were deciding which debate should take place we wondered whether we should take the full five hours, but we thought we would not have sufficient speakers. We have had 31 speakers altogether, at four minutes apiece. It is utterly inadequate. People such as myself decided not to intervene because we felt we simply did not have time to make our case. I appeal to the Government to allocate some of their time so we can have a proper, longer debate where people will at least have time to make their fuller cases.
Baroness Smith of Newnham (LD)
My Lords, I am grateful to the noble Lord, Lord Liddle, and indeed to the Labour Party for bringing the debate. The noble Earl, Lord Caithness, pointed out that this is 15th debate we have had on various aspects of the relationship between the European Union and the United Kingdom since 23 June.
Like the noble Lord, Lord Liddle, I have form on the European question. I am known as somebody who is deeply passionate about the European Union. I declare my interests as listed in the register, not least that I teach European politics at Cambridge University. However, one of the things that is not listed in the register is just how far back some of these links go. When I wrote my doctoral dissertation, one of the people I used regularly to interview was the noble Baroness, Lady Hayter, when she was secretary-general of the European Parliamentary Labour Party, and the noble Lord, Lord Liddle, at various points discussed with me the nature of the UK’s bilateral relations and came up with the concept of something called “promiscuous bilateralism”. I will come back to that concept towards the end.
The Liberal Democrats have a very clear position on what the best relationship for the United Kingdom would be with the European Union following the vote. It is exactly the same view we had before and during the referendum: the UK’s best position is being a member of the European Union. The fact we lost the referendum—that we did not persuade enough people—does not make us think the UK is not better off in the European Union. Like so many Members on the Labour Benches, one or two on the Conservative Benches and the noble Lord, Lord Wigley, we believe that the United Kingdom should be as close as possible to the European Union in the event of us leaving. We would agree, right across your Lordships’ House, with the noble Lord, Lord Green, that leaving the European Union does not mean leaving Europe. That is self-evident. The question is: what is the best relationship?
I will touch briefly on the economic and trade aspects, which have formed the majority of the debate, but clearly there are wider issues which have been touched on, about what the United Kingdom’s relations with the rest of the European Union will be when we leave. That will form part of the debate in the name of the noble Lord, Lord Sterling, next week on foreign and security policy.
There is clearly a question of what “leave” really means. It has been suggested by some of those who advocated voting to leave the European Union that it was always crystal clear what leave meant. It meant leaving the single market, the customs union and every aspect of the European Union, and that we should not even be querying that. For those of us who lived and breathed the then European Union Referendum Bill this time last year, it was not clear what leave meant. Several of us put forward amendments to the Bill, requesting Her Majesty’s Government to produce a document on what leave might look like. The noble Baroness, Lady Anelay, was required on many occasions to say, “It is for the leavers to say what leave looks like”.
Eventually, we were presented with a document on what the alternatives to membership might look like. It seemed to be a little lacking in rigour, but it came up with half a dozen scenarios of what the alternatives might look like. A year on, the alternatives have not fundamentally changed. We could be part of the single market, which, like the noble Lord, Lord Liddle, the Liberal Democrats would say is second best, but if we are outside the European Union it is the best alternative we have. It means that we would still have access to and membership of the single market—not just the right to trade, but trade on the same terms as the European Union member states. This is vital.
Many of those who advocated Brexit advocated hard Brexit, getting outside the European Union and even outside the customs union, and that worrying just about tariffs would be sufficient. That is not good enough. As a member of the single market we avoid non-tariff barriers to trade. As the noble Baroness, Lady McIntosh, pointed out, the late Baroness Thatcher pushed for the single market because barriers to trade beyond tariffs were crucial to this country.
The noble Lord, Lord Howell, pointed out that the single market might now be being perforated by new patterns of trade. That is true, but it does not prevent membership of the single market being better for British business. It gives greater certainty to the City of London, to higher education and research institutions, and to business more generally.
The single market would, for the Liberal Democrats, be seen as the next best alternative. It gives free movement of people. That deals with one of the key issues that has come up, not just today, although it was powerfully discussed by the noble Lord, Lord Judd. The rights of EU citizens resident in the United Kingdom and of UK nationals resident in the European Union has been raised I believe almost every week since the Monday after the referendum. Time after time to Minister after Minister, right across this Chamber, Members of your Lordships’ House have implored the Government to think again about the rights of EU nationals. Perhaps unsurprisingly, I ask the Minister again: will the Government think about giving a unilateral undertaking on the rights of EU citizens resident in the United Kingdom? It would give them certainty. They should not be negotiating chips, whatever the Prime Minister seems to think.
One of the key issues we seem to have been missing in the discussion in the last five months is: what are the Government’s objectives? Nobody is asking the Government for a running commentary on what they want, but what about a sense of the sort of relationship that they are looking for? Members on this side, and many in other parts of the House, have indicated the sort of relationships that we believe would be beneficial. It might have been the single market; it might have been the customs union, as suggested by the noble Lord, Lord Jay; but we have all indicated what the objectives might be. From Her Majesty’s Government so far, we have no sense other than that the Foreign Secretary has a policy on cake. He may not still have it as Foreign Secretary; he had it when he was just a jobbing journalist with the Daily Telegraph, but what might be appropriate for a journalist who is seeking to bring a bit of light relief to his readers is not something that we expect from Her Majesty’s Government.
The least that this House and Parliament can expect is that, when the Government say that they wish to engage us, we are actually told what their objectives are—first, in trade and, secondly, on security and defence policy, which I will touch on only briefly. The noble Lord, Lord Ricketts, in his excellent and welcome maiden speech, talked about defence policy and foreign policy, and suggested that we did not need to worry about a European army. One is tempted to think that that might still be a little of the language of the Foreign Office: “Don’t worry, Minister, it will never happen”. The security of the United Kingdom remains closely bound with that of the European Union, whether we are members of it or not. Can the Minister give us some indication of the Government’s thinking about how far the United Kingdom will still remain part of the European arm of NATO? What ideas do they have for our membership of the European arrest warrant and Europol and on issues that relate very much to dealing with terrorism and our security, as my noble friend Lord Maclennan pointed out?
How we deal with leaving the European Union is a matter of profound national interest. So far, we are getting very vague answers from Her Majesty’s Government. I hope that today the Minister can give us somewhat clearer answers. Finally, I agree with colleagues across the Chamber who have pointed out that these are negotiations with 27 other member states. They all have their own national interests. They are not trying to punish us if they appear to be difficult at times, but they need to get the right deal for the European Union as well.
Baroness Hayter of Kentish Town (Lab)
My Lords, I will start with two thank yous. The first is to my noble friend Lord Liddle, whose knowledge of all things European is unsurpassed in any place but this—and even here is of the highest. My other thank you is to the noble Lord, Lord Ricketts, for making his maiden speech during a Labour debate. I assure him that in no way does it compromise his independence on the Cross Benches. As a former Permanent Secretary, our man in France and at NATO, he is one of that select group who is able to challenge my noble friend as our resident top shot on Europe.
The City of London, the CBI, economists, industrialists, investors, consumer groups and trade unions all fear that the Government, whether by default or by intention, are heading for a hard Brexit, with the UK removed from the single market and even the customs union, and detached from common regulations and minimum standards. Labour’s preference would be for a Brexit that prioritises the economy, jobs and living standards, with no watering down of environmental or consumer protections. This means maintaining our business links, including transport—the CAA supports retaining the benefits of the common safety regime in Europe—market access, competition and consumer protection.
But will our relationships with the EU allow continued membership of the European common aviation area, without which British airlines will no longer be able to sell flights between European cities but only directly to them? Asked last month, the noble Lord, Lord Ahmad, could say only:
“The Government is considering carefully all the potential implications arising from the UK’s exit from the EU for our aviation industry. This includes the implications for UK-based airlines relating to Air Traffic Management and the Single European Sky”.
That is not good enough. By now we need clearer indications than that. The travel industry is calling for access to liberalised aviation markets in Europe and globally, the continuation of visa-free travel, and continued participation in the European health insurance card. What can the Minister offer on those?
Will the Government respond to the pleadings from the higher education sector that its interests should form part of the negotiation framework, with the aim of continuing our close relationship with the remaining 27, such that we have full access to the EU’s research frameworks and educational programmes? Likewise, our vital pharmaceutical industry needs us to promote life sciences, ensuring the flow of researchers and participation in networks, as well as retaining the medical agency and full participation in its work.
There are other agencies where we need continued participation: Erasmus, the European Investment Bank, the chemicals agency, the air safety agency, and Euratom, which was mentioned by my noble friend Lady Crawley. Its funding runs out in 2018, possibly jeopardising Oxfordshire’s £300 million joint nuclear fusion reactor. We also understand that Horizon 2020’s successor is being prepared on the basis of the UK being excluded, with immense consequences for our research funding. What are the Government doing on all those?
As my noble friend Lord Liddle stressed, the service sector is crucial to our economy, with employment growth driven by services, particularly professional, business and computing. Financial services are vital for their earnings, which are perhaps 3% of GDP, but also for other businesses—for the financial flows, insurance and reinsurance needs of umpteen sectors. However, no one in Brussels seems to think that the City of London will get a good deal. Indeed, the Government’s unpopular approach is risking the continuation of passporting, which as we know allows UK-regulated bodies to do business across the EU without being regulated again in other member states. Passporting requires single market membership and that, as we all saw from the handwritten note that followed the meeting in 9 Downing Street, is “unlikely”—presumably because No. 10 is prioritising migration over everything else, including jobs and prosperity.
England and Wales form a global hub for legal services as businesses choose to use our laws in their contracts, with London the seat for arbitration. Various EU directives enable our lawyers to represent UK clients in other member states. Because our judgments are enforced abroad through so-called Brussels I, and because under Rome I contracting parties can choose English law, we have become the preferred seat for arbitration. Will the Government prioritise continued access for our lawyers to practise and plead across the 27? We hear that many are heading off to Dublin to requalify, as they fear the loss of access. Will the Government also prioritise remaining in Brussels I and Rome I? Will they work with insolvency practitioners such that, after Brexit, they can continue to chase down assets squirrelled abroad but due to UK creditors?
Then there is competition policy, which is vital to protect consumers’ interests. EU membership underpins the Competition Act 1998, allowing for a seamless regime across the EU. But what will happen in 2019? Any divergence could lead to major uncertainty for businesses and international undertakings. How is the CMA preparing for relations with the other 27 competition authorities and with the Commission, post-Brexit? Will judgments in the 27 be adopted here in the 28th and vice versa? Who will safeguard consumers’ interests against monopolistic or unfair practices? More widely, can we replicate EU mutual recognition agreements with third countries, such as China and America, whereby goods can be certified as being in conformity with the destination’s rules by authorities within the exporting country, thus saving time, expertise and border checks?
As a member of the EU, we are party to more than 50 free trade agreements granting reciprocal access and waiving most duties. How do the Government plan to replicate these? Such questions, like others posed today, indicate the complexity of unwinding 40 years’ worth of trade, co-operation and interdependence. We have to involve every sector, consumers as well as industry, in these talks, for what the Dutch finance minister has described as “a tough ride” for the UK. Jobs, the economy and living standards should be the priority for negotiations. The Government need to hold that package as their lodestar and seek to build a national consensus around a Brexit plan that will work across the whole UK and for every part of it.
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, the noble Lord, Lord Liddle, has today given the House the opportunity to set out its advice on a wide range of issues which should be addressed not only during the negotiations to leave the EU but also beyond them. I very much value the way in which he phrased his Motion for that purpose.
As the Prime Minister has made clear, following the vote on 23 June we will be leaving the European Union, but we will not be turning our backs on Europe. I agree with noble Lords that our relationship with our European friends and neighbours remains vital to the United Kingdom. It matters to our prosperity because it is where, as noble Lords have said, we do much of our trade, and because 1.2 million British nationals live and work there. It also matters to our security because cybercriminals, people traffickers, drugs smugglers and terrorists simply do not respect international borders, and because threats to the territorial integrity of European neighbours such as Ukraine also present threats to this country.
In addition to prosperity and security, once we leave the EU we will also continue to share wider interests with our European neighbours on issues such as tackling illegal migration and climate change, all mentioned by noble Lords today. Continued close co-operation and consensus on issues such as these will be in all our interests. As the Secretary of State for Exiting the European Union said when he visited Brussels just last week, we want to ensure that we have a,
“positive, strong, and productive relationship with our closest neighbours”,
and one that,
“works in our mutual interests”.
Looking forward, I congratulate the noble Lord, Lord Ricketts, on his maiden speech, in which he referred to the importance of bilateral relationships. I advise the noble Lord that we agree with him and that we intend to build up our strength, in diplomatic terms, in Europe. Seven UK ambassadorial posts in Europe have already been upgraded and up to 34 additional diplomats focused on political work and lobbying are to be posted across the FCO’s Europe network. The precise nature of our future relationship with the European Union clearly and simply depends on the outcome of our negotiations, which will not be simple, as noble Lords have said. Those negotiations will be with all 27 members of the European Union and until they are complete we simply will not be able to give the full picture.
Before I go on to our approach to those negotiations, I shall address the issue raised by noble Lords of the Article 50 judgment and the role of Parliament and the devolved Administrations before and during the negotiations. The window for negotiations on our exit arrangements will open once the Prime Minister triggers Article 50 of the EU treaty, which the Government intend to do, as announced, before the end of March next year. We believe that it is proper and lawful to use prerogative powers to trigger Article 50. As such, we disagree with the judgment of the High Court in England and Wales, and are appealing the decision. The Supreme Court hearing on the matter will begin on 5 December and is expected to last four days. A judgment will be reached in due course. I am being particularly careful because I cannot say more on this while the appeal on this decision is pending in the Supreme Court. I should make it clear that in the initial hearing in the court of first instance, the High Court, words used by me in this House were used in support of the Government’s case.
Turning to the role of Parliament, the Government recognise that Parliament has an important role to play in helping to shape the UK’s future relationship with the EU. It is important to stress that triggering Article 50 is the beginning of the process, not the end. As the Prime Minister has made clear, there will be many opportunities for Parliament to continue to engage with the Government once Article 50 has been invoked; for example, through debates—in reply to the noble Lord, Lord Campbell-Savours, the usual channels will no doubt consider that matter—through ministerial Statements, and through scrutiny by the new Select Committee on Exiting the European Union.
The Government will bring forward legislation in the next Session that, when enacted, will repeal the European Communities Act 1972 on the day that we leave the EU. The great repeal Bill will end the authority of EU law and return power to the UK. My noble friend Lady McIntosh made a very interesting and informed speech in which she referred to specific issues about the great repeal that will have to take place and about secondary legislation. I can tell my noble friend that those issues are indeed being considered by officials at DExEU at this stage. The Government will set out more details on the timing of this domestic legislation to Parliament in due course. When negotiations with our European neighbours have concluded, all relevant legal and constitutional obligations that apply will be observed.
Turning to the role of the devolved Administrations, we will ensure that we build the best future relationship with the EU. In doing so, we will work to ensure that the interests of all parts of our United Kingdom are protected and advanced. We will work closely with the devolved Administrations in Scotland, Northern Ireland and Wales throughout the negotiating process. The Scottish and Welsh Governments and the Northern Ireland Executive will be given every opportunity to have their say as we form our negotiating strategy, and we will take into account all suggestions they put forward. Furthermore, the new Joint Ministerial Committee on EU Negotiations, chaired by the Secretary of State for Exiting the EU, is up and running already, discussing each Government’s requirements for the future relationship with the EU, and seeking to agree a UK approach to the negotiations.
The noble Lord, Lord Jay, among others, referred in particular to Ireland. With regard to Northern Ireland I would say that the open border for people and business has served us well. It is a high priority for the Government that we do not see a return to the borders of the past. There is a very strong commitment for the Irish Government, as well as ourselves, to ensure that that does not happen.
As Minister for the Overseas Territories, it would be remiss of me if I did not refer specifically to them. Last month I was able to reassure the overseas territories at our annual joint ministerial council that we are fully committed to involving territory leaders as we prepare for negotiations to leave the EU, in accordance with their various constitutional relationships with the UK, to ensure that their priorities are taken into account. At that JMC, Ministers from DExEU and the leaders of the overseas territories agreed a structure for future engagement through the creation of a joint ministerial council on European negotiations. That council will meet in the first quarter of 2017.
Much has been said about the negotiations. Clearly, a balance needs to be struck. We want to be as open and transparent as we can with Parliament, to bring parliamentarians with us as we build a national consensus around our negotiating position. The Government want to achieve the best outcome for the British people. As some noble Lords have recognised, to achieve the best outcome in any negotiation it is wise not to reveal your hand too soon—but that has to be balanced with not doing it too late. I do appreciate noble Lords’ views. Noble Lords will be aware that we have committed that Parliament will have access to at least as much information as Members of the European Parliament during the process, and that we are considering the mechanisms for transmitting that in such a way as to ensure that there can indeed be timely debate and scrutiny on the negotiations, while ensuring that complete confidentiality can be maintained. Where we can offer clarity, we certainly will.
The noble Baroness, Lady Crawley, asked about the quality of negotiators. Both DExEU and the DIT are equipping themselves with the resources they need to get the best deal for the UK. A trade faculty is being established within the FCO’s Diplomatic Academy—I have seen it at work already—to ensure that FCO and other Whitehall staff have the trade skills they need. As announced in the Autumn Statement, the DIT will receive an additional £79.4 million over this parliamentary cycle. The funding will come from existing spending aggregates to build our capability and help support a smooth exit from the EU and negotiations for the best possible global trading arrangements for the UK.
Much mention was also made on all sides of the House of the very difficult issues of migration. Our ambition is to create an immigration system that allows us to control numbers and encourage the brightest and best to come to this country, as part of a stable and prosperous future with the EU and our European partners. The UK—I am pleased to say, living in a town with a very diverse society and culture—remains one of the most tolerant and welcoming places in the world. We will continue to welcome those with the skills, drive and expertise to make a positive contribution. After all, if we are to win in the global marketplace, we must win the global battle for talent.
Noble Lords returned to the position of UK citizens currently in Europe and that of EU citizens currently in the UK. As noble Lords have recognised, for the moment the UK remains a member of the EU, with all the rights and obligations that that entails. There have been no changes to the status or entitlements of EU nationals in the UK or UK nationals in the EU. There was an exchange on these matters yesterday in another place at Prime Minister’s Question Time, which I think is the most up-to-date indication of the firmness of the Prime Minister in making it clear that she wants to protect the status of EU nationals already living here and that the only circumstances in which that would not be possible is if UK citizens’ rights in European member states were not protected in return. She made it clear that she hopes that,
“this is an issue we can look at at an early stage in the negotiations, and of course there will be two years of negotiations. I think it is right that we want to give reassurance to British citizens living in the EU and to EU citizens living here in the UK”—[Official Report, Commons, 30/11/16; col. 1518.]
That will underpin our objectives. I cannot go further than that.
Lord Howell of Guildford
I know that my noble friend is pushed for time, but on that issue, would it not make more sense, rather than trying to finesse the residence of EU citizens here and vice versa, to move unilaterally and so create momentum for a happier result with less of a delay?
Baroness Anelay of St Johns
My Lords, I am afraid that it would not. What my right honourable friend the Prime Minister was trying to make clear in answer to my right honourable friend Mr Peter Lilley in another place yesterday was that the position taken by Mr Tusk and others in response to a letter from 80 Members of both Houses on this issue made extremely clear the intransigence that we face. Therefore, it is not a matter that is going to be resolved easily, certainly not by making a unilateral statement. Although I absolutely understand the real principles that underpin the statements made by those who would like to see that unilateral movement made, it would not serve either British or EU citizens well.
There was much focus on trade. I am trying to finish just before my allocated time runs out; otherwise, the noble Lord, Lord Liddle, will have no opportunity to say his final words. The Prime Minister has made it clear that she will seek a deal that will give British companies the maximum freedom to trade with and operate in the European market—and allow European businesses to do the same here. Leaving the EU, we will also have the opportunity to shape our own ambitious international trade and investment opportunities and drive even greater openness with international partners in Europe and beyond. As the Chancellor made clear in his Autumn Statement, the fundamentals of our economy are strong, but there are certainly challenges. We are going to tackle them head on to ensure that the economy is match-fit to overcome the uncertainties ahead.
One of the uncertainties was raised by the noble Lord, Lord Shipley, at the beginning of the debate, when he referred to the domestic upskilling of workers. We are investing in the skills of the workforce by increasing the quality and quantity of apprenticeships, particularly in England, to reach a commitment of 3 million new apprenticeships starting by 2020. An apprenticeships levy will be introduced from April 2017 to encourage employers to invest in the skills they need. The noble Lord, Lord Shipley, was absolutely right to raise that matter, on which we will keep a very firm eye.
As I mentioned earlier, we do not intend to turn our back on our friends in Europe; nor will we turn our back on the world. Our commitment to our extensive security co-operation with European and other international partners remains steadfast. We will continue to play a leading role in promoting international peace, security and prosperity. We will continue to promote and defend the international rules-based system as a permanent member of the UN Security Council, the second-largest contributor to NATO, and a leading member of the G7, the G20 and the Commonwealth. We are the only major country which will simultaneously meet the NATO target of spending 2% of our GDP on defence and the UN target of spending 0.7% of our GNI on development. We have made it clear that we aim to maintain that.
In conclusion, we want the UK to continue to be tolerant at home, respected abroad, engaged in the world and working with all our international partners to advance our prosperity and security—and theirs. Noble Lords have made that clear. It is about the security and prosperity of all of us. If some fails, it damages us all. The negotiations which will begin after Article 50 is triggered will lay the foundations for our new relationship with the rest of Europe—a relationship that is in all our interests, which works for this country and for the European Union. I have stressed that to colleagues across Europe whom I have been meeting over the past few months, and I will continue to do so. That is what the Government aim to deliver.
Lord Liddle
My Lords, I thank the Minister for her reply and for her characteristic graciousness in giving me the time to respond to the debate. I congratulate the noble Lord, Lord Ricketts, on his maiden speech. We are looking forward to many more of them as he educates us about our future security and foreign policy relationships with the European Union. As always in these debates, as the opening speaker one puts a lot of effort into one’s speech, thinks that one has a clear position that one is advocating and then hears all kinds of wonderful contributions that mean that one has to think again. There is a lot to ponder in what people have said here.
Perhaps I could say a couple of things briefly. On my side of the House, several of my noble friends have talked about the possibility of a second referendum. Personally, I do not rule that out, but it is far too early in the process to see whether it is a runner; if the Government achieve the success that they promise, it may well not be. I tabled this debate in an honest wish that the Brexit negotiations go well for Britain. I put a lot of emphasis on economic questions because whether or not we have a successful economy—the single market is vitally tied up with that—will be crucial to whether we are an outward-looking nation. My fear is that if we have the quick, hard Brexit which my noble friend Lord Desai appears to favour, we would suffer a major economic shock that would make the problems of populism and being inward-looking even more problematic in our country than they are now. If we want to be confident, we therefore have to get the economics right. That is a key facilitator in us playing the strong security, foreign policy and defence role in the world that I believe Britain should play.
I agree with my noble friend Lord Chandos that the continental partnership report is a very interesting proposition, which I would like to see taken seriously by government, here and on the continent. The problem—this is certainly not a reference to the noble Baroness, Lady Anelay—is the way in which the Government are presently charging around Europe, making statements about how we are going to have our cake and eat it, treating the whole process with disrespect and demonstrating a lack of sensitivity to the fact that we are the people walking away from our partners of 40 years and causing very big problems for them. Unless the Government show more sensitivity in their approach to these negotiations, we will end up in a very difficult situation and with a hard Brexit—and we will not end up with a happy Britain. On that note, I commend the Motion that I tabled.