(6 years, 7 months ago)
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Baroness Anelay of St Johns
That this House takes note of the position papers and future partnership papers published by Her Majesty’s Government on the United Kingdom’s future relationship with the European Union.
The Minister of State, Department for Exiting the European Union (Baroness Anelay of St Johns) (Con)
My Lords, the Motion standing in my name asks the House to take note of the papers published by Her Majesty’s Government during the summer on the UK’s position in the negotiating rounds and our future relationship with the European Union. These papers were developed to support the UK’s negotiating position and delivered transparency to Parliament and the public as we enter into our discussions with the EU. Over the summer, we published seven position papers unpacking a range of withdrawal issues, and six future partnership papers that set out the Government’s vision for the future partnership with the EU. It is on these 13 papers that I will focus my attention and that of the House today. However, note that these papers are in addition to five technical notes on key negotiation issues and two White Papers.
These papers reflect the Government’s constructive engagement with external parties and the extensive work undertaken across government since the referendum just over a year ago. As my right honourable friend the Secretary of State for Exiting the European Union and I outlined last week in the Statement, it is fair to say that we have seen concrete progress. I use this opportunity to outline how the approach set out in each position paper published to date helped secure that progress. My focus today, and my hope and expectation, is for this to be the beginning of an opportunity for Peers to feed back their views to the Government on the papers, and this being a continuing conversation—one in which I listen rather than speak. I know I will speak today but I would like to listen more.
First, on the paper on safeguarding the position of EU citizens in the UK and of UK nationals in the EU, our June policy paper set out our position on EU citizens’ rights in some detail. It is already clear that there is much common ground between the UK and EU positions and we are confident that we can reach agreement on this important issue early in negotiations. Indeed, we have achieved a great deal so far. As the joint technical paper we first published in July demonstrates, there is significant common ground between the EU’s and the UK’s respective positions, including on matters relating to immigration and residence, social security, healthcare and the mutual recognition of qualifications. I hope that those seeking more information on this issue will review these technical notes, which provide a detailed analysis of the work carried out so far. Looking ahead, we made concrete progress in preparing the ground for the September negotiations, where we expect to move closer to a reciprocal deal. However, as I set out last week, in a number of areas the UK’s position goes further than that of the EU as we seek to provide swift reassurance to the 4 million EU and UK citizens concerned.
Turning to privileges and immunities, we set out our position in July on the framework of privileges and immunities that allows for the smooth conduct of relations between the EU and the UK. Following the August round, I am pleased to say that we are close to agreement on our approach to post-exit privileges and immunities.
Also in July, we set out the key principles for our future co-operation on nuclear materials and safeguards. This includes ensuring a smooth transition to a UK nuclear safeguards regime, collaboration on research and development, minimising barriers to civil nuclear trade and providing clarity and certainty. As part of our orderly withdrawal, and to provide certainty to industry and reassurance to all, the UK welcomes early discussion on issues relating to nuclear safeguards arrangements and nuclear materials in the UK. I appreciate that there was much interest in this House and debate on that matter just before we rose in July. In the August round of negotiations, we reiterated a strong mutual interest in ensuring that the UK and Euratom community continue to work closely together in the future as part of a comprehensive new partnership.
July also saw the publication of our position paper, Ongoing Union Judicial and Administrative Proceedings, which sets out how the UK will seek to ensure a smooth and orderly transition to a position where the CJEU no longer has jurisdiction in this country. In the August round, the UK and the EU discussed and made progress on the cut-off points for cases being defined as pending. There was also progress in discussions concerning the UK’s role before the court whilst these pending cases are being heard.
At the time of withdrawal, administrative procedures will also be undertaken under EU regulations which concern businesses and individuals in the UK, and reaching agreement on the best approach for these is part of securing a smooth and orderly withdrawal from the EU.
I know that the position paper we published in August on Northern Ireland and Ireland was a matter of much interest in this House. Our paper outlines the UK’s position on how to address the unique circumstances of Northern Ireland and Ireland. As the Prime Minister made clear in her Article 50 letter, preserving the unique relationship between the UK and Ireland and protecting the peace process in Northern Ireland is an absolute priority for the United Kingdom. The paper directly addresses separation issues to inform the current negotiations, but it also proposes high-level principles and criteria which are inextricably linked to the future relationship between the UK and the EU, and highlights the importance of moving to discussions on the future relationship as quickly as possible. In August, the negotiation co-ordinators had detailed discussions on the basis of this paper. We believe there is a high degree of convergence on key issues, and we agreed to work up shared principles on the common travel area. We also carried out further technical work on cross-border co-operation under the Belfast, otherwise known as the Good Friday, agreement.
We are also seeking a strong regime to protect the confidentiality of information and access to official documents produced or exchanged while the UK was a member state. Our position paper on this was published on 21 August. It shows that we are getting on with negotiations by directly responding to the EU’s paper, Issues relating to the Functioning of the Union Institutions, Agencies and Bodies. In the August round, we agreed general principles on a mutual approach to professional confidentiality and access to official documents exchanged or obtained prior to exit.
I appreciate that there has been not only interest in but reports by this House on continuity in the availability of goods for the EU and the UK. Our position paper was published in August. Moving to continuity in the availability of goods for the EU and the UK is vital. Ultimately, we want a deep and special partnership which allows the freest and most frictionless possible trade in goods. Our paper on this subject builds on a range of precedents for removing barriers to trade, together with the options set out for customs. In the negotiations we emphasised that the principles outlined in this paper seek to minimise uncertainty and disruption for business and consumers in the UK and the EU. However, our intention is that many of these issues will become irrelevant as we quickly move on to secure agreement about a deep and special partnership that includes free and frictionless trade in goods. For this reason, the UK sees this negotiation on the status of goods on the market before and after our withdrawal as an opportunity to provide certainty, but also recognise our common regulatory systems and ambition for co-operation in the future.
Looking to the future, we have, alongside negotiations, also published a number of papers over the summer which set out our thinking on our future partnership with the EU. These papers are different from our position papers, which relate specifically to negotiations on the withdrawal agreement itself. They offer pragmatic and innovative solutions to issues related to our withdrawal, as well as the future deep and special partnership we want with the European Union. From the start, we have argued that talks around our withdrawal cannot in practice be treated in isolation from the future partnership we wish to achieve.
The future partnership papers do not aim to dictate a single approach but rather to set out considered options for us to work on in partnership with the EU. One such paper was published on 15 August with regard to future customs arrangements, setting out our objectives and our proposals to achieve them. In assessing the options for the UK’s future outside the EU customs union, the Government will be guided by what delivers the greatest economic advantage to the UK and by three strategic objectives: ensuring that UK-EU trade is as frictionless as possible; avoiding a hard border between Ireland and Northern Ireland; and establishing an independent international trade policy.
Over the last year, the Government have conducted detailed and extensive work on all the options for a future customs relationship with the EU. Our paper sets out the two approaches that most commonly meet our objectives. Under either option, it will take time for the UK and our European neighbours to put the new system in place, and for businesses to adapt to new arrangements. The Government therefore wish to explore with the EU a model for an interim implementation period. The Commission published its own paper on customs last week, but that paper is focused narrowly on separation issues that would apply in a context where no agreement at all had been reached. We are more positive and forward-looking in the way we are approaching the matter. It is imperative that both sides consider our future arrangements together to ensure that there is as little disruption as possible to UK and European businesses, service providers and consumers.
The paper that we published on civil judicial co-operation in late August makes it clear that it is in the interests of the UK and the EU that there continues to be an effective framework for resolving cross-border legal disputes after we leave. This is to provide confidence and certainty, and minimise delay and expense for families, businesses and individuals, ensuring they can continue to settle cross-border disputes efficiently and effectively in the future. For businesses engaged in international trade, it is crucial to have confidence in, and respect for, choices made about which country’s courts will hear a case in the event of a dispute, and which country’s law will apply to resolve that dispute.
Our paper on enforcement and dispute resolution, published at the end of August, reinforces the Government’s message that after our withdrawal we will take back control of our laws and bring an end to the direct jurisdiction of the Court of Justice of the European Union in the United Kingdom. This paper states that it is in the interests of both parties that the rights and obligations agreed upon between us can be relied upon and enforced by individuals and businesses, and that where disputes arise between the UK and the EU on the application or interpretation of these obligations we can resolve them efficiently and effectively. We are clear that we do not consider that the Court of Justice of the EU should have direct jurisdiction for any of the UK-EU agreements that comprise the deep and special partnership. This is entirely in line with the many precedents which demonstrate that it is normal for the EU to reach agreements with third countries that provide for a close co-operative relationship, without the CJEU having direct jurisdiction over those third countries.
I turn to a matter of current issue, and certainly of great interest, under the presidency of the Council by Estonia: data protection. Our paper outlines the United Kingdom’s position on ensuring the continued protection and exchange of personal data between the UK and the EU. The UK recognises the need for, and indeed is one of the leading drivers of, high data protection standards across the globe. In an ever more connected world, we cannot expect data flows to remain confined within national borders. Individuals should have confidence that their personal data are being appropriately protected. After leaving the EU, the UK will continue to play a leading global role in the development and promotion of appropriate data protection standards and cross-border data flows. It is essential that we agree a UK-EU relationship on data that maintains the free flow of personal data between the UK and the EU and offers sufficient stability and confidence for businesses, public authorities and individuals.
More recently—last week—our paper on science and innovation explored how the UK can continue to collaborate with European partners on major science, research and technology initiatives. The UK has a long history of collaborating with European partners on ground-breaking research, from the development of a new clinical trials approach for the Ebola vaccine to cleaner energy and space exploration. This Government want the UK to maintain its world-leading position on science and innovation. We have four of the world’s top 10 universities, a world-class intellectual property regime and more Nobel laureates than any country apart from the US. As part of the new, deep and special relationship, the UK will seek an ambitious science and innovation agreement with the EU that ensures that the valuable research links between us can continue to grow.
Today our most recent paper was published, which sets out our vision for future UK-EU co-operation on foreign policy, defence, security and development. In doing so, it reinforces the Prime Minister’s message that the UK will continue to play a leading role as a global foreign policy and security actor. With challenges to our common security becoming more serious, our response cannot be to co-operate with one another less, but to work together more. This approach reflects our shared history, the practical benefits of our co-operation and the UK’s ongoing genuine commitment to the promotion of European interests and values across the world. The UK will also continue to use its partnerships and substantial international development budget to increase the impact of global development or to tackle country-specific problems. Noble Lords should have no doubt as to the commitment of this country to the security of Europe as a whole. The closing paragraph of today’s report makes clear our unconditional support for that.
Our future partnership papers describe a vision that will inform the current negotiations on separation issues where they relate to questions that can be settled only in light of the future partnership. Indeed, the early rounds of the negotiations have already demonstrated that many withdrawal questions and future partnership issues are inextricably linked. As the negotiations proceed in the autumn, the case for a more detailed discussion on that future partnership grows in importance. The position papers and those on the future partnership, taken together, provide the essential path towards building a new relationship to promote our shared interests and values—a relationship that will enable the continued success of all the peoples of the UK and the European Union, our closest neighbours and friends. I beg to move.
Baroness Smith of Basildon (Lab)
My Lords, I begin by thanking the Government for ensuring that we had some time for today’s debate. The Government are responsible for the business of your Lordships’ House, so we appreciate the efforts of the Chief Whip and the noble Baroness to engage the House. I have to say, I am not entirely sure that I agree with her when she said last week that the Government were being generous in allowing time for this debate but I think that we are agreed it is essential.
With the talks and the negotiations well under way, it is clear that these position papers are really important documents. It would not normally be acceptable to publish so many key papers when Parliament is in recess, but we understand the time constraints. But it really is not satisfactory that today’s debate has to cover so many different issues across those papers. I listened carefully to the noble Baroness refer to the 13 papers and five technical documents, and with the best will in the world, she obviously would not go into detail on all of them. Our debate today may be a little disjointed as colleagues wish to talk about different papers and different issues.
I welcomed our brief conversation earlier about the better sharing of information and improving the opportunities for effective engagement, and the comments that the noble Baroness made about ensuring that she listens to what is said. However, our concerns about that lack of engagement have been reinforced by the EU withdrawal Bill. That will come to your Lordships’ House in due course, but the very serious anxieties about engagement and the sovereignty of Parliament have been clearly set out by my colleagues in the other place. The Bill perpetuates the notion that the Government see Parliament as an irritant to which they occasionally need to pay homage and that Parliament is interested only in tying the Government’s hands in negotiations.
We have had little reporting back from the rounds of negotiations from the Secretary of State, and the Lords European Union Committee is continuing to find it difficult to get him to appear. The noble Baroness knows that your Lordships’ House has been the primary body in Parliament to scrutinise EU legislation, and many noble Lords have significant expertise that could be, and will be, helpful to the Government. Let us be clear that it is only through discussion and scrutiny that we can get the best out of these negotiations. The Secretary of State should therefore view our committees and your Lordships’ House as useful resources, and not things to be endured when he has the time.
We on these Benches appreciate that this is a difficult process but we are concerned about the slow rate of progress in the negotiations so far. By now, we would expect there to be emerging consensus on key issues, allowing formal agreements to be reached when we embark on the final round of phase 1 talks in October. Clearly it is not straightforward in some areas, not least Northern Ireland, but I know I speak for many in your Lordships’ House when I say it feels like we are failing to make substantial progress.
We welcome the fact that there are issues where both parties are moving towards an agreement and accept the need for both sides to reach a detailed understanding of the other’s position. But just how long do the Government expect this exploratory phase to last? The clock is ticking, and we need to move quickly to detailed negotiation and then to agreement. We seem a long way from that, other than on a small number of important but second-order issues. I hope that when the noble Baroness responds, something can be said about the very real worries that the Government’s position in negotiations is being hampered by that irrational doggedness in rejecting a European court that would arbitrate in disputes between the EU and UK.
Divorces are never easy, especially after a long marriage and when both parties want to remain on friendly terms afterwards, and especially when there are children involved. It was inevitable that as the referendum reduced a complex issue to a simple yes or no on the ballot paper, the arguments were similarly reduced. It was soon accepted that the £350 million a week for the NHS just was not going to happen. But it was easy to understand as a slogan—certainly much easier than extolling the virtues of regulatory alignment, nuclear safety, trade agreements and policy, for example. But promises that Brexit would be easy and straightforward were far more deceptive.
Let us look at some examples. Michael Gove boldly declared:
“The day after we vote … we hold all the cards and we can choose the path we want”.
Boris Johnson, assured us all that,
“there will continue to be free trade, and access to the single market”.
Liam Fox, now the International Trade Secretary, told us that a deal with the EU would be,
“one of the easiest in human history”.
Even David Davis told us:
“Be under no doubt: we can do deals with our trading partners, and we can do them quickly”.
If only. I really wish this were so: I wish they had got it right and I wish that was the position.
Unfortunately, Ministers now need to understand that we do not hold all the cards. Brave utterances about what we want are misleading, and they look foolish when they change their minds so often. The Foreign Secretary, having told the EU to “go whistle” if it wanted the UK to pay a divorce bill, within weeks had to eat his words and confirm that the UK will indeed meet its financial obligations. Pretending that such complex negotiations are easy is doomed to failure—and none of us wants to even contemplate that. The Prime Minister’s mantra that no deal is better than a bad deal is irresponsible and dangerous. Neither outcome would be acceptable, and neither outcome is what Ministers promised us.
A good deal for the UK has to be worked out. We need wise negotiators, and understanding and compromises on both sides. Michel Barnier has praised the hard work and dedication of the UK negotiating team, and I join him in that. Our negotiators are doing a difficult job under difficult circumstances, and in some cases are operating without any clear direction. This is complex and complicated. That is why we welcome the publication of these papers—and we looked forward to them.
However, part of the problem is that the position papers were late in coming forward, and in some cases they were pretty flimsy on detail. For the Secretary of State to describe the track and trace proposal in the Government’s customs paper as “blue sky thinking” was as embarrassing as it was puzzling. It really is a bit late now to throw ideas up into the air and see where they fall. It is crunch time; talks are happening; the sand is flowing through the timer. Our negotiators, hard-working as they are, need clear positions to present to their counterparts.
I have some sympathy with the Secretary of State, considering the pressures of the forthcoming negotiation rounds—which is why he should seize on our support for a transitional period. With just 18 months to go, the notion that we can negotiate a bespoke transitional deal that takes us out of the single market and customs union, and then continue to negotiate a final long-term arrangement, and have all the other trade agreements in place, without falling off the cliff edge, is more suited to Peter Pan’s never-never land than the UK.
It is an even more unrealistic proposition if, as expected, phase 1 talks are not closed in October, resulting in the all-important phase 2 talks being pushed back. The transitional deal within the single market and customs union has widespread support from across politics and business, because it is practical common sense. Businesses are making decisions on investments and jobs now. Some will be forced to implement contingency plans if they do not get answers in the very near future. It is therefore significant that the CBI—not a remain campaigner—has said that,
“Remaining in the single market until a free trade agreement is in force is the simplest way to secure continuity for business operations”.
I am grateful to the CBI for its briefing and for the examples it gives us of the impact of having no transitional deal, or one outside the single market and customs union, on small and medium-sized businesses. A comprehensive transitional arrangement is needed because businesses will be making those investment and relocation decisions in the coming months.
Following the transitional agreement, negotiations should continue from where we are now. For the Government to rule out certain options from the start is to go into negotiations with one arm tied behind our back. It may be an ideological position, but it is not a rational one when trying to get the best possible deal for the UK.
Let us look at the papers that have been published so far. It is impossible to deal with all the issues in the papers published to today’s one on foreign policy, defence and development, in the time available. But such debates can be helpful to the Government given the expertise and experience of noble Lords. I have a few general comments and, I hope, a suggestion for the way forward that the Minister can take on board.
When the Government published their paper on EU nationals on 26 June, it was as if they were starting again from the beginning rather than responding to the paper that the EU had published on 29 May. Your Lordships’ House offered the opportunity to resolve this issue early on, but although the Government promised that it was a priority, little progress has been made, and such a sensitive issue clearly impacts on wider negotiations. It is affecting EU citizens living here and UK citizens living in the EU, and in a number of ways it is already affecting businesses, services and individuals in the UK. The position paper did not really take us any further forward. Progress in areas such as healthcare and pensions is welcome, but a number of questions remain.
One of the most complicated issues in the negotiations, and certainly the most sensitive, is that of Northern Ireland and the Irish border. My noble friend Lord McAvoy, as well as my noble friends Lord Murphy and Lord Hain, as former Secretaries of State, have consistently and continually raised this issue in a constructive way. We welcome the commitment of both the Government and the EU to address very complicated questions. However, the EU has been clear that the onus of presenting proposals on the future of the border is on the UK. This will require the Government to move beyond blue sky thinking in areas, such as customs, and put a concrete and workable proposal on the table.
The publication of position papers and the withdrawal Bill has once again highlighted the Government’s difficulties regarding devolved Administrations. It is essential that Ministers fully and effectively engage with them and recognise the constitutional, practical and moral necessity of doing so. There remain a number of outstanding issues that must be resolved, and we will all be looking closely at the debates in the other place on the withdrawal Bill around this issue.
It is essential that the Prime Minister earns the respect and understanding of those who hold influence in the process or are most affected by the referendum result. It was reported that the Prime Minister declined an invitation from the President of the European Parliament to attend a full public session, instead opting for a behind-closed-doors meeting with a select few. Back in January, the Prime Minister declined an invitation from the Irish Parliament—an invitation that was also extended to, and accepted by, Michel Barnier. We all understand the difficulties, but it is the responsibility of the Prime Minister to ensure that our negotiations are against a backdrop of co-operation, and rejecting such invitations cannot be at all helpful. If the noble Baroness and her colleagues are able to enlighten us as to why, that would be extremely helpful.
Looking and planning ahead, whenever your Lordships’ House has debated, expressed an opinion, or passed an amendment on this issue, it has brought howls of protest—and worse—from some of the most ardent Brexiteers. We are clear about our constitutional role and responsibilities. You could say that we know our place and know our limitations. We also know that this House is always mindful of the constitutional role of Parliament as a whole, including the primacy of the House of Commons, which is different from the primacy of the Executive. There will be opportunities for your Lordships’ House to discuss the withdrawal Bill later, and I hope that the Government will reflect on this as the Brexit debates progress.
Our Constitution Committee has expressed its “considerable regret” that the Bill has been drafted as it is, leaving many fundamental constitutional questions—as it says—“unanswered”. For a referendum fought on the principle of parliamentary sovereignty, I know that many in your Lordships’ House are bewildered by the scale of the power grab being attempted by Ministers. Throughout the history of the 20th century, no Bill has ever sought such powers before—not even during wars or civil emergencies. Again, we will follow the debates in the other place with great interest before the Bill comes before your Lordships’ House.
In conclusion, we welcome the publication of the Government’s papers over recent months, but it still feels that we lack a clear strategy. For all the talk of a deep and special partnership with the EU, or of building a truly global Britain, we have not yet seen that clear road map that will take us there—a road map that does not send us hurtling over the cliff edge, but guarantees the full engagement of the devolved Administrations, outlines how relevant organisations, including employers’ organisations and trade unions, will be formally involved, and commits to interim arrangements that offer genuine certainty to businesses, consumers and workers alike.
It would be helpful if the noble Baroness and the Chief Whip could consider how future papers, such as these—indeed, perhaps these as well—will be treated. Where possible, it seems only right that Parliament be given an opportunity to debate their content, whether in response to a formal ministerial Statement or in a proper debate, as we do with EU Committee reports.
Your Lordships’ House is here to help. Debates on such issues will be an important contribution to the negotiations that Ministers will have, and I hope that the experience of this House will be welcomed. I hope that Ministers will accept that and choose to avail themselves of all the expertise and knowledge that Parliament has to offer.
Lord Newby (LD)
My Lords, I am grateful to the Government for making time for this debate. Over the summer they issued a swathe of documents about our future relationship with the EU and it is important that your Lordships’ House has the chance to discuss them in a timely fashion. Today’s debate gives us such a chance to take stock: of the documents themselves; of the negotiations as a whole; and of the Government’s preparations for Brexit more generally.
The Secretary of State for Brexit described the Government’s position as one of “constructive ambiguity”. He is half right—the Government’s position is one of almost total ambiguity. But he is also half wrong—there is nothing constructive in the Government’s approach because, being largely vacuous, it simply does not form a basis for detailed negotiations. As a result, it is producing a mixture of frustration and annoyance in Brussels, which can only augur badly for the deal which the Government might eventually negotiate.
I will not comment on all the papers which the Government have published, but I would like to mention two. The first is the recently published Collaboration on Science and Innovation. The Government acknowledge that, given the importance of science, innovation and related sectors, it is vital that links with the EU are maintained. The question, of course, is: how is this to be done? The paper completely fails to answer it. The response of many in the scientific community is exemplified by an email I received from a former senior Commission official in this field. He said:
“I just read the UK government Future Partnership Paper on Collaboration on Science and Innovation, and I am completely disgusted. It summarizes all the wonderful EU science and technology projects and current UK participation, many of which I organized and supervised at the Commission, and of which I am infinitely proud. There is not a single concrete proposal for continuation, not one. All it says in each area is that the UK would like to talk about collaboration and would welcome suggestions. Oh yes, it also mentions that free movement of people is ending, but smart and well paid people are still welcome. Post-doctoral positions, the foundation of research, are not well paid. It also says that the UK will fund EU science projects in the UK, but only until the UK leaves. How very generous! If anything was needed to tell all EU scientists to leave the UK now, this was it”.
The second paper on which I wish to comment is that on customs, an issue of fundamental importance to trading companies and to the economy more generally. The paper opens with a series of motherhood-and-apple-pie statements such as “We want to make trade work for everybody”—as if anybody could hold an alternative view. It then puts forward two options as to how we might move forward. One is described as “a new customs partnership”, which would involve the UK,
“mirroring the EU’s requirements for imports from the rest of the world where their final destination is the EU”.
This approach was so complicated and ill thought-out that David Davis, in a speech in the US at the end of August, said that the Government had dropped the idea—that is, one of the Government’s two possible proposals for building a new customs relationship with the EU jettisoned as useless only a fortnight after it was first proposed. This leaves standing only what the Government call a “highly streamlined customs arrangement”. The specific elements in this proposal largely consist of continuing existing practices wherever possible and adopting new technology to speed passage through the ports and avoid physical checks. Incidentally, there is no indication whatever of what this new technology might be. But, as far as I am aware, there is no arrangement anywhere in the world where there are no physical checks of any kind on goods passing across a border where different tariffs are applied by the two contiguous countries. Even if we have a free trade agreement with the EU, this will be the case post Brexit, for either the EU will negotiate trade agreements which have lower tariffs than at present, from which we are excluded, or—if Liam Fox is correct—we will be doing the same in reverse. In practice, both are possible. In any event, there will be a customs border and the need for some kind of capacity for physical checks.
Our economy, from the automotive to the fresh food sectors, depends on just-in-time deliveries. These will no longer be guaranteed, particularly because the lack of spare land at a number of our most important ports means that any sort of physical check is bound to lead to severe delays. Just as worrying, the Government have not even begun to come up with a proposal to avoid a hard border in Ireland.
The clear failure of the Government to make credible proposals in the areas which I have mentioned is replicated across the piece. Up to now, the consequences of this almost complete drift on the part of the Government have been largely reputational, but companies and individuals are making their plans and unless, by the end of the year, realistic proposals are made and significant progress is made in the negotiations—of which there is so far no sign—they will start voting with their feet, and our economy and society will suffer.
In these circumstances, what should the role of Parliament be? The Government’s approach, in both the withdrawal Bill and the negotiations more generally, is basically to say that we should trust Ministers to get it right, with as little scrutiny as they can get away with. However, my Lords, we do not trust them to get it right. As far as the negotiations are concerned, a monthly statement by the Brexit Secretary is inadequate. Statements do not allow for in-depth probing. The Secretary of State said that he would attend your Lordships EU Committee each month; he now says “quarterly”. He should return to his original stance, or at the very least—and I mean no disrespect to the noble Baroness—the noble Baroness, Lady Anelay, should fulfil his original commitment.
On the withdrawal Bill, concerns about the extent of ministerial powers have been widely aired, but the conclusion of your Lordships’ Select Committee on the Constitution seems particularly chilling. In paragraph 44 of its report of 7 September it says:
“The number range and overlapping nature of the broad delegated powers would create what is in effect an unprecedented and extraordinary portmanteau of effectively unlimited powers upon which the Government could draw. They would fundamentally challenge the constitutional balance of powers between Parliament and Government and would represent a significant—and unacceptable—transfer of legal competence”.
These concerns are widely shared, most notably of course in the Commons itself. In last Thursday’s debate in the Commons, the Brexit Secretary hinted that he might be prepared to make concessions but, as is typical for him, no firm proposals followed. Can the Minister give us any further indication of what the Secretary of State had in mind?
However, even if the Bill is amended in respect of powers, there remains the practical challenge of giving satisfactory scrutiny to the thousand or so statutory instruments which the Government say Parliament is going to need to pass over a nine-month period from next Easter. The Hansard Society, in its recent report Taking Back Control for Brexit and Beyond, points out that the Commons does not normally give SIs detailed consideration. In the case of SIs resulting from the withdrawal Bill, it seems likely that this attitude might change, in which case current procedures for dealing with them are inadequate. It is obviously for the Commons to decide how it wishes to conduct its business, but the Government must have a view. Have the Government read the Hansard Society report, with its core suggestion of a sifting process in the Commons, and do they have a view on such a change? As far as your Lordships’ House is concerned, dealing with SIs would be made much easier if they were published in draft form. What is the Government’s policy on publishing withdrawal Bill SIs in draft and, if they indeed plan to do so, when will we see their first offerings?
The Government’s approach to the Brexit negotiations has so far been shambolic. Given that the leading players in the process are unlikely to change, so too is the approach. In these circumstances, the role of Parliament becomes more important than ever.
In advance of today’s debate, the Government expressed extreme indignation at the tabling of a divisible Motion. But if the Government continue to treat Parliament with, at times, near disdain, they can hardly be surprised if they provoke a hostile response. It is not too late for the Government to change this approach—and I welcome the comments of the noble Baroness in her opening speech—but, as with the negotiations themselves, the clock is ticking.
Lord Jay of Ewelme (CB)
My Lords, the negotiations on leaving the European Union are the most important and complex undertaken by any British Government since the Second World War. The role of Parliament in scrutinising the key elements of those negotiations is essential. I therefore thank the Government for scheduling this debate, and I welcome the Minister’s commitment to future debates. However, as the noble Baroness, Lady Smith, has said, more detailed scrutiny by parliamentary committees is also essential—at least by the European Union Committee of your Lordships’ House, which I chair at the moment, in the absence of the noble Lord, Lord Boswell. That committee and its sub-committees have produced over 20 Brexit-related reports since the referendum, with more to come.
The committee agrees very much with Mr Davis’ comments in his latest letter of 8 September—as part of a rather lengthy correspondence with the committee—that,
“allowing for sufficient scrutiny in these negotiations is crucial”.
However, the committee does not agree with the second half of that sentence:
“but rigidity of providing for Committee appearances at fixed intervals may run counter to the flexibility needed to ensure those negotiations are conducted successfully”.
The committee wants to be constructive. It also wants to discharge responsibility to your Lordships’ House. We hope we can find a way for the Secretary of State—or, when he is unavailable, other Ministers, including the noble Baroness, or senior officials—to appear before us regularly as these crucial, complex negotiations proceed.
I do not for a moment underestimate the weight of the negotiating schedule on the shoulders of Ministers and senior officials. The subjects are extraordinarily complex and touch upon almost every aspect of national life. It therefore seems entirely sensible for the Government to accept the need for a transitional period after we leave the EU formally in 18 months’ time. How long that transition period should be and what form it should take remain for negotiation.
The realistic alternative, it is increasingly clear, is that we simply leave after two years—either because we decide to walk away, or because we have not completed the negotiations on time and the clock stops. Against that background, the EU Committee is about to start an inquiry on the implications of walking away and on the nature of the transition period. These are issues which deserve careful analysis.
My own view is that walking away is an uncertain option because, the following day, we would have to walk back again to talk in our own interest about co-operation—on foreign policy, security, counter- terrorism, cybersecurity, police co-operation and other subjects, too. This seems to be the implication of the Government’s latest position paper, published today, on foreign policy, defence and development, which I welcome. I particularly welcome the reaffirmation of the conclusion of the NATO Warsaw summit, that:
“A stronger NATO and a stronger EU are mutually reinforcing”.
Indeed, I welcome more generally the position papers and future partnership papers produced by the Government over recent weeks. Some of them have real substance, but others have a Cheshire Cat-ish quality about them: the more you look at the arguments in them, the more they seem to disappear before your eyes.
Finally, I want to focus on Ireland. We had a good debate about Ireland last Tuesday. The following day, the Commission’s negotiating paper was published. We now seem to be in a position in which both sides recognise the importance of the Irish dimension of Brexit, particularly in respect of the border, and I greatly welcome that. However, the British Government have put forward a solution which is widely seen as impractical, and the Commission has produced a paper which does not put forward solutions at all but says—surely correctly—that,
“flexible and imaginative solutions will be required”.
I listened carefully to what the Minister said in introducing today’s debate but I should be grateful if, in summing up, she could tell us what happens next in what is one of the most important, seemingly intractable aspects of the negotiations.
The Lord Bishop of Birmingham
My Lords, I am grateful for the debate and for the papers. It may help noble Lords to rest their ears for a moment if I say that my concluding remarks will be very similar to those of the noble Lord who has just spoken. It may also help your Lordships to know that—in confession terms, if I take the lead—I have not read all the papers in detail. None the less, I would have liked those sorts of details much earlier, I would have liked them to be debated and scrutinised, and I would have liked them to achieve a little more consensus as we get into the timetable of these negotiations.
Before and after the referendum, we were treated to the lazy slogans “Brexit means Brexit” and “No deal is better than a bad deal”. I am hopeful and expectant that those moments are over and that now, with these papers and other details, we are getting down to some serious work. We realise that this is no easy task, and I was very grateful that the noble Baroness opposite, the Leader of the Labour Party here, said, “We are here to help”. That is certainly the view from these Benches for very obvious reasons—for the national good, but also for a successful outcome.
Although we have the papers, I am honestly still at a loss to know what the end game is. We heard speeches from the Prime Minister at the party conference last year and at Lancaster House setting out a clear understanding of neither the direction of travel nor the future relationship between Britain and the EU. The vote in the other place last night—or was it early this morning?—was really about process and took me little further into the content of the negotiations. Unless we know what the Government have in mind when they say they want a “deep and special partnership” with the EU—the words used by the Minister today—the House and the public will know little about how the papers fit with that overall strategic objective.
As someone who has spent a lot of time negotiating both in my previous life in the oil industry and, now, in creating relationships between the Church, the state and China, which I do regularly for the archbishop, I know how important it is for negotiators—I am glad to hear them complimented today—to have a very clear understanding of where we want to get to as we go into the nitty-gritty and detail of the papers before us. I am looking forward to hearing from the noble Baroness more detail about the integration of the ideas into an overall strategic objective that can be negotiated harshly and quietly but realistically. The piecemeal ideas that we have here, whether on defence, science, immigration or many of the other topics mentioned in the list of papers today, can lead to uncertainty and confusion and contribute to increased anxiety and entrenched positions.
In conclusion, perhaps I might be allowed to take a bigger view of our own processes and political life. Politics is tough and often ruthless. On the whole, we do it very well in this country and have done for many centuries. I hope that we continue to raise our game collectively, both here and in the other place, in how we debate and decide on Brexit, so that we do not do any more damage to the special and precious political processes that we have inherited and for which we are responsible. The way we disagree on such an important, generational issue as this—and disagree we will—needs to be with grace and compassion, both for the integrity of our political processes and, let us not forget, for a reliable and successful outcome for the wider population of the country, but especially for the weak and vulnerable whom we are here to serve.
Baroness Neville-Rolfe (Con)
My Lords, I congratulate my noble friend Lady Anelay of St Johns. In my view she has the hardest job in our House.
I am a new member of the EU Select Committee. I should perhaps declare an interest as a previous Commercial Secretary to the Treasury and as the UK Minister on the Competitiveness Council from 2014-16, preparing vigorously for the UK presidency which never happened. My whole career has involved negotiating in Brussels as a civil servant, business executive, chairman of the European retailers’ organisation and then as a Minister. I have experienced good and bad times and dealt with serious matters, but none more serious than those facing us today.
Given my love of European culture, I was a natural remainer. On referendum night, I was on a plane with the German Minister, returning from a digital summit in Mexico. We went to bed with Nigel Farage admitting defeat and woke up to Cameron’s resignation. It was a difficult night for both of us.
I have always disliked referenda, but the then European Union Referendum Bill was not opposed by any major party and was passed with massive majorities. Those concerned with its passing have to live with the consequences. Certainly, if we were to go against a clear instruction from the electorate—as senior but discredited figures are now advocating—our body politic would degenerate in ways we cannot now see clearly. So we have to make Brexit a success.
So far the process has not been impressive. I am not clear why we agreed to discuss divorce before our future relationship with the EU. My reading of Article 50 would support our refusal to do so. It says,
“the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union”.
So, to my mind, it is misguided both for the Commission to have refused to discuss future trade alongside withdrawal and for the UK to have accepted that refusal.
I also worry about the documents that have been produced on both sides. I have looked at those on customs and on data protection. The UK Government and the EU seem poles apart, suggesting that our negotiators are barely engaged. The UK papers try, rightly, to look forward but are written largely in isolation. As the noble Lord, Lord Newby, said, our proposals for frictionless trade across the Irish border have attracted major EU criticism. It is regrettable that we do not seem to have the knack of taking account of where the EU is coming from—a skill we were famous for in the Council of Ministers when we worked on policy together. The EU documents are even worse because they deal only with withdrawal and do not try to look forward to a new partnership at all. It would be good to have explanatory memoranda from the Government on these proposals.
So how do we move forward? First, we need to accept a significant exit payment to the EU over a number of years. It is painful, but it is dwarfed by the business disruption that a cliff edge would bring. But—and it is a big but—the payments must be dependent on a future agreement covering all aspects. Not a penny should be paid in advance and, in the Commission’s own words,
“nothing is agreed until everything is agreed”.
Secondly, both sides must agree to treat existing immigrants of the EU 27 and the UK well, as the case may be. However, for the future, post-2019, we must bring in a much greater degree of control and the leaked Home Office document could represent a real start. We need a guest workers’ scheme to help farming and a few other industries, with or without EU agreement, and we need continued access for the talented to secure the future of our financial, tech, research and international businesses.
However, we also have to recognise that the EU has failed to construct a proper border for third countries, especially across the Mediterranean. Indeed, Brexit was in large part the logical consequence of a succession of unfortunate drivers of immigration—the wars in the Middle East, social breakdown in North Africa, Chancellor Merkel’s encouragement of asylum seekers and the failure of our own referendum negotiators in 2016 to find a creative solution on the movement of people.
Thirdly, we need a transition period to ease the strain of adjustment on both sides, on issues ranging from financial services and border controls, to Euratom, telecoms, contracts and intellectual property. Two years transition should be enough but the direction of travel for each sector should be set out by 2019. Transition cannot become an elastic article 50.
Finally, we should agree on the outline of trade arrangements with our European partners and be ready to move into active third country agreements from 1 April 2019.
Those with an expertise in European matters want to help the Government in the biggest change since the war, as the noble Lord, Lord Jay, has said. The EU Committee is also seeking to maintain relationships with Parliaments and countries beyond narrow party politics, as well as with the Commission with Michel Barnier making us welcome in July. This can pay long-term dividends.
There are some hopeful signs amid the gloom, The French seem to be rethinking on the sequence of discussions since it became apparent that Frankfurt could do much better than Paris in financial services if London was to take a big hit. We can also have a more constructive conversation once the German election is behind us.
Of course there is some risk of a cliff edge in the Brexit negotiations, which we must prepare for and be prepared to accept if the other side is totally unreasonable. However, this is not where we want to be. We want to develop new partnerships with our European neighbours, new machinery for collaboration and dispute resolution, new and refreshed fora for the exchange of ideas, free trade and the tackling of common problems.
The Brexit process is hard and often depressing but we can move to a more prosperous Britain after these turbulent times. However, a significant injection of energy and realism into these negotiations is needed soon from both sides.
Lord Liddle (Lab)
My Lords, on Brexit it is time for the Government to start facing realities. The divorce negotiations in Brussels have effectively reached deadlock. None of our negotiating partners expects the European Council to agree to widen their scope in October, and few expect any real progress by December. Those who expect a triumphant Angela Merkel to rescue the British coals from the fire are living in the fantasy land that the British Government have inhabited since last June’s Brexit vote.
The Government are still behaving as though we can leave the EU and continue to enjoy all the benefits of membership. Although the position papers the Government have produced are to be welcomed, what marks them out is an absence of specifics and a refusal to face up to hard choices. That is why we are facing the abyss of a no deal. The consequences of walking away without an agreement would be horrendous. It would cause the biggest political crisis any British Government have faced since 1940.
My view is that the only way for Britain to avoid this looming crisis is to accept a transition based on our continuing membership of the single market and the customs union. I am glad that my own party is now clearly moving to support that. Indeed, I go further: the full membership of the single market and customs union could be viable—although, I accept, not ideal—as a long-term arrangement.
The obstacle to a sensible transition is the refusal of the Government to make tough choices. Take the question of the customs union: if Britain is outside the EU customs union, we have to accept the reality of a customs border being imposed where there is none now. Without that, there cannot be the necessary checks to ensure goods comply with rules of origin, product standards, phytosanitary standards for agriculture, health and safety requirements or differential tariffs. These necessary realities cannot be magicked away by talking about smart technological solutions; they can be mitigated but not removed.
A customs border is an inevitability, given that the declared purpose of the Government in leaving the customs union is to pursue an independent trade policy. The purpose of such independence must be to negotiate different and easier terms of access for overseas products to our markets in return for greater access to theirs than the EU itself has negotiated. However, if we negotiate independent trade deals that open up our markets to overseas goods and agriculture with lower standards than the EU’s, then of course the EU is going to insist on tough border checks to prevent these goods being transferred for sale in EU markets. The spectre of Donald Trump and his chlorinated chickens comes to mind.
This may seem narrow and technical, but for the EU it is not, and it certainly is not for the Irish. If Britain chooses to leave the customs union, it is effectively imposing the necessity of checks on the UK-Irish border, much though the Government may protest that is not what they want. The reinstatement of a hard border in Ireland would be, in these circumstances, the Government’s political choice as, at present, it seems that satisfying Liam Fox in securing his independent trade policy counts far more than securing Northern Irish peace.
This refusal to accept reality is even starker when it comes to the single market. The European Union (Withdrawal) Bill incorporates the EU acquis into British law, but what happens then? The Commons debate rightly focused on the Bill’s unacceptable Henry VIII powers for Ministers to change EU rules at will, but from the perspective of our EU partners this means that from day one of the Bill’s enactment there is no guarantee that EU rules and standards will continue to be maintained: the floor of social and labour standards; the health and safety and environmental rules; the protections for consumers; the control of state aid; and, increasingly, corporate tax regimes. For a common set of rules is the only way in their view—and they are right—to ensure fair competition and the avoidance of a regulatory race to the bottom.
There is, therefore, an unresolved tension between the unimpeded market access the Government seek to the single market, and the regulatory sovereignty they insist Brexit implies. Brussels will insist that full access to the single market requires full adherence to the EU rulebook. How could it be otherwise without undermining what lies at the foundation of the European construction?
I recognise of course that, on Brexit, Britain would become the single market’s rule takers not rule-makers. But, frankly, the EU’s imperfect rules for a regulated market capitalism are a far happier prospect, and more in accord with my values, than the Brexiteers’ vision of an offshore, deregulated tax haven Britain, conquering new markets across the seas, led by such buccaneers as David Davis, Liam Fox and Boris Johnson. Is it really the case that sacrificing our home market, which is the EU single market, is worth paying the price for this unquantified vision of a Thatcherite nirvana?
Of course, I voted to remain and I do not think that we should be leaving the EU.
Lord Liddle
I accept that public opinion is still some way off recognising that the Brexit game simply is not worth the candle, but as the misrepresentations of the leave campaign become daily more apparent, as the contradictions and tough choices of Brexit can no longer be hid from sight, as no Minister has been able to present a realistic vision of what a “global Britain” would actually be like and what they mean, and as the chaos in the Cabinet in framing any kind of credible policy becomes the funniest end-of-the-pier show in town—were it not so tragic, given what it means for our own country—I live in hope that public opinion might change. My strong belief is that we pro-Europeans should continue to fight for that.
Viscount Trenchard (Con)
My Lords, I, too, thank my noble friend the Minister for introducing this debate today. I have read—well, at least skim read—the position papers and future partnership papers published by the Government explaining where we stand on several aspects of our negotiations. While many of the papers are lacking in detail, they clearly show the Government’s sincere intention to build a mutually beneficial deep and special partnership with the European Union after our withdrawal. Does the Minister agree that the Government could perhaps show more enthusiasm and explain more clearly their vision for the UK post Brexit?
As for the exit bill, we should surely include those sums which we should properly continue to pay for our membership of Horizon 2020, the Erasmus exchange programme and others. In addition, there is a strong argument that we should continue to pay our share towards projects in the current spending round which are already approved. It seems clear that we should not be expected to agree our leaving bill with the EU without at the same time agreeing at least the broader outlines of our future relationship. As recognised by my noble friend Lady Neville-Rolfe, the noble Lord, Lord Kerr of Kinlochard, apparently understood the logic of that linkage in his sensible drafting of Article 50. The Irish Taoiseach has also said that it is common sense that the future of the Northern Irish border cannot be settled until the shape of our post-Brexit trading relationship with the EU emerges.
Can the Minister say any more about future customs arrangements beyond what is written in the partnership paper and what she said in her opening speech? The Government have put forward two options: a highly streamlined customs arrangement and a new customs partnership with the EU. Which of the two is favoured by the Government and which would provide the UK with the greater freedom to pursue its independent trade policy objectives?
Can the Minister also say any more about the transition or implementation period during which it is intended that trade with the EU 27 should continue on the same basis as now? Does she agree that temporary membership of the customs union, EEA and even EFTA would all inhibit our ability to engage in discussions with third countries with which we may be able to agree very beneficial trade deals when we are free to do so? Third countries cannot seriously engage in negotiations unless they know where the UK will be in two years. Therefore, it is important that there should not be measures in the transition which take the opportunities for the UK after Brexit off the table. It is important that, during the interim period, the UK should be seen as sufficiently in control of its regulatory choices that it can be a proper partner capable of agreeing and implementing measures on technical barriers to trade and services regulation.
Among such countries is Japan, to which the Prime Minister recently made a successful visit. The Japanese are happy that the Government recognise the special nature of our partnership with that country, which accounts for over £40 billion of accumulated foreign direct investment and whose companies directly employ over 140,000 people in this country. In a recent conversation, the CEO of one of the largest Japanese investors in the UK told me that he wanted to be sure that the UK could quickly implement a free trade agreement post-Brexit with Japan. So I do not think it is only Germany, France and other EU exporters that are asking their Governments to ask European Commission negotiators not to pursue their political objectives ahead of a mutually beneficial free trade agreement. Third-country Governments such as Japan’s also have good reasons to do the same thing, so I believe it is likely that the EU will decide to show more flexibility than it has done so far. It does not make any sense for the EU to continue to pursue a punishment deal, which, as my right honourable friend the Chancellor said on “The Andrew Marr Show”, would be even worse than no deal.
I regret the intention of the noble Baroness, Lady Smith, to divide the House this evening. It is clear that the Labour Party’s position on Brexit has changed from what it was at the time of the general election, and is now more closely aligned with the views of Sir Keir Starmer than those of Jeremy Corbyn.
I attended the launch of a useful report by the International Regulatory Strategy Group, which is supported by TheCityUK and the City of London Corporation. The report is entitled ‘The Great Repeal Bill’: Domesticating EU Law. I agree with the report’s recommendation that the Government should not use the repeal Bill to make policy changes, but it is clear that the Government’s intention is to take technical powers under the Bill to ensure that EU law works after transposition into English law.
In another place, there has been much talk of Henry VIII powers, but those who object to the repeal Bill should recognise that it cancels at a stroke the application of the acquis—a massive collection of Henry VIII powers taken, sometimes by stealth, from Parliament over the years—and that its object is to restore powers to the other place and your Lordships’ House.
Baroness Goldie (Con)
My Lords, may I respectfully remind everyone that the advisory time limit for Back-Benchers is five minutes? We were doing rather well, but there has been a bit of a straggle off the path. I invite your Lordships’ co-operation for the sake of the subsequent speakers, who will be waiting patiently over a considerable period of time if we begin to stray significantly from the five-minute allocation.
Lord Wallace of Saltaire (LD)
My Lords, it is now 15 months since the referendum, and 18 months until the Government’s deadline of March 2019. We are almost half way there, in terms of the passage of time, but the Government are lagging a long way behind that in terms of clarifying, either to the EU or to the British people, what sort of relationship we wish to have with the EU after we leave.
Three vacuous, but no more understandable, phrases appear throughout these papers, as a sort of leitmotif: “Brexit means Brexit”; “deep and special”, as in “a new, deep and special partnership”; “flexible and imaginative”; and “seamless and frictionless”. Like “strong and stable”, these empty soundbites are clearly intended to give the impression that they mean something, without actually explaining anything.
The referendum campaign was about the principles of leaving or staying in the EU; but in trade negotiations, the devil is in the detail. It is detail about the future relationship between the UK and the EU that this House will want to hear from the Government, in area after area, as the Government stumble toward the March 2019 deadline. Detail—as the noble Viscount, Lord Trenchard, said—is largely missing from these papers. There are strong hints in these papers of how far the Government have moved from their initial hard line. I noted references to new arrangements—in civil justice, for example—which would,
“mirror closely the current EU system”,
or, in future customs arrangements,
“a new customs partnership that would involve the UK mirroring the EU's requirements for imports from the rest of the world.”
The Minister might like to tell us how much mirroring of the EU’s rules and regulations the Government propose to maintain after we leave. Is it likely to become a permanent mirroring with the UK following EU rules and regulations from the outside without a voice in their formulation, as with Switzerland and Norway?
The science paper states that,
“given the UK’s unique relationship with European science and innovation, the UK would like to explore forging a more ambitious and close partnership with the EU than any yet agreed between the EU and a non-EU country”.
That is an extremely deep and very special relationship, almost associate membership, and I am sure not what Nigel Farage or the Daily Mail—or even John Redwood MP or the noble Lord, Lord Forsyth—think the will of the people demanded. Why are we leaving if that is what we seek instead? It goes on to refer to Norway’s participation in EU science programmes as the model we should follow. However, I thought David Davis and others had ruled out the Norwegian model. Perhaps the Minister can enlighten us on that.
I welcomed last night’s news that there would be a position paper on foreign policy, defence and development. Last February’s White Paper was vague and imprecise in this field but today’s paper only repeats what it said. It focuses on how much the UK has valued EU co-operation but not on how we will manage to continue that co-operation after we leave. It correctly reminds us how much our Government—most of all, the Conservative Government after 1979 under Mrs Thatcher and the noble Lord, Lord Carrington—led in developing the structures of foreign policy co-operation. It tells us that we participate in all 15 current common defence policy missions and have,
“successfully commanded the EU’s Operation ATALANTA off the Horn of Africa”,
for several years.
Some 17 of the 21 pages set out all that we have achieved within the EU over the last 40 years, including in meeting the challenges of global migration, in space policy and in cybersecurity. Only in the last four pages does it gingerly suggest how we might maintain such collaboration after we leave:
“Our future relationship and cooperation could take a range of forms”,
it brightly suggests,
“including by mirroring participation by other third countries contributing to European security”.
That is the Norwegian model again. It goes on to say:
“This future partnership should be unprecedented in its breadth”,
and include secondment of personnel, mutual provision of consular services, exchange of classified intelligence, industrial co-operation including in space programmes and,
“a continued contribution to CSDP missions and operations”.
The science paper already told us that the UK “has been instrumental” in defining the future work plans of the European Defence Research Programme in the next multi-annual financial framework, which is expected to invest €500 million a year in industry and academia from participating countries. There follows a cry of “Help”, thinly disguised in official language:
“The UK would welcome dialogue with the EU and its Member States on the future of this programme and terms for non-EU involvement, noting that Norway will have third-party association in this preparatory phase”.
I understand that as saying that we would like to stay in this but do not know how to do so.
In today’s Times, the Foreign Secretary assures us that in terms of foreign and security policy,
“our departure from the European Union will change nothing”.
Yes, and pigs will fly and cakes will miraculously remain intact when eaten. We cannot leave without excluding ourselves from the many multilateral meetings, structures and integrated staffs that hold this all together. We will be absent when decisions are taken. Perhaps the Minister would say a little on whether the foreign policy paper gives us a subtle series of messages that there is an awful lot of European collaboration that we really do not want to leave now we have at last thought about it in detail.
Lord Howell of Guildford (Con)
My Lords, unlike the previous speaker, I warmly welcome this stream of partnership and position papers, which I believe reflect rather well on our Civil Service and its creative resources and energies.
I shall confine my comments in my five minutes to one point and plea. The worst and silliest advice ever given to a Prime Minister throughout this whole saga was to avoid seeking fundamental changes in the way the European Union works. That was the advice given by officials close to David Cameron and by think tanks such as the Centre for European Reform. They all said that deep reform is not on and that it should be avoided. They advised sticking to a shopping list of British demands, which is of course what Mr Cameron did, against his earlier judgment and inclination, with absolutely disastrous results. Far from avoiding the fundamental principles of the European Union, we as a major regional power and networker should have opened them up in close alliance with the majority of European peoples who see the overwhelming need for new models of European co-operation. That is where all good Europeans should be turning their efforts.
All along, what is happening to the whole European Union has been the real story, which too many people have avoided. It faces entirely new challenges from unprecedented migrant movements larger than anything in history, from a totally transformed world trade pattern and from the new phase of global digitalisation and networking, which is changing the entire conditions of international relations and trade. That is the point that so many columnists, and the BBC in particular, have completely failed to grasp.
This brings me to my plea: we need one more position paper to add to all that we have had, including the one today. I would like to see this position paper majoring on the following points. First, it should address the whole of Europe’s crying need for new immigration strategies, of which our own wish for stronger border controls is only one aspect. The theoretical principle of free movement of persons, introduced at Maastricht, which is said to be so fundamental, has in reality long since collapsed as country after country adopts border restrictions and job regulations for immigrants, such as France itself and all of the Visegrad countries.
Secondly, there is the need for the old EU economic model to be replaced with arrangements which respond to the powerful decentralising and localising pull of the digital age in all areas, as well as the need to bring a new philosophy not just to trade and industry but to security and all aspects of regional co-operation including energy—although, of course, on quite different lines to the present bankrupt EU energy policy.
Thirdly, there is the need for Europe, which is a fast-shrinking part of the global trade order, to revise its trading provisions fundamentally in the new globalisation phase, and adopt new platforms and blockchain technologies which invalidate the old protectionism and the old customs union concept to which our friends opposite, the Labour Party and others, still cling. That makes them prisoners of the past, one and all.
Fourthly, there is the question of how to reverse out of the blind cul-de-sac of the chronically sick euro system which demands an unattainable, undesirable and unnecessary degree of budgetary tax and political centralisation, and prepare for the fintech age of crypto and virtual currencies and the demise of cash which lies just ahead.
Today there are good Europeans looking forward and vested-interest Europeans clinging to the old hierarchy. A weak, outdated and fractious continental Europe has always been of immense damage and danger to Britain. We just cannot isolate ourselves from it; that way lies disaster. Rather than trying to walk away from what will be a lopsided Europe overdominated by a reluctant Germany, we should be committing our considerable intellectual and diplomatic resources and our huge experience to the design of a more modern European model and the pathway towards it. That would include the deep defence partnership which the latest position paper talks about, and very welcome it is. That is one example of many on how closer co-operation in Europe can be achieved outside the rigid confines of the old EU treaties.
Long before Brexit, we should have been doing this anyway. We should have been afraid of neither treaty change nor allegations that we are somehow heretics challenging the sacred European principles. We are neither. We are, or should be, realists who want, and always have wanted, our region to be stable and to prosper—and continue to be so—in utterly changed conditions. It is a different world from the one in which the EU was conceived 60 years ago. We can argue endlessly about exit payments, land borders, citizen status and transition times—where, in my view, it seems a no-brainer that there should be an EEA-type holding pattern. These can all be resolved in due course, as we move to a sensible customs partnership. But the real issue is what is happening in Europe in this age of upheaval and disorder, and how we work hand in glove with our partners in the face of the colossal new challenges. That is the missing frame to our overall approach and we need now to set it out with boldness and foresight. Can we please have another paper on that?
Lord Whitty (Lab)
My Lords, the timetable spelt out by the noble Lord, Lord Wallace, is even tighter than he says. The reality is that on the present timetable there are 12 months between now and when, to allow for ratification across Europe, we have to agree. I therefore hoped that the position papers from both the EU and the UK would clarify the progress that had been made on these negotiations. I am afraid that I came away—in so far as I managed to read them—feeling that the two sides were operating in parallel universes. They were not congruent or engaging. I came to the conclusion that the solidity needed in negotiations has not actually started. The latest word across the wires is that the next stage of those negotiations may indeed have been postponed.
In my youth, I took a professional interest in the skill of negotiation, in which certain unwritten rules are pretty universal. The first of those is: be clear about your optimum objective. The second is: do not prematurely disclose your bottom line. The Government have breached both those rules pretty spectacularly. They are not clear what form the future partnership is likely to have. They may use all sorts of aspirational adjectives to describe it but the reality is that they have not been clear. These papers describe, for the most part, second-order issues but do not relate them to how the partnership which our Government intend to achieve will look, particularly in relation to trade. On the other hand, the Government have been overkeen on spelling out our red lines—on migration and on having no role whatever for the ECJ. I expect that they may well, in the end, have to compromise on these issues.
Rule 3 is: understand where your counterparts are coming from and be clear about their relative strength. Rule 4 is: identify their bottom lines. Despite the access to diplomatic and political contacts which the Government have throughout Europe, there seems to be no very effective assessment of where Europe is coming from in the negotiations or of how the European institutions and the 27 member states are approaching them. These papers do not give a single clue as to the Government’s assessment of the EU position, nor is it self-evident in them what the Government consider the EU’s red lines to be. The most self-evident of the EU red lines, one which could guarantee the agreement of both contributing net payers and late receivers within the 27, is on settling the budget. Unless we face up to that early, the rest of it is not likely to be delivered at all.
Rule 5 is: settle what can be settled early on. This applies even if, theologically, nothing is agreed until everything is agreed. It is always useful to have some bits of agreement in your pocket. The EU and UK negotiators appear to be misjudging this, particularly in relation to Ireland, which can only be concluded once we know what the general trade and migration arrangements will be.
Rule 6 is: identify key outstanding areas of difference. Rule 7 is: keep as many options open as possible. The first of those is the only one on which the Government have clearly set out the different positions and compared them to citizens’ rights. I wish that they would do that more generally.
Rule 8 is: do not believe your own propaganda—not during the referendum, nor indeed since, not the pronouncements by the Foreign Secretary or the Brexit-supporting press. It will not help at all. Rule 9 is: yes, you can threaten to walk away, but only seriously contemplate it if you know where you are going. As yet, we do not have a clear idea what those who advocate, or are prepared to contemplate, no deal mean by it—we need to know. If I were back in the days when I was assessing role-playing negotiators, I probably would have given Messrs Davis and Barnier roughly a C-plus—the plus for resilience and good humour.
I also have rule 10, which is: be prepared to take advice. At the moment, it appears from the discussions with business leaders that they all fear that the Government are not taking their advice. There is also the key issue for us of whether the Government are prepared to take advice from Parliament, and in particular this House. I very much endorse what the noble Lord, Lord Jay, said about getting on a proper keel the relationship and the rapport back between Ministers and your Lordships’ EU Select Committee. We have 12 months to get this right, a key part both for the negotiations and the legislation—in whatever form it comes to us from the Commons. If the Government, this House and the Select Committees are at odds, we will not manage this well.
Lord Blencathra (Con)
My Lords, I warmly welcome and congratulate the Government on the excellent position papers that they have produced setting out our aims but, quite rightly, not our strategy. I cannot for the life of me understand the wisdom or logic of the Official Opposition’s Motion, which is on the Order Paper for debate later today, calling on the Government to publish their strategy for the negotiations, thus revealing all our key negotiating positions and red lines. What sort of foolishness is that?
When Churchill gave his first speech to the Commons as Prime Minister in May 1940, he said:
“You ask, what is our policy? … It is to wage war, by sea, land and air, with all our might … You ask, what is our aim? … It is victory … victory, however long and hard the road may be”.—[Official Report, Commons, 13/5/1940; col. 1502.]
Did he then go on to set out his strategy? Did he go on to say, “First, we will take on Rommel in North Africa, then we will land in Sicily and drive up through Italy and, hopefully, some time in 1944 we will land in Normandy”? Of course not. A strategy revealed is no longer a strategy but a concession. That is what the Opposition and some other noble Lords are asking for in that Motion.
So what is our policy? It is to leave the EU with the best deal possible. What are our aims? They are the 12 aims set out in the White Paper. I have heard no one suggest that those aims are inadequate or wrong. It would be madness for the Government to publish in detail the strategy on how they plan to achieve the aims. We see the monstrous try-on by Mr Barnier, suggesting that the UK should pay anything from €50 billion to €100 billion and asking if we would kindly make him an offer. I am sure he would love to see a UK strategy paper setting out what our bottom line might be and what we would be prepared to settle for.
I want to see a deal done with the EU that meets our aims of the White Paper. But that deal has to have us out of the single market, the customs union and the EU court, because that is what the British people voted for. Let us have no more of the myth perpetrated by some remainers that those things were not on the ballot paper and the public did not vote for them. Oh yes they did vote for them—it is insulting to say that the electorate did not know what they voted for. The authoritative report recently published by NatCen Social Research—not one of my usual reading papers—makes it clear, as did the Vote Leave analysis, that voters were principally motivated by sovereignty issues and that the Government’s dire warnings of economic Armageddon or being poorer were not as important to them.
I hope that we get a deal but I suggest to my noble friend that we must seriously prepare for a no-deal scenario and prepare a position paper on that, because it is looking increasingly likely that the EU will remain intransigent in its desire to punish Britain. I welcome what I heard from the noble Lord, Lord Jay, that his EU Committee will look at a no-deal scenario paper as well. I hope my noble friend, in addition to all her other reading, has read the article by Yanis Varoufakis in the Sunday press and the leaked memo by Jeremy Browne, a former Lib Dem MP and Foreign Office Minister and, currently, a City envoy. There is no reason to disbelieve them, and all the evidence points to the fact that the EU intends not to give a single inch in so-called negotiations, expecting that at some point the UK will panic and surrender. That is a very good tactic for them—if it works—and we must not play into their hands by showing signs of panic.
Mr Varoufakis wrote:
“That Michel Barnier and his team have a mandate to wreck any mutually advantageous deal there is little doubt. The key term is ‘sequencing’. The message to London is clear: you give us everything we are asking for, unconditionally. Then and only then will we hear what you want. This is what one demands if one seeks to ruin a negotiation in advance”.
Did we not see that in Barnier’s attitude to his divorce bill demand? When UK officials spent three hours going through his monetary demands line by line, questioning the legality of it, he was apparently outraged that we dared to question it instead of plucking an offer of billions of euros out of thin air. We have also seen how they rubbished our position papers. Mr Varoufakis also said that the EU’s “media cheerleaders”, meanwhile,
“would work feverishly towards demeaning London’s proposals, denigrating its negotiators and reversing the truth in ways that Joseph Goebbels would have been proud of”.
No one has challenged that view. Then he says:
“Right on cue came the leaks that followed the dinner that the prime minister hosted for Jean-Claude Juncker … their explicit purpose being to belittle their host. Then came the editorials by the usual suspects … deploring the ‘lack of preparation’ by the British—using … Brussels’s favourite put-down that ‘they have not done their homework’”.
The latest, of course, is the slur by Juncker that my right honourable friend David Davis is lazy and lacking in stability—all that abuse gleefully reported by the BBC and some of our media as if it had the force of divine writ. I congratulate my right honourable friend the Secretary of State on the way he is conducting the negotiations and on not indulging in the sort of vile abuse which the EU is heaping on him.
We must prepare for a no-deal scenario, I am afraid, because as Jeremy Browne reveals in his memo, according to the Sunday Telegraph:
“Brussels shows no interest in finding ‘long-term solutions’ to Brexit and could ignore the interests of European Union business”.
In the memorandum, Browne says:
“The restricted mandate means little energy is expended on the imaginative search for long-term solutions. People can look most contented when they have declared a problem to be intractable”.
He notes:
“Such a virtue is made of intransigence and ensuring that Britain learns lessons from the EU”.
He also writes:
“It is the received wisdom that all that is required is for Britain to come to terms with the inevitable and yield accordingly”.
It is clear that the EU tactics are to refuse to negotiate on issues of substance and to wear down UK negotiators until we capitulate and promise them huge unjustified sums of money, so that we are then in no position to strike any sort of deal on market access.
Much as we would all like a good deal, so must stay at the negotiating table—of course we do not walk away—and take on the chin all the intransigence and abuse from our so-called partners, we must now plan and prepare for the possibility of a no-deal scenario.
Baroness Kramer (LD)
My Lords, as I listen to the noble Lord, Lord Blencathra, I begin to understand why so little progress is being made. From the perspective of the Brexiteers, this is a war scenario, whereas I thought that we were trying to negotiate a long-term partnership. Indeed, I thought we were the people who had decided to leave the EU and so initiated and required this whole process of negotiation, and therefore it was us who were going to establish how we thought the relationship should be structured in the future. But clearly that is not the Brexiteer view, and I thank the noble Lord, Lord Blencathra, for making clear why David Davis is, frankly, proceeding so slowly and inadequately in this negotiation.
I want to focus on financial services, an industry which underpins this country. It contributes 7% of GDP, £76 billion in annual taxes and 2 million jobs across the UK, a third of it or so arising from clients or activity in the 27. To quote Catherine McGuinness, policy chairman of the City of London Corporation, this week,
“the sector is approaching a precipice … The sector needs clarity on immigration policies, agreement now on transitional arrangements and a clearer idea of how it can continue to trade post-Brexit”.
That lack of clarity in this crucial arena is becoming a critical problem.
Your Lordships will have read today that Chubb, the US insurer, has just announced that it will move its European headquarters from London to Paris; it has been in London since 1930. That is the 16th major insurer to announce its move to one of the 27—including Lloyd’s of London.
I have great concerns about the small and medium-sized players in the industry. The big companies are making provision; they have adopted a “save ourselves” policy, because they are tired of lack of clarity from the Government. The small companies, however, lack the resources to make such contingency plans, but they are critical to the ecosystem of financial services in our country, and for their sake alone the Government need much clearer communication.
There is something that the Government could help us with, and I hope we shall get some response from the Minister on the subject. The only one of the papers that seems to have any application to the financial services industry—even that is only a slight application—is the interesting paper on enforcement and dispute resolution. I hope the Minister will produce more papers focusing on that critical area. In February the Government were enchanted by the idea of an enhanced equivalence arrangement with the EU for financial services. It would be unique: long-term equivalence agreements would be underpinned by a dispute resolution mechanism.
The word on the street is that the idea has now been abandoned. Perhaps the Minister could tell us more about the status of enhanced equivalence as a potential strategy. It was supposed to replace the parts of MiFID, including passporting, that currently permit cross-EU business in financial services. We understand that the industry has expressed fears that such a framework would be a recipe for almost permanent dispute, and that it is very dissatisfied with the proposals for dispute resolution that the Government have trialled in trial balloons. Is that accurate? Can the Government confirm today that some key firms have been telling them that in any equivalence arrangement they need to be free to opt to select the European regulator as the regulator for their non-domestic UK activity, as the only way to keep the current pattern of business that underpins so much of the industry?
Is it also accurate to say that various regulators across the globe have now entered the fray, and that to retain London’s regional and global roles, the Government are now considering the creation of a sort of international college of regulators—European, US and Asian—which, together with the UK regulator, would have joint supervision and monitoring roles as well as providing dispute resolution across a wide range of financial services? Is that the interpretation that the industry should put on the paragraph in the paper that I described a moment ago, which discusses a joint committee structure as a mechanism for monitoring, supervision and dispute resolution? In such a case what would be the role of the UK regulator, when sterling is such a small part of the market, and how would such a college of regulators relate to British institutions—for example, Parliament? I should make it clear that I do not oppose the idea; I just want to understand how it would work, as would the industry.
There are also critical issues involving clearing. Can the Government update us, as the European Central Bank has now taken powers from the European Parliament to remove euro-denominated clearing from third-party countries—essentially at will, and salami slice by salami slice—which is creating a great deal of uncertainty and difficulty, particularly for client securing here in the UK?
On immigration, I want to make a couple of very quick comments. In the leaked paper there was no discussion of entrepreneurs, who are critical to the development of the financial services industry in this country. Critical, too, are not just high skills and low skills, but mid-level skills such as coding. Among all those players, almost nobody is interested in coming to this country unless their spouses and partners can also be given work permits—an issue that is never addressed. I am afraid that workers in this industry, so much in demand across Europe, even with the kind of reasonable provisions that the Government may be considering, will often hesitate to bring their skills to the UK because here they face restrictions, whereas they will have great opportunities in 27 other countries with no restrictions whatever.
Lord Wigley (PC)
My Lords, in five minutes, it is impossible to give attention to all 12 documents published by the Government this summer, which are lumped together for this rather disparate debate. It was unacceptable for many of those, containing important information, to be published when Parliament was not sitting. If the diktats of the Brexit timeframe made this inevitable, Parliament should have forgone part of the Summer Recess to hold the Government answerable before negotiations were reopened in Brussels. Given the backlog we now face, it is ludicrous that Parliament should adjourn on Thursday for politicians to swan around at party conferences, when vital discussions are being held regarding Brexit.
I shall address the position paper concerning Ireland, if I may. This dimension is vital to Wales in terms of trade, the free movement of people and the future of mutual programmes such as Interreg. I accept that there is considerable agreement between the Governments of Ireland and the UK—on the Good Friday agreement itself, on the peace process, on the common travel area and on east-west support, although there is no mention of continued Interreg funding. There is also substantial agreement on the movement of people. It even seems that the Government have guaranteed that Britain would not expect the Irish Government to monitor the entry into Ireland of EU citizens trying to enter Britain via Ireland.
The tricky area revolves around the issue of no return to the hard borders of the past. There is some dispute over whether there ever were real hard borders, and the wording of,
“aiming to avoid any physical border infrastructure in the United Kingdom or Ireland, for any purpose”,
seems at odds with the apparent intention of the UK to have cameras monitoring everyone who crosses the border. Equally, inventing some tracker arrangements on EU foods seems undesirable and unworkable. If the principle is no physical border, that has to mean what it says.
It is clear that getting an acceptable solution for both the north and the Republic is fundamental for negotiations with the EU, as it is one of its three sticking points. It is not just a question of getting a frictionless border between the two parts of Ireland, but of getting equally frictionless movement of goods, services and people in the two parts of Ireland with all parts of Britain. I am concerned about maintaining the unfettered movement of goods and people between the Irish Republic and Wales, where the ports of Holyhead, Fishguard and Swansea could be severely affected, as could Stranraer and Liverpool. Forty per cent of the exports that Ireland sends by truck are sent via the UK. If the Brexit outcome is to significantly hamper these channels of communication, it would have a serious effect on both sides of the Irish Sea.
Michel Barnier has made it clear that the EU would not tolerate the UK using its links with Ireland as a back door to circumvent the trade consequences of a hard Brexit. The UK Government are between a rock and a hard place: they either accept that we remain in a single market, or negotiate single market access, as proposed in the Welsh White Paper. That means accepting a lesser control over EU citizens coming to work in Britain. The alternative is to face some fracturing of the links between Ireland and Britain and inevitably, the disruption of the current free movement between the north and south of Ireland. The Government cannot have it both ways.
This issue was highlighted by the Irish Foreign Secretary, Simon Coveney, on Saturday. He called for the closest possible relationship between the UK and the EU, for an orderly exit and for a substantial transition period, stating that the transition period must,
“maintain the status quo in terms of membership of the Customs Union and Single Market”.
He stressed the need to protect the “the all-island economy”, reminding his audience that a third of Northern Ireland’s exports travel south. He warned that,
“maintaining the integrity of the EU’s single market on the one hand, and implementing the ideas on a customs relationship that the UK put forward last month, seem to be mutually exclusive”.
He believes that streamlined customs arrangements are unlikely to be streamlined enough for businesses whose margins are tight, and that a customs partnership—again, I quote,
“will simply not be feasible if it is undercut by the UK making trade deals with countries that don’t share our standards or systems”.
However, he added:
“There is an obvious solution … that is for the UK to remain in an extended Customs Union and Single Market, or some version of that concept, taking advantage of the new and comprehensive trade deals the EU is reaching with countries like Canada and Japan”.
He concluded with the words:
“I find it difficult to accept that while the options available to the UK are now being discussed, debated and negotiated, that the potential option of staying in a customs union would be taken off the table, before negotiations on trade have even commenced with the EU”.
He warned that,
“shutting off avenues such as remaining in a customs union, without agreed deliverable and credible alternative pathways, narrows future options in a dangerous way”.
The Irish Foreign Secretary’s words must be taken to heart by the UK Government, who I fear are now in hock to the Democratic Unionists in the north, with all their anti-EU and anti-Dublin baggage. The August position paper is holed beneath the waterline in this most critical area of trade relations. The Government have to get real, and get real quickly. Otherwise, in undermining Ireland to keep the Tory party intact, they will pay a price that most assuredly will come back to haunt them.
The Earl of Caithness (Con)
My Lords, I am grateful for this debate and particularly for the Government allowing time in which to hold it. I thank the Government not only for their position papers—they have published another today— but for their fact sheets on the strategically correct European Union (Withdrawal) Bill. Although some of its detail might need to be corrected, the principle of what the Bill sets out must be right. We must have a fully functioning and sensible statute book that reflects current law when we exit the EU.
I also appreciate the time that Ministers and their staff are giving to Parliament and its committees. I believe that what they are doing and have done is more than any other Government in the EU would do for their parliament. I say to the noble Lord, Lord Jay, given his huge experience in the Foreign Office, that it is right that there should be security, but we could reach a point where demanding too much of ministerial and senior government staff might be to the detriment of the UK and its negotiating position. It is a delicate balance that the noble Lord, in his new post, will have to tread.
Whichever Government were in power, they would have a hugely difficult job in implementing the decision of the British people to exit the EU, particularly in the timescale laid down. The noble Baroness, Lady Kramer, said she thought that the negotiation was for a better future and a new relationship for both the EU and the UK. I hope that is exactly what the negotiation will be and that it will lead to a more prosperous EU and a more prosperous UK. From the UK point of view, Brexit is the most important question and piece of government business before us; the noble Lord, Lord Jay, said exactly the same thing. It is receiving full government attention. However, if one looks at it from the EU point of view, Brexit is not the most important issue on the table. The EU has other, more important issues. David Cameron, when he was Prime Minister, found exactly the same thing when he went to negotiate with the EU. It must be equally frustrating for our Ministers today to find that the EU is more focused on other matters than it is on Brexit.
The inflexibility of Monsieur Barnier, with his team, is reminiscent of how he behaved as a commissioner. I remember sitting on the House’s financial committee looking at some of his proposals. I give one example: MiFID II. It is about to come into force, but a lot of it is extremely bad for business and for investors. I fear that he is adopting the same attitude in his discussions with the EU Governments. It is wilfully obstructive to rule out discussion on the future relationship between the EU and the UK when the exit terms depend so much on what the terms of that are. No wonder so much frustration is shown in the House today. What else can the UK do, when the EU will not even talk? My noble friend Lord Blencathra was absolutely right that we must not reveal our strategy.
It is also important that the background mood has changed. When we held our referendum, disillusion with the EU was at its highest. Things have clearly changed and the pendulum has swung: France has elected a federalist president in Mr Macron. The EU is changing, but not in the way my noble friend Lord Howell of Guildford wants. President Juncker is about to set forth his proposals for the future of the EU. It is going to be more federalist and integrated, to an extent that would be objectionable to us in the UK. It is going to take the EU in a very different direction. It is interesting to note that, on financial matters, the USA is already heading in a dramatically opposite direction from that of the EU.
The Government need maximum flexibility and support in these negotiations in the months ahead. The position papers have revealed the distinction between the UK’s culture of common law and practicality and the mainland European civil, prescriptive rules. I hope that the EU will show a bit more imagination and flexibility. We try to read something in the press, but it is so often distorted and has false news, led by some rather nasty briefing. Can my noble friend tell us a little bit more about the detail of the negotiations which are going on, and the progress that has been made? In particular, what has been the EU reaction to the UK’s proposal that there should be rolling, week-by-week meetings, to resolve issues—particularly the amount of the exit bill? That seems an eminently sensible way forward and I hope the EU will take it.
These are very difficult times. As the noble Lord, Lord Whitty, said, we have a year in which to finalise these agreements. All we can hope for is that something sensible will come out of it. We wish the Government well in their negotiations.
Lord Adonis (Lab)
My Lords, the most striking Brexit fact that I have learned is that trucks going to and from the European Union through Dover take two minutes to process, while trucks from outside the EU take 20. How long do the Government hope it will take for trucks to and from the present EU states to be processed from April 2019?
The difference between two and 20 minutes at Dover graphically illustrates the challenge we face with Brexit, as does the debate we had on Ireland last week, when the Minister, the noble Lord, Lord Bourne, was reduced to telling us about pubs he had visited in Enniskillen because he was unable to address the two fundamental concerns of the debate. The first was how the Northern Irish border is going to become the external border of the EU and yet customs checks are going, in 18 months’ time, to be magically frictionless and electronic—presumably as frictionless and electronic as they currently are at Dover. The second was how the common travel area would continue once the UK and Ireland have different visa and immigration rules. Even diverting down the highways and byways of Enniskillen, Lord Bourne could not keep going for 20 minutes in explaining how the Government’s magical thinking will ensure that everything will be fine on 1 April 2019.
The other papers we are discussing today fit into two categories. There are those that claim that everything will be fine because nothing will change; and those that claim that everything will be fine because everything will change. The common thread in both is magical thinking. In the paper on future customs arrangements, we are encouraged to think that everything will be fine because of an entity which at present is a figment of the ministerial imagination, namely, “highly streamlined customs arrangements”. The Government say they will seek to maintain a series of facilitations that are part of the existing customs union: the waiver for the requirement to submit entry and exit summary declarations, continued membership of the common transit convention, and mutual recognition of authorised economic operators. Let us hope that this is possible. However, the revealing part of the position paper is what is not being kept: countless other measures which facilitate frictionless trade and form the existing customs union. We keep coming back to this: if we mean to protect the status quo in trade, why do we not simply maintain the status quo and remain in the customs union and the single market?
This theme recurs in the paper on the exchange and protection of personal data, where our domestic data protection rules, at the time of our exit, will be aligned with the EU data protection framework. The Government’s paper states:
“The UK’s data protection law fully implements the EU framework”,
for once the Data Protection Bill has passed, both the general data protection regulation and the data protection directive will be part of UK law. To maintain the free flow of personal data, the Government suggest that our relationship should be built upon the adequacy model. However, this requires routine validation by the European Court of Justice, so how is this going to work when we are outside that court? And how is this compatible with the Government’s aim of playing a leading global role in the development of data protection standards?
In the paper dealing with cross-border civil judicial co-operation, the Government similarly state that the,
“optimum outcome for both sides will be an agreement reflecting our close existing relationship”.
To do so, the Government are, once again, proposing to incorporate EU law wholesale into domestic law: Rome I and II. EU law is clear: if an international agreement contains provisions which are, in substance, identical to EU law, the European Court of Justice can be the only body which has jurisdiction to give definite interpretations of those provisions. Yet the one thing the Government seem determined to change at all costs is the role—any role—for that court once we have left the European Union.
All the alternatives to the European Court of Justice set out in the paper come with disadvantages highlighted by the Government themselves. A reporting or monitoring clause, or a joint committee, do not possess sufficient legal authority for they are not binding, and the arbitration model has not been tested in non-economic areas of agreement. It is important to note that the reason the Canadian deal and the EU-Singapore free trade agreement are not subject to the European Court of Justice is precisely because they do not wish to co-operate as closely as we would wish to in the construction of a common trading area.
Sharing data as closely as possible, frictionless and free trade, subscribing to the European Court of Justice in certain cases—the Government are investing huge political capital trying to construct a policy infrastructure which, even if it were successful, would never be as good as the status quo. But the price of failure is immense.
Viscount Eccles (Con)
My Lords, we need the Government to bring us up to date with a wider view than these papers. The Lancaster House speech needs its second edition. For the EU it is all about tactics. Does Brussels want a special partnership? It does not look like it. Who is trying to go where? Shadow boxing comes to mind.
I voted remain, because there was enough trouble in the world already. Nobody needed us to create any more. Mr Cameron had been to Europe wanting to remain. Greeted by the short-sighted, he was not seen as wanting anything of substance. What did we need? I suppose it was an opening up of European Union rules, recognising that we are not federalists, and seeing this English-speaking island as a honey pot with sterling as its currency—a two-speed Europe, if you like.
Our trouble now is that accepting the referendum result seems to mean, for example, that we can “take back control”, as leave supporters insist. But we cannot go backwards; things have moved on. What does “control” mean in a world where Facebook has 2 billion users? Does it mean only ceasing to appear before the European Court? Or is it a credible border control plan? Does anybody believe immigration should be brought down to tens of thousands? That would certainly need a lot of people to leave.
As for the rhetoric of trade agreements, I have never found that selling things depended on agreements; rather, it depended on whether one had the things available that others wanted to buy. People can usually find a way of buying what they want. Right now, I hope that the Prime Minister, who has not been much mentioned this afternoon, as she remembers the leave campaign, also remembers Burke and knows she is not a delegate.
All this is not the heart of the matter. We are a member of a faulted institution and, as my noble friend Lord Howell said, an institution which has lost its original imperative—the prevention of another war which might well have started in Europe. So the institution changed and became intent on becoming an economic power bloc, expanding to a union of 19, 28 or maybe even more European states. This creation within the world order and its nation states was never a good idea. Indeed, as Willie Whitelaw assured Margaret Thatcher, it was never—and I would say now, never is—going to happen. Instead, trouble has mounted with time. First the euro itself and the intervention in Greece—classic problems of a common currency without fiscal and monetary union; then the steady rejection of subsidiarity, yielding little since 2008 other than unrest; and then the migrants with the desperate ways in which they come.
All this gives Brussels good reason to worry. Is it possible, or likely, that the project will fail one day? So the negotiator gets his negative brief, confidence and good will are in short supply, and both sides are living on illusion. How can it come out well?
Right now, we would do well to remember what would have persuaded us to remain if it has been on offer to Mr Cameron: a thoughtful version of the special partnership. The Prime Minister should provide it. We and the 27 need to see a bigger, bolder picture. Who knows what might happen then?
Lord Teverson (LD)
My Lords, I got some information from one of the EU 27 embassies today that Brexit negotiations are to be postponed for at least one week. I would be interested to hear from the Minister why that is, whether it is for one week and what that means for the negotiations. My noble friend Lord Wallace also mentioned the security and defence paper, which came out today. Having in the past chaired the EU Sub-Committee on External Affairs, what struck me about the paper was that it is far more constructive about co-operation than we ever are as members of the European Union. This is somewhat ironic; I am sure the EU will go on to produce its own defence HQ and all those things that we so long resisted not to detract from NATO. These are interesting times.
As the Minister might have guessed, I want to talk briefly about Euratom. Perhaps I may say some positive things. I welcome the fact that the Government appear to be giving this some priority. It is mentioned in the science and research future partnership paper and two technical papers have been produced on Euratom, so we have some progress.
However, like many other Members of the House, when I looked through most of the papers coming from the Government—the same is true to a degree of the Commission papers as well—they seemed to me no more than A-level or undergraduate standard at the most in terms of their analysis and the way they went through the headings. All the detail one was looking for to get a clue about the way forward was missing.
I remind Members of the House of all the things that have to be sorted out about Euratom. There is the small issue of a safeguarding regime, which Euratom fulfils at the moment; without this we cannot trade nuclear fissile materials, whether they are medical or nuclear-powered to keep our lights on, or related to nuclear waste processing. We cannot do anything in that area until we have the International Atomic Energy Agency’s tick as a safeguarding authority.
We also need a number of nuclear co-operation agreements with our main trading partners, whether they are providing nuclear material to help us develop our nuclear fleet or to keep our existing fleet going. Then there are those important agreements with the United States, Australia and some of the central Asian countries; they all need to be negotiated. As for our research, which I will come back to, there are, not least, JET, ITER and the future of our contracts with other countries to consider, to make sure that trade can continue, let alone our ownership of fissile materials. Who owns and takes responsibility for them?
There are so many of these issues still to be tackled and I would be interested to hear from the Minister how they are proceeding. Returning to the Government’s paper, I welcome the high-level principles it contains in terms of strategy, but what are the Government’s high-level principles? The principles set out in the paper include ensuring a smooth transition to the UK nuclear safeguards regime. I agree with that; it becomes necessary because of our removal from Euratom. We did not need one before, and it will be an additional cost.
Providing certainty and clarity to the industry is another principle. As the industry sees our withdrawal from Euratom, it will certainly need that detail. Regarding collaboration on nuclear research, it is interesting to see in the paper, in relation to JET— which is hosted at Culham in Oxfordshire and is an important part of our work—that the Government say that if the JET extension is agreed by the Commission,
“the UK will underwrite its share of JET contract costs after it leaves the EU”.
That takes us up to 2020. It does not seem a generous offer. It is just saying, “We’ll continue doing what we do if you pay for all the rest”. I am not sure this sets out a positive view. Also, the Government are asking for the minimising of barriers to nuclear trade for industry, ensuring the mobility of nuclear-skilled workers and collaborating on areas of wider interest.
I agree with that list, but what is the easiest solution? It is to stay in Euratom, which is something we could have done but decided not to. I accept that that is where we are, but I ask the Minister whether we could look for an associate membership of Euratom. I think that would be a way forward, albeit second best.