European Union: Negotiations (European Union Committee Report)
(4 years, 9 months ago)
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The Earl of Kinnoull
That this House agrees with the conclusion of the European Union Select Committee, that the Council Decision authorising the opening of negotiations for a new partnership with the United Kingdom of Great Britain and Northern Ireland, published in draft on 3 February 2020, and adopted in amended form by the General Affairs Council on 25 February 2020, raises matters of vital national interest to the United Kingdom.
Relevant document: 8th Report from the European Union Committee
The Earl of Kinnoull (Non-Afl)
My Lords, I thank those who, despite difficult national circumstances, have signed up for this debate. I extend my best wishes to those who are, for entirely understandable reasons, staying away from Westminster.
This is the first time that the House is debating a Motion under Section 29 of the European Union (Withdrawal Agreement) Act. Section 29 imposes a duty and a power on the European Union Committee of this House. This is in addition to the remit already reflected in our terms of reference, which, inter alia, is to help inform parliamentary and public debate on EU-related matters. The new Section 29 comes into play once we have identified a document of “vital national interest”, and leads on to the production of a report, a Motion and a debate in a relatively short timespan. The document we are concerned with today is the Council’s decision that was adopted on 25 February: the EU’s negotiating mandate for our future relationship.
Before I address the detail of the report, I will say how glad I am that the Government have tabled their Motion today, as we had expressed our regret—at paragraph 29 of our report—that the UK Parliament had not had the opportunity to debate these vital matters to date. The fact that the Government also have put down their Motion sets a good precedent. Can the Minister commit to tabling further Motions in government time as and when there are significant developments in the negotiations?
I thank Michael Gove, who has agreed to appear before us shortly. However, we are still trying to establish clarity and structure as to how the Government will work with committees scrutinising the future relationship negotiations and, importantly, the withdrawal agreement’s implementation. As a committee, we have commented on this several times. It is very important to get it right. Will the Minister commit to working with me in agreeing in short order the structure of this engagement for the months ahead?
Our report is neutral, factual and analytical. We have sought to compare the Council decision of 25 February with the Government’s command paper of 27 February on the future relationship and the political declaration that was agreed by both parties in October 2019. A further relevant item is Article 184 of the withdrawal agreement, ratified in January this year. This places a treaty obligation upon both parties to
“use their best endeavours, in good faith and in full respect of their respective legal orders, to take the necessary steps to negotiate expeditiously the agreements governing their future relationship referred to in the Political Declaration”.
The Council decision is structured very similarly to the political declaration, with some texts simply copied over. Naturally, there are areas where the EU has expanded on the political declaration, a number where the emphasis has changed and some that are omitted. Broadly, however, the council decision is a mark-up and development of the political declaration, and this has facilitated our analysis.
Things have been rather more difficult where the UK’s Command Paper is concerned. During the passage of the withdrawal agreement Act in January, we heard from the noble and learned Lord, Lord Keen of Elie, who said:
“The political declaration ... sets out the framework for a comprehensive and ambitious free trade agreement with the EU. The general election result has clearly shown that the public support that vision and we consider that we have been given the mandate to begin negotiations on that basis.” [Official Report, 13/1/20; col. 553.]
This was clarified later by the noble Lord, Lord Callanan, who said that
“the Government’s vision for the future relationship with the EU is already set out … in the political declaration”. [Official Report, 20/01/20; col. 1004.]
Yet the Command Paper is a wholly different structure from that of the political declaration and is instead based on existing EU free trade agreements, such as its Canadian and Japanese ones. This makes it very difficult to conduct a line-by-line comparison with the political declaration, or to trace and explain changes to the Government’s position since the political declaration was settled in October last year.
At paragraph 26 of our report we said:
“It would be helpful if the Government, without prejudicing its negotiating position, could publish a comparative analysis of the Political Declaration and the Command Paper, explaining the changes in its approach.”
Will the Minister commit to provide this in the near future?
The bulk of our report is taken up by a comparison of the UK and EU opening negotiating positions. These are opening positions; it is the haka at the start of a match, and both sides will have left themselves room to manoeuvre. But the current trajectory, as exposed by our analysis, is clear: the two sides are currently diverging, not converging. I draw your Lordships’ attention to four examples.
The first is the overarching structure that the two sides state they are aiming for. The Council decision envisages a single association agreement. The Command Paper proposes a “suite” of agreements within a “broader friendly dialogue”. It would be helpful to hear from the Minister about the strength of feeling that the UK has on this.
The second is fisheries—I have no doubt we will hear more about this in the debate. I stress that this is very much one area where the devolved Administrations need to be involved. The political declaration looks to a new fisheries agreement but lacks detail in this difficult area. Both sides have now set out their vision in considerable detail. There is a lot to be said for the Government’s position, in particular their reliance upon scientific evidence. But it is fundamentally incompatible with the EU’s position, and it is not easy to see how this gap will be bridged.
Thirdly, and equally difficult, is the “level playing field”. The political declaration again lacked detail in this difficult area. Since agreeing the political declaration, the EU has toughened its line, as we set out in paragraphs 107 and 108 of the report. The political declaration contained no explicit reference to continuing UK alignment to EU rules. Instead, it referred to
“appropriate and relevant Union and international standards”.
The Council decision now wants to use
“Union standards as a reference point”
and, more importantly, for EU state aid rules to apply “to and in” the UK. So the EU’s position has hardened, and state aid will necessarily be a key point of disagreement. Again, the widening gap looks hard to bridge, not least given the position of Northern Ireland, where EU state aid rules will apply directly as a result of the Northern Ireland protocol of the withdrawal agreement.
My fourth and final example concerns foreign and defence policy. The Government have set their face against a formal structure and there are no discussions about this in the future relationship negotiations. The terms of reference document notes that while the EU would be open to have them, the UK feels that none are needed. The political declaration on this area states that the future partnership
“should provide for appropriate dialogue, consultation, coordination, exchange of information and cooperation mechanisms.”
To take sanctions as an example, co-ordination is vital if they are to have real bite. It seems to me that effective co-ordination would require at least some structure. Given the political declaration’s language, I ask the Minister to comment.
We expect both sides to produce draft legal texts shortly—indeed, the EU’s text was leaked over the weekend. I have received four copies through separate leaking arrangements. It is 441 pages long. I very much hope that we will be able to scrutinise both texts. The risk is that, on the current trajectory, these texts will reinforce the divergence between the UK and EU approaches and that, in effect, both parties could back themselves into opposing corners.
In closing, I come to time: the ticking clock so often cited in this era of silent digital timepieces. The Government’s insistence on the 31 December deadline and the threat of walking away after June have added greatly to this time pressure. Current world events must be adding further to it. Statecraft might be best served by at least some flexibility here.
I hope that the Minister will offer a considered explanation of the Government’s approach to the negotiations. I certainly do not expect him to give away the Government’s negotiating confidences. However, simply restating their demands and insisting that they will walk away if those are not met is not enough for Parliament in our bounden duty to play our scrutiny role in these vital negotiations. I beg to move.
Baroness Hayter of Kentish Town
At end insert “and notes the undertaking of Her Majesty’s Government in paragraph 40 of the Department for International Trade’s summary of responses to a public consultation on trade negotiations with the United States, published on 18 July 2019, to ‘draw on the expertise and experience of Parliamentarians’ by working with a parliamentary committee which would be afforded ‘access to sensitive information’ during the process, before taking a ‘comprehensive and informed position on the final agreement’; and therefore calls on Her Majesty’s Government to ensure that, in a manner consistent with the European Commission’s treatment of the European Parliament, both Houses of Parliament are able to receive regular updates from ministers, scrutinise all relevant policy documents and legal texts, and debate the terms of emerging agreements, as negotiations on the future relationship between the United Kingdom and the European Union progress.”
Baroness Hayter of Kentish Town (Lab)
My Lords, this is a timely debate. It is two days before the second round of face-to-face negotiations was due to open in London. As we know, the negotiations cancelled because of the virus, a matter of serious national concern. As the noble Earl, Lord Kinnoull, has just set out, there were also these EU talks, which are matters of vital national interest.
Despite the description clearly and persuasively set out in the report, our Government seem curiously shy about the content, unlike the EU side: while Monsieur Barnier had a press conference and took questions after round one, this Parliament had a 200-word Written Statement and no discussion in either Chamber until today. I am thankful to our brilliant EU committee, the Bill Cash amendment and the Chief Whip, who agreed to table the Government’s Command Paper for debate. It is this reluctance to engage with Parliament that leads to my amendment.
It is somewhat strange that a civil servant rather than a Minister has been sent out to bat for Britain in these talks. I am sure that Mr Frost, who likes to quote Edmund Burke, is excellent. However, as a Member of neither House, he is neither here nor there to explain or be questioned. Is it not shameful that our Government hide behind him to avoid accountability and debate?
In their response to an earlier consultation about discussions with the US, the Government promised
“to draw on the expertise and experience of Parliamentarians”
by working with a parliamentary committee that would be afforded “access to sensitive information” during the process. This would, in the Government’s words, enable Members to take an
“informed position on the final agreement”
before being asked to ratify.
That is what we are requesting for the EU negotiations: this Parliament should have the same access as that given by the European Commission to the European Parliament, receiving regular updates from Ministers, as well as seeing relevant documents and legal texts. Our debates would therefore inform the UK negotiators and ensure that at the end of the process we have a treaty acceptable to the Government and the Commons, who have to agree it.
The report of the EU committee was brilliant. It did all the work that the rest of us would otherwise have had to do. From the Command Paper in the Motion tabled by the noble Lord, Lord True, it is clear why we need such dialogue, given the disparity between the opening gambits of the two sides and the shift in the Government’s stand since the political declaration signed by the Prime Minister in October and ratified on 31 January this year. As the Financial Times noted,
“the longer Prime Minister Boris Johnson holds power, the faster Brexit is evolving into a project more extreme than most British people”
anticipated
“at the time of the … referendum”.
No wonder Monsieur Barnier said that “very serious divergences” had emerged and, as we have heard, the noble Earl, Lord Kinnoull, talked about the widening gap.
I shall mention only a handful of issues, as other speakers have much more experience in dealing with some of the very thorny issues on the path towards a settlement satisfactory to both sides. My first point is about the tone of the Government’s paper. “Mean spirited” is the kindest way I can describe it. It goes on and on, saying, “We’ll only do what’s fair to us”—as if any sovereign state would settle for anything less. It reiterates again and again its hang-up about any contamination by the ECJ, while at the same time proposing no ideas on dispute resolution that do not use that sort of mechanism It repeats five times that various of the elements will not be subject to the Chapter 32 dispute resolution mechanism, which itself excludes the ECJ. It goes on and on about what we will not accept, but offers no ideas about what to put in its place.
That abhorrence of the ECJ means that we will even pull out of EASA, to the consternation of ADS, the aerospace industry and every specialist carrier and business involved. They all see this as a threat to the very future of the air sector. Similar prejudice about the ECJ undermines our withdrawal from the EMA and from the Early Warning and Response System, which is particularly significant at this moment.
Secondly, the crucial, and possibly the most problematic, issue is fair competition and the level playing field. Competitiveness is good for consumers, who get a better deal; it is good for business and good for the economy. The competition remit of the EU has driven much of its focus and much of the bloc’s economic growth. As we leave that regime, it will be imperative that the UK strengthen its competition authorities, as disturbance of trade could lead to less competition, and greater opportunities for rip-offs.
In addition, after December the UK will face major cross-border competition and merger cases. This is urgent, and demands Ministers’ attention now. Following the CMA’s proposals for new duties to put consumers first and to act quickly, and the Conservative manifesto’s welcome commitment to provide those powers, can the Minister update the House as to whether such legislation, to end rip-offs and bad business practice, will be introduced, when it will be introduced, and also assure us that it will be in time to be effective from January next year?
Thirdly, the Government say that they want no tariffs, charges or restrictions, but this would mean shared standards, recognised enforcement, independent checks and a level playing field. EU countries are hardly going to accept our goods tariff-free if they are produced to lower standards, or simply by paying workers less.
The Government have finally admitted that no alignment means checks, costs and paperwork. Indeed, we hear that 50,000 extra pairs of hands will be needed across the piece—a number well in excess of the 32,000 employed by the European Commission. Unsurprisingly, British Chambers of Commerce is calling for more funding for customs agents, as declarations on goods will rise from 55 million to 300 million a year from January. Oh, and by the way, the NAO reckons that we have already spent £4 billion on Brexit preparations —with, of course, more to come.
Fourthly, turning to financial services, the Government plan to streamline how firms are regulated, raising concerns in Brussels that Brexit will allow London to reduce oversight of the industry. Trillions are at stake if the EU, perhaps as a result, decides to deny the UK so-called equivalence. As Michel Barnier has said, granting access to EU financial markets is a unilateral decision so there will be dialogue but no negotiations. I wonder whether the tone of our language and apparent light-touch regulation will damage the chances of a satisfactory outcome.
Fifthly, the Government’s document fails to include a demand that that UK tourists should be able to travel to the EU visa-free, despite other Statements referencing that. It is slightly hard to imagine why that is not in this important Command Paper.
In addition to what my amendment is about—dialogue with this Parliament—there is the crucial issue of the involvement of devolved authorities. I hope it was simply an error when on 27 February, the noble Lord, Lord True, said:
“We will keep the devolved Administrations informed”.—[Official Report, 27/02/18; col. 287.]
That is not good enough. Involvement is needed, not just information.
The Welsh Government have tried to reach agreement with the UK Government to facilitate a united position as we enter the negotiations. However, Welsh Ministers had no early involvement in negotiating objectives and saw the text less than a week before publication, with a mere telephone conference with Ministers hours before the Cabinet sign-off. Ever since the referendum, the Government have consistently ignored, as we have repeatedly said in this House, the terms of reference of the JMC(EN) which require it to seek agreement on negotiation positions with the devolved Governments. This does not bode well for the future negotiations where the devolved regions have particular concerns, be they over agriculture, non-tariff barriers, regional and economic development, or other things, and those must be central to the Government’s thinking.
This side of the House continues to worry that the Government will either accept no deal or else something as bad as no deal. The document itself threatens that if by June there does not appear to be the outline of an agreement which could be finalised by September, then the UK should move from negotiating to preparing for a no-deal exit. Michael Gove has been telling business groups that, while he wants a Canada-style agreement, they should nevertheless prepare for no deal on 31 December, while Boris Johnson has said he was prepared to walk away from talks in June if there was insufficient progress. No wonder the EU committee said that this raises matters of vital national interest. So it is imperative that Parliament is not shut out; my amendment is about dialogue and engagement with Parliament. I beg to move.
The Deputy Speaker (Viscount Simon) (Lab)
My Lords, the original question was that this Motion be agreed to, since when an amendment has been moved at the end to insert the words as set out in the Order Paper. The question I therefore have to put is that this amendment be agreed to.
Baroness Ludford (LD)
My Lords, as a preliminary, I just want to send best wishes to colleagues from any Benches who are ill or staying at home because of coronavirus. Just before I left home, I was pleased that Radio 4 on “The World at One” responded to the plea from Esther Rantzen for some amusing material to keep up morale and played a clip of Martin Jarvis as Bertie Wooster. More from where that came from, please.
Yet again, we on these Benches are very grateful to our EU Committee for a timely and high-quality report of the standard we have come to expect from it. I can say that now without any vestige of self-congratulation as I have, alas, been rotated off even a sub-committee. The report’s finding that there is a wide gap between what the Government committed to in the withdrawal agreement and the political declaration and the policies now espoused in the Written Ministerial Statement in last month’s Command Paper is deeply concerning. I shall focus on the question of trust, as exemplified by the Government’s behaviour over the Ireland protocol; on the triumph of absurd hard-line ideology over pragmatism, as illustrated by the rejection of heath co-operation; and on the damage that the Government’s limited ambition for the future relationship will cause.
In the current coronavirus crisis, trust is an essential component of the Government’s credibility; people will not follow advice they feel does not have a grounding in facts and competence, as opposed to political posturing. A Government who acquire a reputation for playing games or crying wolf will not be trusted in a crisis. This is one reason it is so essential that the Government can be trusted in their conduct of the Brexit negotiations —both to comply with their legal obligations and to deliver a Brexit that meets, as far as possible, the pledges made by the leaders of the leave campaign in 2016.
Under those legal obligations, respect for the terms of the Northern Ireland protocol, which came at the request of the May and then Johnson Governments and which became, at their request, a front-stop instead of a backstop, is at the core of this. A few weeks ago, Tony Connelly of RTÉ wrote a commentary in which he noted that, in one breath, Michael Gove had told the House of Commons that
“this government are wholly committed to implementing the withdrawal agreement, to respecting and enacting the Northern Ireland protocol,’ yet minutes later told the DUP’s Jim Shannon that ‘there will be no border down the Irish Sea’.”
Mr Connelly reminded us that public messaging from Boris Johnson and Northern Ireland Secretary Brandon Lewis has added to the confusion, such that Michel Barnier could barely conceal his irritation at the UK’s apparent doublespeak on the protocol after the EU adopted its negotiating mandate.
After suggestions that Suella Braverman, former chair of the hard-line European Research Group, had been appointed Attorney-General to help Downing Street extricate itself from some of the obligations of the protocol, one EU diplomat reportedly said, “The UK can’t mess around with peremptory norms of international law, as that goes to the heart of the UK’s reputation as a reliable international partner.”
Paragraph 42 of the EU Committee’s report says that the Government have explicitly distanced themselves from the withdrawal agreement and the protocol on Ireland, with a consequence that some of the language in the Command Paper is misleading. We are entitled to be shocked and dismayed. In particular, the Command Paper rejects any obligation to align with EU laws, or to allow the CJEU any jurisdiction in the UK. Yet, as the committee points out, such jurisdiction is conferred in respect of Northern Ireland by the protocol. Can the Minister make it very clear in his reply today how the Government intend to comply with the Ireland protocol? Can he give an assurance that they are not trying to wriggle out of that protocol, which would be totally corrosive of trust?
Turning to what sort of Brexit the Government are now pursuing, let us recall that, after many twists and turns, Prime Minister May finally settled on the goal of a “high alignment” future relationship. Perhaps nothing demonstrates how far we have come from Mrs May’s intentions than the question of co-operation on health matters.
The Written Ministerial Statement said rather pompously:
“The UK is ready to consider participation in certain EU programmes”,—[Official Report, Commons, 3/2/2020; col. 4WS.]
oddly, making it sound as though we would be doing everyone else a favour by such participation. In fact, this Government have not only pulled out of the European Medicines Agency, booting it out of London and therefore booting the UK out of its fast-track drug and vaccine approval system and the joint procurement system, they have also declined to take part in meetings of EU Health Ministers, which Switzerland asked to be part of and was allowed to be. The Government have also declined to participate in the EU systems of public health co-ordination in the European Centre for Disease Prevention and Control, and its early warning and response system. The ECDC was set up in 2004, just after the SARS epidemic, and has been active in advising and co-ordinating in respect of bird flu. Norway, Iceland and Liechtenstein are associates, and Switzerland has been granted temporary access to cope with coronavirus.
What possible justification can there be for the Government’s refusal to participate in these mechanisms? It goes against the pleas of, we understand, the Department of Health and Social Care and sectoral bodies such as the Brexit Health Alliance, whose co-chair is Niall Dickson, the chief executive of the NHS Confederation, which, as its website says,
“speaks on behalf of the whole NHS.”
This Government’s failure to seek association with these EU bodies and networks, as well as their failure to prioritise staying plugged into research programmes, is nothing less than a dereliction of their duty to do all in their power to keep the people of this country safe. Do they seriously think that sovereignty trumps safety? Have they discovered a way to instruct a virus to respect national borders? Of what value is autonomy in these dangerous times? It is all very well seeking, in the words of the Written Ministerial Statement, for the UK to
“have recovered in full its economic and political independence”,—[Official Report, Commons, 3/2/20; col. 86WS.]
but at what price in terms of the social and economic welfare of the people of this country? Why should they be put at risk because of some idiotic ideological bee in the bonnet of hard Brexiters such as Dominic Cummings? Can the Minister give any other explanation?
Another example of the triumph of hard-line ideology over pragmatism is the Government’s rejection, as a matter of policy, of the notion of an extension to the negotiations, which has to be requested by 1 July. This was untenable before coronavirus hit; it is even more so now. Will the Minister assure us that the question of an extension will be guided by the needs of this country, not the prejudices of the ERG?
It is increasingly suspected that this Government have reverted not only to a preparedness for no deal but to an ambition to that end. They have certainly set the bar of ambition very low—for a minimalist free trade agreement of zero tariffs and zero quotas, rejecting any level playing field, regulatory alignment obligations or shared governance akin to an association agreement. This Government also reject the mutual respect for core values and principles, including explicitly staying in the European Convention on Human Rights and keeping the Human Rights Act, which the Council decision calls for. This will also hit the prospect of co-operation on internal security, which is supposed to be a high priority for the Government.
Outside the single market and customs union, the costs for business, including mountains more red tape, and the risk to jobs will be very high. Of course, we know what the Prime Minister’s attitude to business, including manufacturing in aerospace and cars, is—he expressed it very pithily—but that is a bit tricky when you are appealing to manufacturers to turn their hand to the production of ventilators. New border frictions and delays due to checks and formalities instead of just-in-time deliveries are very bad for filling supermarket shelves. This is a long way from what was promised in 2016, when a “deep and special partnership” was said to be the goal. Hostility and resentment have characterised the approach of those who won the referendum. The aim now, apparently, is the dogmatic rejection of anything and everything remotely connected to the EU, whether that is in health, Galileo, Erasmus, Euratom, EASA, REACH, the Unified Patent Court, the European arrest warrant and many more.
The Government intend to replicate the functions of these agencies at huge cost, but money is one thing that will be in short supply. Not only is there absolutely no Brexit dividend, but the OBR says that we have already lost 2% of GDP since the leave vote; it also warned that leaving the EU will hit growth, exports and the public finances at a time of rising uncertainty, predicting a 5.2% loss of potential GDP over 15 years if a “typical” FTA is struck. It blames trade friction, restrictions on migration and red tape. Even before coronavirus struck, economic growth had sunk to zero. Why are the Government refusing to publish their own economic impact assessment of the limited Canada-style trade deal that they are aiming for, when they published one on the not very beneficial US deal that they want? Are the Government afraid that the citizens of this country will wake up to the price they are paying for the ideological dogmatism of the hard Brexiters, who are now in charge of this country’s fortunes—or, rather, misfortunes?
Our EU Committee has done us a huge service with its forensic report, but it sets off many alarm bells. The country cannot afford the hard-line, doctrinaire Brexit policy of this Government, especially when our health is so much under threat. As one commentator, Professor Chris Gray, observed, their policy is indeed demented.
Baroness Noakes (Con)
My Lords, it will not surprise the House to find that I will not be echoing the sentiments of the noble Baronesses, Lady Hayter and Lady Ludford. I welcome the Government’s plans for a future relationship with the EU, as set out in their White Paper, and I particularly welcome my noble friend Lord True as the Minister in this debate; it is in very capable hands.
I could not be more proud of the approach that the Government are taking to our relationship with the EU. We have left behind us the servile acquiescence that characterised the first three years of negotiations with the EU after the referendum. In its place, we now have a confident Government who really believe in our future outside the EU and have the strong backing of the British people from last year’s general election.
In the Command Paper, the Government have set out their vision of
“friendly co-operation between sovereign equals”.
Those of us who strongly supported the UK’s exit from the EU are much heartened by both the content and the spirit of the Government’s position, and I look forward to my noble friend’s summary of the key elements of our policy when he winds up.
For me, the most important aspect is that we are seeking a comprehensive free trade agreement with the EU. We are one of the world’s largest economies, and we expect to be able to negotiate trade agreements with our trading partners on a basis of mutual respect on both sides. The EU is no different from any other trade counterparty in this respect. It is the same basis on which we should approach negotiations with other important trading partners, such as the USA.
Of course, that means that we do not want an association agreement and will not bind ourselves to the rules and mechanisms of the EU, whether for a level playing field or any other purpose. Our country did not vote to leave the EU in order to recreate the past relationship all over again. We especially did not vote to leave the EU to be bound to mirror any part of its regulatory environment in perpetuity. Dynamic alignment is a million miles from any reasonable interpretation of what the British people voted for in 2016.
Lord Lea of Crondall (Non-Afl)
Is the noble Baroness saying that she is advocating no deal?
Baroness Noakes
I will come on to that in a short while. I was saying that dynamic alignment is simply not what the British people voted for in 2016 or in last year’s general election. It is right that it forms no part of our approach to our longer-term relationship with the EU.
One symbol of being an independent nation again is fisheries. The EU seems to think it can recreate the existing quota arrangements, which are so disadvantageous to our home fishing industry. That simply cannot happen. The fishing industry may not be the most important contributor to the nation’s GDP, but it is symbolic of what it means to be a free nation: controlling our own waters and setting the rules by which we will be responsible conservators of our fishing stocks.
I am also completely behind the Government’s decision that we should not seek any extension of the transition period at the end of this year, even in the face of the current pandemic, which may well disrupt negotiations but does not present an excuse for not completing them. It is essential that we move to prepare for life without a comprehensive agreement if we do not make enough progress by the summer. I have never been afraid of trading on WTO terms and I will not start now.
All in all, I believe that the Government’s approach as set out in Command Paper 211 and as illuminated by the wonderful speech last month by Mr David Frost, our chief negotiator, is terrific. I hope that the House will support it.
I turn now to the other Motions before us, namely the Motion in the name of the noble Earl, Lord Kinnoull, on behalf of the EU Select Committee, and the amendment in the name of the noble Baroness, Lady Hayter. If I had to sum up both of these Motions, I would say that they are seeking to rerun battles that have already been fought and lost. I was absolutely amazed that the EU Committee managed to hang its first report on Section 29 of the EU withdrawal Act. I shall express no opinion on the validity of the argumentation around this as set out in chapter 1 of the report. It may well be technically accurate. I do not, however, believe that Section 29 was intended to be used for the purpose of requiring a debate on the negotiations on our longer-term relationship. I had understood that section to allow Parliament to raise important issues about EU legislation passed in the transition period and therefore applying to the UK while we do not have any representation in the EU.
Noble Lords will be aware that the terms of the 2020 withdrawal Act differed significantly from the version of the earlier Bill that was considered by the last Parliament. The earlier Bill required the approval of Parliament to the Government’s negotiating objectives, which themselves had to be consistent with the political declaration. It also required three-monthly reports to Parliament on the progress of negotiations. Those provisions were inserted in a doomed attempt to get the last Parliament to pass the withdrawal Bill. But since then, the general election has given a huge mandate to the Prime Minister to “Get Brexit done”. The provisions for involving Parliament in the negotiations were removed from the Bill which became law in January this year. The will of Parliament is now clear: these provisions of parliamentary scrutiny are neither necessary nor desirable; yet here we are with the EU Committee using Section 29 of the Act to achieve a debate on negotiating principles, and even calling for the Government to publish a comparative analysis of the political declaration and the Command Paper.
The political declaration has no legal force and, as the EU Committee’s report makes clear, neither the Government nor the EU are using the political declaration as the starting point for their negotiations. We have moved on. I respectfully suggest that the EU Committee does as well.
Lord Hannay of Chiswick (CB)
Will the noble Baroness explain why it is that she believes that the European Union is not behaving in a manner consistent with the political declaration when my noble friend’s report says quite explicitly that it is?
Baroness Noakes
I will say to the noble Lord only that it may have the headings of the political declaration but the content is significantly different in a number of places, as indeed was set out in the EU Committee’s report.
Baroness McIntosh of Pickering (Con)
I am following very closely what my noble friend has said. I understand that she has years of experience in a certain sector, but what does she fear about scrutinising a policy such as fisheries or agriculture, or a potential no deal where the consequences could be to decimate the sheep market in this country? She is a parliamentarian. What does she fear from scrutiny?
Baroness Noakes
My Lords, I fear nothing from scrutiny. I am making the point that Parliament has consciously removed provisions that were contained in an earlier Bill; the version of the withdrawal Act that is now the law of the land has no such provisions and has deliberately removed them. That, to me, expresses the will of Parliament that Parliament does not expect to be involved in the minutiae of the negotiations with the EU; it is simply that.
I suspect that what is driving a lot of this debate is the fact that the majority of Members of this House never favoured exiting the EU and continue to be of the remain persuasion. I am sure that that is true of the EU Committee. Having been a member of that committee, I am well aware of the balance of its membership. I have raised in your Lordships’ House before the point that, if this House is out of alignment with the opinion of the country at large, that is at best unhealthy; at worst, it could undermine support for this House’s continuation, at least as currently constituted. I believe that the House and its committees need to think very carefully about that.
To conclude, we should praise the Government’s approach to negotiations with the EU and then let them get on and deal with them.
Lord Hannay of Chiswick
Well, my Lords, that really was back to 1958.
Were the coronavirus pandemic not dominating the public debate almost to the exclusion of everything else, the admirable and forensic report of your Lordships’ EU Select Committee, which was so excellently introduced by my noble friend Lord Kinnoull and which we are discussing today, and which deals with the opening positions of the UK and the EU in the post-Brexit new relationship negotiations, would be getting a great deal more attention, and rightly so. The political and economic choices that will be made in these negotiations will be felt for a long period—a period measurable in decades, not just in months and years—and very possibly long after the consequences of coronavirus will have been consigned to the history books and academic research. The consequences of the post-Brexit negotiations are likely to be seriously negative, which is no doubt why the Government are still refusing to publish any impact assessment of the proposals that they have put on the table in Brussels.
This report tells us that, on 31 January, this country ratified a political declaration annexed to the withdrawal agreement which set out the framework for our new relationship with the EU, and that from 3 February onwards—a mere four or five days later—every statement made by the Government treated that framework with blithe disregard, often contradicting it. Before anyone jumps up to say that the political declaration was not legally binding, I would not dream of suggesting that it was, but the time was when this country prided itself that its word was its deed. No more, apparently. Such blatant disregard for what we signed up to will carry a heavy cost in lost trust and confidence on the other side of the negotiating table. That will no doubt become clear when the two parties meet to thrash out the details of the Northern Ireland protocol to the withdrawal agreement, the interpretation of which by the Prime Minister bears no resemblance to what he actually signed up to.
The level playing field will clearly be a major bone of contention. In the political declaration we agreed—I emphasise: “we” agreed—and ratified the following words:
“Given the Union and the United Kingdom’s geographic proximity and economic interdependence, the future relationship must ensure open and fair competition, encompassing robust commitments to ensure a level playing field.”
There is not much ambiguity there, you might think, but the Government are driving a coach and horses over it by turning to the precedents of the EU’s agreements with Japan, Canada and South Korea, all many thousands of miles distant and much less interdependent with the EU, and ignoring the fact that agreements with its neighbours—Norway, Switzerland and Ukraine, for example—all have elaborate level-playing-field provisions.
Why are we insisting on the principle of regulatory divergence before we have even worked out in what sectors divergence might be to our advantage? I noted that today the noble Lord, Lord Goldsmith, made it quite clear that we have not worked that out yet on motor vehicles and chemicals. I wonder whether business really wants us to diverge. Surely it would have made more sense—and still makes more sense—to discuss the practicalities of divergence, not the principle of it.
Then there are all those regulatory agencies for which we seem determined to set up or restore separate, national institutions come what may, for largely ideological reasons. That will involve more costs, some no doubt to be loaded on to business, and more civil servants. Will it also mean more safety and protection for consumers? That is not terribly likely. Think of the implications of leaving the European Medicines Agency. As for internal security and law enforcement—on which the EU has made great strides in recent years from which we have benefited substantially—if the use that we have made of those new instruments is anything to go by, will we be safer without the European arrest warrant, or less safe? I think the answer is the latter.
One of the most blatant departures from the political declaration, which has already been mentioned, is the way that we have turned our back on any systematic co-operation with the EU on foreign and security policy, opting instead for bilateral ad hoc approaches. However, we will have no control over this. If the EU decides to act together on an issue of foreign policy, security, defence or sanctions, we will have no choice but to deal with it on that basis or not at all. Will we have more or less influence on the formulation of EU policies if we refuse systematic co-operation? That question is not too difficult to answer.
It is not too late to remedy some of these defects as the negotiations proceed—not too late even to reach mutually beneficial arrangements over fisheries which give our fishers a better deal than they had in the past, so long as we do not take an all-or-nothing approach. But imposing artificial deadlines which ignore what is written in the political declaration about the possibility of extending the transitional period and threatening to walk out in June are not the best ways to promote out interests, nor are they likely to succeed. That is why I support the resolution in the name of my noble friend Lord Kinnoull and the amendment moved by the noble Baroness, Lady Hayter, and why I regard the Motion in the name of the noble Lord, Lord True, as grossly inadequate to meet the challenges that lie ahead.
Lord Hain (Lab)
My Lords, without any scrutiny apart from the excellent report from the European Union Committee, since the election the Government have been rushing to an extreme hard Brexit which will simply compound the profound economic damage already triggered by the coronavirus into quite unnecessary and reckless national self-harm. Incredibly, the Prime Minister has unilaterally committed—come what may and way before he needed to—to leaving the transition period at the end of December, meaning the spectre of no deal is once again on the horizon, with immensely damaging long-term consequences for the UK’s economy. With respect to the noble Baroness, Lady Noakes, it would also be an outcome that was not foreseen or supported by most people at the time of the 2016 referendum.
In recent weeks, the magnitude of the coronavirus crisis has vividly demonstrated the limits of national action and the challenges of an unregulated, globalised world. Contrary to the belligerently nationalist tone adopted by the Prime Minister, Britain alone cannot fight the virus. We need leadership like Gordon Brown’s as chair of the G20 at the time of the global financial crash. The need for internationally aligned standards on isolation, quarantine and contact tracing and for much more investment in public health systems has been demonstrated. For instance, the UK has no vaccine production capacity of its own. As we have exited the EU, this could make us vulnerable to a potential second wave of Covid-19 and future pandemics. The European Medicines Agency, which once ensured that London was the centre for scientific evaluation, supervision and safety monitoring of medicines in the EU, relocated to Amsterdam in March 2019. As David Meek, the CEO of Ipsen, a leading pharmaceutical company, has warned, when it comes to availability of new treatments, pharmaceutical companies will first of all target the far bigger markets of the EU, the US and China. The UK, as predicted by President Obama, will indeed be at the “back of the queue”.
The EU Committee has drawn attention to the extent to which the two sides have diverged since last October’s agreement, which has created a mismatch of expectations on virtually all aspects of the future relationship. This analysis shows that the EU Council’s decision adopts the same structure as the agreed political declaration. As the UK is no longer a member of the EU, it seeks not to maximise trade but to prevent the UK undercutting the single market by lowering standards. However, the UK’s position appears to have changed significantly following the December election. A precursor to this can be found in changes made to the draft in November 2019 by the new Prime Minister’s negotiator. In particular, the words in the protocols relating to alignment of the UK in the areas of taxation, environmental protection, labour standards, state aid and competition were moved from the binding withdrawal agreement into the aspirational political declaration. Then, on 3 February, the Prime Minister announced that there was
“no need for a free trade agreement to involve”
the UK
“accepting EU rules”.
The new approach by the UK’s negotiating draft is also therefore motivated by a desire not to maximise trade but to seek the fullest amount of regulatory independence for the UK, putting Brexiteer dogma ahead of jobs and prosperity. This was confirmed by the Prime Minister’s statement:
“The question is whether we agree a trading relationship with the EU comparable to Canada’s—or more like Australia’s.”
But no trade deal exists between Australia and the EU, and his comments have also been interpreted as “code for no deal” by Ireland’s EU Trade Commissioner Phil Hogan. Even the Canada deal to which the Prime Minister referred—which took seven years to negotiate—would be disastrous for the UK, which already has a sizeable trade deficit on goods with the EU, as competitive EU suppliers could take advantage of zero tariffs in many areas, while services, where the UK has a trade surplus with the EU, would lose access to their former EU markets.
It is now clear that the obsession of Brexiteers with the so-called “sovereignty” of the UK means that the Government now believe there must be no alignment with EU rules. Slashing European regulation has, of course, long been a right-wing article of faith for those promoting a “Singapore-upon-Thames” UK, but the truth is that divergence caused by Brexit will lead to more bureaucracy, not less. First, the UK will need to replicate the functions of the EU regulatory bodies. Secondly, UK exporters will then have to deal with two sets of rules, as they will still need to meet EU standards to trade into the biggest, richest market in the world.
The sectors affected do not want to lose the protection and market access provided by EU regulatory frameworks, which have been developed, with UK support and influence, over the last 40 years. A case in point is the recent announcement by the Transport Secretary that the UK will leave the European Aviation Safety Agency, which enforces safety standards in the airline industry. The trade body representing the British aerospace and defence industry immediately condemned this decision as “unnecessary and unwanted divergence” from EU norms and harmful to the UK aerospace sector. The automotive, food and drink and pharmaceutical industries, among others, have also warned the Government that moving away from key EU rules would be damaging. But there is no sign that their pleas have been heard.
The Government’s own analysis in 2018 concluded that under a no-deal scenario the UK economy might be 6% to 9% smaller. Yet Number 10’s “divergence for divergence’s sake” could be catastrophic for British manufacturing industry and its workers. The industrial heartlands of the north-east and the West Midlands face the greatest potential economic hit—down by 16% and 13% respectively, it was estimated. Their economies are heavily dependent on European-wide just-in-time production found in advanced manufacturing such as cars, aerospace and chemicals. No doubt the Prime Minister will blame the EU for making these regions poorer when his damaging hard Brexit cuts our manufacturers off from lucrative EU single market access. This malign threat now looms over all sectors of the UK economy.
Take fishing and financial services as two very different examples. A bizarre stand-off between the UK and the EU over fishing rights triggered alarm that the Government were thinking of sacrificing the UK financial service industry’s access to the EU market in order to “save” UK waters for the British fishing fleet. Financial services account for around 7% of GDP, 11% of UK tax take and more than 1 million jobs, over half of which are outside Greater London. Fishing, while deserving of full support as it is important, especially to coastal communities, employs fewer than 10,000 people and is worth a fraction of 1% to national GDP.
The Brexiteers do not understand how this industry works. After years of promises of “frictionless trade” by Brexiteers, on 10 February, Michael Gove was finally forced to admit that this will cease at the end of this year. As one person’s fish is another person’s poisson, the UK fishing industry relies completely on overnight frictionless UK/EU trade. Informed analysis has shown that the most likely outcome of closing the UK’s sea borders would be a lose-lose situation for both UK and EU consumers and for both fishing industries. It would therefore be yet another spectacular own goal if the UK refused a deal on finance, which is critical to the UK’s prosperity, as the price of not reaching one on fishing.
We now learn that the government team negotiating with Brussels has been ordered to find ways to “get around” the Northern Ireland protocol, which includes checks on goods moving from Great Britain to Northern Ireland, measures adopted to protect the balance of the Good Friday agreement and avoid a hard border on the island of Ireland. This would trigger dispute-resolution arrangements in the withdrawal agreement, which in turn jeopardises a future trade deal with not only the EU but the US, where support for the island of Ireland, north and south, in Congress is strong.
When the UK and the EU together ratified the withdrawal agreement last October, it became legally binding under international law, as noble Lords have already mentioned. This means that, regardless of the outcome of the current negotiations on the future relationship, the protocol on Ireland/Northern Ireland is legally in place, and the Good Friday agreement must therefore be fully protected. Implementation of the protocol will ensure that there is no hard border on the island of Ireland and that the common travel area is maintained, to the continued benefit of UK and Irish citizens, and that more practical things such as the single electricity market in Ireland are part of protecting north-south co-operation. The protocol also maintains commitments to ensure no diminution of rights and safeguards equality of opportunity, as set out in the Good Friday agreement. It confirms that people in Northern Ireland who exercise their right to Irish citizenship will continue to enjoy their rights as EU citizens and reaffirms the EU and UK commitment to the PEACE PLUS programme.
The protocol states that Northern Ireland will remain in the UK customs territory but continue to apply the rules of the EU customs code. This means that there will be a need for checks on goods entering Northern Ireland from Great Britain, some of which already exist—for example, on livestock. However, the Prime Minister has insisted there will be no checks on goods moving in either direction. Unless the UK honours its legal commitments in the protocol, we will damage our long-standing and deserved global reputation as a credible international actor and undermine our ability to conclude international agreements of any kind in the future, including free trade agreements and the negotiations on the future relationship with the EU.
The protocol effectively moved the UK/EU customs and regulatory border into the Irish Sea, so that Northern Ireland will be on the EU side of the barriers to UK/EU trade. At the very least, this means more paperwork and administration; it could also well mean regulatory divergence, duties and even quotas. It poses an existential challenge, not only to the UK exporting but to the model of intra-UK business itself. I spell this out bluntly, because the Prime Minister is sailing blithely on, denying that there will be any problem implementing what he has legally agreed to on Northern Ireland, and sooner rather than later he is going to hit a brick wall.
Finally, we must surely insist that, in the light of the coronavirus catastrophe, the Government will face down the hard-Brexit zealots and reconsider the decision to exit the transition period at the end of the year, come what may. Right in the thick of the coronavirus pandemic, the last thing the country will need by then is yet more disruption and instability triggered by the double whammy of a rushed Brexit driven by dogma to meet an arbitrary deadline, especially when so many questions about the Government’s agenda remain mired in confused contradiction.
Baroness Falkner of Margravine (Non-Afl)
My Lords, I agree with the EU Select Committee’s report and support the Motion in the name of the noble Earl, Lord Kinnoull. I was a member of that Committee until last summer and I know how carefully it strives to be as objective as possible. This report upholds that tradition of neutrality. However, I do not support the amendment to the Motion in the name of the noble Baroness, Lady Hayter, for reasons that I will set out.
The EU Committee’s report notes the change in the Government’s Command Paper of February to the political declaration of October 2019. Again, I agree that there is a change, but I point to the significant fact that explains that change: the event of a general election on 12 December 2019. This was contested on the basis that, if the Conservatives won the election, they would seek a very different settlement from Prime Minister May’s withdrawal agreement in terms of the sovereign autonomy of the United Kingdom. They won that election resoundingly, hence the hardening of the autonomy provisions in the UK’s negotiating position.
The Committee also notes the EU’s new hardening of its own position on provisions to implement a level playing field, almost predicating the deal on this proviso. This change of position has some history. During my time on the committee, we had several meetings with Mr Barnier through the course of the negotiations. The quest for a level playing field was there, but mainly in regard to market access for, for example, financial services. I recall one meeting in, I think, November 2018 when there was a robust exchange between us when I asked him why he thought the UK would wish to leave the EU if it would end up as a rule-taker with no rights but having to abide by EU rules. I remember his answer in the margins of the meeting, which was simply, “Well, it is your choice.”
Regulatory autonomy is particularly relevant at a time of rapid technological and economic change, which will undoubtedly impact the prospects for all advanced economies in the relatively near future, so dynamic alignment with EU rules in areas such as environmental protection and workers’ rights come at a time when most independent states will seek as many levers at their disposal as possible to mitigate the effect of job-displacing technology. In plain English, every country wants to do what it needs to do to protect the jobs and prosperity of its citizens. That is why carve-outs and exemptions exist in all trade agreements.
Regarding state aid, Mr Johnson, in his speech of 3 February 2020, detailed the enforcement taken by the EU against EU member states. He did so to prove that the UK is not front of the pack in diverging from EU rules. The UK, he said, was subject to four actions in 21 years, compared with 29 against France, 45 against Italy and 67 against Germany. The record speaks for itself.
A further change to the EU position not mentioned in the report is the reluctance of the EU to envisage a Canada-style CETA. Again, Mr Barnier’s sideshow, wheeled out frequently during the negotiations, had several levels of relationship on offer, depending on what the UK sought to do in its withdrawal agreement and future relationship. If we wanted untrammelled market access, we had to be in the single market and the customs union. At the other end of the scale was the Canada CETA as an ordinary third country. So it is surprising to see that once the UK has resolved to be a third country, the EU now discovers, three and a half years later, that we have a close geographical proximity and are a large economic power—which are the reasons it gives for why a Canadian-style CETA is inappropriate for us.
The UK position, reflecting the Government’s majority, can be summed up by the observation made by John Maynard Keynes: “When the facts change, I change my mind.” However, instead of a similar realisation that the facts on the ground have changed, the EU seems to move away from the political facts in the UK, its negotiating partner. However, I hope that these are just negotiating positions through which a consensus will emerge.
My objections to the Labour amendment are mainly in its seeking an analogous position to the European Parliament, not in its desire for greater scrutiny, which to a great extent I share. This comparison with the European Parliament has been a long-standing ask from those in the Lords and the Commons, and was promised by the Government in response to a question that I asked Mr David Davis in 2017 during EU Select Committee evidence sessions. I was surprised that he agreed to grant the committee that, and I continue to be surprised that the Lords continues to ask the question as the Government move away from that offer.
The Motion seems to imply that Parliament should be given the same rights as the European Parliament. That in turn implies that the UK Parliament is similar in composition and powers to the EU, whereby it should have the same rights. First, the European Parliament was given the powers under Lisbon as the Commission, post Maastricht, had come under attack for being insufficiently democratic. The status quo ante had been that the Commission negotiated agreements and the European Council agreed them. Post Lisbon, the European Parliament forms a bicameral legislature with the Council of Ministers. This is not analogous to the role of the UK Parliament vis-à-vis the UK Government; I think that should be self-evident. As the EU institutions—
Baroness Smith of Newnham (LD)
I am a little confused. I thought that the point of the United Kingdom voting to leave the European Union was to take back control and that Parliament was sovereign and no Parliament could bind its successor. In such circumstances, is it not wholly appropriate for this Parliament to seek to hold the Government to account? Why is there anything peculiar about this?
Baroness Falkner of Margravine
I fear that the noble Baroness is a little enthusiastic in jumping in before I have concluded setting out my rationale for why I think that this is not analogous. I will not go into “taking back control” because we are a bicameral Parliament and the European Parliament is not, so it is a different entity entirely.
As the EU institutions practise in an area of trade policy that is not analogous, there is a distinction between straightforward trade agreements and mixed agreements, with differing procedures as the CETA debacle apropos Wallonia demonstrates. I remind noble Lords that CETA remains a provisional agreement; as yet it has not been ratified by all member states. So I would argue that how the Commission works through blockages is still a work in progress. My prediction is that the EU will find it increasingly difficult to pass the kind of comprehensive deals with either the US or other large countries that it seeks if such divergent and multiple checks on its autonomy prevail.
I turn to the noble Baroness’s question about the UK Parliament and the attempt to replicate the European Parliament’s powers here. One singular distinction is that we are bicameral and the European Parliament is a single Parliament, as I have just reminded her. Moreover, we have an elected Chamber, the Commons, which is similar to the European Parliament, and a further appointed Chamber, the Lords. Were we in the Lords to seek to put up objections to a trade deal that had been agreed by the Commons potentially where the detail may not have formed part of that Government’s manifesto, where would we be if the Commons cleared it but the Lords did not? Moreover, if one takes the EU analogy for mixed agreements and replicates it at national level, is one not saying that the devolved nations should also have a veto on the deal?
I am all for involving the devolved powers in the details of free trade agreements as in the end they have to implement them. The current mechanism for consultation should be improved. Would that be against changing our settlement for reserved matters? If that is the case, I will need to look again.
It seems to me that this ongoing quest for analogous powers to those of the European Parliament on the part of some sides of this House is misguided.
Baroness Hayter of Kentish Town
Will the noble Baroness accept that the amendment only asks for access to documents, not for powers over their content?
Baroness Falkner of Margravine
I will read the wording of the amendment, which
“calls on Her Majesty’s Government to ensure that, in a manner consistent with the European Commission’s treatment of the European Parliament, both Houses … are able to receive regular updates from Ministers”—
and so on. In my view, that goes too far, because it draws the analogy with the European Parliament. I also say that to the noble Baroness, Lady Hayter, because I have noticed sections of this House consistently making that analogy.
The noble Baroness may be interested to know that I would seek powers of scrutiny over future trade deals through a Select Committee on international trade—perhaps a Joint Committee of both Houses that would have several and various powers of scrutiny that the Government have said that they are perfectly willing to consider. I see benefits to Parliament, the public and the Government in that pathway, as Governments undoubtedly benefit from the early warning of problems that comes through Select Committees. But ultimately it is the Government’s prerogative to be the sole negotiator of trade agreements and, while the UK should improve its own constitutional arrangements, it should not seek to emulate processes designed for other institutions.
Viscount Trenchard (Con)
My Lords, it is a great pleasure to follow the noble Baroness, Lady Falkner. She made some very interesting new points to inform your Lordships’ debate. I thank the noble Earl, Lord Kinnoull, for introducing this debate. His committee rightly concludes that the recent Council decision raises matters of vital national interest.
I believe that the matters that the committee raises are not exactly new, because we have been debating them since before the referendum of 2016 and, indeed, before that. Indeed, a majority of the electorate voted to leave because they considered that remaining in the EU raised matters of vital national interest. They thought that reclaiming our right to have our laws made in this Parliament by MPs accountable to the British people was one of these matters.
I am sure that your Lordships are grateful to the noble Earl’s committee for its report and for promoting debate on our EU negotiations, which will, whatever their outcome, profoundly and permanently change the United Kingdom. However, even if we had not left the EU, the continuing incremental transfer of competences to the European institutions would have continued to profoundly and permanently change the country.
I regret that the negotiations leading to the withdrawal agreement were conducted ahead of and separately from the current negotiations on our future relationship with the EU. As your Lordships know very well, Article 50 states that the negotiations on the withdrawal of a member state shall take account
“of the framework for its future relationship with the Union.”
My understanding is that it was expected that the framework for the future relationship would be agreed at the same time as the withdrawal agreement. Article 50 does not suggest or imply that there should be two separate sets of negotiations or agreements. The EU insisted that we should agree the terms of withdrawal first, dealing with the future framework in the separate and non-binding political declaration.
The political declaration, as your Lordships are well aware, provided for a number of possible outcomes, ranging from continued close alignment with EU laws and regulations, to a clean break with full restoration of national sovereignty but also starting from a point where our legal and regulatory systems are identical.
The Conservative Party manifesto—on which the new House of Commons was elected—made it very clear that the Government would seek a future relationship with the EU based on a free trade agreement similar to that enjoyed by Canada; leave the single market and the customs union; and not agree to the continuing jurisdiction of the ECJ in this country. The Prime Minister made it clear in his Greenwich speech that if the EU would not agree to an FTA similar to that which it has with Canada, the UK would seek trading arrangements similar to those which the EU has with Australia.
I am opposed to the amendment of the noble Baroness, Lady Hayter, which seeks to exercise control over the actual process of our negotiations, or even debate the terms of emerging agreements. This would detract from our negotiator’s ability to obtain the best possible result for the UK and make it more likely that we will not be able to reach agreement with Mr Barnier and his team. I therefore urge your Lordships to reject this amendment, which, if agreed, would send the wrong message to the EU, and damage the authority of Mr Frost and our negotiating team.
One area where the Government’s Command Paper differs significantly from the EU’s decision is state aid. Indeed, the amended text of the decision adopted on 25 February implies not only that the EU will require the UK to continue to apply existing state aid legislation, but that it will be expected to adopt new or amended EU state aid rules in future. But the UK is very far from being the worst culprit of the excessive use of state aid. As the Prime Minister pointed out, and as the noble Baroness, Lady Falkner has just reiterated, the EU has enforced state aid rules against the UK only four times in the last 21 years, compared with 29 enforcement actions against France, and 67 against Germany. The recent hardening of the EU’s position on state aid will make it very difficult to reach agreement on a satisfactory FTA within the time available.
I would like to say a few words about services, especially financial services, based on more than 40 years’ experience as an investment banker. The political declaration suggested that the EU and UK should seek close and structured co-operation on regulatory and supervisory measures, including by working together in international bodies. As a member of the committee’s Financial Affairs Sub-Committee, formerly chaired by the noble Baroness, Lady Falkner, and now chaired by the noble Lord, Lord Sharkey, I can confirm that we have discussed this matter to a considerable extent. Our witnesses have included the present Governor and the Governor-designate of the Bank of England. Both have expressed the view that we should not be a rule-taker from the EU and should in future adopt a regulatory regime which recognises London’s connections with other important financial markets, such as New York and Tokyo.
I regret that the EU did not match our decision to grant temporary equivalence to EU clearing houses for two years, but was willing to grant this only for one year. Does the Minister concur that, in agreeing the basis of granting and withdrawing the recognition of equivalence in financial regulation, we should not establish a cumbersome and bureaucratic bilateral structure for assessing divergence with the EU which would, in effect, tie our rule-making more closely to Brussels than to other important financial markets, such as those of the US and Japan? Does he also agree that in future the UK should seek to maximise its influence in establishing best practice and designing proportionate regulation at the global level, through bodies such as the International Organisation of Securities Commissions, IOSCO? There are several EU financial rules, such as AIFMD, Solvency 2 and MiFID 2 which contain elements which we tried to resist and from which we may wish to diverge. If the structures we agree with the EU unduly restrict us from divergence, it will complicate our freedom to reach agreements on regulatory equivalence with third countries such as the US and Japan.
I agree with the former Chancellor who called for a durable equivalence relationship, whereas the EU has stated that its equivalence decisions can be withdrawn at 30 days’ notice unilaterally, as it has done in the case of Switzerland. This has increased the cost of trading in Swiss stocks, especially in the case of smaller companies.
On defence, the Government’s Written Ministerial Statement contains no specific reference to defence but states that foreign policy alignment, which is likely to be substantial, does not in itself require a joint institutional framework. However, the EU’s decision reflects the political declaration in agreeing that the UK may co-operate in certain projects under the European Defence Fund and PESCO. Our Armed Forces enjoy a close collaborative bilateral relationship with those of France. Does the decision mean that UK-France defence co-operation will be possible only under the framework of the EDF or PESCO in future? Does that mean that in order to co-operate, British forces could work with French forces only under the command of a European general?
Lord Hannay of Chiswick
Perhaps I can give the noble Viscount an answer to his question. The answer is no, it does not mean that. It could only mean that if the French agreed to make it mean that, and they will not.
Viscount Trenchard
I thank the noble Lord for his assurance.
As noted in paragraphs 34 to 40 of the report, the decision envisages an overall institutional framework, which suggests the EU wishes to enter into an association agreement. Does the Minister agree that such an arrangement would be inconsistent with the Written Ministerial Statement, which proposes a suite of agreements appropriate to a relationship of sovereign equals? Will he confirm that the Government have made it clear to the EU negotiators that the UK will not entertain such a semi-detached continuing relationship with the EU which would make it impossible for this country to respond positively and flexibly to the opportunities that our new freedoms to pursue an independent trade and regulatory policy will provide?
I much look forward to other noble Lords’ contributions and especially to my noble friend’s winding-up speech.
Lord Kerr of Kinlochard
I bow to the noble Lord’s experience in financial matters. I usually find the usual channels as baffling as the Sibyl of Cumae, but on this occasion we have to congratulate them on arranging such a prompt debate on the Select Committee report. We must also congratulate the noble Earl, Lord Kinnoull, on producing such an excellent, analytical, factual report—a good trigger for the first test of what we mean by Section 29 of the Withdrawal Act. I declare an interest: I sit on his committee, which is why I suck up to him.
As he spelled out, the report brings out the striking contrast between the detailed negotiating mandate put forward by the 27 and the terse assertions of the Government’s White Paper. Of course, these are only opening positions but the gap is quite wide, particularly in the four areas where it seems to have arisen because our Government’s position has changed.
On architecture, we no longer believe in an overriding institutional framework, which is what we agreed to in the joint political declaration of 19 October. Instead, we now want only a free trade agreement
“supported by a range of other international agreements, all with their own appropriate and precedented governance arrangements”—
all, presumably, with different governance arrangements.
The EU mandate sticks with what the political declaration said, and still wants “an overarching institutional framework”. I suspect that this reflects the EU’s unhappy experience with Switzerland and the unsatisfactory multiplicity of separate EU-Swiss agreements. We were one of many member states to agree that the Swiss experiment should never be repeated. I expect the others still feel the same.
Secondly, on the level playing field, as the noble Lord, Lord Hannay, reminded us, we agreed in October that:
“Given the Union and the UK’s geographic proximity and economic interdependence, the future relationship must ensure open and fair competition, encompassing robust commitment to a level playing field”.
That is still in the EU mandate, but it seems that we have changed our minds on that too. We now say that we will not agree to any obligations for our laws to be aligned with the EU’s. That could have consequences. In October, we agreed that the “precise nature of” level playing field
“commitments should be commensurate with the scope and depth of the future relationship”.
That works both ways. If we will not provide convincing assurances on competition and the other topics, any free trade agreement is likely to be rather shallow and narrow in scope.
Thirdly, in October we wanted “ambitious, close and lasting co-operation” on foreign policy, sanctions, security and defence. The EU mandate now covers the same ground in broadly the same terms, but our White Paper is completely silent on the subject. I note that, according to the press, we have rejected the Commission’s idea that one of the negotiating groups working to Mr Frost and Monsieur Barnier should cover external relations topics. I am not clear why our position has changed. Perhaps the Minister could tell us.
Finally, the White Paper robustly rejects the idea of any role for the Court of Justice. Mr Gove, giving evidence last Wednesday to Mr Benn’s committee in the other place, spelled out that this extended to any organisation—say, REACH, the chemicals regulator or the European arrest warrant—that was under CJEU jurisdiction. This, too, would seem to indicate a preference for narrowing the scope of any eventual agreement.
I draw two observations from those four facts. First, I am not sure that our continental friends will fully understand that the election has changed everything, as the Prime Minister, Mr Gove and Mr Frost have maintained in their recent speeches. October’s joint political declaration is not, of course, a legally binding text, as the noble Baroness, Lady Noakes, reminded us—I was delighted to hear something I could agree with—but it is an international agreement. It is not legally binding—it is not part of the treaty—but it was an agreement that emerged from a negotiation involving mutual compromise.
I do not think it follows from Mr Johnson’s election victory that his 27 colleagues will accept that the balance of the declaration can now somehow be changed, with the UK cherry-picking the bits we like best and dropping the other bits, and their having to acquiesce. The thesis seems to be that the political situation in the UK is now different, so we can just pick and choose the bits we like. Perhaps the foreigners may accept that; I am not sure.
Secondly, on the other hand, it must be true that by aiming low and going for a narrow agreement and a more distant relationship with continental Europe, we increase the chances of getting something agreed by the end of the year. If it does not extend beyond trade in goods, as seems plausible on the basis of the opening position, it probably will not need national ratification in 27 capitals with the delays that inevitably entails. I thought it rash of Mr Johnson to rule out any extension to the negotiation period—perhaps coronavirus will now change his mind—but I am not one of the those who argue that it is impossible to secure a deal by December. I am certain that, if the Prime Minister sticks to his timetable and to the brusque autarkic assertions of his White Paper, the best we can get will be a narrow deal, a shallow deal and a very bad deal—but if that is what we want, I think it is possible.
However, there is a wild card and I turn to it now. It is Northern Ireland and the 131 pages of the protocol on Ireland and Northern Ireland in the withdrawal treaty, which has been in force since 31 January. In Brussels and among the 27, one today detects a growing suspicion that we are not terribly keen to implement the protocol. In Brussels, that is understandably taken rather seriously. The protocol is part of the treaty, and it is legally binding. Were we seen to be resiling from it, the consequences would be grave. I would certainly expect the EU to break off negotiations on the further treaty. I would assume that the nightmare of a hard border in Ireland would be back and the Good Friday agreement in grave danger. The noble Lord, Lord Hain, has drawn attention to the United States repercussions of that.
Of course, it seems wild and outlandish to suggest that this country would ever resile from a treaty obligation, an obligation we have only just taken on, on the last day of January. I hope that the suspicions of Brussels are misplaced, but we are currently not trusted over there, as the noble Baroness, Lady Ludford, explained. The Minister has made clear more than once in the House that he believes that the Government will fulfil their legal obligations, and I believe him, but there is a new Attorney-General, who may be more malleable than the previous one.
Why is trust evaporating in Brussels? The issue is the frontier in the Irish Sea and the suspicions spring from what the Government say and from what they do or do not do. First, let us look at the words. Mr Johnson and his new Secretary of State still seem in denial about what the protocol means for trade between Northern Ireland and Great Britain. Under Article 5 of the protocol from 1 January, we will be obliged to collect on the EU’s behalf EU customs duties on goods moving from Great Britain to Northern Ireland, except for those goods on which the UK and EU agree there is no risk of them moving into the Republic. We agreed that; that is what the treaty says. In Article 6 of the protocol we also agreed that the EU customs code and hence EU export checks will apply to goods moving from Northern Ireland to Great Britain, although with controls at ports and airports minimised to the extent possible. We agreed that; that is what the treaty says. In Article 12 we agreed to give the EU the right to monitor and supervise these two-way frontier arrangements. We agreed that. It is in the treaty.
As long ago as 21 October, the then Secretary of State for Exiting the EU, Mr Barclay, confirmed to the Select Committee chaired by my noble friend Lord Kinnoull that there would be two-way checks, but the Prime Minister continues to deny it and, unlike his predecessor, Mr Smith, so now does Mr Brandon Lewis, the new Secretary of State for Northern Ireland. In this context, the White Paper’s flat rejection of any role for CJEU jurisdiction in this country starts to look, in Brussels’ eyes, very sinister. Seventy-five pages of the protocol consist of long lists of single market laws that will apply in Northern Ireland and will be under CJEU jurisdiction.
Did the drafters of the White Paper just forget about Northern Ireland? Or, as some in Brussels fear, are the Government hoping to forget about the protocol? Giving evidence to Mr Benn’s committee in the other place last week, Mr Gove refused to confirm the description of the Irish Sea frontier, which the Government themselves set out in their explanatory document on the EU (Withdrawal Agreement) Bill, published on 21 October. He brushed questions aside, saying that they were a matter for the Joint Committee set up under the protocol, which will, I understand, finally meet at the end of this month. But the Joint Committee’s task, as spelled out in the treaty, is to agree how to implement the provisions of the protocol. It cannot change them—and we have signed up to them.
So much for the words—it is the deeds that worry me most. The Select Committee, visiting Belfast on 25 February, could find no evidence of any central or devolved government action to prepare to implement the protocol. The business community was equally unsighted, and suggested that with five months gone and only eight to go, it would be a “herculean” task to get workable frontier arrangements up and running. I think “herculean” is Hibernian for “impossible”.
We were told that no one from HMRC, which will be responsible for the two-way customs border in the Irish Sea, had, as of 25 February, given the business community of Northern Ireland any indication of what to expect or how best to prepare for it. We were told that 2,500 trucks cross the Irish Sea within the UK every day—850,000 a year—and that for GB-NI movements, 45 questions would probably have to be asked about every consignment. We were told that for NI-GB movements there might be 31 questions, if the precedent of the EU’s Ukrainian-Polish frontier were followed.
I find all this acutely disturbing—indeed, shocking. I can think of few greater infringements of national sovereignty than a foreign-supervised frontier inside our United Kingdom. I am not surprised that Mrs May—and Mr Johnson, before he got to No. 10—ruled it out as something no UK Prime Minister could possibly accept. But he did accept it: it is in an international treaty, and we do not break treaties.
The Government in Dublin are well aware that we are dragging our feet. So, too, is the Commission, whose members have been in Belfast to find out. No wonder there are suspicions in Brussels. If we walk away from the treaty we signed, there will not be another to sign. The worst of all possible worlds would be to leave the people of Northern Ireland in limbo and in the dark, puzzled by the words being uttered and totally unbriefed on the necessary deeds.
I would be grateful if the Minister could confirm that it is not our Government’s intention to seek to reopen or reinterpret Articles 5, 6 and 12 of the Irish protocol, and tell us when the people of Northern Ireland will be informed—ideally, consulted—about the preparations they should make for their resultant new trade frontier with the rest of this kingdom.
Lord Lamont of Lerwick (Con)
I do not disagree with everything the noble Lord has said in his formidable speech, but is there not one scenario that he has not covered? If there is a free trade agreement, will not a large part of the protocol fade into it?
Lord Kerr of Kinlochard
Yes, I think that is true. The checks would then become much less onerous—but they would still be required. The EU would still be required to collect data on its exports, which means that there would still be checks on Northern Ireland-GB trade, and in the other direction there would still have to be VAT checks, phytosanitary checks and rules of origin checks, even if the customs checks were reduced to near zero.
The noble Lord is right: it is perfectly true that, if there is a comprehensive free trade agreement, checks will be less onerous, but they will still have to happen in both directions. I support both the Motions on the Order Paper. I also support the amendment in the name of the noble Baroness, Lady Hayter. The Minister will note how supportive I am being today.
Lord Whitty (Lab)
My Lords, I thank the noble Earl, Lord Kinnoull, and his committee for producing this report. It is very timely and clear. I will be supporting my noble friend Lady Hayter’s amendment and I thank her for tabling it. I will say something towards the end of my remarks about the whole issue of accountability.
I also thank the noble Lord, Lord Kerr, even though he has largely pre-empted some of my more important points. Like him—and the committee, rather more delicately—I regret that there has been a departure from the spirit of the political declaration. There has been a bit of a departure by the EU, one has to say, but a very substantial departure by the British Government from a political declaration that was, after all, signed by this Prime Minister. That is serious enough but, as the noble Lord, Lord Kerr, has just said, even more serious is the apparent departure from what is already in a signed treaty in relation to Northern Ireland and the protocol in the withdrawal agreement.
My main remarks will be about trade, which is, after all, the most important dimension of our joint relationship, although it is not the only one. I had to look back; it was as long ago as December 2016 when the committee I was then chairing jointly produced for the then EU Committee a document entitled Brexit: The Options for Trade. I had another look at it over the weekend. We were very prescient and far-sighted in the options we looked for. We accepted that Britain would be outside the EU and that we would leave in formal terms the customs union and the single market. I remember saying several times in this House and elsewhere that, in that situation, frictionless trade is a relative term; you have to look at the different implications of the different arrangements.
We looked at a number of arrangements, ranging from membership of the EEA through to trading under WTO rules. It seems to me that all those outcomes might still conceivably be the case. We are no further ahead. In effect, in the latest Council decision, the 441-page treaty which the noble Earl, Lord Kinnoull, has clearly read—he might send me one of his four copies, even if it is in French—the EU clearly goes for the option of something very like an association agreement. In fact, in treaty terms, it will be under Article 217 relating to association agreements.
The British option, as far as one can interpret it, is much closer to the arrangements with Switzerland, as the noble Lord, Lord Kerr, has said. They are looking for a trade agreement but also a whole suite of other agreements. That was an option that we looked at but largely dismissed. It could still be a form of free trade agreement, similar to that agreed with Canada or Japan, or to what the Government used to talk about—Canada-plus-plus-plus. That has been relegated to just one “plus” in recent ministerial announcements, but all those options are still there, as is the bare-bones agreement of limited clauses and effect that was once referred to by David Davis; or it could be on WTO terms, as I say, which is now known as Australia. They are all still available, although the one that we identified at the time as the easiest and least disruptive course to take—namely, to join on EEA terms: the Norway option—although we did not actually advocate it, has been clearly rejected by the Government and, in effect, by the EU. So there are still a lot of potential outcomes between now and the end of December.
It is three and a half years after our report, after two general elections, two Prime Ministers, three Governments and four Secretaries of State. Until very recently, the only continuous presence was that of the noble Lord, Lord Callanan, on the Front Bench opposite—I am pleased to welcome the noble Lord, Lord True, in his stead. There have been many changes in the British political situation since we produced that trade report. However, there has been no serious progress regarding relations on this key issue between ourselves and our largest and closest trading partner.
Do the Government mean what they say about wanting a Swiss-type suite of separate agreements with separate Governments? That has caused many ructions between the EU and Switzerland, and it is a relatively small part of EU trade compared with the EU’s trade with the UK. I am not sure why we need that suite. In the British government documents and the other pronouncements there is, for example, a reference to a bilateral aviation agreement. I hope we have one, otherwise aviation range will fall on 1 January. There was a reference in the timetable for the trade talks—before the virus slowed them down a bit—to talking about a separate aviation safety agreement and a general aviation agreement. I have a Question set down for later in the week about the European Aviation Safety Agency. The situation there, as both the airlines and the aerospace manufacturing industry recognise, is that if we are not careful and do not continue to act very closely with EASA, the airlines will be faced with a situation where their aircraft, their components, and the qualifications of their personnel may be legal at one end of a short European hop but queried at the other end. If we want to diverge, there are consequences. If we do not want to diverge, why do we not say so and reach some sort of association agreement with EASA?
The same applies to many of the other EU agencies, which, during the course of several different withdrawal Bills, I raised in the House. Mrs May, when she was Prime Minister, recognised that there would need to be some separate arrangement on aviation, as she did on chemicals. We had a Question today from the noble Lord, Lord Fox, and the Government were not at all clear on what arrangements would be made for that vital industry. Environmentalists and the industry itself are deeply concerned about the capability of the HSE and air authorities to reproduce the arrangements in the European Chemicals Agency. Indeed, even if we manage to duplicate those arrangements, it is a double administrative cost and charge, and a potential delay for our chemicals-based sector and the industries that use chemicals.
If we are going to have separate agreements on separate areas that are covered by such things as the aviation or chemicals agencies, now we ought to be particularly concerned about the medicines agency, which was of course based here and has already left—and there are many others, for example on food safety. If we are to have a separate agreement on fisheries, the EU will insist that that is reached before we reach a general agreement. Indeed, because of the timing of this, the Government seem to be going along with the view that we can reach a fisheries agreement by June. I think that is unlikely. It is equally unlikely that we will reach a financial services agreement by July. The noble Lord, Lord Kerr, and my noble friend Lord Hain spelled out the ambiguities in meaning of the Northern Ireland protocol and whether we can reach mutual understanding on that in time for this to be all agreed, broadly speaking, by September, and ratified through the European Union and ourselves by December. It is about time for the Government to recognise that, leaving aside the current serious difficulties because of the coronavirus, the timetable they set themselves was never achievable and is certainly not achievable now.
Other issues, such as the level playing field—where we started from the position in Mrs May’s Chequers proposition that we were talking about a common rulebook but ended up with the Government making a virtue of maximum divergence—and state aid, also need to be resolved. There is certainly deep anxiety among our former partners in Europe that there will be heavy state intervention to support competitors against their own industries. Not that long ago, during the election, it was regarded as a very leftist position to look to subsidise British industry—people were worried about Jeremy Corbyn breaching the state aid rules in that regard—but now, with this big-state Toryism, the Government in Brussels and Governments throughout the continent are worried about this Government causing unfair competition. These issues are not easy to resolve and are unlikely to be resolved in the timetable currently announced—but they need to be resolved.
My last point is on accountability to Parliament, which is the main point of my noble friend’s amendment. I understand what the noble Baroness, Lady Noakes, said about the political situation having changed but, like the noble Baroness, Lady Falkner, we are not asking for the exact equivalent of the European Parliament. We are simply asking that both Houses of Parliament are kept informed on the progress of these negotiations and can comment on them.
The strange thing is that, in discussing the potential trade treaty with the United States, the Government have, in effect, given that guarantee, at least to the House of Commons. When we talk about a prospective treaty with the United States, they are prepared to be accountable to Parliament; when we talk about a trade agreement with our largest and closest neighbour, they are not. That needs to be addressed; Parliament needs to assert itself in that process. I support my noble friend’s amendment.
Baroness Falkner of Margravine
Does the noble Lord agree that there are many routes for Parliament to carry out that scrutiny? One route could be a Joint Committee of both Houses or a dedicated Select Committee—possibly even an extension of the European Union Select Committee. It does not have to be a replication of the European Parliament’s powers but can be something where scrutiny is undertaken adequately.
Lord Whitty
I thank the noble Baroness. I agree. We need the principle of scrutiny; the form of it we can debate. We can debate the correct structure within our two Houses but, without the principle being conceded by the Government, we are in an anomalous situation in relation to Europe and to what has been promised on this side of the pond in potential trade negotiations with the United States.
Lord Hamilton of Epsom (Con)
My Lords, your Lordships’ House has always regarded itself as the guardian of our constitution. Of course, included in our unwritten constitution, although many people wish it were not, is the whole question of referenda. I know that many people think we should never hold referenda in this country, but the fact is that it was decided that we should.
I want to put a hypothetical question to your Lordships’ House: what would have happened if all the Euro-enthusiasts, described by a noble Baroness on the Liberal Democrat Benches as Euromaniacs, had succeeded and kept us in the EU when the country had voted to leave—or, indeed, kept us in Brexit in name only when the country had made it quite clear that it wanted to leave the EU? I totally accept that this is a hypothetical question because the whole situation has now changed. For that reason, I do not expect my noble friend the Minister to reply to this—he should not reply to hypothetical questions—but your Lordships’ House should give thought to this matter because, let us face it, that referendum was in the 2015 Tory manifesto and was honoured in both the 2017 manifestos of the two major parties, which said that they would honour the result. If at the end of all this we had decided that somehow we were going to stay in the EU, where would that have left democracy in this country? We must think about this very seriously. Your Lordships’ House has done itself no credit in its role of scrutinising the whole business of European legislation and conspiring to do everything it could to ensure that we would never leave the EU at all.
I turn to the report. Much comment has been made about the level playing field, but also included in that is the fact that the role of third countries has been completely redefined. I thought that a third country was a country that did not happen to be in the EU—as simple as that—and that once you signed the withdrawal agreement and left, you were no longer in the EU but were a third country, but oh no, that seems to have been redefined. Now, for some reason, our closeness to the EU puts us in a unique category, and the amount of trade that we have with the EU puts us in a special position. I was somewhat surprised because, reading the report—
Lord Hannay of Chiswick
Obviously the noble Lord did not listen very carefully to the quotation that I read from the joint declaration. It makes it quite clear that we recognise that geographical proximity, and the extent of our independence, require a level playing field. Perhaps he could answer that question.
Lord Hamilton of Epsom
That is the point I am trying to make; this should have been answered in the report. It does not matter where it comes from. Whether our closeness to the EU makes any difference to our relationship with it is questionable. The problem is that we have had the nerve to vote in favour of leaving the EU. Therefore, the EU must redefine the position of a country that leaves so that it can mete out special treatment to that country and somehow discourage others from leaving as well. This report should have addressed these issues. Does it make any difference whether or not a country is close to the EU? Does the size of trade make any difference? I agree that our trade with the EU is probably greater than that with the United States, but the United States does a massive amount of trade too. Nobody is asking for a level playing field with the United States, and they would be told where to go if they tried. We should be questioning these things, as I hoped the report would. Perhaps the noble Earl, Lord Kinnoull, can tell me why this was not included in the report.
The Earl of Kinnoull
Certainly I can make some practical points on the very interesting questions that have been raised by the noble Lord. These are vital documents that have become public. There has been no opportunity for Parliament to read a report or have a debate. We were given a power and a duty under Section 29 of the Act. We heard a very interesting interpretation of that, which I am afraid I disagree with. If we were to write and address a separate question, we would have to take evidence or find evidence in the stock of evidence that we have, and there was no time to do that. The second of those documents, the Command Paper, arrived on 27 February. We had a report agreed by people on every position of the spectrum agreed by 3 March. We felt that it was important to bring it to the House immediately so that we could have this very interesting debate.
Lord Hamilton of Epsom
The document that I am reading says that this statement was made on 18 February. That is quite a distance from 3 March, when the report went to the printers. I question whether you can reach a decision as a committee unless you have taken evidence. The whole business of whether how close you are to the EU counts or whether the size of your trade is a determinant factor is surely something that the committee can make its mind up about without taking evidence.
The Earl of Kinnoull
Section 29 addresses that issue. The Command Paper—a key document in our report—was issued on 27 February. I do not have Section 29 in front of me, but it says specifically that such evidence as we have deemed necessary should have been taken. I am sure we would have loved to read a report about a whole lot of other very interesting questions, but unless we had the evidence on file we would have had to have taken more evidence, which would have slowed things down immensely.
Lord Hamilton of Epsom
We could go on arguing about this indefinitely. However, the noble Earl is rather underestimating the intellectual abilities of his committee if it cannot reach a conclusion on this relatively simple issue without taking evidence. I will move on to the amendment in the name of the noble Baroness, Lady Hayter.
Lord Lea of Crondall
We may be criticised on our structure. In the next month, noble Lords will have the chance to make comments on the work of committees. I agree that committees are too reliant on “evidence” which is simply regurgitating things that other people have said. This is an excellent report by an excellent committee; the noble Lord may have just contradicted himself.
Lord Hamilton of Epsom
I do not know whether or not the noble Lord, Lord Lea, was on the committee. I am saying merely, as he did, that committees should be intelligent enough to reach their own conclusions without necessarily having to take evidence.
The noble Baroness, Lady Hayter, said that it was not good enough for the Government to inform devolved assemblies what was happening: there should be consultation. However, when we talk about consultation we are actually talking about reaching agreement, so you are, therefore, giving the devolved assemblies a veto over a compromise on the final deal. I have a problem with Parliament getting too involved in all this. At the end of the day, everybody has a different opinion. My noble friend Lady Noakes thinks that we should be preserving all our fishing. I suspect that quite a bit of it will be given away. That will be part of the negotiating ploy and my noble friend will have to ask herself whether or not the compromise which the Government have reached and the overall deal—which I suspect will include some sacrifice of fishing—are acceptable as a whole. That is what Parliament will have to decide.
However, the Government cannot possibly go into these negotiations constantly referring back to Parliament and asking if it is all right to do this or that. By their nature, the negotiations will be a compromise. Concessions are going to be made in some directions and gains made in others. At the end of the day, the Government have to be judged on whether the overall package is satisfactory as a whole. We have to be wary of undermining the Government’s negotiating position but, now that they have a decent majority, I do not think they will be too moved by many of these arguments.
Lord Anderson of Ipswich (CB)
My Lords, in a constructive spirit, I will raise two matters concerning civil justice. My purpose is not to press the Minister on the Government’s bottom line, which of course he will not—and should not—share with the House while negotiations are ongoing. Rather it is to test the currently uncertain limits of the Government’s aspirations and to encourage them to aim high.
The first matter relates to judicial co-operation in the field of family law. This is the subject of the very last paragraph of the Command Paper, all three and a half lines of it. It says simply that the UK will continue to work with the EU through multilateral precedents set by the Hague Conference on Private International Law. If lawyers agree on anything, which I accept is rare, it is that, in relation to family law, the EU’s Brussels II revised regime is faster and more flexible than the Hague conventions. What does this mean in practice? It is only under the Brussels II regime that a father who is given access to his child after a divorce in Spain can automatically enforce that contact order in the UK. In the case of a child which is abducted from England to Poland, under the Hague convention, the left-behind parent in England is limited to a remedy in Poland; under Brussels II, they have, if they need it, a second bite of the cherry: the ability to ask the English court to return the child. We would also lose the maintenance regulation which allows someone in the UK to go to an EU country to enforce a maintenance order made by a British court.
I understand very well that we are out of the EU, that we cannot put the clock back and that the Government prefer not to sign up to regimes where the Court of Justice of the EU has the final say, except of course in the substantial respects already agreed in the withdrawal agreement. But we are looking here at real disadvantages to real children. As one of our witnesses said—and I declare an interest as a barrister and a member of the EU Justice Sub-Committee, which has been taking evidence on this—any child abducted from a European Union state will be in a more difficult position after Brexit than before. It will be a terrible shame to settle for something demonstrably worse than what we have, yet the self-imposed deadline looms and the cursory reference to family law in the Command Paper suggests that it may not have been given the importance that it deserves. So, I have two questions for the Minister. Is there any aspiration to negotiate something with the EU that improves on the Hague conventions? If not, will we, as EU law permits in the field of family law, seek bilateral agreements with the countries where we would make most use of them?
The other matter I want to raise is the UK’s participation in the unified patent court agreement, which, as noble Lords will know, is an international agreement made outside the EU’s formal structures by 25 states including the United Kingdom. The court is not an EU institution. That is why the pharmaceuticals and life sciences section of the court is earmarked for Aldgate Tower in London. Unlike the European Medicines Agency, which had to leave London, as the noble Lord, Lord Hain, said, it is not an EU entity. The court will hear cases on the validity and infringement of European patents and unitary patents granted by the European Patent Office, itself a non-EU intergovernmental organisation with 36 members. The advantages of the UPC for innovative British companies are self-evident. It will be a one-stop shop for patent disputes to be resolved continent-wide. That is of particular importance to research-led small and medium enterprises, on which I asked a Written Question last week. More than that, if the UPC goes ahead, it will be an instrument for the transmission of good British practice across Europe. The reputation of our intellectual property judges is second to none and the procedural rules of the UPC draw heavily on those of our own intellectual property enterprise court. It is true that the UPC agreement obliges the court to refer any question of EU law that may arise during a patent case to the Court of Justice, but the main elements of patent law—obviousness, novelty and infringement—are not governed by EU law. Questions of EU law do not arise in patent cases, save in very limited areas such as supplementary protection certificates. Indeed, so dominant is the intergovernmental element of this system that the UPC agreement is not even mentioned in the Command Paper on the future relationship.
On 28 February, the Law Society Gazette quoted a Downing Street spokesman as saying that the UK will not be seeking involvement in the court and the associated unitary patent. However, that report has been, so far as I can see, officially neither confirmed nor denied. The Justice Sub-Committee has written to the Government about this. Can the Minister tell us today whether a final decision has been taken on UK participation in the unified patent court? If the door has been closed, why was this not announced to Parliament on the record? If the door remains open, which I dare to hope it does, I urge the Minister to cast aside dogma and use his influence pragmatically and in the interests of the innovative British firms on whom our future outside the EU particularly depends. Other noble Lords will speak for themselves, but as urged by the noble Baroness, Lady Noakes, I have moved on. Brexit has happened and, whatever our views on that, we must all now unite in seeking our best possible future as a self-governing nation. However, as one of our committee’s witnesses, the chair of the Intellectual Property Bar Association, Daniel Alexander QC, said last week, if one wants to be a self-governing nation and a powerful one, it is wrong to reject institutions that help you to be an independent, powerful and self-governing nation. He was referring to the unified patent court—inter governmentalism, so lightly tempered by EU law that only the ideologically purist could possibly object. It will strengthen us in an area where we need to be at our strongest. In our own interests, let us not turn our back on it.
Finally, I listened carefully to what the noble Baroness, Lady Falkner of Margravine, said but, as I read the amendment in the name of the noble Baroness, Lady Hayter, it calls not for any parliamentary veto—still less a veto vested in this House—but simply for information, updates and scrutiny. That, as I understand it, is what we are for. On that basis, and subject to what we might yet hear from the Minister and others, I am minded to support the amendment.
Baroness Donaghy (Lab)
My Lords, I made very few contributions during the Brexit debates but, now that we have reached the very beginning of the negotiating stage, I am interested in the stance taken by both sides. At one stage in my career, negotiations were my bread and butter. My comments are intended to be practical rather than principled. As the great Tommy Cooper said, “It’s not the principle, it’s the cash”.
First, I thank the noble Earl, Lord Kinnoull, for setting out the questions that the Government should try to clarify, if not immediately then as the negotiations proceed. The document from the EU Select Committee was produced in double-quick time by its staff, and I pay tribute to them for their hard work and to the Select Committee, which gave it careful scrutiny. In case the noble Baroness, Lady Ludford, accuses me of self-congratulation, I confess that I am a member of that committee. The image produced by the noble Earl, Lord Kinnoull—that the negotiating stances are the equivalent of the haka—is quite disturbing. I shall be studying any changes of clothing by the noble Lord, Lord True, as the negotiations proceed.
Secondly, I thank my noble friend Lady Hayter for emphasising the scrutiny role of our Parliament and the need to keep it fully informed. I recognise that this Government can force their view through Parliament, within certain limits, and that the real deadline of 31 December 2020 will concentrate minds. I also recognise that ECJ involvement over time is regarded as a red line by the Government, but there is nothing to stop a deal that recognises that reference to the ECJ, and that is how the EU 27 will proceed—by the way, if they are wise enough, they will try to limits its scope in the future—and also recognises an infrastructure that the UK will use in the future. If the quality of that infrastructure is satisfactory to the EU, a deal is possible.
I also recognise that the language of state aid versus subsidy and the definition of “level playing field” have changed. This is not something to go to the wall about if the Government are sincere when they say that they will not lower standards in consumer rights, workers’ rights and environmental protections. I winced a bit—but I am trying hard not to fight old battles—when the noble Lord, Lord True, read out the Statement on 27 February by the right honourable Michael Gove, that:
“The United Kingdom has a proud record when it comes to environmental enhancement, workers’ rights and social protection.”—[Official Report, Commons, 27/2/20; col. 468.]
I could not help remembering that, before we joined what I think was called the EC, our beaches were so filthy that we were known as the “dirty man of Europe”, and that we waited 10 whole years in the late 1980s and 1990s for a single improvement in workers’ rights. But let us celebrate late conversions.
The noble Lord, Lord True, also said that we were
“seeking … an agreement based on full respect and friendly co-operation, and centred on free trade.”—[Official Report, 27/2/20; col. 286.]
I cannot argue with that or that fisheries, internal security and aviation will be dealt with separately, so I will not deal with them in this debate. The success of any negotiation will be the acceptance by the parties of the deal, not necessarily its quality. It will have to be something that both sides can live with. It will not be as good as the deal that the UK had before 31 January but will have to be good enough.
I do think—this is where I do not agree with the noble Lord, Lord Hamilton—that proximity is important. All the charts that we have seen in my EU Sub-committee B show the enormous weighting of existing trade with the 27 and the very much smaller weighting the further away that a country is from the UK. However, let us just say for the sake of argument that the noble Lord is right and that proximity is not important. How then can it be explained that Germany’s trade with China has knocked the UK’s into a cocked hat? Does it have better-quality politicians or better-quality goods? Do the Germans try harder? Germany’s success was done within what some call the strict and debilitating bureaucratic confines of EU membership. How does the noble Lord explain that?
I return to the negotiations. I understand that some of them will be conducted by videoconferencing because of the coronavirus pandemic. I can only hope that the technical quality is adequate, and certainly a lot better than in this Parliament building. There is something to be said, as my experience in ACAS shows, for keeping the parties in separate rooms; it may be that sooner or later a deal may be more productively done in that way. When it is done, though, there has to be some clarity on precisely what “standards”, “ongoing alignment” and “subsidy” mean and, as has been well covered by the noble Lord, Lord Kerr, and others, what the Northern Ireland protocol really amounts to, because that is one of the things that cannot be squared.
I will make three more brief points. First, the devolved Administrations may well have been kept informed, but they have certainly not been consulted. “Consult” does not mean “veto” in anybody’s language; it means being consulted. This has led to a fear that the devolved competences will not be respected in the outcome of the negotiations. Will the Minister give some assurance to the devolved Administrations on the matter of competences?
Secondly, the Prime Minister’s speech of 3 February 2020 suggests that the UK will maintain a subsidy control system after the end of the transition period, albeit not necessarily based on EU state-aid rules, which are likely to change in any case as a result of its recently published industrial policy. The UK has a consistent record of compliance on state aid—or “subsidy”, as the UK Government now call it. Successive Governments were so strict that they did not even use the flexibility in the system to increase state aid that was allowed. It is acknowledged in the EU that UK Governments led the way in trying to ensure discipline in this area, but it is a fact that France, Germany and Italy were always looking to take advantage of the flexibilities. If we are so good, and if we led the way, why not take the lead again? Why not make a clear declaration about what the UK’s subsidy infrastructure will look like on 1 January 2021? Is the Minister able to assist the House in this matter? It is one area where we could declare our independence by setting out the structure that we believe will work.
Finally, Sub-committee B on internal markets, which I have the privilege to chair until Easter, is conducting a brief inquiry into state aid and level playing field definitions and possible outcomes. It is hoping to finalise its report by 26 March, before it disappears into the sunset. I very much hope that the work done by my committee will prove helpful to the general debate.
Lord Bowness (Con)
My Lords, like other noble Lords, I thank the noble Earl, Lord Kinnoull, and the EU committee for producing this report and enabling us to have this debate. While I acknowledge that the Government are rightly concerned about and occupied with the coronavirus situation—and so are the media—Brexit nevertheless remains of vital importance and we must not let it go off our radar.
I refer to Brexit because I am tired of the statement that Brexit “has been done”. As witnessed by this afternoon’s debate, the important and heavy-lifting part of Brexit remains undone and the most important elements of our future relationship remain to be settled. It might even be that, given the economic consequences of coronavirus, it will be even more important than we can envisage at the present time. A simplistic free-trade agreement, as in Command Paper 211, might not be a good substitute for the existing deep relationship with our near neighbours. I say to my noble friend Lord Hamilton that it is not about 22 miles across the water: it is about 40-plus years of integration of our economy and much of our personal interests and activities that make us a different kind of third country from other third countries.
Lord Hamilton of Epsom
Would that not make a free-trade agreement easier rather than more difficult?
Lord Bowness
I just do not agree: I do not think it makes any of the Brexit negotiations easier. We have had that integration. The noble Lord, Lord Anderson of Ipswich, talked about family law, as I was going to do later on in my speech, but thankfully, from his knowledge, he has touched upon that particular issue. I just cannot accept the idea that it makes it easier. We are a unique third country as a result of the 40-plus years that we have been members of the European Union.
I do not know what happened to the ambitions of the political declaration: that talked about a broad, deep and flexible partnership across trade and economic co-operation, with a comprehensive and balanced free-trade area. It talked about security and law. Those ambitions seem to have gone away and I am afraid that I am not proud—I say to my noble friend Lady Noakes —of the Government’s approach to this matter: I am alarmed by their approach. I remain unconvinced—and I hope that my noble friend Lord True might be able to convince me—that this Government, and many of their prominent members, actually want a deal or anything other than the most basic agreement. If they do, then surely the attitude they take towards an extension—especially in the current climate—would be rather different.
There are so many matters that give me cause for concern and make me wonder what our objectives are. The debate in your Lordships’ House this afternoon has been about some of the major issues. I have been —I was going to say “wasting my time”—occupying my time over the last few weeks asking some Written Questions. It is a triumph of hope over experience because even if the Questions were silly, the Answers—with great respect to those who have given them—were even sillier. They did not advance matters one iota. I asked these Questions because of the involvement that we as individuals—not necessarily as corporations or financial institutions—had with the European Union.
I have been seeking answers to some simple questions, such as whether the Government are going to negotiate mutual recognition of the European Health Insurance Card and of driving licences. People from the EU in this country have exchanged their national driving licence for a British driving licence. They cannot easily change it back, but they will nevertheless go home from time to time. That is a matter that ought to be on the agenda of the Government.
What about mutual recognition of disabled persons’ blue parking badges—I declare an interest in that my wife has one. I was referred in the reply to one Parliamentary Question to the Written Ministerial Statement of my noble friend the Leader of the House, who made a statement some time in February. I was told that it was covered, in terms of when it was going to be negotiated, under some vague heading of “Other Provisions”, but in fact it does not appear in Command Paper 211 at all, so I am now asking, and awaiting an answer, as to which chapter or part of Command Paper 211, or in which group in negotiating terms, these things are covered. Because I do not get any answers, and because I get the distinct impression that it is all a bit of a nuisance and people are thinking, “I do wish the noble Lord would go away”, I wonder how seriously these matters are being taken.
We have talked in the past about participation in agencies. We have heard already this afternoon from other noble Lords about the European safety agency. I pose the same question: why did we take the decision to set up our own, and at what annual cost compared to the contributions currently made to the European agency? Part 2 of Command Paper 211 talks about the UK and EU agreeing a bilateral safety agency. What is the real position about this? Are we going to have a joint enterprise, or are we going to build our own castle in the air?
I have asked about family law. The noble Lord, Lord Anderson of Ipswich dealt with this. I remember when I chaired the Law and Institutions Sub-Committee of your Lordships’ EU committee: a lot of work was done because—again, I refer to my noble friend Lord Hamilton of Epsom—after 40-odd years, many nationals of one state have married nationals of another. They may have property in one or other of their countries—or, indeed, a third country. They have family disputes. Members of the family die and they need to deal with inheritance tax matters. All these things are important for people; they cannot be dismissed with “Brexit is done” or just washing our hands of them to satisfy some ideological requirement, or some macho desire to meet a self-imposed deadline.
I do not know where the Government are going on these matters. I hope that I am wrong in my perception of the way they are going, but would it not be a gesture of incredible good faith to many of our citizens who need and want to travel to the EU if the Government were to try to establish equality of treatment between EU citizens visiting the UK, who I understand will get a six-month visa, and UK citizens who, at the moment, when visiting the EU after the end of December, are very likely, depending on the state, to get only 90 days? I should have thought that we should try to resolve that matter for the benefit of our citizens, who are now going to lose a benefit as a result of leaving the European Union.
Lastly, I turn to the amendment of the noble Baroness, Lady Hayter. I support it and cannot understand the objection to it. It does not prescribe how; it refers to a committee. This could be any kind of committee: a Joint Committee, a Select Committee, or any other that is devised. It does not ask for a veto; it asks for information. If a Parliament does not want information, then that Parliament might as well go home. But it complained, very loudly, when it was sent home, and it had better make sure that it is here to do things that are worth while.
Lord Davies of Stamford (Lab)
My Lords, the narrow nationalism of this Government has been deeply depressing for a long time. But the fanatical, pedantic ideology that the Government have displayed in the last few weeks is quite unspeakable. The Government have withdrawn from the European Aviation Safety Agency and from Euratom. They have withdrawn from the EMA, the European Medicines Agency, in the middle of a pandemic, without any idea of what they are going to put in its place.
We had a debate a few weeks ago in which I asked the Minister a series of questions about what might happen and the various possibilities for replacing the EMA. It is obvious that the Government did not have the faintest clue what they were going to do. You cannot build up a new EMA—or FDA, to use the American term—in just a few months, let alone in nine months. We literally have the prospect that any new compound coming from the world’s pharmaceutical industry—and that could well be a vaccine for the coronavirus—will not be registrable in this country, will not be registered, cannot be licensed and will not be available to British patients. This seems fantastic but is actually the case.
What does one do in these circumstances? Until that debate, which left me with a profound sense of concern and anxiety, I took the view that these negotiations were going to be very difficult, take a long time and that there would be a lot of posing, rhetoric and so forth but that, at the end of the day, between rational, reasonable people, and given the importance of trade, there would be some compromise. Indeed, I worked out what I thought could be a viable compromise in the area of the regulation of traded goods, or what is now known as the level playing field.
I do not mind telling the House what I worked out; it will not have any relevance and, for reasons I shall come on to, it will never be implemented. I had in mind that we would start off with regulatory alignment, and we would then have an understanding, or a rule, that any party wishing to introduce a new regulation or change an existing one would have to give three months’ notice to the other. This would provide time and opportunity for negotiation and possibly compromise. But if the party insisted on having his or her way, at the end of the three months, he or she could withdraw from the whole arrangement. It would be so unlikely that anyone would want to withdraw from an arrangement affecting the exchange of tens of billions of pounds or euros of goods every year that it would be very unlikely that it would ever occur.
But I then realised, particularly after the debate that I have referred to, that I had really got it quite wrong. It was a great mistake to look at this from the point of view of rational analysis. We are dealing with much more powerful emotions than that. If you ask—and I have done this—the members of the ERG, who are supposed to be dominating the Government, what regulations they would like to introduce, if they are going to introduce new British regulations, or about the regulations we currently have that they would like to get rid of, they have no idea. This is not about regulations at all; it is about something much more profound and deeply emotional—something which goes to the heart of the Government’s ability to continue with its nationalist and populist campaign and which has brought it such electoral success recently. It is all about sovereignty.
On the continental side, there are equally strong emotions. In my view, what drives the continentals is more important than pounds, shillings and pence—or euros—or the productivity gains that you can certainly achieve from international trade, or the wealth creation or employment creation. Those things are very important. They are very attached to them. However, even more important to them is the survival of the European Union and the protection of that great sense of solidarity that has been built up over the past 50 years: the cultural changes, the exchanges and the bringing down of barriers; the educational and scientific research programmes; the enhancement of security through things such as the common arrest warrant and Europol; and the economic benefits of the single market—very much so. Above all is the assurance that Europe would not go back to the international system of 1914 or 1939, in which we had a bunch of highly competitive, nationalism-driven states quarrelling from time to time about economic, ethnic and territorial disputes. We know very well to what appalling tragedies that led. These matters are far more important than they appear. I am afraid that I can draw the conclusion only that it is most unlikely that there will be any agreement on them in present circumstances.
I will take another example, which is that of equivalence in financial services—I only have time for two examples, but they are perhaps the big two potential deal breakers in this whole negotiation. Equivalence is not quite the same as the example that I have given about the level playing field, because the proposals on equivalence do not involve giving privileges not available to members of the union to someone who has been a member of the union but has left. That seems absurd and unjust—it is, of course—and would be a permanent source of resentment, bitterness and recrimination within the union. If we came to an arrangement similar to the one that I just proposed theoretically for the level playing field, I do not doubt that, within a day or two, Mr Viktor Orbán would come up with a demand for 200 more regulations to be imposed or removed, so as to show how absurd and unjust the whole thing was.
Equivalence is not quite in the same category because it is not having something better than what members of the union have: it would not be as good as what they have, because they have stability and confidence that the regime will continue in the future. Equivalence means that you are considered equivalent as of today. However, banking regulations change the whole time: you might not be equivalent after six months, most unlikely to be after two years and certainly would not be after five years. You will have no guarantee of it being renewed and do not know what new regulations might come in. You are not in a better position, although it is still a much better position than not having the right to deal in the markets concerned without setting up separate subsidiaries and fragmenting your capital base, which no bank wants to do.
Equivalence is valuable and important but not likely to be granted. There are perhaps three reasons for that. The first is very understandable, and I do not think that anybody should be shocked by it, because I do not doubt that we would be behaving in exactly the same way if the boot were on the other foot. The continentals have noticed that London has attracted an enormous amount of the wholesale banking business that can be so profitable in normal circumstances. Since you need only one capitalised entity in the EU to trade throughout it under present EU arrangements, most of those entities have been placed in London. I doubt that there is a general desire on the part of our continental former partners to ensure that our commercial advantage continues indefinitely; they may well feel that there should be a level playing field there too, and that they should put themselves in a position where they can attract that sort of business to their own financial markets. There will be an element of that, which you can call protectionism, but it is natural—it is human nature, really. As I said, I do not think that we should be particularly shocked about it. We should just accept it. It is a strong argument and there is no answer to it.
The second thing is precedent. All Governments are very concerned about precedents when they give a favour to anybody—we are talking here about a major favour. As has already been said, there has been a considerable extension of the idea of equivalence far beyond what was originally envisaged as a purely EU-US arrangement. The EU is currently locked in difficult negotiations with the Swiss on precisely that point. No doubt the Chinese, the Indians or all sorts of people would like to have equivalence, and they are people whom it is very difficult to refuse, but in this context it would have to be refused because they do not have the effective banking supervision and regulatory systems that would be required. The creation of yet one more precedent would be something that a lot of people in the European Union would want to resist.
Thirdly, there is a point that possibly will not be spoken about very frankly, but it plays a big part in this, and that is the attitude of the central bank, the ECB. All central bankers, before they go to sleep at night and when they wake up in the morning, have two great concerns: one is whether there will be a financial crisis; the other is, if there is a financial crisis, whether they have the instruments to deal with it satisfactorily. If you have a financial crisis, you have to give orders to the banking system—like the orders we gave to banks after the Lehman collapse to stop buying CDOs—and those orders have to be obeyed immediately. You cannot really have a situation in which somebody says, “But I’m British and I’ve got a special protocol. I don’t have to obey you. I want to go to arbitration and do this, that and the other and call in lawyers.” It does not work that way. Equally, central banks depend upon a situation in which the major bankers in their jurisdiction are very beholden to them. I speak as a former investment banker for 14 or 15 years. Latterly, I was a main board member and head of European corporate finance in a large investment bank. Anybody who has ambitions in the City in that field has to make sure that they do not cross the Old Lady—that they do not upset the Bank of England. It is not a question of breaking some specific rule, but you want be regarded as responsible and helpful, particularly in a crisis when it is necessary.
Christine Lagarde and her colleagues will almost certainly be asked by Monsieur Barnier about their views on equivalence—no doubt it has already happened. I doubt very much that they have said that it would be a great idea to have more people in this market based outside the European Union with the privilege of operating under the equivalence regime. I very much doubt they will be saying that. I think they will be saying that it is something they would be reluctant to see. There are serious reasons why in both these cases—and I described them both as potential deal breakers—we will not get what we want.
The Government are very optimistic. They are trying to up the ante the whole time—saying that the continentals have got to agree everything by the end of the year and they have to make substantial progress by May or June otherwise we will drop the whole thing et cetera. They have even, as has come out very clearly from this debate, broken the terms of the agreement that they made on Ireland, which will make it very difficult for a negotiation to succeed. I think they are doing this because they are extremely confident. They have always said that the continentals are much more dependent on us than we are on them because they sell much more to us than we sell to them. It is a wonderfully quaint, mercantilist idea from the 17th century. Most people dropped that idea with Ricardo in the early 19th century. We now believe that the benefit of international trade is the opportunity gains through the international division of labour, and the benefit is computed in terms of gross domestic product, not in bullion accumulated in the central bank as mercantilists believed, or perhaps still do believe.
Nevertheless, if we look at it from the point of view of GDP, it is quite instructive. We find that the reverse is true. Their dependence on us is much less than our dependence on them. Some 14% of British GDP is exports to the European Union. In no European Union country, with the exception of the Republic of Ireland—and the Netherlands, where there is quite a lot of entrepot trade through Rotterdam which perhaps falsifies the figures—is the figure for exports to this country greater than 4% of GDP.
Lord Davies of Stamford
No, indeed it is not. I am not saying that the benefit we get is accumulating bullion, because we have a balance of payments surplus. That is the mercantilist idea, and I can only describe it as quaint; it is curious that people still believe in it. Yet the Government evidently do—because that is what it means when people say, “We’re in a better position, because they sell more to us than we sell to them, so they’re more dependent on us.” In fact, the GDP figures show the reverse.
To complete what I was saying about the figures, no EU country, apart from the two I mentioned, has exports to this country greater than 4% of GDP. That means that, if there were a 10% reduction in our trade because we went over to a WTO basis after the end of the transition period, the continentals would lose 0.4%, which is within the annual fluctuations of national accounts, whereas we would lose a much more important 1.4%. If there were a 20% reduction, they would lose 0.8% of their GDP—still manageable, although it would be a difficult blow—whereas we would lose 2.8%, which would be cataclysmic.
For those who do not like elementary economics, I should add that one could ask a 12 year-old, “Who has the greatest leverage and influence: someone who speaks for a market of 500 million people or someone who speaks for a market of 60 million people?”, and that 12 year-old would give you the right answer. The Government have the wrong answer. The first step in wisdom is self-knowledge, and the Government should take that step before they get involved any further in these negotiations.
Lord Barwell (Con)
My Lords, I thank the members of the committee for producing such a thorough report in short order. It is right that the Government of this country should determine our strategy for the negotiations, and it is right that Parliament should scrutinise that strategy. I also congratulate the noble Lord, Lord Kerr, on an outstanding speech. I find myself, as I all too often have on this issue, stuck between those who seem to believe that dismantling our economic and security relationship with most of our nearest neighbours is nothing to worry about at all, and those who blame the gap between the two parties solely on the British Government and attribute no blame to the other side of the argument.
I shall look at the three key conclusions in chapter 2 of the report. The first is that changes in the structure, and the way the Government have set out the Command Paper, make it difficult to trace changes in government policy. I do not agree with that conclusion. Indeed, I would argue that the committee’s excellent report proves that it is eminently possible to see where those changes have taken place.
Paragraph 20 says:
“The headings … rather than following the PD”—
the political declaration—
“appear to be based on those used in … Free Trade Agreements”.
As the Government are seeking to negotiate a free trade agreement, I do not think one can criticise them for that.
The second conclusion is that truncating the timetable will make it harder to reach an agreement. It is certainly true that the decision not to extend the transition period —taken for reasons I well understand—makes it all but impossible to negotiate the entire future relationship. The Canada-EU deal is nearly 2,000 pages long, and the future relationship is far more than an FTA. It is possible that, unlike the withdrawal agreement, it may need ratification by all the national parliaments, as well as by the European Parliament. The EU’s mandate is clear:
“The Commission should aim to achieve as much as possible during the short timeframe of the transition … and should be ready to continue negotiations on any remaining issues after the end of the transition.”
If we prioritise the key issues, it is certainly possible to negotiate a deal and reach an agreement by the end of the year.
The third and central conclusion is that both sides have moved away from the political declaration, making it harder to reach agreement. I very much agree with that, and I shall now consider the two sides in turn. First, with our Government, there are four areas in which it is undeniable that the UK’s position has changed since the political declaration. As the noble Lord, Lord Hannay, said about the level playing field provisions, the political declaration is clear that the future relationship must include robust commitments to ensure a level playing field. That is in paragraph 77.
It is also implicit that the UK is not Canada. As paragraph 77 also says, these commitments need to be robust,
“Given the Union and the United Kingdom’s geographic proximity and economic interdependence”.
I assure the noble Baroness, Lady Falkner, and the noble Lord, Lord Hamilton, that this is not some sudden change in the EU’s position. I sat with the former Prime Minister in every interaction she had with EU member states, individually and through the EU institutions, from the 2017 election onwards. This was always and consistently the European Union’s position, and it is in the political declaration that this Government signed up to in the autumn.
The political declaration is also clear that the parties should uphold the common standards applicable in the Union and the UK at the end of the transition period in a whole range of areas—I will not detain the House by reading them out. It is also clear that the agreement should include appropriate mechanisms to ensure effective implementation domestically, enforcement and dispute settlement. That is what the political declaration that this Government signed up to says.
Now the Government are saying that they no longer accept the argument that the UK’s geographic proximity and economic independence necessitate more robust level playing field permissions. The Command Paper, and the Written Statement to Parliament that preceded it, state:
“The Government will not agree to measures in these areas which go beyond those typically included in a comprehensive free trade agreement.”—[Official Report, Commons, 3/2/2020; col. 3WS.]
As a result, it appears that they are rejecting not just dynamic alignment but any enforceable, non-regression clause. I can give noble Lords one example from the UK Command Paper. It says:
“The Agreement should include reciprocal commitments not to weaken or reduce the level of protection afforded by labour laws and standards … and … these provisions should not be subject to the Agreement’s dispute resolution mechanism”.
In essence, we are asking the EU to trust us to keep our word that we do not intend to cut standards. It feels unlikely that that will work at a time when, as the noble Lord, Lord Kerr, said, we are denying that the withdrawal agreement that we signed up to means that there will be checks when goods move from Great Britain to Northern Ireland. I was going to rehearse in some detail what is in the withdrawal agreement, but the noble Lord, Lord Kerr, did so quite brilliantly; I will just make a simple point for those who remain unconvinced. If there are no checks when goods move from Great Britain to Northern Ireland, and no checks when goods move from Northern Ireland to Ireland, goods will move from Great Britain into the European Union without any checks. If the Prime Minister had succeeded in negotiating that, people like me would be cheering him to the rafters. That is what Theresa was trying to negotiate and achieve; she was struggling to maintain the continuous free trade in goods. It is clear that the withdrawal agreement does not provide for that.
The second area where the Government’s position has shifted is in relation to the ECHR. The political declaration says:
“The future relationship should incorporate the United Kingdom’s continued commitment to respect the framework of the European Convention on Human Rights”.
That is what this Government agreed to in the autumn. Now, the Command Paper says:
“The agreement should not specify how the UK or the EU Member States should protect and enforce human rights”.
That decision has critical implications for the likely level of security co-operation that we will be able to enjoy after the end of this year.
A number of noble Lords have touched on the third area: the architecture of the agreement. The political declaration says:
“The future relationship should be based on an overarching institutional framework … The Parties note that the overarching institutional framework could take the form of an Association Agreement.”
The Command Paper says that the comprehensive FTA
“should be supplemented by a range of other … agreements … All these agreements should have their own appropriate and precedented governance arrangements”.
My noble friends Lady Noakes and Lord Trenchard were allergic to the idea of an association agreement. I gently point out that countries as diverse as Israel and South Africa have association agreements with the European Union. Having an association agreement with the European Union does not mean that we have not regained our sovereignty. There are other arguments that the Government may wish to advance for why they want a separate suite of agreements, but let us not mislead ourselves that an association agreement is somehow inconsistent with the decision of the British people.
The fourth area critically relates to dispute resolution. The political declaration says:
“The Parties indicate that should a dispute raise a question of interpretation of provisions or concepts of Union law … the arbitration panel should refer the question to the Court of Justice of the European Union … as the sole arbiter of Union law, for a binding ruling as regards the interpretation of Union law”.
We agreed that, but now the Command Paper says:
“The arrangements will reflect the regulatory and judicial autonomy of the UK and accordingly there will be no role for the Court of Justice … in the dispute resolution mechanism.”
During this debate, the justification that we have been given for these changes is that the Government won a huge mandate in the general election. That is true and obviously, since I am on these Benches, I welcome it. But that is not a justification for changing the position in relation to the political declaration. The message that we Conservatives took to the doorsteps in that general election was that we had an oven-ready Brexit deal: we were going to get Brexit done; the deal was done. So, that is not a justification for now changing the nature of the deal.
I turn now to the European Union. Too often in this debate, we look at our own Government and are critical if we think their position is not right. The European Union has also shifted its position in some areas—not as significantly as the British Government, as the committee’s report recognised, but, none the less, there are changes. I shall run through those in my remaining time. On the level playing field, the European Union is now saying:
“The envisaged partnership should ensure the application of Union State aid rules to and in the United Kingdom”.
This is not just dynamic alignment but the actual application of the EU’s rules in this country after the end of the transition period. It is quite understandable that the British Government are resisting that request. It also says that
“the envisaged agreement should uphold common high standards, and corresponding high standards over time with Union standards as a reference point”
in these areas. That is a clear implication, at least, of dynamic alignment.
On the ECHR, the EU has hardened its position. Its mandate now says that
“the envisaged partnership should...provide for automatic suspension if the United Kingdom were to abrogate domestic law giving effect to the ECHR, thus making it impossible for individuals to invoke the rights … before the United Kingdom’s courts.”
That is not something that was in the political declaration.
Thirdly, and crucially, the EU’s mandate refers to the date by which agreement needs to be reached on fishing. However, it does not reference two other crucial dates in the political declaration: the dates for completing assessment of equivalence on financial services and data protection. It is no accident that those dates have been left out of the EU’s mandate.
On architecture, the EU’s changes are nothing like as drastic as the British Government’s but, as the committee rightly spotted, the comprehensive air transport agreement is missing from the EU mandate and has now been rolled into an issue to be considered as part of the economic partnership.
Finally, although this is not a change from the political declaration, there is the issue of fishing. The wording on fishing in the political declaration was carefully chosen to mask the fact that the two parties were a long way apart. The EU has now stated very clearly its position that
“the provisions on fisheries should uphold existing reciprocal access conditions, quota shares and the traditional activity of the Union fleet.”
I cannot begin to count the number of occasions when I sat next to the former Prime Minister in a room with Michel Barnier, and he told us that, given the decision of the British people, things had to change. In every area, we could not expect the same relationship that we had before—that is, it turns out, apart from fishing, where nothing must change at all. This is an area where the EU’s position is clearly not reasonable.
I leave the House with two final thoughts. There has rightly been concern in this debate about whether a deal will be achieved. I gently put it to the House that, given the level of the Government’s ambition for the economic relationship, either outcome will mean an end to frictionless trade between the UK and the EU. It will mean customs controls, regulatory checks and less access for service providers. The Government’s own analysis shows that these non-tariff barriers are an order of magnitude more important than the imposition of tariffs. In other words, given the kind of deal we are now seeking as a country, and for which the Prime Minister has a clear mandate from the general election result, there is not a huge economic difference between the deal the Government are seeking and no deal.
The biggest single difference is in the security field where, during this transition period, we are maintaining the security co-operation that we had as members of the union. If we could resolve this issue in relation to the ECHR, the two parties are not that far apart with respect to maintaining as many of the capabilities as possible. Therefore, I ask the Government to think carefully about how they proceed in that area in particular.
A final thought: my noble friend Lady Noakes accused the Government I had the honour to serve of servile acquiescence in the negotiations. I gently point out to the House that the deal that this Government now seek should prove easier to negotiate with the EU than the deal that the previous Government sought. The deal this Government seek is very close to what the EU wanted to offer UK if it was not prepared to stay in the single market and the customs union. Far from servile acquiescence, the previous Government were trying to create a unique model between a standard FTA and a single market and customs union.
For all the concerns that many will have about the change in our relationship—it is coming, whether we get a deal or not, on 1 January—the two parties are not as far apart as they would be if we were trying to pursue a more ambitious arrangement. I will not detain your Lordships any more and thank you for the opportunity to contribute.
Lord Lea of Crondall
My Lords, if we were moving towards a love affair with Monsieur Barnier, this would be a funny way for us to go about it. If one was the proverbial man on the moon, one would say that the U-turn we have done since January is undoubtedly much more egregious than anything Monsieur Barnier and the Council of Ministers have done.
I begin with a remark made by the noble Lord, Lord Callanan, in this House on the withdrawal Act. He said that
“the Government’s vision for the future relationship with the EU is already set out in detail in the political declaration”.—[Official Report, 20/1/20; col. 1004.]
I do not know why the noble Lord is no longer with us but he was always very much on top of his brief, and he would not have said that if it had not been the policy at that time. Whether it is a U-turn or a 90-degree turn, there has certainly been a considerable change. I do not know whether the noble Lord who just spoke claims that it is cosmetic or fundamental, but it is pretty fundamental.
At present, we face a severe economic prospect. We have to step up to the plate as a country in the next few months in two or three obviously very difficult areas, and come together, as was said. However, we need to do so with a close understanding and good will with our neighbours in the European Union. Coronavirus has been mentioned, and it is fortuitous—of course it is. We did not invent it as some sort of political stunt to make it more likely that we would stay in the European Union. However, there has been an enormous change since 31 January. At that point, two things happened. There is an EU room with two doors in it. One is signed “Exit” and we walked out of it, while through the other one, signed “Enter”, walked a big elephant. Its name is coronavirus. In the next few months, the political climate in this country will conflate these two questions, especially as the already forecast decline in GDP will become significant for people’s living standards, whether or not they are affected by the virus per se. We can already see transport, restaurants and so on shutting down. We have not had this sort of mixture—rationing et cetera—in our lifetime, apart from those of us who were just about alive during the war. This will change the political psychology in Widnes, Wakefield, Wolverhampton and Walsall.
In December we had a change of Government. We are only beginning to recognise that this was a huge change. We are, at the same time, both becoming more nationalistic and starting to tear up the Union Jack. We will lose the cross of St Andrew and be left with a strange combination of Parliaments in the different parts of the British Isles—if we still call them that. People have to be careful about the sort of nationalism that they now say trumps every ace because they have a majority of 60, 70 or 80.
As a former TUC official, I want to explain something that has been happening in the European Union for many years. The Social Chapter has been there since 1990. Robin Cook signed it as Foreign Secretary when the Labour Government came in in 1997. I will read out a list of things that have been achieved, with the agreement of employers, through collective bargaining: equal pay; protection from discrimination; protection when a business changes hands; equal rights for part-time workers; maternity and paternity rights; equal rights for fixed-term workers; four weeks’ paid holiday; eight hours in the working day; having a voice at work through information and consultation; European works councils; the posting of workers in Europe; and health and safety at work. No employers in this country are asking for the repeal of that lot. They know that it helps a modern labour market and we have to do more to deal with zero-hours contracts. This is the new agenda with which we are locking antlers in Brussels. The TUC will be part of the social negotiations because they are conducted with the European TUC and European employers. There is a notion that something is being imposed on us through qualified majority voting, but there was always a consensus on these things. There has been no voting on anything. It has been a huge step forward but we need to go further on the new labour market trends emerging, on new technology and so on, but I do not hear that speech from the Government at the moment.
As Philip Stephens pointed out in a very interesting article in the Financial Times last week, if one said, “Of course, there will be a Brexit trade deal, stupid”, everyone would accept it. But he is not so sure, now that the conservatives have taken over the Conservative Party. For 200 or 300 years, they were hard-headed pragmatists; now they have become the champions of English nationalism. It is a totally different party, according to the article. Whether that will stand the test, with everything that is happening in the next six months, is another question. I think it probably will not. We will need as close co-operation with our EU neighbours as we can get in the next six months, in every possible way, not just because the elephant has entered the room, but because it has come in at a time when we are putting at risk a lot of the factors that determined our rate of economic growth.
I remember, again from the Financial Times, that four or five years ago a French person was wandering around London and he or she happened to be interviewed and said, “Of course everyone knows that London is the capital of Europe.” This was in South Kensington. It is not said now—of course not, because we have just thrown it all away. I think there is something in the fact that we have a nationalistic media. The only part retaining its sanity, for the most part, is the BBC, on which we had a very interesting debate the other day.
We have to move to a position where we can find some construct to meet together as the European economic area—I say that without the capitals, necessarily. I cannot believe that we can do all the things that now need to be done in every sphere without being part of a forum, having left the European Union. No one in this Chamber is saying other than that we have left the European Union, but there is no reason why we cannot do some geometry with something like the European economic area, apart from what we might call the trade geometry. Instead of trying to negotiate 10,000 different agreements de novum, we have the option of buying a bundle that more or less suits.
I do not understand at all what to make of the Government’s new negotiating strategy, apart from the fact that it began with a proto-Churchillian speech—“We will fight them on the beaches, we will fight them on the hills; we will never surrender.” That sounded pretty good for a bit, but it will not sound as though it has a shelf life for more than two or three weeks from now. I very much hope that we can ask the Minister to bear in mind the opportunity for the Government to take up some of the ideas mentioned by my noble friend Lady Hayter at the beginning, instead of trying to override the very interesting remarks made over the last couple of hours with some ideological override. If the Labour Party were doing this, the very people on the other side who are doing it would say, “Marxist dogma.” This is the equivalent of the Marxist dogma, and it is not like the Conservative Party we used to know. I can give some free advice to the Conservative Party: get real.
Lord Cormack (Con)
My Lords, I nearly did not put my name down to speak in this debate: I was under considerable domestic pressure not to come, and I understand why, although I just say to my noble friend who is going to reply—and even more importantly to my noble friend who is going to make a Statement shortly after—that while, in common with many of my age, I am happy to be advised and encouraged, I do not want to be dictated to. I draw the attention of noble Lords to an absolutely splendid article in today’s Daily Mail by the noble Lord, Lord Blunkett.
We are talking about our relations with Europe and I take as my text, as it were, the quotation the noble Baroness, Lady Falkner of Margravine, gave from John Maynard Keynes: “When the facts change, I change my mind.” Here, to a degree I join company with the noble Lord who has just spoken. The facts have changed in a way that no one could have foreseen on 12 December or even on 31 January. The world is changing around us. Those of us who know and love France are sad to realise that at the end of this year it is highly likely—indeed, almost certain—that a large number of those family-run restaurants that we have all enjoyed from time to time will have gone. The same will happen in Italy and Spain. In a changed world and a fundamentally changing Europe, we cannot stick to the text that we had on 13 December after the Government won a very handsome victory, in which, like my noble friend Lord Barwell, I was very glad to rejoice.
Before the election, the Prime Minister made it plain time and again that he wanted to have as close and constructive a relationship as possible with our European friends and neighbours once we had left the European Union. Of course, it cannot be the same but we have left, and I was one of those who from the very beginning accepted, with sadness, the result of the referendum. That is why I gave strong support to the deal that Prime Minister Theresa May drew up with the assistance of my noble friend Lord Barwell—I thought that it offered a way forward. However, all that is history.
We are out, but it is absolutely essential that we have a friendly and constructive relationship with nations with which we have shared a great deal of our history over the last 500 and more years. It is extremely sad that, where co-operation has worked, as in the European Medicines Agency, Europol and Euratom, it should just be discarded. I appeal to my noble friend on the Front Bench, Lord True, who was on the opposite side of the argument before Brexit, to recognise that we are now in a wholly different national and international situation.
We, and the Government in particular, owe the British people a great debt, and we have to satisfy that debt. The Prime Minister referred to the votes that he had been given on trust in what used to be known as the red wall. We owe a debt to those people who looked to our Government, having felt, for reasons that I completely understand—I always lamented the decline of a powerful Opposition—that they could not trust a Labour Party led by Jeremy Corbyn. Our debt is manifest and manifold, and it is to ensure that they do not suffer any more than is absolutely necessary with this dreadful pestilence raging around us. Therefore, I say to my noble friend Lord True: please, there is nothing sacrosanct about the date 31 December. There is nothing sacrosanct about bringing negotiations to a head in the summer, because we and all our European friends and neighbours will doubtless still be grappling with this pestilence right through this year. What was perhaps difficult but entirely practical on 31 January is now probably insuperably difficult and not very practical. Of course, if the Government can negotiate a deal that is fair on both sides, we would all rejoice, but I beg them to realise that it is no more realistic to stick to the 31 December deadline than it would have been to have stuck to any absolute deadline in 1939.
I was born just shortly before the Second World War. My memories of it are those of an infant, but this country has not faced any crisis as potentially difficult and dire as this one since that war. It is crucial that we recognise this and, above all, it is crucial that the Government who have responsibility for this country and the Prime Minister who leads this country recognise that fully and properly. If they do not, they will be letting down those who created that majority on 12 December. The Government have a tremendous challenge, but also a tremendous opportunity to provide national leadership. I very much hope that after 3 April, we will have a coherent, strong and able Opposition to challenge the Government wherever necessary and to co-operate with them if they provide the leadership that we so desperately need. The greatest achievement—apart from dealing with the pestilence—would be a constructive and mutually beneficial relationship with the nations of the European Union, of which we are certainly now not one. I beg my noble friend to reflect on those things when he comes to reply.
Baroness Wheatcroft (Non-Afl)
My Lords, I am delighted to follow the noble Lord, Lord Cormack, because as I listened to the speeches this afternoon, I have been amazed by the determined intention to keep calm and carry on. I admire a degree of sanguinity, but it seems to me that this is not the time to display it. I was delighted to hear the noble Lord, Lord Lea of Crondall. It is true that he does not always keep calm and carry on, and this afternoon he most certainly was not. I do not think that we should and I do not intend to. As the noble Lord, Lord Cormack, has said, we are in an extraordinary time. The Prime Minister’s broadcast this afternoon has made that clear. The stock market could not make it clearer: it is now lower than it has been since 2011 and who knows where it is going. That is people’s pensions and their futures.
When the referendum took place, coronavirus was unheard of. When the general election took place in December, it was not in sight; indeed, had it been, that election might not have taken place. Let me reassure the noble Lord, Lord Hamilton of Epsom, that I will not dwell on what might have been: we have left the EU. What is now to be determined is the future relationship. I support the amendment in the name of the noble Baroness, Lady Hayter—that Parliament should have appropriate scrutiny of those negotiations—and the Motion in the name of the noble Earl, Lord Kinnoull, whose committee’s report highlights the fact that it will be more difficult to negotiate a deal now that the parties, particularly our Government, have moved so much further away from a political declaration.
Right now, the 27 countries of the EU have a far more pressing concern than their future relationship with the UK. They are trying to protect their public, their country and their economy from the ravages of this virus. Our Government, in their own way, are doing the same. This will be the case for many months. This does not seem to be the background against which to insist on a timetable for negotiations, which was always seen as demanding. The Command Paper states:
“The Government will not extend the transition period provided for in the Withdrawal Agreement. This leaves a limited, but sufficient, time for the UK and the EU to reach agreement.”
It may have been a limited, but sufficient, time back at the beginning of the year, but it is certainly not so now. Given how the UK has moved away from the political declaration, that timetable looks even more optimistic now than it did then—and that was before the virus hit. The Government’s priority now must be to concentrate all their efforts on protecting the people, the country and the economy from the previously unforeseen threat of the virus. Just as the Government have asked industry to turn its efforts to creating more vital appliances for our hospitals, so Ministers must redirect their efforts to looking to the country’s future under this virus.
I have just one question for the Minister: can he categorically assure the House that, in the Government’s efforts to cope with the virus, absolutely nothing will be off the table, including considering asking for an extension to the transition period? If that will help the country and the rest of the EU through this extraordinarily difficult period, the Government absolutely should do it. The EU and the UK now have a common enemy; it is, as the noble Lord, Lord Lea, put it, the elephant in the room. It would be unforgivable for many future generations if this Government, in pursuit of an ideological Brexit, were allowed to distract themselves and the countries of the EU in any way from what is now truly a life-or-death battle.
Lord Liddle (Lab)
My Lords, I apologise to the House for not being present for what I am sure were excellent speeches at the start of the debate; I was on the HS2 committee, under the chairmanship of the noble and learned Lord, Lord Hope, and in order for it to be quorate, I had to stay. I asked our Whips to put me down for the end of the debate. The trouble is that an excellent debate such as this leaves you with very little new to say. I will try not to repeat what others have said, even if it means jumping about in the speech I prepared.
I did not hear the previous speeches, but the report before us is absolutely admirable, in the great traditions of the EU Select Committee. To my mind, it demonstrates beyond all doubt that the Government are now pursuing not just a much harder Brexit than Mrs May tried to achieve but a harder Brexit than was outlined in the political declaration, which the Prime Minister signed in October and which was ratified as part of an international treaty at the end of January. That was the basis on which he fought the election. As the noble Lord, Lord Barwell, said, he solemnly promised that he had this oven-ready deal, and it is now clear that he is going for something different.
I want to make clear that I fought Brexit very hard. I think that it is absolutely the wrong direction for the country. However, I now accept that it is done. Having said that, that does not mean that those of us on these Benches have to accept that the only option is the hardest Brexit imaginable. We in the Labour Party have a responsibility to vigorously oppose what the Government is now trying to do. Plenty of changes could be sought. If they are not, Labour should go into the next election saying that it wants to achieve a closer relationship with the EU.
On the question of a hard Brexit, many noble Lords have drawn attention to the retreat from the paragraph of the political declaration that made it clear that there is a difference between the United Kingdom’s position and other nations’ positions on concluding a free trade agreement. Because of our geographical proximity and economic interdependence, these are the words—I say to the noble Lord, Lord Hamilton—that the Prime Minister signed up to. The noble Lord has to accept that.
Lord Hamilton of Epsom
I thank the noble Lord for giving way. The issue that I was raising was why this was not considered in the report. It first came to light on 18 February and the report went to bed and to the printers on 3 March. There was plenty of time to consider these issues. It is remiss of the report that it did not consider whether our closeness to the EU and the size of the trade that we were doing were material issues.
Lord Liddle
I take the point—but at least the committee has drawn this crucial point to our attention. If we had not had this Select Committee report, what kind of debates would we have had, either here or in the other place, on the Government’s new policy? The fact is that we had nothing. There was no explanation of how what the Government were proposing was different from what they had previously proposed. Mr Johnson was going for a sleight of hand in going for this hard Brexit, and it was right that our committee should have exposed it.
The shift in our position on this particular point about the level playing field for open and fair competition will undermine confidence in our good faith. That will have very practical and real consequences for jobs and livelihoods in Britain. Even if we reach a trade agreement, I think that it is now likely that the EU will say that, if we make any move that it interprets as a move away from a level playing field, it will have a legal right to impose trade defence instruments in short order and we will not be able to stop them. These could be very damaging to sectors of our economy such as the car industry, where the non-existence of tariffs is of crucial importance.
We have already damaged ourselves very considerably. We will end up with a treaty that will not provide a stable investment climate for companies in Britain because they will always be under the threat of EU sanctions being imposed because of our attempts to break the rules.
However, that is not the only issue on which the position has changed. It is scandalous that we have thrown away just like that our participation in the European arrest warrant. Where has the big debate about that and what it means for our security been? Where has the Home Office statement been—the explanation by the Minister of what alternatives will be put in place that will be as effective in defending our interests? I feel that something fundamental such as this should not have been done in the way that it has.
As for the rest of the security agenda, the Government say that they are aiming for what they call “pragmatic co-operation”, but then go on to say:
“The agreement must not constrain the autonomy of the UK’s legal system in any way.”
So they will not sign up for our continued participation in not just the European Court of Justice but the European Convention on Human Rights. It is incredible that a Government believe that our European friends will agree to some system of administrative co-operation between the police and intelligence agencies without there being in place a binding framework of legal oversight that both parties judge to be acceptable. That has to be that, or co-operation will not work.
My third point relates to co-operation on foreign policy. The Government dismiss the prospect of a joint institutional framework; all they promise is friendly dialogue and co-operation and they do not want an agreement about this. Yet anyone who knows anything about how relations between countries work knows that institutions are incredibly important. One of the lessons I took away from my time in Brussels was that the framework it provided for regular meetings and policy discussions between senior officials, day by day and week by week, is absolutely fundamental to trying to create a convergence of approach between countries. If we say we do not want any of that kind of institutional co-operation on foreign affairs and defence, it will put us in a much weaker position.
I also think it is wrong for the Government’s new policy to reject the possibility of an overarching framework for the EU-UK relationship that was held open in the political declaration. What has happened to the deep and special partnership that Mrs May used to talk about? Do we no longer believe in that? Without such an overarching partnership, our relationship with Europe runs the risk of being characterised, and indeed poisoned, by interminable trade disputes when these are in fact of secondary importance. What matters is that we should work with our European friends to promote our shared values of democracy, human rights and the rule of law. Without that overarching partnership, I think we will lose that.
I have come to the regrettable conclusion—and I do regret it—that this Government do not really want a close relationship with our European friends. The thing that convinces me of that is the attempt that I think is being planned to rewrite the Northern Ireland protocol, which the noble Lord, Lord Kerr, explained to us in great detail. If that is what happens, the relationship is going to be one of betrayal and resentment, and I think it is an absolute tragedy that that is the route down which we are going.
Somebody referred to Philip Stephens’ article in the Financial Times last week. Many of us, probably including myself, in the next few days are going to go into self-isolation because we want to survive. Well, a lot of us will survive but I do not think that the policy of the country should be one of self-isolation—but that is what we are getting with this Government.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank your Lordships’ House for its forbearance in allowing me to speak into the gap. I echo many noble Lords in congratulating the noble Earl, Lord Kinnoull, on the excellence of his report and to offer the Green group’s support to the amendment tabled by the noble Baroness, Lady Hayter, in the interests of democracy.
I will not repeat the many concerns expressed by noble Lords about what is happening with aviation, chemical regulation, Euratom, the ideologically driven direction that the Government are taking, or indeed the concerns others have rightly expressed about the lack of consultation with the nations. I join the noble Lord, Lord Barwell, and many others in congratulating the noble Lord, Lord Kerr, on his excellent explanation of the Northern Ireland situation and I am sure I will be linking to that on Hansard many times in the future.
I want to draw attention to two issues in the report, particularly paragraphs 114 and 115, which highlight the disturbing divergence on the climate emergency and more broadly on sustainable development. The Government keep telling us that they want to lead the world on tackling the climate emergency; in which case, we have yet to hear an explanation of why signing up to a level playing field, presumably a level much lower than we are aiming for, is a problem. I also draw attention to paragraph 104, which highlights the fact that the EU decision has a very specific and strong focus on small and medium-sized enterprises and how the arrangements will work for them. It is unfortunate that there is nothing in the Government’s statements along those lines.
However, the main part of my speech has another focus. I compliment the House on its extremely strong concentration, in the circumstances, on the topic which we are debating. I think we know, however, that the country is perhaps somewhat less focused than usual on the deliberations in this Chamber at this moment. Your Lordships may not know that, as we have been debating, the Prime Minister apparently said—I am paraphrasing—that noble Lords and MPs over 70 must stay away from Parliament. That really brings us to the words of the noble Lord, Lord Cormack, and of the noble Lady, Baroness Wheatcroft. Every government resource, every official attention, every bit of funding is going to have to go to managing the coronavirus. There is no capacity to deal with the huge questions we have been covering today. It would be a dereliction of duty to take attention away from the focus on the coronavirus.
To be dismantling more than 40 years of close interrelationship with the EU and to establish new national rules on everything from aviation to trade, agricultural rules and workers’ rights with the entire country distracted would be profoundly undemocratic and dangerous. The process has to be put on hold. We have already postponed the local government elections in May. If we cannot manage to deliver basic democracy, having acknowledged that business as usual is not an option, we need to do the same with Brexit. I conclude by agreeing with the noble Baroness, Lady Noakes. She said that this House should reflect the opinion of the country at large as currently constituted. I think the country wants us and the Government to focus on the coronavirus.
Baroness Smith of Newnham
My Lords, like the noble Lord, Lord Liddle, I need to apologise for having been temporarily absent during this debate. I was in my place for all the opening speeches, but I was absent because I am being double-hatted today. In normal circumstances, my noble friend Lord Wallace of Saltaire would have been winding for the Liberal Democrats and I was going to play a bit part. Unfortunately, for various reasons associated with the coronavirus, he is not able to be in his place and, as I also do defence things, I was in Grand Committee, but the fact that I was in Grand Committee will shortly be relevant to my remarks.
As so often, the report of your Lordships’ European Union Committee is timely and insightful. As other noble Lords have said, we are most grateful to the noble Earl, Lord Kinnoull, for bringing it to the House. Unlike the noble Baroness, Lady Noakes, these Benches believe that many of the issues raised in the report and in the Government’s negotiating strategy are of national interest. It therefore seems wholly relevant that the report should come to the Chamber and that the Government’s Command Paper has also been brought.
Like many other noble Lords, we on these Benches have considerable concerns about the timing of not the Command Paper but the Government’s attempts to negotiate and ensure that the future relationship is agreed by 31 December 2020. It is clear that the Government won a mandate on 12 December with the clarion cry “Get Brexit done”, but on 31 January that first stage of the withdrawal agreement was reached. The UK has left the European Union. The future relationship does not have to be agreed by 31 December.
Several noble Lords, starting with my noble friend—she is a friend—Lady Falkner of Margravine, talked about John Maynard Keynes’s remark that when the facts changed, he changed his mind; what do you do? The facts that have changed since 12 December and since the Command Paper was published are precisely that Covid-19 may potentially have a catastrophic effect on this country and the EU 27. The international context has changed fundamentally. As the noble Baroness, Lady Bennett, pointed out, the country expects us to be focused on dealing with that crisis. It is not only the country that thinks that. When I asked the Minister, the noble Baroness, Lady Goldie, in Grand Committee about the future of the integrated security and defence review, she pointed out that the country wanted and expected the Government to focus on the crisis, and that is what they are doing. If the Government are rightly focused on the Covid-19 crisis, do they have the bandwidth to engage in the appropriate negotiations to ensure that by the end of June we have reached a situation where we have a future trade deal?
I will not rehearse the Brexit debate. I do not wish to do that, or to test the patience of the House by rehearsing the views for or against being in or out of European Union. We have very clearly left. But it is surely in the national interest to get the best deal that we can. It is well known that the Prime Minister is of the view that if you cannot get the deal you want, you should walk away. He made that absolutely clear writing in the Daily Telegraph before Prime Minister David Cameron tried to renegotiate the UK’s terms of membership.
Lord Hamilton of Epsom
Does the noble Baroness agree that if you threaten to walk away, you strengthen your negotiating position?
Baroness Smith of Newnham
My Lords, as has happened so often this evening when there has been an intervention, I will say: “Ah, if the noble Lord will only wait just a moment, I might get to that point.” What I wanted to say was that when Boris Johnson was writing in the Telegraph he was always clear in his advice to David Cameron and Theresa May that they had to be able to walk away from the table. That is clearly something that as Prime Minister we expect him to do. If we get to late June and he does not feel the deal is appropriate, we expect him to be willing to walk away, and that is certainly a negotiating strategy. But there is a huge difference between the Government negotiating with the 27 as equal sovereigns, as the Command Paper suggests, in our current situation and in normal times, when the focus of negotiations can be week in, week out. We have already seen the second phase of negotiations postponed because of the current crisis that affects not just this country but the EU 27. We are not going to be focused for the next three and a half months on negotiating the future relationship; nobody would expect us do that. In that context, can the Minister confirm either that it would be appropriate to extend the deadline or give the House some indication that the Government are acting in good faith in negotiations?
As my noble friend Lady Ludford pointed out earlier, there is a question of trust. It is not always clear that Her Majesty’s Government are trusted in Europe on the question of our relationship. Issues in the Command Paper, as we have heard in so many speeches this evening, have raised questions about the Government moving from the political declaration. Could the Minister reassure the House that the negotiations will take place in an appropriate timeframe—that 31 December does not have to be do or die? After all, the Prime Minister won his election on 12 December; he has a five-year term of office, unless and until the Fixed-term Parliaments Act is repealed.
There is every opportunity for the Government to do the right thing, act in the national interest and postpone the deadline for withdrawal—not least because we do not simply have to negotiate and ratify the withdrawal agreement in your Lordships’ House and the other place, but the other 27 member states have to ratify. The noble Lord, Lord Kerr of Kinlochard, suggested that perhaps it would be a very simple agreement; if we go low, it will be simple. In that case, the 27 might not have to ratify through their national capitals. But, if we have a mixed agreement, which is what we might have expected, it will have to be ratified through all the national parliaments of the 27, including Flanders and Wallonia, and the Canadians can tell you what that might mean in practice.
We are faced with a very tight timetable, and the potential for serious divergence from the political declaration and from the future of the European Union on a whole range of areas. We have had questions about financial services. I want to raise another set of areas of participation in Union programmes, and at this point declare an interest: in my day job, I am reader in European politics at Cambridge University, where I have project funding from Horizon 2020, and I am linked to the Erasmus+ programme. So I would like to know a little bit about the Government’s thoughts on future integration in those areas, particularly because on Erasmus+ the Command Paper says that the Government might look at some possible time-limited arrangement,
“provided the terms are in the UK’s interests.”
Can the Minister explain what that might mean? Similarly, and more importantly for the research community at large, under what conditions might the Government wish to participate further in Horizon Europe?
On security questions, we have heard from the noble Earl, Lord Kinnoull, and the noble Lord, Lord Liddle, particularly the concerns about security and foreign policy. The former Prime Minister, the MP for Maidenhead, seemed to be rather keen on the idea of close security and foreign policy co-operation with the EU 27. That seems to have disappeared from the Command Paper. Will the Minister reassure us that the Government still believe and understand that our security interests and those of the EU 27 remain as one? If anything demonstrates that, it is surely the Covid-19 crisis, which affects all of us and in which we are benefiting from the links to the European Union for ventilators and so on.
On these Benches, we strongly support the amendment from the noble Baroness, Lady Hayter. Some of us listened with some incredulity to the noble Baroness, Lady Noakes, who, I believe, said, “Parliamentary scrutiny is neither necessary nor desirable.” She may wish to correct me if I have misheard. I thought that that was what your Lordships were here for. Regarding the future relationship with the European Union, we believe that parliamentary scrutiny is both necessary and desirable. We may not be involved in the day-to-day negotiations, but we should certainly be kept abreast of what is going on to the extent that it is possible in the context of whatever limited arrangements Parliament might face in the context of the current crisis.
We are in a situation in which time is of the essence. We have seen months of negotiations with the European Union sometimes leading to the outcomes that we want and sometimes not. We are currently faced with a three-and-a-half-month window of opportunity for the future relationship unless the Government are willing to demonstrate some flexibility. In the context of the dire straits that the Prime Minister has just been telling us that we are facing and the fact that so many Members of your Lordships’ House will self-isolate and not be here, it is surely appropriate for the Government to look again at their timing and talk to the EU 27 about changing the timetable for our future relationship.
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, I rise to respond to what has been a typically incisive and insightful debate. I say to the noble Baroness, Lady Smith, that there is no reason to be concerned that she was not present during the whole debate, because the Liberal Democrat Front Bench was covered all through the debate. I do not take offence, and I am sure that the House did not.
I should declare an interest as a part-time resident in Italy—someone currently not permitted to return home to cut the grass. I am acutely conscious of the state of affairs occurring across Europe at the moment. I would also like to make another personal comment about how sad I was to read of the death of Lord Wright of Richmond. We are here in a debate on international affairs, and he was an outstanding servant of his country who always enlightened this House when he spoke. He was a very good citizen of Richmond as well. All our hearts go out to his family.
The debate started off in a not very pleasant tone, and rather a political one. I will address that point in a moment. It then evolved into an extremely measured debate. Perhaps I should take this point at the start: at the end of the debate, a number of speakers who were perhaps able to look on their iPhones—as I have not been able to during the debate, as I have been trying to listen to it—suddenly came up with this new line that the Government should not proceed any more with the pursuit of negotiations with the European Union because of the coronavirus crisis. The plea was put by the noble Lords, Lord Lea of Crondall and Lord Liddle, my noble friends Lord Cormack and Lady Wheatcroft, and the noble Baroness, Lady Smith—the last five speakers. Your Lordships will very shortly hear a Statement on coronavirus so I will not go there but, without diminishing the gravity of that matter at all, I say that, in the blast of the Second World War—using the resources of William Beveridge, who would have been on the Benches on that side of the House—the Government thought about designing and redesigning the welfare state for the future and made arrangements that lasted for two lifetimes.
Lord Cormack
I do not think that any of us who talked about coronavirus said that the negotiations should be abandoned. We said that the deadline should be abandoned.
Lord True
All right—I shall accept the timetable. However, I maintain the point. In the middle of the Second World War, when Winston Churchill sent for Rab Butler—who my noble friend will remember very well—to look into the future of education in this country, he did not suddenly, when some news came in, say, “Rab, you must drop this.” The Government went on and, in the 1944 Education Act, laid the foundations to the education system in this country despite the enormous crisis of the Second World War. Everything is possible and nothing is impossible in life, but I do not think—
Baroness Ludford
My Lords, the Minister has just been advised by the noble Lord, Lord Cormack—and I support what he said—that nobody has suggested that the negotiations be abandoned. People have talked about the Government not being ideological about requesting an extension, so that we possibly go beyond December. There were murmurs of support for the noble Lord, Lord Cormack. The Minister should surely have got the message: this House does not accept his interpretation of what he is claiming was said, but he is going on with the same theme.
Lord True
My Lords, it is an unfortunate condition of democratic life that not everybody accepts the contention that is put forward by somebody on the other side. When I hear a plea being made for indefinite open-ended deferment—if I may go that far—that might or might not be a move towards abandonment. Let us not argue about that. My contention is that, in so far as possible, the business of this Government should go on. Until instructed otherwise, my view is that the central promise made by this Government to the electorate at the recent general election was that they would accomplish the completion of this process—and by the date agreed by both the European Union and the British Government: 31 December 2020. As I stand here, the position of the Government is that we should seek to conclude the arrangements on the timetable set out.
Having been diverted by those last few speeches, I should perhaps get back to the central response to the outstanding report put forward by your Lordships’ Select Committee and the noble Earl, Lord Kinnoull. I do not agree with all the strictures or necessarily all the rapture that attaches to that report, but I do think that it was outstanding and timely. That he, his committee and their clerks have achieved this report so swiftly and ably is a tribute, as many have said, to the work of your Lordships’ House. To the noble Baroness, Lady Donaghy, I say that I would certainly be interested to see the report of her sub-committee when it comes out; I am sure that that would be widely shared.
In a tight timeframe, the committee has produced a detailed and informative report. I believe that everyone who has spoken would agree, at least on this: that it has facilitated the debate that we have had today on negotiations. I salute the continued dedication of your Lordships’ committee and I say clearly to the noble Earl that, certainly while I stand at this Dispatch Box, I will wish to have the closest co-operation with him and the committee and that is the position, I think, of all my colleagues on the Front Bench. He asked me some specific questions about engagement and methodologies—these were also put forward in the amendment in the name of the noble Baroness, Lady Hayter. I will come to those, but in general terms, without setting out a specific structure for engagement, of course the Government wish to engage with and hear the opinions of your Lordships’ committee.
I was struck by the tone at the start of the debate, when, with the greatest respect to her, the noble Baroness, Lady Hayter, spoke of a mean-spirited tone and of extremism—it is a fact; Hansard will record it—and went on to talk about our hard line. She actually ended her speech saying that the Government’s policy was “demented” in trying to put into effect the central proposal of our manifesto and the central request twice made by the British people. I reject that. I do not accept it and I think it was a tone that luckily we moved away from after the first few speeches, when we moved to the normal tone of your Lordships’ House.
I was asked about the current negotiations—not just about the timeframe, but whether negotiations would actually continue this week. As noble Lords will know, the EU and UK negotiators have today jointly decided not to hold this week’s round of negotiations in London in the form originally decided, but both sides remain fully committed to continuing negotiations and are currently exploring alternative ways to continue discussions. That must be right, and it must and does include the possibility of video conferencing or conference calls and exploring flexibility in the structure over the coming weeks. If we are asking the people of this country to do ever more indirectly —by video, remotely—then surely the Government of this country and the negotiators for the European Union can seek to advance policy in the same way.
Today’s debate also covered the UK’s approach to negotiations with the European Union as set out in our Command Paper. That remains, although I know it does not please everybody, that by the end of this year —I have to repeat it again—we will be fully independent and a sovereign country. The Command Paper is also clear that we are not asking for a special or bespoke relationship with the European Union: in our proposals, which are based on the political declaration, we are looking for a relationship grounded in precedent. Even the noble Lord, Lord Hannay, acknowledged in his speech that the UK proposals were grounded in precedent. The relationship that we are suggesting is aligned with the parameters for our relationship as agreed in the political declaration.
Points have been made, including by your Lordships’ Select Committee, about the political declaration—who has moved away from it, who has not moved away from it and so on. I thought that, in an outstanding speech, my noble friend Lord Barwell set out a point also made in the Select Committee report: that the wording is not aligned in every respect with the wording of the political declaration. Both sides are making new asks—no, that is not the right phrase: both sides have set out their objectives. As was explained in another outstanding speech by the noble Lord, Lord Kerr of Kinlochard, there are differences in the positions, and the British position is as has been set out before your Lordships.
Our view, that our future relationship must be based on sovereignty, and that autonomy of decision-making must be respected as a principle on both sides, is not incompatible with having a close relationship with the EU. Our outline for negotiations, which noble Lords have heard before, builds on precedent and the EU’s offer of a Canada-style agreement. It reflects the type of free trade agreement that should be entirely achievable between sovereign states, as the EU has done previously. We continue to see the EU as our neighbour and friend and want our future relationship to be as wide-ranging as precedent allows. I do not accept that this is a doctrinaire Government who do not want good relations with the European Union; the opposite is true. However, it is a Government who believe that the relationship must be one of sovereign equals. That is what the British people have required and requested of us. We believe that our economic and political independence is a matter of vital national interest.
I will now address the specific points raised by the report. From my reading, there were three specific areas that the noble Earl asked the Government to address. The first was on an association agreement. It invited the Government to comment on the structure of the relationship and whether it would take the form of an association agreement. It is not fruitful to parse the political declaration, but my noble friend Lord Barwell quoted from the relevant part of it, which said that it could take the form of an association agreement, but, as the noble Lord, Lord Liddle, said, the parties may also decide that an agreement should sit outside an overarching framework and in a series of linked agreements. We strongly believe that the content of discussions should drive the structure of the agreement, not the other way around. As my Prime Minister set out, we will seek to negotiate a free trade agreement as well as a separate fisheries agreement, an internal security agreement and other more technical agreements, which I hope will include one on aviation, where points have been made about the move in the European Union’s position.
The report also invited the Government to explain the extent to which the general principles and core values in the political declaration should form part of our future relationship with the EU. This has been the theme of a number of opening speeches on the other side. The noble Lord, Lord Hannay, said that there was “blithe disregard” for the political declaration. I certainly do not agree with that. The UK and the European Union signed up to the political declaration. All the areas of policy set out in the political declaration will be relevant to the UK’s future co-operation with the European Union. However, not all need form part of a negotiated treaty. Many can be developed in a spirit of friendly dialogue between the UK and the EU, which is what we seek. This vision is fully compatible with the political declaration and based on the principles of precedent and reciprocity.
The noble Earl also asked whether the Government would publish a comparative analysis of the political declaration and the Government’s Command Paper. There has been a great deal of debate on the political declaration. The document has been on public record since last October. As the noble Lord, Lord Liddle, I think, said, the Select Committee’s own document provides what the Select Committee asked for.
The report notes Parliament’s role. The noble Baroness, Lady Hayter, has tabled an amendment on this topic, and a number of noble Lords have touched on this point. This House and Parliament as a whole was given a chance to vote on a potential statutory role for the House when they approved the Government’s approach to negotiations and the agreements during the passage of the withdrawal agreement Bill. As noble Lord will recall, and as my noble friend Lady Noakes reminded us, the other place voted decisively against giving a statutory role to Parliament in these matters. Indeed, the noble Baroness, Lady Hayter, withdrew her amendments on this matter during the passage of the Bill. Nevertheless, as the Prime Minister said at the Second Reading of the withdrawal agreement Bill:
“Parliament will be kept fully informed of the progress of these negotiations”.—[Official Report, Commons, 20/12/19; col. 150.]
In meeting that commitment, I ask noble Lords to note that the publication of the Government’s approach was supported by Oral Statements in both Houses and it is being debated today. A Written Ministerial Statement was also made on 9 March, and the Chancellor of the Duchy of Lancaster has appeared before a Select Committee in the other place.
I was asked about the role of the devolved Administrations by the noble Lord, Lord Hain, and others. Throughout the negotiations, the United Kingdom has acted on behalf of the whole of the union. That is the constitutional position and it is consonant with the UK’s constitutional responsibilities—in particular, for the international conduct of the UK’s interests. However, on 28 January in Cardiff there was a ministerial conference on future relationship negotiations, and we stand ready to hold more such meetings. We shared a draft of our approach to the negotiations with the devolved Administrations in advance of publication, and UK government officials and Ministers have been in regular contact with their counterparts throughout this process. That must be the correct position.
I was asked about the Northern Ireland protocol. The Government will hear what has been said in many of the distinguished speeches made today but, as noble Lords will know, a discussion is to take place on this issue at the first meeting of the Joint Committee, and I would not wish to anticipate that.
In conclusion, of course there are areas of divergence between the UK and the EU, and those have been highlighted by many in this debate. However, I like to travel in hope and we must not forget that the Government’s intention is to get a good deal with the European Union. There are many areas where there is convergence. The very act of highlighting the areas where there is divergence draws attention to the silence on the areas where there is not divergence, and that illustrates the fact that both sides want a comprehensive, friendly relationship based on free trade. We will continue to approach these conversations in that way.
We are committed to doing everything we can to ensure that both sides see reasonable progress by June, so there is a clear point in keeping the negotiations going with a view to completing ratification this year. However, under no circumstances will the Government accept an extension. We firmly believe that there is ample time to strike an agreement based on free trade and friendly co-operation.
Again, I thank the committee of your Lordships’ House for its important and insightful work. I look forward to engaging with it in the future and indeed with other Select Committees of this House throughout our negotiations with the EU.
Baroness Hayter of Kentish Town
My Lords, I shall not respond to the debate—that is for the noble Earl, Lord Kinnoull, to do. I shall speak only about my amendment. There were some elements of my speech, such as on competition law, to which the Minister could not respond due to a lack of time, but I am sure that he will write to everyone who raised points that he was not able to answer.
Baroness Hayter of Kentish Town
I found the Minister’s response on my amendment much more positive than that of the noble Baroness, Lady Noakes. However, because of that, I must say something on the issue.
The noble Baroness, Lady Falkner, must have misread the amendment. We are asking not for a veto but for documents. I gave the example of the negotiations with America, where a parliamentary committee was specifically involved. I talked about the documents for both Houses of Parliament, not only the non-elected House. The fact that we are not elected and the European Parliament is seems irrelevant because the documents are for the Commons as well. So let us put that to one side. As my noble friend Lord Whitty said, it is more the principle of scrutiny that matters and less the detail of how it is done.
More seriously, I have to respond to the argument of the noble Baroness, Lady Noakes—not to the Minister because his reply was more helpful—who said that the general election and the huge majority to get Brexit done somehow means, as the noble Baroness, Lady Smith of Newnham, highlighted, that parliamentary scrutiny is neither necessary nor desirable. The noble Lord, Lord Hamilton, thought that, with a decent majority in the other place, this Government would not listen. That is scary stuff: “We have a majority of 80 and therefore we will do what we like—don’t trouble us.”
But Parliament matters and must not be shut out for two reasons: first, we do not want to reach a situation, when this treaty is ready to be ratified, where Parliament says, “Oh, we don’t like that now that we’ve seen it.” That would put the country in a difficult position. We have got to the negotiations and the dialogue is necessary now so that we do not find the Government taking us down a road that would be unacceptable not only to this House but to the other House. It is also wrong in itself. The idea that because you have an overall majority—we had a much bigger one in 1997—you do not listen to Parliament is highly dangerous.
Perhaps it is different and this is not about the big majority but a fear that the new deal would not stand up to scrutiny. That is just as serious. It is obvious that it has been heard and responded to by the Minister but we will keep talking. Some of us will be sent away because of our age but there will be enough people on these Benches to make sure that if he does not come here, we will bring him back to answer more questions. He is younger than me, so he will have to be here even when I am not. For the moment, I beg leave to withdraw the amendment to the Motion.
The Earl of Kinnoull
My Lords, very briefly, I thank the staff of the committee. As I tried to explain in an obviously unsatisfactory answer to the noble Lord, Lord Hamilton, this was done in a tremendous rush, with lots of late-night oil being burned, because we got the Command Paper on 27 February and the staff and the whole committee had agreed to our report by 3 March. I hope the House feels that we performed our duty in trying to do that.
Secondly, I thank everyone who has spoken in our four and a half hours of debate, which I found fascinating. New points and new thoughts have been put to me—I live in this world 24/7 and enjoy everything—and it has been rich in content.
One gypsy’s warning was given. About half the membership mentioned Northern Ireland and I hope the Minister will reread the excellent speech of the noble Lord, Lord Kerr of Kinlochard, which summarised the issues and got to the nub of them. I should say, as a minor piece of advertising, that we worked together in Northern Ireland and have taken evidence both there and here. Our next work will focus in that direction, and I hope we will have the opportunity to consider what we have found out today on the Floor of the House. This is definitely something that needs attention. It is not an unwinnable position at all, but it needs attention; it is a gypsy’s warning.
I will comment finally on whether our report answers our own question on divergence. I am afraid it does not. There are two elements that one is asking for with divergence: an explanation as to what has diverged, and the justification for why it is right to diverge. In our report, through burning the midnight oil, we have been able to do a reasonable job of explaining what has diverged. We will ask Europeans why they are diverging—I tried to point out that there were divergences on both sides. As scrutineers, we will also need to ask the Government to explain and justify why the divergence is taking place, assuming that there will be future divergence. I am afraid that our question on that is still live. I hope that, when the Government respond to our report, we will get some clues.
Lord Hain
I very much welcome the committee’s intention to look at Northern Ireland. For some time, the Government said of the Irish border that it would all be all right on the night and we should not worry about it. They then conceded that there was something to worry about—and the agreement protects the open border, provided it is maintained. But there is still considerable denial about de facto checks and a virtual border in the Irish Sea. I very much welcome the committee’s intention to look at that.
The Earl of Kinnoull
I thank the noble Lord for that. Here, I point to the very important intervention on that issue by the noble Lord, Lord Lamont of Lerwick. He pointed out that the situation is quite dynamic. If a free trade agreement results, it will greatly reduce, although not eliminate, the list of problems.
This has been an excellent debate and I thank everyone again. I commend the report to the House.