Brexit: Negotiations

Baroness Anelay of St Johns Excerpts

Thursday 7th September 2017 Grand Committee

[The Minister of State, Department for Exiting the European Union (Baroness Anelay of St Johns) (Con)]

My Lords, I add my congratulations to the noble Lord, Lord Dykes, for securing this debate. His exposition of the last year and why he regrets the decision of the British people dominated his speech, but that shows his passion. We understand that. What I want to do, as my respect to Parliament, is to base most of my remarks on the core issue of the Question on the Order Paper. But I will, in doing so, seek to cover many of the issues rightly raised today.

One of those, of course, was from the noble Lord, Lord Foulkes, who joined in the reminiscing of what might have been if there had not been the result in the referendum. He asked a question specifically about legislation. The Queen’s Speech gave an outline of that. Since then, we have been giving greater detail about which Bills are published, and they are now beginning to be debated not only in the House of Commons, but in this House. I waited for 13 years in opposition for the Labour Government to tell us what Bills were about to come: answer came there none. We have given more of an answer about how these Bills will develop. It is important—the noble Lord was not asking an improper question—because as we set out White Papers, as we have said we shall, on immigration and trade, those will be a core part of the discussion in this Parliament about how we proceed after we have left the European Union.

Therefore, Parliament will have a scrutiny role and there will be, I am sure, from my colleagues across departments opportunities to participate in meetings, as I shall do, not only when the withdrawal Bill reaches the House, but in advance. For example, next Tuesday I am having a drop-in meeting for all Peers, not only to hear a brief introduction from me about the Bill, but to be able to hear directly from the Bill team. I felt it was essential for this House to hear that shortly after the finalisation of Second Reading on Monday evening. That is really core to the way I like to operate and I shall continue to do so. I shall return to some of those very helpful comments made by my noble friend Lord Balfe later.

We have heard today the lively, informed, rightful interest in this House on the progress of the negotiations. We are reminded by many that the clock is ticking. It ticks for both sides. As it goes faster, it is faster for both sides. It is important for the European Union also to recognise that they need to be more “flexible and imaginative”. Those are words from the European Council, not made up by us. David Davis is simply reminding our colleagues across Europe what our joint enterprise is. We have always undertaken that we would wish to provide for the greatest possible transparency that is consistent with maintaining our ability to negotiate successfully. In that, we are guided by the Motion that was agreed by the House of Commons that the process should be undertaken in a way that does not undermine the negotiating position of the Government, but there is still much that we can do. We are doing that and we can learn from the debate today, and others, about how we can do more.

In looking at the issues today, I try to set out what we have done so far to report to Parliament, our plans to continue to update Parliament in the wake of future negotiating rounds, including, of course, our support for invaluable scrutiny by Select Committees. and our written publications. In reporting to Parliament, my right honourable friend the Secretary of State for Exiting the European Union has committed to update the House after each round of negotiations. Naturally, I will do so in this House, with the leave of the House, as I did earlier this week. Of course, as noble Lords have pointed out, the dates of the negotiation rounds do not always align well with parliamentary sittings. That is a matter for the House to determine but it is a matter of practical fact and I recognise the difficulties it can raise. Of course, it will occur again as the September round takes place, but we have sought to ensure that Parliament was kept properly informed over the summer. That is why the Secretary of State wrote to all colleagues to give details on the progress made during the second round of negotiations. Noble Lords can be assured that they will have an opportunity to scrutinise the Government on the next round of negotiations when we return in October.

Of course, Statements to Parliament are a powerful method of reporting. I appreciate that they are not the only method, although I note in parenthesis, thinking back to the question asked this morning by the noble Lord, Lord Hannay, that when we had the Statement on Tuesday, I was astonished that Back-Bench time was not taken up. There was time at least for two, if not three, further questions at the end. That was a little disappointing.

In the European Parliament the position is different. Of course, there is a constitutional relationship with the Commission; it is a unicameral Parliament. As a result, it has a different way of operating. Therefore, when Monsieur Barnier appears before the European Parliament, as he has just twice, he takes no questions. He appears, speaks and goes. Guy Verhofstadt has been nominated the Brexit co-ordinator there. He does report back and has a role in that respect. It is a different hub: Barnier and Verhofstadt. There is the Brexit steering group, which is more or less a self-appointed group and does not represent all the parties there. That is the group to which Monsieur Barnier goes and has some discussions with on a confidential basis and therefore nobody knows what goes on.

[Lord Balfe]

Everybody knows what’s going on.

[Baroness Anelay of St Johns]

I have to say, I listened with belief to what my noble friend said on that. I am glad that he said it, not me. We are going to maintain our undertaking to serve Parliament as well as we humanly can.

My noble friend Lord Balfe made a point about the problem with information. Everyone wants it but there is a huge amount of it and how do we get it, particularly in the recesses? I do have an answer. My own department arranges that there is information on its website. It is the go-to place for everything that we do on Brexit. I do not want to put my noble friend off but at GOV.UK/dexeu there are 133 announcements, seven position papers, five future partnership papers and two White Papers. Of course, the European Commission site updates its papers.

The advantage of our website is that after each negotiating round we update the papers. As I mentioned on the Floor of the House this week with regard to the citizenship paper, it means that the joint EU-UK position paper—the annexe that has been published, which shows the red/amber/green system—actually shows how that has been advanced at the latest negotiating stage, not only the further agreement that has been reached but where each of the negotiating groups has agreed that it needs to do more. It is not just us, it is the Commission as well, but we are more forward-leaning. For example, on citizens, after the August round a further 20 lines of detail were added. More than half of those are where we are making more of an offer than the European Commission is.

[Lord Foulkes of Cumnock]

We all accept on this side—and, I think, on all sides—that the people who can best deal with the detail are those on the European Union Select Committee. They have all the background, they are working on it week in, week out. The Minister has still not explained why David Davis refused to appear before our Select Committee when we offered to meet—as we know, Select Committees can meet even when Parliament is not sitting. Why did he refuse to meet us?

[Baroness Anelay of St Johns]

My next page turns to Select Committee appearances. The key to explaining the Secretary of State’s position is in the letter he wrote on 9 August to the noble Lord, Lord Jay. I am delighted he has been able to participate here. I want to address his very careful points in a moment, but first I will refer briefly to the noble Lord, Lord Foulkes, because I do not want to run out of time and the intervention of the noble Lord, Lord Jay, was crucial.

In that letter from 9 August, my right honourable friend said that,

“I want to emphasise that I fully recognise the critical role the Committee plays in scrutinising our withdrawal from the European Union. It is for that reason I am clear that, as the Secretary of State who represents the UK in Brussels, I should personally update the Committee on the progress of negotiations.”

He goes on to talk about how. At the meeting of the committee in July, he made it clear that he would consider how best he could do that and balance that duty against the range of other committees. I would say, very carefully of course, that since my department was created, just 15 months ago, Ministers from my department have given evidence to Select Committees, covering a range of EU exit-related inquiries, on no less than 16 occasions. We will not step back.

I address the noble Lord, Lord Jay, because I feel it is vital to do so in my last two minutes. I thank him for the letter he wrote to the Secretary of State, which he kindly copied to me. I have made it clear that my department and I fully support the work of committees in both Houses in fulfilling their scrutiny responsibilities and that we will continue to value the work of the noble Lord’s committee as it conducts its Brexit-related inquiries.

The Secretary of State has given his commitments to update us after each round and will do so with a Statement, as he said. It is no small commitment to update the House after each negotiation round and, no less importantly, to take questions from Members. I want to give all Members of the House the opportunity to scrutinise progress in the negotiations and the Secretary of State has made it clear that he is happy to give evidence to the committee in the autumn.

I am sure the noble Lord, Lord Jay, will appreciate that the complexity of the negotiations—he was head of the Foreign Office so knows about the difficulties of the issue—demands a level of flexibility to ensure that they are conducted successfully, and that rigid committee appearances at fixed intervals may run counter to that. I appreciate there has been some joshing about what my right honourable friend may or may not do. What he does do is properly respect Parliament and scrutiny. I look forward to seeing the noble Lord, Lord Jay, later today when I am sure I will have the opportunity to explain in more detail why the Government are taking that approach.

[Lord Jay of Ewelme]

Before the noble Baroness finishes that part of her speech, can she confirm that she will be prepared to accept the invitation of the Select Committee to come before it for meetings when the Secretary of State is otherwise engaged?

[Baroness Anelay of St Johns]

Although I am out of time, I crave the indulgence of the Committee. I would like to discuss the matter further. I have set out the Government’s position and, because of the interventions from noble Lords, I have not been able to cover the issue of papers. I hope that I have at least given the way in which noble Lords can access those papers and that information. It is disappointing not to be able to conclude in a fuller way but I can certainly say that we will have plenty of further opportunities to discuss these matters.

Update on the Progress of EU Exit Negotiations

Baroness Anelay of St Johns Excerpts

Tuesday 5th September 2017 Lords Chamber

[The Minister of State, Department for Exiting the European Union (Baroness Anelay of St Johns) (Con)]

My Lords, with the leave of the House I will now repeat a Statement made by my right honourable friend the Secretary of State for Exiting the European Union. The Statement is as follows.

“Mr Speaker, I will now update the House on the two rounds of negotiations with the EU which took place in July and August. While at times these negotiations have been tough, it is clear that we have made concrete progress on many of the most important issues. I would like to thank all our officials who have been working hard at home, as well as out in Brussels, to make this happen.

Colleagues will have received my letter following the July negotiating round, dated 9 August. I set out the dynamics of that round in some detail. These rounds were not at this stage about establishing jointly agreed legal text. Rather, they were about reaching a detailed understanding of each side’s position, understanding where there might be room for compromise and beginning to drill down into technical detail on a number of issues. During both rounds discussions took place on all four areas, including the specific issues relating to the rights of citizens on both sides; Northern Ireland and Ireland; the question of a financial settlement; and a number of technical separation issues. I will speak briefly about each area in turn.

Making progress on citizens’ rights has been an area of focus for both negotiation rounds and we took significant steps forward in both July and August. We have published a joint technical paper which sets out our respective positions in more detail, updated following the August round. This underlines the significant alignment between our positions and also provides clarity on areas where we have not as yet reached agreement. In July we achieved a high degree of convergence on the scope of our proposals on residence and social security; the eligibility criteria for those who will benefit from residence rights under the scope of the withdrawal agreement; and a shared commitment to make the citizens’ application process as efficient and streamlined as possible. In August we agreed to protect the rights of frontier workers; to cover future social security contributions for those citizens covered by the withdrawal agreement; to maintain the right of British citizens in the EU 27 to set up and manage a business within their member state of residence, and vice versa; and that we should protect existing healthcare rights and arrangements for EU 27 citizens in the UK and UK nationals in the EU. These are the European Health Insurance—or EHIC—arrangements.

These areas of agreement are good news. They may sound technical but they matter enormously to individuals. The agreement on healthcare rights, for example, will mean that British pensioners living in the EU will continue to have their healthcare arrangements protected both where they live and when they travel to another member state, where they will still be able to use an EHIC card. On mutual recognition of qualifications, we have made progress in protecting the recognition of qualifications for British citizens resident in the EU 27 and EU 27 citizens in the UK. In fact, each one of these areas of agreement is reciprocal: they will work for Brits in the EU and the EU 27 in the UK. These areas of agreement help provide certainty and clarity for EU 27 citizens in the UK and UK citizens in the EU 27. They will make a tangible difference to these people’s lives. I hope everyone recognises the importance of that.

The outcomes of these discussions demonstrate that we have delivered on our commitment to put citizens first and to give them as much certainty as early as possible in this process. Of course, there remain areas of difference which we continue to work on. For example, we will need to have further discussions on the specified cut-off date, on future family reunion and on the broader issue of compliance on enforcement. Progress on these areas will require flexibility and pragmatism from both sides.

During the summer negotiating rounds a number of issues emerged in the EU offer that will need further consideration. For example, the EU does not plan to maintain the existing voting rights for UK nationals living in the EU. We have made it clear that we stand ready to protect the rights of EU nationals living in the UK to stand and vote in municipal elections. Similarly, the EU proposals would not allow UK citizens currently resident in the EU to retain their rights if they move within the EU.

Even in areas where there has been progress, more is needed. While the EU has agreed to recognise the qualifications of UK citizens resident in the EU, and vice versa, we believe this should go further. This recognition must extend to students who are currently studying for a qualification; it must apply to onward movement by UK citizens in the EU; and it should extend more broadly to protect the livelihoods of thousands of people which depend on qualifications which will be gained before we exit the EU. In these areas the EU’s proposals fall short of ensuring that UK citizens in the EU and EU citizens in the UK can continue to live their lives broadly as they do now.

On separation issues—a very technical area—we have established a number of subgroups. They made progress in a number of specific areas, and drew on papers the UK published ahead of both rounds. I am pleased to say that we are close to agreement on our approach to post-exit privileges and immunities—on which we have published a position paper—which will benefit both the UK and EU to maintain after we leave. We have agreed on our mutual approach to confidentiality requirements on shared information post exit.

With respect to nuclear materials and safeguards, we held discussions on the need to resolve issues around the ownership of special fissile material and the responsibility for radioactive waste and spent fuel held both here and there. We reiterated a strong mutual interest in ensuring that the UK and the Euratom community continue to work closely together in the future as part of a comprehensive new partnership.

With respect to legal cases pending before the Court of Justice of the European Union, the parties discussed and made progress on the cut-off points for cases being defined as ‘pending’. There was also progress in discussions concerning the UK’s role before the court while these pending cases are being heard.

With respect to judicial co-operation in civil and commercial matters, and ongoing judicial co-operation in criminal matters, we made good progress on the principles of approach and the joint aim of providing legal certainty and avoiding unnecessary disruption to courts, businesses and families.

With respect to goods on the market, both parties reiterated the importance of providing legal certainty to businesses and consumers across the EU and the UK at the point of departure. We held discussions on the principles of an agreement and agreed that further exploration was needed of how these objectives would be achieved. In this area in particular we emphasised that the broader principles outlined in the UK’s position paper seek to minimise the type of uncertainty and disruption for business which we are all working to avoid.

We remain committed to making as much progress as possible on those issues that relate solely to our withdrawal, but our discussions this week have exposed yet again that the UK’s approach is substantially more flexible and pragmatic than that of the EU, as it avoids unnecessary disruption for businesses and consumers. I have urged the EU to be more imaginative and flexible in its approach to withdrawal on this point.

On Northern Ireland and Ireland, I am pleased to report that there has been significant, concrete progress in this vital area. The negotiation co-ordinators explored a number of issues, including both the Belfast—or Good Friday—agreement and the common travel area. In August, the group also held detailed discussions on the basis of the UK position paper. As both I and Michel Barnier said at last week’s press conference, there is a high degree of convergence on these key issues, and we agreed to work up shared principles on the common travel area. That is quite a major change. We also agreed to carry out further joint technical work on cross-border co-operation under the Belfast agreement. Of course, as I have said all along, the key issues in relation to cross-border economic co-operation and energy will need to form an integral part of discussions on the UK’s future relationship with the EU.

Finally, on the financial settlement, we have been clear that the UK and the EU will have financial obligations to each other that will survive our exit from the EU. In July the Commission set out the EU position. We have a duty to our taxpayers to interrogate that position rigorously. That is what we did, line by line. That may have been a shock, but that is what we did. At the August round we set out our analysis of the EU’s position. We also had in-depth discussions on the European Investment Bank and other off-budget issues.

It is clear that the two sides have very different legal stances. But as we said in the Article 50 letter, the settlement should be,

‘in accordance with the law and in the spirit of the United Kingdom's continuing partnership with the EU’.

Michel Barnier and I agreed that we do not anticipate making incremental progress on the final shape of a financial deal in every round. Generally, we should not underestimate the usefulness of the process so far, but it is also clear that there are still significant differences to be bridged in this sector.

Initial discussions were also held on governance and dispute resolution. These provided an opportunity to build a better shared understanding of the need for a reliable means of enforcing the withdrawal agreement and resolving any disputes that might arise under it.

Alongside the negotiations, we have also published a number of papers which set out our thinking regarding our future deep and special partnership with the EU. These future partnership papers are different from our papers that set out our position for the negotiations over our withdrawal agreement. Our future partnership papers are part of a concerted effort to pragmatically drive the progress we all want to see.

All along, we have argued that talks around our withdrawal cannot be treated in isolation from the future partnership we want. We can only resolve some of these issues with an eye on how the new partnership between us will work in the future. For example, on Northern Ireland it would be helpful to our shared objectives on avoiding a hard border to be able to begin discussions on how future customs arrangements will work. Furthermore, if we agree the comprehensive free trade agreement we are seeking as part of our future partnership, solutions in Northern Ireland are of course easier to deliver.

A second example is financial matters. As we have said, the days of making vast contributions every year to the EU budget will end when we leave. But there may be programmes that the UK wants to consider participating in as part of the new partnership we seek. Naturally, we need to work out which of these we might want to pursue. We need to discuss them as part of talks on both our withdrawal from the EU and our future as its long-standing friend and closest neighbour.

A third example is wider separation issues. While we are happy to negotiate and make progress on the separation issues, it is our long-term aim that ultimately many of these arrangements will not be necessary. With the clock ticking, it would not be in either of our interests to run aspects of the negotiations twice.

Last week, as we turned our consideration to the next round of talks, my message to the Commission was: let us continue to work together constructively to put people above process. To that end, my team will publish further papers in the coming weeks, continuing to set out our ambition for these negotiations and the new deep and special partnership the UK wants to build with the EU. Ultimately, businesses and citizens on both sides want us to move swiftly on to discussing our future partnership, and we want that to happen after the European Council in October, if possible.

As colleagues know, at the start of these negotiations, both sides agreed that the aim was to make progress on four key areas: citizens’ rights; the financial settlement; Northern Ireland and Ireland; and broader separation issues. We have been doing just that. I will not pretend that it is always easy or simple. I have always said that this negotiation would be tough, complex and, at times, confrontational. So it has proved. But we must not lose sight of our overarching aim: to build a deep and special new partnership with our closest neighbours and allies, while also building a truly global Britain that can forge new relationships with fast-growing economies around the world”.

--- Later in debate ---

[Baroness Ludford (LD)]

My Lords, I also thank the Minister for repeating the Statement. I am afraid the Government have shown themselves to be insufficiently prepared and, at times, even undisciplined and undignified in throwing insults at Brussels. They have rather squandered the 14 months since the referendum, including an unnecessary court battle to prevent parliamentary accountability and three months on an unnecessary general election.

There have been some steps forward, with the useful publication of the position papers—albeit in recess and given to the media several hours before they were made available to members of the public, including parliamentarians—and the acceptance of a transitional period, although without specifying how long the Government want that to be and with no acceptance of whether it would mean being in the customs union and the single market. Like the noble Baroness, Lady Hayter, I was intrigued by the reference in the Statement to it not being in either of our interests to run aspects of the negotiations twice. The only way I can see that happening, unless the Minister can contradict me, is if we stay in the customs union and single market during the transitional period and in the long term. There has also been some progress on EU citizens and an acceptance of some role for the European Court of Justice. In July, there was an acceptance of financial obligations from commitments made while we are a member state. These acceptances, however, were all inevitable. It would have been better if they had not had to be dragged out of the Government.

There are still, however, several impractical red lines and there have been some rather backward steps. The Home Office has sent letters to a significant number of EU nationals threatening them with immediate deportation, which hardly makes for good mood music for the negotiations, apart from being obviously distressing for those individuals. We have had a repeat from the Prime Minister of the “no deal is better than a bad deal” mantra, which we had hoped had been put to bed. There was an agreement on the sequencing of the talks; now that acceptance is put up in the air again by the Government. We understood that the Government had accepted the principle of the financial liabilities; now all that is also being challenged.

This fickleness and lack of reliability is fomenting some distrust of the Government. It makes it much harder for the EU to agree a linkage between the elements of the Article 50 divorce arrangements and the future relationship. For instance, if the Government would state the period of transition they seek, the status, in terms of the customs union and the single market, and what continuing contributions they propose to make in respect of that status, that might facilitate an agreement on the liabilities or the existing commitments. If the Government said that they wanted to stay in the customs union and the single market, that would at a stroke resolve many of the worries over Ireland we are in the course of debating this afternoon.

While the Government rather go round in circles, businesses are having to make relocation decisions now, affecting jobs, the pound drops and the economy slows. The Government keep reproaching the EU for not coming up with concrete suggestions for flexible solutions, but if the Government cannot specify what end goal they are seeking, how can we expect Brussels to come up with flexibility to fit what the Government want? It is Catch-22.

It was suggested that the customs solutions put forward in the paper about three weeks ago were innovative, but they were not practical or thought through, and even the Secretary of State called them blue-sky thinking a mere couple of weeks after the paper was published. That hardly gives a good solid basis on which Brussels can engage with those suggestions. If the Government have a strategy, as opposed to a series of delays, reactive statements and outbursts, will they share that strategy with Parliament and the British public? Are we not secondary to an audience of the ideologically obsessed hard Brexiteers in the Tory party’s ranks and outside them who are not happy? I see that Arron Banks is trying to unseat Tory MPs, including Amber Rudd. Perhaps that accounts for the Prime Minister repeating the “no deal” mantra. It is unhelpful and petulant to raise, even as a possibility, a chaotic, “falling off a cliff-edge” Brexit. Will the Government level with Parliament and the public and be honest about the fact that, as we are proposing to leave the EU club, the UK cannot expect to retain the full benefits of club membership? We cannot have our cake while eating it. The fact that they need us as much as we need them is untrue, and we need to compromise. It is up to Britain to set out in detail its preferred destination and how to get there. As one journalist put it:

“The departing ship is watched”—


by the EU—

“with both sadness and concern, but there is no rush to take on its navigation problems”.

Will the Government please tell us their proposed destination and how they are going to navigate?

[Baroness Anelay of St Johns]

The strategy of this Government is clear, straightforward and pragmatic. It is to ensure that we build a deep and special partnership with our closest neighbours and allies which is of benefit to the people of the EU 27 and the UK after we leave. This is the most momentous form of negotiation that I have experienced in my lifetime. It is a privilege to be at the Department for Exiting the European Union and to see the hard work that has been going on to deliver that path towards a successful legal decoupling while still remaining closest friends. Considerable progress has been made. I thank both noble Baronesses for their contributions and their questions and I will seek to amalgamate my answers to cover them.

The nature of negotiation which has been carried on by this country over centuries has varied from being on the battlefield in Tudor times against some who are now our dearest neighbours, Portugal and Spain, to negotiations, a matter of finding methods of agreement of convergence—not dictating, saying that we will agree to this only, but setting out reasoned proposals. That is work that has been done. There is going to be no delay. The department has been working with other departments across Whitehall to look at the ways in which we can publish our proposals and give options for the negotiations. That is clear in the customs paper, which proposes two options, one a highly streamlined approach which would ensure that the customs arrangement works as well as can be done with modern technology, and the other a new customs partnership with the EU. I heard what the noble Baronesses said about the fact that the Secretary of State has pointed out that there are problems in some of those, because there are always problems in finding new ways to deliver customs agreements, but they are not insuperable. That is why the pace of the negotiations has been deep and fast. Michel Barnier and we have made it clear that we are ready to make even more dates available for negotiations, if that is helpful, because we want to continue to make the progress that has already been achieved.

There is more to be done; that is absolutely right. The noble Baroness, Lady Hayter, referred to the Irish Minister saying that the Northern Ireland paper needs a lot of work. We agree, but we also say that we have made great progress, and Ireland agrees. We have received congratulations from Ireland about the progress that has been made. The summer papers are not vague. They provide a basis for negotiation, not for dictation.

The noble Baroness, Lady Hayter, asked about our position on a transitional agreement and implementation. Our position is set out clearly. From having carried out all the consultation with business—not only those businesses based here but international businesses—and consumers, we appreciate that there could be different lengths of time that different organisations and businesses need to achieve movement to a new relationship with the EU. Therefore, it is only by carrying out our negotiations with the European Union on our future relationship that we can finalise how long that implementation period would be. We have been clear that it will not go beyond the date of the next election.

With regard to the question asked by the noble Baroness, Lady Hayter, about publishing Treasury analysis, I say that it is not usually published. It is for government use, but I have made it clear before that we have carried out analysis of more than 50 sectors, and we will publish the list of what those sectors comprise. We continue to consult business and consumers, and I am very pleased that I am able to be part of that.

With regard to the devolved Administrations, we have throughout made it clear that it is essential that they are engaged at every stage. Whether it is the JMC—the next one is in October—person-to-person phone calls or visits, as carried out by my honourable friend Robin Walker this summer, they continue. He visited the Crown dependencies as well. It is not a matter of leaving it for meetings; it is a continuing conversation.

Throughout all this process we want to be in a position where, by setting out in our papers the implications of leaving the European Union but maintaining a strong trading relationship, we enable us and the EU 27 to avoid running negotiations twice. The noble Baroness, Lady Ludford, referred to this and asked whether this would mean that we would be staying in the customs union and the single market in the implementation period. That is not the answer to having a transition and implementation period. We are seeking a negotiation to see what that period would look like. It is does not mean that we stay in the single market with all the ceding to others the right to make decisions about our destiny.

I believe that the noble Baroness, Lady Ludford, said that we had challenged the principle of financial liabilities. No, we have not. In fact, we have maintained that we accept that there is not only a legal basis for the EU and us having to ensure that there are liabilities that need to be met but also a moral responsibility. My right honourable friend the Secretary of State made that absolutely clear in his press conference last week with Michel Barnier. But we do not hand the keys of the Treasury to the Commission. What we do, on a friendly but rigorous basis, is to work through with it, challenging the legal basis but also beyond that, the calculation of what should be paid and how and when. That, again, is woven into the nature of our future relationship with the European Union.

This has been a hard-working summer for all. I do not believe that Peers simply disappear into the ether and do nothing, and I know that many noble Lords have already read the papers and discussed them. I put on record my particular thanks to the noble Baronesses, Lady Hayter and Lady Ludford, and the Convenor of the Cross Benches, the noble and learned Lord, Lord Hope of Craighead, for agreeing to have conversations with me during the Summer Recess on these matters. It is only by doing that that we can deliver what this country needs.

[Lord Howell of Guildford (Con)]

My Lords, I very strongly welcome this Statement and in particular the stream of position papers that have come out throughout July. We have hardly had time to read all of them, the volume has been so great, but they set out extremely clearly—much more clearly than has been given credit in this House or elsewhere—the aims and objectives of Her Majesty’s Government in reaching constructive agreements with the rest of Europe. Would she agree in particular that the concept of customs partnership, which is developed in one of the recent papers, is really a vast improvement on being tied to the outdated customs union, which is a design of the 20th century and hardly fits into the modern pattern of trade at all—but which the Opposition have suddenly decided to cling to, for reasons which I cannot fully understand, although perhaps they can be explained?

I know some more position papers are coming, but I would ask for one more in particular which concentrates on the thoughts and contribution that Britain might make to the overall fundamental reform of European co-operation and the modernisation of the whole EU model, which is so obviously needed as the European continent as a whole faces colossal new challenges—notably, migration and refugees but many others as well. We need an entirely new pattern of co-operation to meet the 20th century in Europe, and through our deep and special relationship we can make that contribution. Could we have that set out as well as the other ideas that have already been presented to us?

[Baroness Anelay of St Johns]

My noble friend, as ever, speaks from great experience in these matters. I am very interested in his proposal about a paper looking at further EU reform and the new pattern of co-operation. I recall in our years in opposition together listening to him examining, in a very intellectual way, how we could change the way that the EU worked for the better of all. I am very interested and will certainly take that idea back.

I agree with my noble friend that a customs partnership is better than a customs union because a customs union means that one is not in a position to carry out trade deals. The Department for International Trade is ready, willing and very able to carry out those deals. Earlier on, the noble Baroness, Lady Hayter, seemed to think that it lacked capacity. However, since its formation, DIT has increased to a global workforce of more than 3,200. The trade policy group has quadrupled in size, and in June 2017 the department appointed a new chief trade negotiations adviser with over 25 years of experience. I was a little bit cheeky there, because what I really wanted to do is add to the record my thanks to my noble friend Lord Price. It has been an absolute joy to be able to work with him over the last year and a quarter. I was very keen on his appointment because before that, for one month only, I am pleased to say, I was Trade Minister while also doing the work at the Foreign and Commonwealth Office. He was super.

[Lord Hannay of Chiswick (CB)]

My Lords, I thank the noble Baroness for the Statement. It seems to me to show that her right honourable friend in the other place has learned the good old American advertising adage that, when you have a fairly dodgy product, you must accentuate the positive.

I have two questions. First, on the jurisdiction of the European Court of Justice, the paper that the Government have put on the table, which the noble Baroness referred to, is interesting. It is a piece of rather academic research on the possibilities, but does not say a single word about which are the Government’s preferences among those options. It invents a rather peculiar concept, which is “indirect jurisdiction”, if I understand it rightly, because I assume that the opposite of direct jurisdiction is indirect jurisdiction, which is apparently not so rebarbative as direct jurisdiction. Perhaps she could say something about the Government’s preferences among those choices.

Secondly, can the noble Baroness also say a little bit more about the implications of the Government’s support for the idea of some transitional period after March 2019 for the budgetary issues which are causing so much trouble now? It strikes me, not being all that arithmetically advanced, that in fact if we stayed among many of the workings of the European Union—not in the European Union—for a transitional period, that might make quite a big difference to the way that the financial issues would be handled. Perhaps she could confirm that that would be so.

[Baroness Anelay of St Johns]

My Lords, with regard to the first question about the Court of Justice of the European Union, we set out options without saying which we were going to come down firmly in favour of because we were putting forward options for discussion on the basis that, as I said earlier, in discussions you scope out where there can be some early agreement and build upon that. The noble Lord is of course right to raise the question about indirect jurisdiction. I would just add that there are areas where the Court of Justice of the European Union will continue to have some indirect jurisdiction after we leave the European Union if there is an agreement, as is currently developing, with regard to pending cases at the court itself. There is already built into the current structure of the withdrawal Bill and the negotiations some room where there would be indirect jurisdiction—but indirect jurisdiction is not something that would change the law in the United Kingdom or direct us how to change the law. Therein lies the difference.

With regard to a transitional period and the matter of budgetary issues, the multiannual financial framework of 2013 applies between 2014 and 2020. Therefore, what we are doing in challenging the paper which was put out by the European Union is to see whether there is a basis for saying that there are duties upon the UK to continue paying beyond 2019—whenever the date of leaving may be—and when there are not. Although I cannot at this stage answer the noble Lord directly, he raises the important issue that we are trying to flesh out in the way that we are not only challenging the basis on which the European Union has said that it has a legal basis for claiming contributions from this country to the EU but also saying that we need to look, during those negotiations, at the liabilities of the EU to the UK.

[Lord Davies of Stamford (Lab)]

David Davis was quoted earlier in the House, in the course of the Ireland debate this afternoon, as saying that the best practical outcome to which we could realistically aspire was hard Brexit. Did he say that, or something along those lines? If so, what did he mean by it and is that the position of the Government?

[Baroness Anelay of St Johns]

My Lords, I cannot say that I heard him say that, but I have heard him say time and again, as he did indeed on the Marr show on Sunday, quite simply that he does not go in for talking about “hard” Brexit or “soft” Brexit. Neither do I; we both want a successful one for this country and the EU.

[Lord Kerr of Kinlochard (CB)]

My Lords, picking up the Minister’s answer to the question from the noble Baroness, Lady Hayter, about the devolved Administrations, I think I heard her say that the JMC (EN), the ministerial committee set up with the devolved Administrations to co-ordinate Brexit positions, will meet next month. Is that true? I see the Minister nodding. Excellent; I am delighted to hear that. Why has it not met since February? Why was none of these 10 papers, these little essays that were sent out in the summer, seen in draft by the devolved Administrations? Why did they not see in draft the only serious negotiating paper that the Government have put forward, the interesting paper on citizens’ rights? Why are the Government so determined systematically to break the promises given to the devolved Administrations about close consultation? While she is at it, could the Minister please give us an example of a successful money negotiation where one of the parties refused to put forward any numbers?

[Baroness Anelay of St Johns]

My Lords, the EU has not put forward any numbers. This is a negotiation and, I would like to say, a good-natured one. Clearly there are occasions when people like to take certain positions in the press, but those who are negotiating know each other, work well with each other and want to come to a result that is good for all of us.

With regard to the devolved Administrations, there has been continuous conversation not only between Ministers but between officials, where so much of the detailed technical work can be done. That will continue. As soon as I was appointed, I attended one of the parallel meetings that happen with the devolved Administrations, the general committee that meets about Europe, not about the negotiations. It was a privilege to be able to talk to representatives of Scotland and Wales. It is of course a disappointment that we are not yet able to talk to representatives of Northern Ireland until the Executive issue is resolved.

[Lord Elystan-Morgan (CB)]

My Lords, the Minister has given the impression that there is complete amity between Her Majesty’s Government and the Welsh Assembly in relation to all aspects of Brexit. The reports emanating from Cardiff seem to differ. Indeed, the impression given by Mr Carwyn Jones, the First Minister for Wales, is that indeed Wales is treated with a lofty disdain in the matter. Those are my words, not his, but I think that is the description that he has clearly given. Who is right in this matter?

[Baroness Anelay of St Johns]

My Lords, no one in this Government would treat any member of the Welsh Government with lofty disdain, and no one has; indeed, the leader of the Welsh Government has not made such an accusation. The devolved Administrations may have a short history in the history of this country but it is a very honourable one. There are matters that are devolved to them that they carry out punctiliously. Sometimes of course the process can be bumpy, as in all political life, and they get taken to task by their voters. We recognise fully the importance of engaging with them, and we will continue to do so.

[Baroness Smith of Newnham (LD)]

My Lords, the Minister said, in reading out the Statement from the Secretary of State, that,

“we have been clear that the UK and the EU will have financial obligations to each other that will survive our exit from the EU. In July the Commission set out the EU position. We have a duty to our taxpayers to interrogate that position rigorously. That is what we did, line by line”.

The Minister suggested that the European Commission had not brought forward any numbers. What on earth has been discussed line by line? Is this all fantasy?

[Baroness Anelay of St Johns]

The noble Baroness is of course right to pursue the matter of what has been discussed. There was an over three-hour presentation by the UK technical group challenging line by line the treaty basis—the various regulations and directives, all of which were listed in the paper to which Monsieur Barnier referred in last week’s press conference, at which I believe I heard him say that the Commission had a link to the legal bases for all on that list. In fact that was not quite accurate; there are two entries in the published list where there is no reference. That is what we are testing; the Commission goes and looks at the exact wording of the treaty, but what we are saying is that one needs to look also at how that is applied to people as well. Still, we are also challenging the legal basis itself.

[Lord Green of Deddington (CB)]

My Lords, will the Minister confirm that the EU side is continuing to insist that EU citizens in the UK after Brexit should continue to have the same free-movement rights as they have now, guaranteed by the European Court of Justice? If so, does she recognise that this would put EU citizens in a position of having much better rights with regard to bringing spouses and independent relatives into the UK than British citizens? Do the Government believe that this could remotely be acceptable to the public, or indeed feasible?

[Baroness Anelay of St Johns]

The noble Lord is right in his presumption that the European Commission is currently saying that the EU citizens who remain here should have better rights regarding bringing family members in in future than would be available to British citizens. Again, this is an area where we are looking very carefully at the detail. We have tried to ensure that families who are here at the time of leaving can ensure that they continue to operate as a family. It is a matter of how you define that. That is what our paper was doing earlier this year. I can say to the noble Lord that we are looking carefully at these issues. It is important that, overall, people should be able to get on with their lives. My goodness, they can be so complicated. Our family structures are so different and etiolated these days. It takes a lot of technical detail to be able to discuss how to resolve a way forward for both sides.

[Lord Higgins (Con)]

My Lords, may I raise a technical economic, rather than political, point? It is a reality that a pound or a euro today is worth more than a pound or a euro in a year’s time. In looking at these complex financial arrangements regarding the exit payment and so on, we need to agree two things. First, what we are going to use in the negotiations as the base date? Secondly, and importantly, what is the rate of discount—the allowance for the time value of money? Unless we agree on those two points, the figures are going to be very difficult to reconcile.

[Baroness Anelay of St Johns]

My noble friend has made a very valid point, and he certainly has much better experience in these matters than I do. I am aware that the Treasury was well represented at the discussions last week, and I will ensure that his comments are brought to its attention. I am also aware that the paper issued by the European Commission required that any money paid by the UK to the EU should be in euros.

[Lord Campbell of Pittenweem (LD)]

My Lords, I cannot avoid the observation that “strong and stable” has now been replaced by “deep and special”. If deep and special is the objective then clearly foreign affairs, defence, security and the exchange of intelligence will be very important components of that relationship. I do not see any reference to those matters within the four corners of the Statement. Are they being discussed, and to what extent?

[Baroness Anelay of St Johns]

My Lords, the noble Lord is absolutely right. I assure him that this is not the sum total; papers will come out in future. Discussions have been held across government about how we will be able to take forward the matter of common defence and security policy in particular. We want to be able to show that not only do we want to continue the co-operation that we have but we want to strengthen and deepen it too. I hope the noble Lord will not have to wait too long to see some better information than I have given in that snapshot.

Brexit: Trade in Goods (EUC Report)

Baroness Anelay of St Johns Excerpts

Tuesday 18th July 2017 Lords Chamber

[The Minister of State, Department for Exiting the European Union (Baroness Anelay of St Johns) (Con)]

My Lords, it is indeed a privilege to respond to the debate today on the Select Committee’s report, Brexit: Trade in Goods, and to put on record my appreciation for the work of the External Affairs Sub-Committee. I commend my noble friend Lady Verma on her expert chairing of the committee.

The report provides us with a detailed, instructive and expert analysis of the key opportunities and issues concerning trade in goods which arise from the United Kingdom’s exit from the EU. I am keenly aware of the value which the Select Committee’s experience brings to the work of this Government and we value the rigour of its scrutiny. The committee notes that:

“Minimising disruption to trade between the UK and the EU-27 after Brexit is crucial to the UK’s future prosperity”.


That objective is at the heart of our negotiations to leave the EU.

My predecessor, my noble friend Lord Bridges, appeared before the committee, as did my noble friend Lord Price from the Department for International Trade. As was referred to earlier, the Secretary of State for Exiting the European Union gave evidence to the EU Committee last week, where he restated his commitment for our department to be transparent in our dealings with Parliament. Therefore, I understand the frustrations expressed by some noble Lords today, who said that a response to this report should be before the House. Of course, as a Minister, I would prefer to present that to the House but purdah is a serious matter; it is not an excuse. It goes to the heart of what happens in government and governance as a general election is called. I feel frustrated that I have not been able to present the result of our discussions but they have been ongoing. I have seen a draft response and give a commitment to the House to get that draft into final form as soon as is humanly possible, because that is the right thing to do. I appreciate that it is not only my department that has been in this position—the House heard similar reasons being given yesterday. It is not satisfactory but it is the real world.

We have made it clear that we will pursue a deep and special partnership with the EU which encompasses both economic and security co-operation. That includes caring not only about business and its success but about consumers. If they do not feel secure, businesses do not succeed either. The noble Baroness, Lady Hayter, was absolutely right to draw attention to the importance of consumers.

As part of our partnership, we will pursue a bold and ambitious free trade agreement that is of greater scope and ambition than any such existing agreement. We want the UK to have the greatest possible tariff-free and barrier-free trade in goods and services with our European neighbours and for that cross-border trade to be as frictionless as possible. We realise—and the committee is right to point out—that there are different ways of creating friction, and we are trying to reduce as many of those as possible.

I will now address some of the main issues raised today as they relate to the committee’s excellent report. As the report rightly points out, the EU is an important trading partner in goods for the UK. However, this is a relationship from which both parties benefit. It sometimes seems to have escaped the media’s attention that the EU benefits, as do we. This is not just a one-sided negotiation. The EU is the UK’s largest export market, but the UK is also the largest goods export market for the EU 27 taken as a whole.

The UK is a major export market for important sectors of the EU economy, including in manufactured and other goods, as noble Lords have said, such as automotives, energy, food and drink, chemicals, pharmaceuticals and agriculture. These sectors employ millions of people across Europe. It is therefore in the interests of both the EU and the UK for our deeply integrated trade and economic relationship to be maintained after we leave the EU.

The discussions that started last month have been and continue to be constructive. A little bit of fun has been made in the press about the fact that my right honourable friend the Secretary of State was in Brussels for perhaps less time than usual, and how that may matter—but no: it can be usual in G20 and G7 discussions, where there is the same brief period at the beginning. I will not say that he is the Terminator, but just watch him—he will be back.

My noble friend Lady Verma and other noble Lords were absolutely right to raise the importance of what progress we have made in consulting business. There has been more of a public aspect to this; 10 days ago we held an event at Chevening, when 30 or 35 leaders of a range of businesses, including automotives, were there to give us the benefit of their wisdom—and, my goodness me, they did. It was a superb event, very constructive and very much something from which we have learned, and we can now build on that. In addition, before I got to the department, my colleagues had carried out over 250 engagements with people across business. That is just my department—it is happening in other departments, too. We intend to continue that with round tables and a variety of ways of engaging with people so that their time is well used when we listen and learn from them.

I was asked about the research and analysis we have been doing. Parliament of course agreed that we should not publish anything that would undermine the Government’s ability to negotiate the best deal for Britain. However, with respect to the fact that we have been looking in detail at more than 50 sectors, as well as areas of cross-cutting regulations and looking at the economy, I can confirm that we will shortly publish that list of the sectors that have been examined.

Thinking of the noble Baroness, Lady Smith of Newnham, I say that we are also carrying out a programme of rigorous and extensive analytical work to inform our understanding of how exiting the EU will affect the UK’s domestic policies and framework. Of course, it is not standard practice to provide an ongoing commentary on internal analytical work. However, as she will see as we publish position papers and carry out negotiations, we will be as transparent as we can be. We have also undertaken—and will fulfil the undertaking—to provide Parliament with information as soon as it reaches the European Parliament. In other words, we will not let the European Parliament get there first while we lag behind.

Of course, noble Lords were right to talk about non-tariff barriers to trade, which was a vital part of this report. I found it particularly practical in the analysis carried out by the committee. Whether on regulatory standards or regulatory co-operation, clearly I agree with the committee’s report, which notes that non-tariff barriers can pose as significant or even greater a barrier as tariffs, to trade in goods. We are therefore clear that we of course want to see zero tariffs on trade in goods as far as is possible and to minimise the regulatory and market access barriers for both goods and services, and we recognise the importance of minimising non-tariff barriers to trade.

There are existing precedents for how this can be done. For example, on non-tariff barriers, many countries have authorised economic operator schemes—I know that the committee took evidence on this—which means that exporters with supply chains that are demonstrably secure are subject to fewer and less stringent checks at the border. That is just one existing precedent. Clearly, as noble Lords will have realised during the debate, the exact form of our customs arrangement with the EU is subject to our negotiation.

My noble friend Lady Verma talked in particular about regulatory co-operation. We are certainly advancing with our plans to put forward our ideas on how we can have a bespoke deal with the EU on regulatory co-operation, which would indeed include mechanisms for dispute resolution.

To go more broadly, there were concerns about timing and about how we could perhaps fail to get on with the work of making agreements with third parties outside the European Union. We will stick absolutely to the rules of membership of the EU. We gave that undertaking—we will keep it. But in complying with our EU law obligations, including the duty of sincere co-operation, we can still do much that is technical and preparatory in discussions with others. That is what the DIT has been doing. It has had a number of trade working groups or discussions, including, for example, with the Gulf Cooperation Council and with Korea.

My noble friend Lady Verma quite rightly asked whether we are convinced that the resources and the expertise are enough at DExEU and the DIT to be able to carry this business forward. My noble friend Lady Sugg answered questions on the DIT at Question Time earlier today. She explained that at the DIT nearly 1,500 highly qualified members of its staff are now overseas. They are based in 109 countries, they deliver on highly ambitious targets for export investment, and they are building up on that expertise.

In considering, too, the impact of leaving the European Union on the UK as a whole, I listened very carefully indeed to the noble Baronesses, Lady Quin and Lady Armstrong of Hill Top, who made the crucial point that we have to focus not only on the devolved Administrations but on the regions. So much has been said that was, rightly, concerned about what role the devolved Administrations will play. However, it is just as crucial that we look at all the manufacturing industries around our country—we have a proud history there and have gone through some difficult challenges. That is being done—it is already taking place—but we will focus more on it this summer. For example, the Minister in the other place, my honourable friend Steve Baker, will in particular be doing that this summer, and his priority is in fact the north-east.

It is right that the industrial strategy we pursue should improve living standards for all, not just for some. On a different issue, although it is important for the living standards of those who work in our industries, my noble friends Lord Leigh of Hurley and Lady Byford both raised the importance of the availability of overseas workers for agriculture. I try to avoid using the term “migrant workers” because I appreciate that it can be offensive to our friends and colleagues across Europe. This morning I had a very helpful conversation with the new Romanian Minister for Europe about this very issue. I reassured him about how seriously we take the contribution by workers from overseas to all our industries here, and I particularly mentioned seasonal workers.

I do not have time to go into great detail now but I can say that just last month, on 28 June, the Minister in this House, my noble friend Lord Gardiner, answered questions about foreign workers in agriculture and made it clear that we are having formal discussions on that subject. These matters have been discussed by the Secretary of State and Minister of State in Defra and key stakeholders over recent weeks. My noble friend said that the Government will commission advice from the Migration Advisory Committee and that, working with business and communities, we will develop a future migration system that works for all and meets the labour market in this sector. I am very much reminded that we had agreements with Romania on seasonal working before we entered the European Union. We can make these things work with good will, and we have good will.

I was asked by the noble Baroness, Lady Hayter, in particular, to make the period of implementation a priority when considering how to frame our negotiations. She was right to ask that, as were other noble Lords around the House who raised it. I mention, for example, my noble friends Lady Verma, Lord Livingston and Lord Horam, the noble Lord, Lord Hain, and the noble Baroness, Lady Smith of Newnham. Others also raised it but those noble Lords particularly focused on it. We could talk about semantics and about what we mean by “transition” or “implementation”. When I was at Chevening listening to the business leaders, I realised that they too applied different meanings to the same words. Therefore, as a rather practical person, in my breakout group with them I wanted to find out what it meant for their businesses and how they could best operate. We can learn from that, and certainly we will consider what an implementation agreement might look like.

We have been clear about the timing. We are more optimistic than some in this House, more determined than perhaps some in this House realise, and even more energetic than some might hope we are. We are clear that we want to reach an agreement about our future partnership by the time the two-year Article 50 process has concluded. That is what you should do when going into a negotiation. You should go in with drive and determination, and you do that because it is the right thing to do.

As many noble Lords have said, we start from a unique position—that of close regulatory alignment, trust in the institutions, and a spirit of co-operation that stretches back decades. As I reached a milestone just yesterday, I thought about how much of my life in politics had been taken up in discussing our relationship with the European Union, and much of it has been very positive. I even arranged for a partnership with the CDU in one part of Germany. Therefore, I have seen it from the inside and I know that it can work. However, when I arranged that partnership we were not in the EU, so partnership can work even when you are not in the EU.

We are confident that we can reach an agreement in the period set out in the treaty but we believe that, from that moment on, a phased period of implementation—in which the UK, the EU institutions and member states prepare for the new relationship that will exist between us—will be in our mutual interest. That is what it is about: it is about getting a nexus around that mutual interest. An implementation period will help investors, businesses and citizens in both the UK and the EU to adjust to the new arrangements in a smooth and orderly way, and it will help to minimise any unnecessary disruption. It is in nobody’s interests for there to be disruption in Europe or here. We are all looking for a constructive response.

I know that some think that the implementation period might mean some kind of membership of the EEA. At this stage, I simply say that the reason we fall out of the EEA structurally is that, when we leave the European Union, we have to fall outside the geographic scope of that agreement. The geographic scope of the EEA agreement is the EU and a number of other countries which have joined up separately. We came into scope because it was part of the EU; we did not enter it separately. However, I have listened to what noble Lords have said. We are trying to achieve the same thing: we want to find an implementation period and interim agreements from the negotiations that will help this country to succeed and achieve prosperity for all.

I was specifically asked by my noble friend Lady Verma about progress on the new customs system. We are undertaking an extensive consultation to understand the needs of service users to ensure that the new system and linked processes are built in accordance with users’ needs. I reassure my noble friend that for the migration phase HMRC is planning for the two systems to operate in tandem at the border. That will provide extra contingency, if it is ever needed, to ensure that the UK has a robust border declarations service. HMRC is clear that CDS is on track for delivery by January 2019.

Perhaps I may refer briefly to the point made by the noble Earl, Lord Sandwich, about the impact on the least developed countries. He quoted my right honourable friend Liam Fox at the Department for International Trade, who is supported in his objective across government. Priti Patel, the Secretary of State at DfID, made it clear that building a more prosperous world and supporting our long-term economic security is firmly in our interests. She said:

“Helping developing countries harness the formidable power of trade means we are not only creating trading partners of the future for UK businesses, but supporting jobs at home too”.


It is the right thing to do.

This has been a wide-ranging and important debate. I look forward to others of this nature as we progress through the negotiating period. I am particularly grateful to my noble friend Lord Howell of Guildford for reminding us that in the modern world we have to see interconnectivity not just in business but worldwide. He was right about business: goods and services are intertwined, and we remember that as we plan for our future.

Brexit: United Kingdom-European Union Parliamentary Assembly

Baroness Anelay of St Johns Excerpts

Wednesday 12th July 2017 Lords Chamber

[Lord Soley]

To ask Her Majesty’s Government whether, as part of their Brexit negotiations, they intend to propose the formation of a United Kingdom–European Union joint parliamentary assembly.

[The Minister of State, Department for Exiting the European Union (Baroness Anelay of St Johns) (Con)]

My Lords, European parliamentary rules of procedure state that joint parliamentary committees can be created only with countries that have an association agreement with the EU or pre-accession member states. While the United Kingdom is a member of the European Union, the Government therefore have no plans to create an assembly. Parliament should continue to engage through existing channels. Once we have left the EU, it will be for Parliament to consider how it wishes to engage.

[Lord Soley (Lab)]

I am grateful for that Answer, and I am aware of the problem at the European Parliament end. I think that everyone agrees that, following Brexit, the EU and the UK will need a very close and strong relationship both politically and economically. In that respect, it would be very useful for everyone for the EU and UK Parliaments to have a close relationship—not dissimilar to the British-Irish Parliamentary Assembly, which was set up with a grant of £1.5 million from the Treasury. That is a useful model. Do the Government support such an approach?

[Baroness Anelay of St Johns]

My Lords, the noble Lord makes a very important point. Who could but wish that after we leave the European Union, we are able to continue the strength of our relationship with our colleagues across Europe at not only governmental but parliamentary level? The noble Lord referred to the British-Irish assembly. The House may wish to know that that assembly and three other parliamentary groups—the CPA UK, the British Group of the Inter-Parliamentary Union and the British-American Parliamentary Group—are funded by a grant from the two Houses. The funding which had been provided by Her Majesty’s Government was transferred to Parliament some years ago, so it is clearly a matter for Parliament, and I think that a lot of voices here might beat a path to the door of the relevant authorities.

[Lord Garel-Jones (Con)]

My Lords, does the Minister agree that although the Question of the noble Lord, Lord Soley, is quite legitimate, in a complex negotiation such as Brexit, involving 27 nation states and where all kinds of difficult compromises will have to be made, the less that the Government have to reveal in advance about their negotiating position, the better?

[Baroness Anelay of St Johns]

Absolutely right, my Lords, but in defence of the noble Lord, Lord Soley—although my goodness, he does not need me to defend him—it is a fact that the Government simply cannot under the rules of the European Parliament take any action on this specific matter. As for the generality of my noble friend’s comments: absolutely right.

[Baroness Ludford (LD)]

My Lords, thoroughly disagreeing with the previous question, is not the European Parliament, however much mocked in this country, showing the mother of Parliaments just what parliamentary control looks like in the modern era? Its ability to veto the Brexit deal means that the other institutions have to front-load information to the Parliament, so there have been seven position papers, as against one from our Government. Unfortunately, parliamentary scrutiny in the Westminster Parliament is still rather unstructured, despite many promises. We have things to learn from the European Parliament.

[Baroness Anelay of St Johns]

My Lords, it is recognised by countries around the world where I have visited as a Minister in the Foreign Office that other Parliaments have much to learn from the strength of scrutiny in this House and another place, and indeed, through our Select Committees, as well as the way in which the Chambers work. With regard to scrutiny of papers, I believe that my right honourable friend the Secretary of State made it clear to the European Union Select Committee yesterday that further position papers are expected shortly.

[Lord Hylton (CB)]

My Lords, I am going to speak from a non-party point of view. Will the Government consider bringing together the existing assemblies of the Council of Europe and the OSCE with the kind of assembly that the noble Lord, Lord Soley, proposes? Would this not enable much better consideration of issues affecting the whole of Europe?

[Baroness Anelay of St Johns]

My Lords, the latter point about matters affecting the wider geographical range of Europe is an interesting one. It is not for the Government to intervene with regard to rolling up existing parliamentary bodies. We have colleagues across the House who have made a great impact in the parliamentary assemblies of both the Council of Europe and the OSCE, particularly recently. I commend those who attended because they stuck the course, whereas some representatives from other countries left a wee bit early.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I was in Rome, as it happened—where I was introduced to tiramisu—when there was a “parliament of parliaments”: a gathering of the European Parliament with representatives of the then 15 member states during the process of the intergovernmental conferences. Parliamentarians at that stage were about to vote on what was emerging from those conferences. We now face similar complicated intergovernmental negotiations in which, in due course, as the noble Baroness says, both we and the European Parliament will vote on ratification. Although I appreciate that it is not a governmental issue, could the Minister use her best efforts with some of her friends to see whether there is a way of facilitating early discussions which would be helpful later in the process when both they and we come to vote?

[Baroness Anelay of St Johns]

My Lords, the noble Baroness makes an extremely valid point: that better exchange of information leads to better understanding in negotiations. That is why, as Ministers, we have not only engaged thoroughly with our counterparts around the European Union but encouraged Select Committee visits. I know that those visits have been thorough, and if they have been to the European Parliament, they have been supported by the secretariat and the European Parliament. The worst thing is for newspaper articles to appear giving misleading information, not necessarily intentionally but just because we have not had the opportunity to discuss with colleagues the real issues.

[Lord Tebbit (Con)]

My Lords, does my noble friend agree, on the proposal of the noble Lord, Lord Soley, that most of us can recognise what the Americans call a boondoggle when we see one? Secondly, would she be so kind as to instruct the Liberal Benches that this Parliament in this country can dismiss the Executive? Can the European Parliament dismiss the Executive?

[Lord Tebbit]

I do not think there is any record of it yet. It can sack the Commission? Oh, no.

[Baroness Anelay of St Johns]

My Lords, I find it very interesting that when I have travelled around the world as a Minister I have met Ministers who have never appeared in Parliament and never had to answer questions in Parliament. For me, it is a vital part of parliamentary accountability. But there are also occasions, I know as a Member of Parliament, when as a Minister you could get your finger caught in the nut and the screw.

Brexit: EU Institution Relocations

Baroness Anelay of St Johns Excerpts

Thursday 6th July 2017 Lords Chamber

[Lord Harrison]

To ask Her Majesty’s Government, in the light of Brexit, what assessment they have made of the impact on jobs and the economy of any relocations away from the United Kingdom of European Union institutions based in this country, such as the European Banking Authority.

[The Minister of State, Department for Exiting the European Union (Baroness Anelay of St Johns) (Con)]

My Lords, in the negotiations, we will discuss with the European Union and its bodies how best to continue economic co-operation. It is in the interests of both the UK and the EU to secure a mutually beneficial agreement for business and citizens across Europe.

[Lord Harrison (Lab)]

My Lords, according to the briefing paper from the House of Commons, the hard Brexit expulsion of the European Medicines Agency and the European Banking Authority will cost us jobs, tax revenues and personnel with deep knowledge of banking and medicines, and will incur the costs of this relocation to another country. Could the Minister detail the bright, sunlit uplands for opportunity foreseen by Brexiteers for this dark and wilful act of self-harm?

[Baroness Anelay of St Johns]

My Lords, as this country goes into the light of being able to decide its own future and laws, we will continue to press hard for the stability and the economy we have had heretofore. That also means we will press hard to continue the safety of products in the medical and life sciences world. The locations of agencies in themselves do not determine the future health of our economy or the safety of our products. What will determine that is achieving that deep and special relationship with the European Union. That is what we shall do.

[Baroness Ludford (LD)]

My Lords, is it not apparent to all except extreme Brexiteers that the retention of a decent trade relationship with the EU is dependent on regulatory co-operation? That means a role for EU law and the European Court of Justice. Certainly, Jeremy Hunt and Greg Clark recognised this in the case of pharmaceuticals. When will the Government put the economic interests of this country before an absurd fetish and prejudice against European judges?

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[Baroness Anelay of St Johns]

My Lords, I would not know anything about fetishes. I certainly know quite a lot more about the need to ensure that this House is well informed. That is what I shall seek to do about the way the Government engage in negotiations. The noble Baroness raised an important point: we must ensure that we have security and safety in the healthcare system. That is exactly what my right honourable friends Greg Clark and Jeremy Hunt were doing this week when they set out the principles on which we will work with the regulatory system across Europe and the role that we can play there. The precise description of that is yet to come but they were not saying that it would be the European Court of Justice that made the ultimate decision. Clearly, regulations are important for safety.

[Lord Tebbit (Con)]

My Lords, does my noble friend not find it as disappointing as I do, as an indication of the failure of our education system, that so many people, even in this House, are utterly ignorant of the fact that the United Kingdom ran its own affairs very successfully for a very long time when most of Europe was in a constant turmoil of revolutions, coups and the like? Of course we can manage on our own. We do not need their court of justice to educate us in justice.

[Baroness Anelay of St Johns]

My Lords, as a history teacher, I certainly learned that this country has a proud history and one that we should recall. It is one that our young people today can carry forward because they have great ability, and we have the duty to ensure that their great ability can be put to best use for this country.

[Lord Grocott (Lab)]

My Lords, it would assist all sides of the House if the Minister provided a glossary of terms relating to Brexit. My noble friend referred to hard Brexit, the Liberal Democrats referred to brutal Brexit—I am sorry, extreme Brexit—and we have heard of the hardest of hard Brexits, most extreme Brexit and soft Brexit. I would really like to know what they all are, and could the Minister explain to the House the difference between soft Brexit and remaining in the European Union?

[Baroness Anelay of St Johns]

My Lords, as ever, the noble Lord, Lord Grocott, provides us with a sensible approach to this. Remember, he was a really great Chief Whip. I may no longer be a government Chief Whip, but you recognise a good one when you see one. The serious issue is that I call on those who use these terms to define them. I talk about a successful Brexit, and that is the one we are negotiating.

[Lord Dykes (CB)]

My Lords, bearing in mind that the reality for the Government is that the Brexit mandate effectively ended with the general election on 8 June and no longer exists, as well as keeping the agencies in London, would it not be a good idea to listen to the increasing advice from all sections of the population that we remain a member of the European Union?

[Baroness Anelay of St Johns]

No, my Lords. The people decided.

[Lord Hamilton of Epsom (Con)]

My Lords, is it not rather early in the day to start anticipating what the outcome of our negotiations with the EU is going to be? It is inevitable that at this point, both sides will be taking more extreme positions. Compromises will eventually be reached, and there is no reason to believe that they will not be for the benefit of both the EU and the United Kingdom.

[Baroness Anelay of St Johns]

I agree entirely with my noble friend.

[Lord Anderson of Swansea (Lab)]

My Lords, how are we best to construe the fact that two Cabinet Ministers felt the need to write their joint letter to the Financial Times? That is probably unprecedented. Does it not mean that there is a certain concern among the more moderate members about the harsh line of the more extreme members? For example, regarding the licensing suggestion with the European pharmaceutical authorities, does it not mean that we have not given up altogether our hope that the European Medicines Agency will remain at Canary Wharf?

[Baroness Anelay of St Johns]

On removal, the European Commission has made it clear that it intends to move the two agencies. That is a decision for the EU to make. Regarding the letter written by my right honourable friends, who could not but welcome the fact that they refer to the importance of placing patient safety at the heart of regulation, providing certainty and long-term stability to the market and building on the UK’s legacy as a leader in medical innovation? There is entire Cabinet agreement on that.

[Lord Kilclooney (CB)]

My Lords, does the Minister welcome the decision by the European Parliament last night—which was not attended by just 30 Members—by 374 to 66 votes to reject the idea from Sinn Fein and the Irish Government that Northern Ireland should be given special status separate from Great Britain?

[Baroness Anelay of St Johns]

My Lords, I certainly noted the discussion in the European Parliament last night. The House will know that the Government’s position, taken in the speech given by my right honourable friend the Prime Minister at Lancaster House, is very clearly that there is a special relationship. We have historic ties with Ireland, and we intend to maintain the common travel area.

Brexit

Baroness Anelay of St Johns Excerpts

Tuesday 4th July 2017 Lords Chamber

[Baroness Ludford]

To ask Her Majesty’s Government, in the light of their 2017 manifesto commitments, what are their criteria and specific objectives for Brexit; and how they intend to forge a deep and special partnership with the European Union.

[The Minister of State, Department for Exiting the European Union (Baroness Anelay of St Johns) (Con)]

My Lords, the objectives for our partnership with the European Union are as the Prime Minister set out in her Lancaster House speech on 17 January, the White Paper of 2 February and the Article 50 letter. Supporting our exit from the European Union is a cross-Whitehall effort. We are conducting negotiations in a constructive manner to ensure a strong and prosperous Europe with the UK as its closest partner.

[Baroness Ludford (LD)]

I thank the Minister for that reply. The Government have reportedly dropped their cake-and-eat-it approach to Brexit negotiations, but freelancing by individual Ministers is creating an even more dizzying pick-and-mix confusion. The fisheries, financial services and pharma sectors are getting this treatment as well as cars. What, if any, coherent partnership framework—the word mentioned in the manifesto and the Queen’s Speech—is all this fitting into? Is the Prime Minister actually in charge?

[Baroness Anelay of St Johns]

My Lords, yes, she is, which is why she has formed a series of Cabinet sub-committees to consider the full range of issues—some of the crucial issues, as the noble Baroness pointed out, that this country needs to address as we leave the European Union and as we look at the implementation period. Our overall objective is to ensure that there is no cliff edge and that we have security for all those practising business, whether agribusiness or financial services. That is why this is a true cross-Whitehall effort. It is not easy, and it is not necessarily the way Whitehall has worked in the past—but it does now.

[Lord Cormack (Con)]

My Lords, in order to put one misused phrase to flight, does my noble friend agree that it is perfectly possible to have your cake and eat it but that you cannot eat your cake and have it?

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[Baroness Anelay of St Johns]

My noble friend has a real way with words. I agree.

[Lord Kerr of Kinlochard (CB)]

My Lords, can the Minister tell the House why the Government have not put forward their proposals for the framework, as required by Article 50, for the future relationship, and when they will get round to doing so?

[Baroness Anelay of St Johns]

My Lords, we have set out our framework from the point of view of the objectives in, for example, the Prime Minister’s Lancaster House speech, repeated in the White Paper. That is the framework to which we are working and the one which our colleagues in the European Commission see as part of our negotiations. We have already had one round of those negotiations, and are looking forward to the second, starting on 17 July.

[Lord Hain (Lab)]

My Lords, how many EU nationals in the UK have the Home Office removed under article 14.4(b) of directive 2004/38 because they did not satisfy its work requirements? Does not this provision enable EU nationals not in work to be returned home while the UK still remains in the single market and the customs union?

[Baroness Anelay of St Johns]

My Lords, I will certainly seek advice from the Home Office on the specific statistic, if that is to hand, but the noble Lord quite rightly points to all the issues that need to be considered as we work through our offer on citizens’ rights—the rights of EU citizens who are here and have played a very valuable role in our economy but also the rights of UK citizens who live overseas. Our recent paper on this seeks to address some of those issues. These are the matters that we are discussing, not just at headline level, but in minute detail, with our colleagues in the Commission.

[Lord Wigley (PC)]

My Lords, is it possible to negotiate an agreement to facilitate barrier-free single market participation on the basis of allowing the free movement of working people taking up specific jobs? Would that be within the Government’s negotiating criteria?

[Baroness Anelay of St Johns]

My Lords, the negotiating framework looks very carefully at how we can ensure that we will continue to be able to recruit the brightest and best here and that those who have employment in specific fields where they need to go across borders are able to do so. That underwrote of course some of the paper on citizens’ rights which we published recently. The noble Lord raises an issue which goes to the heart of all the considerations about how we then protect employment rights. Protection of employments rights was one of those 12 principles which were set out so clearly by the Prime Minister.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I am delighted that the noble Baroness has talked about partnership. Does she agree with her DExEU colleague, Steve Baker, that the EU is an “obstacle” to world peace and “incompatible” with a free society? Is that what her department thinks?

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[Baroness Anelay of St Johns]

My Lords, I have to say I am thoroughly enjoying working with my colleague Steve Baker. He brings a different perspective on many matters, but all of them constructively, as a Minister. It is a real pleasure to work in a department where everyone is focused on one thing, and one thing only—getting the best agreement for the UK and the European Union, because that is the one that will work.

[Lord Hannay of Chiswick (CB)]

My Lords, does the Minister not agree that it is a little anomalous that so far the only detailed paper we have from our side is that published last week on status, whereas on the European side there are a plethora of papers putting forward their views? Does she not think that it would be desirable that on for example scientific co-operation, justice and home affairs, and foreign policy and security issues, some piece of paper could emerge into the light of day setting out the British Government’s extremely positive objectives in these fields, and does she not feel that that would help to create a positive atmosphere in the negotiations?

[Baroness Anelay of St Johns]

My Lords, the noble Lord is right to point out that it is important to be able to set out issues such as that, but we must do so in a way that is in sync with our negotiations across Europe. Further papers were released by the European Commission just at the end of last week, which I have read, and we will be responding to those shortly. I hope we will then be able to share those more widely.

[Baroness Smith of Newnham (LD)]

My Lords, in response to the International Relations Committee’s Middle East report, where we raised the issue of the importance of bilateral relations with our EU partners, the Government said that,

“until the Government’s negotiations on exiting the EU have concluded, there will be no decisions on specific post-Brexit arrangements”.

Is there any evidence that the Government have a clue where they are going? Should we be worried? Is Steve Baker helping?

[Baroness Anelay of St Johns]

My Lords, we work closely with the Foreign and Commonwealth Office—my own department until recently—and clearly the Ministers there look very seriously at this issue, particularly at a time of the remembrance of the Balfour declaration. I assure the noble Baroness that the security issues across that region are crucial to us, which is why the Prime Minister made it clear that security co-operation must be a vital part not only of the first tranche of discussions, which they are, but of the agreement to be reached.