Brexit: Deal or No Deal (European Union Committee Report)

Debate between Baroness Falkner of Margravine and Lord Hamilton of Epsom

Tuesday 16th January 2018 Lords Chamber

[Lord Hamilton of Epsom]

That is one way of looking at the balance between the United Kingdom and the EU. But at the same time, I think the noble Lord, Lord Davies, would accept that if we are putting at risk 10,000 jobs in the United Kingdom, we are putting at risk 15,000 jobs in the EU; if we are putting at risk 100,000 jobs in the United Kingdom, we are putting at risk 150,000 in the EU. There are two ways of looking at this, and it would have been a good idea if the committee had also called some Commissioner—I am sure there is one—responsible for employment in the EU and asked how they would react to seeing very large numbers of their own citizens made unemployed by the fact that they cannot reach a deal with the United Kingdom. Would that not have been helpful? The noble Lord, Lord Davies, would be the first to accept that EU levels of unemployment are running at between 8% and 9% at the moment, compared with just over 4% in this country, so the EU has double the rate of unemployment that we do. You would have thought that in those circumstances they would think the jobs of people in the EU were quite important and would not want to sacrifice them by having no deal with the United Kingdom. It is important to ask that question.

[Baroness Falkner of Margravine (LD)]

One of the problems with the argument being made by the noble Lord, Lord Hamilton, is that he sees the EU 27 as one unitary decision-making body. He may be surprised to hear that employment law is not an EU competence but a member state competence. I am a member of the committee, and the answer to his question about calling German car manufacturers is that we did not need to do it, for two reasons. First, we know what German car manufacturers say: the German chamber of commerce and the German employers’ federation both came out early and told the German Government that they stood behind their negotiating position and would not seek exceptional deals. So we knew the answer to that, which is why we did not call them. Secondly, when he is talking about these figures, the noble Lord also needs to think that there are 27 member states, not one.

[Lord Hamilton of Epsom]

Certainly, there are 27 member states, but you could produce that argument for not calling anybody to give any evidence whatever to the committee. You could say, “We know what their position is anyway”. Come on, this is ridiculous! You have to call evidence from people just to have their position confirmed. You can also cross-question them and ask them what they think the significance would be for car sales to this country if a 10% tariff barrier was imposed under WTO regulations. They would tell you whether they thought their turnover was going to go up or down, or whether they thought they were going to sell more or fewer cars, and they might be able to tell you about the impact it would have on employment in Stuttgart. The noble Baroness is making an absolutely ridiculous claim, if she does not mind me saying so: that you do not call somebody because you know what their views are already.

The other thing wrong with the committee’s findings on all this is that at the end of the day we have only one ace card in our hand: if we reach no deal with the EU, we stop paying. We are under no obligation whatsoever to pay towards the EU’s budget. There are perhaps a few side-effects on pensions and things, but the main payment would stop on the day that we actually reached no deal. As we know, the EU is absolutely obsessed with getting hold of our money because it really does not know what it is going to do. Juncker has already made noises about others among the 27 nations of the EU contributing more. I will tell your Lordships what is going to happen: all the poor countries of the EU are going to say Germany should pay because it is the richest country, so the Germans are not very keen on this either.

It therefore strikes me that if we completely discard the idea of no deal we are completely undermining our negotiating position. On top of that, it is not inconceivable that we may be unable to reach a deal. On both those counts, it is very important that we actually work on no deal and take steps to provide more customs posts and generally put in the logistics that would be needed for no deal. If we do not, we are going to be in a very weak position in negotiating with the EU. If we want a good deal, we have to have the threat of no deal permanently there. If anyone is actually saying that under no circumstances should we entertain the idea of no deal—indeed, there are people in the Government saying it—they are guilty of undermining our negotiating position with the EU.

The other day a German ex-ambassador called Mr Thomas Matussek said the EU’s position on the negotiations is that it wants as soft a Brexit as possible but at the same time, it does not want to encourage anyone else to go down the same route as the UK. Germans, of course, believe in the two-headed eagles that have the great ability to face in opposite directions at the same time. When you come to think of it, those two statements are completely contradictory. My best guess as to what is going to happen is that we are going to reach heads of agreement terms by October or November this year, and then there will be a two-year transition period while the detailed negotiations go on.

I hope we have learned by now that dealing with the EU is actually very difficult. We started off these negotiations rather like someone playing tennis on a vicarage lawn, lobbing soft furry balls over the net. Unfortunately, what came back were cricket balls hurled with great vehemence and accuracy and designed to injure and break bones. I hope we have learned by now that negotiating with the EU is not going to be easy in any circumstances. We must therefore keep our position as carefully as possible, with options. If we do not have options, we are going to end up with a very bad deal.

That transition period is going to be the start of some very difficult negotiations; whatever deal is reached by October or November of this year may be much easier. So we must keep “no deal” as an option if we want to have a good deal, and anyone who suggests otherwise is undermining this Government’s negotiating position.

European Union Bill

Debate between Baroness Falkner of Margravine and Lord Hamilton of Epsom

Wednesday 25th May 2011 Lords Chamber

[Lord Hamilton of Epsom]

My Lords, I, too, would like to address the question of sunset clauses, but first I will pick up on one or two comments by my noble friend Lord Taverne. He seemed to suggest that we would be put at enormous disadvantage, because there would be negotiations in the EU on certain things that were to the United Kingdom’s advantage but which the referendum lock would somehow stop us agreeing to. This suggests that it is impossible to win a referendum on an issue that is to the advantage of the United Kingdom. I do not quite understand the logic of that. It suggests either that the British people are extraordinarily stupid or that somehow there are no powers of persuasion to tell the people of this country that when things are to their advantage they should vote for them—a rather depressing attitude.

To return to the sunset clauses, and indeed to the points that were raised by the noble Lord, Lord Kerr, I voted in favour of the amendment moved by the noble Lord, Lord Pannick, that introduced a sunset clause for the five-year fixed Parliament. I did that because it struck me that it was a matter of convenience to the coalition to have a five-year fixed Parliament. If that is what was wanted, and if the Liberal Democrats wanted somehow to organise life so that they would not be tipped out of bed by Prime Minister Cameron, who would then call an early election, that was up to them and it was surely something pertinent to this coalition Government and for their duration. I did not quite see why that should tie future Parliaments to adhering to the timescale of a five-year fixed Parliament. That was entirely different.

[Baroness Falkner of Margravine]

I imagine that since the noble Lord sees the Liberal Democrats behind attempts to tie anyone’s hands through the use of sunset clauses, he has forgotten that it was the late Lord Kingsland who moved, for the Conservatives, a strong Motion for a sunset clause when we debated the Prevention of Terrorism Bill 2005.

[Lord Hamilton of Epsom]

I was coming on to counterterrorism. Those sunset clauses were designed because the Government had taken an enormous power to themselves. It therefore seemed right that there should be sunset clauses allowing those powers to lapse automatically. As my noble friend Lady Nicholson mentioned, we are now talking about giving power to the people in referenda, then saying, “No, no, we should have a sunset clause so that those powers are then taken back by government”. That is a totally different concept, which was the point raised by my erstwhile noble friend Lord Pearson of Rannoch.

There would be enormous problems in the country if we had to explain that we were passing legislation that gave referenda to the people and that those powers would then lapse and come back to their Government. The people of the country would not understand that in any way whatever. There is a very clear difference between giving the power to the people and having the Government, as in the counterterrorism legislation, taking powers to themselves that can be seen to be excessive. It is in those cases that the sunset clauses should allow those powers to lapse.