Trade Bill

Debate between Baroness Falkner of Margravine and Lord Kerr of Kinlochard

Report: 1st sitting: House of Lords
Wednesday 6th March 2019 Lords Chamber

[Baroness Falkner of Margravine (LD)]

My Lords, I would like clarification from those who tabled this amendment: they refer to “a” customs union but other speakers have used the expression “the” customs union, as the noble Baroness, Lady Altmann, has. For the purposes of what I am going to say. I will assume that they mean remaining in the EU’s customs union and common commercial policy.

If that is the case, I understand the motivation for seeking a halfway house between leaving and remaining, which is what this implies. However, being in a customs union and being entirely subject to the EU’s common commercial policy, which is the overarching umbrella under which the customs union sits, is the worst of all options. That is why Switzerland and Norway—two countries with different arrangements in the EU—have chosen not to be part of the customs union. So while the idea may be attractive to protect trade in goods—and I admit that is important—given that we have an economy where trade in goods is a relatively small part of our exports, the sting of the common commercial policy, although it is encroaching into services, is primarily about trade in goods, not trade in services.

Being under the umbrella of the CCP without membership of the EU will mean that we will not be present in the European Council, which has the ultimate say over trade deals; we will not be present in the European Parliament or in regional parliaments. Noble Lords may remember the Canada-CETA story and the Parliament of Wallonia. We would not even have the status of the Parliament of Wallonia in future trade deals were we stay in the customs union. We would be a rule taker without a seat at any table. It would also render the previous amendment, which the House overwhelmingly passed, entirely redundant.

Turkey feels so disadvantaged by its current arrangement in the customs union—which, incidentally, was only agreed as a stepping stone towards full membership—that it is seeking to change those terms. However, I suspect that by now it is not seeking to change the terms because it accepts that it is not going into membership of the European Union.

The CCP is designed to serve the interests of member states—and so it should—but it is not designed to serve the interests of the fifth biggest economy in the world. Even those who feel that the United Kingdom will be much diminished if it leaves the EU must surely recognise that we are a more significant economic power than Turkey. So when the EU rightly seeks to advance its own interests, who will speak for UK interests? When the EU moves to use trade remedy laws—we have had a great deal of discussion during the passage of this Bill about trade remedies—to protect its own industries, and when that does not cohere with the United Kingdom’s interests, while we remain a member we can say something about it; we can indicate our preferences. If we are out of the EU but within the customs union, we would have no say over our interests being disadvantaged in the interests of any of the 27 member states which would be at the table.

[Lord Kerr of Kinlochard]

The situation the noble Baroness is describing will obtain if the Prime Minister’s deal goes through and we go into an interim transition period. It is certainly the situation that would obtain if we go into the backstop. We would be a rule taker. We would have no say in the making of the tariffs but we would have to apply them. We would not be consulted; we would be notified.

The amendment refers to “a” customs union. We have never attempted to work out what kind of customs union the EU would be prepared to agree with us. We have never done that because the Prime Minister’s rash red line ruled it out. We are now going into the worst possible case, if the deal goes through, of being absolutely a rule taker and absolutely not in the European Council, as correctly described by the noble Baroness. However, that is not what the amendment is asking for. It is asking for the negotiation of a real customs union between the United Kingdom and the European Union.

[Baroness Falkner of Margravine]

The noble Lord has expressed sentiments that I have heard many times over the past three years from Mr Corbyn. In our various EU Select Committee meetings with the EU’s chief negotiator Mr Barnier, some of us raised the issue of whether there would be a possibility of negotiating a different sui generis, unique, bespoke customs union. We have been told in terms that that is not possible. I fear that concealing one’s intentions behind “a” customs union in the hope that if all else fails the EU will come around to providing us with a customs union presents the EU with a situation where it would have to consider how it could give each country it does any negotiation with in the future a bespoke customs union.

Anyone who knows anything about EU law—I accept that the noble Lord does, but I do too—will tell you that it will not uniformly make such an enormous exception in a law that has been there from the 1950s to accommodate the United Kingdom, particularly not at this late stage.

Brexit: Preparations and Negotiations

Debate between Baroness Falkner of Margravine and Lord Kerr of Kinlochard

Monday 23rd July 2018 Lords Chamber

[Baroness Falkner of Margravine (LD)]

My Lords, I chair the EU Sub-Committee on Financial Affairs. The committee also has responsibility for the UK contribution into the EU budget, so the current discussion about cannot pay or will not pay is also pertinent to our role. I was also part of the EU Select Committee’s delegation to Brussels last week to Mr Barnier, under the distinguished chairmanship of the noble Lord, Lord Boswell. It was my fourth discussion with Mr Barnier. In the light of what I heard there, I will concentrate my remarks on three things: the budget contribution in the light of calls for a second referendum; the cost of the Norway option and the EEA; and the exit fee. In doing so, I remind the House that I speak in a personal capacity. I could hardly do otherwise, having heard the rather diverse speeches of other members of the committee, such as the noble Lords, Lord Butler of Brockwell and Lord Cavendish of Furness, excellent members as they all are.

Several noble Lords talked about the possibility of holding a second referendum or a people’s vote on the outcome of negotiations. A lot of people believe that if you put the facts to the people they will change their minds and remain, as if no facts were available last time around. We heard that in the Chamber today. If facts were distorted last time, people nevertheless thought that they would pay less to the EU if we left and more money would therefore be available for UK priorities. The next vote will also focus on money, so the question is what the offer of “remaining” in that future referendum would involve.

Noble Lords may not know that the negotiations for the EU’s next multiannual financial framework are currently under way. The Commission intends to conclude them in May 2019, just weeks after the UK’s projected leaving date. We are not present during those negotiations on the basis that they do not concern us, as they cover the period from 2021 till 2028. We are not there and are not fighting for our interests.

One issue under discussion is the phasing out of the rebates paid to member states over a period of five to seven years in that MFF. It is likely that net contributors will try to resist this, or at least to prolong the period, but the rebate is unlikely to last in its current form. Other aspects under discussion are an increase in the EU’s own resources through the EU raising direct taxation, which the UK fiercely resists on the basis that tax-raising powers belong to member states alone. It is envisaged that some €200 billion will be raised directly by the EU in the next period, through visitor taxes, environment taxes and a tax on plastic among others.

What will happen if the UK does not retain its rebate? The Office for Budget Responsibility shows that the net contribution to the EU budget paid by the UK in 2016 was £8.1 billion. This was equivalent to £123 per head. The UK rebate was worth £5 billion, or £76 per head, so the UK contribution to the EU budget if we did not have the rebate would be £200 per head. Several people to whom I speak in Brussels who are experts on the budget and have knowledge of the MFF negotiations confirm that it would be difficult for the UK to swan back in and keep its happy rebate.

If the figure on the side of arguments last time around was based on £123 per head, the new figure would be some 60% higher. Do those who want another people’s vote really think that they would win a referendum on the basis that the UK would pay more than it currently does? Several noble Lords believe, as the EU negotiators told us last week, that the only other option—

[Lord Kerr of Kinlochard]

The own-resources decision, in which the British rebate is embedded, can be amended only by unanimity. If we did not leave, we presumably would not vote the amendment that would kill our rebate. If we do not leave, we do not lose the rebate, unless we are accepting enough to vote to lose it, which I do not think we are likely to do.

[Baroness Falkner of Margravine]

The noble Lord was of course a member of that committee and he knows the system well. What he loses sight of is the timing. The discussions are happening now. As far as I know, and I am sure the noble Lord knows, we are not at the table—this is a point I made early on.

European Union (Referendum) Bill

Debate between Baroness Falkner of Margravine and Lord Kerr of Kinlochard

Friday 31st January 2014 Lords Chamber

[Baroness Falkner of Margravine]

My Lords, one of the other things that we want to seek in a referendum would be transparency, as the Electoral Commission recommends. Of course, in general elections, the public know precisely how people have voted in different parts of the country because of the constituency system. So you can tell how many people are returned from which party from the respective countries of the United Kingdom, and it is very clear. In that sense, I am rather tempted by the amendment, which would allow that level of transparency to come in, not as finely defined as that but broadly, for us to be able to tell where opinions lie in one direction or the other. It would help us to reflect on what to do next and how we might best reflect the opinions of those constituent parts of the United Kingdom, depending on the outcome of the referendum, along the lines of the amendment that we have just agreed.

[Lord Kerr of Kinlochard]

My Lords, before the noble Lord, Lord Dobbs, replies to the debate, I should like to speak briefly on the Gibraltar point raised by the noble Lord, Lord Anderson. I should also like to raise a bigger point for the noble Lord, Lord Dobbs, to think about.

On Gibraltar, I point out first that no one has an amendment tabled to Clause 4; nobody in this House objects in principle to the idea of Gibraltar voting in the referendum. Although it was not in the original Bill and was added in the House of Commons, nobody here is objecting to it, and I certainly do not do so. It is a little anomalous that a British overseas territory should vote, of course, but that the Gibraltarians should be able to vote is not nearly as anomalous as the expatriates across the frontier in Spain being unable to vote. Gibraltar is a country member of the European Union; large numbers of European Union rules do not apply there—it does not have VAT, and it is not in the customs union, the common commercial policy, the CAP or the CFP. On the other hand, expatriates would see a very serious change to what they might legitimately have expected, if the referendum produced a no—but we will come to that under a later amendment, and I shall not pursue it now.

The very small point that I would like to make is on the Channel Islands, which are much more closely integrated into the European Union than is Gibraltar. They apply the common agricultural policy, and their main export is to France—agricultural goods and products derived from them. I do not know why the drafters of the Bill included Gibraltar and not the Channel Islands. That is a legitimate question to ask the noble Lord, Lord Dobbs, to think about and come back to. I am speaking in support of what was, I think, a probing amendment about Gibraltar and asking that the probe should go a little wider and include the anomaly of the Channel Islands.

I come to my bigger point about the nature of probing amendments. We worked quite hard for quite a long time a week ago. A number of noble Lords withdrew amendments, for which there was quite a lot of support around the House, on the understanding that there would be reflection. I have heard nothing from the sponsors of the Bill on the major amendment I withdrew. I have heard from one distinguished Member of this House—he is now in his place—but I am not going to embarrass him by saying who he is or what he said. Probing amendments are well worth it if they are designed to see whether the sponsors will accept them or will come back with a different version of them. However, on none of the amendments that were withdrawn in our eight-hour debate last week with a view to coming back on Report, have the sponsors subsequently been in touch with the proposers. What is the point of a probing amendment? It seems to me the only way one can get the defects in this Bill corrected is in the Division Lobbies. The House has voted three times, and three times by substantial majorities has amended the Bill.

It has been suggested more than once that, once one amendment was carried and therefore the argument that the Bill must stay intact had collapsed, there was no cost to the noble Lord, Lord Dobbs, in buying an amendment. Indeed, there might be considerable advantage. I had hoped that today’s debate would take place in a less confrontational way than last week’s one started and that we would be more consensual and try to find areas of agreement. However, on the previous amendment on which we have just voted, the noble Lord, Lord Dobbs, must have known from the debate that the Division Lobbies would not give the result he wanted. Why did he not feel that he could accept the amendment? Why do we have to force it on him? If anything is wasting time, it is this.

We had an hour and a half’s debate and then a Division on something that plainly was correct and was going to be written into the Bill one way or another. The only argument that the noble Lord, Lord Dobbs, produced against it was that it was unnecessary. He did not say it would be damaging. I do not think he was right. The House did not think he was right and clearly thought the amendment was necessary. If the noble Lord thinks that it is unnecessary but does not do any harm why does he not buy it? What does the House expect to happen when it puts forward probing amendments and takes them away again? It expects something to occur, perhaps in the gap between Committee and Report. The gap is there for approaches. I had hoped that there would be an approach to me about Amendment 10 by now and I am very sorry that has not happened. It is pity to force us into the Division Lobbies. It wastes a lot of time. It would be much better, and we would make progress with this Bill, if the noble Lord, Lord Dobbs, was prepared to accept amendments.

I am not saying that the Gibraltar issue, let alone the Channel Islands issue that I have raised, is one that deserves an immediate answer or anything like that. Mine was a genuine probing amendment. I do not know why the Channel Islands are not in and Gibraltar is. The biggest question is that I do not know how we make progress with this Bill if no amendments can be accepted other than through the Division Lobbies.

--- Later in debate ---

[Baroness Falkner of Margravine]

My Lords, I, too, support this amendment. The alternative vote referendum, the legislation for which was passed during this Parliament, had the franchise as proposed by my noble friend Lord Shipley that we ought to include local authority areas. The forthcoming Scottish referendum has exactly the same provisions.

I want to illuminate my request that European Union citizens be included in this vital matter affecting them from a personal perspective. I therefore declare an interest. I am married to a German citizen. There are many reasons why large numbers of EU citizens live in our country, which has the largest number of expatriate EU citizens of all the EU countries. However, one fact is indisputable, as other noble Lords have mentioned: that they pay taxes in this country. We incurred the wrath of the Polish Foreign Minister, Mr Sikorski, only five or six weeks ago when, in the hostile debate against eastern European workers on the whole, he reminded our country that those people live here and that they contribute, work and pay taxes here. I do not think that we won a friend in Poland by having gone out of our way intentionally to annoy member countries whose citizens have made such a positive contribution. No one who has had to have construction work done, or who needed babysitting or anything else, in the south-east in the past 15 years can doubt that.

Noble Lords on the Conservative Benches might wonder why, if some of these citizens make such a positive contribution—in the case of the one I know, it has been a contribution of 20 years—they do not become nationals of this country. In that case, they would be entitled to vote. I want to address that specifically. There are certain countries which have, as Germany had in place, a statute against the holding of dual nationality. That can be one reason why people do not take the nationality of the country in which they have worked and lived. It does not diminish for a second their loyalty here. If you look at their voting records, in terms of their entitlements, they take up their entitlements when they can.

There is another possible reason, and in my case this is a very personal one. I travel to lots of countries where a white person or—I am afraid to say, after the Iraq and Afghanistan wars—a person associated with the foreign policy of our country may not necessarily consider themselves safe. My origins lie in Pakistan. My daughter was young and we went back to Pakistan frequently to see my aged parents. I requested my husband not to adopt British nationality in the light of the Daniel Pearl murder because I could see, palpably around me in Pakistan, that no white person ventured into the country. You could see that even in the queue for immigration. There was a period when business investment and everything collapsed because the Pakistani state was incapable of guaranteeing people’s safety. There were particular attitudes in these countries towards the West in general and the United Kingdom specifically.

On that basis, there may be numerous other reasons why all sorts of people come and live in this country but decide not to take nationality. I know of Americans who have lived here. They tend not to take British nationality for taxation reasons. That does not mean that they should be denied a franchise on a matter of such vital interest not only to them but to us as British nationals.

[Lord Kerr of Kinlochard]

My Lords, my name is on the amendment so ably moved by the noble Lord, Lord Shipley. I have very little to add to the arguments that he advanced. I pay tribute to the arguments advanced just now by the noble Baroness, Lady Falkner.

I want to pick up something that the noble Lord, Lord Bowness, said. The noble Lord is a very nice man. His suggestion about the motive for not following the precedent of the Scottish referendum and for past precedents being broken with was that this was just the quickest and simplest thing and that there was no policy intention. I am not a very nice man. I am not as nice as the noble Lord. I ask the “Cui bono?” question. Why should the sponsors of the Bill want to exclude the citizens of the European Union who have come here under the conditions set out in the treaty and who are living here, paying their taxes here, working here and possibly being officers on local councils here? Why should we want to deny them the vote? The only reason I can think of is that the sponsors of the Bill are not just seeking a referendum. In this case, as on the question and the timing, they are looking for a referendum that is likely to produce the answer, “Let’s get out”. I strongly support the amendment of the noble Lord, Lord Shipley.

European Union (Referendum) Bill

Debate between Baroness Falkner of Margravine and Lord Kerr of Kinlochard

Friday 24th January 2014 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

My Lords, I speak in support of the amendment in the name of the noble Lord, Lord Armstrong. I have a dog point—but the noble Lord, Lord Armstrong, made it himself. I would put it in a slightly different form. I would say, “Why have a watchdog and ignore its barking?”.

I also have a tartan point—but the noble Lord, Lord Forsyth of Drumlean, made it himself. When Mr Salmond put forward his question for the Scottish referendum, loud were our complaints and strong were our strictures, particularly from the former Secretaries of State for Scotland. Their wizened locks shook. In the case of the noble Lord, Lord Forsyth, his head shook. Loud was our condemnation of Mr Salmond for ignoring the advice of the Electoral Commission. What happened? He listened to us, or he listened to the Electoral Commission, and he changed his question. He did as the House of Lords encouraged him to do. That seems to be quite a relevant precedent.

My third point you could call cui bono. I disagree with the noble Lords, Lord Grenfell and Lord Lipsey. They say that the question in the Bill—the slanted question—was written by Conservative Central Office. However, we know from the Second Reading debate that that is not true, because we were told then that the form of the question that the Tea Party in the other place has chosen to put in the Bill was not the one it was given by the Conservative Party hierarchy. The Conservative Party hierarchy provided a question very like the one proposed by my noble friend Lord Armstrong of Ilminster in the amendment before the House.

You have to say, “cui bono”. There will be people in this House who think that it is a very good idea to have a slanted question because they are not seeking a referendum; they are seeking a referendum that says we leave the European Union. Those on the other side who are thinking of opposing the amendment of my noble friend Lord Armstrong—and I hope they are very few—should reflect that this is not what the Conservative Party sought. This is a question that is not accidentally defective but deliberately defective. I support my noble friend’s amendment.

[Baroness Falkner of Margravine (LD)]

My Lords, I apologise on behalf of my noble friend Lord Lester of Herne Hill, whose name is added to Amendment 1 and the other amendments in this group, spoken to by the noble Lord, Lord Armstrong. My noble friend is unable to be in the House this morning because he has a medical appointment.

I agree with Amendments 1, 28 and 31, in the name of the noble Lord, Lord Armstrong, and with Amendment 32, and I want to speak briefly to them—but, before doing so, I want to take on what the noble Lord, Lord Forsyth of Drumlean, said. I tend not to tangle with the noble Lord—normally he is far too ferocious for me to lift my head above the parapet— but I remind him that it was Mr David Cameron, the Prime Minister, who undertook in a speech in January 2013, famously known as the Bloomberg speech, to negotiate a new settlement with our European partners. He said that once the settlement had been negotiated, there would be an “in or out” referendum in which the British people would choose to stay in the EU on these new terms or come out altogether. He undertook that this would be done in the first half of the next Parliament. He said:

“Legislation will be drafted before the next election. And if a Conservative Government is elected we will introduce the enabling legislation immediately and pass it by the end of that year”.

In fact, what has happened is that the Bill before us is the enabling legislation. It should not be before us in this Parliament; it should come as enabling legislation after the next general election.

I will now speak to the amendment. I note that I am the first member of this House’s Constitution Committee to so do and I regret that our chairman, the noble Baroness, Lady Jay, is unable to be here now. However, I draw the House’s attention to the Constitution Committee’s report on the Bill. The report is brief but clear. It clearly sets out that the Electoral Commission has, in Section 104, a duty,

“to ‘consider the wording’ of a referendum question and to report on its ‘intelligibility’. In doing so the Electoral Commission considers whether the question presents the options to voters ‘clearly, simply and neutrally’”.

It recommends that the question be amended from the question in the Bill, which is:

“Do you think that the United Kingdom should be a member of the European Union?”,

to one of two alternatives. One is:

“Should the United Kingdom remain a member of the European Union?”,

and several noble Lords have spoken to that, and the other is:

“Should the United Kingdom remain a member of the European Union or leave the European Union?”,

with the possible answers to the second option being, instead of yes or no, remain or leave. We should discuss both options.

My personal preference is not, as this group of amendments recommends, that the question should require a yes or no answer but that it should ask whether the UK should remain a member of the EU or leave the EU, with a “remain or leave” option clearly put to the electorate. The reason I say that is that when the Electoral Commission conducted its research—in the way that the noble Lord, Lipsey, might have found flawed, although I will not address his concerns at this point—it discovered that significant numbers of the public were confused as to whether we were members of the EU or members of the eurozone, and indeed there were people who did not know that we were members of the European Union. In the light of that, the committee certainly suggests that the House should carefully consider whether it is satisfied with the question and that it should do so in the spirit of its obligation to carry out scrutiny and revision.

European Union Bill

Debate between Baroness Falkner of Margravine and Lord Kerr of Kinlochard

Tuesday 5th April 2011 Lords Chamber

[Baroness Falkner of Margravine]

My Lords, again, I have to say that I think that when we say that we are giving up representative democracy in favour of plebiscitary democracy, we are on ground which is difficult to explain out there in the media. In the debate on Amendment 1, the noble Lord, Lord Kerr of Kinlochard, said that it was undoubtedly true that the public did not trust Parliament on EU matters to the extent that they had done in the past, and that there was a disconnect—

[Lord Kerr of Kinlochard]

I did not say that. I said that I shared the view expressed by the noble Lord, Lord Howell, that the public at large have become less convinced of the merits of the European Union. I said nothing about Parliament and its role in relation to the process.

[Baroness Falkner of Margravine]

I thank the noble Lord for reminding us of his exact words. It will be useful to read Hansard when it comes out. I completely accept that his version is probably the appropriate version of what was said. However, I will pursue the point I am making for another second or two. I say this particularly in response to the noble Lord, Lord Hannay. It is pretty difficult to justify the idea that an unelected House of Lords, which is absolutely part of the constitutional framework, should deliberate at length about whether the public are capable of making a judgment on matters of considerable significance—that is how they see them according to opinion polls—but that we should then disregard that, as this amendment would do, by saying, “We will have a referendum, we will come back and we will disregard it”. That is my opinion, which I am sharing with the Committee as other noble Lords have done.

I come back to the other element in this group of amendments, which is the 40 per cent threshold. I think that noble Lords will agree that you could get a very low turnout—perhaps it was the noble Lord, Lord Clinton-Davis, who mentioned something like 20 per cent. However, given that the public are being asked to express a view on the matter, it would be odd subsequently to overturn the Act of Parliament which had determined that the change should go ahead simply because the turnout was low. The need to gain a particular threshold would set another hurdle for the Minister to jump over. I am not completely opposed to the figure, but it is rather curious that it is 40 per cent.

I also think it rather curious that we would be saying, “If it is 39 per cent we will not accept it, but if it is 41 per cent we will”. It is an arbitrary figure. We could select any arbitrary figure, and I do not understand where the 40 per cent figure comes from. If a Minister had signed up to a change and we had an Act of Parliament, it would be incumbent on the Government to sell their viewpoint. That would be set out in the statement and in the reasoning given in the statement. As for the suggestion that the failure to convince 40 per cent of the public to vote in favour might result in the resignation of Ministers, I think that, in that case, that would be the honourable thing for Ministers to do. As the Bill stands, however, there is no threshold. It simply states that if,

“the majority of those voting in the referendum are in favour of the ratification of the treaty”,

that is the way to go.