Brexit: Preparations and Negotiations

Baroness Goldie Excerpts

Monday 23rd July 2018 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

My Lords, the noble Lord has just talked about Boris Johnson, but I want to talk about a great Foreign Secretary. A fortnight ago we lost Peter Carrington, a great Foreign Secretary, a great Defence Secretary, a great Secretary-General, a great patriot and a great European. It is 46 years since I first worked with Peter Carrington. I knew him well and I know what he thought about Brexit. For that generation—that of Denis Healey on the beach at Anzio or Peter Carrington in the Guards Armoured Division liberating the Low Countries—“Never again” really meant something. For that generation, “Never again” meant ensuring no more war in Europe, ensuring the collective defence of Europe against external threat, rebuilding a broken Europe and working for its prosperity, and fostering and entrenching the values of Europe’s better nature. For all his endearingly laconic understatement, the commitment of Peter Carrington was very clear. Britain in Europe was a non-transactional relationship. It was about common values, a common effort to protect, and a commitment to advancement.

What would Peter Carrington have made of this White Paper? We do not know but, if he had written it, I do not think that it would have started with a “facilitated customs arrangement”. One can sense his shudder of patrician disdain. I think it would have started with something about values. It might have said something about the future rights of our fellow Europeans in our country and our citizens in continental Europe. The silence on legal immigration is very strange. As a great Defence Secretary, he might have wanted some restatement of the absolute nature of the British commitment to European defence. Whatever happens between the Brussels bean-counters, when the chips are down the Brits will be there. The Prime Minister fudged that a bit in her Lancaster House speech, but I thought she got it absolutely right in Munich in February. It is odd that the White Paper is totally silent on it. The reference on page 66 to a possible defence “enhanced Framework Participation Agreement” does not quite do the trick. The White Paper is a bit technical and bottom up. It is very transactional and it does not seem to have a lot of vision in it.

That is what Peter Carrington might have thought, but I do not know. He was a very skilled diplomat so he certainly would not have said, as the Prime Minister did on television and as Mrs Leadsom said in the other place, that the proposals in the White Paper are non-negotiable. Concrete on the feet is rarely wise. Of course, as the noble Lord, Lord Forsyth, pointed out at the outset, the proposals have already changed. The passage that the noble Lord, Lord Liddle, read out on the facilitated customs arrangement gave the foreigners the good news that we would not insist that third-country flows through their ports should be slowed down while they handled the segregated goods heading for us and operated two systems of taxation and checking. That was a relief for them, I am sure, except that the amendments made in the House of Commons mean that we do so insist that the ports of Rotterdam, Hamburg and Antwerp be clogged up operating two systems. So the proposals are negotiable after all, but only if you are British, Tory and a rebel. The 27 have to operate two systems where they now run one. They will not, of course. Why would they?

Actually, they would not have agreed with the White Paper’s proposal anyway, because the reciprocal regime at our ports is not one that they would be prepared to put up with. It is as inconceivable as it would be unprecedented that the EU should allow a third country, not a member state, to collect its taxes, which are important for its common budget, when no longer under the control of its court. As I mentioned to the House two weeks ago, the EU anti-fraud agency, OLAF, currently has two cases in the ECJ, each worth more than €3 billion, against the United Kingdom for undercharging customs duty and for allowing VAT fraud at our ports. I thought that Monsieur Barnier was spectacularly diplomatic when he said quizzically on Friday about the facilitated customs arrangement, “Would there not be a risk of fraud?”

Anyway, it does not work like that. If we leave the customs union we leave the customs territory and each check will take place at its frontier—unless, of course, we form a new customs union with the EU, as this House recommended when it accepted the amendment to the withdrawal Bill that I moved. We encouraged the Government to explore a customs union with the EU. I really think that they should. The facilitated customs arrangement will not run—it is dead already—and without a workable solution such as a genuine customs union I do not see how we can avoid the hard border in Ireland. The situation is now really very grave. We have accepted that a solution to the Irish question is integral to the withdrawal agreement. If we do not get one we do not get the other. We would kill off the transition period, so the no-deal cliff edge would be not December 2020 but next March.

Then there is the point from the noble Lord, Lord Bowness. The Minister appeared to put himself in the same camp as Mr Raab, who yesterday asserted that if what we have put in our White Paper is not agreed by the EU by October and if there is not an agreed framework text by October, we will resile on our financial commitments, refusing to pay the sum that we agreed in December that we owed. I have to say to the noble Lord, Lord Forsyth, that it is the cost not of the future but of the past. These are commitments. If we were to do a runner all bets would be off, with no deals doable, and not just with the EU. Third countries would be very chary of striking agreements with a UK that had no working relationships at all with its 27 neighbours—we would not have while they were dunning us in the courts for the money that we owe them.

I still hope that wiser counsels will prevail. I wish that we had a Carrington to provide them. I think that he would have been much less dismissive than Mr Johnson of the concerns of business on the no-deal scenario and of the importance of the Good Friday agreement. On the debt question, I think that he would have thought the idea of doing a runner a tiny bit dishonourable.

How do we get out of this mess? I have two suggestions. First, the Government should look again at the amendment proposed by the noble Duke, the Duke of Wellington, which the House also passed. No one knows—at least I do not—why the Prime Minister sent in the Article 50 notification on 29 March 2017. I have no idea. No one can assert that the country voted on 23 June 2016 to leave the EU on 29 March 2019. An extension is possible under Article 50 if all agree. Would they agree? I do not know. The noble Lord, Lord Birt, was doubtful. I think that it would depend on why we asked.

Let us bear in mind that if we go over the cliff in March, it is suicidal for us but it is bad for all 27 as well. Nobody wants that to happen. The EU has contingency plans for dealing with the European Parliament election should our departure date be pushed back. Mr Benn’s committee in the other place has recommended that it should be pushed back. The issue should be explored; it would be irresponsible not to. It would be irresponsible to crash out in eight months’ time if there is no done deal, doing huge damage to the economy, to jobs, to the stability of Northern Ireland and the well-being of our fellow citizens. Mr Rees-Mogg would be just fine—he has his money in Ireland—as would the Bullingdon boys, but as Sir John Major said at the weekend, the people who have the least would be hit the worst.

My final point is one that I have made before—I am afraid that I have made it tediously, but I must do it again. An Article 50 invocation is not an irrevocable act. Withdrawing the invocation would carry no price, political or financial. We would never have left. The terms of membership would not have, and could not be, changed without our agreement. If the Government cannot negotiate a Brexit which even remotely resembles what was promised in June 2016 and if the red lines which Mrs May wrote in September 2016 in the party conference speech turn out to preclude any workable solution to the Irish border, the country should certainly be asked whether—knowing what we now know—they would prefer that the notification be withdrawn. That might mean an election; it might mean a referendum; it might mean both. It would certainly mean an Article 50 extension, and this is the scenario in which we can be absolutely certain that we would get that extension. The 27 would unanimously agree straightaway to give us an extension if the purpose was to permit a people’s vote. The case for such a vote, before the people’s EU citizenship rights are extinguished and before the damage to their well-being really starts to bite, seems to me to grow stronger with every passing day and with every new lurch by the Government away from what a Carrington would have thought about Britain in Europe and about responsible leadership.

[Baroness Goldie (Con)]

My Lords, while the contributions are extremely interesting, the advisory time limit has been somewhat generously interpreted. In deference to the speakers further down the list, perhaps your Lordships could see what they can do to co-operate in rough adherence to the advisory time limit. Otherwise, we will be very unfair to some of the later contributors. We want to hear from them as well.

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[Lord Cavendish of Furness (Con)]

My Lords, I follow a powerful and analytical speech from the noble Baroness, Lady Deech.

I fear that this White Paper cannot fly. In fact, I wonder if it is not already a casualty of gravity. My principal and reluctant reason for opposing the White Paper is that the more I read it the plainer it becomes to me that its adoption would render this country worse off than we are now. And that is our opening shot. No one seriously believes that the Barnier team are just going to leave it there. Attrition is the means by which these people work.

I home in on two issues. The first is the common rulebook. Its commonality is limited to Britain’s participation in a rule book that is written by the EU and run by the EU. Here I echo the noble Lord, Lord Howarth, when he quoted Mr Martin Howe QC. The UK would have to obey and apply in all respects the laws promulgated by the EU without having a vote on the content of those laws. Further, the UK would be obliged to interpret those rules in accordance with the rulings of the ECJ under a system that would, directly or indirectly, bind UK courts to follow ECJ rulings. I think that on that the noble Lord, Lord Mandelson, would agree.

Secondly, will we be able to alter current laws? I find nothing in the White Paper to suggest that the UK would be in a position to change any of the existing body of EU laws, however damaging they may be or become in the future. I have in mind restrictive EU laws that block the development or deployment of new technology, such as in the biotech area, where the UK enjoys global pre-eminence. This is a seriously important point. Here in Britain we look to innovation as the single most important pathway to growth. The EU appears to turn its back on it.

As significantly, the system is skewed in favour of existing technologies and against innovators. Once we leave the EU and no longer have a vote on the framing of these types of rules, the EU will have a positive incentive to frame the rules in order to disadvantage UK producers. The recent notorious Dyson case illustrates how the EU regulatory system for goods can already be skewed in favour of continental interests against British manufacturers.

In her speech, the noble Baroness, Lady Hayter, rehearsed project fear again. Unlike her, I have been in business—as listed in the register of interests—for 50 years, operating in scores of different markets. I have never woken up to certainty in my life—I have never looked for certainty—and I am utterly comfortable with operating under WTO rules, as are an enormous number of people to whom I speak and colleagues in business. I can tell the noble Lord, Lord Davies of Stamford, that it is a vanity of politicians that they run trade. In fact it is the people who produce commodities that can be bought and willing buyers who drive trade, not trade deals. In all of the markets in which I have operated, I never once over 50 years asked, “Do I have a trade deal with you?”

So what is the background to this mess? My inquiry stems from a little-mentioned fact that, for the first time I can remember in my life, the laws and the people have diverged. People used to look to the laws to protect them from an overbearing Executive and overbearing House of Commons—no more, and probably never again.

It is probably a good rule that politicians do not criticise civil servants. However, such has been the extraordinary and partisan involvement on the part of civil servants throughout the Brexit process that it is hard to ignore their role, especially when we reflect on the background to this White Paper. Let me say straightaway that our generally brilliant Civil Service has had to endure great provocation in recent years and better-qualified people than me need to address the many problems that beset the service and find enduring solutions to them. However, there can be no denying that Britain has a new ruling class—new to the extent that the power and influence of the official class has risen steadily as the power and influence of the political class has declined. I venture to suggest that this decline corresponds to the diminishing role of the modern Member of Parliament, a consequence of membership of the European Union. Nature abhors a vacuum.

Perhaps the Bench of superannuated mandarins in your Lordships’ House and the role that they have played in the Brexit process have attracted too little attention. Talk of “coming to heel” is not so far removed from “We are the masters now”. Plainly, former civil servants who come to this House are quite rightly liberated from the constraints of impartiality. They might even be forgiven for being a little demob happy. Some might question, however, whether it is right or indeed dignified for these very clever men to huddle in what my noble friend Lord Ridley has described as an “incantation” of mandarins—a collective term normally applied to warlocks—and, as they are driven by groupthink, they chant and parrot all the most absurd and disingenuous remainer slogans.

It is rather chilling to reflect that a group of people possessed of such famously bulging brains should lend their support to a measure as crassly ill-crafted and unsuitable for English law as the ECHR, a document which attracted, when it first appeared, almost universal derision and which was repudiated by senior members of both main political parties. In that case, it was instructive that the noble and learned Lords, with actual experience of the legal process, did not support that amendment.

We see a class composed of clever, well-paid, unelected, London-centric men and women who have gathered to themselves unprecedented levels of unaccountable power. They show conspicuous solidarity with their opposite numbers in Brussels and conspicuous contempt for the voting public. I suppose that one should be grateful that Mr Olly Robbins remembered to show the White Paper to the Prime Minister. This new power is being harnessed against the rest of us—the majority, as it happens—who ask for little more than to keep our well-tried institutions and preserve the freedoms that we used to enjoy through the ancient and always evolving system of representative democracy.

I conclude with a vivid memory. On Second Reading of the withdrawal Bill, the noble Lord, Lord Butler of Brockwell, expressed strong opposition to Britain leaving the EU, on which he has been consistent. He said that the wording of Clause 1 of the Bill,

“strikes a dagger to my soul”.—[Official Report, 30/1/18; col. 1411.]

It was a much-quoted phrase. Well, of course, out of respect and affection we all felt keenly for him in his anguish. However, we had barely regained control of our emotions when he went on to describe how mistaken the EU was in its rush towards a federal union, which, in the noble Lord’s own words, “may lead to disaster”. It was to avert just that disaster that thousands of people like me campaigned for Brexit and 17.4 million people agreed with us. The prescience of the noble Lord, Lord Butler, is already being borne out with yet more eurozone crises looming and yet more federalist solutions being proposed.

People understand the great issues of the day more than the likes of the noble Lord, Lord Kerr, give them credit for. While I cannot say that all the election results of my adult life have always given me pleasure, I believe that in every case the people merited the trust that the universal franchise conferred on them. Unlike many, I was privileged to know both my father and grandfather. Both returned from the horrifying conflicts of the 20th century and both bore the scars of those conflicts for the years that remained to them. They and those like them suffered and died so that we might enjoy the freedoms that have been defended by our forebears for probably 1,000 years. It is this priceless legacy that more than 17 million of my fellow countrymen voted to preserve. I can find nothing in this White Paper that will offer these people the hope and reassurance that they are entitled to expect.

[Baroness Goldie]

My Lords, I observe that we are now at the halfway point and, if my calculations are correct, it has taken us just under five hours to reach it. More noble Lords wish to speak and we want to hear their contributions. Six minutes can let a lot of very good things be said.

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[Baroness Altmann (Con)]

My Lords, it is a pleasure to follow the noble Baroness, Lady Randerson. I congratulate the Prime Minister on publishing the White Paper, which could at last enable us to talk meaningfully with the EU. We all recognise that the White Paper is a compromise, designed to ensure that the UK position is more realistic than the previous strict red lines, often mutually exclusive, which seem to have been imposed upon the Prime Minister by the extreme wing of our party.

As a starting position, the White Paper is an achievement, but Cabinet reticence and changes to legislation forced through in the other place last week undermine even that position. I am afraid that it becomes clearer by the day that there are some, such as members of the ERG, who will never accept any reasonable deal with the EU. The ideologues have no plan of their own, just threats, obstructions and impossible demands. Indeed, the UK’s approach to Brexit has been rather like Gareth Southgate going to FIFA during the World Cup and saying, “We would like to continue playing in the competition but some of our players don’t want to participate any more as they don’t like the rules. However, the players have agreed that they will play in a few matches as long as England can choose its own referees, ditch the offside rule and play with 12 men sometimes if they want to”.

Such unreasonableness is not helpful. Therefore, I believe that if the Prime Minister wants to make progress in our Brexit negotiations—and I believe she does—she must accept that some in the party will never agree to any position that the majority in Parliament recognise to be vital to protecting our national interest. She needs to proceed with the more sensible, softer approach that this White Paper alludes to—no more fudge, no more bluff, no more stringing everyone along and hoping it will be all right; no more threats against our partners and fighting among ourselves. To thrive in the 21st century requires open arms, not raised fists. The time has come to face down the fantasy of cake and eating it. In the words of Abraham Lincoln:

“You cannot escape the responsibility of tomorrow by evading it today”.


Some key issues of concern have already been brilliantly exposed by previous speakers. Many noble Lords have insisted that democracy requires that the 2016 vote is sacrosanct. We must of course respect the will of the British people, but Parliament has respected the result of the referendum. It has triggered Article 50 and is now trying to negotiate a good outcome for the whole UK from a new EU relationship. However, the referendum did not specify a date on which we must leave, nor did it give a direction of travel.

This is about the ordinary people of this country who are trusting us to look after their future as best we can. Therefore, the current threats of no deal fill me, like so many other noble Lords, with horror. I fear that some are determined to obstruct progress in the negotiations for the next few months just to get to March 2019 when we will be out, due to the two-year limit, no matter the consequences.

People did not vote for no deal. By countenancing this, we are betraying most of the 17.4 million people who voted to leave in order to be better off, as the leave side promised, and all of the 16.8 million people who did not want Brexit at all. The referendum did not ask whether people wanted to leave the single market, the customs union, ECJ jurisdiction, all the agencies, and abandon the Good Friday agreement. People did not vote for that. The impact of no deal would be catastrophic. Indeed, the light at the end of the Brexit tunnel that so many leavers have told us about is really, I fear, an oncoming train.

The Japanese embassy has said that no deal is impossible for it to accept—the normally polite, understated and inscrutable Japanese have expressed their outrage with unusual forcefulness. London is a hub for European, Middle Eastern and African banking, but this would be at risk. The Chinese embassy itself has said that London risks losing its status as a banking hub if there is no deal.

No deal would mean the end of our manufacturing success, as integrated supply chains collapse, with workers’ jobs at risk. Car manufacturers have profit margins between 3% and 10%. Under WTO rules, car exports to the EU face 10% tariffs and car parts a 5% tariff. Indeed, the WTO has 135 different tariff rates on imports from third countries and 150,000 goods classifications to determine those tariffs. How do we think UK firms will cope with that? Much of our manufacturing is of intermediary goods: 70% of UK goods exports are intermediate inputs for manufacturers in the EU, which they then sell to the rest of the world. If the UK does not count in the EU rules of origin, EU firms will have to go elsewhere and will look to EU firms for their inputs.

Even in trying to negotiate new trade deals with other countries, the benefits have been overblown. The UK is no longer a hub to the rest of the globe as it was in the days of our Empire. We are a medium-sized country, dwarfed by the US, China, Russia, India and the EU. Countries of our size cannot define their own terms of trade when negotiating with whole continents. Those who naively hope for a trade deal with the US should wake up. The US has a vested interest in weakening the EU. Encouraging the UK to break away will increase American power and, once the UK is out, the US will be in a stronger position to give us a deal that is much more in its interest than ours.

Leaving the customs union and single market are acts of economic vandalism against both our own industry and that of the EU. Our negotiating position has asked the impossible. The EU cannot and will not give us the advantages of being in the EU, including security co-operation and membership of all the agencies that are so important to our way of life, while we do not have to obey its rules. It seems that many Brexiteers are willing even to put peace in Northern Ireland at risk—surely the Conservative and Unionist Party cannot accept that.

Something hardly mentioned is the enormous cost we have already imposed on the EU and on other EU countries. Domestic firms have also had huge costs imposed on them, and so have UK taxpayers. Our Government have taken no responsibility for this, and there has been no acknowledgement of the impacts of our decision. This has already resulted in a loss of respect for the UK on the international stage.

British values of decency, fair play and tolerance have been subsumed in the Brexit mania. If we do not retain EEA membership and a customs union or partnership, British people will be poorer as a result of the vote they were told would make them better off. To quote Cicero: “the welfare of the people is the highest law”.

[Baroness Goldie]

My Lords, I observe that we have exceeded eight minutes.