Update on EU Exit Negotiations

Baroness Ludford Excerpts

Tuesday 17th October 2017 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

I thank the Minister for repeating the Statement, although sadly it adds nothing to what we have already seen in the press. Indeed, it is rather less since we have been able to read what the EU negotiators and their political masters think of how things are going, and it was their side that used the words “impasse” or “deadlock”. It is noticeable that the Governments of the 27 EU member states have shown markedly more unity than the 29 people who sit around our Cabinet table. Moreover, while the British side argues, the clock ticks relentlessly on, so it is time to talk turkey for the sake of citizens, business, trade, farmers and consumers. If that means talking money now, so be it. We know that the Government’s reluctance to do so is a fear of their more uncompromising Eurosceptics.

A financial deal will need to be made, a deal that some will not like no matter how good it is, so why put it off for fear of their wrath at such cost to everyone else? Every industry, as well as agriculture, consumers, patients, doctors, lawyers and investors, says that we must end this uncertainty. Just this morning I met representatives from Rolls-Royce who told me how key it is that we can trade freely with the EU. We might make the best aircraft engines, but they include parts from the EU, use the skills of people from the EU, and sell within the EU when complete, as do 90% of Toyota cars made here. Their reps were telling me this morning that non-tariff barriers, rules of origin certificates and so on are as challenging as tariffs if we leave the customs union.

Meanwhile, Rolls-Royce and other companies are highly dependent on our participation in the European Aviation Safety Agency, but they are hearing nothing from the Government as to what they want in that regard—as with other vital agencies, such as Euratom and the European Medical Agency. I even read talk of us coming under the US Food and Drug Administration in Maryland—or la-la land.

There is a host of other non-trade issues where reciprocity is key: the mutual recognition of civil and family judgments, handling insolvency cases, data protection, and long-term insurance contracts. All those issues need early negotiation and preparation by the Government, which those industries concerned simply find that they are not invited to engage with. They can get no answers on those questions and nor can we. For example, the Minister for Consumers in the Commons said last week that while consumers will retain rights on goods bought,

“from a trader based in the UK”,

beyond that,

“is a matter for negotiations”.—[Official Report, Commons, 10/10/17; col. 51WH.]

Nothing was set out about what we wanted from those negotiations. She said only that we are exploring options in maintaining early warnings of dangerous non-food products—shared at the moment via Rapex—as with the pharmacovigilance network on unexpected responses to drugs and our key role in the European Consumer Centre Network. It is not simply that Europe is not ready to talk on these issues, though I understand it is on some of them, but that the Government are not engaging with industries or the consumers concerned.

There are three key areas on which Parliament, not just the Government, must have the right to decide. One is future trade with the EU, where the Institute of Directors is demanding to know what the Government want from our EU trade deal. Can the Minister indicate whether achieving tariff-free trade is the Government’s objective? The second area is about transitional agreements. The word “implementation” was used, but I think we are really talking about transitional arrangements. Can the Minister confirm that the Government will press to achieve those arrangements on the same terms as now and to ensure that the withdrawal Bill contains approval of those agreements? Finally, does the Minister agree that any walking away from the negotiations—effectively a “no deal”—should be a matter for Parliament and not Ministers alone? Will the Government therefore agree to amend the withdrawal Bill to ensure that any such decision will be taken by Parliament?

[Baroness Ludford (LD)]

My Lords, it is 16 months after the referendum. The brazen and airy assertions by the leave campaign that negotiations would be easy and our economy would prosper have been revealed as the empty rhetoric they always were. The Government believe that,

“we are on the right path”.

That path seems not only to be a long one, but to have an unknown end point.

On citizens’ rights, it seems true that some progress has been made, but 4 million to 5 million citizens are still in limbo. The Government’s approach is still flawed because of their concept that EU citizens resident in the UK will have to secure settled status, even if the Government claim the process will be streamlined and low-cost. Those citizens should not have to secure what they already have by right, and it remains a matter of great regret that the Government refuse to give the unilateral guarantee of existing rights that a majority in this House wanted. Can the Minister assure us that we will have the novel experience of witnessing a process by the Home Office that is administered efficiently, quickly and accurately?

To complain that,

“the sequencing of negotiations, has always been an EU construct”,

is rather feeble. It has always been clear that this sequence would be followed—so what is it now that takes the Government by surprise? The Secretary of State even accepted the sequencing a few months ago after a little bit of huffing and puffing. The Government maintain that they are ready and well prepared to start the negotiations on transition and final status, but as the right honourable Kenneth Clarke MP has said, that sounds like la-la land—there is no substance. The truth is that members of the Cabinet are fighting like ferrets in a sack, with no agreement in prospect. This is a key reason for lack of progress.

The sensible approach would be to stay in the single market and customs union not only in the transition but in the permanent relationship. Instead of that stability, we hear the deeply destabilising nonsense about no deal. The Secretary of State told the other place that he had not talked up no deal, but he has failed to disown it. Many of his ultra-hard Brexiteer colleagues have talked it up. Those ideological obsessives positively want no deal as the destructive revolution they crave. Will the Government now rule out the hugely harmful no-deal prospect?

The former top official at the department of trade, Sir Martin Donnelly, rightly calls this reckless bravado. The OECD says that it would immediately cut UK growth by 1.5 percentage points. The Resolution Foundation predicts that in a no-deal scenario the “just about managing”, the people whom the Prime Minister professes to care about so much, would suffer the most from an inflation hit to the tune of £5 a week on top of the current 3% rate of inflation. No wonder polls show that 47% of people are now against Brexit—it is 49% of women; I shall not make any remarks about how sensible women are—compared to 42%. Has not the time now come to offer the British people an honourable way out of this morass through an opportunity to think again, to really reflect in a further referendum, once they can see the concrete reality of what Brexit entails?