European Union (Withdrawal) Bill

Baroness Ludford Excerpts

Committee: 1st sitting (Hansard): House of Lords
Wednesday 21st February 2018 Lords Chamber

[Lord Adonis]

My Lords, I could not agree more with my noble friend, nor with all those other noble Lords who have responsibility for Northern Ireland, or have held it in the past, including the noble Lord, Lord Patten, my noble friends Lord Hain and Lady Kennedy, and the noble Lord, Lord Carlile, not least in his role as reviewer of terrorism legislation. Everyone who has been engaged in this sees the continuing value of the Northern Ireland agreement. It is a solemn undertaking on the part of the United Kingdom. It is an international treaty. Playing fast and loose with peace in Northern Ireland in the cause of Brexit is utterly reprehensible.

We are looking forward to the Minister’s reply. I know that he has a mountain of amendments to reply to, but I am afraid that is the fault of the people whose responsibility it is to group them, who seem to want to group almost everything in the Bill into one group. I hope that when he replies he will begin by saying from the Dispatch Box that the Government remain committed to the Good Friday agreement, that they wish to see the restoration of devolved government in Northern Ireland, and that the Government will use every endeavour to do that and to ensure, as the Prime Minister also said in solemn undertakings at the end of last year, that all of the commitments that the Government of the United Kingdom reach in respect of Brexit will fully honour the Good Friday agreement. I take the amendments that we will discuss later, which my noble friend Lord Hain and others have tabled, which would enshrine a commitment to abide by the Good Friday agreement in the text of the Bill, to be immensely important to our consideration of the Bill, particularly in the light of comments made in the last week.

My amendments focus on two particular areas where I seek the Minister’s guidance, because we have many long debates to come, and we need to establish a good evidence base as we do so. I take to heart the words of the Minister for Exiting the European Union, Mr Baker, when the House of Commons was considering the Bill—I was glad to see him at the Bar earlier—and he said:

“The Government have always been clear that the purpose of the European Union (Withdrawal) Bill is to ensure that the UK exits the EU with certainty, continuity and control”.—[Official Report, Commons, 14/11/17; col. 206.]


We can have certainty, continuity and control only if we know what will happen as a consequence of enacting the Bill.

Therefore, there are two areas that I particularly wish to probe the Minister on. The first is the extremely important issue raised by the noble Baroness, Lady McIntosh, about the status of the European Economic Area and our membership of it. There is a debate that will range far and wide across our consideration of this Bill and future Bills as to what is the right status for the United Kingdom if and when we leave the European Union: whether we should be in the EEA, or in the customs union but not the single market, or in the single market but not the customs union; whether we should have bespoke trade arrangements, or whether we should belong to a customs union but not the customs union. The Schleswig-Holstein question was positively simple in comparison with the options and complexity of the options on offer but for our role as legislators, it is crucial that we understand the consequences of decisions that we take in respect of the Bill when we enact it. In many crucial areas—having read, as many other noble Lords will have done, all the debates in the House of Commons on the Bill—it is still unclear what will be the legal position in key respects after the enactment of the Bill.

The issue raised by the noble Baroness, Lady McIntosh, is of acute concern in this respect. The question that I hope the Minister will address himself to is: what is the procedure under which the United Kingdom will leave the European Economic Area if and when we leave the European Union? The noble Lord, Lord Owen, who I am sorry to say is not in his place this afternoon, has written, with help from serious lawyers—including, I think, one or two in this House—a very long and learned paper on precisely this issue. It says that there are two very different views as to what the position is, partly because the EEA agreement is itself ambiguous about the nature of the relationship between the European Union and the European Economic Area.

The European Union is itself a contracting party to the EEA agreement and on one reading—I am now going into areas where, seeing so many lawyers around me, I am waiting for them to leap in at any moment, but the definitive view from the Government is going to be important here—it is therefore not possible for those states which leave the European Union to remain a party to the EEA agreement. On another reading of the treaty, Her Majesty the Queen is the signatory to the treaty independently of the United Kingdom’s membership of the European Union, and we would therefore continue to be members of the EEA when we leave the European Union. As a layman in these matters, this looks to me to be an issue of huge consequence. When and if we leave the European Union on 29 March next year, do we or do we not continue as a member of the EEA simply by virtue of leaving the European Union? If we do not leave the EEA, what is the procedure under which we do leave the EEA? Does it require a vote, does it require legislation, or are the Government proposing that it should be done by the royal prerogative? These are big issues and I hope the Minister can address himself to them, because they will have a significant bearing on amendments we raise later in Committee and on Report.

The second issue concerning withdrawal from the European Union, which is what the half of the Bill that we are substantially debating at the moment is about, is whether it is necessary to withdraw from the entirety of the European Communities Act 1972, or whether it is in fact legally possible—or what would be the consequences of deciding—to withdraw from some parts but not from others. This is an issue of such importance because of the customs arrangements enshrined in Part 2, Section 5 of the 1972 Act, which sets out all the arrangements under which the United Kingdom agrees to abide by customs rules set by the European Union. That is, as I read it, a large part but not the entirety of our membership of the customs union.

The question that was raised in the House of Commons but not properly debated, and that looks to me to be of significance to our debates going forward, is about not disapplying the customs clauses of the 1972 Act— Part 2, Section 5, and the appropriate schedules. If they remained in force and we repealed the rest of the Act but not those—by virtue of that fact, subject of course to an agreement with the European Union itself, we would remain in the customs union. Again, in terms of the legal means by which we might secure the objective which many noble Lords wish to see, continuing membership of the customs union and single market, that is a point of great significance.

Finally, in terms of the objectives we are seeking to achieve, in her Lancaster House speech, the second of the two significant speeches she has given on government policy in respect of Brexit, the Prime Minister, addressing our European partners, said:

“The decision to leave the EU represents no desire to become more distant to you, our friends and neighbours … We do not want to turn the clock back to the days when Europe was less peaceful, less secure and less able to trade freely”.


In my view it is impossible to see how we can have a Europe which maintains peace unless we start with peace within our own borders, which must mean peace guaranteed in Northern Ireland, hence the centrality of the Good Friday agreement to our consideration of the Bill. When it comes to,

“less able to trade freely”,

I take that to mean not entering into any trade arrangements which are less advantageous for this country and involve any more border controls than currently apply. I look forward to the Minister explaining to the Committee how leaving the customs union and the single market can make it easier for us to trade than the extremely advantageous arrangement we currently have as a member of the European Union.

[Baroness Ludford (LD)]

My Lords, I cannot match the dazzling intellectual exposition of the noble Lord, Lord Adonis, but I completely endorse his remarks on the Good Friday agreement. We need to stay in the single market and the customs union and to preserve the integrated economy and the peace and political enjoyment of the Good Friday agreement is one of the best arguments for doing so. I shall speak to Amendment 203 in my name and those of the noble Lord, Lord Adonis, and my noble friend Lady Smith of Newnham, who sadly feels that there is not time for her to speak. I shall also speak more generally on this group and second the remarks of noble friends who have spoken on it.

Amendment 203 requires a specific parliamentary vote on whether to leave the EEA. This would perhaps both remove any legal doubt about whether the Article 50 notification made that decision—I will slightly sidestep that issue—and be an explicit political decision in itself. Therefore I advocate the merits of Amendment 203.

We are in the dark about the future. The Cabinet is meeting again tomorrow at Chequers and we are all very hopeful that some white smoke will emerge from that meeting. As many noble Lords have said this afternoon, the implications of leaving the single market and the customs union are serious. Indeed, it has been described by my former noble friend Lord Carlile of Berriew as a “suicide note”—hence the need to have a specific vote on whether to leave the EEA, which would be a safeguard, at least against sudden death.

We learn from the Financial Times, in advance of having anything explained to us in the open by the Government, that the buzzword for the trade relationship that the Government will be aiming for is “managed divergence”. Apparently:

“Under this approach, economic activity between the UK and the EU would be divided into three baskets: complete alignment, where the UK would follow EU rules”—


presumably to at least encompass the famous paragraph 49 of the phase 1 agreement—

“‘managed mutual recognition’, where both would agree to common objectives but each would choose its own rules; and a third basket where the UK can abandon EU regulations and do whatever it wants”.

That sounds incredibly complicated for citizens and business, as against the simplicity of full membership of the single market and the customs union. This commentator says:

“The beauty of this approach is that it unites the cabinet”.


This is possibly because it has three variations. However, it does not have one single theme.

Of course, we have heard all variants, not least this past week. We had the speech from the Foreign Secretary and the letter from the European Research Group—I am not sure that it does a lot of research but it writes a lot of letters. It wants “full regulatory autonomy”. I hope that I will not embarrass the Minister if I quote him when he was in the European Parliament. He said in 2012:

“Surely one of the best ways for the EU to speed up growth is to scrap the employment and social affairs directorate in the Commission, repatriate its responsibilities to national governments, then we could scrap the working time directive, the agency workers’ directive, the pregnant workers’ directive, and all of the other barriers to actually employing people if we really want to create jobs in Europe”.


We will discuss on other days the maintenance of employment and other rights, but it is illustrative of the problem that we have that there is such an array of opinion within the Government. The advantage of having a parliamentary vote in the context of the implementation of the withdrawal agreement would be that it would allow Parliament to have the backstop of saying, “Actually, we want to stay in the EEA”.

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[Lord True]

If we have another referendum on the question of whether we should leave the European Union, to me that talks like a second referendum, walks like a second referendum and will be a second referendum.

[Baroness Ludford]

As many of the noble Lord’s soulmates often say, it would actually be a third referendum—so you pays your money and takes your choice. But it would be quite different because it would be in the knowledge of the actual detail of what Brexit entails, which people did not have in 2016.

[Lord Robathan]

The noble Baroness talked about patronising the British people. I think that all politicians are capable of being patronising, but does she not think that we should accept that the British people are sensible and clever enough to work out what they voted for in 2016?

[Baroness Ludford]

Actually, there is growing support in the opinion polls for people taking control themselves. I think it was the noble Lord himself who talked about how it is the people who decide, not us—and especially not us in this unelected House. I totally agree with him that it is the people who are now showing through opinion polls that they want to take control of the decision on what should happen to this country and on whether to give a verdict on the Brexit deal.

This has been an extremely valuable debate on the crucial decisions about the single market and the customs union. My last remark will be to mention, as my noble friends did, that being in the EU has not stopped other EU countries, such as Germany, exporting many more times the value of British exports to countries such as India. In fact, Germany is India’s top trade partner in the EU and its sixth biggest overall, and the UK is only India’s 18th-biggest trade partner. Even Belgium has a trade surplus with India, unlike the UK. So being in the EU has certainly not prevented other EU countries making a greater success of trade with India than we have. It is the problem of visas that has prevented a deepening of the trade relationship with India.

I cannot resist mentioning that the noble Lord, Lord Marland, who I understand is the Government’s trade envoy to the Commonwealth, was quoted recently as saying that it would be easy to do trade deals with Commonwealth countries such as Singapore, Malta and Cyprus. Malta and Cyprus of course are in the EU and are not free to do individual trade deals—so good luck with that.

To conclude, I give my full support to the amendments in this group which, one way or another, seek to keep us in the single market and the customs union, which is vital not only to the integrity of the United Kingdom, particularly on the intra-Irish border, but to the economic future of this country.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, this has been a valuable and, indeed, an enjoyable debate, but it is particularly important for two major reasons. The Bill is not about whether or not we leave but about how we leave, and there are two important aspects of why we have debated and heard these views today that we should not forget.

One is that Article 50—and its author is here, as always—by which we are leaving, requires that we have the framework for our future relationship with the European Union. That is what all these amendments are about. But the second reason we have to discuss that today is because the Government have absolutely failed to tell us what their vision for that framework is. That is why we are doing this now and why these amendments are key. Indeed, as has just been mentioned, it is only tomorrow that the Prime Minister will finally lock her little brood into Chequers for what the Financial Times today described as “Mission Impossible”, to thrash out some sort of consensus about the future of our country. Meanwhile, both in the UK and among our partners in the EU 27, there is a complete lack of clarity about the direction of travel. We need to know, as my noble friend Lord Adonis said, what is going to happen as we go into the negotiations.

What I have found rather strange is that, instead of the Prime Minister bringing her brood together earlier after the referendum 20 months ago, as we have just been reminded, she sent out her little chicks, and, indeed, a Fox, to make speeches far and wide—in fact, almost everywhere other than in Parliament—on their competing visions of what that post-Brexit future will look like. They are mostly doing that without a proper dialogue with consumers, with trade unions, with industry or with farmers. I will not have been the only one listening to “Farming Today” this morning to hear the responses to Michael Gove in Birmingham yesterday, when NFU members—not, incidentally, members of the Labour Party—lined up to say: “Where’s the beef”? They had heard his speech; they still did not know what was going on and wanted to know where this Government are taking us. They do not know whether they can sell their meat tariff and quota free in 13 months’ time. The fishermen in Newlyn have also been given little detail about their future and are beginning to worry about that, too.

Critical to this is the big issue: do we want tariff and barrier-free trade with the EU? Do we want no customs posts, particularly but not solely in Northern Ireland, no checks at borders and smooth, duty-free transit? The ports of Dover, Holyhead and Fishguard would like to know the answer to that, but so indeed would Calais and Rotterdam. But checks and paperwork will be avoided only if we produce and sell according to the same regulations, and if our internal systems of checks on food and manufactured goods are recognised and respected by the importing countries. Frankly, that means regulatory alignment. If that is not what the Government envisage, they must decide pretty quickly so that the plans, buildings, documentation, computer systems and, yes, the personnel can be put in place.

The big political question facing us is one that the Prime Minister seems not to dare ask those chicks: “Do we want to maintain our current, pan-EU high standards?” The Fox seems to think not. Reliable sources in his department—and I mean reliable sources—suggest that they hope trade deals with third countries will become materially easier when there is “less pressure”, in their words, to stick to the high levels of regulations required by the customs union and the single market, and easier because the so-called political factors, which I gather is departmental code for having less respect for human rights, would be “less of a problem”. Furthermore, the secret documents in Room 100 that have been referred to—I also saw them on the first floor—were, incidentally, reported in the Independent, so I am not giving any secrets away. My quotes are from that paper, which describe areas being explored where “maximising regulatory opportunities” are possible. It cited particularly what, as we have heard, was said by the Minister in an earlier life about the opportunity of ending the working time directive.

However, that is not what we heard from the Chancellor at Davos, nor what we heard from Austria yesterday when the Brexit Secretary stressed his support for,

“the principle of fair competition”,

which I would argue implies no lowering of standards to gain competitive advantage. Mr Davis said that the UK and EU should be able,

“to trust each other’s regulations and the institutions that enforce them … Such mutual recognition will naturally require close, even-handed cooperation between these authorities and a common set of principles”.

So the Viennese version is that standards and regulations are the building blocks of free trade. This is of course in contrast to the Foreign Secretary, who asserted:

“The great thing about EU regulation is that it is not primarily there for business convenience, it is not primarily there to create opportunities for companies to trade freely across frontiers, it is primarily there to create a united EU”.


There was not quite the same line coming out of Vienna.

We have also read—perhaps the Minister could confirm this when he comes to reply—that British and American conservative groups, including the Initiative for Free Trade founded by Daniel Hannan MEP, who I gather is his friend, are working on an “ideal trade agreement” that would allow the import of US meats such as chlorinated chicken and hormone-raised beef, along with drugs and chemicals currently banned in Britain. Is that the vision that they want?

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[Baroness Ludford]

My Lords, this issue is linked to those under Clauses 9 and 14 about the withdrawal agreement and the exit day in that context. No doubt we will come back to some of these issues, because they are all interlinked and it is quite difficult to get a holistic view. The noble Lord, Lord Liddle, is quite right: one key issue is what we are going to be exiting to. Flexibility is one thing but an excess of uncertainty is another—particularly, as my noble friend Lord Tyler said, when it is coupled with ministerial discretion.

We have the exit date, we have the date when the treaties cease to apply, and we can add on the layer of what is going to be in the transition terms—I have not had time to read the Government’s proposal today. We also have the question about whether Article 50 might be extended, and the question of whether Parliament might want to put the deal to the citizens for a final say. There is also the question of the post-dated cheque. So, all in all, they went all round the houses in the other place—no fixed date, then an attempt to fix it, then a date movable by Ministers. In all this brew, the amendments raise a very reasonable point about Parliament being in the driving seat—something that has been the theme of so many of our debates in the last year and a half.

We have no idea exactly what being subject to EU law, or even respecting the remit of the ECJ, whatever that will turn out to mean, during transition and even in the longer term—because that was the implication of the Prime Minister’s speech on Saturday—means. That sits uncomfortably with the Bill as a whole, and especially with the specification of exit day. We are being asked to fall into a black hole and trust Ministers to get it right—which on current experience is not a very wise thing to do.

The amendments have been described as probing, but answers from the Government—I am sure that the Minister is about to give very precise answers—will be very helpful to our understanding of how the jigsaw will fit together. At the moment it all looks far too uncertain for anyone to be comfortable.

[Baroness Hayter of Kentish Town]

My first question to the Minister is: why did the Government slot in the calendar date at Committee stage, when that was never foreseen in the original Bill? Was it for some good legislative reason, or was it, as my noble friend Lord Hain suggested, to satisfy a certain hard Brexit group of MPs sitting on the Prime Minister’s shoulder, rather like the 60 who have been writing her helpful letters today? It certainly looks as if this was more to do with party management, in the words of the noble Lord, Lord Triesman, than being in the national interest, which we have been advised should control everything we do.

Secondly, I ask the Minister to comment on the point discussed a few moments ago—the exact wording of Article 50. The Bill as it stands would allow the date specified to be extended in exceptional circumstances, but this probably deals only with the possibility of an extension to Article 50, which, as the noble Lord, Lord Kerr, has said, provides:

“The Treaties shall cease to apply to the State in question”—


that is us—

“from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification … unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.”

The date could be amended in accordance with what is in the withdrawal agreement. We indeed might come to an agreement that, for some other reason, chooses an earlier or a later date. Or we might want to amend the date if the withdrawal agreement were not finalised. On the evidence of negotiations so far, it is quite unlikely that this divided Government, seeking to negotiate something which, I have to say in all fairness to them, has never been undertaken before, will keep to their timetable. They should therefore want the flexibility.

There is another issue. Even if we had a deal, what would happen if the European Parliament voted it down? I understand that that vote could be as late as one year from now; it could be as late as February 2019. And the European Parliament has the right to vote any deal down. Guy Verhofstadt told Andrew Marr at the weekend that a thumbs down from the European Parliament meant exit with no deal. So if in a year’s time the Parliament were to vote a deal down, I assume that we would be out a month later, on WTO terms with no transition deal, which would also mean no safeguards for EU citizens—either ours living in EU countries or theirs living here. I do not think that the European Parliament would do that, but my judgment is that if it did, the 27—or indeed the 28, with our Government as well—would speedily get themselves into a room and row back from that. I cannot imagine that we, or they, would want to be in that position. Again, that would mean a change in the date, so the flexibility needs to be there.