Further Developments in Discussions with the European Union under Article 50 of the Treaty on European Union

Earl of Caithness Excerpts

Monday 11th March 2019 Lords Chamber

[The Earl of Caithness (Con)]

My Lords, I liked the way my noble friend Lord Sherbourne introduced his speech. He reminded us that the purpose of the referendum was to settle the question of Europe once and for all. All it has done is divide the country more and more over the past two years. I voted to remain because I believed that the case to leave the EU had not been made and that we could do better by staying within the tent and trying to reform the EU from within. I have slightly changed my mind on that.

I hoped when the result of the referendum was announced that we would discuss both the leaving of the EU and the next stage: the trade deal. Certainly, that was what we were led to believe when I was on the EU sub-committee of this House and we took evidence from respected people. They thought that the whole thing would be dealt with together rather than be separated. That separation is causing immense problems. The noble Lords, Lord Rooker and Lord Kerr of Kinlochard, said exactly that: this is a long drawn-out affair. But it is rather like having multiple fractures on one arm. We have one arm and we are about to go into the second arm but, as both noble Lords said, that will take even longer and there will be more multiple fractures. Having spent some time in hospital over the past three years, multiple fractures are ghastly. A clean break is so much easier. It heals more quickly and your body gets better; relationships can be restored.

Inevitably, the noble and learned Lord, Lord Goldsmith, and the noble Lord, Lord Newby, blamed the Prime Minister and the Government for the mess that we are in, but this is a negotiation. I stand back a little from that view and blame both sides. Neither side has come out of the past two years with any credit. When Nelson Mandela came out of prison, he was asked what his red lines were in a negotiation. After 27 years in prison he said that everything was up for negotiation—we are prepared to negotiate on anything and everything. That is not the situation with the EU. The EU is far too legalistic a structure to bend or to adopt that approach.

This leads me on to the point about remaining in the EU that the noble Lord, Lord Armstrong, and my noble friend Lord Saatchi mentioned. That is a position I would have liked to adopt, but I now believe that, having gone through this period, if we were to stay in the EU there would be only one choice for the UK: to become part of a fully integrated EU. It is inevitable that, in order to survive, the EU will have to get much closer together, and President Macron is driving that. The legal structure of the EU prevents it treating Britain as an equal partner. So I believe we are now faced with a choice: if we stay we will have to become part of the eurozone and to commit fully to a much more federal Europe. We do not have any provisions in our legislation to have referendums on any treaty change—that was abolished soon after the referendum took place—so there is a stark choice. We would not go back to exactly the same position we were in three years ago.

The situation in the country since the referendum was well encapsulated by the noble and learned Lord, Lord Hope of Craighead, who said that the country is frustrated, bored and irritated with the process. I believe that is a correct summary. The more I talk to people, the more people have said to me, “Let’s just get on with it, one way or the other”.

That takes me to the three options that confront the other place, possibly in the next three days. I start with the last: the delay; the postponement of Article 50. I firmly believe that would cause only more irritation and frustration. Yes, it has been a mess and we are in a mess, but the extraordinary thing is that I do not think there is any other country that could have gone through what we have gone through in the last two years without people taking to the streets. I believe people will take to the streets if there is a further delay to Brexit. The way this country has behaved will put it under strain and it will break, so to delay Article 50 would be quite wrong.

Let us move on to the no-deal Brexit. I believe the criticism of that has been wildly overblown. Two years ago I firmly believed that a no-deal Brexit would have been a terrible disaster. I do not believe that any more. I do not like it as an option, but it does give us a clean break and a chance to allow businesses to decide what to do. For the past two years, businesses have been waiting for the Government to make a decision. That is why they are not investing or performing as they should. It is perhaps the least good of the two options.

So we come to the Prime Minister’s deal. The latest information I can get from the news is that the Prime Minister is on her way to Strasbourg at the moment. Let us hope she can pull something out of the bag. If she can change her deal—which I do not believe is a very good deal—and get the reassurances, it is the duty of the MPs, who in my view have so far behaved rather badly, to come behind the Prime Minister and say, “Yes, this is a way forward that takes us out of the EU and fulfils the decision of the referendum”. Then we can get on and businesses can build up a new and better Britain.

Scotland Bill

Earl of Caithness Excerpts

Monday 29th February 2016 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

My Lords, I, too, am very concerned about the review provisions. The noble Lord, Lord MacGregor, was absolutely right in what he said about the Barnett formula and I agree with every word. Of course it should be needs based. However, I fear that that pass is sold. It was sold in the vow; it was sold before Smith even started. It is a great mistake and very damaging but we are where we are.

I am struck by the same point that the noble Earl addressed on paragraph 17. We are saying there that in the fiscal framework talks both parties have agreed that the right block grant annual indexation mechanism should be the comparable model, but they have agreed that it will not be used up to 2021; the wrong one will be used. Then comes the review, with no terms of reference set out, and the decision-making machinery in the review is that both Governments have to agree. As the French say, rien ne dure plus que le provisoire—nothing lasts longer than the temporary. I am afraid that the can is being kicked down the road not only until 2021 but as far as the eye can see. That is a serious mistake.

I agree with the noble and learned Lord, Lord Hope, on the dispute settlement mechanism, which, on the face of it, simply does not make sense—ending up with, “if they do not agree there will be no fiscal transfer”. What is that? Is it a nuclear weapon in the hands of the Government so that the whole thing stops? Is it a plausible nuclear weapon? Is it a credible deterrent? I do not think so.

However, we are where we are. I greatly sympathise with the noble Lord, Lord Dunlop, who handles these matters very well, but what are we expecting him to do? Are we expecting him to tell us tonight, “Okay, we will change the fiscal framework because the House of Lords does not like it”? I do not think he can quite do that, though his skills are legendary. However, the noble Lord, Lord Forsyth, may have the answer in Amendment 68—not the amendment to which the noble Lord, Lord Higgins, drew attention—which suggests that it would be a good idea that both Houses of Parliament should have a chance to have a serious discussion about the fiscal framework.

As a Scotsman, I admit that I am torn. When Mr Hogg passed the ball successfully in the last minute against the Italians and the Scots finally won a game, I was very pleased. It looks as if Mr Swinney is the Hogg of this particular match. There are consequences for the United Kingdom, for Northern Ireland, for Wales and for the north of England, so the UK Parliament should address the fiscal framework before the Scotland Bill goes on to the statute book. If the noble Lord, Lord Forsyth, were to press Amendment 68, I would be inclined to go with it.

[The Earl of Caithness (Con)]

My Lords, we are in a mess. It is a very sad occasion when you get a situation like this where the pass has been sold. What is most interesting about the debate is the number of Scots who are questioning this because it affects adversely the rest of the United Kingdom, and I add my name to that list. I have never before attended a debate in this House, in the many years that I have been here, which has involved so many Scots who are all on the same side against an agreement that is beneficial to Scotland. Let us make it absolutely clear: Scotland had a very good deal before the present devolution agreement and it now has an even better deal. It will rank as one of the great victories that the Scots have achieved over the English Government. It is the UK Government in this case, but as far as the Scots are concerned, it is the English Government.

At the meeting this afternoon my noble friend Lord Dunlop said that this is a significant agreement which provides the opportunity to end the blame game. Actually, nothing could be further from the truth. This will not end the blame game—the blame game will continue. All of us who have been brought up in Scotland know full well that whatever the UK Government concede to the Scots Government, particularly the Scots nationalist Government, it will never be enough. The blame will continue.

We have an interim agreement but a permanent agreement. The interim agreement has handed over the grenade, as the noble Earl, Lord Kinnoull, said, to go off five years or five and a half years down the road. No one is going to want to handle that grenade, and as the noble Lord, Lord Kerr of Kinlochard, said, it will be passed on again. So we have a false but permanent agreement which is of huge detriment to the rest of the United Kingdom.

[Lord McCluskey]

Perhaps the noble Earl will permit me to ask him a brief question arising out of what he has said. If those of us who reside in Scotland are going to benefit so much, as we all think we are, should we be declaring an interest in speaking in this debate?

[The Earl of Caithness]

My Lords, having recently moved from Scotland to London, I will leave that to the noble and learned Lord, but I would certainly declare an interest—not that the Scottish Government in Edinburgh are remotely concerned with what happens in Caithness; they are much more concerned with the central belt. I do not think that Caithness is going to benefit very much.

I raised at the meeting hosted by my noble friend this afternoon the question of the tangential consequences of the no-detriment principle. It was quite clear that the Chief Secretary thought that this was a grey area. Let us take the example mentioned earlier by my noble friend Lord Forsyth and myself, of air passenger duty and the Edinburgh-Glasgow axis against the Manchester-Newcastle axis. If consequences flow from that, they are going to be very hard to prove, and, quite frankly, as far as I could determine, the Chief Secretary was not terribly interested in them. But if they can be proved by one side, we then get into the question of the resolution mechanism. The lawyers in this House have clearly shredded the mechanism that is before us, so we are now in an even worse situation in that we have a mechanism that is not going to work satisfactorily from the legal point of view; that will be difficult to implement in the first place; and that could be highly prejudicial to the north of England and other areas in the rest of the United Kingdom.

I have some sympathy with my noble friend on the Front Bench. I have been in his position when the whole House was against me and the only people on my side were those who were sitting to my right and to my left. That is the situation today. However, I would ask him to take this away and try to implement something of what my noble friend Lord Forsyth has requested. Of course this has to be a political deal in the end, but it is one that the United Kingdom Government have lost and the Scottish Government have won.