Outcome of the European Union Referendum

Lord Brennan Excerpts

Tuesday 5th July 2016 Lords Chamber

[Lord Brennan (Lab)]

My Lords, the present state of affairs constitutes a major challenge to the political system of our country—a challenge with which we in this House have to cope. What is now to come and how should we deal with it?

First, I commend to the House many of the speeches today that have given us a role with a special responsibility: to help restore confidence in our political system. The front page of last Friday’s Economist carried the words “Anarchy in the UK”. I read a lot of the continental press every day of the week and over the last seven to 10 days have seen similar headlines, quite apart from a degree of consternation within our own country. The House of Lords, with its experience, expertise and capacity for calm, reasoned debate, is very necessary at the moment, particularly if the Government, because of their election of a leader, do not institute significant action until September. We have a short-term and a long-term obligation.

All of us in the political system should reassure people of our principles and process. I suspect many of those who voted leave did so because of their resentment and not for their appreciation of one side or the other. Many who voted to stay are deeply regretful of the result. They will all need to be reassured now about objectives, process, timing and alternative solutions, and this must be done with transparency. The idea that these negotiations can be conducted in secrecy or semi-secrecy is totally unrealistic. There will be leaking by everyone involved as they think appropriate.

We should resolve the following in the action we need take. There should be a plan—not a plan to have a plan—which includes the basis of a coherent strategy. We should use professionals. We should go out and recruit. There is no reason why we should be concerned about the intellectual competence of our civil servants—trade negotiations are conducted by trade experts, not national civil servants. We have one in the House. My noble friend Lord Mandelson was the Commissioner for Trade in Europe for four years and negotiated with the WTO. So I am talking about cross-party co-operation as well as professional involvement.

On business and finance, small businesses depend on Europe much more than the multinationals—it has the most direct effect on them and their workers—as well as the City of London and others. If we are to negotiate, let us base the strategy on realities. I was for remain but negotiation is hard talking. Sixteen per cent of the continental trade of the European Union comes to the UK. More than £1 trillion of assets are managed in London, put there by European investors. Do we really think that the Germans will give up on their cars? One of its own confederations of business last week said that an attempt to stop that trade would be “very foolish” if its own Government supported it. The same applies to French wine and Spanish tourism. In Italy, 20% of GDP is represented by non-performing loans. With the stability and growth pact no longer working, it prefers Germany’s operation at the cost of the poorer countries. We have to be realistic and tough —and I am a remain man.

In these negotiations we have to talk about alternatives —that is, competent negotiation. Of course we must be friends together, but we tell the other side, “This is what we want, or else”. What of the “or else”? President Eisenhower said:

“Firmness in support of fundamentals, with flexibility in tactics and methods, is the key to progress in negotiation”.

Firmness in fundamentals offers flexibility. The timing of how you put things from one period to the next is critical. Reporting back to Parliament is indispensable if you need, as you must, to maintain public confidence. Then there is the final deal: what is going to happen then?

What about the effect of Article 50 on our politics generally? There is a period until we trigger it—let us say three to six months. There could be an early agreement, but that is highly unlikely. Or, at the end of two years we are out unless there is unanimous agreement to extend that period. Do we realise that, depending on which alternative occurs, that runs through pretty well the whole life of the rest of this Parliament? Indeed, it could go into the next general election. What would we then face compared to the referendum we have just had?

I turn now to new markets. Last Friday, in the United States Congress, the United Kingdom Trade Continuity Act was proposed by Republicans, with, I understand, some Democratic support. It is designed to open the prospect of a United States trade agreement with the UK. That might bring us into or next to the NAFTA with Canada and Mexico. I am not recommending it but pointing out that there is an actual alternative.

We built Latin America in the 19th century. It contains 500 million people and has a vast and emerging infrastructure and other projects that we could supply. China, the Commonwealth, and India are all also economic factors.

One extremely important factor is the geopolitical issues that bind us to Europe: whether we are in the Union or not, terrorism, human trafficking and refugees from conflict will still be there.

Lastly, there is NATO. The Americans may talk to Germany and France out of necessity if we leave, but we are their preferred ally. We should bear in mind that Mr Steinmeier, the German Foreign Minister, last Friday condemned NATO for warmongering military exercises in Poland. Europe is not going to go away, whatever we decide.