Brexit: Trade in Goods (EUC Report)

Lord Davies of Stamford Excerpts

Tuesday 18th July 2017 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, it is a pleasure to follow the noble Lord, Lord Horam. He and I have taken part in more debates over more years in both Houses of Parliament than we probably choose to count. I particularly agree with what he said about control and sovereignty, and the problems we have brought on ourselves through this Brexit project that have reduced our capacity to control or influence our environment. They have reduced our sovereignty, not in any way increased it.

It is fairly clear now that the whole Brexit project is ploughing a trail of destruction through the British economy. We are in the very early days and most of our fellow citizens have not really noticed what is going on. Almost every day there is a sad and worrying indication of some strategic loss in the country’s interests and long-term economic assets. The other day we heard the announcement that the European Medicines Agency would be lost. That is 1,000 people, many of them highly paid and skilled pharmacologists and doctors, and more than 10,000 people who come over here to visit them, talk to them and take part in conferences arranged by them. Beyond that, there are people—I cannot calculate the number but it is quite significant—in this country as representatives of international pharmaceutical companies that made their European headquarters here precisely because the EMA is located here. You would think that was a major loss but I have not heard a word from the Government about it. There has not been a word of concern or regret, or any suggestion that they might try to mitigate the damage going on.

With the European Banking Authority there is exactly the same story. Again, a few days ago we heard the news that easyJet is setting up a headquarters in Austria and managing part of its airline from there. Future job creation will be in Vienna rather than in London. Are the Government worried about that? Not in the least, so far as I can see. Perhaps the Government’s attitude is, “It can go to blazes—it’s nothing to do with us”.

Significantly, there is more of a row in the press about the threat of our no longer being a member of Euratom, with real problems created for the NHS, in both diagnosis and the treatment of patients, and for our nuclear industry. For once, the Government responded. Mr Damian Green said that the accounts were scaremongering. He accused leading scientists—including my noble friend Lord Winston, who made a distinguished speech on the subject in this Chamber not long ago—of not knowing what they were talking about, and of saying there was something very troubling going on when there was nothing troubling going on at all. Apparently, the Royal College of Radiologists was scaremongering, according to the First Secretary of State. This is a Government who have not even bothered to respond to the report before us. Serious things are in the report and the Government have no answer to them. Of course, that can only further depress potential investors in this country, because not only do they see the problems, the issues and the anxieties that are expressed but on the Government’s side there is complete and utter silence—either silence or, frankly, comments that can hardly be expected of intelligent and responsible people.

Obviously, this is a deeply worrying situation for the whole country and it is against that background that I read the report. It is a very good report and I agree with what everybody has said—I think the noble Lord, Lord Horam, described it as a cornucopia of information on this matter. But I thought when I began to read it, “At least it won’t be as bad as some aspects of this story. This will not be quite as depressing because it is about goods. There is a better chance of us getting a reasonable deal on goods in the context of a free trade agreement with our European partners than there is with services”.

I think there is very little chance that we shall get passporting rights in financial services; I would be amazed if we did. I cannot see why we would for a moment. It seems to me that the continentals would be very ill-advised to do so, not least because we have learned from the Lehman Brothers crisis how vital regulation and supervision are in maintaining financial stability. You really do not want people practising financial services in your country or in your market who are not directly under your supervision, where you can decide that a director of a bank is not a suitable person and remove him; or where, in a crisis, you can give instructions to institutions as to how to behave and they do not have the opportunity to object or say, “I am sorry, we have to go to an arbitration tribunal. We cannot obey your instructions directly”. So I would be very surprised if the continentals allowed us to have banking passporting rights.

If we were allowed banking passporting rights, presumably the Swiss would have to be allowed them. The only reason the Swiss have located their wholesale banking operations in the City of London is because we are in the EU and they are not, and they get banking passporting rights by having those operations in London. It would be very odd indeed if, when we have left the EU, the Swiss could come to London and have passporting rights but could not enjoy them in Zurich or Geneva. That is not going to happen so clearly if the continentals gave those rights to us they would have to give them to the Swiss. I do not think they will give them to the Swiss so they will not give them to us. If they gave them to the Swiss, they would have to give them to the Japanese. If they gave them to the Japanese, they would have to give them to the Chinese.

We all know that any Chinese-owned company, whether a bank or a trading company of any kind, is ultimately taking orders from the Government in Beijing, whatever the theoretical allegiance of that business to the regulators in a particular country. Politically, it would be quite impossible to argue that there should be discrimination against China on those grounds, so the continentals would have to give those rights to China. I do not think they will do anything of the kind.

The position on services is really rather grim. I thought the position on goods might be a little better but then what did I read? I read on page 29 of this excellent report:

“All our witnesses said that the imposition of tariffs on trade with the EU would be deleterious to businesses in their sectors”.


There are few phrases more likely to make a parliamentarian stop in his or her tracks than “all our witnesses”. How often do we get all witnesses in any of our inquiries, or all participants in any debate, for that matter, or all people you happen to interrogate on a particular subject saying the same thing? But there it is. The Government have not responded to it. Presumably the Government are embarrassed by it and do not have an answer to it but there it is: “all our witnesses” feel that.

The report says on page 4:

“In the absence of a FTA with the EU after Brexit, tariffs would apply. These would incur additional costs for many UK businesses … Non-tariff barriers—such as rules of origin—would be more difficult to resolve. The Government’s stated intention to leave the Single Market and the EU customs union would mean that additional non-tariff barriers would apply to all the sectors considered in this report … We conclude that compliance with rules of origin requirements would introduce a significant additional administrative burden, with a particularly negative impact on sectors with a highly integrated EU supply chain”.


The report is absolutely unambiguous and clear. This debate has gone on for several hours. Of course, we have heard people trying to defend the Government in different ways but we have not heard any attempts to address those criticisms. Are we going to hear the Minister address those criticisms? Will she tell us that everything is actually all right? Will she say that these criticisms are misconceived? They are not misconceived; we are heading for a real crisis, with open eyes and doing absolutely nothing about it. I cannot think of a greater measure of irresponsibility. I also think it extraordinary that some of the people responsible for this like to talk about themselves as patriotic. I do not believe there is anybody in the world who wills us anything like as much harm as we are imposing on ourselves by the policies we are currently adopting.

It really is time Parliament did its job, which is to warn the public of perceived dangers before it is too late. It is enormously important that we do not allow ourselves, because of some misconceived party loyalty or a feeling that we do not want to depress people and have to make upbeat, complacent speeches—we heard an excellent example of an upbeat, complacent speech from the noble Lord who chairs the Commonwealth trade commission—to be seduced by these temptations to not speak the truth as we see it. To speak the truth as we see it requires us, I am afraid, to use some pretty blunt language. I have been using some pretty blunt language. I just hope that I have convinced the Minister that she really cannot avoid responding to these matters in this debate. We do not want just a bland summing-up at the end. Precisely because the Government have not given us a written response, we need an oral response to the very real concerns that have been raised by this excellent report.

Brexit: Legislating for the United Kingdom’s Withdrawal from the European Union

Lord Davies of Stamford Excerpts

Thursday 30th March 2017 Lords Chamber

[Lord Bridges of Headley]

I am delighted that the beady eye of my noble friend will continue to survey all that comes from government, and so it should. I thank very much my noble friend and the members of her committee for their work. As I said, we have confirmed that there will be a sunset clause in this piece of legislation. My noble friend is absolutely right about the other pieces of legislation that will follow. I will not say here and now the extent of any delegated powers they might have, but we are obviously very mindful of the need to ensure that those powers are proportionate.

[Lord Davies of Stamford (Lab)]

My Lords, the Government’s policy is to leave the single market, with potentially devastating consequences for the British economy. It is already causing the deepest anxiety in the City and among manufacturing industry particularly. I hope the Minister has read the recent report of the engineering manufacturers’ federation on the subject. The Government defend their policy. Their stated reason, or excuse, for it is that any other policy would be incompatible with their desire to restrict EU immigration. Now that the Secretary of State for Brexit has publicly acknowledged that in practice there will not be any meaningful reduction in EU immigration for some time, would it not be elementary common sense to re-examine this whole policy? The cost of leaving the single market remains the same, but the potential gain or return for which the Government said they were hoping is obviously much less than anticipated and possibly non-existent. Is it not common sense in those circumstances to review their policy, quite apart from the other issues such as the difficulty it would create for Ireland to create a new frontier across the island of Ireland, which could be avoided if we remain in the single market?

[Lord Bridges of Headley]

I respect the passion with which the noble Lord speaks on this matter; he does so with great eloquence. I have very little more to say to expand on what I have said at the Dispatch Box on this issue many times before. We view the need to leave the single market as reflecting the view and the instruction that the people delivered on 23 June last year. We have always said that we believe we need to take control over our borders. We also see that as an instruction and part of the need to leave the EU. As regards how we do so, my right honourable friends the Secretary of State and the Prime Minister have both said on many occasions that we need to do so in a sensible way, mindful of and sensitive to the needs of the economy. I have little to add to that.

European Union (Notification of Withdrawal) Bill

Lord Davies of Stamford Excerpts

Ping Pong (Hansard): House of Lords
Monday 13th March 2017 Lords Chamber

[Lord Oates (LD)]

My Lords, I move this Motion for the following reasons. First, despite the large majority that voted for the amendment to the Bill in this House, the Government have failed to make any concessions and not even attempted to address the many issues raised by noble Lords in Committee. Secondly, the profound nature of the issue at stake should make us think very carefully before we concede. This debate is not over some arcane technicality or some petty, partisan disagreement; it is about people’s lives. It is about whether people will be allowed to live in the country that they have made their home with the people for whom they care, whether they can stay in a job or plan a career, and whether their children can remain in the school they know and study with the friends they have made. It is about their futures, their homes and their families, and it is about the fear and misery being caused by every further day of uncertainty.

Thirdly, we should weigh our decision very carefully, because this debate is also about the integrity of our country. It is about whether we will honour the unequivocal commitment made by the official Vote Leave campaign that, if the United Kingdom voted to leave the European Union, the rights of all EU citizens in the UK would be guaranteed. Unlike most other issues arising from the referendum, there is absolutely no dispute about what was promised to EU citizens. The Vote Leave campaign, which was supported by a number of noble Lords, made the following categorical statement:

“There will be no change for EU citizens already lawfully resident in the UK. These EU citizens will automatically be granted indefinite leave to remain in the UK and will be treated no less favourably than they are at present”.


There were no caveats; there was no issue of reciprocity or talk of negotiations—just a categorical commitment unilaterally given.

Finally, this debate is about the role of this House. Precedent indicates that, when the rights of individuals have been threatened, this House has always been robust in its defence of them. I hope that we will live up to that precedent today. The facts are clear: a firm and explicit commitment was made by the Vote Leave campaign that the rights of EU citizens in the UK would be protected. Parliamentary committees of both Houses agree that a unilateral guarantee should be provided now, and all the bodies representing British citizens in the EU who have contacted me and many other Members of this House have supported that position.

It is clear that, if we do not insist on our amendment, there is a real possibility that EU citizens in the UK and UK citizens in the EU may not have clarity as to their status for another two years. The House of Commons Exiting the EU Committee rightly described such a situation as unconscionable. I understand the nervousness of some noble Lords about challenging the elected House on this matter, but to those who argue that it is not the right time for us to insist on our amendment, that this Bill is the wrong place for us to insist or that precedent tells us that we should not insist, I respectfully argue the contrary. Your Lordships’ EU Justice Sub-Committee and the House of Commons Exiting the EU Committee unanimously agreed that the UK should act unilaterally and that the time to act was now. This Bill is the only place to act if we are to end the debilitating uncertainty that is causing so much distress.

The Minister says that we have the right to amend the Bill; we also have a right to insist on our amendments, and precedent tells us that we should—that when issues of important principle or individual rights are at stake, your Lordships’ House can and does insist on its position and, if necessary, repeatedly pushes the issue back to the Commons. It did so on the 2014 Criminal Justice and Courts Bill, and on the 2012 Legal Aid, Sentencing and Punishment of Offenders Bill. It did so no fewer than three times over the 2007 Corporate Manslaughter and Corporate Homicide Bill, no fewer than four times over the 2006 Identity Cards Bill and no fewer than five time over the 2005 Prevention of Terrorism Bill. It has regularly insisted on amendments to Bills when far less was at stake than today: on the powers of the Learning and Skills Council; or the means by which the chairman of the Legal Services Board is appointed; or even on the fitting of retro-reflective tape—whatever that is—on heavy goods vehicles.

How then, when the rights of millions of people are on the line, could this House give up at the first attempt? How, when clear and unequivocal commitments were made to EU citizens in our country, could this House fail to insist that they are upheld? How, when the integrity of our country is at stake, could this House fail to insist that it is upheld? Many people will be watching us tonight: we cannot please them all, but we can show them that no matter what the pressures from the media or the threats from the Government may be, we are prepared to do what we know to be the right thing. I have no doubt that the right thing is to insist on this amendment to protect the rights of EU citizens in the UK and, in doing so, to uphold the honour and integrity of this country. I beg to move.

[Lord Davies of Stamford (Lab)]

My Lords, it is not in any way my intention to repeat the arguments I have used about Brexit in the various debates in this House over the last few weeks. But there is a question I must ask the Minister, the answer to which is very important to all of us. It goes to the heart of the earnest intention of the Government to be quite transparent with the House and the public as the Brexit negotiations, which will presumably start in a few days, continue—as they will for a long time.

I have not been very successful in getting answers to questions I have asked the Minister in previous debates. I console myself by thinking that that may be because I have touched on some rather delicate points that are potentially embarrassing for the Government. But it is not a great consolation: I would rather have full and frank answers and I hope that I will have one tonight—not at all in my interest but in the interest of the issues that I have just raised.

The Minister has just told the House, and the Prime Minister and Minister for Brexit have both said on many occasions, that it was their original hope and intention to negotiate a deal on the future residency rights of EU citizens here and of British citizens in the remaining part of the EU in advance even of giving notice under Article 50. That unfortunately proved impossible because some of the continentals were not willing to do it. The Government would now like to negotiate on that matter and resolve it in advance of negotiations on difficult economic and other subjects, so that those negotiations can start very quickly.

My question is: how can that possibly be? A negotiation on the future residency rights of British citizens in the EU or of EU citizens here is nothing whatever to do with the Commission. It is not a negotiation that can be pursued with Monsieur Barnier; it is not a matter for Mr Verhofstadt or Mr Juncker, either. Residency issues, requirements and regimes throughout the European Union concerning persons who are not citizens of a member state or another member state but citizens of a non-EU state are not a matter for the treaty: they are a matter for each individual member state. Every member state has its own different residency rules. What is more, the arguments and forces which will be brought to bear if there is any suggestion of changing those rules will be different in each country. So if you want to negotiate on that—as the Prime Minister says, and the Minister has said this evening—you will have to conduct separate, bilateral negotiations with 27 different countries.

Eventually, the result of that negotiation will have to be ratified by 27 different countries—28, actually, because it will have to be ratified here, I hope. That is not something that can be done in a few weeks, or even, I think, in a short number of months. If it had been attempted before notice was given under Article 50, it would have delayed by many months the issuing of a notice under Article 50, quite contrary to what the Prime Minister said her intention was. That is something which, if it is undertaken immediately we issue notice under Article 50, will itself delay the procedures for a very long time. How can the Government have thought that this was a way of accelerating progress on the Brexit negotiations? I think that is a question which nobody has asked. I tried to ask it the other day but I was not able to capture your Lordships’ attention. I ask it now because it is absolutely essential if the House is to achieve a complete picture of what is going on in this very important area.

European Union (Notification of Withdrawal) Bill

Lord Davies of Stamford Excerpts

Report stage (Hansard - continued): House of Lords
Tuesday 7th March 2017 Lords Chamber

I applaud the noble Lord, Lord Hain, for the wording of his amendment. I thank him and his two colleagues who have served the people of Northern Ireland over the years. Even though in a sense the noble Lord is probing us with the words of his amendment, I ask the Minister to recognise once more that this is much than a question of a line on the map; it is a question that goes very deep into our understanding of the future.

[Lord Davies of Stamford (Lab)]

The whole House always listens to the noble and right reverend Lord with the greatest respect on these matters. I have known him for about 20 years and have spoken to him on the subject over that time and feel the same degree of respect. I wonder whether he would like to tell the House—I do not know what answer he will give—whether he feels that one possible solution to the difficult, dire problems he has just outlined might be to allow for the negotiation of a special status for Northern Ireland which might leave it, at least in some respects, within the European Union.

[Lord Eames]

My Lords, I feel that the question that the noble Lord has raised takes us far beyond the points I was trying to put over because we must not tie the hands of the team that is going to speak for us all in the negotiations. I say to the noble Lord, please keep an open mind on the possibilities, but it is not for us to concern ourselves with.

--- Later in debate ---

[Lord Hain]

I am grateful to my noble friend. I will not prolong this discussion too much except to say that, following the impasse that the Minister, the Secretary of State and their colleagues are grappling with, we hope that negotiations will bear fruit. It may well be that the British Government have to give something on this. I would just mention in passing that there is, for example, a demand from the WAVE trauma group to have a pension for innocent victims—not perpetrators of atrocities. I presume this could come only from the Government. I will briefly give way.

[Lord Davies of Stamford (Lab)]

I am grateful to my noble friend. Thanks to the initiative of the noble Viscount, Lord Slim, we are talking about a desperately important matter. As the noble Lord, Lord Empey, said, there are still some serious reservations about granting amnesty to British forces. I share some of those sensitivities. Without getting into this complicated ground, is it not the case that the prosecuting authorities always have the option to decide whether or not to prosecute not just on the grounds of whether there is a chance of a conviction but also on the grounds of national interest? Is it not to be hoped that the prosecutor in Northern Ireland will take advantage of the opportunity for a judgment with the greatest degree of sensitivity?

[Lord Hain]

We are opening up a whole new debate. I am not sure I fully agree with my noble friend. I will end by saying that I welcome the fact that the Minister said that the commitment to the option of Irish citizenship is rock solid, as is the commitment of the Government to the Good Friday Belfast agreement. I beg leave to withdraw the amendment.

European Union (Notification of Withdrawal) Bill

Lord Davies of Stamford Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 1st March 2017 Lords Chamber

[Lord Blencathra (Con)]

My Lords—

[Lord Davies of Stamford (Lab)]

My Lords, I shall be very brief—

[Lord Taylor of Holbeach]

My Lords, it is the Conservative Party’s turn. The noble Lord, Lord Blencathra.

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[The Parliamentary Under-Secretary of State, Department for Exiting the European Union (Lord Bridges of Headley) (Con)]

My Lords, we have had a very good debate here tonight—

[Lord Davies of Stamford (Lab)]

My Lords—

[Noble Lords]

The Minister.

[Lord Taylor of Holbeach]

I think the mood of the House is to carry on and to hear from the Front Bench.

[Lord Davies of Stamford]

My Lords—

[Noble Lords]

Order!

European Union (Notification of Withdrawal) Bill

Lord Davies of Stamford Excerpts

Committee: 1st sitting (Hansard): House of Lords
Monday 27th February 2017 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, I agree very much with my two noble friends, who have set out very well the purpose of the amendment. I, like them, feel that it is a disaster for our country to leave the European Union in any circumstances, and that the economic costs have not begun to be properly assessed in this country, although as every week goes by we become more aware of some of them. However, I think it is common ground, even with those who think that we should leave the European Union and who voted and campaigned for that, that there are economic costs and even they would accept that those economic costs are very serious.

The economic costs essentially affect manufacturing, particularly areas such as automotive and aerospace where there are a large number of supply chains in the European Union going across countries, with parts and components and so forth going back and forth more or less the whole time. That business will be very severely affected by our leaving the customs union and the single market, particularly where we would have to pay tariffs, as we would do in the case of motor cars, for example. The other area is financial services, which accounts for 10% of the gross national product of this country, as we all know. The City at the moment is the financial capital of the European Union but that is likely to cease if we left the European Union. It is very difficult to imagine how it could continue to be that unless we had some way of remaining in the internal financial market.

The great thing about the EEA is that it is a way of avoiding some, if not all, of the economic costs—there would be a loss of investment in many areas and as time went by there might be threats to our competitiveness as a country, both in services and in some of the manufacturing areas I mentioned. Nevertheless, it would mitigate and very much reduce the economic costs, which everybody is agreed are considerable and serious. Therefore, it seems extraordinary that the Government have not even bothered to consider or negotiate the possibility of our remaining in the single market by virtue of becoming again a member of EFTA or otherwise.

The Government have very reluctantly conceded that there should be some parliamentary process in this procedure of leaving the European Union. They have very reluctantly conceded that they should report to us at least as much as the European Commission does to the European Parliament on the progress of negotiations. They have very reluctantly exposed to us some of their thinking on some of these points, which have been dragged out of them in different ways—and we have to go on doing that.

However, as we begin to get clearer sight of what the Government are doing, it becomes more and more curious because we observe that they are actually breaching some of what one had always thought were the golden rules of negotiation. They are behaving in a way that is clearly irrational. No normal person gives up an option unless he or she gets to the point when they have to. There is no point in giving up an option in advance so why did the Government state in advance they were not interested in becoming a part of EFTA and remaining in the single market on that basis?

Secondly, the Government have said that their priority is to prevent freedom of movement or stop freedom of movement in future so far as this country is concerned. We now hear from Mr Davis that he does not expect any significant reduction in immigration from the rest of the EU or anywhere else for the next few years. In other words, the benefit for which the Government are apparently prepared to pay this enormous economic cost is much less than it was always made out to be. That is very clear.

[Lord Forsyth of Drumlean (Con)]

On the subject of giving away an option in advance, is my memory playing a trick on me in recalling that the noble Lord and others on the remain side during the referendum campaign argued that membership of the EEA would be the worst possible option because we would be bound by all the rules but have no say?

[Lord Davies of Stamford]

The noble Lord is uncharacteristically inaccurate; he normally does his homework before intervening in this way. He is quite right that I and many on the remain side argued against the EEA being the right solution but he is quite wrong to suggest that any of us argued that it was the worst solution. On the contrary, throughout the campaign I always said while it was a very bad solution, it was the least bad solution of all those on offer. I am on record as saying that and probably said it in debates in which the noble Lord took part. Indeed, that is my strong view today and is the case I now argue.

I wish we could stay in the EU—period, as the Americans say, or full stop—but if we cannot we must try to mitigate the enormous damage. That is the argument I have been making. The way to do that is to try to find a way to stay in the single market, and one way we could certainly do that is to rejoin EFTA, as my noble friend Lord Lea set out. It is extraordinary that the Government have excluded that possibility and I now come to their extraordinary behaviour.

The Government have not only revealed that the benefit for which they are prepared to pay this high cost is nothing like as great as it was always made out to be, but not even considered negotiating on the single market regime provided by the EEA and using that as a basis for trying to get some concessions on freedom of movement. My two noble friends suggested a way forward that might be possible. I do not think that we on this side of the House will be able to take over these negotiations but we want to know—it is important that everybody in the country knows—why the Government did not even think it worthwhile to sit down with our European Union partners and say we would like to stay in the single market but we would also like to curb freedom of movement at least to some extent. We could have a negotiation on that basis.

[Lord Grocott (Lab)]

Could my noble friend refresh the House’s memory on what success the previous Prime Minister had in having this as an objective in his renegotiation of our terms of membership of the European Union?

[Lord Davies of Stamford]

I think the previous Prime Minister was a completely incompetent negotiator. The way to make progress in European affairs—it is extraordinary that after all these decades the Tory party has not learned this—is to adopt a communautaire approach and the language of one’s partners, to say that what one is seeking to do is in the interests of everybody and not purely in the selfish interests of this country, and certainly not just to get a good headline in the Daily Express or Daily Mail. We make it clear that we share the long-term objectives of our neighbours and partners for the future of western civilisation, as well as for prosperity, competitiveness and employment and these important economic but ultimately subsidiary objectives. Then we say pragmatically, as we have a reputation for being pragmatic, “Would it not be a good idea to do X, Y and Z which would strengthen our common purposes and take further forward our common ambitions?”. That is the way to make progress but it is the opposite of the confrontational approach the last Prime Minister adopted. It is not surprising that he did not get very far.

I am glad that my noble friend made this brief intervention because it enables me to say that I am extremely worried—I am not alone in this—that the Tory party has learned nothing at all from this experience or from any other experience over the last 40 years of the European Union and so will make the same mistake again. It will find itself not achieving what it ought to in the national interest in these negotiations. They will be a disaster, and a largely avoidable disaster, precisely because the Tory Government have not learned the obvious lessons of the past which my noble friend was kind enough to give me the opportunity to remind them of this afternoon.

If you have somebody negotiating on your behalf—a solicitor, an accountant or some representative, agent, trustee or whoever—and you watch carefully what they are doing, you are entitled to get worried should they do something that goes quite counter to normal human common sense. I pointed out three ways in which the Government are behaving in an extremely irrational fashion. I will repeat them so that the Minister can address them when he sums up. First, why are we pursuing this particular objective with the same kind of intensity and passion when we have acknowledged that the objective that we are trying to achieve—what we are trying to obtain in exchange for the high price of giving up our membership of the single market—is not anything like as great it was previously made out to be?

Secondly, why have we not decided to negotiate on the basis of the available option, which we know exists, of our potential membership of the EEA and see if we can perhaps do a little better and achieve some additional concessions? We have not even tried to do this—why not? Thirdly, why are we proceeding in this negotiation by giving up options in advance, before we have even explored them and before we have even started the negotiations? It is a very extraordinary thing to do.

[Lord De Mauley (Con)]

My Lords, I wonder whether the Labour Party could find room for others in this debate. Even if the noble Lord, Lord Lea, were right that we did not have to go through a process of joining EFTA and the EEA—I do not think that he was, actually—being a member of the EEA means accepting EU laws, as my noble friend Lord Forsyth has said, without any political representation or influence over them. This would, of course, result in less control for the UK over its destiny, rather than more. That is not what people voted for in the referendum. I oppose this amendment for those reasons and because it is directly inconsistent with the White Paper.

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[Lord Davies of Stamford]

Perhaps I may be permitted to correct the noble Lord, who I know is an expert on these matters and normally gets his facts absolutely right. We have sat on European Union committees together for quite a long time. But he is wrong about the EEA being a waiting room for applicants to the EU. Norway had a referendum which decided against joining the EU. It decided not to be a member of the EU but it decided to be a member of the single market and to join EFTA on that basis. For Norway, it is not an anteroom, it is an alternative, as it could be for us if we so wished.

[Lord Hamilton of Epsom]

I accept that but it was designed originally to be a waiting room for those who wanted to join and that is why it has been put in place and you have to comply with all the regulations of the EU. But I come back to my point that if we join the EEA, we do not join the customs union so we have all the problems of the customs regulations. It enables us to do free trade deals with others but it has many disadvantages and I still do not really understand why we have cannot have our own unique arrangement with the EU. I am sure that is the ambition of the Government and that is why the amendment should be opposed.

--- Later in debate ---

I understand the real political issues behind this amendment. The concern with regard to nationalism is real. I spent many years involved in various types of negotiations—years and years and more years. We are still negotiating. You cannot be ambiguous on these issues, either there is a United Kingdom of Great Britain and Northern Ireland or there is not. I believe that our colleagues in the European Union get this. I have absolutely no doubt that they will be helpful because they have invested a lot in this. In the time of Jacques Delors a unique funding system was brought in—the Northern Ireland peace funds. Nobody else ever got that. It is still going in its fourth iteration. We are all most grateful for the help we have received. Brussels has invested a lot in this process as it set an example of an attempt to solve an internal problem within the European Union. Unfortunately, some people have been invited into the European Union before some of their constitutional issues have been sorted out. That was done in breach of regulations, but when the euro came along the regulations were also breached. All I ask of Ministers is to give us an assurance and to be clear. The Bill is not the right place for the Belfast agreement. To contaminate that agreement by linking it exclusively to leaving the European Union does it a disservice. We have a unanimous view that we want to resolve our differences without having any borders. We should allow Ministers the opportunity to get on with this process. At the end of the day, we will have an opportunity to pass judgment on what they do. That is the correct role for this Parliament. However, I ask noble Lords to please bear in mind what the High Court in Belfast and the Supreme Court said. Given those two clear and unambiguous decisions, I believe that the amendment would be misplaced in the Bill.

[Lord Davies of Stamford]

What a depressing afternoon this is. If we in this legislature were trying to get rid of barriers, borders and frontiers between people, what a good day’s work we would be doing, instead of which we are talking about creating new barriers and frontiers between us and the continent, between Northern Ireland and the Republic, and possibly potentially between England and Scotland. Those are all very depressing thoughts.

One of the advantages of Committee is that we can have a debate. It is possible to respond to what other people have said and, if what they suggest is plainly possible, it is obviously very desirable to take it on board. I thought that my noble friend introduced his Amendment 2, which I strongly support, with a brilliant speech. I agree with every word of it except one very important sentence, to which the noble Lord, Lord Empey, referred in a very powerful speech—namely, it is utterly intolerable and inconceivable that we should have an internal border within the United Kingdom. I regard that as an utterly unacceptable solution. We need two sets of red lines in these negotiations. We must have no borders within the United Kingdom and no border between the Republic of Ireland and the Province of Northern Ireland—between the 26 and the six counties. Those two things should be absolutely immovable desiderata and requirements of the British Government in conducting these negotiations. I hope, and believe, that we would have the understanding of Brussels and the rest of the European Union in insisting on those two points.

I was mystified by one of the things that the noble Lord, Lord Trimble, said and quite shocked by another. I was mystified when he said that freedom of movement in Ireland, called the common travel area—it is exactly the same thing—has been in place since 1923, so it would be nothing new if it was somehow modified or constrained. The Irish Free State came into being only in January 1922 when the treaty was ratified, so there was never a border before then. Clearly we were then part of the same country. If there has never been a border since 1923, on that calculation there has been only one year in the course of the last 800 years of Anglo-Irish history in which there has been any restriction on freedom of movement within Ireland. That being the case—I believe it to be the case—it would be profoundly shocking and would have a traumatic effect if we suddenly started to introduce one now. What a very sad thing to do after the last 20 years. The thing that shocked me, though, was when the noble Lord appeared to say that if the Irish Republic was observing its own interests, it should leave the European Union. I remind him that the people of the six counties voted very substantially to remain in the European Union only a few months ago. Surely, in all courtesy, we should leave it to the people of the 26 counties to make their own decision on that matter and not lecture them from the British Parliament—a habit which I am afraid has become too bad a habit over too many centuries.

The matter we are discussing is particularly important because during the Bill’s passage we will debate other matters such as the single market. We have already had a go at that and will come back to it. If we make a big mistake in that regard—we know that we may well make some very big mistakes—we shall be the major sufferers. But in this matter we shall not be the major or the only sufferers; the equal or the substantial sufferers—certainly the equal, perhaps the greater sufferers—will be the people of the island of Ireland. Therefore, we should be particularly concerned to get matters right.

Some people, including probably the noble Lord, Lord Trimble, will not like what I am about to say. However, I remind the House that this country’s and Great Britain’s relations with Ireland over the last 800 years have been just about as hideous as relations between neighbours could ever get. Right from the 12th century, the Anglo-Norman invaders imposed on the Irish exploitation and a form of apartheid-type discrimination. In the Reformation that was followed by persecutions of a different kind. We had the massacres under Queen Elizabeth. We had the massacres under Oliver Cromwell of every man, woman and child in the cities of Drogheda and Wexford.

[Noble Lords]

Oh!

[Lord Davies of Stamford]

I knew that some noble Lords on the other side would not like this but they are going to hear it. We had the heartless expropriations of Catholic property by Oliver Cromwell, and again in the 18th century, contrary to the Treaty of Limerick. We had a series of broken promises—four major historic broken promises—the Treaty of Limerick itself, the promise made to Grattan’s Parliament in 1782, the promise made by Pitt in 1800 to introduce Catholic emancipation and the promise made by Asquith to bring in, live up to and carry out the third home rule Bill. All those promises were broken.

Even at that point the British Government did not get it. We did not get the Easter rebellion. We tried to impose conscription on Ireland. Even when Sinn Fein won every seat in the November 1918 elections except, I think, for two in the 26 counties, we still did not get it and, within two months, we had the Anglo-Irish war. We know what happened to that. After the treaty, we neglected Irish matters in this House. We allowed Stormont to get away with an absolutely scandalous programme of deliberate job and housing discrimination—job discrimination even explicitly encouraged by a unionist Prime Minister by the way—and other breaches of civil rights, and, of course we did not get it. We did not intervene after the attack on the civil rights march by Paisley’s thugs at Burntollet bridge. We then had the appalling violence and terrorism by the IRA.

In the last 20 years we have had the brightest moment in Anglo-Irish history that we have had in 800 years, starting with the Belfast agreement. It may have been prepared before the Belfast agreement in the great co-operation that took place between our two countries after we both joined the European Union. I remember Garret FitzGerald, a very great Taoiseach, saying to me once over lunch that that had transformed the position of the Irish and the British. After 800 years in which we had been the patronising imperialists and the Irish had been the petitioners, we were equals, involved in the same programme and the same agenda in the European Union, or the European Community, as it was originally, and we needed each other’s support and votes to get our business done. That was the basis on which a new relationship was created. That has been a great asset and great achievement of the last generation. It is now at risk if we gratuitously decide to impose a border upon the beautiful country and proud people of Ireland. It does not matter whether the border is a mechanical border, a human border, an electronic border, an analogue border or a digital border, it is a border, a frontier. That is the important psychological fact and we cannot get away from it. There is no way you can get away from it. It is completely and utterly out of the question. The Government are quite good at saying that we had the discussion on the previous set of amendments about them dismissing the idea of our remaining in the single market through being a member of the EEA. Why do the Government not—as they should—dismiss the idea altogether of being a party to the end of freedom of movement in the island of Ireland, let alone, of course, within the United Kingdom itself?

[Lord Cormack (Con)]

My Lords, we should remember Sir John Major and Albert Reynolds and the fact that my noble friend Lord Trimble shared the Nobel prize with John Hume for what they did to create the foundation for a peaceful settlement. No one in this Chamber needs a lecture from my friend the noble Lord, Lord Davies of Stamford, and a rehearsal of Irish history—a very poor rehearsal as my noble friend Lord Trimble interjects.

We have had some very notable speeches in this debate. I pay particular tribute to my noble friend Lord Empey and the noble Lord, Lord Alderdice—

[Lord Davies of Stamford]

The noble Lord is very welcome to correct me and if I have made a historical error I apologise, but will he tell the House what the historical error was?

[Lord Cormack]

The noble Lord certainly left out Henry VIII and many other things. The noble Lord, Lord Alderdice, put the thing beautifully in context and gave a very remarkable speech. We should all be grateful to my friend the noble Lord, Lord Hain, for introducing the amendment in the way that he did but I hope he will not push it to a vote. I say that with great respect. He knows I mean that because I had many dealings with him when he was Secretary of State and I had the honour to be the chairman of the Northern Ireland Affairs Committee in another place. I had members of seven parties on my committee and we remained unanimous throughout, even though we looked at issues such as organised crime, prisons and many others. He knows how closely we worked together as a committee.

What we need today—and I hope we will get it—is an assurance from my noble friend the Minister that the Government truly recognise the importance of the points that have been raised. They recognise that Northern Ireland is not only in many ways the most beautiful part of the United Kingdom but also the most vulnerable. We are not going to strengthen this procedural Bill by hanging this amendment on it. There may well be a time when we return in the context of the negotiations that will follow. There may well be amendments later in this Bill that I will feel I need to support to ask colleagues in the other place to think again, but this is not one of them and I very much hope that my friend the noble Lord, Lord Hain, will withdraw his amendment at the end of the debate.

--- Later in debate ---

[Lord Howell of Guildford]

At the outset of this debate, the whole focus is on the concept that we have benefited and will continue to benefit from being members of the single market, and that by being outside and only having access to it—like every other country that exports into the European region—we would be vastly disadvantaged. I am afraid I am going to say something that will probably be unpopular on both sides and which asks your Lordships to look more closely at what is actually happening in the patterns of both European and world trade currently. I am not talking about 1990, or the world of globalisation in the last century, but about the fantastic, revolutionary disruption and transformation of the pattern of trade that has gone on for the last five or 10 years. Unless we understand that, and the impact it is having on trade throughout the region and on the relevance and nature of the single market, which has changed beyond recognition from the single market of a decade or so ago, we will not reach very sensible conclusions.

Lord Keynes was quoted earlier. He said many things, but one of the interesting things he said was that his real quarrel was not with those who disputed his economic theories or arguments but with those who persistently failed to see what was actually going on. That is the theme I want to develop. We can expend enormous indignation on asserting that in the single market everything will be okay but that out of it there will be disaster. Indeed, the noble Lord, Lord Hain, has suggested that with great eloquence and clearly believes it to be the position. But we have to grasp what is going on and understand the nature of the flow of trade to see just what the disadvantages would be if, instead of having membership of the single market, with all the standards, regulations, access, tariff-free areas, co-ordination of regulations and so on, we were outside it, although still obviously able to trade into it like any other country.

I start from a rather remarkable statement made by the chief economist to the Bank of England, I think last week, that from his point of view whether we were inside or outside the single market would have no “material” effect on the UK’s growth over the next three years—he put a time on it. That is rather a remarkable statement from a very high authority, not someone known to be biased one way or the other but someone speaking totally objectively. I had to ask myself how he could come to that conclusion. Have we not been told that outside the single market it will all be disaster and we must somehow stay in as full members? This raises all the other issues we have so vigorously debated, including the problems in the island of Ireland and many other issues. If one begins to look at the detail, the answer is very interesting.

I suspect what he has seen, and what your Lordships might possibly turn their eyes to, is that the whole nature of international trade is shifting at record speed in two directions. First, there is the vast growth in services, digital information, data transmission and information exchange, so much so that McKinsey is telling us that more than half the wealth generated worldwide comes from the transmission of data and information and not from goods trade at all. The old world of trade being dominated by containers or great ships sailing out of Felixstowe, or whatever it was, is rapidly disappearing. Services are the huge growth area in every aspect of international trade, including into the European Union. The noble Lord, Lord Hain, is quite right that sales of services into the European Union have been large—they are about a third of our total export of services throughout the world—but frankly they are not doing very well. In so far as they have got in to Europe’s single market, services have gone through a bit of a struggle, not through tariffs—because you cannot put tariffs on those services—but through all sorts of local and national regulations and control. They have been pretty flat over recent years because there never was a glorious single market in services. We struggled for 40 years to improve one and got nowhere at all, and the chances are that countries outside the European Union have done rather better with our services and imports into the European Union than we have.

It may be that in future, outside the single market—this may be in Mr Haldane’s mind—we can do rather better with services in Europe. If we cannot do better in Europe—it is very difficult because of the all these local restrictions on how things are set up—we should look to the areas where service developments are growing at a very fast pace. This is certainly right across the part of the world that deals in the English language and has common legal, political, social, ethical and cultural practices, which tends to be a Commonwealth network in English-speaking nations, including the United States of America, which is our biggest export market of all. We have no single market and no free trade agreement with America, but it is by far our largest single market of any country.

That is the first point: services are growing at a phenomenal exponential rate and now dominate world trade and are beginning to dominate our own earnings overseas. Secondly, services know no boundary or tariff barrier, so the services we sell into Europe—this, again, may be in Mr Haldane’s mind—will not be very much affected by whether we are in the single market or not. It is a tough area anyway. We export £89 billion, gross, of services of every kind, including financial services, into the European market and that is about a third of the much bigger degree of service exports all around the rest of the world. It is not a question of tariff barriers. The tariff barriers are anyway extremely low, except for one or two things such as car components, which are at 10%. We would have to think about that, but generally we are moving into a zero-tariff world. It is quite different from 1990, when developing southern and eastern countries were taught that they would have to have high tariffs and heavy investment protection.

[Lord Davies of Stamford]

My Lords—

[Lord Howell of Guildford]

I shall just finish this sentence. The culture before 1990 was of high tariffs and protection against foreign investment, which was deemed colonial. The culture of the last 30 years has been the opposite, with low tariffs all around the world and direct investment agreements to encourage more investment. I give way.

[Lord Davies of Stamford]

I am grateful to the noble Lord for giving way. I am listening to him with great attention, as I always do. He is making the case for certain aspects of the digital services market; he does not say much about whether we are part of the single market or not. Does he not agree that for manufacturing, which is about 10% of our GDP, the imposition of tariffs would be extremely serious? Does he also not agree that for financial services—which, as I have already mentioned in a different context, accounts for about 10% of our GDP as well—the loss of the passports which enable us to trade in the single market would be equally catastrophic?

[Lord Howell of Guildford]

Although manufacturing is very important, it is a smaller and diminishing proportion of our export earnings. As I think the government White Paper points out, at least 33% of the value embedded in any manufactural product—I think the figure is 37%—comes from services. When you think about manufacturing, you have to think about something that is really not quite a manufacture or a service; it is a product of a service and high technology. A good example for the noble Lord is the Japanese company Uniqlo, which produces garments—not from Japanese manufacturing but from Japanese technology and services. All around the world, this pattern is developing. What I am trying to bring before your Lordships is the realisation—

European Union (Notification of Withdrawal) Bill

Lord Davies of Stamford Excerpts

2nd reading (Hansard - continued): House of Lords
Tuesday 21st February 2017 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, this Bill has come to us, as it should, with a White Paper. The White Paper has been dealt with quite frequently this evening and yesterday in the debate, and a number of things have been said about it. It has been described as “hubristic”. The noble Lord, Lord Warner, described it as Panglossian, I think, and I accept both of those epithets. But what struck me most about it was how very uninformative—almost insultingly uninformative—it was. Nothing precise was said at all about the benefits of Brexit and nothing whatever was said about the costs.

I looked in vain for even the words “cost” or “risk” in the whole document. If you put out something like that in the private sector as a circular to shareholders or a prospectus for a public offering, you would be faced with a criminal prosecution. Is it because the Government do not think that there are any costs to Brexit, or do they think that public attention should not be drawn to the costs and, if possible, people should be kept ignorant of them? Either of those explanations—and there are no logical third or fourth possible explanations—is deeply disquieting.

The fact is that the Government know perfectly well about some of the major costs of Brexit. Only a few days ago a Minister, Greg Clark, went over to Paris to offer Peugeot SA a large financial package wrapped up as grants for training or innovation or something of that kind—rather along the lines of the similar offer made to Nissan—to bribe PSA into agreeing to keep open their Vauxhall plants in Ellesmere Port and Luton if they go ahead with the takeover of Vauxhall in this country. There is no doubt at all that every other multinational automotive manufacturer in this country will want the same kind of treatment and will have to get it. So the British taxpayer is faced with having to pay out a lot of money for this purpose to reward the shareholders of these international companies, and have no idea what the cost is; the Government refuse to answer questions on that subject, on the spurious ground that it is commercially confidential. Of course, it is not: those payments will appear in the accounts of the UK subsidiaries in due time but, if the payments are not made until after Brexit, and the accounts concerned are not produced for a year or so afterwards, it will happen safely after the next election. That is just an example not merely of the costs but of how the Government are trying to conceal them from the British public, which is deeply disturbing.

The British public are at the very beginning of learning about some of the costs, particularly those of the Brexit devaluation and the inflation that we have had since. Real wages will fall this year, which will put most people in a very uncomfortable position—but it will be particularly bad for the poor and for those who are just getting by, the group that Mrs May says that she is so concerned to help.

A lot has been said this evening about many areas where there will be some real costs, and I will pass over important ones—such as universities, for example, which have been dealt with, and Euratom, which has been dealt with. I will just say in passing that it is an extraordinary idea, when there is such a shortage of nuclear scientists, to decide to duplicate a regulator of that kind. In January, there was an article in Nature, a very well-respected scientific journal, stating that this would almost certainly lead to increased costs and delays in the delivery of our own nuclear programme.

No one has said very much about the European Medicines Agency. What happens if we withdraw from that and set up our own regulatory registration of new pharmaceutical products agency? The answer, of course, is that you will duplicate the costs of registration to pharmaceutical companies. We have heard for years from those in the pharmaceutical industry that a major cost for them, and a major disincentive to put new products into the registration pipeline, is the cost of registration. Fewer drugs will be registered, unless the costs can be successfully passed on to the customer, in which case the NHS budget will be under further strain, as if it were not under enough strain already. Why is that? Why would any sane person do such a thing? I think it has something to do with trying to avoid any contact with the ECJ.

We had a series of very good debates on these subjects here in the House, the most recent one being about the justice and home affairs aspects of the whole question—the membership of Europol, the common arrest warrant, the Prüm exchange and information system, and so forth. It was an extraordinary debate because, very unusually in parliamentary circumstances, there was complete unanimity. Everybody who spoke on both sides of the House, and indeed the members of the sub-committee and its report, were absolutely agreed. They agreed on three things. The first was that these measures are vital for the protection of the British public against terrorism and other forms of serious international organised crime. Secondly, any other arrangement than the one we currently have with full membership of these institutions would be very problematic, difficult and time consuming to negotiate. Thirdly, no alternative arrangement would be anything like as good as the status quo. Everybody said that. So why are the Government doing such a thing? I realised during the course of the debate why it was, although the Government never admitted it. It is because they do not want any contact with the ECJ. This extraordinary decision against the national interest is driven entirely by ideology.

We have heard even worse problems in the last few days. We have heard that the Government propose to malversate money in the international aid budget to give it to east Europeans as a bribe to vote in favour of good terms for Brexit. We have had the most extraordinary suggestion by the Chancellor and the Prime Minister directly that if we do not get what we want in these negotiations we will start a kind of corporation tax war with the rest of the EU, cutting corporation tax and trying to undercut them. As I said in a letter some colleagues may have seen in the Times, we are actually the least well-placed Government in any EU country to undertake a war of that kind as we have the highest fiscal deficit already. So what is going to happen? Will we have a higher fiscal deficit? Will we take the money out of public services when public services are already underfunded—the National Health Service, social services and defence are dramatically underfunded—or will we increase other areas of taxation, put the burden on income tax or on consumption taxes? We have not, of course, been told.

The Government have gone far away—right over the hills and out of sight and beyond—from the referendum in coming up with these policies. They are taking the referendum as a mandate to undertake a series of steps that would have absolutely horrified the British electorate if there had been any mention of them last summer during the referendum campaign. Nobody dared to speak of such things at the time. We should not be in any way inhibited by the referendum in opposing them and we need to have the robust kinds of amendments that have been tabled in this House on this Bill to make sure that the Government do their job and to keep them under some kind of control, answerability and responsibility to the public and to Parliament.

UK Withdrawal from the EU and Potential Withdrawal from the Single Market

Lord Davies of Stamford Excerpts

Thursday 26th January 2017 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, I shall probably surprise the House by starting my remarks on this subject by saying that I agree very much with the noble Lord, Lord Forsyth. I strongly agree with what he said about the time constraints imposed on us now. I hope that in the months to come the Government, having promised to give Parliament a full opportunity to debate these important issues, will not do so in a way that artificially constrains our debates into periods of two and half hours, one and a half hours or what have you, so that in practice it is impossible for anyone to develop a coherent argument or make an intelligent contribution on the subject.

This is a pressing matter. Personally I have always felt that freedom of movement was a great ideal and an asset that it was important to preserve for our people and for future generations. In my view it has worked extremely well; it is inconceivable that we would have had the growth we enjoyed in the 10 years before the Lehman Brothers collapse and the banking crisis if we had not had the immigration we then enjoyed from other parts of the EU. I think I was the first person to alert your Lordships’ House a couple of years ago to a study done by the University College London economics team showing that the contribution made by eastern European immigrants in this country in the form of national insurance and taxation was far greater, by billions, than their consumption of public services or receipt of any kind of benefits. In other words, every taxpayer in this country was better off as a result of eastern European immigration. That was not true of other groups of immigrants to this country, but it was particularly true of them.

On the whole, the experience has been a very happy one. Of course, it is always possible to say that you can import unskilled labour from any part of the world. That is perfectly true but, if people were to come here in droves from all sorts of places around the globe—from Chad, Eritrea, Somalia, Afghanistan and other places where there is enormous poverty and enormous need—we would find ourselves integrating into this country people who in many cases were almost certainly illiterate in their own languages, coming from countries with traditions of political and religious fanaticism and violence. That would be a problem of a quite different order of magnitude from the integration of people from eastern Europe, which on the whole has been a very happy experience. I speak with some experience locally in Lincolnshire. It has to be said that the great advantage of having that kind of close relationship with neighbouring countries and being in the single market is that the freedom of movement principle is reciprocal, which is not something we get through any such deal with other countries around the world.

Something, however, must have gone badly wrong because the Prime Minister and the Government, far from regarding freedom of movement as an asset, an advantage and an achievement, now seem to regard it as such an evil that in order to escape from it, we should be prepared to pay the enormous economic price of leaving the single market. I do not think the Prime Minister has thought through properly the costs, which will be enormous. Another debate will be required to discuss the economic aspects of Brexit, and I am sure we shall have those opportunities. Still, it is quite terrifying that any responsible Government should even be contemplating such a drastic move as leaving the single market, threatening our position—certainly undermining it—as the financial service capital of the EU. All this in order to get out of freedom of movement.

I wonder what has gone wrong over the last few years. It has been a matter of perception: people have been concerned that there is no limit to the immigration that can result. It is unfortunate that the last Prime Minister did not succeed in negotiating some form of emergency brake; if he had approached matters in a much more communautaire way, he would have been much more successful in that negotiation. A quite different issue has darkened the whole picture: the sense that the whole common external frontier of the EU is not secure. People see on the television pictures of people coming in from Libya across the sea, from Turkey and from Syria. The German Chancellor’s decision to invite 800,000 refugees from Syria to Germany enormously undermined confidence in this country because there was a sense that these people would arrive in Germany tomorrow and be here the next day. That is of course complete nonsense—it is hysteria—but it unfortunately played a critical and negative part in the referendum campaign. Whether we are part of it or not, the European Union will need to look carefully at strengthening the external frontier and to take serious measures, such as the Australians have had to do, to prevent illegal immigration becoming a major social problem.

I hope we have other opportunities to discuss this matter in greater detail, because it really deserves it.

Article 50 (Constitution Committee Report)

Lord Davies of Stamford Excerpts

Tuesday 22nd November 2016 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, this has been quite an unusual debate; almost every contribution has been very effective and penetrating, and two or three have been quite memorable. I am grateful to be able to speak in the gap. I do not need more than a few minutes. I just want to ask the Government three simple questions that I think are in the mind of every member of the public who takes an interest in this matter.

The first has already been asked by two of the Minister’s noble friends, the noble Lords, Lord Higgins and Lord Balfe, so I hope if I ask it again towards the end of the proceedings there is a chance it might get an answer: why have the Government been so desperately anxious to cut Parliament out of the loop over Article 50? No one has given an explanation of that, but the proceeding is quite extraordinary and the public are entitled to know why. I hope we will not be told that it is in order to save time, because it really would be the most terrible insult to Parliament to be told that to consult it was a waste of time. Anyway, it would be an untrue explanation because, by appealing the decision of the High Court, the Government have lost more time—at least six or seven weeks—precisely in order to be able to prevent Parliament from getting in on the action. In other words, it is quite clear that time is not the consideration in the Government’s mind. So there is a mystery here, and the mystification of the public on this point ought to be brought to an end. We ought to hear from the Minister tonight exactly what the real motives of the Government have been in this extraordinary matter.

Secondly, why have the Government not clearly and unambiguously dissociated themselves from the shameful attacks on the judges that were made after the High Court’s judgment—attacks that included the phrase “Enemies of the people”, a phrase popular with the most murderous and terrible fascist and communist regimes of the 20th century? That was a quite extraordinary piece of hysterical demagogy, and it is amazing that someone should resort to such terms in any civilised democracy. Yet the best that the Government could do was come out with a statement— drafted, presumably, by some spin doctor at No. 10, because identical statements were produced by the Lord Chancellor and the Prime Minister—that started with just one sentence, a perfunctory acknowledgement of the principle of the independence of the judiciary. That was coupled with another single sentence talking about the freedom of the press—quite gratuitously, because the freedom of the press had never been attacked or raised in that whole context. The effect of the combination of those two sentences, drafted and conveyed in that way, was actually to put forward the idea that maybe the Government had some secret sympathy with what the press had been saying about the judges, which of course would be utterly deplorable. The Minister has an opportunity tonight to put that terrible impression to rest and to dissociate himself unambiguously and clearly from those mischievous, appalling and unforgivable words.

My third question is a fundamental one, to which the public have a right to a clear answer from the Government: what is the Government’s concept of parliamentary sovereignty? If I ask the Government whether they believe in parliamentary sovereignty, I know they will say yes, but what do they mean by it? Specifically, do they accept the definition in the High Court’s judgment, which I think is the most lucid and authoritative definition that I have ever seen? It is not original because, of course, the concept is not original—it has been going on for a long time; I remember reading the words of Sir Edward Coke on the subject as a schoolboy and trying to memorise them for examination purposes—but it is very clearly set out in the judgment, which is likely to become a locus classicus on the subject in future. Do the Government accept that? Do they accept what followed from that, as explicitly stated by the judges, that therefore the referendum, since Parliament did not explicitly decide otherwise, was in fact advisory? I ask the question particularly because, on two or three occasions, I have heard government Ministers from the Front Bench refer to an “instruction” given to Parliament by the electorate. The Minister will accept that instruction is quite incompatible with sovereignty. By definition, you cannot be sovereign and subject to instructions from outside. That is a matter of the logical use of language. Can we hear tonight from the Government what their concept of parliamentary sovereignty is and whether they accept the definition in the High Court’s judgment?

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department for Exiting the European Union (Lord Bridges of Headley) (Con)]

My Lords, I am delighted to be likened to a brick wall. When my wife says that talking to me is like talking to a brick wall I shall remind her that it is a compliment.

I thank the members of the Constitution Committee and the European Select Committee not just for securing this debate but for their extremely interesting and useful reports. I also thank all noble Lords who contributed to this very good debate.

From the outset I want to stress the importance that I personally attach not just to the role of Parliament but to the Select Committees in the process before us. I hope to continue to draw on the invaluable expertise and experience that I have heard, and been able to use, in recent months. I intend to continue to have as many meetings as I can with members of those committees. I am grateful to the Constitution Committee for agreeing to extend the deadline for the Government’s response to its report given the legal sensitivities that currently exist. I assure noble Lords that the Government will respond formally to the EU Select Committee’s report in line with the usual timeframe.

However, clearly this debate gives me an opportunity to set out the Government’s thinking on a number of the issues raised this afternoon, and I shall begin by outlining the guiding principles that underpin our approach. The first principle is one of which noble Lords will be well aware—that we must respect the view of the electorate expressed on 23 June to leave the European Union. The Government, as I have said before at this Dispatch Box, are determined to deliver on what the people of the United Kingdom voted for. There must be no attempts to rejoin the EU through the back door and no second referendum. On that point I welcome the comments made previously by the shadow Leader of the House, the noble Baroness, Lady Smith, that the Opposition will not seek to block Brexit. I hope that that approach will be followed by all sides of the House and, meanwhile, that the scrutiny of the process of the legislation will be constructive, as I am sure it will be, with this House exercising its usual discipline and restraint.

The second principle is that we respect and value the role of Parliament, and the third principle is to negotiate in the national interest. I bracket those two principles together, as clearly a balance needs to be struck if we are to respect both those principles. We do indeed want to be as open and transparent as we can with Parliament. However, it is also crucial, as a number of your Lordships have said this afternoon and previously, that the Government negotiate from the strongest position possible. Revealing too much information before triggering Article 50 will, as a number of your Lordships know, weaken our hand. Indeed, the EU Committee of this House has noted that point. Getting the balance right is clearly a core aspect of the debate today, as my noble friends Lord Boswell and Lord Lang said, and it is something on which we are very focused—a point I will return to.

The final principle governing our approach is to respect the rule of law and abide by due process. That obviously means respecting the ruling of the Supreme Court as regards Article 50, and respecting the independence of the judiciary. In response to the noble Lord, Lord Davies, I thoroughly concur with what my noble and learned friend, Lord Keen, said a couple of weeks ago at this Dispatch Box:

“My Lords, we have a judiciary of the highest calibre”.

Sadly, however—and I say this as a journalist myself—that cannot always be said of the media and the press. As my noble and learned friend also said:

“Sensationalist and ill-informed attacks can undermine public confidence in the judiciary, but our public can have every confidence in our judiciary, a confidence which I believe must be shared by the Executive”.—[Official Report, 8/11/16; col. 1029.]

[Lord Davies of Stamford]

I am grateful for that, but it does not really answer the question. The question is not whether the Government are in favour of the independence of the judiciary but whether they dissociate themselves from the appalling remarks made in the press about the judgment in the High Court.

[Lord Bridges of Headley]

I think I did answer that point. I am sorry to say that some comments in the media can at times be sensationalist, but at the same time, we obviously want to respect the freedom of the press. Above all, in this case, I concur with the thrust of the noble Lord’s point: we absolutely must respect the rulings of the Supreme Court in this case and the independence of the judiciary. Respecting the rule of law and abiding by due process also means respecting our obligations and responsibilities as a member of the EU up until the day we leave, and respecting parliamentary precedent and procedure as regards the legislation that we shall need to pass as we leave the European Union.

With those principles in mind, I shall approach the issues we are debating under two broad headings: first, the process we are following, up to and including the triggering of Article 50; and secondly, the process that will follow. Let me first, very briefly, chart the democratic process that has been followed so far to leave the European Union, which my noble friend Lord Hunt referred to, in an attempt to bring out the interaction between representative and parliamentary democracy on the one hand, and direct democracy on the other.

In 2013, as your Lordships will remember, the then Prime Minister announced that if a Conservative majority Government were to be elected, they would deliver an in/out referendum—a policy which was in the Conservative Party manifesto. The people voted for that Government, and MPs then voted—by a majority of six to one—to hold a referendum. In the referendum campaign, the Government made it clear that they would respect and implement what the people decide. The referendum itself delivered a bigger popular vote for Brexit than that won by any UK Government in history. The people have therefore voted twice: once for a Government to give them a referendum and then in the referendum itself. Parliament voted to give them that referendum without any conditions attached as to the result.

I heard what my noble friend Lord Higgins and the noble Earl, Lord Sandwich, said about their being non-believers in referendums in our parliamentary democracy, but that argument was meant for when Parliament and this House were debating the referendum itself. I hear what has been said but think that it is now an argument for another day.

Regarding the role of referendums in our parliamentary democracy, I think that my noble friend Lord Lang quoted that noted jurist and constitutionalist, AV Dicey. I too would like to quote AV Dicey. Back in 1911, he wrote that the referendum is the only institution that could,

“give formal acknowledgement of the doctrine which lies at the basis of English democracy—that a law depends at bottom for its enactment on the consent of the nation as represented by its electors”.

The referendum, he wrote,

“is an emphatic assertion of the principle that nation stands above parties”.

I turn now to the actual process of triggering Article 50. It is the rule of law—the principle that I referred to earlier—that has guided the Government’s approach. I am certainly in agreement with paragraph 9 of the Constitution Committee’s report: Article 50 is the only lawful route through which the United Kingdom can leave the EU under the treaties. As a matter of policy, the Government’s view is that, once given, our notification will not be withdrawn. We are committed to leaving in accordance with any legal and constitutional requirements that may apply. The Government have outlined their case and what we believe is the right and proper process to leave the EU under domestic law following established precedent with regard to international affairs.

As your Lordships will know, we have argued that triggering Article 50 is a prerogative power and one that can be exercised by the Government. It is constitutionally proper to give effect to the referendum in this way. As such, we disagree with the judgment of the High Court in England and Wales and are appealing that decision. The Government therefore await the final decision by the Supreme Court and, as I have said, we will abide by its decision. Let me repeat once again: the Government fully respect the independent role of the judiciary in deciding those cases.

I hope your Lordships will understand if I refrain from entering any further into the specifics of the ongoing legal challenge. There will be a hearing in the Supreme Court beginning on 5 December. It is expected to last four days, and a judgment will be reached in due course after that. But whatever happens in the Supreme Court, there will be further parliamentary scrutiny before Article 50 is triggered. We have been making time available for a series of Brexit-themed debates in the other place and in this place which will allow Parliament to make its views clear on a variety of topics. We welcome this House’s likewise debating this but I also note—how could I not?—the recommendations in the report and the numerous contributions made from all sides of the House today regarding the Government’s approach to the negotiations and the scrutiny of our position before those negotiations —or stage 1, as the noble Earl, Lord Sandwich, called it—and furthermore, as he rightly said, the application of the lessons learned from the debates held in this place and the other place and the extensive consultation that the Government are having with business. There were a number of powerful contributions on that point, especially from the noble Lords, Lord Kerr, Lord Teverson, Lord Maclennan and Lord Hannay, and the noble Baroness, Lady Suttie, to name just a few. Naturally, when we trigger Article 50, we want people to be aware of our overall approach, not least to give as much certainty and clarity as we can, and to build a national consensus.

I am sorry to disappoint the noble Lord, Lord Kerr —one of his balls is disappearing into a hedge. I am sorry that all I can say at this stage is that we have noted the calls for this and we will consider the best approach, taking into account what has been said in today’s debate and in the Select Committee’s report. The issues around Brexit, as I have said at this Dispatch Box before, are indeed highly complex, as the noble Baroness, Lady Hayter, said. They deserve very careful consideration, including as the Government continue to consider the customs union.

One of the issues raised in a number of noble Lords’ speeches is, for example, a transitional arrangement. I and my ministerial colleagues are fully aware of this issue in discussions that we have had with representatives of the financial services sector and of other industries right across the board. We have said that we wish the process of Brexit to be as orderly and as smooth as possible—a point which my right honourable friend the Prime Minister repeated at the CBI yesterday. We very much hope that our European partners will also see such an approach as in their interest too, as trade is obviously two-way. I assure your Lordships that we are looking at this issue among all the others that have been raised.

I would also like to address the point that a number of your Lordships made, including my noble friend Lord MacGregor—the position of EU nationals in the UK and UK nationals there. I would draw his and your Lordships’ attention to what the Prime Minister said at the CBI yesterday—that she wants an early agreement in the status of UK nationals in Europe and EU nationals here.

As regards the process of drawing up our negotiating position—

Brexit: Article 50

Lord Davies of Stamford Excerpts

Monday 7th November 2016 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords—

[Lord Taylor of Holbeach]

We really should try to go round the House. It is the Labour Party’s turn.