EU Withdrawal

Lord Falconer of Thoroton Excerpts

Wednesday 13th February 2019 Lords Chamber

[Lord Falconer of Thoroton (Lab)]

It is a pleasure to follow the noble Baroness, Lady Wheatcroft. I have never heard her make a bad speech: every speech I have heard her make has been brave, powerful and funny and that was no exception.

I am also glad to be in quite a small band in this Chamber tonight of people who have not made a contribution to this European Union debate before. I am in the company of the noble Lord, Lord Cope, the noble Earl, Lord Cathcart, and my very good friend Lord Puttnam, and I regard it as very good company indeed. Although I did not agree with everything the noble Earl, Lord Cathcart, said, I am very pleased to be in his company.

It has been an incredibly gloomy debate because this House feels that we are in the waiting room with absolutely nothing happening except the can being kicked down the road. We rightly think that our influence on events is quite minor. Again, we are right about that. I rather disagree with the procedural urging from the noble Lord, Lord Saatchi, for us to take a more assertive role; I do not think that we should. Our power, such as it is, is to persuade and to make clear what the real choices are.

Although there have been quite a number of gloomy speeches, some of which, indeed all of which, were excellent, I suspect some have been delivered before, in various guises. There is nothing wrong with that—they were so good that they were well worth delivering again—but there were also quite a few things said that I did not know and that may well influence events, at least to some extent.

In my speech, I simply want to make two points. The first is that the debate that is now reaching a critical stage should be conducted in an honest and not a dishonest way. I have three particular dishonesties that are currently gripping this debate. The first is that the choice that faces the country is between some version of Mrs May’s deal and no deal. That is not correct. If the Commons says no to the deal, it will plainly be open to Her Majesty’s Government to ask for more time, and the indications are that the European Union would say yes to more time. I do not know how long, but I think it would be very unwise of this country to say that, if we cannot get Mrs May’s deal through, we should go for no deal.

Do not forget the objective choice that would then face the United Kingdom if there were no deal: we would have the choice of trading on World Trade Organization terms, which is likely to increase tariffs on goods by about 5%, leading to unemployment that will obviously affect people employed in manufacturing industries most, so that the poorest will be likely to be the worst affected. We could try to get around that—and the Government will have to make a decision about this—by saying, “Let us liberalise all trade and have no tariffs on goods and make that a unilateral decision”. I see the noble Viscount, Lord Ridley, nodding his head vigorously. The consequence of that is that there are no trade deals to be done. America and Japan are not going to offer us trade with no tariffs, and they will not need to negotiate terms with us. So we open our doors and we will get some benefits from that, but the whole of the Brexit idea, as far as the Brexiteers are concerned, on trade—namely, that we will negotiate marvellous terms with everyone else—will not happen. That is the choice that will have to be made if we go for no deal.

I urge the Government—this is why I strongly support the Motion from the noble Baroness, Lady Smith, this evening—to rule out no deal. She can do that by saying that, if we cannot make a deal, we will come back and ask for more time. I am not in favour of asking for a long period of time. I think two to three months is all that should be required. The nation is not helped by this period going on for a long time. But the debate should not be framed as Mrs May’s deal versus no deal.

The second dishonesty is that there is a realistic prospect of getting some sort of changes to the backstop. We know that the Prime Minister urged the House of Commons to vote for the Brady amendment, the terms of which required the replacement of the backstop with “alternative arrangements” that would deliver an open border. The three proposals that she is making in these negotiations are: that there be a time limit for the backstop—the Irish Government have made it clear that they would not accept that, quite rightly, because it would not be a backstop; that the United Kingdom have a unilateral exit, which is equally problematic for the same reasons; and that the whole backstop be replaced by something else—I do not know what; possibly the Malthouse compromise.

The Malthouse compromise involves the United Kingdom entering into a customs agreement with the European Union that there be no tariffs on goods, which is perfectly possible. As everybody in the House will understand, it does not obviate the need for a customs border, because you have to check where the goods come from to see if they are entitled to the no tariff. The answer, not from Mr Malthouse—obviously a totally admirable chap who has simply brought these people together—but from the people advancing this nutcase compromise, is that there will be technology that makes it clear from which country these goods come. That is how the Malthouse compromise deals with the customs aspect.

As for the regulation aspect, what Mr Malthouse proposes—not him, but other people—is that there be an agreement between the European Union and the United Kingdom that both sides be deemed to have the same regulatory position. They advanced that case on the basis that we have the same regulatory position at the moment and it is not likely to change that much over the period of time, so let us therefore just treat the regulations as the same. It is clear what is being asked for. It is completely hopeless as a proposition, because the European Union is rightly saying that it cannot have a flapping open door if we are not in the customs union or the single market. That is a flapping open door.

I do not know how the alternative discussions are going. I understand—I could be wrong about this—that Mr Stephen Barclay, a person for whom we should have the highest admiration because he has taken on the job at short notice, is the person negotiating the alternative arrangements to the backstop. Blimey! How did we end up with a totally inexperienced Minister, through no fault of his own, seeking to negotiate one of the most important negotiations we have ever indulged in since 1945? I suspect—I hope the Minister will be able to help me on this—that no meaningful negotiations to replace the backstop are going on. Could he tell us how the negotiations are going, first of all on a time limit to the backstop and secondly on a unilateral exit for the United Kingdom? What stage has been reached? Are any drafts in existence? What has the European Union’s attitude to these proposals been?

The third dishonesty is that all of this can be dealt with by 29 March. The number of people in the House who have made it clear that that is impossible demonstrates that that is a dishonesty on which we should not proceed.

What should we do now? What is wrong with Mrs May’s deal? There is really only one thing wrong with it: that she has given away our biggest negotiating card, namely the budget deal, in exchange for what the noble Lord, Lord Kerr, described as simply no agreement at all. We need certain things nailed down in that political declaration. The things we need nailed down are: first, that we stay in a customs union, because the less friction there is in trade, the better; secondly, that we get the benefit of integrated supply lines, so we get a deal whereby there will not be regulatory checks; and, thirdly, in relation to the main goods we deal with—medicines, chemicals and aerospace—that there are deals whereby our goods and theirs can cross the channel without customs or regulatory checks of any sort. That is not pie in the sky. Those things could have been put into the political declaration. They have not been, because Mrs May has spent since 17 December 2017 until now trying to unscramble the problem she got this country into as a result of the agreement she entered into on 17 December 2017.

We stand at a moment where it is not too late to get a good deal. I was strongly in favour of remain, and I am strongly against a second referendum. We have to respect the result of the referendum, but we should do a deal that gives us the softest Brexit possible, and it is not too late.