European Union (Withdrawal) Bill

Debate between Lord Fox and Lord Hain

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

[Lord Hain (Lab)]

My Lords, I will speak in greater length on the second group but I want to touch on just a few points, if I may, to support Amendments 162 and 197, tabled by the noble Lord, Lord Wigley. I begin by saying how much I agreed with the speech of the noble Lord who has just spoken and also the speeches of the noble Viscount, Lord Hailsham, and the noble Lord, Lord Carlile. I agreed with every word of them, and the best way those two noble Lords can express their passion about Northern Ireland and the dangers of having anything other than the same customs union and single market either side of the border is to support Amendment 198, which I hope, at least on Report, will be put to the vote.

The noble Lord, Lord Lamont, spoke with great eloquence. The problem is that he does not agree with his Government’s policy. The Government signed up in December to an agreement with the European Council for regulatory alignment. That is not what the noble Lord is arguing for. This brings me to Amendment 197, which does not say that we will be in the single market and customs union but that we will have,

“the same rights, freedoms and access”

as exist now. I thought that this was the policy of the Government: to leave but to have exactly the same opportunities for businesses as we have now. As the noble Lord, Lord Wigley, explained, it is of great concern to the Welsh Government, who I am close to. It is the same concern of the London governing authority, expressed through the mayor, and I am sure—since it voted to remain—it would be the same view of the Northern Ireland Government, if they were functioning.

Publishing impact assessments is the least that the Government can agree to. I ask the Minister, in responding to this debate, to explain why they are so afraid of publishing impact assessments for Wales, Scotland, Northern Ireland and, for that matter, England. Why are they afraid of doing that? What is wrong with doing that? Can the Minister also say why he does not accept Amendment 197, when I thought that was what his Government were arguing for? Or are the Government reneging on what they signed up to in December, despite the fact that it was a solemn decision between the European Union and the United Kingdom?

[Lord Fox (LD)]

My Lords, my noble friend Lord Newby and the noble Lord, Lord Carlile, spoke of Kafka in the basement, but I was struck by another, more bizarre allusion earlier this week when the Brexit Secretary ruled out the “Mad Max” scenario post Brexit—I was not aware that the “Mad Max” scenario was on the table. I was concerned about whether he had actually seen the post-apocalyptic, low-budget film packed with ridiculous contraptions and strange fashion. Then, today, the European Research Group issued its ultimatum and it became clear how appropriate the Secretary of State’s imagery was. He clearly has seen not just the original “Mad Max” film but the sequels as well. We are living in a world where so many things are said that clearly cannot be true. We are living in a fantasy world, and we have heard some of those fantasies today.

In speaking to Amendment 89, I declare my interests as set out in the Members’ register, which of late have focused primarily around the aerospace and automotive industries. Last night, along with other Members of your Lordships’ House, I attended the Engineering Employers’ Federation annual dinner, which followed its extremely successful conference. The EEF was celebrating arguably the best year for manufacturers for at least a decade. This is not a justification of Brexit; it is a repudiation of it. The single market, the customs union, the free movement of people and many other facets of the European Union helped to facilitate this highly impressive performance, built on the back of increased trade not only with a burgeoning European economy but with non-European countries. This trade increased while we were still in the customs union. Increased trade with China, albeit from a low base, was achieved while we were still in that iniquitous thing, the single market. We achieved growth with both our European partners and partners in the rest of the world.

To be clear—I know that all noble Lords know this—the single market ensures that UK companies can trade with any of the 27 European Union countries without restrictions and arbitrary barriers. It is a question not just of tariffs, of course, but of regulations and standards and what the Government term “friction”. One of the most damaging things that the Government did from the outset was to rule out membership of the single market and the customs union post Brexit. We see the issues that that has caused, particularly in Northern Ireland. The noble Lord, Lord Carlile, has talked very eloquently about that issue but I shall address the business and industrial implications. The industrial fallout is extremely daunting. We heard evidence of that last night at the EEF dinner. Many companies are only just starting to realise the complexity and friction that will be introduced into their daily business dealings. Many more have yet to comprehend this. Certainly what this means for smaller SMEs is still beginning to dawn on them.

Amendment 89 is focused on the single market. As noble Lords can tell, I think the UK should remain in the single market permanently. However, in case that upsets your Lordships too much and they are reluctant to support Amendment 89, I should emphasise that that is not the point of that amendment. As the noble Lord, Lord Wigley, eloquently said, Amendment 89 is specific in seeking to ensure that the Government cannot use their regulation-making powers in a way that would lead the UK to diverge from the single market. Such divergence would introduce friction between the UK and the 27 in regulation and standards that would harm the very supply chains that manufacturers gathered to celebrate last night. Remaining in the single market would be the most desirable outcome. I hope that the Government will eventually see sense and realise that it is in the UK’s economic interests to stay in the single market and the customs union, as was eloquently expressed by the noble Lord, Lord Bilimoria. However, I trust that your Lordships will recognise that Amendment 89 has a much less ambitious aim than that and will see it essentially as a prudent way of ensuring that we do not increase friction in our trade with the EU.

Your Lordships will be interested to hear that last night the Secretary of State for BEIS, who addressed the more than 1,000 manufacturers from all over the United Kingdom present at the dinner, said that we are going to remain in the single market and the customs union throughout the transition and that nothing will change. Essentially, that means that nothing will change for three years from now. I have heard other messages from other members of the Government, so it would be useful if the Minister could take this opportunity to confirm that that is the settled view of Her Majesty’s Government. That being the case, I am sure that Her Majesty’s Government will have fewer qualms about supporting Amendment 89, because surely Ministers will not seek to erode those barriers to frictionless trade.

In short, it is important that nothing in the Bill hinders the operation of the frictionless, tariff-free trade arrangements in goods and services that we currently enjoy. Amendment 89 seeks to achieve this, and I hope that the Government will realise that and support this sensible addition to the Bill.