European Union: Negotiations (European Union Committee Report)

Debate between Lord Hamilton of Epsom and Lord Liddle

Monday 16th March 2020 Lords Chamber

[Lord Liddle (Lab)]

My Lords, I apologise to the House for not being present for what I am sure were excellent speeches at the start of the debate; I was on the HS2 committee, under the chairmanship of the noble and learned Lord, Lord Hope, and in order for it to be quorate, I had to stay. I asked our Whips to put me down for the end of the debate. The trouble is that an excellent debate such as this leaves you with very little new to say. I will try not to repeat what others have said, even if it means jumping about in the speech I prepared.

I did not hear the previous speeches, but the report before us is absolutely admirable, in the great traditions of the EU Select Committee. To my mind, it demonstrates beyond all doubt that the Government are now pursuing not just a much harder Brexit than Mrs May tried to achieve but a harder Brexit than was outlined in the political declaration, which the Prime Minister signed in October and which was ratified as part of an international treaty at the end of January. That was the basis on which he fought the election. As the noble Lord, Lord Barwell, said, he solemnly promised that he had this oven-ready deal, and it is now clear that he is going for something different.

I want to make clear that I fought Brexit very hard. I think that it is absolutely the wrong direction for the country. However, I now accept that it is done. Having said that, that does not mean that those of us on these Benches have to accept that the only option is the hardest Brexit imaginable. We in the Labour Party have a responsibility to vigorously oppose what the Government is now trying to do. Plenty of changes could be sought. If they are not, Labour should go into the next election saying that it wants to achieve a closer relationship with the EU.

On the question of a hard Brexit, many noble Lords have drawn attention to the retreat from the paragraph of the political declaration that made it clear that there is a difference between the United Kingdom’s position and other nations’ positions on concluding a free trade agreement. Because of our geographical proximity and economic interdependence, these are the words—I say to the noble Lord, Lord Hamilton—that the Prime Minister signed up to. The noble Lord has to accept that.

[Lord Hamilton of Epsom]

I thank the noble Lord for giving way. The issue that I was raising was why this was not considered in the report. It first came to light on 18 February and the report went to bed and to the printers on 3 March. There was plenty of time to consider these issues. It is remiss of the report that it did not consider whether our closeness to the EU and the size of the trade that we were doing were material issues.

[Lord Liddle]

I take the point—but at least the committee has drawn this crucial point to our attention. If we had not had this Select Committee report, what kind of debates would we have had, either here or in the other place, on the Government’s new policy? The fact is that we had nothing. There was no explanation of how what the Government were proposing was different from what they had previously proposed. Mr Johnson was going for a sleight of hand in going for this hard Brexit, and it was right that our committee should have exposed it.

The shift in our position on this particular point about the level playing field for open and fair competition will undermine confidence in our good faith. That will have very practical and real consequences for jobs and livelihoods in Britain. Even if we reach a trade agreement, I think that it is now likely that the EU will say that, if we make any move that it interprets as a move away from a level playing field, it will have a legal right to impose trade defence instruments in short order and we will not be able to stop them. These could be very damaging to sectors of our economy such as the car industry, where the non-existence of tariffs is of crucial importance.

We have already damaged ourselves very considerably. We will end up with a treaty that will not provide a stable investment climate for companies in Britain because they will always be under the threat of EU sanctions being imposed because of our attempts to break the rules.

However, that is not the only issue on which the position has changed. It is scandalous that we have thrown away just like that our participation in the European arrest warrant. Where has the big debate about that and what it means for our security been? Where has the Home Office statement been—the explanation by the Minister of what alternatives will be put in place that will be as effective in defending our interests? I feel that something fundamental such as this should not have been done in the way that it has.

As for the rest of the security agenda, the Government say that they are aiming for what they call “pragmatic co-operation”, but then go on to say:

“The agreement must not constrain the autonomy of the UK’s legal system in any way.”


So they will not sign up for our continued participation in not just the European Court of Justice but the European Convention on Human Rights. It is incredible that a Government believe that our European friends will agree to some system of administrative co-operation between the police and intelligence agencies without there being in place a binding framework of legal oversight that both parties judge to be acceptable. That has to be that, or co-operation will not work.

My third point relates to co-operation on foreign policy. The Government dismiss the prospect of a joint institutional framework; all they promise is friendly dialogue and co-operation and they do not want an agreement about this. Yet anyone who knows anything about how relations between countries work knows that institutions are incredibly important. One of the lessons I took away from my time in Brussels was that the framework it provided for regular meetings and policy discussions between senior officials, day by day and week by week, is absolutely fundamental to trying to create a convergence of approach between countries. If we say we do not want any of that kind of institutional co-operation on foreign affairs and defence, it will put us in a much weaker position.

I also think it is wrong for the Government’s new policy to reject the possibility of an overarching framework for the EU-UK relationship that was held open in the political declaration. What has happened to the deep and special partnership that Mrs May used to talk about? Do we no longer believe in that? Without such an overarching partnership, our relationship with Europe runs the risk of being characterised, and indeed poisoned, by interminable trade disputes when these are in fact of secondary importance. What matters is that we should work with our European friends to promote our shared values of democracy, human rights and the rule of law. Without that overarching partnership, I think we will lose that.

I have come to the regrettable conclusion—and I do regret it—that this Government do not really want a close relationship with our European friends. The thing that convinces me of that is the attempt that I think is being planned to rewrite the Northern Ireland protocol, which the noble Lord, Lord Kerr, explained to us in great detail. If that is what happens, the relationship is going to be one of betrayal and resentment, and I think it is an absolute tragedy that that is the route down which we are going.

Somebody referred to Philip Stephens’ article in the Financial Times last week. Many of us, probably including myself, in the next few days are going to go into self-isolation because we want to survive. Well, a lot of us will survive but I do not think that the policy of the country should be one of self-isolation—but that is what we are getting with this Government.

Trade Bill

Debate between Lord Hamilton of Epsom and Lord Liddle

Committee: 4th sitting (Hansard): House of Lords
Monday 4th February 2019 Lords Chamber

[Lord Hamilton of Epsom (Con)]

My Lords, both the noble Lords, Lord Stevenson and Lord Purvis, have stressed how important the services sector is to the economy of this country and to the exports that we sell. However, anybody involved in the financial services industry would say that they have not been much helped by the single-market provisions of the EU, which have put up many non-tariff barriers, to which the noble Lord, Lord Stevenson, referred. It is probably quite ambitious, if we hope to have a free trade deal with the EU, to think that we are actually going to lower the non-tariff barriers that have been erected during our membership of EU, when the single market was supposed to provide a market for services as well as goods but effectively has not actually done so. I will be very interested to hear what the Minister has to say about this very important sector of the economy. We have not been much blessed by reciprocal agreements with the EU over financial services and very many other services in the past because of the non-tariff barriers that have been erected against them.

[Lord Liddle (Lab)]

My Lords, I strongly support this amendment, which is of profound importance. I apologise for an intervention that I made in Committee last week, where I was ticked off by the noble Viscount, Lord Younger, for intervening on an amendment when I had not been present for the start of the debate. I apologise again; I should know the rules better.

I was privileged to serve on the EU Internal Market Sub-Committee of your Lordships’ House. We conducted an inquiry into non-financial services, and I was very struck, not having known much about this before, by the importance of non-financial services. The sector makes up something like two-thirds of the total of the services trade. This is important, particularly for people who think that services just mean finance and the City. It is far broader than that and a lot of members of my own party might better understand that point.

European Union (Withdrawal) Bill

Debate between Lord Hamilton of Epsom and Lord Liddle

Committee: 5th sitting (Hansard): House of Lords
Wednesday 7th March 2018 Lords Chamber

[Lord Liddle]

The noble Lord, Lord Forsyth, is clearly saying that he thinks there is a real possibility we are going to crash out of the EU. We have heard that from him on other occasions and from people who agree with him. David Davis wrote to Conservative MPs to say that it was a possibility that we would not pay up the money unless we got a good free trade agreement. The fact is that any deal is better than no deal: no deal would be an absolute disaster for this country. But if there is a serious risk of no deal from Members of the governing party—I am sure the Government do not want that but there is pressure in that quarter—I believe we would be right in this Bill to guarantee the rights of EU citizens living in this country.

[Lord Hamilton of Epsom (Con)]

The noble Lord said that we seem to be able to crash out and to have no deal as a bargaining chip. Surely, we either crash out or we have no deal as a bargaining chip—we cannot have both.

[Lord Liddle]

The point I am focusing on is that this is our opportunity to guarantee the rights of EU citizens in the event of there being no deal.

European Union Referendum Bill

Debate between Lord Hamilton of Epsom and Lord Liddle

Wednesday 18th November 2015 Lords Chamber

[Lord Hamilton of Epsom]

At the end of the day, the EU thinks that it is free to issue information. Information can take many different forms, and I do not see that there is anything that can be done. The Minister has already said that we cannot actually stop the EU financing activities because they are all done in the name of information—and what is the difference between information and propaganda?

[Lord Liddle (Lab)]

Is the noble Lord a regular reader of the Daily Express and the Daily Mail? Does he think that they provide objective, truthful information about the European Union?

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[Lord Hamilton of Epsom]

I have to say that that is an entirely different issue.

[Lord Liddle]

My Lords—

[Lord Hamilton of Epsom]

The noble Lord has intervened so let me answer his question. I think that the Daily Mail and the Daily Express have their own views, as do the Guardian and the Independent. We have a free press; it is up to them what they do. We are talking here about what the EU does to finance activities during this referendum.

[Lord Liddle]

My Lords, does the noble Lord believe it is wrong for the EU to provide factual information about what it does when in large sections of our press, which are foreign owned, lies are printed about the EU virtually every day?

[Lord Hamilton of Epsom]

As the noble Lord, Lord Liddle, will know well, factual information from the EU amounts to it advertising that it is spending inordinate amounts of money on different interest groups of one sort or another around the UK, as if this were all manna from heaven: “Gosh, you’re lucky, the EU has decided to spend some money on you”. What it does not bother to tell people is that it is their own money.

The great problem that Lord Joseph had when he was in the Thatcher Government was to persuade Ministers to talk not about “public money” that they were being so generous with, but about “taxpayers’ money”. He managed to hold that line for a time with the Conservative Cabinet, but quite quickly it drifted off and we got back to Ministers constantly talking about how incredibly generous they were being with “government money”, as if all this stuff came from heaven. Of course, half the government money that we have now is borrowed anyway. It is an absurd mentality to think that people can be generous with other people’s money and get credit for it. Why should they, when it is actually the money that they have taken off the people of this country? We must live in the real world.

Amendment 18 is about purdah. The problem with purdah, as we all know, is that the Government are arguing that they have to allow the normal functions of government to continue. Obviously that is quite justifiable, but the point of my amendment is to restrict what can be done with regard to purdah. To return once more to my noble friend Lord Forsyth’s argument that this has to be seen to be a fair referendum, our worry is that we should not, as we did in the Scottish referendum on independence, suddenly have an enormous initiative from the Government to try to swing the vote because the polls are going the wrong way. We do not want some great initiative from the EU saying how incredibly generous or wonderful it has been in order to try to swing the vote here.

[Lord Liddle]

I moved an amendment on this in Committee, partly in jest. If the noble Lord wants a fair referendum, why does he not persuade his friends in the Conservative newspapers to give equal space to people who are in favour of our membership and people who are against?

European Union Referendum Bill

Debate between Lord Hamilton of Epsom and Lord Liddle

Monday 2nd November 2015 Lords Chamber

[Lord Liddle]

I take the point. The noble Lord has thrown me off my path. I was saying that the nature of our economy has changed and that sometimes when I listen to these debates I do not get an appreciation of that. The fact is that Britain has benefited more from European Union membership than virtually any other member, and has done so through attracting inward investment to the United Kingdom from all parts of the world. This has been a tremendous boost; it has been the only successful industrial policy we have had since the era of Margaret Thatcher; she was the one who first started it, and it has worked. That has meant that many British businesses are part of European and global supply chains, and we as a country benefit from hosting many foreign companies here. I often think, when I listen to the arguments, that people just do not appreciate that. Yet, that is clearly the major economic issue in the debate on membership. If that inward investment, that ability to organise your supply chains across Europe, were to be interrupted as a result of withdrawal and badly damaged, that could seriously deter future inward investment in the UK.

Most of us in this Chamber are pretty passionate in our views about the European Union, for and against. However, we also have to remember that most of the great British public are not very passionate about it; in fact, the great majority do not regard it as the most important issue in the world at all. Most opinion polling suggests that only about 10% of the voters are worked up about our membership of the European Union. That does not mean that they are pro—I am not trying to argue that. They are genuinely sceptic about the whole issue in a way in which a lot of the people who are anti-European Union in this Chamber, who claim to be sceptics, are not—they are passionate ideologues. However, most of the voters are sceptics, who want to weigh the evidence and be convinced one way or another by the argument.

[Lord Hamilton of Epsom]

I totally accept the noble Lord’s thesis that this is not a high priority for the British public at the moment. On the other hand, however, he will recollect the time when the Tory party was tearing itself apart over the issue of Europe, and it was certainly a very much higher priority at that time. Does he not feel that as we approach the referendum and the debate rages it will move up in people’s priorities, and that they will take more interest in it?

[Lord Liddle]

The noble Lord is right about that, but it is the result of dissent in an elite and a particular part of the British political elite. People will get worked up about this because of a vigorous argument on one side of the political spectrum; it is not as a result of massive popular demand from below. However, that is not my point, which is that a lot of people are genuinely sceptic and probably dislike the Brussels bureaucracy a great deal but worry about our future outside the EU. That is where I think that the need for objectivity is very important. Clearly, I am not the right person to make an objective case about the European Union but I still believe that we have a public service in Britain which is independent and can be objective and which can help to frame a rational debate about our membership. That is why I think that the amendment moved by the noble Lord, Lord Kerr, is so important.

I hope that the Minister, for whom I have the greatest respect, and the Government will look favourably on the argument regarding the need for objectivity in this debate and on the argument that the public service can help to bring that to the debate. That is what the public are looking for. I would hate to think that our politics had got to the state of that of the United States, where everything is so polarised that it is impossible to have any kind of meeting of minds or objectivity and rationality in discussions. I think that the senior members of the Government are coming round to a certain view about Britain’s future which I favour, so I hope that they will be prepared to support this call for independent, objective analysis, which is so important for the quality of our politics.

European Union Referendum Bill

Debate between Lord Hamilton of Epsom and Lord Liddle

Wednesday 28th October 2015 Lords Chamber

[Lord Liddle]

Because there might be fundamental treaty change—for instance, within the eurozone—by that date. There is no possibility of that within the date of the renegotiation. This means that the Government have to be honest about what they can achieve and what they cannot; they have to adopt the position that Harold Wilson wisely adopted in 1975 and say, “We did want to achieve quite a lot of things in this renegotiation. We haven’t achieved them all, but we have achieved some useful reforms which in our view justify staying in”. I think that that is the best that the Government can do on their own policy. That is why I have tabled the amendment.

[Lord Hamilton of Epsom]

I am rather in sympathy with the noble Lord’s proposal. Does he not agree that, as the years progress, the whole of the eurozone in particular and the EU generally is becoming more and more accident-prone; that one drama follows another; and that by 2019 the whole thing will probably be falling apart?

[Lord Liddle]

No, I do not agree. Britain should not push unreasonable demands in the next 12 months on top of the very real issues the European Union has to deal with: resolving the long-term issues arising from the euro crisis—the short term has been resolved—and putting together the more Europe that we need effectively to tackle the migration crisis. Those are very serious problems, and Britain is getting in the way of solving them. That is an added reason for the Government to be honest with the people about the feasibility of the fundamental reforms that some noble Lords appear to think are possible—they are not.

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[Lord Liddle]

Because this is a referendum about leaving the European Union. I am not suggesting that this become the electorate in a British general election or on any other matter. However, this referendum is about the rationale for why these people are here.

[Lord Hamilton of Epsom]

My Lords, we have been discussing virtually all day how we are going to try to make this referendum fair. We want to keep the playing field as level as we possibly can. Enfranchising 1.9 million people of European nationality is a blatant opportunity to try to swing the vote in favour of staying in the EU. Of course, so much is going wrong for all these people who want us to stay in the EU. Let us face it: the EU is imploding as we watch and one crisis follows another. It is going to be quite tricky for anybody who wants us to stay in the EU to win this referendum. Therefore, I agree that those people who do want to stay in have got to try every trick in the book to try to swing it in their direction. However, let us see this for what it is: this is a referendum for the British people to decide whether or not they want to stay in the EU. This is not a decision for foreigners who happen to be living in this country.

EUC Report: MiFID II

Debate between Lord Hamilton of Epsom and Lord Liddle

Tuesday 26th March 2013 Grand Committee

[Lord Liddle]

My Lords, before I begin I should say that the think tank that I chair, Policy Network, has received funding from the City of London Corporation.

I will make three points in introducing what I have to say. First, I agree with the final point of the noble Lord, Lord Kerr, and with his tribute to my noble friend Lord Harrison and his fellow committee members—that should go on the record—for the excellent work that they do in bringing informed debate to the House.

Secondly, I will avoid the considerable temptation offered by the speech of the noble Lord, Lord Hamilton, to engage in the debate about the euro that he has so richly offered. I will just say—this is not meant to be a cruel point—that he has been making the same speech ever since I was privileged to join the House in 2010, and the euro has not collapsed yet. Even in what I agree was the mismanaged Cyprus crisis, the Cypriot Government decided that they would prefer to take the pain and stay in the euro rather than leave it.

[Lord Hamilton of Epsom]

Does the noble Lord accept that the pain has not even started in Cyprus yet?

[Lord Liddle]

They knew perfectly well what they were doing by signing up to the deal that they did. Perhaps I may make another aside. The idea that taxpayers should always pick up the bill for the irresponsibility of bankers is offensive. A lot of people in Cyprus have enjoyed the benefits of relatively high interest rates, which pensioners in Britain have not enjoyed over the past few years. The idea that they made these investments in a noble way that should be protected by the European taxpayer is, I think, offensive.

Thirdly, I agree with the noble Viscount, Lord Brookeborough, that the issues raised in this report are very complicated. I am certainly not in a position to talk about the details. Instead, I want to focus on the Government’s political strategy for handling these financial services questions. This is not a party point; it seems to me that as a nation we have a real difficulty here. A number of propositions form the approach on this side of the Room. The first is that we need a healthy financial services sector; I agree strongly with the noble Lord, Lord Hamilton, and the noble Viscount, Lord Brookeborough, on this. Yes, we need to rebalance our economy. My noble friend Lord Mandelson was right to say that we have had too much financial engineering and not enough real engineering, but the financial services sector is a huge overseas earner for us and we cannot do without it. It is a vital national interest where we have a comparative advantage. However, we have to acknowledge that things have gone wrong in the City in the recent past. Grave reputational damage has been done as the result of the LIBOR scandal and the scandals around mis-selling. Risks were taken that should never have been, and as a result we need to rethink the way we regulate the City.

The second proposition that should inform government policy on a national strategy in this area is that the City benefits hugely from being the financial centre of the European single market. The noble Lord, Lord Kerr, is right to say that what Britain achieved in the 1990s and the early 2000s—I was slightly involved in the 1999 Financial Services Action Plan—was tremendous. It opened up the market and ensured that London got a larger share of it. What happened, though, was that we had liberalisation without putting in place proper cross-country regulation, and we have to acknowledge that that was a UK mistake. It was a UK consensus that we should have light-touch regulation and we got it wrong. The Turner report that was published at the start of the financial crisis said that we have to choose between European regulation and being part of the European market or going back to national regulation, and that is basically right. I think that both the then Labour Government and the new Conservative/Lib Dem coalition have accepted that we are part of a properly regulated European single market in financial services.

However, the result of all this is that on the Continent there is now a great suspicion of UK motives in this field. I sense this an awful lot as I travel around to various meetings. Therefore, the third objective we have to set ourselves is to accept that we need re-regulation at the European level, but that it has to be done in a proportionate and sensible way. I have some sympathy with the remarks of the noble Lord, Lord Hamilton, about shutting the stable door and things moving on so that the new regulations will not cope with the new circumstances, but we must recognise that we have to put a national effort, as the noble Lord, Lord Kerr, said, into getting our regulatory strategy right.

We face big problems here. There are some basic asymmetries that put us in a difficult position. We had very strong support from what you might call the northern liberals for the positions that we took in the 1990s and 2000s but I am not sure to what extent that support is as solid as it once was, which I think is one of the reasons why the coalition on the financial transaction tax that the noble Lord, Lord Kerr, wants has not occurred. There is an asymmetry of expertise. People complain about the bureaucracy of the Commission, but when you look at the thousands of people employed in the regulatory agencies in London and the dozens who are dealing with these matters in the Commission—a very small group of people covering a very wide brief—it is not surprising that sometimes the proposals that come forward are flawed in key respects. The Commission tries to listen and amend in the light of representations made to it.

Another major asymmetry, which is a very serious one, is that there are euro-ins and euro-outs. We are among the euro-outs, and that is the way it is going to be, but we have to recognise, as a euro-out, that financial regulation is fundamental to the financial stability of the eurozone. If they are going to do whatever it takes to stabilise the euro then they will be prepared in the eurozone to adopt whatever financial regulations they believe are necessary to stabilise their currency.

In this situation, the national strategy clearly has to be to go out of our way to win friends and influence people. That is where the Government—or perhaps only one part of the coalition—has got it so badly wrong. There is a difficult environment for us in the European Parliament. They think bankers are to blame for the crisis and that Britain is, in part, to blame because we pushed a deregulatory agenda. How do we deal with that? Not by going in with the Thatcher handbag, nor by doing what David Cameron did at the December 2011 European Council in circulating a paper—which, incidentally, has never been disclosed to Parliament, although we have seen it and know what is in it—that had “unanimity” written at the top and which, to anyone who looked at it, would look as though the British Government were basically seeking to reverse qualified majority voting on a large number of financial services questions. It was a disastrous strategy: how could you expect the eurozone to agree to surrender sovereignty over their currency to Britain through our having a veto over financial regulation? We have to argue from a position of qualified majority, and we have to win friends and base our position on reason and good argument.

I agree with the noble Lord, Lord Kerr, that we have to point out to people the advantages of London being the global centre of the single market and all that that brings. At the same time, though, we have to acknowledge the criticisms of the City that have been made and demonstrate that we are prepared to see them tackled. That is basically the question that I put to the Minister: how are the Government going to do that? What is their political strategy for dealing with these questions, which are of vital national importance, even though they are of great complexity and difficulty for many members of the committee?