Resetting the UK-EU Relationship (European Affairs Committee Report)

Lord Kerr of Kinlochard Excerpts

Thursday 26th February 2026 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

It is an excellent report and very well presented, but I wonder why the negotiation has to be so transactional, so timid and so slow. What could be done to speed it up? I suspect that one of the reasons is that the Commission negotiators are the same guys who were involved in the Brexit negotiation, and it may be that our current negotiators suffer for the sins of their predecessors.

We also suffer from a degree of timidity in what we are putting forward, and the other side suffers from a bit of excessive ambition. I do not think we should be paying contributions into the EU budget, that it is right to try to charge us €10 billion to join SAFE, or that it is right to try to charge us for integration into the EU electricity market. These things are a common benefit—they suit both sides—so why should we pay?

What should we do to speed things up? A common Cross-Bench speech is emerging today, because I think we have to play the security card—in fact, we need to play it anyway. I would like to see the negotiations become more top down, and I would like to look at the big picture. The prophet there was Mark Carney. We are indeed seeing a serious transatlantic rupture. Of course, we must retain as much as we possibly can of the NATO architecture, but within it we need to build new, all-European structures and capabilities. I agree with the noble Lord, Lord Ricketts, that the coalition of the willing is the place to start, but we need an E3 blueprint. Why E3? Because it exists, because we work well with the French—our military works well with the French—and because German defence spending has taken off and is set to surpass ours and that of the French put together.

It was another Healey, Denis Healey, working with Helmut Schmidt, who created the NATO Eurogroup and developed the NATO Nuclear Planning Group. The need for big-picture thinking about European defence is much greater now than it was then. Now, economic security is the EU’s business—energy security, not military security—but a British initiative in the military sphere leading to an E3 security blueprint could transform the atmosphere in the EU Council, with two provisos. First, there must be no direct linkage, explicit or implicit—we must not repeat Prime Minister May’s mistake—and, secondly, that is provided we back our words with action.

The noble and gallant Lord, Lord Stirrup, was absolutely right. Our friends—just like our foes, I fear—know that our uniform numbers and stockpiles are too low and our forces hollowed out. We talk a good game but we are living on history and reputation. We are not investing enough. We are where the Poles were when Putin invaded Ukraine. Four years ago, Poland was spending 2.2% of GDP on defence. Today it is 4.8% and rising, because the Poles know that Putin would not stop at Ukraine. If our financial commitment rose to match theirs and the Germans’, and if the Healeys and Schmidts of today could produce an E3 plan, our friends in Brussels would be more likely to override the transactional technicians and identify common interests. Anyway, upping our defence spending is what we need to do, because we are at a 1938 moment and need to respond, with or without Trump, to the Putin challenge. That is the big picture.