Brexit

Lord Kerr of Kinlochard Excerpts

Monday 25th March 2019 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

I warmly applaud what was just said by the noble Lord, Lord Alderdice.

I shall shock the Government Front Bench by saying that I rather like the Prime Minister’s Statement. I found three things in it that seem to be the beginning of wisdom. The Prime Minister says that,

“as things stand, there is still not sufficient support … for a third meaningful vote”.

She said that the House has “expressed its opposition” to no deal and,

“may very well do so again”,

and she said that,

“the bottom line remains, if the House does not approve the withdrawal agreement this week, and is not prepared to countenance leaving without a deal we will have to seek a longer extension”.

Those three propositions are all true and one should welcome this dose of reality.

If I were going to be pompous, I would say that what has gone wrong in the past three years—I hope everybody has rejected the idea of my being pompous—is that we have forgotten that the Executive are responsible to Parliament. It has been the rule down the years that a Government who cannot sell their principal policies to Parliament change the policies or make way for another Government. Since Walpole’s time, the principle of Cabinet solidarity has been that if you do not agree with the policy of the majority in the Cabinet, you leave the Cabinet and you shut up. The third principle is that at times of national crisis, the national interest overrides the party interest. A Narvik brings out a Churchill, a Churchill brings in an Attlee and a national consensus is sought. We come together. None of those three principles has been applied in full in the past three years. Indeed, they seem to have been flouted.

It is a pity that there was no national debate, or at least a debate with Parliament or within the Cabinet, about what Brexit meant—and what form of Brexit one should be aiming for and how. To set out those red lines at a party conference with no prior discussion in this House or the other place was a mistake. Keeping Parliament in the dark during the negotiations was a mistake. The Minister had to tell us again and again that he was not allowed to give us a running commentary. I am sure he found that painful; I found it painful to hear it. It would have been better to have a discussion about the process; the product might not then have come as such a surprise. It was then a mistake to pull the product out of the House of Commons for two months, not allowing the meaningful vote, and it was probably a mistake to go on pressing it after the massive failure of the first meaningful vote.

On Cabinet solidarity, it was a mistake to make the deal the Prime Minister’s deal and not the Cabinet’s deal or the Government’s deal. That was not wise. Letting the principle of collective responsibility lapse has proved self-defeating. Threatening hard leavers with no Brexit and soft leavers or remainers with no deal has produced the effect of isolating the Prime Minister in a very worrying way.

What about country before party and reaching out? I was on the march. We marched past Downing Street and we called on the Prime Minister to think again. How did she react? As has been said, she summoned the ERG to Chequers. I do not know why she always moves right at a moment of decision. This morning, we see what I suppose must be the ERG manifesto, in Mr Johnson’s column in the Telegraph, which has some rather odd aspects to it, as the noble Baroness, Lady Hayter, said. Mr Johnson says two things. First, we must,

“come out of the EU now—without the backstop”.

So it is no deal: a customs frontier across Ireland, forget about the Belfast agreement and forget about the peace process. I think that is irresponsible.

Secondly, he says:

“Extend the implementation period to the end of 2021 if necessary; use it to negotiate a free-trade deal”.


As the noble Baroness, Lady Hayter, said, no agreement —no deal—means no implementation period. It means also that our trade with our biggest market is instantly no longer free, and rollovers of existing EU trade deals with third countries become hugely more difficult and rather unlikely. This is instant economic disruption. This is what the Chancellor calls catastrophic. Avoiding this is now paramount, as the CBI and the TUC rightly said, last week. They believe that an Article 50 extension and a new approach are required. No more “my way or the highway”. Some 85% of CBI member companies apparently think that an Article 50 extension is better than no deal. I am not surprised, given the Government’s own economic analysis of no deal.

Those views of the CBI and the TUC were pretty well represented at the European Council by President Tusk and Chancellor Merkel. They do not want no deal; they know how damaging no deal would be to them and how much more damaging such an outcome would be to us. It seems that our Prime Minister was still arguing then—though today’s Statement is a little different—that there was only a binary choice for the United Kingdom: her deal or no deal. It seems that she was evasive when pressed on the chances of her deal being approved. She seems to me to be honest today in her Statement. She refused to countenance any plan B, and I think the European Council concluded that she did not have one. It was her counterparts in the European Council who ensured that the conclusions mean that, as President Tusk said afterwards,

“anything is possible: a deal, a long extension if the United Kingdom decided to rethink its strategy, or revoking Article 50, which is a prerogative of the UK government”.

The ball is now in our court and we have, at last, to rise to the level of events. What we need is time to stop and think. I do not believe that the European Council would have difficulty agreeing to a substantial Article 50 extension, provided we satisfy the Council’s only condition, which was that we should be able to “indicate a way forward”. I do not believe that that way forward need be very detailed or specific—indeed, it would not be. After 1,000 days of no national debate, it would be crazy suddenly to try to produce a new answer in a fortnight. What we need to indicate—I think this would be sufficient—is that, at long last, a process to decide the future is being set in train. Here, I echo the noble Lord, Lord Bridges: if Brexit is to go ahead, we need a process to decide the best balance of autarkic sovereignty and common purpose, and of independent action and identifying mutual interest. I think the noble Lord put it better than I have, but that is the dilemma: finding that balance, and a process to determine whether, after at long last a genuine, and genuinely informed, national debate, Brexit should go ahead or whether our Article 50 notification should be withdrawn—in either case, with full democratic authorisation. The broken, blindfold Brexit that we have blundered into results from a flawed process, which broke with our basic constitutional principles—but it is not too late to put that right.

The spectacle of the European Council last week was shaming. We saw a Prime Minister lurking in an empty room while 27 colleagues tried to help her find a way out of the corner she had painted herself into; we saw a haggard Prime Minister, unable to stay on to participate in the Council’s debate on probably the most significant issue of our time: western democracy’s relationship with China. For Britain to be silent—for Britain to be absent from such a debate—is shocking. A good test, at moments of difficult decisions, is to ask oneself what Peter Carrington would have thought and done, supposing he were in the Cabinet today. When, on the last day of January, we remembered him in the Abbey— with the help of the noble Lords, Lord Luce and Lord Carrington; with the Grenadiers’ “Slow March” and “Nimrod”; with memories of Nijmegen; with memories of Carrington alongside Kissinger and Schmidt; and memories of Carrington as Secretary-General of NATO—we remembered someone who deeply believed in the European Union, for precisely the reasons so brilliantly explained in Parliament Square on Saturday by the noble Lord, Lord Heseltine. He believed deeply that this country mattered, that we had a vocation and that we should make sure our voice was heard. He was someone whose voice certainly was heard, who understood parliamentary democracy and the need to put country before party and honour before ambition, and who knew what to do when something went wrong.

Our friends in 27 countries have thrown us a lifeline, provided that we can “indicate a way forward”—the phrase in the Commission’s text—which could, and I hope will, mean ourselves by 12 April to a process to seek a national consensus on a negotiable outcome. I hope we will: better late than never.

Further Developments in Discussions with the European Union under Article 50 of the Treaty on European Union

Lord Kerr of Kinlochard Excerpts

Monday 11th March 2019 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

It is a pleasure, as always, to follow the noble Duke, the Duke of Wellington—lots of soldiers have done so successfully.

Since there are no new facts in this debate, we have to deal with the fantasies of the weekend. Mr Johnson told us that the EU has treated the Attorney-General with contempt. The Attorney-General’s argument that the Irish protocol, which we negotiated, might itself be a breach of the European Convention on Human Rights seems to be an argument that might be treated with polite disdain. I do not think that the EU reacted with contempt when Mr Barnier reminded us that its original preferred offer of an all-Ireland customs union was still on the table.

The noble Lord, Lord Howard of Lympne, said that the EU is intransigent; it is worth remembering that it was to suit us and Dublin that the EU came forward with the Irish protocol, breaching two of its guiding principles—the indivisibility of the four freedoms and the impossibility of extending single market status to a non-EU member, Northern Ireland. We may now not like the backstop, but our Government asked for it, our Government signed up to it in principle in December 2017, to Mr Johnson’s loud applause, and our Government signed up to it in detail in November 2018, to Mr Johnson’s loud disgust. It was Mr Barnier who persuaded some reluctant EU member states to allow us to have it, so it is no wonder that they are a bit baffled about the position now taken by the Attorney-General.

Mr Johnson today tells us that it would be preposterous to take the option of no deal off the table as it is vital that we do nothing further to weaken our negotiating position. Here I strongly agree with the noble Duke, the Duke of Wellington, that a threat to shoot ourselves in both feet continues to surprise the EU but provides us with no negotiating leverage whatever. Mr Johnson’s preferred solution today seems to be a slight misreading of the Malthouse proposal. Mr Johnson would like us to leave on 29 March but with a longer transition period which he describes as,

“a mutually agreed standstill in the existing arrangements, so that we can use the period to the end of 2021 … to do a proper free-trade deal”.

That is a fantasy. The fact is that we cannot have our cake and eat it—that has been established over the past three years. When we leave, we lose control. We have no voice, no vote and no veto. We are obliged to follow EU rules with no say in their making. That is what Mr Johnson used to call a “vassal state”.

There are also fantasies around even in the austere columns of the Financial Times. Mr Münchau says that it would be easier to reconcile the Norway option with the Irish backstop and that the Norway option offers a smooth transition. That is a fantasy. The fact is that the Norway option would create a customs frontier across Ireland. I do not see how that is easier to reconcile with the Irish backstop. The frontier across Ireland would be just like the Sweden/Norway frontier, but with many more crossing points and much more difficult to man. It in no way solves the backstop problem. Nor is the Norway option immediately available. It would require amendments to the EFTA treaty, with five ratifications required, and then the EEA treaty, with 31 ratifications required.

I hope and believe that tomorrow the other place will again vote against the draft treaty and the political declaration because I believe it is a humiliatingly bad deal. I know it is in no way determinant of the future UK/EU relationship and I think it is a recipe for years and years of rancorous negotiations stretching far into the future.

Like the noble Duke, I hope and believe that the other place will, again, firmly reject the grossly irresponsible idea of leaving with no agreed divorce terms, no understandings, however sketchy, about the future relationship, and no transition period. Only Mr Johnson, with his well-known respect for business views, could recommend such a course. However, if the other place rejects the deal and rejects no deal, it will be five to midnight and the only third option will be an Article 50 extension. Two and two make four; you cannot reject both the deal and no deal and not want an extension.

The noble and learned Lord, Lord Hope, asked what the extension would be used for. It might allow us to rethink our red lines; in fact, we have already fudged two of them a bit. The backstop gives the ECJ a role in dispute settlement, and of course it leaves us stuck—in my view, probably for a very long time—in a partial, unequal, unsatisfactory form of customs union. A real customs union, which this House voted for on Wednesday, would be much better. We have always known that if we changed our view on the red lines, the EU 27 would change their mandate. They have always said so and they would go on saying so. An extension would also allow us to check that all this really is what the country wants. I suspect that the Government know it is not, and that this is what the Prime Minister meant when she said in Grimsby on Friday:

“If we go down that road”—


the road of a second referendum—

“we might never leave the EU at all”.

Quite. It is called democracy.

I suspect that somebody may have shown the Prime Minister the latest YouGov poll—in only two out of 632 constituencies is there now a majority in favour of leaving—or maybe she has been shown the BMG poll, in which over 75% of the more than 2 million voters who have joined the electoral roll since 2016 would vote to remain.

Mr Baker of the ERG—this is one more fantasy—told us this weekend that any delay beyond 29 March would mean that democracy in this country was effectively dead. I am not sure. No one in June 2016 voted for the date of 29 March 2019. Some may have voted on the basis that the Irish frontier would in no way be affected, because that is what the then Secretary of State for Northern Ireland told them during the referendum campaign. Some may have voted on the basis that Turkey was about to join the EU, because that is what a number of senior members of the campaign—some still in the Government—told them. Some may have voted on the basis of what was said on the side of the bus about the NHS. Some may have believed that the deal with the EU would be the easiest in history, and that all these trade agreements would be lined up ready to sign, pre-negotiated and ready to go, and that “they need us more than we need them”.

If the Prime Minister cannot get her deal through the House of Commons, the honourable course will be to take her case to the country, but I do not think that she will. I believe she knows that the country, now knowing the real exit terms, would not vote to leave. I believe the Prime Minister is, to use the words of a greater Prime Minister, frit.

[Lord Pearson of Rannoch]

I was waiting for the noble Lord to finish his peroration. His experience of matters in Brussels is probably unparalleled in your Lordships’ Chamber. Does he think that Brussels would allow us to continue in our existing free trade with the European Union, but under the WTO and not the Luxembourg court, and, if not, why not?

[Lord Kerr of Kinlochard]

I am not sure I caught all of the noble Lord’s question. If he is asking whether the EU wishes to have free trade agreements with the UK, the answer is yes, it does; tariff-free trade has always been part of the EU’s mandate. If the noble Lord’s question is whether in the event of a no-deal crash out we would secure tariff-free trade with the EU, the answer is no; the EU would on 30 March impose the common external tariff against our goods.

[Lord Pearson of Rannoch]

My Lords, that was not quite my question—

Further Discussions with the European Union under Article 50 of the Treaty on European Union

Lord Kerr of Kinlochard Excerpts

Wednesday 27th February 2019 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

Following the noble Lord, I am reminded of how much he has done down the years to encourage our engagement in Asia and Asian investment in this country. I feel very sorry for him, because this must be a sad time for him. If you take just Anglo-Japanese relations, his work down the years was remarkable. We know what the Japanese banks here are doing. We know what Hitachi and now Honda are doing. We know what Toshiba is doing. We know about Sony and Panasonic. When will we hear from the third of the great car companies, Toyota? Actually, we did hear from it. It exports 80% of its UK production to the European Union. Its executive vice-president, Didier Leroy, said that:

“The UK government should … understand that we cannot stay in this kind of fog when we don’t know what will be the output of the negotiation”,


and that any kind of EU import tax would create a huge,

“negative impact in terms of competitiveness”,

for its UK plant. That quote—

“we cannot stay in this kind of fog”—

was from October 2017. It is still in this kind of fog. We have not told it anything, so it is not surprising that it has given up and is backing off. It has given up expecting clarity from us.

[Lord Lilley]

I am sure the noble Lord will want to congratulate Toyota on opening in this country a year later—in October last year—a line producing the best-selling car in the world, opened by the Secretary of State. That shows a rather different picture to that he was portraying.

--- Later in debate ---

[Lord Kerr of Kinlochard]

I wait to see what will be the fate of its massive investments in Deeside and in Derbyshire, both of which are very important. I am concerned; I know the company is concerned. The noble Lord, Lord Howell, has worked very hard to secure investment in this country and must be very sad.

The noble Lord, Lord Newby, started with a Churchillian quotation, which put me on my mettle. I was determined to match him. I can just beat him on vintage; mine is a 1936 quotation. Churchill described Chamberlain as,

“decided only to be undecided, resolved to be irresolute, adamant for drift”.—[Official Report, Commons, 12/11/1936; col. 1107.]

As we kick the can down the road, somehow it came to mind. It is actually quite unfair to Mrs May; it was probably unfair to Chamberlain too. What is more striking about Mrs May is her messianic, Mosaic mission, and her determination not to listen to anybody else. I am impressed by her belief that she knows all the answers, and does not have to pay attention to any of us.

[Lord Winston (Lab)]

I think the noble Lord will find that Moses listened. That was one of the issues.

[Lord Kerr of Kinlochard]

But what he brought down was graven on a tablet of stone, and what Mr Nick Timothy drafted for the Prime Minister in September 2016 was not, in my view, to be taken as graven on a tablet of stone. We know now that the Cabinet was not consulted about it. We knew at the time that the country and this Parliament were not consulted, but these four red lines have determined where we are now.

The European Union has said all along—it said it in the cover note of its first mandate—that if our red lines were to change, then it was happy to look again at its mandate and change it. However, we do not seem to listen to those across the House of Commons who propose something that would break one of the red lines. When Labour talks of customs union, and this House votes for customs union, it is dismissed because it breaches one of the four red lines.

By the logic of the Prophet Timothy, Switzerland, Turkey and Norway are not sovereign states independent of the EU, because in at least one respect each breaches at least one of the four red lines laid down by Mrs May in the party conference speech in September 2016. Yet the Swiss think that they are independent. They do not think they are in the EU, and are commonly regarded as not being in the EU. I do not know why the definition of Brexit that was laid down without consultation in September 2016 has to be accepted as the only definition, and why it is a denial of Brexit, flying in the face of democracy, to argue that there might be a better Brexit than the one defined by Mr Timothy and the Prime Minister in September 2016. That is why I am offended by the “my deal or no deal” choice.

As everyone has been saying and as the document published yesterday proves, no deal is an economic catastrophe for the country, but it cannot be right that the only alternative is the lineal descendant of the tablet brought down by Moses to the party conference in September 2016. There are at least two more options available. One is to try for a better Brexit, which I do not believe the Prime Minister is going to do with the short extension she says that she might be ready to foresee. She is not looking at anything other than the sort of declaration that could be fitted into the political declaration, or might be free-standing, in some way adding emollient words about the backstop. However, the backstop is not the only defect in this dreadful, humiliating package—this humiliating treaty and vacuous declaration.

If we were prepared to contemplate the Swiss approach to free movement of persons, the Turkish approach to a customs union or the Norwegian approach to the single market, or if we were prepared to envisage an EEA-type arrangement, we do not know what new prospects might open up—we have never tried, because No. 10 does not listen. It has never been tested. We have never discovered what the EU means when it says that, if we were to change our red lines, it would change its negotiating position. That makes the “my deal or no deal” position irresponsible.

Others have explained why no deal is extremely bad for our trade. There would be no preferential arrangement with the EU or with any of the countries with which it has preferential deals, which amounts to more than two-thirds of our trade. The non-EU countries I am talking about include some very big ones, such as Japan, South Korea and Turkey. We are told that we have rolled over six agreements, but these are with minnows—not Japan, not South Korea and not Turkey.

Quite apart from the question of our domestic tariff, which the noble Baroness, Lady Hayter, spoke about, we have to accept that our export market would be seriously damaged by no deal. Whether it happens in April, May or June, no deal is no better then than it would be on 29 March.

[Lord Howell of Guildford]

I apologise for interrupting the noble Lord—he said some very nice things about me and I have a lot of very nice things to say about him. However, he has presented me with a puzzle. He keeps talking about this business of “my deal or no deal”. In fact, the Government have now recognised that it is not “my deal or no deal”, but “my deal or postponement”—admittedly, in the words of the Prime Minister, a “short” postponement. We all know perfectly well that an overwhelming majority in the other place supports a delay in Article 50. If the Prime Minister fails on 12 March—I do not think she will—there will be a postponement. The concept of “my deal or no deal” is last week’s story. It is simply out of date, so why is the noble Lord worried about it?

[Lord Kerr of Kinlochard]

I am worried about it because I do not believe that the Prime Minister intends to use the short delay she says she is prepared to settle for—although she has not said that she would vote for it—to explore the possibilities of a better Brexit. As far as she is concerned, the only deal is that which she brought back in November, possibly titivated slightly in the declaration to try to deal with the objections of some to the backstop. I believe that is all she intends to do. The right thing to do is to have a long enough extension to go back and consult the people. This has turned out so differently from what we were told, and it is absolutely right that we would go back and consult the people.

The point I was trying to make was about trade. I would like to end on a warm and friendly note towards the noble Lord, Lord Callanan, who is in such sparkling form today—I shall try to sparkle back in what is, for me, an unusually friendly way. I congratulate him on his honesty in the last debate, when he put to rest the Legatum Institute theory that the answer to the problem of WTO terms and no preferential trade deals was Article 24. It was extremely straightforward and honest of him to say of Article 24:

“This provision refers to interim agreements. In order to use it, we would need to agree with the EU the shape of the future economic partnership, together with a plan and schedule for getting there. This would then need to be presented to all 164 WTO members and they would be able to scrutinise it, suggest changes and, ultimately, veto it”.—[Official Report, 13/2/19; col. 1935.]


That, I believe, is absolutely correct. I think it was generous and honest of a Minister to put it on record. Article 24 is absolutely no way out in the situation we would be in with no deal. It depends on a deal being struck. It depends on a process going on. It is possible that eight years into future negotiations this is what we might be able to do, although we would, as the Minister rightly said, be dependent on the agreement of 164 parties in GATT. Therefore, even that cannot be assumed.

EU Withdrawal

Lord Kerr of Kinlochard Excerpts

Wednesday 13th February 2019 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

My Lords, I follow the noble Baroness, who had the misfortune to follow me in the great Lutyens house in Washington. It is said that every ambassador deplores his predecessor’s taste and his successor’s judgment.

I owe the House and the Minister an apology. I was called away and missed part of his speech.

The text for my sermon is the following:

“Taking back control is a careful change, not a sudden stop—we will negotiate the terms of a new deal before we start any legal process to leave”.


That is what the Vote Leave campaign said in June 2016. I repeat,

“we will negotiate the terms of a new deal before we start any legal process to leave”.

Here we are with six weeks to go, but we do not know what the new deal is and we are flirting with no deal.

Flirting with no deal is playing ducks and drakes with the country’s economy. It would be hugely damaging. British business is shocked because this is not what it was told to expect; it is not what it did expect; it is not what it is prepared for; and it is still in the dark about how to prepare for it. The noble Lord, Lord Newby, mentioned the British Chambers of Commerce’s 20 questions to the Government—20 basic questions that it has asked with six weeks to go. The noble Lord highlighted three of them; I would like to add three questions to the Minister.

First, supposing that there is no deal, what, on 30 March, will be our trade regime with our biggest trading partner—the 27 countries of the European Union? Am I right in thinking that the EU will apply its common external tariff and that the fascinating arguments about Article XXIV of GATT advanced by the noble Earl, Lord Cathcart, are a very elegant red herring? Am I right that the EU will apply its common external tariff in full on 30 March?

My second question is as follows. In the event of no deal, how many of the EU’s free trade deals with major third countries will have been rolled over? What about Canada, Japan, South Korea, Australia and New Zealand, which are all big trading partners? Am I right in thinking that the answer is, “None of the above”?

Thirdly, in the event of no deal, how many new trade deals with third countries will be in force? What about Canada, Japan, South Korea, Australia and New Zealand? Am I right in thinking that the answer is, “None of the above”?

With six weeks to go, if the answers are as I fear or if the Government do not know the answers or will not reveal them, it is grossly irresponsible not to take no deal off the table. This is not a Westminster game; real jobs are at risk out there in the real economy. The irony is that those who misled us back in 2016 by saying:

“Taking back control is a careful change, not a sudden stop—we will negotiate the terms of a new deal before we start any legal process to leave”,


are precisely the same people who are now saying that we do not need any new deal and that no deal will be just fine. That is irresponsible. It might be just fine for them; for the country it would be disastrous.

Of course, the Minister will say, yet again, that the way to avoid no deal is to vote for Mrs May’s deal—the one that both Houses rejected by large majorities. They rejected it because it is such a humiliating and one-sided deal, and it will not get much better in the next six weeks. Here, I disagree with the noble and learned Lord, Lord Hope of Craighead, whom I normally follow with great respect. As President Tusk and President Juncker said in their letter a month ago,

“we are not in a position to agree to anything that changes or is inconsistent with the Withdrawal Agreement”.

That draft treaty, on which they shook hands with Mrs May back in November, will not change in any significant respect, and I do not think that it is going to change at all.

It is perfectly possible to envisage changes to the political declaration, provided that they are not inconsistent with what is in the draft treaty. Of course, the political declaration is not legally binding. We in this House have spent very little time on it; we have spent most of our time on the treaty because we are so fascinated by the backstop problem. However, we should have spent more time on the political declaration because it is the most extraordinary document. It is astonishingly wide in scope and astonishingly shallow in substance. It does not settle anything for the future negotiation.

The political declaration kicks off well in paragraph 4:

“The future relationship will be based on a balance of rights and obligations, taking into account the principles of each Party. This balance must ensure the autonomy of the Union’s decision making and be consistent with the Union’s principles, in particular with respect to the integrity of the Single Market and the Customs Union and the indivisibility of the four freedoms”.


I wonder which side drafted that. The next sentence reads:

“It must also ensure the sovereignty of the United Kingdom and the protection of its internal market, while respecting the result of the 2016 referendum including with regard to the development of its independent trade policy and the ending of free movement of people between the Union and the United Kingdom”.


Who drafted that one? That is settled, then—there we have it. These principles will be respected, so the game is over and we might as well crack open the champagne straightaway.

Bits of the declaration do settle things. Paragraph 24 shows that we have accepted that we cannot be in the agencies, particularly the medicines agency, the chemicals agency and the aviation safety agency. Paragraphs 89 and 90 show that we have accepted that we will not have access to the European arrest warrant, the Schengen Information System and the European Criminal Records Information System. The police tell us that we will suffer greatly from that, but we have accepted it. The financial services paragraphs—paragraphs 37 to 39, which are astonishingly thin—make it clear that passporting and mutual recognition will not happen. That is not good news for the City.

However, most worrying are the really vacuous paragraphs about my old profession—the section on foreign policy co-operation. When you think of Peter Carrington moving the Council on the Falklands, of John Major moving the Council on a safe haven for the Kurds in 1991, and of the way that Hans-Dietrich Genscher, the other heavyweight in the Council, would defer to Douglas Hurd at the very time that the noble Baroness, Lady Meyer, was speaking about—I wish that Lord Hurd of Westwell were with us today—it is very sad to read where we have got to on foreign policy. The political declaration says:

“The Parties will shape and pursue their foreign policies according to their respective strategic and security interests, and their respective legal orders. When and where these interests are shared, the Parties should cooperate closely … To this end, the future relationship should provide for appropriate dialogue, consultation, coordination, exchange of information and cooperation mechanisms”.


There is no definition of “appropriate” there. This is sad. We have contributed a huge amount to the foreign policy of Europe over the last 40 years. Now, we and the EU will be following our own interests and, if they happen to coincide, there will be some mechanism for talking about it. That is very bad.

I should draw the House’s attention to an even more vacuous paragraph on space. Paragraph 107 says:

“The Parties should consider appropriate arrangements for cooperation on space”.


So that is done—it is settled.

This document settles nothing at all. It is not prescriptive or definitive. We should remember that the EU will be negotiating on the legal basis of Article 218, and it needs unanimity on its side. Any single member side on that side can block anything. If somebody decides that to allow access for British fish products to his market he will demand access to British fishing waters, there is nothing to stop him saying that this year, next year and the year after—until we agree. Remember that the outcome is subject to national ratification; it goes off to the Wallonia parliament and referenda in five EU member states.

There is nothing certain in this description of the future. The only thing that is certain is that we are heading for at least five years—probably 10, I would guess—of continuing uncertainty. I come back to agree with the noble and learned Lord, Lord Hope of Craighead, because it would be shocking if I only disagreed with him in my remarks. I strongly agree with the way he ended. We do not have to accept this choice. It is not a choice between being thrown over the Tarpeian Rock on 29 March or the slow strangulation of this rebarbative negotiation, which would poison our relations with our neighbours for a decade, and the certainty that the deal we would end up with is a hell of a lot worse than the one we have now. We do not have to buy that choice. The first thing to do is agree that we should seek an extension under Article 50(3) of the treaty.

Brexit: Parliamentary Approval of the Outcome of Negotiations with the European Union

Lord Kerr of Kinlochard Excerpts

Monday 28th January 2019 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

It is a pleasure to follow the noble Lord, Lord Desai. I cannot answer his question on how long negotiations for a free trade agreement will take from outside, but, like him, I would not have started from there. I would have started during the process, agreeing a framework for the future relationship, which is what the treaty says we should have been doing, and thus got some way down the road during the two years of negotiations on the first agreement.

I thought I would try very hard to say something new today. It is time we talked about time. It is running out, and we are going to need more. There are 60 days left, and plan B is exactly like plan A: sticking with the November agreement, which the Government would not let Parliament vote on in December; sticking with the agreement that Parliament rejected by a record majority in January; and sticking with this hopeless and humiliating request that the 27 acquiesce in some sort of legally binding formula contradicting the feature of the agreement which the Attorney-General highlighted in his letter of 13 November, as mentioned by the noble Lord, Lord Campbell of Pittenweem—namely, that the backstop will last as long as the EU 27 want it to last.

The Prime Minister told us she would change that in December—it did not work. She told us that again in January—it did not work. Mr Johnson, the former Foreign Secretary, tells her in today’s Daily Telegraph to,

“stiffen the sinews and summon up the blood and get on that trusty BAE-146 and go back to Brussels”,

to kill off the backstop and to replace it with a “freedom clause”. The content of the freedom clause is as yet unspecified. Reading this, I was reminded of “Beyond the Fringe”, and its splendid wartime RAF sketch, in which squadron leader Peter Cook declaims that, since the war is going rather badly:

“We need a futile gesture … Get up in a crate … pop over to Bremen … don’t come back”.


What, conceivably, could Mr Johnson’s motive be in saying “Don’t come back”? Presidents Tusk and Juncker could not have been clearer when they said in their letter of 14 January about the backstop:

“We are not in a position to agree anything that changes or is inconsistent with the withdrawal agreement”.


As the noble Baroness, Lady Wheatcroft, said:

“These people mean what they say”.


There is no more time to waste challenging them.

As for “no deal”, I do not believe that our Prime Minister, whom I believe is a serious, responsible, honourable person, would drive the country over the cliff in 60 days’ time. I do not believe it, and I do not believe that anyone believes she would. Her Cabinet may be divided, but they are not deranged. The consequences of no deal for the country have been spelled out every day ever more clearly, as the noble Lord, Lord Newby, said. The logically and physiologically rather odd argument that it would weaken our hand in Brussels if we were to stop threatening to shoot ourselves in the foot now looks even odder, given that there is no serious negotiation going on, because we have tabled no serious proposition.

I will reflect on the interesting analogy with nuclear deterrence that my noble and learned friend Lord Brown of Eaton-under-Heywood regaled us with. The flaw may be that Trident deters the Russians and does not damage us, whereas a no-deal Brexit would delight the Kremlin, and the risk of it is ravaging the British economy right now, as the noble Lord, Lord Newby, pointed out. The choice cannot be between the November deal and no deal. That makes no sense, and the Spelman-Morgan amendment in the other place tomorrow deserves support.

Talleyrand defined statesmanship as foreseeing the inevitable and accelerating its occurrence. The Government must already know that we are going to need an extension under Article 50(3). They must know that the Reeves-Benn-Grieve amendment tomorrow is sensible. They would do well to embrace it.

What are the arguments against seeking an extension under Article 50? I have heard three. It is said that it would betray the referendum result if we were still in the EU on 30 March. I cannot see that. The date was not on the ballot paper, and I do not think anyone knows why the Prime Minister subsequently picked it and started the two-year clock with no proposals tabled in Brussels, no strategy agreed in Cabinet, no attempt made to find consensus in Parliament, no consultation with the devolved Governments, and no consultation with the Dublin Government.

Mr Johnson, the former Foreign Secretary, says that 29 March is an “iconic” date, which it would be humiliating to miss. Why “iconic”? I do not know. Maybe he was thinking of the Battle of Towton, fought on 29 March 1461, which did, after all, produce a change in leadership. However, I doubt it. Towton was the bloodiest battle ever fought on English soil, and Mr Gove is still around.

Maybe he had in mind the Treaty of St Germain, signed on 29 March 1632, when we gave control of Quebec back to the French. Could he be planning to reverse that, in a maximalist version of Canada-plus? I rather hope not, but enough of Mr Johnson. Let us be serious.

[Lord Forsyth of Drumlean (Con)]

Could it be that he considers the date iconic because such a huge majority of the House of Commons voted for the legislation that set it in stone?

[Lord Kerr of Kinlochard]

That is perfectly true; the date is in the legislation. The date was taken out of the legislation in this House by quite a large majority— I think it was 78—on the recommendation of the amendment of the noble Duke, the Duke of Wellington. I think that the House of Commons was extremely rash to put the date back in again, but the Letwin compromise ensures that there is no particular problem here. It can be taken out again without primary legislation.

The second objection I heard is that the House of Commons has decided on that date. If it wishes to, the House of Commons can change the date, on the Government’s recommendation, by the stroke of a pen. That is not a serious objection.

The third objection I have heard is that the 27 might not agree to an extension. However, they do not want no deal either. Nobody wants no deal. While it is much worse for us, it is bad for everyone, and the 27 have always been clear that a better deal—better than the November deal—could be envisaged if the Prime Minister were ready to move on her four red lines, which were so rashly laid down for party management reasons at the 2016 party conference. A move might involve considering a real customs union, unlike the partial, unequal, temporary, bare bones version in the backstop. It might even, two years late, involve working out a real, legally binding framework for the future relationship, as envisaged in Article 50(2), which would be directive and determined, unlike the present loose aspirational declaration. That would require time for real negotiation, but we know that the 27 would allow it, and we have always known that they would allow time for an election or a referendum in this country. It is clear that Brussels, shocked by the disarray in this country, now knows that more time may be needed and is waiting for us to signal that. Provided that we have a real proposition to discuss—not just the plan A, plan B, “Beyond the Fringe” nonsense of seeking contradictory assurances—it is clear that the 27 would give us more time, if we ask for it. Therefore, the Cooper amendment tomorrow in the other place makes sense and should be supported.

Our debate is only the overture to tomorrow’s drama over there, but it is right that we should show that we are just as concerned as they are and ready to do our bit to stop the country sleepwalking into disaster. I now believe that that will require stopping the clock.

Brexit: Withdrawal Agreement and Political Declaration

Lord Kerr of Kinlochard Excerpts

Wednesday 9th January 2019 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

My Lords, following the noble Lord, Lord Fox, I too have decided I will not repeat what I said five weeks ago. I learned from the noble Lord, Lord Newby, and the most reverend Primate. Speaking then about the deal on offer, I said how shocked I was by the humiliating nature of the treaty, and by how vacuous the declaration was and how toxic the combination was, in particular since, to me, it in no way predetermines or indicates what the nature of the future relationship will be. It seems the only certainty it guarantees is that there will be continuing uncertainty and rancour for a very considerable period, once we are trapped in the backstop.

What I said produced some unusual support; this was unaccustomed support for me from the Robespierres of the government Back Benches—the rebellious revolutionaries. I fear I must disappoint them today, because I want instead to talk about two things which have happened since our debate started. In particular, I want to draw the House’s attention to the Commission’s announcement on 19 December about what happens if the British crash out on 29 March. The Commission has told the member states that if the treaty is not approved and ratified by the United Kingdom, it must apply the Union customs code in full to all goods coming from the United Kingdom from 30 March. It did so in spite of the suggestion made from the government Benches by a former leader of the governing party—a very distinguished noble Lord—that the answer to the problem of disruption was a 12-month moratorium, during which we would,

“not place any tariffs, tariff barriers or obstacles against the importation of goods and services into the United Kingdom from the European Union”,—[Official Report, 5/12/18; col. 1034.]

in the hope that the EU would reciprocate. He emphasised that we should do it anyway, even if it did not reciprocate.

Why has the EU not responded to this extremely kind and generous proposal? Because the EU is a member of the World Trade Organization and is legally obliged to play by WTO rules, including the fundamental rule known as “most-favoured-nation”. If the EU allowed tariff-free access for our goods when we are a third country, as we will be from 30 March if the Government get their way, it would have to do the same for similar goods from any other third country. That is what WTO rules mean. If we were to do as the noble Lord suggested, we would either have to abolish all our import tariffs and quotas for any category of goods which we also import from the EU—a step which would hardly thrill British industry or agriculture—or, from the start, we would be in breach of the very WTO rules which the Robespierres tell us would suit us so well. I give way to the noble Lord.

[Lord Lamont of Lerwick (Con)]

Would the noble Lord comment on Article 24 of the GATT agreement?

[Lord Kerr of Kinlochard]

Indeed, if there was a free-trade arrangement, then of course none of what I have said applies. However, I thought the essence of “no deal” was that there would be no deal. Those who advocate no deal and living by WTO rules should be honest about what these rules mean. The noble Lord, Lord Hain, was absolutely right in his description: no deal would be a disaster, and a managed no deal is a mirage.

The second development I want to mention is the Court of Justice’s finding on 10 December, which confirmed that we have an absolute right unilaterally to take back Mrs May’s letter and that this would bring the withdrawal process to an immediate end. The only stipulations are that the two-year period, or any extension of it, must not have expired; that our decision must involve a democratic process, not just an executive act—in other words, Parliament must have voted for revocation; and that the decision must be unequivocal and unconditional, which I assume means we could not withdraw the letter and resubmit it the following day. We could not just do so as a stratagem to reset the clock, undercutting both the two-year limit and the specific provision in Article 50 for securing extensions.

I was not surprised by the court’s ruling, although I admit that I was a little relieved. Had the court reached a different view my credibility might have dropped a little bit, since I have spoken on the subject once or twice before. But my relief must have been trivial compared with that of the Dantons and Marats of the Government Back Bench, who have argued regularly in the House—and a couple of them in the columns of the London Times—that revocation would entail a negotiation. They have warned us down the years that we would lose the Thatcher rebate, or be forced into Schengen or the euro. They must have been hugely reassured that the court confirmed that there would be no negotiation. The terms of our membership would not change and could not be changed to our disadvantage.

This establishes that the country has a third option. We do not have to settle for the Hobson’s choice of the May deal or no deal. There is the option of keeping the deal that we have, secured and improved by successive Governments. Public opinion polls, as the noble Lord, Lord Newby, said, consistently show that that is the will of the people. The margin for months has been 8%. Interestingly, it rises to 16% if you ask people to compare the May deal and staying in, and to 26% if you ask people to compare no deal and staying in. Now that people have the facts and know that we cannot have our cake and eat it—that unicorns do not exist—they can make an informed choice. It is pretty clear what that is.

Of course, putting the question to the country would require an extension of the Article 50 period, but I have yet to meet anyone in Brussels who thinks that an extension for that purpose would be refused. Brexit, though worst for us, is bad for everybody. I would expect objections if we were seeking an extension purely to permit further posturing and prevarication, or further efforts to get the 27 to agree a legally binding text contradicting the legally binding treaty. But an extension to permit consulting the country would be easily obtained. Though, like the noble and learned Lord, Lord Hope, I do not relish the prospect of a second referendum, it seems it is now clearly the least worst option on the table.

I support the Motion in the name of the noble Baroness the Leader of the Opposition. I hope that the Opposition will soon be able to return the favour and support a people’s vote as a responsible way to resolve the deadlock in the other place.

Brexit: People’s Vote

Lord Kerr of Kinlochard Excerpts

Thursday 25th October 2018 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

Gold medal to the noble Lord, Lord Campbell, once the fastest man in Europe, for securing a debate on the issue of the hour—and would that we had an hour each to explore it. For those who have but 20 minutes, I commend The Roadmap to a People’s Vote, published a month ago. In the short time I have, I will draw on it to make four quick points. First, why a people’s vote? Because the people want it. Polls in the late summer showed clear backing, 45% to 35%, for a public vote on the outcome. The majority rose to two to one, 50% to 25%, in the event of no deal. These majorities are still rising. The people want to have their say.

Point two: why do they want to have their say? Because nobody voted for the Brexit we seem to be going to get. Fewer than one in five now believe that the Government will get a good deal; over 60% believe they will be worse off; and a larger majority believe the negotiations are going worse than they were led to expect. The quotations from the noble Lord, Lord Campbell, were very apposite. The policy was to have our cake and eat it. The people now know that is not possible—it is not working out as they were promised—so it seems right to ask them whether they nevertheless want to go ahead.

Point three: is that feasible? Is there enough time? The noble Lord, Lord Lamont, and I think on a previous occasion the noble Lord, Lord Callanan, have said that a referendum would take a year. I do not think so. The UCL Constitution Unit report the other day suggested 22 weeks; the Roadmap suggests it could be even faster. However, I acknowledge that it would be necessary to stop the Article 50 clock and obtain an extension of the two-year negotiating period. This would not be a problem. It is important to distinguish between two scenarios here, thinking about the position of the 27. The 27 might well cavil at the idea of an extension to permit the present UK negotiating team to carry on negotiating in the way they are. The EU has other priorities, and the Lithuanian lady got it right the other day when she said after the European Council that “this is a difficult negotiation; it is difficult to know what they want, because they don’t know what they want”. If it is merely to carry on the process, I am not sure the necessary unanimity for an extension would be available. But I am quite sure that 27 democracies would never prevent our putting the outcome to a democratic decision in May, June or September. For that scenario, an extension could be instantly obtained.

A stronger objection is my point four: that a referendum would be socially divisive. I agree. A second referendum would be. However, it would not be nearly as divisive as Brexit without one. The polls now show a decisive majority wanting a second vote and an admittedly much smaller majority not wanting Brexit. If that persists, to drag the country out while denying it a vote would be bitterly and lastingly divisive. The economic and societal consequences of that for jobs, growth, investment and living standards would hit home over time and hit the poorest the hardest, as Sir John Major pointed out the other day. That is a recipe for deep and lasting resentment. It would not then be the people’s Brexit; it would the politicians’ Brexit, the Government’s Brexit, Parliament’s Brexit. The most democratic course is also the least divisive: Parliament should seek the verdict of the people.

Brexit: Negotiations

Lord Kerr of Kinlochard Excerpts

Tuesday 9th October 2018 Lords Chamber

[Lord Callanan]

I said we are planning for a no-deal Brexit. I do not know what the noble lord means by a “confirmatory vote”. If he means a second referendum, then, no, we are not planning for a second referendum, because we have already had a referendum and the vote was clear.

[Lord Kerr of Kinlochard (CB)]

My Lords, the noble Lord, Lord Wallace, drew attention to the possibility of a black hole between the end of the implementation period and the entry into force of the future relationship treaty. As I understand it, the present draft of the withdrawal treaty contains no extension provision. Would it not be as well to include in the treaty the possibility of its extension? I can see that might be controversial with some in this country and with some lawyers across the Channel, but building in the flexibility to be able to bridge that gap could be very valuable. The noble Lord, Lord Wallace, is certainly right that it will take several years to negotiate the agreement, but probably another year to ratify it, since it will be a mixed agreement. So the possibility of extending it being built into the draft—both parties would clearly have to agree—is surely desirable.

[Lord Callanan]

The terms of the implementation period are already agreed and both sides agreed with the proposal to end the implementation period co-terminous with the end of the current multiannual financial framework. There is no possibility of extending that built into the agreement.

Brexit: Financial Settlement

Lord Kerr of Kinlochard Excerpts

Tuesday 11th September 2018 Lords Chamber

[Lord Callanan]

Of course, we will respect our legal obligations. We are a law-abiding nation; that goes without question. But there are several conflicting legal opinions as to our liabilities. Your Lordships’ House held a committee of inquiry under the chairmanship of the noble Baroness, Lady Falkner, on which I was privileged to serve. Its conclusion was:

“On the basis of the legal opinions we have considered, we conclude that, as a matter of EU law, Article 50 TEU allows the UK to leave the EU without being liable for outstanding financial obligations under the EU budget and related financial instruments”.


There are alternative legal opinions—in fact, I have spent the morning reading most of them—but it is a complicated area of law. Of course, we want none of these scenarios to come to pass; we want to reach an agreement. Indeed, we have reached an agreement, and we will honour our commitments within the context of the withdrawal agreement.

[Lord Kerr of Kinlochard (CB)]

Did the Minister notice that the head of the NAO has said, formally and on the record, that we will be responsible for paying the bills whether or not there is a withdrawal agreement? Does he accept that the costs of £39 billion are the costs of past commitments, not of future access? They are computed as the cost of the commitments we have already entered into. Is he seriously contemplating that the UK would become a defaulted state?

[Lord Callanan]

At the risk of repeating myself, I said we will honour our legal commitments, but it is a complicated legal area. There are some great legal brains in this House who would, no doubt, want to opine on the matter, but there are different opinions. Ultimately, I suspect this will come down to a matter of politics. We do not want to get into a dispute on these matters and so we have negotiated a settlement. It is hugely complicated, there are a number of different financial areas involved, but we remain confident that we will reach a withdrawal agreement and meet those commitments.

Brexit: Preparations and Negotiations

Lord Kerr of Kinlochard Excerpts

Monday 23rd July 2018 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

My Lords, the noble Lord has just talked about Boris Johnson, but I want to talk about a great Foreign Secretary. A fortnight ago we lost Peter Carrington, a great Foreign Secretary, a great Defence Secretary, a great Secretary-General, a great patriot and a great European. It is 46 years since I first worked with Peter Carrington. I knew him well and I know what he thought about Brexit. For that generation—that of Denis Healey on the beach at Anzio or Peter Carrington in the Guards Armoured Division liberating the Low Countries—“Never again” really meant something. For that generation, “Never again” meant ensuring no more war in Europe, ensuring the collective defence of Europe against external threat, rebuilding a broken Europe and working for its prosperity, and fostering and entrenching the values of Europe’s better nature. For all his endearingly laconic understatement, the commitment of Peter Carrington was very clear. Britain in Europe was a non-transactional relationship. It was about common values, a common effort to protect, and a commitment to advancement.

What would Peter Carrington have made of this White Paper? We do not know but, if he had written it, I do not think that it would have started with a “facilitated customs arrangement”. One can sense his shudder of patrician disdain. I think it would have started with something about values. It might have said something about the future rights of our fellow Europeans in our country and our citizens in continental Europe. The silence on legal immigration is very strange. As a great Defence Secretary, he might have wanted some restatement of the absolute nature of the British commitment to European defence. Whatever happens between the Brussels bean-counters, when the chips are down the Brits will be there. The Prime Minister fudged that a bit in her Lancaster House speech, but I thought she got it absolutely right in Munich in February. It is odd that the White Paper is totally silent on it. The reference on page 66 to a possible defence “enhanced Framework Participation Agreement” does not quite do the trick. The White Paper is a bit technical and bottom up. It is very transactional and it does not seem to have a lot of vision in it.

That is what Peter Carrington might have thought, but I do not know. He was a very skilled diplomat so he certainly would not have said, as the Prime Minister did on television and as Mrs Leadsom said in the other place, that the proposals in the White Paper are non-negotiable. Concrete on the feet is rarely wise. Of course, as the noble Lord, Lord Forsyth, pointed out at the outset, the proposals have already changed. The passage that the noble Lord, Lord Liddle, read out on the facilitated customs arrangement gave the foreigners the good news that we would not insist that third-country flows through their ports should be slowed down while they handled the segregated goods heading for us and operated two systems of taxation and checking. That was a relief for them, I am sure, except that the amendments made in the House of Commons mean that we do so insist that the ports of Rotterdam, Hamburg and Antwerp be clogged up operating two systems. So the proposals are negotiable after all, but only if you are British, Tory and a rebel. The 27 have to operate two systems where they now run one. They will not, of course. Why would they?

Actually, they would not have agreed with the White Paper’s proposal anyway, because the reciprocal regime at our ports is not one that they would be prepared to put up with. It is as inconceivable as it would be unprecedented that the EU should allow a third country, not a member state, to collect its taxes, which are important for its common budget, when no longer under the control of its court. As I mentioned to the House two weeks ago, the EU anti-fraud agency, OLAF, currently has two cases in the ECJ, each worth more than €3 billion, against the United Kingdom for undercharging customs duty and for allowing VAT fraud at our ports. I thought that Monsieur Barnier was spectacularly diplomatic when he said quizzically on Friday about the facilitated customs arrangement, “Would there not be a risk of fraud?”

Anyway, it does not work like that. If we leave the customs union we leave the customs territory and each check will take place at its frontier—unless, of course, we form a new customs union with the EU, as this House recommended when it accepted the amendment to the withdrawal Bill that I moved. We encouraged the Government to explore a customs union with the EU. I really think that they should. The facilitated customs arrangement will not run—it is dead already—and without a workable solution such as a genuine customs union I do not see how we can avoid the hard border in Ireland. The situation is now really very grave. We have accepted that a solution to the Irish question is integral to the withdrawal agreement. If we do not get one we do not get the other. We would kill off the transition period, so the no-deal cliff edge would be not December 2020 but next March.

Then there is the point from the noble Lord, Lord Bowness. The Minister appeared to put himself in the same camp as Mr Raab, who yesterday asserted that if what we have put in our White Paper is not agreed by the EU by October and if there is not an agreed framework text by October, we will resile on our financial commitments, refusing to pay the sum that we agreed in December that we owed. I have to say to the noble Lord, Lord Forsyth, that it is the cost not of the future but of the past. These are commitments. If we were to do a runner all bets would be off, with no deals doable, and not just with the EU. Third countries would be very chary of striking agreements with a UK that had no working relationships at all with its 27 neighbours—we would not have while they were dunning us in the courts for the money that we owe them.

I still hope that wiser counsels will prevail. I wish that we had a Carrington to provide them. I think that he would have been much less dismissive than Mr Johnson of the concerns of business on the no-deal scenario and of the importance of the Good Friday agreement. On the debt question, I think that he would have thought the idea of doing a runner a tiny bit dishonourable.

How do we get out of this mess? I have two suggestions. First, the Government should look again at the amendment proposed by the noble Duke, the Duke of Wellington, which the House also passed. No one knows—at least I do not—why the Prime Minister sent in the Article 50 notification on 29 March 2017. I have no idea. No one can assert that the country voted on 23 June 2016 to leave the EU on 29 March 2019. An extension is possible under Article 50 if all agree. Would they agree? I do not know. The noble Lord, Lord Birt, was doubtful. I think that it would depend on why we asked.

Let us bear in mind that if we go over the cliff in March, it is suicidal for us but it is bad for all 27 as well. Nobody wants that to happen. The EU has contingency plans for dealing with the European Parliament election should our departure date be pushed back. Mr Benn’s committee in the other place has recommended that it should be pushed back. The issue should be explored; it would be irresponsible not to. It would be irresponsible to crash out in eight months’ time if there is no done deal, doing huge damage to the economy, to jobs, to the stability of Northern Ireland and the well-being of our fellow citizens. Mr Rees-Mogg would be just fine—he has his money in Ireland—as would the Bullingdon boys, but as Sir John Major said at the weekend, the people who have the least would be hit the worst.

My final point is one that I have made before—I am afraid that I have made it tediously, but I must do it again. An Article 50 invocation is not an irrevocable act. Withdrawing the invocation would carry no price, political or financial. We would never have left. The terms of membership would not have, and could not be, changed without our agreement. If the Government cannot negotiate a Brexit which even remotely resembles what was promised in June 2016 and if the red lines which Mrs May wrote in September 2016 in the party conference speech turn out to preclude any workable solution to the Irish border, the country should certainly be asked whether—knowing what we now know—they would prefer that the notification be withdrawn. That might mean an election; it might mean a referendum; it might mean both. It would certainly mean an Article 50 extension, and this is the scenario in which we can be absolutely certain that we would get that extension. The 27 would unanimously agree straightaway to give us an extension if the purpose was to permit a people’s vote. The case for such a vote, before the people’s EU citizenship rights are extinguished and before the damage to their well-being really starts to bite, seems to me to grow stronger with every passing day and with every new lurch by the Government away from what a Carrington would have thought about Britain in Europe and about responsible leadership.

[Baroness Goldie (Con)]

My Lords, while the contributions are extremely interesting, the advisory time limit has been somewhat generously interpreted. In deference to the speakers further down the list, perhaps your Lordships could see what they can do to co-operate in rough adherence to the advisory time limit. Otherwise, we will be very unfair to some of the later contributors. We want to hear from them as well.

--- Later in debate ---

[Baroness Falkner of Margravine (LD)]

My Lords, I chair the EU Sub-Committee on Financial Affairs. The committee also has responsibility for the UK contribution into the EU budget, so the current discussion about cannot pay or will not pay is also pertinent to our role. I was also part of the EU Select Committee’s delegation to Brussels last week to Mr Barnier, under the distinguished chairmanship of the noble Lord, Lord Boswell. It was my fourth discussion with Mr Barnier. In the light of what I heard there, I will concentrate my remarks on three things: the budget contribution in the light of calls for a second referendum; the cost of the Norway option and the EEA; and the exit fee. In doing so, I remind the House that I speak in a personal capacity. I could hardly do otherwise, having heard the rather diverse speeches of other members of the committee, such as the noble Lords, Lord Butler of Brockwell and Lord Cavendish of Furness, excellent members as they all are.

Several noble Lords talked about the possibility of holding a second referendum or a people’s vote on the outcome of negotiations. A lot of people believe that if you put the facts to the people they will change their minds and remain, as if no facts were available last time around. We heard that in the Chamber today. If facts were distorted last time, people nevertheless thought that they would pay less to the EU if we left and more money would therefore be available for UK priorities. The next vote will also focus on money, so the question is what the offer of “remaining” in that future referendum would involve.

Noble Lords may not know that the negotiations for the EU’s next multiannual financial framework are currently under way. The Commission intends to conclude them in May 2019, just weeks after the UK’s projected leaving date. We are not present during those negotiations on the basis that they do not concern us, as they cover the period from 2021 till 2028. We are not there and are not fighting for our interests.

One issue under discussion is the phasing out of the rebates paid to member states over a period of five to seven years in that MFF. It is likely that net contributors will try to resist this, or at least to prolong the period, but the rebate is unlikely to last in its current form. Other aspects under discussion are an increase in the EU’s own resources through the EU raising direct taxation, which the UK fiercely resists on the basis that tax-raising powers belong to member states alone. It is envisaged that some €200 billion will be raised directly by the EU in the next period, through visitor taxes, environment taxes and a tax on plastic among others.

What will happen if the UK does not retain its rebate? The Office for Budget Responsibility shows that the net contribution to the EU budget paid by the UK in 2016 was £8.1 billion. This was equivalent to £123 per head. The UK rebate was worth £5 billion, or £76 per head, so the UK contribution to the EU budget if we did not have the rebate would be £200 per head. Several people to whom I speak in Brussels who are experts on the budget and have knowledge of the MFF negotiations confirm that it would be difficult for the UK to swan back in and keep its happy rebate.

If the figure on the side of arguments last time around was based on £123 per head, the new figure would be some 60% higher. Do those who want another people’s vote really think that they would win a referendum on the basis that the UK would pay more than it currently does? Several noble Lords believe, as the EU negotiators told us last week, that the only other option—

[Lord Kerr of Kinlochard]

The own-resources decision, in which the British rebate is embedded, can be amended only by unanimity. If we did not leave, we presumably would not vote the amendment that would kill our rebate. If we do not leave, we do not lose the rebate, unless we are accepting enough to vote to lose it, which I do not think we are likely to do.

[Baroness Falkner of Margravine]

The noble Lord was of course a member of that committee and he knows the system well. What he loses sight of is the timing. The discussions are happening now. As far as I know, and I am sure the noble Lord knows, we are not at the table—this is a point I made early on.