UK and EU Relations

Lord Liddle Excerpts

Tuesday 12th September 2017 Lords Chamber

[Lord Liddle (Lab)]

My Lords, on Brexit it is time for the Government to start facing realities. The divorce negotiations in Brussels have effectively reached deadlock. None of our negotiating partners expects the European Council to agree to widen their scope in October, and few expect any real progress by December. Those who expect a triumphant Angela Merkel to rescue the British coals from the fire are living in the fantasy land that the British Government have inhabited since last June’s Brexit vote.

The Government are still behaving as though we can leave the EU and continue to enjoy all the benefits of membership. Although the position papers the Government have produced are to be welcomed, what marks them out is an absence of specifics and a refusal to face up to hard choices. That is why we are facing the abyss of a no deal. The consequences of walking away without an agreement would be horrendous. It would cause the biggest political crisis any British Government have faced since 1940.

My view is that the only way for Britain to avoid this looming crisis is to accept a transition based on our continuing membership of the single market and the customs union. I am glad that my own party is now clearly moving to support that. Indeed, I go further: the full membership of the single market and customs union could be viable—although, I accept, not ideal—as a long-term arrangement.

The obstacle to a sensible transition is the refusal of the Government to make tough choices. Take the question of the customs union: if Britain is outside the EU customs union, we have to accept the reality of a customs border being imposed where there is none now. Without that, there cannot be the necessary checks to ensure goods comply with rules of origin, product standards, phytosanitary standards for agriculture, health and safety requirements or differential tariffs. These necessary realities cannot be magicked away by talking about smart technological solutions; they can be mitigated but not removed.

A customs border is an inevitability, given that the declared purpose of the Government in leaving the customs union is to pursue an independent trade policy. The purpose of such independence must be to negotiate different and easier terms of access for overseas products to our markets in return for greater access to theirs than the EU itself has negotiated. However, if we negotiate independent trade deals that open up our markets to overseas goods and agriculture with lower standards than the EU’s, then of course the EU is going to insist on tough border checks to prevent these goods being transferred for sale in EU markets. The spectre of Donald Trump and his chlorinated chickens comes to mind.

This may seem narrow and technical, but for the EU it is not, and it certainly is not for the Irish. If Britain chooses to leave the customs union, it is effectively imposing the necessity of checks on the UK-Irish border, much though the Government may protest that is not what they want. The reinstatement of a hard border in Ireland would be, in these circumstances, the Government’s political choice as, at present, it seems that satisfying Liam Fox in securing his independent trade policy counts far more than securing Northern Irish peace.

This refusal to accept reality is even starker when it comes to the single market. The European Union (Withdrawal) Bill incorporates the EU acquis into British law, but what happens then? The Commons debate rightly focused on the Bill’s unacceptable Henry VIII powers for Ministers to change EU rules at will, but from the perspective of our EU partners this means that from day one of the Bill’s enactment there is no guarantee that EU rules and standards will continue to be maintained: the floor of social and labour standards; the health and safety and environmental rules; the protections for consumers; the control of state aid; and, increasingly, corporate tax regimes. For a common set of rules is the only way in their view—and they are right—to ensure fair competition and the avoidance of a regulatory race to the bottom.

There is, therefore, an unresolved tension between the unimpeded market access the Government seek to the single market, and the regulatory sovereignty they insist Brexit implies. Brussels will insist that full access to the single market requires full adherence to the EU rulebook. How could it be otherwise without undermining what lies at the foundation of the European construction?

I recognise of course that, on Brexit, Britain would become the single market’s rule takers not rule-makers. But, frankly, the EU’s imperfect rules for a regulated market capitalism are a far happier prospect, and more in accord with my values, than the Brexiteers’ vision of an offshore, deregulated tax haven Britain, conquering new markets across the seas, led by such buccaneers as David Davis, Liam Fox and Boris Johnson. Is it really the case that sacrificing our home market, which is the EU single market, is worth paying the price for this unquantified vision of a Thatcherite nirvana?

Of course, I voted to remain and I do not think that we should be leaving the EU.

[Noble Lords]

Really?

[Lord Liddle]

I accept that public opinion is still some way off recognising that the Brexit game simply is not worth the candle, but as the misrepresentations of the leave campaign become daily more apparent, as the contradictions and tough choices of Brexit can no longer be hid from sight, as no Minister has been able to present a realistic vision of what a “global Britain” would actually be like and what they mean, and as the chaos in the Cabinet in framing any kind of credible policy becomes the funniest end-of-the-pier show in town—were it not so tragic, given what it means for our own country—I live in hope that public opinion might change. My strong belief is that we pro-Europeans should continue to fight for that.