European Union (Withdrawal) Bill

Lord Liddle Excerpts

Wednesday 14th March 2018 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

I support the amendment of the noble Lord, Lord Hain, and that of the noble Lord, Lord Browne, to which I have added my name. I do not need to say very much in support of the amendment of the noble Lord, Lord Hain, because he introduced it so clearly and fully, except to say that I agree with the noble Baroness, Lady Doocey: I cannot see any reason why the Government cannot accept the amendment of the noble Lord, Lord Hain, tonight. It seems to me that it sets out very clearly the commitments made by the UK Government, which we all agree are very important. In its second paragraph, it provides for the possibility that there might be something in the magic solutions to the border. If there were, that would be taken into account in the wording of the amendment of the noble Lord, Lord Hain. I therefore hope that the Government will accept it.

Turning to the amendment of the noble Lord, Lord Browne, my only point is that the extraordinary linguistic fudge in December is very hard for the lawyers to construe. It has been construed by the Commission lawyers in the 118-page draft withdrawal treaty, which was published on 28 February. It has been construed as requiring “a common regulatory area” in Northern Ireland and including Northern Ireland in the EU’s customs territory. Many in London have denounced these solutions; many in London and some in Northern Ireland find them unacceptable. However, they have at least tried; they have produced a draft treaty with draft clauses explaining how they think that fudge could be construed and turned into treaty language. We have not done so: all we have done is make another speech, including the same two suggestions that were made last summer, one of which the Secretary of State for Exiting the EU immediately dismissed the day after as blue-skies thinking. We still seem to be at the stage of blue-skies thinking, but next week in the European Council, we will be confronted by a draft treaty that provides a solution acceptable to some in this country but not acceptable, perhaps, to all in this country. It is half way there. I really worry that if we stick to speeches and do not produce drafts, it is very hard to see how this negotiation will reach a conclusion.

I very much support the amendment of the noble Lord, Lord Browne, and it is in the spirit of that amendment that the Government should be thinking very hard of producing the legal language that they want, and then a real negotiation could start in Brussels. Personally, I do not think that it is possible to find the legal language that matches the Mansion House speech. I believe that the only solution that is likely to be acceptable to all parties in Ireland and in this country is continuing membership of a customs union for the United Kingdom as a whole, which is, of course, what the CBI, the TUC and manufacturing industry want, and we all want for other reasons as well. We do not all want it, but on my side, we do all want it. I think that that is where it will end up. But if the Government think there is another way to go, they really need to produce the language and put it on the table in Brussels quickly.

[Lord Liddle (Lab)]

Is there not a more sinister potential interpretation of the Government’s behaviour—that they have looked into the customs partnership paper that they published in August and decided that nothing can really be made to work out of it? Therefore, their hope at the moment is that the EU 26 will force Ireland to accept some form of hard border because it is in the trade interests of the EU 26 to make sure that there is a smooth exit for Britain. Is this not an extremely dangerous situation for us in the United Kingdom and in the Republic of Ireland, in which we might end up in a situation where the EU 26 agrees to some form of hard border that then leads ultimately to a further outbreak of the Troubles?

[Lord Kerr of Kinlochard]

I would not want to attribute sinister motives to the Government—I think that somebody managed to get the word “cock-up” into Hansard the other night. Conspiracies are very rare. It is possible—and there are some who believe—that the 26 will lean on Dublin; that is perfectly possible. It is unlikely, and it is of course the case that the European Council decides by unanimity, so if one were looking for a settlement in the European Council which meant that the 26 leaned on Mr Varadkar, Mr Varadkar would have his vote and could say that he did not agree. However, I have seen no signs of the 26 leaning on the Irish. It looks to me from what Mr Tusk said when he went to Dublin the other day that we are heading for another European Council where the Irish position on the hard border and our position on the hard border are recognised by everybody. Nobody wants a hard border.

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[Lord Empey]

I am grateful to the noble Lord for that. I have to say that the chief constable was using as an example the erection of customs posts and things that used to exist in the 1950s and 1960s, as well as all sorts of other concrete establishments and so on which we are not going to have. In many respects, the United Kingdom Government have committed themselves not to produce that material at the border. Whether Brussels wants or would insist on the Irish Government doing so, no Irish Government I can conceive of would do anything of the sort. I just do not believe they would—it would be politically impossible for them to do it. Brussels may have its own objectives and determinations to protect the single market—we understand that—but when push comes to shove. I do not believe it is possible.

[Lord Liddle]

Surely it is we who have created this problem. It is not a Brussels problem—we in this country have decided to leave.

[Lord Empey]

I understand what the noble Lord is saying perfectly well. To put this into context, my party supported remain in the referendum, on a free vote. We cited two things: Scotland and the border. I have had this discussion with the noble Lord, Lord Cormack. I am not a Europhile at all—I never have been, even though I spent eight years in Brussels on the Committee of the Regions, very minor body that it is. I have some sense of the EU. But a vote has taken place, and we accept the outworkings of that vote. We are trying to get on with it and to find a solution that works for all of us.

When we talk about “the” border we must remember that it is not confined to the island of Ireland. The primary bit of the border between the United Kingdom and the Republic of Ireland is actually between Dublin and Holyhead, Rosslare and Fishguard—it is in Wales. That is where the vast majority of the problem lies, and where the bulk of the goods go in order to use Great Britain as a land bridge. The noble Lord, Lord Hain, mentioned that a very large percentage of goods that travel via Northern Ireland go to Great Britain. These are goods in transit.

Noble Lords need to appreciate what we are talking about in terms of scale. In this amendment we use the phrase, “all-island economy”. I was privileged to serve as Trade Minister and Energy Minister, and I was the Northern Ireland Minister who established InterTradeIreland, which is designed to promote trade. On taking office, I discovered that neither the United Kingdom nor the Irish Republic could agree on the amount of trade that they do, and that is still the case. In 2015, the Central Statistics Office in Dublin produced a report on goods exports classified by commodity, listing where the goods were going. Exports from the Republic of Ireland to Northern Ireland accounted for 1.6% of the Irish Republic’s total exports. The CSO also produced a report setting out the percentage of imports to the Irish Republic from Northern Ireland, including live animals and food products, and that was also 1.6%.

I had to deal with these matters for years. I set up a cross-border body and implemented the outworkings of the agreement. I think that the noble Lord, Lord Murphy, and I are the only two Members still in the Chamber tonight who were involved in the agreement. He will know the heavy lifting that had to be done by the noble Lord, Lord Trimble, who is not in his place, the noble Lord, Lord Alderdice, and others to get the agreement approved. It was approved by 71.2% in a referendum in Northern Ireland. We are talking about a referendum of 52%, but we had a majority vote of 71.2%. It was a hard slog and he knows that.

I agreed with the earlier remark of the noble Lord, Lord Kerr, that the Government have not produced sufficient hardcore copy to match the proposals put forward by Brussels. He makes a fair point. Brussels has put forward 118 or so pages. I am not asking for that but I think that we have to have a counterproposal on paper. If that happens to involve technology, so be it. I have no difficulty with that and nor does the European Union. A report was recently published in Brussels by the EU’s Policy Department for Citizens’ Rights and Constitutional Affairs, which comes under the Directorate-General for Internal Policies. It sets out what are thought to be feasible proposals involving technology and other things. We already have a currency border—Northern Ireland and the Republic have different currencies—and we have different taxes, so we are not dealing simply with a one-dimensional problem.

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[Lord Liddle]

My Lords—

[Lord Duncan of Springbank]

Perhaps I may make some progress but I will return to the noble Lord if he will allow me. We have had a very wide-ranging discussion and we will come back to his point.

As we go forward, I want to stress again that the key thing which the Government must achieve in the negotiations is an equitable, sensible and sustainable solution. A number of noble Lords have referred to certain elements which must and will appear in subsequent Bills, whether they are questions about agriculture, fisheries, broader trade or electricity. All these will fit in sensibly to those parts and the withdrawal agreement and implementation Bill will afford an opportunity for noble Lords to address all these particular points. We as a Government are determined to ensure that all the commitments on Northern Ireland and the Republic of Ireland set out in the joint report are turned into legally binding text—not just one of them. Each of them has to be a component part. All the parties involved must recognise that, to ensure that it is indeed the case. Further, we have been clear that in all circumstances we will protect the UK internal market. The noble Lord, Lord Empey, was very persuasive in the way that he set out the reality of the market as it affects the Province of Northern Ireland, and we cannot lose sight of that. Nor can we see a border suddenly appear down the middle of the Celtic or Irish Sea; that in itself would be wrong. We therefore need to find, along with the EU, an approach that works.

I turn now to the remarks made by the noble Baroness, Lady Kennedy of The Shaws. In some ways the points I am going to make echo those of the noble Lord, Lord Empey, because in certain respects the key thing will be for the two respective Governments to ensure that they create a situation in which there is a disincentive to abuse the border. That will be the first step. On the points raised by the noble Baroness about the physicality of checks and the reality of what they might look like, I wanted to be very clear about what I would say in my response, so I scribbled a note for my officials in the Box in order that I would not in any way stray on to thin ice. To be clear: there will be no impediment at the land border to the movement of people—no checks and no profiling, full stop. That is the ambition and the policy of the United Kingdom Government.

Going forward from that, I shall address the points made by the noble Baroness, Lady Smith of Basildon. She raised the question of regulatory alignment, which was covered in the joint report. It is important to recognise that alignment is about pursuing the same objectives. As my right honourable friend the Prime Minister stated in her Florence speech, it is about achieving the same goals by the same means or achieving the same goals by different means. In many respects, as a former Member of the European Parliament, I am familiar with that approach. It is like the difference between producing a regulation and producing a directive. A directive sets out clearly what the ambition should be but gives greater latitude to those to reach the particular ambition. A regulation does none of that. It is set in stone and in law and it must be followed. The noble Baroness will recognise that in the negotiations it will be necessary for both sides to achieve an understanding of what that will mean. That is because, in truth, it will affect both sides and it will disproportionately affect Ireland over the United Kingdom. That is why the negotiations will be conducted on a very sensitive and sensible footing. I do not impute the sinister motives raised earlier by the noble Lord, Lord Liddle.

[Lord Liddle]

My Lords—

[Lord Duncan of Springbank]

I should like to make some progress, so I hope that noble Lords will forgive me.

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[Lord Duncan of Springbank]

Well, I will make progress without the forgiveness of noble Lords on this occasion.

On Amendment 187A in the name of the noble Baroness, Lady Doocey, and Amendment 215 in the name of the noble Lord, Lord Browne of Ladyton, the joint report makes clear the Government’s commitment to avoiding a hard border, including any physical infrastructure or related checks and controls—a point made on more than one occasion by my right honourable friend the Prime Minister, most recently in her speech on 2 March. That is the policy of Her Majesty’s Government. We have put it before noble Lords as a statement of the policy; the interpretation of it must rest in noble Lords’ hands, but that is the policy we put forward.

Amendment 198 was introduced by the noble Lord, Lord Hain, in a very expansive and careful manner; I believe the entire House appreciates that. The Government made clear during the Bill’s passage in the other place that we will include an appropriate provision in the withdrawal agreement and implementation Bill iterating each element of the agreement we reach, including the protections set out in the joint report. Passage of the implementation Bill will provide an opportunity for noble Lords to scrutinise the specific provisions envisaged in today’s amendment as they appear in that Bill. There will be an opportunity at length, I hope, to address these point specifically.

I am conscious that the issues raised by the noble Baroness, Lady Suttie, require some attention. As I say that, I am conscious that the important issue she raised is about how we ensure that the children of Northern Ireland—indeed, of the entire United Kingdom—understand what we do here, not just in your Lordships’ House but in the other place too. To some degree, explaining what we do and why we are trying to do it is incumbent on each of us. The key thing will be ensuring that children can be part of that ongoing discussion and dialogue and see that making laws is not an easy process, responding to democratic challenges is not simple and sometimes there will be positions that are challenging to hear but none the less must be taken forward. A number of noble Lords have raised the issue again of the nature in which the Brexit vote took place.

I listened to the remarks of the noble and right reverend Lord, Lord Eames, who can often calm the House with his careful and considerate remarks. He captured that very well when he reminded us of the challenges we face in trying to move this forward. We need to be careful because a generation awaits the outcome of what we do here today and what the Government do in ongoing negotiations. There is no doubt about that. That is why, as I have said on more than one occasion in your Lordships’ House, the key must always be to secure an Executive in Northern Ireland who will be part of that process. Those voices are missed from the processes we are taking forward at this time.

As we give consideration to the appropriateness of the amendments, I am also aware that there will be opportunities for certain aspects of them to be addressed more head-on as we move through the negotiations. In putting these points before noble Lords, I hope I appear to have been, in some respects, more focused on the amendments than the broader discussion, but I do not doubt that there will be opportunities for further broad discussion. On this occasion, I hope that the noble Baroness will find it appropriate to withdraw her amendment.

[Lord Liddle]

Before the Minister sits down, I think he will allow me to make my point now. I want to say how much I welcome his tone and the spirit in which he has approached the House on this. I think he is a very constructive Member of the Front Bench opposite. In that context, I want to raise my concerns.

I am on the EU Select Committee. We have taken a lot of interest in the Irish question and produced reports. I am very concerned by the fact that the Government produced their proposals on a customs partnership last August and made a commitment in the December consensus, but there is absolutely no evidence that the Government have come forward with any alternative proposals on the border to those of the Commission. In circumstances where they have had all this time and no alternative proposal has been produced, a reasonable person can conclude only that the Government have concluded that there is no alternative to remaining in the customs union and the only way they have of trying to spike being cornered in this way is to try to get the EU 26 to tell the Irish that they have to back off a bit. Is that sinister? After all this delay and the lack of information on what the Government are doing about the border, it is not sinister—it is a reasonable conclusion.

[Lord Duncan of Springbank]

I thank the noble Lord for his final comments and I am sorry if I appeared to lack politeness in not allowing them earlier.

There are negotiations that are yet to come. I do not believe it is useful in negotiations to place all your cards face up. In concluding, if I may, I will cite the words of the great country and western singer Kenny Rogers. In negotiations,

“You’ve got to know when to hold ’em, know when to fold ’em,


Know when to walk away, know when to run”.

European Union (Withdrawal) Bill

Lord Liddle Excerpts

Committee: 7th sitting (Hansard): House of Lords
Wednesday 14th March 2018 Lords Chamber

[Lord Beith (LD)]

My Lords, I want to direct the Committee’s attention to the fact that in the process of defending this Parliament and trying to bring back control to it, we are in danger of legislating one of the worst set of Henry VIII powers that could possibly be imagined. They would enable the Government to change the Northern Ireland Act, the Scotland Act and any of a series of things, so long as they were matters that had been considered in the withdrawal agreement.

Having come from a position of wondering why Clause 9 was in the Bill at all, because these are all matters to do with the withdrawal agreement—we have not got one yet, so we cannot legislate for it—we are now in a situation where I am surprised that the Government want to keep it. A poison pill has been administered to it by a very helpful amendment in the other place. None of the powers which we will put on the statute book can be exercised until a piece of legislation on the withdrawal agreement has been passed. It is entirely useless from the Government’s point of view, but from the point of view of those of us who are trying to protect Parliament, it is the one place in which we have a guarantee that there has to be an Act of Parliament to complete this process—if we do, indeed, complete it.

The grouping suggests that this is where we consider clause stand part. I think it would be wrong to pass over what Clause 9 contains, without recognising that it is not what we should be putting on to the statute book at all, certainly not without knowing what the withdrawal agreement is and without therefore being able to circumscribe the powers to things which reasonably arise from it.

There are things that cannot be done under these powers which are specified in subsection (3) but an enormous range of things can be done if a Minister considers them appropriate for the purposes of implementing the withdrawal agreement. I will no longer be ready to turf Clause 9 out of the Bill, for the reason I gave. The Constitution Committee, when it considered it, thought that it was entirely inappropriate to have these powers at this stage. The stage at which we should have them, if at all, in modified form is in the withdrawal agreement Bill, and not before, but we have the compensation that the clause contains the guarantee that the process can go no further without another statute being passed in both Houses of Parliament.

[Lord Liddle (Lab)]

My Lords, I rise to speak to Amendment 196.

[Lord Hannay of Chiswick (CB)]

My Lords, I think it is fairly reasonable as someone putting forward Amendment 150 that I should be allowed to speak.

[Lord Liddle]

My Lords, I just want to get Amendment 196 on the record, because it makes helpful points which should be taken into account by noble Lords when we come to devise a composite amendment on Report. That is why I am anxious to speak and I am sorry if I have upset the noble Lord, Lord Hannay.

We have had many excellent speeches. I think the three by the noble Viscount, Lord Hailsham, the noble Lord, Lord Patten, and my noble friend Lord Reid are among the best I have heard on this Bill and perhaps even since I have been a Member of this House. I fully support what they said.

The purpose of Amendment 196 is to build on the Grieve amendment that is now incorporated in the Bill. En passant I will say from this side of the House how much I respect the bravery of the Conservative MPs who voted for that amendment and put the national interest first. If they had not done that, a lot of the point of our proceedings would have been removed—so I respect them enormously.

The merits of Amendment 196—I will be very brief—are, first, that it specifies a date by which the Government have to produce their withdrawal agreement: 31 October 2018. That would prevent any attempt to bounce a last-minute decision through Parliament. Secondly, it attempts to deal with two eventualities: not just the eventuality of no agreement and no deal being reached in Brussels but also a failure on the part of the House of Commons to agree to and adopt the resolution that the Government will put forward seeking to endorse that agreement.

It does not give the House of Lords a veto. I agree with what the noble Viscount, Lord Hailsham, said: these matters fundamentally have to be decided by the Commons. This amendment allows the Commons to consider a whole series of options, including the extension of Article 50.

[Lord Kerr of Kinlochard (CB)]

I am grateful to the noble Lord. I agree very much with what he said about the speeches from the noble Lords, Lord Reid and Lord Patten, and the noble Viscount, Lord Hailsham.

I am concerned about the point he is on now. Subsection (2)(b) of the clause proposed by Amendment 196 seems to me to open the possibility of a period after we have left the European Union before we have any agreement with it in respect of the terms of withdrawal. That would be an extremely dangerous legal vacuum.

One of the desirable features of the Mansion House speech was that we had no more nonsense about no deal being better than a bad deal. It was clear that the Prime Minister wished to do a deal. It is very important that, if we leave the European Union, we do so on the basis of agreement with it on the terms of our withdrawal. If not, our position with third countries would be impossible and they would be unable to do business with us until we had established a secure position with the European Union—and, of course, our position with the European Union would be pretty bad. So I agree with the spirit of this amendment—indeed, I agree with the spirit of all the amendments in this group—but it seems to me that there is a real danger lurking in the wording of subsection (b).

[Lord Liddle]

If the noble Lord, Lord Kerr, thinks there is a danger, we will have to look at it again because I so respect his judgment. I certainly do not want to create a legal vacuum; I want to see the possibility of an extension of Article 50 as one thing that Parliament might do if it decided to reject the Motion on the withdrawal agreement. I also think that it would be appropriate for the Commons to decide on any other course—and certainly I agree with the noble Viscount, Lord Hailsham, that a referendum would be a possibility in those circumstances. How can we possibly judge at this stage what those circumstances will be? We have to have in our amendment—while maintaining legal certainty—the possibility of the Commons being able to decide on a number of different things.

[Lord Wallace of Saltaire]

One of the benefits of the Grieve amendment, as inserted, is that it refers to approving the “final” terms of withdrawal. Part of the problem we now face with an exit day in March 2019 is that the prospects of reaching a final and detailed agreement before then are receding day by day. So it appears to me—I read the Daily Mail every day and follow, as far as I can, what Jacob Rees-Mogg is saying—that the hard Brexiteers want to get us out with the vaguest possible interim agreement and do not mind about it. Parliament has not to allow that. Therefore, it is important to talk about the final and detailed terms of the agreement to be presented to Parliament before we leave, and it is something that we all need to ensure we have in this Bill.

[Lord Liddle]

I agree very much with what the noble Lord, Lord Wallace, is saying. That is why I think that the possibility of extending Article 50 is realistic, before one contemplates the possibility of a further referendum. The risk that we face at the moment is that the Government will seek to take us out of the European Union finally on the basis of a political declaration that will, frankly, contain mushy words that mean one thing to one set of people and another thing to another set of people.

[Lord Lea of Crondall]

Will my noble friend allow me to interrupt to check that I have understood what has been said in the last five minutes by both him and the noble Lord, Lord Kerr? As I understand it, the noble Lord, Lord Kerr, said that we cannot have a vacuum and have to have what I would call a treaty. A treaty, in turn, has to be an agreed document. It cannot be just a piece of paper to say that we want to agree with each other; it has to fill the vacuum to which the noble Lord referred. Am I right in my understanding of what is being said?

[Lord Liddle]

My noble friend is making a good point, but I think that the vacuum that we potentially face is the risk of a vague political declaration that gives us absolutely no idea what the eventual economic relationship between Britain and the EU will be. In those political circumstances, one might want to say to the Government that we have to extend the period allowed under Article 50 and be given a much better idea of where this course that they are so in favour of is leading us. On that basis, we might then consider whether the final deal should be put to the people in a referendum. The risk is that this declaration will provide the opportunity for misleading the British public about what is involved.

That is all that I have to say. I am wholly in favour of all the amendments in this group and the sentiments behind them. It is wonderful that there is such support around the House for them, but we need to think through the precise terms of what I hope this House will eventually pass on Report.

[Lord Hannay of Chiswick]

My Lords—

European Union (Withdrawal) Bill

Lord Liddle Excerpts

Committee: 6th sitting (Hansard - continued): House of Lords
Monday 12th March 2018 Lords Chamber

[Baroness Altmann]

If we are not in the single market as well as the customs union, there must be checks at the border between Northern Ireland and Ireland. It is not good enough for us to somehow assume that some magical solution will appear. There is no IT solution that will work for the border. The Smart Border 2.0 paper that was released does not solve the issue. If you read it carefully, you will see that it is not a solution. There is no solution, so either both sides need to turn a blind eye to the fact that there is no checking at the border even though there is supposed to be, or there has to be some checking.

In the last year, 4.4 million driver-accompanied freight vehicles moved between the UK and continental Europe. Four million of these movements took place on ferries through Dover or on the shuttle through the Channel Tunnel; around 99% of these required no customs clearance processes at the ports. As road movement is free of customs controls now, it has allowed UK industry to build up the fully integrated supply chains that we are in danger of losing. If we were to remain in the EEA or EFTA and elements of the single market, such problems could be minimised. I am very disappointed that the current red lines have ruled this out. It is hard to see how traffic and goods can flow freely and without further delays on the island of Ireland without regulatory alignment that mirrors the single market and customs union arrangements we have now.

This amendment aims to ensure that Ministers do not jeopardise the UK’s economic activity, industrial success and the arrangements for the Irish border. We should perhaps demand that this provision be included in the Bill rather than just in future regulations. Can my noble friend the Minister explain how the Government can contemplate introducing a Bill that could cause such significant damage to our country without providing adequate safeguards? I support these amendments.

[Lord Liddle (Lab)]

My Lords, I had not intended to speak in this debate and I have sat patiently all day listening to excellent discussions, but what brought me to my feet was when noble Lords opposite started laughing at the noble Lord, Lord Bilimoria. The issue that he raises is extremely serious and it does not justify the Chief Whip, who I think is an excellent chap, laughing at him.

[Lord Taylor of Holbeach (Con)]

My Lords, I take debates in this House seriously. I felt that the arguments presented by the noble Lord, Lord Bilimoria, were duplications of arguments that had been admirably presented by the noble Lord, Lord Berkeley, and I felt that he should not have indulged in the way he did by speaking for 11 minutes and repeating arguments that had already been stated.

[Lord Liddle]

I understand the noble Lord’s explanation, and I will not speak for 11 minutes. However, I will say something and ask the Minister serious questions. The facts have been explained by the noble Lord, Lord Bilimoria, and the noble Baroness, Lady Altmann, and the Government are perfectly well aware of these facts. They produced a paper on customs arrangements, I think last July or August. What work has been done on developing the proposals in those papers? If the Government were serious about developing what the noble Lord, Lord Robathan, wants, they would have presented a proposal to Brussels in the last couple of months. In December, in the agreement that the Prime Minister is so proud of—I was delighted that it occurred —it was said that joint work would be done on the Irish border and the other issues to draw up a draft withdrawal agreement in the coming months. What work has happened? How many meetings were there between British and Commission officials before the Commission produced its draft withdrawal agreement? If the Government had a clear view of how the problems set out by the noble Lord, Lord Bilimoria, could be addressed, they would have come forward with a compelling alternative proposal to what the Commission has come forward with. Can we therefore please have a balanced, sensible explanation of what the Government are doing and why they refuse to face facts and produce objective reports on how they will deal with very serious economic issues?

[Lord Tunnicliffe]

My Lords, it may be convenient for the Committee for me to set out the Opposition’s view—

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[Lord Callanan]

I will read Hansard and respond to the noble Lord in writing.

[Lord Liddle]

The Minister did not answer any of the points that I made about what level of contact the Government have had in Brussels discussing these issues, and why in the interval between the September agreement and March, when the Commission produced its own proposals, Britain appears to have done nothing. Will he please tell us what is going on?

[Lord Callanan]

We are having extensive discussions with our partners in Europe. We are also having extensive discussions with representatives of the rail freight industry and other players in the sector, but as the noble Lord well knows, the arrangements are a matter for negotiation.

[Lord Liddle]

If Brussels can produce a proposal, why cannot the British Government produce an alternative proposal?

[Lord Callanan]

As the noble Lord pointed out, we did produce a customs paper last year. In her speech last week, the Prime Minister referred to two alternative customs arrangements and those matters are being taken forward in the discussions. If the noble Lord reads the Prime Minister’s speech of last Friday, he will see that she referred to them specifically.

[Lord Liddle]

Of course I have read the Prime Minister’s speech. What do you take me for? I follow these things very closely, but the Minister still has not explained how it is that the Prime Minister simply referred to the principles that were put out last summer. This is a situation of real urgency for the economic actors, so why are the Government not producing proposals? Would the Minister be willing to write to me on this point?

[Lord Callanan]

I would be delighted to write to the noble Lord.

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[Lord Bilimoria]

My Lords, I have put my name to these amendments. It should be emphasised that the European common aviation area, or what we refer to as the single European sky, should not be taken for granted. Any British airline can fly anywhere it likes in the EU—not just to but within another member state—and sell tickets to anyone in the 28 member states, without restriction. The aviation industry contributes £52 billion to our economy and, as we have heard from the noble Baroness, Lady Randerson, it leads to cheaper fares, better consumer protection and compensation, and a greater variety of destinations. There is of course the environmental aspect as well.

Does the Minister accept that, if we retain access to the single skies, it would require accepting the jurisdiction of the European Court of Justice, which is one of the Government’s red lines? Does he also realise that there is no fallback on the WTO in the aviation sector? In fact, Tim Alderslade, the chief executive of Airlines UK, has said:

“The Government is fully aware that aviation sits outside”,


the WTO system. He continued:

“The principle of ‘no deal is better than a bad deal’ does not apply to us”.


So whatever happens, the airline industry needs a deal. It cannot have any limits to capacity. Already, easyJet has said that it has applied for a licence in Austria to set up easyJet Europe. As we have also heard, airlines plan their schedules up to a year in advance. Can you imagine if the situation with Ryanair was happening today? How will we cope with that across the sector if we do not come to an agreement?

This whole aspect really keeps us connected to these countries; the administration and infrastructure run like clockwork. However, I have looked at a table of the Brexit impacts under different scenarios. It lists eight scenarios, five of which would not be allowed any more. An EEA airline flying from a third EEA country to the UK, for example Air France flying from Berlin to London, would no longer be allowed. A non-UK airline flying from the UK to a third EEA country, such as Ryanair flying to France, would no longer be allowed, and nor would a UK airline flying between two EEA countries. A UK airline flying within an EEA country or an EEA airline flying within the UK, such as Ryanair flying from London to Glasgow, would no longer be allowed; nor would a US or EEA airline using the UK as a hub to fly from Europe to the USA, such as American Airlines flying from New York to Heathrow and continuing on to Rome. We take this all completely for granted but it will no longer be available to us.

According to Ministers, 35 separate pieces of EU legislation work together to make the EU’s aviation single market. This is separate from the single market in goods and services and continued membership for the UK, or alternative arrangements, will be needed. What can we do? As a result of its membership, UK airlines benefit from 42 air services agreements entered into by the EU with countries outside the European Union, including the United States and China. This is what open skies is all about: it has allowed European majority-owned airlines to fly between places within any EU country, not only between the home country and another EU country.

We have also heard about the common regulator, the European Aviation Safety Agency. The UK has been a really proactive member of that organisation. It has been a leading member of it because it has brought benefits to the UK and to Europe. Security is also going to be really important and difficult—as will future border and visa arrangements.

In the longer term, unhindered access to EU aviation is absolutely essential. Benefits have been derived from open skies and a more restricted market would be disastrous. The transport regulations are most comprehensive. They provide for compensation, reimbursement and protection from overbooking. A large part of this is European Court of Justice law. Passengers are protected when they take off from an EU airport or land at one, provided that the carrier is an EU carrier. These are all issues that we take for granted, but if we do not look at these amendments it will be another way in which the whole economy and all our citizens and businesses will be damaged.

I shall conclude by quoting Andrew Haines, chief executive of the UK Civil Aviation Authority:

“Let’s just imagine the UK was to withdraw from EASA altogether and adopt our own framework–although I’m yet to meet anyone of substance that supports that approach. It is, of course, theoretically possible and let’s just suppose we established the best aviation safety regimes in the world. It would mean a major increase in UK regulatory regime, potentially represent a major barrier to track increased costs and yet we would also risk becoming a backwater in terms of wider impact”.


A backwater—that is where we are heading.

[Lord Liddle]

I congratulate the noble Lord, Lord Bilimoria, once again on an excellent speech raising many serious issues which we have to deal with. I shall draw particular attention to Amendment 233, which asks that any amendments to the roles and responsibilities of the European Aviation Safety Agency should be subject to the affirmative procedure. I would like a response from the Minister. I see no reason why the Government cannot just agree to that now to assure the Committee that there will be full accountability on these questions. Why not just say, “Yes, we agree to that”?

[Lord Whitty (Lab)]

My Lords, I shall make a brief broader point. For all the reasons we heard from the noble Baroness, Lady Randerson, and the noble Lord, Lord Bilimoria, I strongly support the objectives of these amendments. So, apparently, does the Prime Minister, judging from her speech last week. Is the reality not that it is also in the interests of all the airlines, the aerospace industry and the airfreight industry across the whole of Europe to retain the present situation? Was that not obvious from day one of Brexit discussions? Why did the Government’s negotiating strategy not recognise that this was one deal which we could have done very quickly and very clearly which would not have interfered with any of the rest of the negotiations and one which almost the rest of Europe would have greatly welcomed? There would have been no cries of “kein Rosinenpickerei”—“no cherry-picking” —from Europe on this one. A bit of common sense at the beginning of these negotiations would have parked aviation. We would have agreed aviation.

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[Lord Callanan]

I will repeat the words that I used, for the noble Lord’s benefit:

“The Prime Minister … acknowledged that an appropriate financial contribution would be necessary and that there will be a role for the Court of Justice of the European Union”.


As I was saying, the precise form and nature of the UK’s future relationship with EASA, as well as continued co-operation with the EU in the field of aviation safety more generally, will of course be a matter for the negotiations. The UK’s geographical position means that, with Ireland, the UK services over 80% of traffic entering or leaving EU airspace from the North Atlantic. Given that, the level of interaction between the UK and the EU demands close co-operation. The Government recognise the need for UK air traffic management arrangements to remain interoperable with the rest of Europe once the UK has left the EU. Safe and efficient air traffic management is a priority for us. The UK’s air traffic management system will remain closely bound to that of our European partners. We seek a close and collaborative relationship in this area, just as in many others. However, NATS will continue to provide the same high-quality service to airspace users that it does today.

The Government also want to avoid disadvantaging industry by imposing additional regulatory burdens. The Bill is part of that: it allows the Government to be clear that we are committed to maintaining a harmonised safety system that benefits both the UK and EU aviation networks and maintains the high safety standards that we all wish to see. I hope what I have said has been reassuring for noble Lords and that they feel able to withdraw the amendment.

[Lord Liddle]

My Lords, what about the point about the affirmative procedure?

[Lord Callanan]

I took on board the noble Lord’s question but I am unable to give him those reassurances at the moment.

European Union (Withdrawal) Bill

Lord Liddle Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Monday 26th February 2018 Lords Chamber

[Lord Bilimoria (CB)]

My Lords, the mere fact that we require these amendments is shocking in itself. UK universities receive an additional 15% in funding from the European Union. Academics will now struggle to co-operate on research projects. The change in the visa regime that takes place may deter high-calibre academics from joining British universities. That is happening already. When European universities have a chance to collaborate they already think twice before collaborating with a British university, and that is shameful.

The Erasmus programme is 30 years old. Are we going to throw away 30 years of that wonderful initiative? Hear what the Europeans say:

“‘The absence of physical mobility after Brexit would take us apart’, said João Bacelar, executive manager at the European University Foundation. ‘Student exchange is kind of the antidote to the malaise of Brexit. It is profoundly unfair if young people would pay a price for something they didn’t want’”.


Employers value the Erasmus brand. More than 200,000 British students have benefited from Erasmus. We have heard that other countries that are not part of the European Union can be part of Erasmus. Let us beware of what happened with Switzerland. When Switzerland voted to restrict European migration, it was taken out of the Erasmus programme. It has had to spend extra money to put a new programme in place. Do we want to go through all that? I do not think we should.

The best thing about Erasmus is that it is for everyone. It allows students who cannot afford it to study abroad in a variety of subjects. My noble friend Lady Coussins spoke about language skills. Erasmus involves 725,000 European students annually—a huge number. We do not want to be left out of it. We are the third most popular destination; 30,000 students want to study in Britain and 40,000 of our students are over there. These are huge numbers. If that mobility goes, we are going to suffer.

Will the Government keep their promise to maintain and protect all funding streams for EU projects in the UK? Will they ensure that there is no cliff edge for funding for scientific research at the conclusion of the Brexit negotiations? Will the Government confirm that British researchers must be able to continue to participate in an unrestricted manner in current and future EU science initiatives? Will they never prevent highly skilled scientists coming into this country? I would like that assurance from the Minister.

We have heard time and again about our funding and research power. We have 1% of the world’s population but produce 16% of the most highly cited research articles. That is how good we are. Every committee—including the House of Lords Science and Technology Committee and the House of Commons committee—is saying that this would be damaging for the UK. A recent YouGov survey showed that 76% of non-UK EU academics are already considering leaving the country. What are we doing?

There are two messages here, one about collaboration and the other about funding. As the noble Lord, Lord Patten, said, we get more than we put in. We are asking the Government for a guarantee that we are going to get that funding. But more important than the funding is the power of collaboration. As chancellor of the University of Birmingham, I am proud that it received a Queen’s Anniversary Prize last week. When I was in India, we cited an example of the power of collaboration between the University of Punjab and the University of Birmingham. The University of Birmingham’s field-weighted citation impact is 1.87. The University of Punjab’s is 1.37. When we do collaborative research, it is 5.64. When the University of Birmingham does collaborative research with Harvard University it is 5.69. Its impact in collaboration is three times greater than it is as an individual university, and that applies to all the collaborations that we carry out with programmes such as Horizon.

Finally, this is about universities and our youth. This is depriving them of their future. I speak at schools and universities regularly, and I ask students every single time how many of them, if they were given a choice, would choose to remain in the European Union. Without exaggeration, almost 100% of the hands go up. There are two years’ worth of 16 and 17 year-olds who did not get a say in the wretched referendum two years ago, and this is their future, in which they will want a say. That is what this amendment is about: the future of our youth through Erasmus and Horizon 2020. We cannot take that future away from them. We have to go through with these amendments, and it is most likely we will end up remaining in the European Union.

[Lord Liddle (Lab)]

My Lords, I was not intending to intervene in this interesting discussion, not because I do not care deeply about these issues—as chair of Lancaster University, I realise how much we benefit from both Erasmus and the Horizon programme—but because I had not realised until I heard this excellent debate what a cliff edge these important programmes now face. This really is a very serious matter that has come out this afternoon.

There are two reasons for the cliff edge. First, the European Union, in the Commission, will now be thinking about the next framework programme, which will come in at the start of 2021. It will be devising its priorities and working on the assumption that Britain is not part of the next Horizon programme. That is a very serious point. Secondly, when the Select Committee went to see Mr Barnier last week in the Commission and he set out to us how the Commission envisages the Brexit negotiations, he put dealing with what he calls “future co-operation” in one of the four treaties that are to be negotiated after we have left. That is when he is assuming that these negotiations will start: in March next year, after we have left. One is on foreign policy, one is on security questions, one is on trade and the other is this basket of future co-operation. This is really serious. Unless we set a higher priority, more quickly, to sorting these questions out, we will end up with a lot of loss of initiative and of partnership, and networks in which we are involved no longer being sustained. We have to do something.

What are the Government proposing to do? It occurs to me that the Government, first of all, must make clear now that they want to continue to participate fully in both these programmes. They must make clear now that they are prepared to put a substantial sum of money on the table so that we can continue to participate in these programmes. They should also say, without equivocation, that for anyone from an EU country who has a place at a British university as a student, researcher or lecturer, or at a research institute, there will be no question of there being any additional immigration barriers to them taking up those places after Brexit. Why can that declaration not be made? The money, the free movement, the determination to participate—why can that not be said now? Why can the Government not, in this area, try to speed up Mr Barnier’s timetable by actually tabling their own text of the agreement that they want to reach? I hope the Minister can provide a satisfactory answer to these perfectly reasonable points.

European Union (Withdrawal) Bill

Lord Liddle Excerpts

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

[The Earl of Selborne (Con)]

My Lords, I think it is important on these Benches to put in a word of support for the amendment of the noble Lord, Lord Hunt. We all recognise that Euratom is a good brand; no one, on any side, is disputing that Euratom has achieved what a good brand should do. It has given confidence to the British and European public on a matter of critical importance, not least in handling medical isotopes with a very short half-life.

It is quite clear to my mind that if we leave for reasons that are obscure to me but probably are concerned only with the notional theory that the European Court of Justice might be able to exert some malign influence on Euratom—that seems to be the only reason that has ever been advanced as to why we should leave Euratom—then that plays second order to how we ensure, in the words of the amendment, which I very much support, that we “maintain equivalent participatory relations” with Euratom. It is essential that we continue to command the confidence of the users of isotopes and other nuclear material and of practitioners. It is not clear to me that the regulation we will have to put in place will be ready in time. In fact, I am absolutely certain that it cannot be. The amendment is a very sensible and modest proposal that I fully support.

[Lord Liddle (Lab)]

My Lords, I support what the noble Earl, Lord Selborne, said, and the other speakers who called for the Government to reconsider this question. I speak as a member of Cumbria County Council. Cumbria is very excited by the prospect of nuclear renaissance in this country, but how we are proposing to achieve it is interesting. First, to build a new nuclear power station we hand it over to the French. We are reliant on French leadership at Hinkley Point. Is it not paradoxical that we are not building up a native British industry, but saying to the French, “Please come and we’ll pay you lots of money to do it”, while at the same time saying that, for purely ideological reasons, we will not have anything to do with Euratom? The Government’s policy is contradictory.

Secondly, the Government put nuclear revival as one of the priorities for their industrial strategy. That is one of the things highlighted in the Industrial Strategy White Paper. That requires investment in science and the kind of European co-operation in science that we have seen so successfully with JET and nuclear fusion. Yet what do they want to do for ideological reasons on the other Benches? They want to throw spanners in the works of that co-operation by withdrawing from Euratom. What conceivable sense does this make?

Will the Minister produce a clear statement of reasons as to why this policy is being pursued? What are the reasons for it? Secondly, within what timescale are the many problems that withdrawal from Euratom will cause be addressed and by whom? Do the Government not have a duty to do that? Thirdly, what will the cost be of having our own separate national arrangements? The Government ought to know that by now. This issue was first raised in this House on the Article 50 Bill. What has happened in the succeeding months? What have the Government actually done since then to address these concerns?

Finally, I will make a point about the handling of the Bill in the House. I see this as an extremely important issue of national importance and we are debating it after 11 o’clock at night. Does that make sense? Is that not the duty that we owe people—to provide proper scrutiny? Should we not be allowing proper time for this debate? This is an example of an issue that should have been debated in prime time in this House. It should have been the subject of a vote in Committee. Because of the hour that is clearly not possible, but the fact is that we have failed in our duty to the people on this question.

--- Later in debate ---

[Lord Callanan]

My Lords, once again I thank noble Lords for an excellent debate on this important issue. I will respond to the point raised by most people who spoke—certainly the noble Lords, Lord Hunt, Lord Warner, Lord Teverson, Lord Carlile, Lord Liddle and Lord Adonis—about the reasons for leaving Euratom.

The Euratom treaty is legally distinct from the European Union treaty but it has the same membership, which includes all 28 member states, and makes use of the same institutions. There are no precedents for a non-European Union member state being a member of Euratom.

Noble Lords will recall that the decision to leave Euratom formed part of both Houses’ consideration of the European Union (Notification of Withdrawal) Bill, which is now of course an Act. Noble Lords spoke at that time about the unique nature of the relationship between the separate treaties of the European Union and Euratom. As the European Union and Euratom are uniquely legally joined, when we formally notified our intention to leave the European Union we also commenced the process for leaving Euratom.

[Lord Liddle]

The Minister mentioned that it was a parallel European institution. Before we gave that notice, did we actually ask other members whether we could remain in Euratom as a non-EU member?

[Lord Callanan]

It is not a matter of getting a political opinion on this. It is the legal position, as I have set out. When we formally notified our intention to leave—

--- Later in debate ---

[Lord Liddle]

When you say it is the legal position, what is the evidence for that? Can we have a look at that legal position? What you are saying as the Minister is that a decision was taken on advice that you are not prepared to show us, with no consultation with our partners, for no good reason.

[Lord Elton (Con)]

My Lords, I hope the noble Lord will remember that we address the House and not individuals. It avoids getting very angry with each other individually and it is much better to address your Lordships collectively.

European Union (Withdrawal) Bill

Lord Liddle Excerpts

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

[Lord Lamont of Lerwick]

As the noble Lord knows very well, Turkey aspires—that aspiration may now be fading—to join the European Union, so being in the customs union was for many a halfway house to joining the EU, just as for noble Lords who tabled this amendment it is a halfway house to rejoining the EU. That is what their amendment is really about.

Lastly and briefly on the single market, the noble Lord, Lord Newby, was exhorting us all to go to the Treasury, look at the papers, draw the curtains and see the forecasts that have been made. Of course those documents should be taken into account, but there are many other studies made outside Whitehall that take a very different view. I refer him to the research by the academic Michael Burrage, who was at the LSE and at Harvard. He has done an in-depth analysis, which is published on the Civitas website, of the effect of the single market on the British economy and British exports. He has come to the conclusion that there is no correlation between the single market and the growth of trade between the UK and the EU.

Furthermore, he has pointed out something that people have acknowledged in these debates before—namely, that many non-members of the single market, countries outside the continent of Europe, have increased their exports to the single market much faster than Britain has increased its exports to the single market. So the idea that this great liberalising force has had a huge impact on the British economy is absolutely not proven. I make these points simply because the debate so far has been very unbalanced and, as my noble friend Lord Hailsham said, we ought to be considering, in a sober, balanced way, what is in the interests of our own economy now that the decision has irrevocably been made.

[Lord Liddle (Lab)]

On the customs union, as a pro-European in his youth, the noble Lord will be aware that the customs union was one of the founding acts when the European communities were established. I understand why Eurosceptics might make a lot of arguments that the European Union has become much more federal and political than the economic basis on which it started. But what, given the arguments that the noble Lord made so powerfully in the early 1970s in favour of membership of the customs union, now prevents us staying in the customs union on leaving the EU?

[Lord Lamont of Lerwick]

I am sure the noble Lord is not intentionally misleading the House when he talks about the arguments that I made so compellingly and eloquently in the 1970s. If he has been studying my maiden speech in the House of Commons, I shall be astonished. The reason why I supported the customs union in the 1960s was that we then lived in a world of very high tariffs, and the EEC was a liberalising influence in the 1950s and 1960s. It was only after the American Administration started cutting tariffs in the mid-1960s that the relevance of the EEC in tariff negotiations became much less significant.

Since the noble Lord wanted me to get my feet again, I will say that my attitude towards the customs union is very different from his. I remember a debate in which he spoke about not being in the single market. He explained how he had been to a German car manufacturer which had explained to him—I could not believe my ears—how Germany was manipulating car standards in order to keep out goods from other countries. The noble Lord thought that was admirable and we were very stupid not to be part of this racket. Well, I do not want to be part of it.

--- Later in debate ---

[Lord Adonis]

Perhaps I may ask the noble Lord, Lord Kerr—the supreme oracle on Article 50—a question which, again, I think will be important for our deliberations later on. An extension of the Article 50 period requires unanimity in the Council. However, if Her Majesty’s Government wished to extend Article 50 for the purposes of holding a referendum, or conceivably for a parliamentary vote, thus completing our established constitutional procedures, would the Council recognise that automatically because it recognises the domestic procedures of member states when it comes to the ratification of agreements?

[Lord Liddle]

I would like to follow that up with a relevant question to the noble Lord, Lord Kerr. I agree with all the excellent speeches in favour of this amendment. To me, the politics of the amendment is the question of whether, when exit day is discussed, Parliament knows what it is exiting to. That is the question. If Parliament does not know what it is exiting to, surely the logic is that the date should be extended until it does.

Along with my noble friend Lady Kennedy, I have recently been on Select Committee visits to Brussels, and she can confirm that there is much uncertainty about what information will be available to Parliament in the autumn of this year. If things go well, we might have a withdrawal agreement and a transition period, but the only thing on the future relationship that we will have is a political declaration. There is no question at all of there being a trade agreement when Parliament votes; it will be a political declaration. The European people to whom we talked said that they wanted that to be clear and precise. However, at the same time, people said to us, “We think that possibly your Government might quite like to get away with a fudge”. Why should Parliament be put in the position of taking this crucial decision when all the British Government are offering is a fudge?

[Lord Kerr of Kinlochard]

To respond simply to the noble Lord, Lord Adonis, it would be a political issue, not a legal or a treaty issue. My view has only the same weight as anybody else’s, but I would say that if one sought an extension in order to carry on a negotiation, it would be very doubtful that one would get it. However, if one sought an extension because Parliament had decided that the terms of the deal available were such that they should be put to the country at large in a second referendum, I am convinced that that request for an extension would be granted.

Brexit: Deal or No Deal (European Union Committee Report)

Lord Liddle Excerpts

Tuesday 16th January 2018 Lords Chamber

[Lord Liddle (Lab)]

My Lords, as a member of the EU Select Committee, I add my thanks to the noble Lord, Lord Jay, who very ably prepared and chaired this inquiry. I also thank the secretariat, who cut through a very complex issue and produced a very able and well-argued report—I disagree with the noble Lord, Lord Hamilton.

This speech will be a bit of a first for me. It is the first time I have disagreed with the noble Lord, Lord Kerr of Kinlochard, on a European matter. I believe there is still a horrible danger of a no-deal outcome to these negotiations. I wish I shared the noble Lord’s optimism that we are on course for some kind of beneficial outcome, but I fear not.

It is worth remembering that the soundbite, “No deal is better than a bad deal”, was one of Theresa May’s more politically misjudged lines in her Lancaster House speech last January. It was the Prime Minister who gave life to this soundbite and opened up in the Conservative Party the view that no deal might be a viable stratagem for this country. For the past 12 months, she has spent an awful lot of her time trying to soften the impact and reduce the significance of what she said then.

There are many in the Conservative Party who still appear to believe that this is a viable threat to make. The poor Chancellor of the Exchequer was attacked for awarding only £250 million to be spent on preparations for no deal. He had to up that to £3 billion in the Budget. Perhaps that was the price of him keeping his job in the reshuffle.

As we heard from the noble Lord, Lord Hamilton, the hard Brexit camp is united that Britain must talk up walking away from the negotiations as a realistic possibility. But how big is this threat to walk away? Of course, there is a lot of pub talk where you hear businesspeople say, “In any negotiation I go into, I always have to have the possibility of walking away from it”. That may be true if you are buying a house or a car: if you think the other side is asking far too much for it, you walk away. That is fine, but the reality is that you do not lose very much by walking away because you can always go out and find some other car or house that you want to buy.

However, if Britain were to walk away from the Brexit talks, the result would not be the status quo that we have now of membership of the biggest free trade area in the world. Our walking out would result in a breakdown of our main trading relationship and, on some accounts, would mean that planes flying to the continent would be disrupted, nuclear materials could not be transported across borders, pharmaceutical regulations would no longer be operative, many EU citizens would become illegal foreigners in this country and there would be massive legal uncertainties about all kinds of business and insurance contracts. That seems to me a pretty appalling prospect.

The committee analysed the possibility of walking away and concluded that it is a credible threat only if it is made well in advance of the leaving date. That point had not struck me until it was pointed out. The nearer you get to the deadline, the less credible the threat of walking away becomes because the resulting chaos would be so much greater that you would not be able to cope with it.

[Lord Forsyth of Drumlean (Con)]

I am most grateful to the noble Lord. I read the report over the weekend. He lists all the Armageddon consequences, as he sees it, that would accrue to this country if we left without a deal. Could he explain why his list of disastrous consequences does not mention any of the things that would be disastrous for European countries, and why the report did not look at that?

--- Later in debate ---

[Lord Liddle]

The evidence is overwhelming. I could point the noble Lord to many research reports which show that, in the event of no deal, the damage to British GDP would be far greater than to the GDP of the EU 27.

Why is no deal still a possibility in my view, despite what was agreed in December? It is basically because the Cabinet cannot make up its mind on its long-term vision for the economic relationship between Britain and the EU. The Prime Minister talks about a bespoke trade deal for Britain despite Mr Barnier having made clear many times that the choice is either a Norway-style deal, where we are close to the single market or in it, or a free trade deal on the Canada model. Those are the limits of the choice. The Cabinet seems unable to make that choice. It is fundamentally divided between those who want to keep as close to EU rules as possible and believe that can be negotiated, which might be difficult—such as the Chancellor, for example, who wants to do that—and those who want to break free.

We are in very perilous political circumstances that might come to a crisis as early as March this year, when the European guidelines for the trade talks emerge. Those who favour a hard Brexit may be close to resolving in their mind that Britain should choose a very different future from the one we now enjoy. They may decide that Britain should go it alone. Goodness knows what the politics of that would be. I think it would mean a split in the Cabinet and the Conservative Party to match that of 1846 and the dispute over tariff reform in 1903. I say to my own Front Bench that in those circumstances there would be a very heavy responsibility on the part of the Labour Party to act in the national interest.

Brexit: Trade in Non-financial Services (EUC Report)

Lord Liddle Excerpts

Monday 18th December 2017 Lords Chamber

[Lord Liddle (Lab)]

My Lords, I add my thanks to my noble friend Lord Whitty for ably chairing our deliberations. It was one of the most interesting experiences that I have been involved with on a Select Committee, as I shall explain.

The first thing that struck me was how the sector of non-financial services is absolutely vital to Britain’s future. It is a growing sector with great diversity, but it all trades essentially, for the most part, on our key strengths in the knowledge economy. It provides fulfilling jobs for people, often working in non-hierarchical companies, and it is a crucial part of our future as a strong economy and thriving society. I would say to the noble Baroness, Lady Noakes, that I would not describe the people whom we met in that sector as status quo people; they are the great disruptors and innovators in our economy today. Unlike the innovators and entrepreneurs of a century or more ago, they do not have the competitive advantage secured by the barrel of a gun in an empire. They have to do it on their own—and that is something that we should respect.

Secondly, the experience challenged the conventional wisdom that I had, having always thought of myself as someone who knew something about Europe. The received wisdom in Whitehall was always that the single market was a great success in goods but very deficient in services. Actually, it taught me that the single market was actually very important in services, and the four freedoms of the Treaty of Rome were essential to the success of the sector.

Thirdly, this is the sector where the Government have given the least thought of any to a strategy for securing its future. In trading goods, you can see where the Prime Minister wants to go; it is a model of regulatory convergence, in return for which we get tariff-free trade. I think that she will find it a lot more difficult than she imagines, but that is a plausible model. Also, in financial services, the buzzword is regulatory equivalence. In this sector, it will be much more difficult because it is so varied. Those trade negotiations are not going to be conducted by the nice Michel Barnier, who has been extremely gentlemanly with the British over the past 12 months. They will be conducted by DG Trade. I have worked in the cabinet of the Trade Commissioner and I know what they are like. They are hard men and women, who are tough mercantilists at heart.

The problem with the sector is that our bargaining position is extremely weak. Why is that? Because, if you look at the EU 27’s export of all services to the UK, it amounts to about 0.8% of EU 27 GDP. But when you look at Britain’s exports of services to the rest of Europe, it amounts to a massive 4.7% of GDP. So who is the demandeur? We are the demandeur, and we do not have many cards in our hand. Of that figure, just over one-quarter—about 30%—is financial services, so non-financial services are extremely important.

Those who think that the WTO offers a happy prospect of this sector had better think again. I looked up the paper which went to the European Parliament on this. It states:

“The liberalisation of services under the GATS is subject to a hugely complex set of ‘reservations’, whereby the member states can continue with restrictions on market access for specified services. Since the EU’s own competence in the field of services is incomplete”—


it is not all at EU level—

“this has had the result that at the WTO the ‘reservations’ by the EU and its member states are a hybrid of EU-level reservations and bilateral member state reservations”.

That is why a trade agreement on services will take years to negotiate. You are not just dealing with the Commission, tough as it is, but you also have to deal with blockages in member states and any agreement has to be ratified by the Parliaments in all member states as a result. We are not talking about two years: it will probably be five or seven, so the Government had better grow up.

This sector faces real problems. I think that the only answer is the single market. People say that you cannot have the single market because it involves free movement. I have a huge pile of evidence from our committee’s deliberations which shows that free movement is not a trade-off with the economy; in this sector, free movement is the heart of their business model and competitive advantage. If we say that we are going to stop free movement for political, non-economic reasons we are damaging one of the most successful parts of the British economy. I hope that the Conservative Party will explain to people why that is in the national interest.

European Union

Lord Liddle Excerpts

Monday 6th November 2017 Lords Chamber

[Lord Callanan]

On the subject of defence and security, we have proposed a bold new strategic partnership with the EU, including a comprehensive agreement on security, law enforcement and criminal justice co-operation.

[Lord Liddle (Lab)]

My Lords, regarding the debate on the future of Europe, has the noble Lord read the speech that President Macron of France made at Sciences Po in September, in which he proposed lots of interesting ideas for future co-operation on climate change, Africa, migration, technology and the development of defence procurement? Does he think that the Government might take on board some of those ideas in drawing up the framework for future co-operation and the future relationship, which they are required to do under Article 50?

[Lord Callanan]

I have seen President Macron’s speech. He made some interesting proposals on how the EU should develop. I am sure that we will want to look closely at those and that we will consider them alongside contributions from leaders of other member states.

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.