European Union (Notification of Withdrawal) Bill

Debate between Lord Mandelson and Baroness Altmann

Committee: 1st sitting (Hansard): House of Lords
Monday 27th February 2017 Lords Chamber

[Baroness Altmann]

I do not disagree with my noble friend that that is what is going on, but by leaving the single market we are hampering our manufacturing industry and putting barriers in the way that will ensure the destruction of millions of jobs. Unless we get some kind of access to the single market, we are sacrificing the integrated supply chains so many of our smaller businesses depend on. If we believe that no deal is better than a bad deal, we are gambling millions of manufacturing jobs, 10% of our GDP and peaceful developments in Northern Ireland—our debate on Northern Ireland was particularly important this evening—in exchange for the hope that we will achieve the White Paper wish list. My noble friend the Minister did indeed set out what we wish to achieve, but we still have no idea what might happen if we do not manage to achieve that. We are giving up the integrated supply chains and Euratom membership, and leaving the customs union, the EEA, EFTA and the single market in the hope that we can benefit from the growth in services and technology.

We need to recognise that leaving the single market was never put to the British people. I believe that it will be hugely damaging to our economy. Somebody may decide to buy a house and, on the basis of the estate agent’s details, may make an offer that is accepted and decide that they will move there. If they then have a survey done, or their lawyer discovers some unexpected legal small print, they want the chance to change their mind. They do not want to be bound by their original decision if what they end up with is not what they imagined. Therefore, I believe it is the duty of this House to ask the other place to think again on some of the vital issues that are bound up in what is, I agree, a very short and potentially uncomplicated Bill.

[Lord Mandelson (Lab)]

My Lords, I am very pleased to follow the noble Baroness because, with her sharpness and clarity, she has brought this debate back to earth with a bump. Yes, whether we stay in the single market goes to the heart of the Brexit debate but, much more importantly, it goes to the heart of our future prosperity as a country—the lives, livelihoods, jobs and standards of living of all our fellow citizens—and therefore we should dwell on it.

In the coming negotiations, Britain should have three primary objectives: first, to secure, as far as possible, the continuity of our existing trade in the European Union; secondly, to be in the best position to attract future supply chain investment in Britain by international companies; and thirdly, to optimise our ability to make future trade agreements with other countries. All these objectives would best be served by our continuing in the single market, through the European Economic Area, as Norway did when, in the 1990s, its public rejected membership of the European Union but, seeking the economic opportunities available to it in Europe, decided instead to join the EEA. I believe this very strongly. I have to say this not only in opposition to the Government’s chosen path—what has rightly been called, “Brexit at all costs”, which is both desperate on their part and potentially very damaging indeed to our economy—but also in disagreement with the argument on grounds of sovereignty, made by Keir Starmer in the other place, that staying in the single market through the EEA would make Britain subject to rules that the rest of the EU has made. That is what lawyers would describe as a piece of Nelsonian knowledge. It is what happens when you intentionally place a telescope to your blind eye.

I accept that, hitherto, the EEA shows what small countries such as Norway, Iceland and Liechtenstein were able to secure when committing to being part of the single market, but Britain is not of the same status, size or type as any of those countries. A British version of membership of the EEA—this is a key point—would retain much more influence and clout in setting the standards for our largest export market. By removing ourselves from the European Union and the single market, we would only theoretically be more sovereign and we would be considerably poorer. I am reminded of what the noble Lord, Lord Heseltine, said:

“A man alone in the desert is sovereign. He is also powerless”.


I respect the result of the referendum, but I part company from the Government in my belief that we now have an absolute duty to obtain the closest and best possible economic relationship with our largest export and investment market after we leave the European Union. Merely seeking a future free trade agreement between Britain and the EU that deals with tariffs and some customs procedures will fall far short of actually being in the single market. Yes, that is the difference between access and actual participation through membership of the single market that the noble Lords, Lord Spicer and Lord Forsyth, drew to our attention. The former—access—we have to beg for; the latter, we have by right. That is a fundamental difference.

If we simply do as the Government are proposing and seek a free trade agreement, I assure noble Lords, as a former Trade Commissioner and this country’s Trade Secretary, that it will give us significantly less trade than we have at the moment, no automatic market rights in Europe and a paltry means of enforcing those rights that we have. Believe me, I have negotiated those things on Europe’s behalf with countries trying to access the European single market. I know how ponderous the European Commission can be when it comes to such negotiations. I know how difficult it is for third countries, which is what we would be, to get access on the terms that they want and need.

A free trade agreement would not cover all trade; it would not cover services as well as goods, which is a fundamental point. The agreement—if we ever get one, given how relations between ourselves and our European partners have gone downhill since the Prime Minister’s October speech to the Conservative Party conference—will take a very long time to obtain and will certainly stretch way beyond the two-year cut-off point of Article 50 itself. That is why John Major was absolutely right to make his speech this evening at Chatham House in which he strongly and in vigorous terms attacked the Government’s approach to Brexit and called, quite rightly, for a little more charm towards our erstwhile partners and a little less cheap rhetoric.

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