Brexit: Preparations and Negotiations

Lord Risby Excerpts

Monday 23rd July 2018 Lords Chamber

[Lord Risby (Con)]

My Lords, I am not entirely sure what conclusion I have come to about a betting experience I had while attending the racing on Saturday at Newmarket. I bet on a horse called Brexit Time. It was 20-1 and not expected to win, so I was cautious and bet both ways. For the first six furlongs the horse led the field, but at the seventh and final furlong it fell back. Nevertheless, although it did not secure victory, it was regarded as a very good and successful effort by the horse. I do not know whether there is any moral to be drawn about what might happen in Brussels in the next few weeks.

The first thing to say is that we should welcome this White Paper as a way to address the advance in a comprehensive negotiation taking place to fulfil the commitments made by the Government to the British people while trying to ensure the continuity of our close relationship. Given that EU member states will be involved in any ultimate agreement, I greatly welcome the energy and activity now being shown by government Ministers to explain our proposals to the member states directly.

Of course, the EU would fall apart if there were not a comprehensive and tight rulebook, but, if the mantra is solely the indivisibility of the four freedoms, the negotiations could fail. If we move on to the complex proposed tariff collection processes, the European Commission will—wholly legitimately—require assurances about fraud. Will the Minister be able to flesh this matter out this evening to enhance our understanding? The British commitment to no tariffs and adherence to EU goods regulations is hugely important to our businesses.

We have historically suffered a trade imbalance, not only with the EU but with the world, compensated for by the attractiveness of the UK as a recipient of enormous foreign direct investment. All of us know that much of this crucial investment was based on unfettered access to European markets. This has been supplemented in the White Paper by a clear and welcome commitment to parallel standards across the full spectrum of activity.

One concern which has come through this debate is anxiety about future defence and security relationships in Europe once we have left. That applies particularly in middle and eastern European countries. For whatever reason, the absence so far of any agreement is a source of concern to them. As the European Commission examines these concerns in our discussions and looks at the handling of the Galileo project, criticised even in the French press, some fresh thinking, out of the box, should be required urgently.

I should also be grateful if my noble friend could elaborate on the model of expanded equivalence, and how it will ensure that the City of London remains a jewel in the crown of Europe overall. This was referred to by the noble Lord, Lord Butler. Competition for us in future does not lie in Europe, in Paris or Frankfurt, but in New York, Singapore and elsewhere. Frankly, it is greatly to the disadvantage of Europe overall if financial services activities here are impaired. It is not clear to me why our world-beating financial sector, with its unique reach, experience and reputation, is not seen as an asset for all of Europe and recognised as such. I note with interest that Mr Barnier has rejected our financial services proposal—but, given the centrality of importance of our financial sector for the whole of Europe, I hope that the view that it requires unilateral authority can be revisited, because it certainly should be.

I do not want to delay the House at this late hour, but I will make reference to Northern Ireland. I thank the noble Lord, Lord Bew, for his contribution and the pragmatic proposals put forward by my noble friend Lord Cope. As a new Member of Parliament, I had a very minor role for a short period in Northern Ireland at a tense and difficult time. At different times, it was appropriate for those who were leading a resolution of this problem, such as Sir John Major, Tony Blair and Members of this House to whom we pay great tribute, to make bold public statements. However, quietly and discreetly, much progress was made in discussions to move the peace process on in a totally different way.

Today, resolution of the border issue is of course most important—indeed, it is regarded as pivotal by the European Commission. However, it is a matter of regret that the lessons of the past have not been absorbed in dealing with some of the problems on our neighbouring island. Megaphone diplomacy has not made the issue any easier to resolve. Indeed, in the words of the noble Lord, Lord Bew, it has been overinflated.

Every interested party wants this matter to be sorted out, and everybody agrees that there should be no hard border. This is not an insoluble problem. The matter is now centre stage, and I hope that greater wisdom and discretion will now prevail.

Brexit: UK-EU Relations (EUC Report)

Lord Risby Excerpts

Monday 2nd July 2018 Lords Chamber

[Lord Risby (Con)]

My Lords, it is truly an enormous pleasure for me to participate in this debate because I recently became a member of the European Union Committee. I pay unreserved tribute to the committee members and the members of staff, including the clerks, who produced the report.

We are indeed at a critical juncture in respect of the matter in hand, with the Prime Minister’s Chequers meeting, the publication of a White Paper and so much to be done before the autumn. What makes the report stand out, as so beautifully enunciated by the noble Lord, Lord Boswell, is that it is a successful attempt to move above and beyond the often emotional observations of the commentariat: either claiming that the EU is bullying us and out to destroy the United Kingdom or that we have been unable to clarify our position on anything of substance. Although I would have preferred more advances to have been made by our Government in some respects, I can only hope that the shared collective statements about a very positive post-Brexit relationship can take substance before the October European Council.

Of course, these negotiations are substantially focused on trade, but we need to see this whole discussion in the context of some remarkable developments which are clearly beginning to affect us all and may do so enormously in future. President Trump is shortly to meet President Putin. I speak as the chairman of the British Ukrainian Society, which tries to build bilateral links between our country and a country which has suffered grievously from Russian aggression.

We in Europe have collective energy interests. Nord Stream 2 will go ahead, avoiding Ukraine. Russia presently supplies 30% of Europe’s energy needs—40% in the case of Germany—and this will rise. All of us in Europe will, to a greater or lesser extent, be affected by this huge gas transmission system. I simply point out that Russia has a history of pricing its energy on the basis of how it determines the political attitude of the recipient country. That in itself means that we have a common interest in looking at our energy security.

One of the most telling observations about politics was once made by the late German Chancellor Willy Brandt, who said that politicians go in to politics to resolve a given set of problems but, once resolved, they cannot move on. That applies to institutions as well. It is very important, as we have this negotiation, to move away and understand the challenges that face us both across the channel and among ourselves, and not adopt positions that are frankly completely ossified.

This report highlights or notes our shared common strategic foreign policy and defence interests. The post-Brexit partnership with the EU, in my view, has not been given the importance that it should have been thus far in this key area. I therefore greatly welcome the European intervention initiative, spearheaded by President Macron and structured in a way that enables the UK to participate in crisis situations near Europe’s borders. It may well be that the defence umbrella with which the United States currently provides Europe will undergo change. In fact, we know that President Trump has expressed dissatisfaction with the levels of European defence spending on NATO. In these rather known unknown circumstances, it is simply imperative that Britain should not be treated as a detached third party. Of course, we are in the context of NATO— but imaginative defence, security and intelligence structures should be pursued in our common interests in Europe.

If we reflect on the past 20 years or so, we can see that a number of very disagreeable regimes have disappeared. In developing countries broadly, we have seen a great acceptance of the values of more active civil society, judicial oversight and electoral processes. These are values that are shared right across Europe. The belt and road project initiated by China is truly massive and focused particularly on infrastructure development. Yet investment does not come with any requirements on good governance. With our generous aid budgets and access offered to our markets, these must continue to be used to encourage good governance.

I say this because the UK and the European Union essentially share the same values. As China becomes ever more a player on the world stage and the United States feels that its generosity and world view is insufficiently appreciated, it is most important that the UK and the EU co-operate, as we recently saw at the Paris climate change conference, on consumer protection or over Iran, based on our common values or perceptions. I hope that some of those issues come to elevate the context of these negotiations. If, after all, our European neighbours thought that we would set off a chain reaction with the departures of other countries, that has certainly not happened at all.

I turn to the issue of the financial sector and the City of London. There have been assertions by some, including the European Banking Authority, that the UK’s financial sector has not adequately prepared for Brexit. The City of London provides a level of expertise, lending and specialist activity that is unique. Indeed, there has been an enormous amount of preparation for exactly the process that is taking place. Inevitably, new arrangements will be made by many British-based financial institutions to set up activities within the EU, but what needs to be understood within the EU is that the City of London is an immense asset for the whole of Europe. If its ability to function is materially impaired, the major beneficiaries will not be Paris, Frankfurt or Dublin but New York, Singapore and Hong Kong.

Of course, the essence of these negotiations are about trade and creating a customs structure, but what this report sets out so admirably, in the clearest possible terms, are the current positions in respect of trade and services of the European Commission, the European Parliament and the UK Government. It does the same thing in the areas of trade. At the heart of this is the need to have a mutually beneficial customs relationship and a mechanism for adjudicating disagreements. As my noble friend Lord Boswell indicated, a price will have to be paid on both sides. However, it is worth reminding ourselves at this juncture that, with the difficulties currently happening within the European Union, the United Kingdom has absolutely no interest in anything but a prosperous and harmonious European Union, as we seek to maintain the breadth and depth of our trade relationship.

I heard a speech very recently by that most experienced European figure, José Manuel Barroso, in which he repeated that the EU always reaches agreement at the last moment, whether discussing matters internally or with third parties. Indeed, we saw that illustrated over the migration crisis, and I suspect that that is precisely what will happen in our negotiations. It is perfectly true that the hand of an individual, business or country is strengthened if there is a threat of walking out of a negotiation. What, however, is undeniable is that all of us who have tried to follow the whole Brexit process know how immensely complex and entwined our commercial relationship is with the EU. Therefore, any enthusiasm for this tactic on my part is tempered by my difficulty in answering the question of the extent to which Her Majesty’s Government have prepared for such an eventuality—because I think, however regrettably, that the hour, if ever there was one, has probably passed.

I conclude by repeating the last sentence of the conclusions of this excellent report, because it says it all:

“The success of the negotiation can then be measured by the willingness of all parties to compromise, as they discover mutual interests and deliver shared benefits”.