Brexit: Withdrawal Agreement and Political Declaration

Lord Thomas of Cwmgiedd Excerpts

Thursday 10th January 2019 Lords Chamber

[Lord Thomas of Cwmgiedd (CB)]

It is a pleasure to follow the noble Lord, Lord Monks, because I too agree with the conclusion that he has reached. I support the Motion in the name of the noble Baroness, Lady Smith of Basildon. Many powerful reasons have been given in the debate in December and over the last day or so that support that view. There is, however, one issue I wish to raise that is different, but which illustrates the problems that this deal will cause. In my view, we should focus on the longer-term effects of the deal and what it does for our future negotiations. That issue relates to the position of the UK as the leading centre in the world for international, commercial and business litigation. It is chosen by countries and businesses from all over the world. I appreciate that, in speaking about work for lawyers, I am not adopting a cause that wins universal popularity. However, it is important to recognise the substantial contribution, measured in billions, that this work provides for the UK economy and, importantly, for Her Majesty’s Treasury.

After the referendum, a good deal of work was done by the legal profession and the judiciary on what was needed to safeguard the pre-eminence of the United Kingdom by ending the uncertainty on which our competitors were starting to rely and providing the certainty that those negotiating a jurisdiction clause require. In late 2016, a paper was presented to the Ministry of Justice and other arms of government. In the summer of 2017, the Government were asked urgently to take a number of steps, and particularly to work with the EU to ensure that there is a simple and flexible regime for the mutual recognition and enforcement of civil judgments on our departure from the EU, when we would cease to be a party to the EU regime. In August 2017, the Government published a paper for partnership, with cross-border civil judicial co-operation with the EU after we leave. This was a pragmatic and realistic way forward, which I fully supported then and support now. It would provide the certainty so badly needed and support the ongoing work that the judiciary and the legal profession are undertaking to try to preserve the pre-eminence of the UK in this area.

The question for me is the effect of the deal on the position of London and the rest of the United Kingdom. Plainly, the continuation of the status quo by the withdrawal agreement presents no problem in itself, but the all-important political declaration is a matter on which I wish to focus. It provides nothing of the Government’s August 2017 proposals on the enforcement of civil judgments. I surmise that this is not because the Government have changed their mind, but rather that this was one of the matters that they were unable to include in the political declaration. Why is that? It is not because of its lack of importance, but because the negotiating position of the UK has become so weak, for the reasons given, even at a time when we still have leverage through the financial contribution that we are to make.

The next stage of the negotiations is more important. In considering that, we ought to look at the position of the EU 27, as their attitude is a vital factor. In this area, they are our competitors—and they have not been idle. In Paris and Amsterdam, commercial courts have been recently established where the proceedings are conducted entirely in English. They are being actively promoted as a much better alternative to the UK because their judgments will be recognised and enforceable across the EU and because of the certainty of their position. Germany and Belgium are considering doing the same. Last Friday, the Taoiseach was reported to have said that the Irish Bar Council and the Law Society took the view that,

“one of the areas that could benefit from Brexit are legal services, on the basis that Ireland could … take some business from the UK”.

Once lost, this work, which contributes so much to our economy, would be difficult to get back.

Let me turn briefly to the next stage of the negotiations. It is inevitable from the deal that the UK’s negotiating position will be very much weaker in many respects. The deal in effect enables our former partners in the EU to control the pace and outcome of the negotiations to their advantage and to our disadvantage, particularly through the leverage that the backstop provides. I agree with the many who have pointed to the multitude of other flaws in the deal. Long and complex negotiations—for that is what they will now be—will advantage our competitors in the EU 27, as they will be able to continue to exploit the uncertainty so caused. For this and for all the other reasons given during this debate, the deal looked on as a whole, and its medium and long-term effects, will have a very damaging effect. In my view, those who must make the decision in the other place would be well advised to reject it.

I see the force of the point about the dilemma we all face in the UK, as made so eloquently by many, including the noble and learned Lord, Lord Hope of Craighead. The issue for the decision-makers is to weigh the manifest disadvantages of this deal against the alternative courses of action which have been explored in the debate. By my support of the Motion, I would rule out a no deal, but in my view the other alternatives, for the reasons given by others which I need not repeat, are all options that will do much less serious medium and long-term harm to the UK economy than entering into this deal. I include within the other options another referendum, as it is clear that the effect of Brexit will be greatest on the young generation. They should be given the chance to express their views in the light of what is now known.