Brexit: Preparations and Negotiations

Lord Tunnicliffe Excerpts

Monday 23rd July 2018 Lords Chamber

[Lord Tunnicliffe (Lab)]

My Lords, I rise as the last speaker before the Minister, very conscious of the fact that the most important thing I can do is be brief and sit down.

[Noble Lords]

Oh!

[Lord Tunnicliffe]

Having achieved a level of agreement, I celebrate.

I will, however, make a few comments on the White Paper. We should pause a moment to look at it, not from our point of view, which is where most of the speeches have come from, but from a neutral point of view. The White Paper is overwhelmingly cherry picking in nature. It is all about, “Can we have the good bits?” Its central theme on the free trade area and the common rulebook suggests a complicated system of the UK charging EU tariffs at our borders. That was complicated enough, but now we have the ERG amendment, which requires reciprocity.

However, even before that amendment, Michel Barnier had set out his reaction. He said that the facilitated customs arrangement raised practical, legal, economic and budgetary questions. Setting out the questions he had posed to the new Brexit Secretary Dominic Raab during their first meeting on Thursday, Barnier said that he was concerned that European business would mean higher administrative costs, and there would be increased opportunity for fraud. He also questioned whether a non-EU country could collect EU customs without being subject to EU oversight. For this reason, EU diplomats say privately that the British plan can never be accepted.

The EU is also deeply concerned that the customs plan would give outside companies a competitive edge over European rivals if Britain and other countries used the UK as a route to avoid higher EU tariffs.

“Are the British proposals in the interests of the EU?”,


Barnier said. This is what we have to recognise—that the people we are negotiating with are there to get the best deal for the remaining 27. Very probably, they are trying to do the best they can for the people whom they represent.

The White Paper assumes that we are going to get wonderful trade deals. One wonderful trade deal that we have to get is with America, where we have President Trump, who seems to have succeeded in starting four trade wars—first, with both his neighbours, Canada and Mexico, and then with China and the European Union. If he negotiates a trade deal with us, he will have one objective: to have better access to the UK, on his terms. Trump is nothing if not honest. He believes in, and was elected on, “America first”. How long do we really believe it will take to do a trade deal with America, and how good do we think it will be? Why should the UK, with a population of circa 60 million, do better than the EU with 500 million? That is not in the real world.

Let us look at the White Paper’s aspirations on the movement of people. Once again, it is a cherry-picking arrangement. It wants to control workers from the EU on our terms: we want only the best and cleverest. Freedom for business people and tourists we want as part of the deal, but we want to control movement of workers.

Let us just look briefly at services. There was a briefing today from the City of London, which was terribly polite, but what it means is, “They’ve abandoned us”. The White Paper abandons the City and the service sector.

What does the White Paper ask for? It asks for the essence of being in the European Union, in one sense—for free access to the EU—but it wants conditions. When you compare that with the situation of a member of the EU, it has to agree to the four freedoms to get that access. EU members expect to pay money, if they are more successful members, because they rightly believe that the EU is a safer and fairer place with transfer of money between the richer and poorer members. In this White Paper, do we offer anything to the EU? No.

Many people are clearly comfortable with the idea of no deal, but let us make it clear that we are not comfortable with that idea. We believe that it would produce hard borders and kill the Belfast agreement. The borders would have queues and delays. I know something about running transport operations, and the smallest delays spiral completely out of control. It would cut out co-operation with EU agencies. A big chunk of the White Paper talks about all the things that we want to opt into. None of these would be available in a no deal situation. There would be no agreement on aviation or road haulage, and the IMF says that growth would be 8% less. We know that that 8% would not be spread among most of us; it would be spread among the poorest and weakest in our society. No deal is simply not acceptable. If we really refused to pay the divorce bill, we would be overwhelmed with legal action, trade wars and the worst relations with Europe since the Second World War.

In negotiations it is important to try to understand the other side. Having spent many years in negotiations, I believe that they consist of three directions: emotion, power and logic. In my experience, emotion is the most powerful and logic the least. We have to remember who we are negotiating with in Europe. We are negotiating with people, many of whom have spent their lives making the European Union work, and doing so in the belief that the European Union has preserved peace in Europe. It is so easy to forget that the last 70-plus years has been one of the most peaceful periods in the history of Europe, going back 1,000 years. We are saying to these people, “We don’t like your club—it’s not good enough for us”. We have to remember that we have hit an emotional headwind.

Power is the next thing that matters in negotiation—what cards you have. Frankly, we seem willing to offer nothing, and we have no credible threats. Perhaps only in logic is there any argument. Yes, it is almost true that a bad deal for us will hurt most European nations as well, but on average, it will hurt them less. It is clear that Ireland will suffer significantly in a bad deal situation, but the European Union so believes in itself that it will sort that out.

The Government should go back to the drawing board, change this White Paper and produce a plan that has some chance of success.