European Union (Notification of Withdrawal) Bill

Lord Tyrie Excerpts

Committee: 2nd sitting: House of Commons
Tuesday 7th February 2017 Commons Chamber

[Mr Raab]

I will not give way, as I am going to make some progress.

The choice on the final deal is clear: the British Parliament can veto the exit agreement and/or the terms of the new relationship agreement, but in that case Britain would leave the EU without agreeing terms. On the new relationship agreement, the UK Government would of course be free to revert for further negotiations, but that could not delay or stop Brexit from happening under the terms of article 50. Those facts will rightly and understandably focus our minds, as they are doing here today, and with a sense of trepidation. They will also focus minds—this is why it was crafted in the way it was—on the other side of the channel, among our European friends. So, on the assumption that it would take at least 18 months to agree all the terms of any new relationship agreement, the idea that Parliament voting down any deal would send the UK back to a further round of meaningful negotiations, before Britain formally leaves, is at odds with the procedure in the Lisbon treaty, and I find it neither feasible nor credible.

[Mr Andrew Tyrie (Chichester) (Con)]

My hon. Friend mentioned article 50(3), which does provide for transitional arrangements. It provides for a country to negotiate for the same arrangements to continue indefinitely until a subsequent date is provided at the end of the negotiating process for their implementation. Does he not agree that that should create a window for exactly the circumstances that he is so concerned about?

[Mr Raab]

My right hon. Friend is right in what he says, but if he reads article 50(3), he will see that it is explicitly referring to the withdrawal component of the diplomacy. But he is also right to say that there is scope for transitional arrangements or phased implementation to deal with some of the so-called “cliff edge” concerns that hon. Members are rightly worried about.

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[Mr McFadden]

I do not have much time so I am going to conclude.

The point of all of this is to avoid the choice between being told that we have to define as success, on the first account of it, whatever the Government have managed to negotiate, or default to the WTO. To be honest, a concession on timing that does not allow us to ask the Government to go back and negotiate a better agreement is simply holding a gun to Parliament’s head a few months earlier than would otherwise have been the case. This new clause is about taking all the claims made for decades about parliamentary sovereignty and making them real, rather than giving us a choice between deal or no deal, take it or leave it, my way or the highway. Frankly, Parliament and the country deserve better than that.

[Mr Tyrie]

rose—

[The Second Deputy Chairman of Ways and Means (Natascha Engel)]

Order. I am happy to call the right hon. Gentleman if he can speak for only two or three minutes.

[Mr Tyrie]

I will limit my contribution to a couple of minutes and confine it to a few questions for the Minister. The concession that he gave at the start is significant; the question is: how significant? What did he mean when he said that the Government “will bring forward a motion on the final agreement”? He must mean the proposed agreement. I noticed that he changed the wording to “final draft agreement”. Is he talking about the draft agreement, or a final agreement, at a point at which it is too late to change it?

Secondly, the Minister says that he expects and intends that this place will get a say before the European Parliament. In what circumstances is it practically possible for us not to have that if the Government want us to have it? Thirdly, will he answer the equivalence point that has been made by my hon. Friend the Member for Devizes (Claire Perry)? We must be able to have at least as much say as the European Parliament.

Fourthly, will the Minister clarify that the WTO cliff-edge issue needs to be subsumed into the issue of transitional arrangements? If the Government put the need to negotiate transitional arrangements as their No. 1 priority and they succeed at least in getting a deal on that, that deal can trigger article 50(3) to enable an extended period of further discussion, should all other aspects of the deal fail. Does he accept that that is a reasonable and sensible approach to take the debate forward? If he does, I might consider not voting against the Government, as I am minded, uncharacteristically, to do. I will listen carefully to what he has to say.

[The Second Deputy Chairman of Ways and Means (Natascha Engel)]

I call Mr David Jones.

European Union (Notification of Withdrawal) Bill

Lord Tyrie Excerpts

Committee: 1st sitting: House of Commons
Monday 6th February 2017 Commons Chamber

[Mr Harper]

If Members will forgive me, I shall make a little progress.

[Mr Andrew Tyrie (Chichester) (Con)]

rose—

[Mr Harper]

I will give way to the Chairman of the Treasury Committee, but then I must make some progress.

[Mr Tyrie]

My right hon. Friend would agree, however, that other nationals should not be treated as bargaining chips, and I am sure he would also be aware that the Treasury Committee has heard a good deal of evidence to suggest that the failure to guarantee the rights of EU nationals is now beginning to damage the economy. Given that, and the overwhelming ethical case, does he not agree, on reflection, that the time has come just to protect those EU citizens’ rights?

[Mr Harper]

I completely agree on the value to the economy. I also agree on this being an urgent matter, and I heard the Prime Minister say exactly that this afternoon. If I may conclude my remarks about EU nationals, perhaps my right hon. Friend the Member for Chichester (Mr Tyrie) will see why I do not think precipitate action is very wise. It could open up a range of complexities which, far from putting people’s minds at rest and making things better, could make things worse.

European Union (Notification of Withdrawal) Bill

Lord Tyrie Excerpts

Tuesday 31st January 2017 Commons Chamber

[Oliver Dowden]

The Conservative manifesto committed us to renegotiation followed by an in/out referendum, which was exactly what we delivered. The whole argument I am making is that the question of EU membership is inextricably linked to that of the single market.

The problem with trying to control migration within the EU is that the Commission rigidly stuck to the doctrine that the free movement of people was one of the immovable pillars of the single market, and that any attempt to favour UK nationals over EU nationals was discriminatory and illegal. That was despite the fact that the whole reality of its application had changed since we initially agreed to single market membership, and that there was no similar perfect purity applied to the other pillars, particularly in services, in which the UK stood to be a major beneficiary of a pure single market.

[Mr Andrew Tyrie (Chichester) (Con)]

Is it not the case that several EU countries now have deep concerns about the consequences of unfettered free movement and that the collapse of Schengen, albeit for different reasons, is further evidence of that?

[Oliver Dowden]

I thank my right hon. Friend for his intervention; what he says is undoubtedly the case. The problem is that the Commission and other EU members move at a glacial speed, so there is unlikely to be a significant change in their approach to this pillar of the single market for some time.

Of course this issue was not the only factor, but it certainly gave strong impetus to the argument that the only way we could resolve the situation was through a policy of renegotiation followed by a referendum, which was what we fought the 2015 election on. Again, the Commission dogmatically refused to compromise on its conception of free movement, which was bolstered by Chancellor Merkel’s experience of growing up as a child of East Germany and innate hostility to any imposition of borders. Going into the referendum, we therefore could not credibly say that significant control had been restored.

Pitted against that strong argument for leaving the EU was the significant economic risk and dislocation that arose from losing unfettered access to a market of half a billion people, which we had achieved through full membership of single market. The decision therefore was about a difficult balance between control and risk, which was why it was absolutely right to put such a profound question to the British people in a referendum. We should be quite clear that the dilemma of EU membership was, in essence, the dilemma of our membership of the single market: the benefits of having free movement of goods, services and capital set against the loss of control over our laws and migration policy. These issues were the essence of the debate.

My innate conservatism favoured not taking that risk, but the British people took an alternative decision—this was whole point of asking them in the first place. So it is clear that not only should I respect that decision and vote to invoke article 50, but that I should also seek to implement it fully, which must mean leaving both the single market and the customs union. For people to claim that the Government do not have a mandate to do that is to completely ignore how we got to this situation in the first place.

Equally, however, we must be clear about the other choices that we have taken. I am glad that the economy has maintained momentum after the initial political decision to leave, and I am confident that in the medium to long term we can make a success of the huge liberation of leaving the EU. We can tailor our laws to meet the economic and trading interests of this country and those with which we choose to enter bilateral deals, rather than being bound by the lowest common denominator interests of a 27-member bloc. Indeed, we are well placed to exploit this position, as we have a centrally placed time zone, the English language, political stability, the rule of law, a competitive tax regime and tremendous creativity. But we should also not forget the risk we took by choosing to leave. I am sure that, in the short term, the depreciation of sterling is likely to lead to price rises this year, squeezing disposable income and consumer spending. The terms of our access to the single market will be different, causing short-term dislocation. Of course, the Commission and member states will initially—

--- Later in debate ---

[Mr Andrew Tyrie (Chichester) (Con)]

I was a remainer and I think it was a mistake to leave. I still think it is a mistake to leave, but that decision has been taken and tomorrow night the House will respect the decision. The question now is not whether we are leaving but where we shall arrive. We must focus on the best way of securing that, not only in our interest but in the interests of the whole continent. We need to grasp the opportunities of Brexit, which do exist, and their significance. The Prime Minister was right to say that she is going to seek a bold and ambitious trade agreement with the EU. Anything that disrupts trade is likely to diminish it and, therefore, output. A deal that safeguards both the UK and our counterparties from that disruption is therefore much needed, and in practice there may be only a little over a year to negotiate it.

So, a transitional arrangement—probably a formal agreement—is going to be absolutely essential. Without it, firms in the financial sector, for example, will act pre-emptively to protect their shareholders from the consequences of a cliff edge. A large number of them have given evidence to the Treasury Committee on exactly that point, and they are not all making it up. The action they will take has already begun in a small way, and it is much more than just brass plating. We need to be clear that the absence of a transitional agreement will cost jobs and economic activity, at least in the short to medium term, and we should not just let that business slip away.

A clear and early commitment from the Government to a transitional period—what I and a number of others have been calling a standstill—at the end of the article 50 process should be priority No. 1 for agreement at the start of the negotiations.

[Wes Streeting]

I am grateful to the Chairman of the Treasury Committee for giving way. Does he agree that such transitional arrangements are not only in our national interest, but in the interests of every other EU member state, which is why they should agree to the Government’s suggestion sooner rather than later?

[Mr Tyrie]

I agree. Other states have an opportunity to agree a deal, because it would be obtainable under qualified majority voting, and does not require unanimity, as a careful look at article 50 shows, although that point was not initially understood.

If the UK leaves the customs union, a huge amount of work will be required to develop and enforce rules of origin. Despite the extra bureaucracy, I still think there is merit in leaving. If the greatest opportunities turn out to be in Asia in the medium to long term, as many forecast, we should put the country in a position to benefit. I strongly agree with my hon. Friend the Member for Gainsborough (Sir Edward Leigh), who is no longer in his place, that a liberal economic internationalism should underpin everything we try to develop in our trade relations.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I agree with much of what my hon. Friend has had to say. Does he agree that TheCityUK’s analysis has, it would appear, changed dramatically? Like him, it can see the advantages that might come from Brexit, having once been of the opinion that Brexit would be the worst possible thing for this country’s financial sector.

[Mr Tyrie]

TheCityUK did say that it was the worst possible thing for the financial sector, and it has clearly decided that the best thing to do is to look for the opportunities rather than spend time moaning about where we are. On the basis of what I read on my iPad on my way to the debate, it has focused on the point about the customs union.

The Treasury Committee has heard convincing evidence that both parties in the negotiations—both the EU and ourselves—have a lot to gain from maintaining a high degree of access to the single market, and a lot to lose from the absence of such access. We should bear it in mind that the EU, like the UK, benefits from our integration with European supply chains in the automotive and aerospace sectors, for example, and we all benefit from access to London’s deep and liquid financial markets, which lowers the cost of capital to European firms, and of course to British firms. Restructuring manufacturing supply chains would cost both sides a lot; so, too, would the fragmentation of the financial markets.

[Sir Gerald Howarth]

Will my right hon. Friend give way?

[Mr Tyrie]

I will not, if my hon. Friend will forgive me, for the same reason previously mentioned—I will not get any extra injury time.

Unlike the customs union, access to the single market is certainly not a binary choice: a wide variety of options is possible. We do not need to look into the crystal ball; we can read the book. Switzerland has better access than Saudi Arabia; Canada has better access than Columbia. Reverting to WTO rules would be a huge risk for the UK—one that we should do a great deal to avoid.

There is a majority in the country for leaving, and if that means anything it must mean an end to the direct applicability of EU law and the restoration of control over EU migration. We should also bear it in mind that there is certainly a majority in the country for a high degree of continued engagement with our closest neighbours, which many on the continent also want. Huge advantages can flow from maintaining a high degree of political and economic engagement from outside the EU. It can be as economically beneficial as it will be politically expedient to try to construct it. It can help heal the Brexit wounds to which the Prime Minister referred in her outstanding speech, and it can address the deep unease that seems to be developing about Brexit among the young. Many of them are rejecting much of the irrationality of current political discourse coming out of Washington, and many are certainly rejecting the populist economic nationalism that President Trump represents, which some also attribute to Brexit.

In demonstrating that we understand and are responding to those voices of concern, we can win support at home, and we can construct alliances among our counterparties abroad by making it clear that we want to engage deeply with the EU from outside. That is why, if we can avoid the politics of unreason and avoid, too, the divisions at home and abroad that a disorderly and confrontational Brexit could bring, we can still reap considerable opportunities from the Brexit decision.

New Partnership with the EU

Lord Tyrie Excerpts

Tuesday 17th January 2017 Commons Chamber

[Mr Davis]

I will correct one or two things the right hon. Gentleman got wrong about what I said. He is wrong to interpret what I said as any suggestion that we will not be able to negotiate this outcome in the timetable in front of us. I said the issue was that we would look at implementation issues, because they may well take time. I cited some of them—borders, customs and various other aspects that might take time to put into effect. It will be in the joint interests of the European Union and ourselves to put those in place. But more widely, I cannot think how I could have been clearer. I have answered every single question, with one exception, that the Labour spokesman put to us. I have tried to answer as many as I can of the ones the Select Committee put to us. We have been very clear. I do not think anybody out there will believe the Labour party now when it says, “We don’t know what the negotiating strategy is.” It is as plain as a pikestaff, and the right hon. Gentleman should recognise that.

[Mr Andrew Tyrie (Chichester) (Con)]

The Prime Minister has indeed given clarity: we are leaving the single market, and we are leaving the customs union. But further to the point that has just been asked, in the implementation phase the Prime Minister has proposed after article 50—that period of adjustment to a deal—will all the detailed terms already have been finalised, or are the details of the so-called bold and ambitious deal, as she put it, to be worked out during the implementation phase?

[Mr Davis]

My right hon. Friend wrote a very wise paper, which I referred to in a previous exchange here. He will recognise that the negotiating balance changes at the end of the two-year period, so it is very important that we conclude the deal by then. The implementation is a different matter; it may take time, and it does take time, but we cannot control that, whether we are putting in place a new customs arrangement or whatever it might be. So there are practicalities there, and it is the practicalities that will drive this.

Article 50

Lord Tyrie Excerpts

Monday 7th November 2016 Commons Chamber

[Mr Davis]

I refer the hon. Gentleman to the leader of his party, who recommended that we trigger article 50 on 24 June.

[Mr Andrew Tyrie (Chichester) (Con)]

The Prime Minister is currently in India attempting to begin negotiations on a trade deal that the UK may, in the event, not have the authority to conclude—not, that is, unless the Government have already quietly decided to leave the customs union. Will the Government give at least some indication of when they will set out their negotiating position on the core objectives of whether we remain in the customs union, whether we are attempting to retain full access to the single market, and whether we intend to retain passporting for our financial services?

[Mr Davis]

As my right hon. Friend well knows, the issue of the customs union is a complex one. There are many different configurations. Turkey is inside the customs union but outside the single market, Norway is inside the single market but outside the customs union, and Switzerland is outside the customs union and partly inside the single market. We have to make a judgment on what is best for Britain in toto, in terms of its access both to the European market and to the rest of the world. We will make that judgment in due course and make it public in due course.

Next Steps in Leaving the European Union

Lord Tyrie Excerpts

Monday 10th October 2016 Commons Chamber

[Mr Davis]

The majority was over a million. This was, I think, the largest vote gained by any Government ever. [Interruption.] I assume that the right hon. Gentleman voted “remain”. It is rather rich for someone like him, who voted the other way, to try to be the arbiter and interpreter of those who voted to leave.

First, we must obey the democratic instruction that we were given. Secondly, I strongly challenge the idea that this will somehow cause an economic downturn. It will not: it will create economic opportunities on a major scale, and that is what we look forward to.

[Mr Andrew Tyrie (Chichester) (Con)]

The Government’s negotiating position will leak as soon as other member states are told about it. Does the Secretary of State not recognise that it would be wholly unacceptable for the British public to find out what the United Kingdom’s position is from our counterparts in the negotiations?

[Mr Davis]

Had the Chairman of the Treasury Committee read my evidence to the Lords Select Committee, he would have seen that I gave an undertaking that this House and the other House would be at least as well informed as democratic institutions on the continent, including the European Parliament. That has never been done before, but it will be done now.

Exiting the European Union

Lord Tyrie Excerpts

Monday 5th September 2016 Commons Chamber

[Mr Davis]

It is early days to forecast the negotiation, but the right hon. Gentleman is right—there is a large trade surplus. The one that was cited time and again during the referendum campaign, which I do not want to revisit, was the surplus in cars from Germany alone, for example. With countries of the European Union facing economic difficulties, I do not think they will want to create problems for themselves by creating bilateral arrangements that hurt them, so the way I think it will play out is that over the period concerned—probably a couple of years or so—people will start to focus on what their own national interest is. My experience of the European Union is that the Commission makes a great deal of public statements, but at the end of the day the national interest of individual countries decides the outcome.

[Mr Andrew Tyrie (Chichester) (Con)]

Can the Secretary of State confirm that as the UK will want to be able to negotiate new trade deals with the rest of the world and has created a Department for that very purpose, it will not be able to remain a member of the customs union?

[Mr Davis]

I am pleased to be asked a question by my right hon. Friend. I spent the weekend reading his draft for Open Europe. I did not agree with everything in it, but, as always with him, what he has to say was insightful and wise. I recommend that people read pages 10, 11 and 12 if they do not have a lot of time.

My right hon. Friend has a good point on the customs union. Membership of a customs union puts restrictions of varying degrees on what countries can do outside. It would put restrictions on what my right hon. Friend the Secretary of State for International Trade is doing, so we have to look at the matter carefully. There is a range of different types of customs union, but that is exactly the sort of decision that we will resolve before we trigger article 50.