European Union: Negotiations (European Union Committee Report)

Baroness Hayter of Kentish Town Excerpts

Monday 16th March 2020 Lords Chamber

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[Baroness Hayter of Kentish Town]

At end insert “and notes the undertaking of Her Majesty’s Government in paragraph 40 of the Department for International Trade’s summary of responses to a public consultation on trade negotiations with the United States, published on 18 July 2019, to ‘draw on the expertise and experience of Parliamentarians’ by working with a parliamentary committee which would be afforded ‘access to sensitive information’ during the process, before taking a ‘comprehensive and informed position on the final agreement’; and therefore calls on Her Majesty’s Government to ensure that, in a manner consistent with the European Commission’s treatment of the European Parliament, both Houses of Parliament are able to receive regular updates from ministers, scrutinise all relevant policy documents and legal texts, and debate the terms of emerging agreements, as negotiations on the future relationship between the United Kingdom and the European Union progress.”

[Baroness Hayter of Kentish Town (Lab)]

My Lords, this is a timely debate. It is two days before the second round of face-to-face negotiations was due to open in London. As we know, the negotiations cancelled because of the virus, a matter of serious national concern. As the noble Earl, Lord Kinnoull, has just set out, there were also these EU talks, which are matters of vital national interest.

Despite the description clearly and persuasively set out in the report, our Government seem curiously shy about the content, unlike the EU side: while Monsieur Barnier had a press conference and took questions after round one, this Parliament had a 200-word Written Statement and no discussion in either Chamber until today. I am thankful to our brilliant EU committee, the Bill Cash amendment and the Chief Whip, who agreed to table the Government’s Command Paper for debate. It is this reluctance to engage with Parliament that leads to my amendment.

It is somewhat strange that a civil servant rather than a Minister has been sent out to bat for Britain in these talks. I am sure that Mr Frost, who likes to quote Edmund Burke, is excellent. However, as a Member of neither House, he is neither here nor there to explain or be questioned. Is it not shameful that our Government hide behind him to avoid accountability and debate?

In their response to an earlier consultation about discussions with the US, the Government promised

“to draw on the expertise and experience of Parliamentarians”

by working with a parliamentary committee that would be afforded “access to sensitive information” during the process. This would, in the Government’s words, enable Members to take an

“informed position on the final agreement”

before being asked to ratify.

That is what we are requesting for the EU negotiations: this Parliament should have the same access as that given by the European Commission to the European Parliament, receiving regular updates from Ministers, as well as seeing relevant documents and legal texts. Our debates would therefore inform the UK negotiators and ensure that at the end of the process we have a treaty acceptable to the Government and the Commons, who have to agree it.

The report of the EU committee was brilliant. It did all the work that the rest of us would otherwise have had to do. From the Command Paper in the Motion tabled by the noble Lord, Lord True, it is clear why we need such dialogue, given the disparity between the opening gambits of the two sides and the shift in the Government’s stand since the political declaration signed by the Prime Minister in October and ratified on 31 January this year. As the Financial Times noted,

“the longer Prime Minister Boris Johnson holds power, the faster Brexit is evolving into a project more extreme than most British people”

anticipated

“at the time of the … referendum”.

No wonder Monsieur Barnier said that “very serious divergences” had emerged and, as we have heard, the noble Earl, Lord Kinnoull, talked about the widening gap.

I shall mention only a handful of issues, as other speakers have much more experience in dealing with some of the very thorny issues on the path towards a settlement satisfactory to both sides. My first point is about the tone of the Government’s paper. “Mean spirited” is the kindest way I can describe it. It goes on and on, saying, “We’ll only do what’s fair to us”—as if any sovereign state would settle for anything less. It reiterates again and again its hang-up about any contamination by the ECJ, while at the same time proposing no ideas on dispute resolution that do not use that sort of mechanism It repeats five times that various of the elements will not be subject to the Chapter 32 dispute resolution mechanism, which itself excludes the ECJ. It goes on and on about what we will not accept, but offers no ideas about what to put in its place.

That abhorrence of the ECJ means that we will even pull out of EASA, to the consternation of ADS, the aerospace industry and every specialist carrier and business involved. They all see this as a threat to the very future of the air sector. Similar prejudice about the ECJ undermines our withdrawal from the EMA and from the Early Warning and Response System, which is particularly significant at this moment.

Secondly, the crucial, and possibly the most problematic, issue is fair competition and the level playing field. Competitiveness is good for consumers, who get a better deal; it is good for business and good for the economy. The competition remit of the EU has driven much of its focus and much of the bloc’s economic growth. As we leave that regime, it will be imperative that the UK strengthen its competition authorities, as disturbance of trade could lead to less competition, and greater opportunities for rip-offs.

In addition, after December the UK will face major cross-border competition and merger cases. This is urgent, and demands Ministers’ attention now. Following the CMA’s proposals for new duties to put consumers first and to act quickly, and the Conservative manifesto’s welcome commitment to provide those powers, can the Minister update the House as to whether such legislation, to end rip-offs and bad business practice, will be introduced, when it will be introduced, and also assure us that it will be in time to be effective from January next year?

Thirdly, the Government say that they want no tariffs, charges or restrictions, but this would mean shared standards, recognised enforcement, independent checks and a level playing field. EU countries are hardly going to accept our goods tariff-free if they are produced to lower standards, or simply by paying workers less.

The Government have finally admitted that no alignment means checks, costs and paperwork. Indeed, we hear that 50,000 extra pairs of hands will be needed across the piece—a number well in excess of the 32,000 employed by the European Commission. Unsurprisingly, British Chambers of Commerce is calling for more funding for customs agents, as declarations on goods will rise from 55 million to 300 million a year from January. Oh, and by the way, the NAO reckons that we have already spent £4 billion on Brexit preparations —with, of course, more to come.

Fourthly, turning to financial services, the Government plan to streamline how firms are regulated, raising concerns in Brussels that Brexit will allow London to reduce oversight of the industry. Trillions are at stake if the EU, perhaps as a result, decides to deny the UK so-called equivalence. As Michel Barnier has said, granting access to EU financial markets is a unilateral decision so there will be dialogue but no negotiations. I wonder whether the tone of our language and apparent light-touch regulation will damage the chances of a satisfactory outcome.

Fifthly, the Government’s document fails to include a demand that that UK tourists should be able to travel to the EU visa-free, despite other Statements referencing that. It is slightly hard to imagine why that is not in this important Command Paper.

In addition to what my amendment is about—dialogue with this Parliament—there is the crucial issue of the involvement of devolved authorities. I hope it was simply an error when on 27 February, the noble Lord, Lord True, said:

“We will keep the devolved Administrations informed”.—[Official Report, 27/02/18; col. 287.]


That is not good enough. Involvement is needed, not just information.

The Welsh Government have tried to reach agreement with the UK Government to facilitate a united position as we enter the negotiations. However, Welsh Ministers had no early involvement in negotiating objectives and saw the text less than a week before publication, with a mere telephone conference with Ministers hours before the Cabinet sign-off. Ever since the referendum, the Government have consistently ignored, as we have repeatedly said in this House, the terms of reference of the JMC(EN) which require it to seek agreement on negotiation positions with the devolved Governments. This does not bode well for the future negotiations where the devolved regions have particular concerns, be they over agriculture, non-tariff barriers, regional and economic development, or other things, and those must be central to the Government’s thinking.

This side of the House continues to worry that the Government will either accept no deal or else something as bad as no deal. The document itself threatens that if by June there does not appear to be the outline of an agreement which could be finalised by September, then the UK should move from negotiating to preparing for a no-deal exit. Michael Gove has been telling business groups that, while he wants a Canada-style agreement, they should nevertheless prepare for no deal on 31 December, while Boris Johnson has said he was prepared to walk away from talks in June if there was insufficient progress. No wonder the EU committee said that this raises matters of vital national interest. So it is imperative that Parliament is not shut out; my amendment is about dialogue and engagement with Parliament. I beg to move.

--- Later in debate ---

[Baroness Falkner of Margravine]

I fear that the noble Baroness is a little enthusiastic in jumping in before I have concluded setting out my rationale for why I think that this is not analogous. I will not go into “taking back control” because we are a bicameral Parliament and the European Parliament is not, so it is a different entity entirely.

As the EU institutions practise in an area of trade policy that is not analogous, there is a distinction between straightforward trade agreements and mixed agreements, with differing procedures as the CETA debacle apropos Wallonia demonstrates. I remind noble Lords that CETA remains a provisional agreement; as yet it has not been ratified by all member states. So I would argue that how the Commission works through blockages is still a work in progress. My prediction is that the EU will find it increasingly difficult to pass the kind of comprehensive deals with either the US or other large countries that it seeks if such divergent and multiple checks on its autonomy prevail.

I turn to the noble Baroness’s question about the UK Parliament and the attempt to replicate the European Parliament’s powers here. One singular distinction is that we are bicameral and the European Parliament is a single Parliament, as I have just reminded her. Moreover, we have an elected Chamber, the Commons, which is similar to the European Parliament, and a further appointed Chamber, the Lords. Were we in the Lords to seek to put up objections to a trade deal that had been agreed by the Commons potentially where the detail may not have formed part of that Government’s manifesto, where would we be if the Commons cleared it but the Lords did not? Moreover, if one takes the EU analogy for mixed agreements and replicates it at national level, is one not saying that the devolved nations should also have a veto on the deal?

I am all for involving the devolved powers in the details of free trade agreements as in the end they have to implement them. The current mechanism for consultation should be improved. Would that be against changing our settlement for reserved matters? If that is the case, I will need to look again.

It seems to me that this ongoing quest for analogous powers to those of the European Parliament on the part of some sides of this House is misguided.

[Baroness Hayter of Kentish Town]

Will the noble Baroness accept that the amendment only asks for access to documents, not for powers over their content?

[Baroness Falkner of Margravine]

I will read the wording of the amendment, which

“calls on Her Majesty’s Government to ensure that, in a manner consistent with the European Commission’s treatment of the European Parliament, both Houses … are able to receive regular updates from Ministers”—

and so on. In my view, that goes too far, because it draws the analogy with the European Parliament. I also say that to the noble Baroness, Lady Hayter, because I have noticed sections of this House consistently making that analogy.

The noble Baroness may be interested to know that I would seek powers of scrutiny over future trade deals through a Select Committee on international trade—perhaps a Joint Committee of both Houses that would have several and various powers of scrutiny that the Government have said that they are perfectly willing to consider. I see benefits to Parliament, the public and the Government in that pathway, as Governments undoubtedly benefit from the early warning of problems that comes through Select Committees. But ultimately it is the Government’s prerogative to be the sole negotiator of trade agreements and, while the UK should improve its own constitutional arrangements, it should not seek to emulate processes designed for other institutions.

--- Later in debate ---

[Baroness Hayter of Kentish Town]

My Lords, I shall not respond to the debate—that is for the noble Earl, Lord Kinnoull, to do. I shall speak only about my amendment. There were some elements of my speech, such as on competition law, to which the Minister could not respond due to a lack of time, but I am sure that he will write to everyone who raised points that he was not able to answer.

[Lord True]

Yes indeed, and on the customs agent point that the noble Baroness raised.

[Baroness Hayter of Kentish Town]

I found the Minister’s response on my amendment much more positive than that of the noble Baroness, Lady Noakes. However, because of that, I must say something on the issue.

The noble Baroness, Lady Falkner, must have misread the amendment. We are asking not for a veto but for documents. I gave the example of the negotiations with America, where a parliamentary committee was specifically involved. I talked about the documents for both Houses of Parliament, not only the non-elected House. The fact that we are not elected and the European Parliament is seems irrelevant because the documents are for the Commons as well. So let us put that to one side. As my noble friend Lord Whitty said, it is more the principle of scrutiny that matters and less the detail of how it is done.

More seriously, I have to respond to the argument of the noble Baroness, Lady Noakes—not to the Minister because his reply was more helpful—who said that the general election and the huge majority to get Brexit done somehow means, as the noble Baroness, Lady Smith of Newnham, highlighted, that parliamentary scrutiny is neither necessary nor desirable. The noble Lord, Lord Hamilton, thought that, with a decent majority in the other place, this Government would not listen. That is scary stuff: “We have a majority of 80 and therefore we will do what we like—don’t trouble us.”

But Parliament matters and must not be shut out for two reasons: first, we do not want to reach a situation, when this treaty is ready to be ratified, where Parliament says, “Oh, we don’t like that now that we’ve seen it.” That would put the country in a difficult position. We have got to the negotiations and the dialogue is necessary now so that we do not find the Government taking us down a road that would be unacceptable not only to this House but to the other House. It is also wrong in itself. The idea that because you have an overall majority—we had a much bigger one in 1997—you do not listen to Parliament is highly dangerous.

Perhaps it is different and this is not about the big majority but a fear that the new deal would not stand up to scrutiny. That is just as serious. It is obvious that it has been heard and responded to by the Minister but we will keep talking. Some of us will be sent away because of our age but there will be enough people on these Benches to make sure that if he does not come here, we will bring him back to answer more questions. He is younger than me, so he will have to be here even when I am not. For the moment, I beg leave to withdraw the amendment to the Motion.

Amendment to the Motion withdrawn.