European Union (Notification of Withdrawal) Bill

Baroness Quin Excerpts

Committee: 1st sitting (Hansard): House of Lords
Monday 27th February 2017 Lords Chamber

[Lord Lea of Crondall (Lab)]

My Lords, I think that one of the themes of these two days in Committee will be that there are no easy answers to the dilemmas we all now face in the United Kingdom. There are upsides and downsides to every option for Brexit and the country’s future. That includes membership of the European Economic Area.

Perhaps I may remind the Committee that we can retain our membership of the single market without membership of the EU only through maintaining our membership, which of course we have already, of the EEA. To spell it out, membership of one or the other is required; that is, either of the EU or of EFTA. That is why I need to say a little more about how we would work within EFTA, which currently comprises three countries: Norway, Iceland and the Duchy of Liechtenstein. We cannot, as we sometimes seem to be doing, rule out all of the options before us, and certainly not rule them out prematurely. Rather, we should look at the pros and cons of each, as has been done in the outstanding report of the joint sub-committee of the European Union Select Committee on Brexit and trade options, chaired by my noble friend Lord Whitty.

We were members of EFTA from its inception in 1960 until we joined the EEC in 1973. I declare a retrospective interest, having chaired the last meeting of the EFTA consultative committee, which was made up of national employers and trade union organisations in consultation with the Council presidency. The meeting was held in Vienna in December 1972. The EEA has a two-pillar structure: the EU on one side and EFTA on the other. They meet together in the EEA council at government level, with various joint committees on particular points, along with a joint parliamentary committee and the EEA consultative committee.

The substance of consultations with the EU depends to an extent on the weight of the member states involved, but I am told by contacts in Norway that these are not without value, and I think that something like this was also the burden of the message sent by the Norwegians who gave evidence to parliamentary committees in both the Lords and the Commons. On the objection to this approach, there is of course the constant complaint that plan B, C or D falls because, “We would not be at the table”. I have to point out that the famous 52% asserted—or supposedly asserted, if they knew what they were doing, which we assume they did—that, without equivocation, they did not want us to be at the table. So that can hardly be a drawback to where we go from here: end of story, full stop. Surely we can all agree that we have to balance influence on the one hand and freedom of action on the other.

EFTA has its own court of adjudication on issues such as interpreting the EFTA treaty and its application of rules of origin, technical standards et cetera. So we will be bound by the rules of EFTA consequent on the relationship with the single market, but obviously there is a great deal of legal alignment with the EU. The four freedoms can themselves be interpreted in different ways. For its part, the Commons Select Committee noted in paragraph 122 of its report that the Secretary of State for Brexit had indicated on 1 December last year that the Government,

“give very high priority to both tariff-free access and access without tariff barriers … that may or may not include membership of the single market”.

The Lords committee report stated in paragraph 82 that in trade terms, becoming a non-EU member of the EEA,

“would be the least disruptive option”,

providing free access to the single market in services and partial access to it in goods. The trade agreements are often negotiated advantageously by EFTA itself. I believe that there is a score of such agreements rather than agreements with individual member states.

I turn now to freedom of movement, border controls, work permits et cetera. Every facet of this debate has now been opened up more than it has been for many years—and by “open” I mean open and not closed down in advance. There is a considerable degree of variance among EU countries on how free movement is interpreted. In Belgium, there is a requirement for a job to go to, it is necessary to pay the rate for the job and no job advertisements can be placed in eastern Europe without being placed also in Belgium. Our Secretary of State seems to have come up with a new form of words about the guarantees for people who are already resident and working in this country. I would simply say that this is an area where we all know that constructive thinking needs to go ahead on a bipartisan basis.

Regarding attitudes in Norway, Iceland and Liechtenstein towards our application to become members once again, which have to be thought about, it is fair to say that we have very close relations—with a possible question mark in the case of Norway about something that happened 1,000 years ago—notably because of the North Sea energy fields from Shetland through to Aberdeen and further south, in particular in the north-east of England and down the east coast. This is true for the UK as a whole in a great variety of ways, including through the activities of the Norwegians’ well-managed, energy-based sovereign wealth fund, which is now worth £250 billion. A lot of that investment is deployed via London, as we were told in a recent briefing by the fund.

Without being presumptuous, and while recognising that EFTA would change its internal dynamics and, to some degree, its character and profile, the advice generally is that one would not expect hostility in Norway—the largest of the three—to any hypothetical application from the UK to rejoin the association. Positives would also arise from this for Scotland, Wales and Northern Ireland, compared with the alternatives. This is becoming more and more obvious as the weeks go by.

In paragraph 58 of its report, the Lords committee observes:

“Various studies had shown that from the EU’s perspective, ‘the EEA is the most preferred model’ of association for third countries”.


That is not a consideration to be underestimated, and it may influence attitudes among the EU 27 countries. These options for trade, investment, tariffs et cetera have to be the subject of not just theoretical argument but practical experience, such as was given by a Mr Emerson, who pointed out in evidence reported in paragraph 70 of the report that the advantage of the EEA option is, inter alia:

“It is a system that exists, offers legal clarity and actually works. It is closest among other options … to the status quo in economic terms and it would avoid uncertainty and thereby minimise damage to the UK as a destination for foreign investment aimed at the EU market”.


These are among the reasons why it would be counterproductive to leave the EEA, certainly prematurely. I know that going down the route I am advocating would entail Ministers eating some words. But I am sure that their digestive systems will be up to it once they have all run a few times around St James’s Park. I beg to move.

[Baroness Quin (Lab)]

My Lords, I support the amendment moved by my noble friend as a way to probe aspects of the Government’s approach to our future trading relationship with the European Union. The EEA was created when the UK, Denmark and Ireland changed from being members of EFTA to members of the EU, but the scale of their commercial relations with the other EFTA countries made it necessary to abolish customs barriers between the two groups of countries. A similar imperative will operate in the current situation as far as the UK market is concerned, given the scale of our trading with the EU. Obviously, in many ways the EEA would not be my preferred option because I would prefer to be in the single market—indeed, I would prefer to remain in the EU. However, given where we are after the referendum, I certainly think it is worth the Government considering and responding to the points that have been made.

My noble friend referred to the excellent report by the European Union Committee on Brexit: the Options for Trade and the fact that paragraph 5 of the conclusions says:

“EEA membership would be the least disruptive option for UK-EU trade, not least because it would maintain membership of the Single Market for services”.


I specifically ask the Minister whether this paragraph of the report, highlighting the importance of services to our economy and the way that that can be handled within an EFTA-type solution, has been discussed with the City of London, and what kind of response was made by the City to the point in the report.

Obviously, we will have a further chance to look at the report when it is discussed in this House on Thursday, but it is very germane to the discussions this afternoon, both on the EEA and on the single market. Therefore, it is quite right to highlight it today and I take this opportunity to do so. Certainly—this point has been made many times—whatever people voted for in the referendum, we are all pretty sure that they did not vote to make themselves poorer. As a result of that, exploring the best deal possible, in looking at all the possible options, is going to be vital. I believe that the Government need to take the amendment and the report very seriously.

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Moved by

[Baroness Quin]

6: Clause 1, page 1, line 3, at end insert—
“( ) Subsection (1) does not come into force until Her Majesty’s Government has laid before each House of Parliament an assessment of the impact of—(a) withdrawing from the European Union, and(b) Her Majesty’s Government's negotiating strategy for withdrawal,on the economy of the North East of England.”

[Baroness Quin]

My Lords, this amendment stands in my name and that of the noble Lord, Lord Shipley. It calls on the Government to lay before Parliament an impact assessment of the effect on the economy of the north-east of England of both withdrawing from the EU and their negotiating strategy. I say at the outset that this is a probing amendment and I do not aim to divide the Committee on it. However, through this amendment I wish to highlight the situation in my part of the country and the region where I live—the north-east. I recognise that this group of amendments raises a number of other issues about taking various parts of the UK into account in the negotiating strategy. I support many of those amendments, although I am obviously speaking to my own amendment in this instance.

In tabling the amendment, I was conscious of the fact that the north-east of England has a particularly heavy dependency on trade with the EU. Some 58% of its exports are destined for the European Union and its largest trading customers by far are in the European Union. I am proud of the fact that the north-east has a positive trade balance. It is unusual in that respect as compared with other regions of the UK. However, I am also concerned that this situation is very much under threat because of the Brexit strategy adopted by the Government.

In tabling this amendment, I also seek to ensure that the north-east has a voice in the Brexit process and that the Government are committed to taking the interests of the region to heart. I recognise that in many of the other amendments the importance of consulting the devolved authorities is mentioned and I would certainly not argue with those amendments in any way. I also support the amendments before the House that refer to the importance of environmental protection in the Brexit negotiations and those concerned that equalities provisions are not endangered. However, I am concerned that in our current devolved structure the regions of England—particularly the northern regions and the north-east itself—often risk being the Cinderellas of our political and economic system and are easily overlooked, despite the fact that the size of their populations and the importance and potential of their economies should give them a more important say.

My amendment is in line with some that were tabled in the House of Commons, in particular proposed new Clause 31 about the impact on regions and proposed new Clause 163 on the importance of consultation with regions. I echo some of the words spoken in the other place, particularly, as regards the north-east, the comments made by my honourable friends—if I can call them that—Catherine McKinnell MP and Phil Wilson MP. However, the amendments in the Commons overall received little attention and almost no response from the Minister, no doubt in part because of the rushed timetable and the programming that governed the Commons proceedings on this Bill. Therefore, I make no apologies for introducing my amendment and supporting other amendments before us this evening.

My amendment is about process so, given that earlier the Minister kept saying that the Bill should stick to process, I hope that it will appeal to him. Also, it cannot be criticised for giving away the Government’s negotiating strategy in advance or tying the Government’s hands in their dealings with our European partners. Where it tries to tie the Government’s hands is in committing them to a proper structure for dialogue and consultation with the north-east and the rest of the United Kingdom.

In the referendum, some areas of the north-east voted remain—Newcastle in particular—and some voted leave, but I believe that all parts of the north-east would not wish to become less prosperous as a result of Brexit. The Government should bear that very much in mind. The Government have a responsibility to do what they can to create a balanced economy throughout the United Kingdom and to ensure the future economic well-being of all parts of the United Kingdom, including the north-east.

Last month, the IPPR report The State of the North 2016 was debated in this House thanks to my noble friend Lady Massey of Darwen, who is in her place. The report expressed great concern about the possible effects of Brexit on the northern regions and it called specifically for a north of England Brexit negotiating committee to identify how the north can thrive post Brexit, given that it is more dependent on trading in advanced goods such as pharmaceuticals and automotives than the south of England.

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[Lord Forsyth of Drumlean]

I do not think we are particularly interested in the noble Baroness’s personal conviction when, in the other place, more than 300 elected Members of Parliament put aside their personal conviction and voted for the Bill to come here to enact the will of the people. We had a very revealing glimpse there of how the Liberals are trying to refight the referendum campaign when we should be following the lead of the amendments put down by the noble Baroness, Lady Jones, and others, and thinking about what our policy should be in the future. However, this is a completely inappropriate place to do it. There will be weeks and months ahead when we can debate these matters.

I want to ask the noble Baroness, Lady Quin, a question. Perhaps I am a bit stupid, but I cannot for the life of me imagine how the Government could possibly do an impact assessment without knowing the results of the negotiation and starting that process. Noble Lords on the Liberal Benches say, “Absolutely”. If they think that it is impossible to do an impact assessment, why are they putting down amendments asking for the Government to do impact assessments? The answer is: because this is a wrecking measure—another attempt to delay the Bill and prevent it going forward. For example, Amendment 9 in the name of the noble Lord, Lord Shipley, lists all the regions—

[Baroness Quin]

My Lords, I said at the outset that my amendment was a probing amendment to raise various issues that I thought it was important to bring to the Government’s attention. I cannot see the inappropriateness of doing that in this debate.

[Lord Forsyth of Drumlean]

I am most grateful to the noble Baroness. I suppose then that she will be withdrawing Amendment 6 and I do not need to argue against it any further. As she has always been a doughty champion for the north-east, I completely understand why that should concern her. I simply point out that this is not the Bill in which to make that argument. I have no doubt that there will be an opportunity to discuss these matters when we get the great repeal Bill, as well as in the intervening period. There is nothing to stop people putting down Motions in either of the Houses of Parliament and pressing the Government on any of these matters.

Amendment 9, in the name of the noble Lord, Lord Shipley, lists every region of the United Kingdom and asks what the impact of withdrawing from the European Union will be. Every penny of regional aid for any of these regions is our money. It is money that we have given to the European Union that comes back. That money is not going to disappear. I remember as Secretary of State being forced into supporting projects that were not priorities for us because we had to get agreement that they were additional and that they represented the prevailing policy at the time of the European Union. The difference will be that we are actually able in this Parliament to decide how our money is spent on our priorities in each of the regions. That is a great step forward. I do not, for the life of me, understand how the noble Lord could expect the Government to come up with an impact assessment of that. It will depend on the negotiations, on how much of our money we get back, and on a whole range of issues.

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[Lord Bridges of Headley]

My Lords, I, too, shall try to keep things brief. To pick up on what the noble Lord just said, I share the motive that I believe genuinely and sincerely underpins many of the amendments, which is to ensure that Parliament has the means to scrutinise the negotiations as they proceed. Obviously, that is the subject of the next group of amendments, which we want to get on to, but let me say now that the challenge that we—that is, Government and Parliament—face is to get the balance right between providing enough information to enable scrutiny and ensuring that our negotiating position is not revealed.

I would argue that some of the amendments fail that test, as they would expose the Government’s negotiating position. The noble Lord, Lord Bilimoria, and others spoke about business and business experience, and I have to say that I disagree with the noble Baroness, Lady Hayter, on this point. We have had many amicable discussions but I disagree with her on this. I see it as a cardinal rule of any negotiation not to tell those on the other side of the table how much certain scenarios and outcomes would cost or benefit you—but that is what the publication of an impact assessment would do. I fully accept that Amendment 22, which the noble Lord just mentioned, accepts that an impact assessment could be kept confidential. The whole matter of sharing information is the subject of the next group. All I would say at this stage is that this Bill is not the vehicle to insert conditions on negotiations.

Since the referendum the Government have indeed been undertaking rigorous and extensive analysis work to support our exit negotiations, to define our future partnership with the EU and to inform our understanding of how EU exit will affect the UK’s domestic policies and frameworks. This includes analysis of what it means right across the UK, including regional analysis. I realise that this House and the other place are obviously eager to know more. So let me repeat to your Lordships what I and my fellow Ministers have said before—I am thinking specifically of the noble Lord, Lord Hannay, when I say this. If and when we believe we can share further information, we will—so long as it does not undermine our negotiating position. We will ensure that our Parliament receives at least as much information as the European Parliament.

Let me now address some specific points that were raised. Amendment 27 refers to the Equality Act 2010 and protected characteristics. We are of course aware that exiting the EU will herald change in a whole host of ways. I can assure the House that all the protections covered in the Equality Act 2006 and the Equality Act 2010 will continue to apply once the UK has left the European Union. The UK is already well placed to continue championing equality, thanks in part to the legal protection assured by the Equality Acts.

The public sector equality duty requires public authorities, in the exercise of their functions, to have due regard to the need to eliminate discrimination, harassment and victimisation, to advance equality of opportunity and to foster good relations between people who share protected characteristics and those who do not. We will continue to comply with our legal obligations under that Act.

I agree with the sentiments of Amendments 13, 14 and 15. The UK is fully committed to remaining an international leader on environmental co-operation. As part of the great repeal Bill, we will bring current EU law, including the current framework of environmental regulation, into domestic British law. As my noble friend pointed out, any changes to it would be subject to parliamentary scrutiny and approval. However, this is not the time to set down in statute anything on environmental regulation.

As to the Aarhus convention, this is a United Nations agreement to which the UK is a party in its own right, meaning that the convention will continue to apply to the UK after we leave the EU. Many of those convention obligations are currently implemented through EU law, which, as I say, will be converted into domestic law.

Amendment 28 refers to the impact of withdrawal on the UK’s trade, security and aid policy towards developing and post-conflict countries. As I have said, leaving the EU does not, and cannot, mean the UK turning its back on Europe or the rest of the world. We will continue to face the same global challenges. We want to work with our partners in Europe and elsewhere to alleviate suffering and hardship. Doing so is not just in our national interest, it is the right thing to do. Therefore, we aim to enhance our strong bilateral relationships with our European partners and beyond, projecting a truly global UK across the world. As your Lordships will know, we are one of only a handful of countries in the G20 that has pledged to, and delivered on, spending 0.7% of GNI on overseas aid, and the UK will continue to be one of the most important global actors in international affairs.

As to trade, to which the noble Earl referred, the UK’s exit from the EU creates a major opportunity to send a positive signal that our markets are open and that we wish to forge new trade deals with nations across the world, both developed and developing. I know that this House and the other place will wish to debate this in the months to come. My door remains open to the noble Earl and others to discuss this. However, once again, now is not the time, and this Bill is not the place, to commit to publishing a report on this prior to notifying under Article 50.

Amendments 9 and 6 call for impact assessments on the individual regions of the UK to be published before we trigger Article 50. I assure the noble Lord, Lord Shipley, that I and my fellow Ministers in other departments regularly talk to local government and regional organisations about a whole range of issues as we are completely committed to securing a deal that works for the entire United Kingdom. To illustrate that, my Minister of State met the chairman of the Local Government Association in January and will hold further regular meetings. He has held a joint meeting with the Local Government Associations in England, Scotland, Wales and Northern Ireland. There are monthly meetings hosted by the DCLG, including representation from local government, the local enterprise partnerships, the National Housing Federation and the Society of Local Authority Chief Executives. On top of that, my Secretary of State is already committed to bringing together the northern elected mayors for a summit in York in the summer, to which the mayors of Liverpool, Greater Manchester, Tees Valley and Sheffield will be invited. So we are very engaged. If the noble Lord or the noble Baroness wish to meet me to discuss this, and have further ideas on how we can do more, I am all ears.

As regards funding, all I can say is that where we can we will give as much certainty as possible. My right honourable friend the Chancellor has confirmed that the Government will guarantee EU funding for structural and investment fund projects, including agri-environment schemes, signed before, and which will continue after, we have left the EU. Funding for projects will be honoured by the Government if they meet the two following conditions: they are good value for money and in line with domestic strategic priorities. However, when considering this amendment, I repeat the point I made earlier that such a publication of regional impact assessments would not serve to strengthen our negotiating position, any more than a general impact assessment would.

While I understand the wish and desire for more information, the Government cannot, and will not, do anything to undermine our negotiating position. We will not accept conditions being attached to a Bill that has a very simple purpose—to deliver on the result of the referendum. Therefore, I ask the noble Baroness to withdraw her amendment.

[Baroness Quin]

My Lords, as I made clear from the outset, my amendment and, I believe, others in this group simply sought to raise issues that we feel it is important for the Government to consider, even at this early stage. I am glad that the majority of contributions to this debate show that that purpose was worth while. I thank the Minister for his reply. I am sure that I and others would like to take up his offer of further dialogue on these important issues. I hope, too, that he and his officials will look at some of the points raised in this debate that he has not been able to answer in his wind-up speech and perhaps write to us on those important subjects. Having said that, and repeating that it was a series of probing amendments, I beg leave to withdraw this amendment.

Amendment 6 withdrawn.