UK Withdrawal from the EU and Potential Withdrawal from the Single Market

Baroness Smith of Newnham Excerpts

Thursday 26th January 2017 Lords Chamber

[Baroness Smith of Newnham (LD)]

My Lords, this has been an excellent debate, which has highlighted many issues that have been discussed over the past seven months since the decision of 23 June, when the United Kingdom, by a majority, voted to leave the European Union. The debate has highlighted some serious differences, even if we have heard some similarities of views on many sides on one particular issue. The one area where I think there is almost universal agreement is the importance of securing the rights of EU nationals already resident in the United Kingdom. That is something I shall come back to repeatedly.

Two different aspects are listed in the Motion in the name of the noble Baroness, Lady Hayter. It refers to the rights of EU citizens already here, but one issue that has been raised throughout the debate has been the rights of EU nationals and UK nationals in terms of free movement of people. That is about the future. In my remarks I will suggest that there are three things we need to think about: the rights of EU citizens who are already here; future free movement issues, which are quite separate; and the future needs of the UK economy. Those issues are all interrelated, yet in this debate we have heard very little about the future needs of the UK economy. Almost all the discussion has been about the rights of EU citizens—perhaps not surprisingly.

Before I get into those questions, the noble Lord, Lord Forsyth, suggested that the Labour Party may be muddled because the Motion refers to the “potential” leaving of the single market. Clearly, the Motion was tabled before the Prime Minister outlined her objectives. She has made it clear that Brexit means Brexit—whatever that means—and, more clearly, as the noble Lord, Lord Forsyth, says, leave means leave. On all sides during the referendum, that is what we had been saying. I certainly did say in referendum debates that leave means leave, but that meant: we will not have the opportunity to rerun the question. It was not something where we could say, “If we get the wrong answer, let’s try again”. It was about saying, “This is not a game”.

Leaving meant leaving the European Union—that decision was clear. Far less clear at any point was what leaving actually meant. The Labour and Liberal Democrat Front Benches and the Cross Benches pressed the Government to outline the alternatives to membership of the European Union. They produced a rather pusillanimous document on the alternatives to membership, which suggested a Canadian-style relationship, the Turkish customs union or the EEA model. If we had decided to go down the EEA route, we would still have been in the single market, so it was not inevitable that by voting to leave the European Union we would leave the single market.

[Lord Forsyth of Drumlean]

Throughout the whole of the referendum campaign, the noble Baroness and her colleagues on the Liberal Democrat Benches, as well as the Opposition Benches, argued that a Norway or EEA model would be the worst of all worlds. They said that we would end up in the single market without any ability to change the rules. They described it as the worst of all worlds but are now presenting it as the best of all worlds.

[Baroness Smith of Newnham]

My Lords, I will not at this stage get into the details of the full Liberal Democrat policy on what we think should happen in the negotiations generally. However, it is important to recognise that there was no clarity from the leave campaign over whether it thought being in the EEA was the best or worst thing. At various times, supporters of the leave campaign suggested that we could remain in the single market. There was no clarity, the Government did not have a plan B, and the leave campaigners kept saying, “It’s not for us to say what leave will look like—it’s up to the Government to decide”. Now is the time for that to be discussed.

The Prime Minister has said that we will leave the single market and has ruled out staying in, precisely because she has now realised what the 27 other member states have been suggesting for quite some time: we cannot be in the single market and not have free movement of people. This is essentially a binary choice. Here I touch on one aspect of Liberal Democrat policy that is essential for this debate. The Prime Minister is talking about wanting “the greatest possible access” to the single market,

“through a new, comprehensive, bold and ambitious Free Trade Agreement”.

However, surely the greatest possible access is via continued membership of the single market. That is how we get the best of the single market, not via access that does not mean membership. That is why the Liberal Democrats have been pressing for ongoing membership of the single market and the benefits that it brings. It might be less good than membership of the European Union, but it would bring considerable benefits to the British economy and give certainty over the rights of EU citizens. However, that means the right of free movement of people, which clearly the Brexiteers do not want. The context of the debate today is clearly in line with the Prime Minister’s stated objective of leaving the single market.

That leaves us with the question of what rights EU citizens will have in the light of leaving the single market. We have been told by many of those on the Government Benches that there is an issue of reciprocity. There is also, however, an issue of what it is right to do. One of the things that Members from all sides of your Lordships’ House have been saying for the last seven months is that the rights of EU nationals already resident in the United Kingdom should be guaranteed. There is no need for reciprocity. That is something on which we can act unilaterally, now. It is not about the future but about citizens who are here, now. It is about EU nationals who have exercised their rights as EU citizens, who are here and who have not taken out British citizenship, because they never thought they would have to. Some of them may do—some may be able to. Others will not be able to afford it and, as we heard from the noble Baroness, Lady Hayter, and many others, the forms are complex and difficult and many people do not have the appropriate paperwork. As EU citizens, they never needed it. We need to guarantee the rights of those people right now, so that we do not tear apart our society and communities, as the right reverend Prelate said. This is something on which the United Kingdom can take the moral high ground, and we can make a decision now. The Liberal Democrats call on the Government to secure the rights of EU nationals resident in the United Kingdom.

The rights of UK nationals resident elsewhere in the European Union are clearly also important. We have all received emails from people who are concerned about their pensions and about whether they will be able to stay in the countries where they are. If we take the lead, however, we can try to negotiate the rights of UK citizens resident abroad. To use EU nationals currently here as pawns is completely wrong.

The future rights of UK and EU nationals and free movement is the subject of the future negotiations. I could ask whether the Government will tell us what will be in the negotiations, but I am sure I will get the answer that we are not going to get a running commentary, as that will damage the negotiations. I therefore would rather suggest a set of things that perhaps the Government can consider in future negotiations, about what sort of United Kingdom we want to be and what sort of relationship we need with the rest of Europe to secure our economic future. The NHS, financial services, the agricultural sector, higher education—people in all those areas have already expressed concerns that if we lose the benefits of EU nationals who are here, we will face problems. It is vital for the British economy that we keep some sort of rights of free movement of labour—free movement of people may not be there if we are outside the European Union—which will be beneficial to the UK economy. Surely the Government can think about that when they lay out their negotiating hand. In addition, please can we not have the imposition of visas on EU nationals? To keep the economy open, it is vital that we do not create barriers that we have not seen in the past and will not benefit us in the future.