EU: Future Relationship

Lord Bilimoria Excerpts

Wednesday 23rd September 2020 Grand Committee

[Lord Bilimoria (CB) [V]]

My Lords, as far back as February 2020, the European Commission laid out its negotiating position, covering general arrangements, values, principles and governance, economic arrangements, trade, level playing field guarantees, fisheries, security arrangements, law enforcement, judicial co-operation in criminal matters, foreign policy, security and defence. Then, in May, the UK published a draft free trade agreement in a series of separate draft agreements covering fisheries, air transport, civil aviation safety, energy, social security co-ordination, civil nuclear, law enforcement and judicial co-operation in criminal matters, the transfer of unaccompanied asylum-seeking children, and readmission of people residing without authorisation.

Between March and September, we have had eight rounds of negotiations. At the end of the eighth round, the EU’s chief negotiator, Michel Barnier, accused the UK of refusing to include indispensable guarantees of fair competition in our future agreement, while requesting access to our market and said that

“the UK has not engaged in a reciprocal way on fundamental EU principles and interests.”

The noble Lord, Lord Frost, the UK’s negotiator, said that the UK had

“consistently made proposals which provide for open and fair competition, on the basis of high standards, in a way which is appropriate to a modern free trade agreement between sovereign and autonomous equals.”

So what if there is no agreement? What if there is a so-called Australia-style agreement whereby we will trade with the EU on WTO terms? The Prime Minister said in early September that a trading agreement like Australia’s

“would be a good outcome for the UK.”

Can the Minister confirm that this is the case? We have of course also had the whole issue of the internal market. In his statement after round eight, Michel Barnier said that:

“The EU remains committed to an ambitious future partnership with the UK. This would clearly be to the benefit of both sides. Nobody should underestimate the practical, economic and social consequences of a ‘no deal’ scenario.”


I speak as president of the CBI, which has been urging both the UK and EU to renew efforts to get a deal. This is essential in order to protect people’s jobs and living standards amid one of the worst recessions in living memory. Time is running out. We have to avoid a cliff edge. This must be the utmost priority for both sides; the UK and the EU cannot afford a no-deal scenario, which would weaken the economies already impaired by the Covid-19 crisis. Business preparations on both sides have not only stalled but have gone backwards. Firms have had to use their stockpiles and reserves—previously built up in the run-up to the threat of no deal last year—to survive the pandemic. There is now next to no capacity to rebuild reserves while directing resources and attention to dealing with the impact of Covid-19 and now a potential second wave of the virus.

Over the last six months we have seen extraordinary levels of ambition, determination and collaboration between businesses and Governments across Europe. These efforts have helped weather the immediate impacts of the Covid-19 pandemic and must be redoubled for the challenges that lie ahead. This same level of determination and creativity is now needed by both the EU and the UK to deliver a Brexit deal for growth.

A deal will have tangible, positive benefits for firms employing thousands of people across Europe in industries such as advanced engineering, manufacturing, green technology and digital and cyber technologies—I could go on. It will also underpin economic recovery on both sides, protecting our younger generation and the future of our public services. Does the Minister agree?

A deal will form a foundation for a strong, growing relationship between the UK and the EU in the future. It will create space for both sides to focus on shared challenges, such as creating jobs, rather than needlessly adding red tape, extra costs and paperwork.

A deal will also be a catalyst to address the global challenges of our time, from tackling climate change at next year’s COP26, which we are going to be privileged to host, to strengthening international institutions, including the WTO, and global co-operation during the UK’s presidency of the G7. It will be crucial for the UK and the EU to work hand in hand to be at the forefront of these issues.

The CBI is committed to working closely with BusinessEurope—which we will continue to be a member of although we have left the European Union—and its sister federations to champion a strong and open Europe on the global stage. In short, the size of the prize is real. Ending years of division and delay by securing an agreement between the EU and the UK will help our economies during the biggest challenge of our generation.

This has been such a turbulent period, not least because of Brexit, but talks are on and the efforts to get a good deal must continue. Business cannot afford anything else. Amid all the noise of the negotiation, businesses in the UK and the EU remain clear that a good deal is essential. Let us not forget that a negotiated outcome is the official position of the UK Government. Can the Minister reassure us about this once again?

An agreement will be the foundation for post-Covid recovery across the continent. It will protect jobs under pressure from the pandemic by duty and quota-free trade, closer customs co-operation and easing the implementation of the Northern Ireland protocol. We must remember that the protocol was the compromise needed to avoid a hard border in Ireland. For Northern Ireland’s businesses and communities it must be implemented in an effective and sustainable way. For that, we need a deal.

A deal will provide a platform on which the UK’s world-beating services industry can continue to trade with its biggest market and stay competitive. It will also be a great fillip for UK exporters, allowing them to focus on R&D, not red tape. Getting a deal requires political leadership and compromise from both sides and is needed urgently in the coming weeks.

As I have said, the reality is that many businesses are still struggling to deal with the fallout from Covid. That is why getting the deal over the line is so important. It means a greater choice for consumers. It means prices of groceries do not rise during a recession. This is vital to help people who are struggling. It will allow businesses to concentrate on helping the Government’s levelling-up agenda. It means building more schools and hospitals, better-quality housing, and growing our economy through the creation of green jobs, and it will be a catalyst for the global challenges of our time. Ultimately, a deal with our biggest trading partner provides a platform on which future trade agreements can be built.

Businesses have shown extraordinary resilience over the previous four years—and over the past six months. We need this deal urgently in the interests of everyone, both in the UK and Europe.

[The Deputy Chairman of Committees (Baroness Barker) (LD)]

The noble Baroness, Lady Meyer, is not contributing, so I call the noble Lord, Lord Berkeley.