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

Lord Bridges of Headley Excerpts

Thursday 26th January 2017 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Exiting the European Union (Lord Bridges of Headley) (Con)]

My Lords, I thank all noble Lords who have contributed to this excellent debate. I start by heeding the remarks of my noble friend Lord Forsyth and the noble Lord, Lord Davies, about the length of speaking time. I note that, and I will have conversations. It is important that we give everyone the opportunity to scrutinise these important matters as we proceed in the weeks ahead.

I will put today’s debate in a little more context. Leaving the European Union will, obviously, touch on every aspect of our nation. As the great, late Lord Denning put it, European law has been like “an incoming tide”. It has flowed into the estuaries and up the rivers of our communities, our businesses and our lives. Today, with Brexit, we are seeking to do what no nation has done before: to create a new relationship with an economic and political entity whose regulations and laws we currently observe and with whom we co-operate and collaborate on a range of issues, from justice and home affairs through to education, science and space.

As I have said and will continue to say, we are leaving the European Union but we are not leaving Europe. It has always been and will always be in our interests for Europe to be stable and prosperous—a continent with which we can trade freely and with whose nations we can collaborate and co-operate where it is in our national interest. Given this, it is entirely correct that we should look to forge a unique relationship with the European Union: one that befits a nation that is one of the largest economies in the world, which has been an EU member for over 40 years, and which has deep links, not just across Europe but around the world.

This is why, as the Prime Minister set out last week, our approach is to forge a new partnership with our European neighbours, in which, as a sovereign, independent nation, we have a new, comprehensive, bold and ambitious free trade agreement with the European Union. This agreement should allow for the freest possible trade in goods and services between Britain and the EU’s member states. It should give British companies the maximum freedom to trade with and operate within European markets—and let European businesses do the same in the UK.

On the noble Baroness’s Motion, I will say a little about the word “impact”, which lies at its heart and which brings me to what the noble Baroness, Lady Smith, said passionately. In the referendum campaign, the debate was, obviously, about the economy—about matters of pounds and pence. However, it was also about something more profound, which my noble friend Lord Forsyth mentioned. It was about parliamentary sovereignty and national self-determination. In a word, as my noble friend Lord Cormack said, it was about control.

After that debate and the referendum, the majority of people voted to leave the EU, which is what we are now going to do. That is why the Prime Minister has been clear that the UK will no longer be a member of the single market nor abide by the common external tariff or the common commercial policy. As my noble friend Lord Forsyth mentioned, we need to consider the impact of our not following the course of action the Prime Minister set out. Remaining a member of the single market would mean accepting that the European Court of Justice still has direct legal authority in our country, so the impact of not leaving the single market would be, to all intents and purposes, to keep the UK under the aegis of the EU. We would not control our laws, nor our borders. We would not be leaving the EU.

As to the point from the noble Lord, Lord Livermore, his remarks were very well judged in many respects, but I disagree with him. We are not putting immigration control above free trade. That is not the case. As I have been arguing, we want a new partnership in which we enjoy free trade, and we wish to control immigration. That is our ambition, and it will be spelled out in the White Paper, which we are now committed to publishing. I turn to what my noble friend Lord Hamilton said: the White Paper will build on the 12 negotiating objectives laid out in the Prime Minister’s speech to build a global Britain with this strong new partnership with the EU after our exit.

I am not going to go into further great detail now, but I will say a couple of words about the White Paper’s components to pick on what a number of your Lordships said on specific issues. First, I know that the noble Baroness, Lady Warwick, speaks with a lot of authority about higher education. I can confirm that we will continue to look at how we can continue to co-operate and collaborate with European partners so we can build on our world-class universities and our record in research and development. I have been fortunate to meet a number of the representatives of universities—I hope to continue to do so—to hear about their needs. The noble Baroness might have mentioned that there was some connection between Horizon 2020 and freedom of movement. That is not my understanding. I do not think it is correct to say that all models of co-operation require the acceptance of freedom of movement.

We would also be willing to take the same approach on co-operation for Erasmus and other schemes. Erasmus was referred to by the noble Baroness, Lady Coussins, who has great expertise on the teaching of foreign languages. On that point, I entirely heed the points she made about the need to continue to ensure that we are training our young people to have the right skills in modern languages. That is why we are increasing the amount we are spending on training and the help we provide teachers in that area.

To briefly touch on financial services, which the noble Lord, Lord Davies, touched on, the Government are obviously incredibly conscious of the challenges faced by financial services right across the sector. I am certainly not complacent about the future, but I was heartened to read that the chief executive of Barclays said within the last few days that he thinks the UK,

“will continue to be the financial lungs for Europe”.

Likewise, the chief executive of HSBC said he thinks that,

“actually, London will remain a global financial centre”.

Finally, the German Finance Minister said:

“London as a financial centre will play an important role for Europe even after Brexit”.


The Prime Minister was quite clear in her speech how we will negotiate. The noble Lord, Lord Owen, made some very interesting remarks about Article 50 and the process around it, which I have noted. I will not add to what the Prime Minister has said, other than to repeat that we expect to get an agreement in two years. We look to negotiate our exit agreement and the new relationship at the same time, as set out in Article 50.

I will now focus on the position of EU nationals now and after Brexit, which has been raised by a large number of your Lordships. I start by thanking the right reverend Prelate the Bishop of Durham for the contribution that the Church of England has made and continues to make in hosting events with church groups across the country. I am extremely grateful for that. It has provided a welcome forum in which to have a very wide-ranging discussion. I also thank the noble Baroness, Lady Kennedy, for the contribution that her committee makes and made in its report.

On this point, of course I recognise the important role that EU nationals make in a vast number of areas in our society and to our economy. Obviously it has been the Government’s approach and wish throughout to provide as much certainty for them in the days and months following Brexit as possible. That is why the Prime Minister in her speech last week made protecting the status of this group of EU citizens a top priority. It is also why we must move to trigger Article 50 as soon as possible. I will spell out why that is the case. The Prime Minister has made it clear that she stands ready to reach an agreement right now. Indeed, she has already told EU leaders that we could give people the certainty they want straightaway—a point the noble Lord, Lord Bilimoria, might like to bear in mind. However, we know that they are not open to any negotiations before Article 50 is triggered. To provide that certainty, I argue that we need to proceed, as the Government intend, to trigger Article 50 by the end of March. Then, we can proceed to seek an early agreement when we have begun formal negotiations, while being very mindful, as the noble Lord, Lord Owen, so rightly mentioned, of Article 8.

Despite this strong signal from the Prime Minister, I understand and have heard today that a number of your Lordships and others wish us to make a unilateral move to grant assurances now, ahead of the negotiations. The noble Lords, Lord Teverson, Lord Greaves and Lord Oates, the noble Baroness, Lady Kennedy, my noble friend Lord Cormack and a number of other people have made these points. I sense the strong feeling there is on this issue.

I am sorry to disappoint your Lordships, but I am not here to move the Government’s position. The Government disagree with this point. We need to ensure that the rights of EU nationals in this country are seen concurrently and negotiated alongside protecting the rights of UK nationals in the EU. I argue as some have done—the noble Lord, Lord Oates, mentioned this—that there are currently living in other EU member states more than 1 million UK nationals. I argue, as my noble friend Lady McIntosh of Pickering picked up on, that we as a Government have an obligation to them. They are UK citizens after all.

I add that there have been no changes to the rights and status of EU nationals currently in the UK as a result of the referendum. Until exit negotiations are concluded we remain a full member of the European Union, and all the rights and obligations of EU membership remain in force. This includes the right, as transposed from the free movement directive under EU law, for any EU national who has been lawfully residing in the UK for more than five years to automatically acquire permanent residence.

The noble Baroness, Lady Hayter, and the noble Lord, Lord Greaves, mentioned the delays that EU citizens face. I am sorry to say I am not going to comment on individual cases—I am sure your Lordships would not expect me to—but the terms under which an EU national can be considered as lawfully living in the UK are set by EU law. Guidance is available for EU nationals wishing to obtain a document to provide permanent residence. To simplify and ease the process that the noble Baroness, Lady Prosser, mentioned, the Home Office has introduced a European passport checking service to avoid the need for EU nationals to send in their passports.

The noble Lord, Lord Teverson, asked about the rights of individuals, in particular spouses. I cannot go into detail on this point right now, but I will say that there has been no change to the right of EU nationals to reside in the UK, as I said, and therefore no change to the circumstances in which someone could be removed from the UK. EU nationals can be removed only if they are considered to pose a genuine threat to the public or if they are not lawfully resident, and, as he referred to, the Government are obviously aware of Article 8, on the right to a private and family life, and Article 1, on the right to property, of the ECHR. I repeat that the Government have no plans to withdraw from the ECHR.

I will now say a word about UK nationals in EU institutions. I thank from the start my noble friends Lord Balfe and Lady McIntosh of Pickering for their contributions on this issue and for the time they have spent talking to me about it. The Government are very seized of this issue: I have had conversations with both officials here in London and those based in UKRep about it. I will return to the fray in the light of what my noble friend Lord Balfe said about wishing to signal this more strongly. If he feels that his message has not got across to those UK nationals in EU institutions, I will redouble my efforts.

UKRep is currently undertaking engagement—which I have asked to be stepped up—with our British nationals out in EU institutions, to ensure that their concerns are heard. On top of that, we are recruiting the necessary expertise from within the UK Civil Service as well as opening some positions up to external recruitment.

As regards pensions, the rights and entitlements that will apply following the UK’s exit are subject to the wider negotiation on our future relationship with the EU. I can assure your Lordships that at every step of these negotiations we will ensure the best possible outcome.

Let me now turn to the future immigration system. I entirely concur with the comments of the noble Lord, Lord Bilimoria, who made a very powerful speech, and of the right reverend Prelate. We need to be extremely sensitive with regard to both the language that we use and the approach that we take. We are looking to take control of immigration. That is sometimes misunderstood or misread as meaning “ending immigration”. This is absolutely not the case. As my ministerial colleagues and I have said on many occasions, we still want to attract to this country and retain the brightest and the best of European talent and talent from right across the world. I agree with what my noble friend Lord Patten said about the need to make sure that we attract them to work not just in financial services, but in creative industries—in which the noble Lord, Lord Puttnam, is interested—biotech and academe, upon which the right reverend Prelate remarked. Meanwhile, as we look to create a new system, we also should not do anything that would cause labour shortages in other sectors such as construction, agriculture and finance.

We are extremely conscious of these points and we are also looking at means by which to improve the opportunities for British people, which my noble friend Lord Hodgson mentioned. The Government have set out how they intend to do so in their industrial strategy earlier this week, which furthers existing proposals, and therefore we are looking at the vast panoply of measures and implications that taking control of immigration involves.

As the Prime Minister set out in her speech last week, we want to ensure that this country emerges from Brexit stronger, fairer, more united and more outward-looking than ever before. We will have further debates of this kind, and it is absolutely right that we do so as the Government’s thinking is set out before your Lordships and before the country. I welcome the chance for your Lordships to scrutinise that policy and I thank noble Lords for the contributions that have been made today.