Brexit: Transition Period

Lord Callanan Excerpts

Wednesday 31st January 2018 Lords Chamber

[Lord Lennie]

To ask Her Majesty’s Government what are their objectives for the Brexit transition period.

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

My Lords, both the UK and the EU are in agreement that a strictly time-limited period would be mutually beneficial. An implementation period forms a key part of a smooth and orderly exit from the EU. It would provide time for government, people and businesses to adjust to the new arrangements and prevent businesses in both the UK and Europe having to make decisions before they know the shape of our future partnerships.

[Lord Lennie (Lab)]

This not a bridge to a clear destination but a gangplank to thin air—I think that was the quote. Secretary of State David Davis said in evidence to the Lords European Union Committee this week that during transition things would not be exactly the same but very, very similar to what they are now. Will the Minister explain to the House what the very, very similar differences are that we can expect during the transition period?

[Lord Callanan]

The two main differences, and the reason that we need to construct an implementation period are, first, the ability for us to sign and agree trade deals with third countries, and, secondly, to agree and sign a trade deal with the EU, which is legally impossible as long as we are a member.

[Lord Bridges of Headley (Con)]

My Lords, I hate to say it but my noble friend continues to refer to this period as an “implementation period”. For there to be an implementation period there needs to be a treaty to implement. Under my reading of Article 50, it is impossible for us to negotiate a treaty during the process of Article 50. We can conclude that only after March 2019. Does my noble friend agree that that is the case and that we should stop using the phrase “implementation period”? It is a transition during which we will negotiate the final treaty.

[Lord Callanan]

I thank my noble friend for his helpful question. As he well knows, Article 50 makes it clear that the withdrawal agreement needs to take account of the future relationship so that we will know the terms of our new partnership with the EU by the time of our exit. This is the basis on which we have to work.

[Baroness Ludford (LD)]

My Lords, given that the Government do not have a clue where they are going, would it not be a lot less dangerous to seek to extend Article 50 and stay longer in the EU instead of sticking to a dogmatic target exit date? That would allow both Parliament and the people to take control and shape all stages of Brexit negotiations, including withdrawal, transition, implementation and any future relationships—giving them, of course, the choice of remain, which is the best.

[Lord Callanan]

The Liberals have obviously forgotten all about the referendum, but we will put that to one side. As an ex-member of the European Parliament, the noble Baroness will know that it is obviously illegal for the EU to sign trade deals with a country that is still a member. We need to be a third-party country, and we need also during the period to have the ability to agree and sign trade deals with other countries. That is why we need an implementation period. Article 50 says that we will leave the EU on 29 March next year. That is what will happen.

[Lord Hannay of Chiswick (CB)]

My Lords, will the Minister say what will happen if the period chosen by the EU and ourselves for the standstill period turns out to be insufficient for the negotiation of all the details and the implementation of the new partnership? Will that not simply postpone the cliff edge by 19 months or two years, and will it not then subject business to two wrenching changes, where one is the maximum that should be even thought about?

[Lord Callanan]

The reason that we are doing this is to have one set of changes. I totally agree with the noble Lord. It is very important that this period is strictly time limited, and both we and the EU agree that roughly two years is the appropriate period.

[Lord Tomlinson (Lab)]

My Lords, what part of the Question, “What are their objectives?”, does the Minister not understand? He has signally failed to answer the Question about the objectives of the Government. Would he agree with me that deliberately to continue not to give an account to Parliament of the objectives that we are supposed to be supporting the Government in is in fact a breach of the House’s right and amounts to a gross contempt of Parliament?

[Lord Callanan]

The Question was about the objectives of the implementation period, which I think I answered fully. If the noble Lord is referring to the objectives of the renegotiation, the Prime Minister set those out very clearly in her Florence speech and in her Lancaster House speech.

[Baroness Smith of Basildon (Lab)]

My Lords, I do have to press the Minister on this point. He referred again to the implementation period. The Question is more accurately about the transition period. I think that is understood by noble Lords. What are the Government’s objectives? The Prime Minister was quite clear previously when she said that access to one another’s markets will continue on the current terms, maintaining on current terms the customs union and single market, and that we will also continue to take part in existing security measures. Can he confirm that those are still the Government’s intentions and objectives for the transition period?

--- Later in debate ---

[Lord Callanan]

Yes. The Question was, “What are their objectives for the Brexit transition period?”. I answered what our objectives for the Brexit transition period were. The noble Lord then asked me about the wider renegotiation objectives, and I answered that—but of course the policy remains as set out by the Prime Minister.

[Baroness McIntosh of Pickering (Con)]

If we are leaving the single market and the customs union, as we have been consistently told by the Prime Minister that we are, at 11 pm on 29 March, how can we carry on trading on the same conditions as we currently do?

[Lord Callanan]

We are leaving the single market and the customs union on 29 March last year—I mean next year; I will have to do better in my speech later. That remains the position, but we have said that if we can negotiate an implementation period, then in the withdrawal agreement which will be put before your Lordships later this year, we will replicate the provisions of our current membership. So we will be out of it but we will replicate the provisions in an identical way for a strictly time-limited implementation period.