European Union (Notification of Withdrawal) Bill

Lord Davies of Stamford Excerpts

2nd reading (Hansard - continued): House of Lords
Tuesday 21st February 2017 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, this Bill has come to us, as it should, with a White Paper. The White Paper has been dealt with quite frequently this evening and yesterday in the debate, and a number of things have been said about it. It has been described as “hubristic”. The noble Lord, Lord Warner, described it as Panglossian, I think, and I accept both of those epithets. But what struck me most about it was how very uninformative—almost insultingly uninformative—it was. Nothing precise was said at all about the benefits of Brexit and nothing whatever was said about the costs.

I looked in vain for even the words “cost” or “risk” in the whole document. If you put out something like that in the private sector as a circular to shareholders or a prospectus for a public offering, you would be faced with a criminal prosecution. Is it because the Government do not think that there are any costs to Brexit, or do they think that public attention should not be drawn to the costs and, if possible, people should be kept ignorant of them? Either of those explanations—and there are no logical third or fourth possible explanations—is deeply disquieting.

The fact is that the Government know perfectly well about some of the major costs of Brexit. Only a few days ago a Minister, Greg Clark, went over to Paris to offer Peugeot SA a large financial package wrapped up as grants for training or innovation or something of that kind—rather along the lines of the similar offer made to Nissan—to bribe PSA into agreeing to keep open their Vauxhall plants in Ellesmere Port and Luton if they go ahead with the takeover of Vauxhall in this country. There is no doubt at all that every other multinational automotive manufacturer in this country will want the same kind of treatment and will have to get it. So the British taxpayer is faced with having to pay out a lot of money for this purpose to reward the shareholders of these international companies, and have no idea what the cost is; the Government refuse to answer questions on that subject, on the spurious ground that it is commercially confidential. Of course, it is not: those payments will appear in the accounts of the UK subsidiaries in due time but, if the payments are not made until after Brexit, and the accounts concerned are not produced for a year or so afterwards, it will happen safely after the next election. That is just an example not merely of the costs but of how the Government are trying to conceal them from the British public, which is deeply disturbing.

The British public are at the very beginning of learning about some of the costs, particularly those of the Brexit devaluation and the inflation that we have had since. Real wages will fall this year, which will put most people in a very uncomfortable position—but it will be particularly bad for the poor and for those who are just getting by, the group that Mrs May says that she is so concerned to help.

A lot has been said this evening about many areas where there will be some real costs, and I will pass over important ones—such as universities, for example, which have been dealt with, and Euratom, which has been dealt with. I will just say in passing that it is an extraordinary idea, when there is such a shortage of nuclear scientists, to decide to duplicate a regulator of that kind. In January, there was an article in Nature, a very well-respected scientific journal, stating that this would almost certainly lead to increased costs and delays in the delivery of our own nuclear programme.

No one has said very much about the European Medicines Agency. What happens if we withdraw from that and set up our own regulatory registration of new pharmaceutical products agency? The answer, of course, is that you will duplicate the costs of registration to pharmaceutical companies. We have heard for years from those in the pharmaceutical industry that a major cost for them, and a major disincentive to put new products into the registration pipeline, is the cost of registration. Fewer drugs will be registered, unless the costs can be successfully passed on to the customer, in which case the NHS budget will be under further strain, as if it were not under enough strain already. Why is that? Why would any sane person do such a thing? I think it has something to do with trying to avoid any contact with the ECJ.

We had a series of very good debates on these subjects here in the House, the most recent one being about the justice and home affairs aspects of the whole question—the membership of Europol, the common arrest warrant, the Prüm exchange and information system, and so forth. It was an extraordinary debate because, very unusually in parliamentary circumstances, there was complete unanimity. Everybody who spoke on both sides of the House, and indeed the members of the sub-committee and its report, were absolutely agreed. They agreed on three things. The first was that these measures are vital for the protection of the British public against terrorism and other forms of serious international organised crime. Secondly, any other arrangement than the one we currently have with full membership of these institutions would be very problematic, difficult and time consuming to negotiate. Thirdly, no alternative arrangement would be anything like as good as the status quo. Everybody said that. So why are the Government doing such a thing? I realised during the course of the debate why it was, although the Government never admitted it. It is because they do not want any contact with the ECJ. This extraordinary decision against the national interest is driven entirely by ideology.

We have heard even worse problems in the last few days. We have heard that the Government propose to malversate money in the international aid budget to give it to east Europeans as a bribe to vote in favour of good terms for Brexit. We have had the most extraordinary suggestion by the Chancellor and the Prime Minister directly that if we do not get what we want in these negotiations we will start a kind of corporation tax war with the rest of the EU, cutting corporation tax and trying to undercut them. As I said in a letter some colleagues may have seen in the Times, we are actually the least well-placed Government in any EU country to undertake a war of that kind as we have the highest fiscal deficit already. So what is going to happen? Will we have a higher fiscal deficit? Will we take the money out of public services when public services are already underfunded—the National Health Service, social services and defence are dramatically underfunded—or will we increase other areas of taxation, put the burden on income tax or on consumption taxes? We have not, of course, been told.

The Government have gone far away—right over the hills and out of sight and beyond—from the referendum in coming up with these policies. They are taking the referendum as a mandate to undertake a series of steps that would have absolutely horrified the British electorate if there had been any mention of them last summer during the referendum campaign. Nobody dared to speak of such things at the time. We should not be in any way inhibited by the referendum in opposing them and we need to have the robust kinds of amendments that have been tabled in this House on this Bill to make sure that the Government do their job and to keep them under some kind of control, answerability and responsibility to the public and to Parliament.

European Union (Notification of Withdrawal) Bill

Lord Davies of Stamford Excerpts

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

[Lord Davies of Stamford (Lab)]

My Lords, I agree very much with my two noble friends, who have set out very well the purpose of the amendment. I, like them, feel that it is a disaster for our country to leave the European Union in any circumstances, and that the economic costs have not begun to be properly assessed in this country, although as every week goes by we become more aware of some of them. However, I think it is common ground, even with those who think that we should leave the European Union and who voted and campaigned for that, that there are economic costs and even they would accept that those economic costs are very serious.

The economic costs essentially affect manufacturing, particularly areas such as automotive and aerospace where there are a large number of supply chains in the European Union going across countries, with parts and components and so forth going back and forth more or less the whole time. That business will be very severely affected by our leaving the customs union and the single market, particularly where we would have to pay tariffs, as we would do in the case of motor cars, for example. The other area is financial services, which accounts for 10% of the gross national product of this country, as we all know. The City at the moment is the financial capital of the European Union but that is likely to cease if we left the European Union. It is very difficult to imagine how it could continue to be that unless we had some way of remaining in the internal financial market.

The great thing about the EEA is that it is a way of avoiding some, if not all, of the economic costs—there would be a loss of investment in many areas and as time went by there might be threats to our competitiveness as a country, both in services and in some of the manufacturing areas I mentioned. Nevertheless, it would mitigate and very much reduce the economic costs, which everybody is agreed are considerable and serious. Therefore, it seems extraordinary that the Government have not even bothered to consider or negotiate the possibility of our remaining in the single market by virtue of becoming again a member of EFTA or otherwise.

The Government have very reluctantly conceded that there should be some parliamentary process in this procedure of leaving the European Union. They have very reluctantly conceded that they should report to us at least as much as the European Commission does to the European Parliament on the progress of negotiations. They have very reluctantly exposed to us some of their thinking on some of these points, which have been dragged out of them in different ways—and we have to go on doing that.

However, as we begin to get clearer sight of what the Government are doing, it becomes more and more curious because we observe that they are actually breaching some of what one had always thought were the golden rules of negotiation. They are behaving in a way that is clearly irrational. No normal person gives up an option unless he or she gets to the point when they have to. There is no point in giving up an option in advance so why did the Government state in advance they were not interested in becoming a part of EFTA and remaining in the single market on that basis?

Secondly, the Government have said that their priority is to prevent freedom of movement or stop freedom of movement in future so far as this country is concerned. We now hear from Mr Davis that he does not expect any significant reduction in immigration from the rest of the EU or anywhere else for the next few years. In other words, the benefit for which the Government are apparently prepared to pay this enormous economic cost is much less than it was always made out to be. That is very clear.

[Lord Forsyth of Drumlean (Con)]

On the subject of giving away an option in advance, is my memory playing a trick on me in recalling that the noble Lord and others on the remain side during the referendum campaign argued that membership of the EEA would be the worst possible option because we would be bound by all the rules but have no say?

[Lord Davies of Stamford]

The noble Lord is uncharacteristically inaccurate; he normally does his homework before intervening in this way. He is quite right that I and many on the remain side argued against the EEA being the right solution but he is quite wrong to suggest that any of us argued that it was the worst solution. On the contrary, throughout the campaign I always said while it was a very bad solution, it was the least bad solution of all those on offer. I am on record as saying that and probably said it in debates in which the noble Lord took part. Indeed, that is my strong view today and is the case I now argue.

I wish we could stay in the EU—period, as the Americans say, or full stop—but if we cannot we must try to mitigate the enormous damage. That is the argument I have been making. The way to do that is to try to find a way to stay in the single market, and one way we could certainly do that is to rejoin EFTA, as my noble friend Lord Lea set out. It is extraordinary that the Government have excluded that possibility and I now come to their extraordinary behaviour.

The Government have not only revealed that the benefit for which they are prepared to pay this high cost is nothing like as great as it was always made out to be, but not even considered negotiating on the single market regime provided by the EEA and using that as a basis for trying to get some concessions on freedom of movement. My two noble friends suggested a way forward that might be possible. I do not think that we on this side of the House will be able to take over these negotiations but we want to know—it is important that everybody in the country knows—why the Government did not even think it worthwhile to sit down with our European Union partners and say we would like to stay in the single market but we would also like to curb freedom of movement at least to some extent. We could have a negotiation on that basis.

[Lord Grocott (Lab)]

Could my noble friend refresh the House’s memory on what success the previous Prime Minister had in having this as an objective in his renegotiation of our terms of membership of the European Union?

[Lord Davies of Stamford]

I think the previous Prime Minister was a completely incompetent negotiator. The way to make progress in European affairs—it is extraordinary that after all these decades the Tory party has not learned this—is to adopt a communautaire approach and the language of one’s partners, to say that what one is seeking to do is in the interests of everybody and not purely in the selfish interests of this country, and certainly not just to get a good headline in the Daily Express or Daily Mail. We make it clear that we share the long-term objectives of our neighbours and partners for the future of western civilisation, as well as for prosperity, competitiveness and employment and these important economic but ultimately subsidiary objectives. Then we say pragmatically, as we have a reputation for being pragmatic, “Would it not be a good idea to do X, Y and Z which would strengthen our common purposes and take further forward our common ambitions?”. That is the way to make progress but it is the opposite of the confrontational approach the last Prime Minister adopted. It is not surprising that he did not get very far.

I am glad that my noble friend made this brief intervention because it enables me to say that I am extremely worried—I am not alone in this—that the Tory party has learned nothing at all from this experience or from any other experience over the last 40 years of the European Union and so will make the same mistake again. It will find itself not achieving what it ought to in the national interest in these negotiations. They will be a disaster, and a largely avoidable disaster, precisely because the Tory Government have not learned the obvious lessons of the past which my noble friend was kind enough to give me the opportunity to remind them of this afternoon.

If you have somebody negotiating on your behalf—a solicitor, an accountant or some representative, agent, trustee or whoever—and you watch carefully what they are doing, you are entitled to get worried should they do something that goes quite counter to normal human common sense. I pointed out three ways in which the Government are behaving in an extremely irrational fashion. I will repeat them so that the Minister can address them when he sums up. First, why are we pursuing this particular objective with the same kind of intensity and passion when we have acknowledged that the objective that we are trying to achieve—what we are trying to obtain in exchange for the high price of giving up our membership of the single market—is not anything like as great it was previously made out to be?

Secondly, why have we not decided to negotiate on the basis of the available option, which we know exists, of our potential membership of the EEA and see if we can perhaps do a little better and achieve some additional concessions? We have not even tried to do this—why not? Thirdly, why are we proceeding in this negotiation by giving up options in advance, before we have even explored them and before we have even started the negotiations? It is a very extraordinary thing to do.

[Lord De Mauley (Con)]

My Lords, I wonder whether the Labour Party could find room for others in this debate. Even if the noble Lord, Lord Lea, were right that we did not have to go through a process of joining EFTA and the EEA—I do not think that he was, actually—being a member of the EEA means accepting EU laws, as my noble friend Lord Forsyth has said, without any political representation or influence over them. This would, of course, result in less control for the UK over its destiny, rather than more. That is not what people voted for in the referendum. I oppose this amendment for those reasons and because it is directly inconsistent with the White Paper.

--- Later in debate ---

[Lord Davies of Stamford]

Perhaps I may be permitted to correct the noble Lord, who I know is an expert on these matters and normally gets his facts absolutely right. We have sat on European Union committees together for quite a long time. But he is wrong about the EEA being a waiting room for applicants to the EU. Norway had a referendum which decided against joining the EU. It decided not to be a member of the EU but it decided to be a member of the single market and to join EFTA on that basis. For Norway, it is not an anteroom, it is an alternative, as it could be for us if we so wished.

[Lord Hamilton of Epsom]

I accept that but it was designed originally to be a waiting room for those who wanted to join and that is why it has been put in place and you have to comply with all the regulations of the EU. But I come back to my point that if we join the EEA, we do not join the customs union so we have all the problems of the customs regulations. It enables us to do free trade deals with others but it has many disadvantages and I still do not really understand why we have cannot have our own unique arrangement with the EU. I am sure that is the ambition of the Government and that is why the amendment should be opposed.

--- Later in debate ---

I understand the real political issues behind this amendment. The concern with regard to nationalism is real. I spent many years involved in various types of negotiations—years and years and more years. We are still negotiating. You cannot be ambiguous on these issues, either there is a United Kingdom of Great Britain and Northern Ireland or there is not. I believe that our colleagues in the European Union get this. I have absolutely no doubt that they will be helpful because they have invested a lot in this. In the time of Jacques Delors a unique funding system was brought in—the Northern Ireland peace funds. Nobody else ever got that. It is still going in its fourth iteration. We are all most grateful for the help we have received. Brussels has invested a lot in this process as it set an example of an attempt to solve an internal problem within the European Union. Unfortunately, some people have been invited into the European Union before some of their constitutional issues have been sorted out. That was done in breach of regulations, but when the euro came along the regulations were also breached. All I ask of Ministers is to give us an assurance and to be clear. The Bill is not the right place for the Belfast agreement. To contaminate that agreement by linking it exclusively to leaving the European Union does it a disservice. We have a unanimous view that we want to resolve our differences without having any borders. We should allow Ministers the opportunity to get on with this process. At the end of the day, we will have an opportunity to pass judgment on what they do. That is the correct role for this Parliament. However, I ask noble Lords to please bear in mind what the High Court in Belfast and the Supreme Court said. Given those two clear and unambiguous decisions, I believe that the amendment would be misplaced in the Bill.

[Lord Davies of Stamford]

What a depressing afternoon this is. If we in this legislature were trying to get rid of barriers, borders and frontiers between people, what a good day’s work we would be doing, instead of which we are talking about creating new barriers and frontiers between us and the continent, between Northern Ireland and the Republic, and possibly potentially between England and Scotland. Those are all very depressing thoughts.

One of the advantages of Committee is that we can have a debate. It is possible to respond to what other people have said and, if what they suggest is plainly possible, it is obviously very desirable to take it on board. I thought that my noble friend introduced his Amendment 2, which I strongly support, with a brilliant speech. I agree with every word of it except one very important sentence, to which the noble Lord, Lord Empey, referred in a very powerful speech—namely, it is utterly intolerable and inconceivable that we should have an internal border within the United Kingdom. I regard that as an utterly unacceptable solution. We need two sets of red lines in these negotiations. We must have no borders within the United Kingdom and no border between the Republic of Ireland and the Province of Northern Ireland—between the 26 and the six counties. Those two things should be absolutely immovable desiderata and requirements of the British Government in conducting these negotiations. I hope, and believe, that we would have the understanding of Brussels and the rest of the European Union in insisting on those two points.

I was mystified by one of the things that the noble Lord, Lord Trimble, said and quite shocked by another. I was mystified when he said that freedom of movement in Ireland, called the common travel area—it is exactly the same thing—has been in place since 1923, so it would be nothing new if it was somehow modified or constrained. The Irish Free State came into being only in January 1922 when the treaty was ratified, so there was never a border before then. Clearly we were then part of the same country. If there has never been a border since 1923, on that calculation there has been only one year in the course of the last 800 years of Anglo-Irish history in which there has been any restriction on freedom of movement within Ireland. That being the case—I believe it to be the case—it would be profoundly shocking and would have a traumatic effect if we suddenly started to introduce one now. What a very sad thing to do after the last 20 years. The thing that shocked me, though, was when the noble Lord appeared to say that if the Irish Republic was observing its own interests, it should leave the European Union. I remind him that the people of the six counties voted very substantially to remain in the European Union only a few months ago. Surely, in all courtesy, we should leave it to the people of the 26 counties to make their own decision on that matter and not lecture them from the British Parliament—a habit which I am afraid has become too bad a habit over too many centuries.

The matter we are discussing is particularly important because during the Bill’s passage we will debate other matters such as the single market. We have already had a go at that and will come back to it. If we make a big mistake in that regard—we know that we may well make some very big mistakes—we shall be the major sufferers. But in this matter we shall not be the major or the only sufferers; the equal or the substantial sufferers—certainly the equal, perhaps the greater sufferers—will be the people of the island of Ireland. Therefore, we should be particularly concerned to get matters right.

Some people, including probably the noble Lord, Lord Trimble, will not like what I am about to say. However, I remind the House that this country’s and Great Britain’s relations with Ireland over the last 800 years have been just about as hideous as relations between neighbours could ever get. Right from the 12th century, the Anglo-Norman invaders imposed on the Irish exploitation and a form of apartheid-type discrimination. In the Reformation that was followed by persecutions of a different kind. We had the massacres under Queen Elizabeth. We had the massacres under Oliver Cromwell of every man, woman and child in the cities of Drogheda and Wexford.

[Noble Lords]

Oh!

[Lord Davies of Stamford]

I knew that some noble Lords on the other side would not like this but they are going to hear it. We had the heartless expropriations of Catholic property by Oliver Cromwell, and again in the 18th century, contrary to the Treaty of Limerick. We had a series of broken promises—four major historic broken promises—the Treaty of Limerick itself, the promise made to Grattan’s Parliament in 1782, the promise made by Pitt in 1800 to introduce Catholic emancipation and the promise made by Asquith to bring in, live up to and carry out the third home rule Bill. All those promises were broken.

Even at that point the British Government did not get it. We did not get the Easter rebellion. We tried to impose conscription on Ireland. Even when Sinn Fein won every seat in the November 1918 elections except, I think, for two in the 26 counties, we still did not get it and, within two months, we had the Anglo-Irish war. We know what happened to that. After the treaty, we neglected Irish matters in this House. We allowed Stormont to get away with an absolutely scandalous programme of deliberate job and housing discrimination—job discrimination even explicitly encouraged by a unionist Prime Minister by the way—and other breaches of civil rights, and, of course we did not get it. We did not intervene after the attack on the civil rights march by Paisley’s thugs at Burntollet bridge. We then had the appalling violence and terrorism by the IRA.

In the last 20 years we have had the brightest moment in Anglo-Irish history that we have had in 800 years, starting with the Belfast agreement. It may have been prepared before the Belfast agreement in the great co-operation that took place between our two countries after we both joined the European Union. I remember Garret FitzGerald, a very great Taoiseach, saying to me once over lunch that that had transformed the position of the Irish and the British. After 800 years in which we had been the patronising imperialists and the Irish had been the petitioners, we were equals, involved in the same programme and the same agenda in the European Union, or the European Community, as it was originally, and we needed each other’s support and votes to get our business done. That was the basis on which a new relationship was created. That has been a great asset and great achievement of the last generation. It is now at risk if we gratuitously decide to impose a border upon the beautiful country and proud people of Ireland. It does not matter whether the border is a mechanical border, a human border, an electronic border, an analogue border or a digital border, it is a border, a frontier. That is the important psychological fact and we cannot get away from it. There is no way you can get away from it. It is completely and utterly out of the question. The Government are quite good at saying that we had the discussion on the previous set of amendments about them dismissing the idea of our remaining in the single market through being a member of the EEA. Why do the Government not—as they should—dismiss the idea altogether of being a party to the end of freedom of movement in the island of Ireland, let alone, of course, within the United Kingdom itself?

[Lord Cormack (Con)]

My Lords, we should remember Sir John Major and Albert Reynolds and the fact that my noble friend Lord Trimble shared the Nobel prize with John Hume for what they did to create the foundation for a peaceful settlement. No one in this Chamber needs a lecture from my friend the noble Lord, Lord Davies of Stamford, and a rehearsal of Irish history—a very poor rehearsal as my noble friend Lord Trimble interjects.

We have had some very notable speeches in this debate. I pay particular tribute to my noble friend Lord Empey and the noble Lord, Lord Alderdice—

[Lord Davies of Stamford]

The noble Lord is very welcome to correct me and if I have made a historical error I apologise, but will he tell the House what the historical error was?

[Lord Cormack]

The noble Lord certainly left out Henry VIII and many other things. The noble Lord, Lord Alderdice, put the thing beautifully in context and gave a very remarkable speech. We should all be grateful to my friend the noble Lord, Lord Hain, for introducing the amendment in the way that he did but I hope he will not push it to a vote. I say that with great respect. He knows I mean that because I had many dealings with him when he was Secretary of State and I had the honour to be the chairman of the Northern Ireland Affairs Committee in another place. I had members of seven parties on my committee and we remained unanimous throughout, even though we looked at issues such as organised crime, prisons and many others. He knows how closely we worked together as a committee.

What we need today—and I hope we will get it—is an assurance from my noble friend the Minister that the Government truly recognise the importance of the points that have been raised. They recognise that Northern Ireland is not only in many ways the most beautiful part of the United Kingdom but also the most vulnerable. We are not going to strengthen this procedural Bill by hanging this amendment on it. There may well be a time when we return in the context of the negotiations that will follow. There may well be amendments later in this Bill that I will feel I need to support to ask colleagues in the other place to think again, but this is not one of them and I very much hope that my friend the noble Lord, Lord Hain, will withdraw his amendment at the end of the debate.

--- Later in debate ---

[Lord Howell of Guildford]

At the outset of this debate, the whole focus is on the concept that we have benefited and will continue to benefit from being members of the single market, and that by being outside and only having access to it—like every other country that exports into the European region—we would be vastly disadvantaged. I am afraid I am going to say something that will probably be unpopular on both sides and which asks your Lordships to look more closely at what is actually happening in the patterns of both European and world trade currently. I am not talking about 1990, or the world of globalisation in the last century, but about the fantastic, revolutionary disruption and transformation of the pattern of trade that has gone on for the last five or 10 years. Unless we understand that, and the impact it is having on trade throughout the region and on the relevance and nature of the single market, which has changed beyond recognition from the single market of a decade or so ago, we will not reach very sensible conclusions.

Lord Keynes was quoted earlier. He said many things, but one of the interesting things he said was that his real quarrel was not with those who disputed his economic theories or arguments but with those who persistently failed to see what was actually going on. That is the theme I want to develop. We can expend enormous indignation on asserting that in the single market everything will be okay but that out of it there will be disaster. Indeed, the noble Lord, Lord Hain, has suggested that with great eloquence and clearly believes it to be the position. But we have to grasp what is going on and understand the nature of the flow of trade to see just what the disadvantages would be if, instead of having membership of the single market, with all the standards, regulations, access, tariff-free areas, co-ordination of regulations and so on, we were outside it, although still obviously able to trade into it like any other country.

I start from a rather remarkable statement made by the chief economist to the Bank of England, I think last week, that from his point of view whether we were inside or outside the single market would have no “material” effect on the UK’s growth over the next three years—he put a time on it. That is rather a remarkable statement from a very high authority, not someone known to be biased one way or the other but someone speaking totally objectively. I had to ask myself how he could come to that conclusion. Have we not been told that outside the single market it will all be disaster and we must somehow stay in as full members? This raises all the other issues we have so vigorously debated, including the problems in the island of Ireland and many other issues. If one begins to look at the detail, the answer is very interesting.

I suspect what he has seen, and what your Lordships might possibly turn their eyes to, is that the whole nature of international trade is shifting at record speed in two directions. First, there is the vast growth in services, digital information, data transmission and information exchange, so much so that McKinsey is telling us that more than half the wealth generated worldwide comes from the transmission of data and information and not from goods trade at all. The old world of trade being dominated by containers or great ships sailing out of Felixstowe, or whatever it was, is rapidly disappearing. Services are the huge growth area in every aspect of international trade, including into the European Union. The noble Lord, Lord Hain, is quite right that sales of services into the European Union have been large—they are about a third of our total export of services throughout the world—but frankly they are not doing very well. In so far as they have got in to Europe’s single market, services have gone through a bit of a struggle, not through tariffs—because you cannot put tariffs on those services—but through all sorts of local and national regulations and control. They have been pretty flat over recent years because there never was a glorious single market in services. We struggled for 40 years to improve one and got nowhere at all, and the chances are that countries outside the European Union have done rather better with our services and imports into the European Union than we have.

It may be that in future, outside the single market—this may be in Mr Haldane’s mind—we can do rather better with services in Europe. If we cannot do better in Europe—it is very difficult because of the all these local restrictions on how things are set up—we should look to the areas where service developments are growing at a very fast pace. This is certainly right across the part of the world that deals in the English language and has common legal, political, social, ethical and cultural practices, which tends to be a Commonwealth network in English-speaking nations, including the United States of America, which is our biggest export market of all. We have no single market and no free trade agreement with America, but it is by far our largest single market of any country.

That is the first point: services are growing at a phenomenal exponential rate and now dominate world trade and are beginning to dominate our own earnings overseas. Secondly, services know no boundary or tariff barrier, so the services we sell into Europe—this, again, may be in Mr Haldane’s mind—will not be very much affected by whether we are in the single market or not. It is a tough area anyway. We export £89 billion, gross, of services of every kind, including financial services, into the European market and that is about a third of the much bigger degree of service exports all around the rest of the world. It is not a question of tariff barriers. The tariff barriers are anyway extremely low, except for one or two things such as car components, which are at 10%. We would have to think about that, but generally we are moving into a zero-tariff world. It is quite different from 1990, when developing southern and eastern countries were taught that they would have to have high tariffs and heavy investment protection.

[Lord Davies of Stamford]

My Lords—

[Lord Howell of Guildford]

I shall just finish this sentence. The culture before 1990 was of high tariffs and protection against foreign investment, which was deemed colonial. The culture of the last 30 years has been the opposite, with low tariffs all around the world and direct investment agreements to encourage more investment. I give way.

[Lord Davies of Stamford]

I am grateful to the noble Lord for giving way. I am listening to him with great attention, as I always do. He is making the case for certain aspects of the digital services market; he does not say much about whether we are part of the single market or not. Does he not agree that for manufacturing, which is about 10% of our GDP, the imposition of tariffs would be extremely serious? Does he also not agree that for financial services—which, as I have already mentioned in a different context, accounts for about 10% of our GDP as well—the loss of the passports which enable us to trade in the single market would be equally catastrophic?

[Lord Howell of Guildford]

Although manufacturing is very important, it is a smaller and diminishing proportion of our export earnings. As I think the government White Paper points out, at least 33% of the value embedded in any manufactural product—I think the figure is 37%—comes from services. When you think about manufacturing, you have to think about something that is really not quite a manufacture or a service; it is a product of a service and high technology. A good example for the noble Lord is the Japanese company Uniqlo, which produces garments—not from Japanese manufacturing but from Japanese technology and services. All around the world, this pattern is developing. What I am trying to bring before your Lordships is the realisation—

European Union (Notification of Withdrawal) Bill

Lord Davies of Stamford Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 1st March 2017 Lords Chamber

[Lord Blencathra (Con)]

My Lords—

[Lord Davies of Stamford (Lab)]

My Lords, I shall be very brief—

[Lord Taylor of Holbeach]

My Lords, it is the Conservative Party’s turn. The noble Lord, Lord Blencathra.

--- Later in debate ---

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

My Lords, we have had a very good debate here tonight—

[Lord Davies of Stamford (Lab)]

My Lords—

[Noble Lords]

The Minister.

[Lord Taylor of Holbeach]

I think the mood of the House is to carry on and to hear from the Front Bench.

[Lord Davies of Stamford]

My Lords—

[Noble Lords]

Order!

European Union (Notification of Withdrawal) Bill

Lord Davies of Stamford Excerpts

Report stage (Hansard - continued): House of Lords
Tuesday 7th March 2017 Lords Chamber

I applaud the noble Lord, Lord Hain, for the wording of his amendment. I thank him and his two colleagues who have served the people of Northern Ireland over the years. Even though in a sense the noble Lord is probing us with the words of his amendment, I ask the Minister to recognise once more that this is much than a question of a line on the map; it is a question that goes very deep into our understanding of the future.

[Lord Davies of Stamford (Lab)]

The whole House always listens to the noble and right reverend Lord with the greatest respect on these matters. I have known him for about 20 years and have spoken to him on the subject over that time and feel the same degree of respect. I wonder whether he would like to tell the House—I do not know what answer he will give—whether he feels that one possible solution to the difficult, dire problems he has just outlined might be to allow for the negotiation of a special status for Northern Ireland which might leave it, at least in some respects, within the European Union.

[Lord Eames]

My Lords, I feel that the question that the noble Lord has raised takes us far beyond the points I was trying to put over because we must not tie the hands of the team that is going to speak for us all in the negotiations. I say to the noble Lord, please keep an open mind on the possibilities, but it is not for us to concern ourselves with.

--- Later in debate ---

[Lord Hain]

I am grateful to my noble friend. I will not prolong this discussion too much except to say that, following the impasse that the Minister, the Secretary of State and their colleagues are grappling with, we hope that negotiations will bear fruit. It may well be that the British Government have to give something on this. I would just mention in passing that there is, for example, a demand from the WAVE trauma group to have a pension for innocent victims—not perpetrators of atrocities. I presume this could come only from the Government. I will briefly give way.

[Lord Davies of Stamford (Lab)]

I am grateful to my noble friend. Thanks to the initiative of the noble Viscount, Lord Slim, we are talking about a desperately important matter. As the noble Lord, Lord Empey, said, there are still some serious reservations about granting amnesty to British forces. I share some of those sensitivities. Without getting into this complicated ground, is it not the case that the prosecuting authorities always have the option to decide whether or not to prosecute not just on the grounds of whether there is a chance of a conviction but also on the grounds of national interest? Is it not to be hoped that the prosecutor in Northern Ireland will take advantage of the opportunity for a judgment with the greatest degree of sensitivity?

[Lord Hain]

We are opening up a whole new debate. I am not sure I fully agree with my noble friend. I will end by saying that I welcome the fact that the Minister said that the commitment to the option of Irish citizenship is rock solid, as is the commitment of the Government to the Good Friday Belfast agreement. I beg leave to withdraw the amendment.

European Union (Notification of Withdrawal) Bill

Lord Davies of Stamford Excerpts

Ping Pong (Hansard): House of Lords
Monday 13th March 2017 Lords Chamber

[Lord Oates (LD)]

My Lords, I move this Motion for the following reasons. First, despite the large majority that voted for the amendment to the Bill in this House, the Government have failed to make any concessions and not even attempted to address the many issues raised by noble Lords in Committee. Secondly, the profound nature of the issue at stake should make us think very carefully before we concede. This debate is not over some arcane technicality or some petty, partisan disagreement; it is about people’s lives. It is about whether people will be allowed to live in the country that they have made their home with the people for whom they care, whether they can stay in a job or plan a career, and whether their children can remain in the school they know and study with the friends they have made. It is about their futures, their homes and their families, and it is about the fear and misery being caused by every further day of uncertainty.

Thirdly, we should weigh our decision very carefully, because this debate is also about the integrity of our country. It is about whether we will honour the unequivocal commitment made by the official Vote Leave campaign that, if the United Kingdom voted to leave the European Union, the rights of all EU citizens in the UK would be guaranteed. Unlike most other issues arising from the referendum, there is absolutely no dispute about what was promised to EU citizens. The Vote Leave campaign, which was supported by a number of noble Lords, made the following categorical statement:

“There will be no change for EU citizens already lawfully resident in the UK. These EU citizens will automatically be granted indefinite leave to remain in the UK and will be treated no less favourably than they are at present”.


There were no caveats; there was no issue of reciprocity or talk of negotiations—just a categorical commitment unilaterally given.

Finally, this debate is about the role of this House. Precedent indicates that, when the rights of individuals have been threatened, this House has always been robust in its defence of them. I hope that we will live up to that precedent today. The facts are clear: a firm and explicit commitment was made by the Vote Leave campaign that the rights of EU citizens in the UK would be protected. Parliamentary committees of both Houses agree that a unilateral guarantee should be provided now, and all the bodies representing British citizens in the EU who have contacted me and many other Members of this House have supported that position.

It is clear that, if we do not insist on our amendment, there is a real possibility that EU citizens in the UK and UK citizens in the EU may not have clarity as to their status for another two years. The House of Commons Exiting the EU Committee rightly described such a situation as unconscionable. I understand the nervousness of some noble Lords about challenging the elected House on this matter, but to those who argue that it is not the right time for us to insist on our amendment, that this Bill is the wrong place for us to insist or that precedent tells us that we should not insist, I respectfully argue the contrary. Your Lordships’ EU Justice Sub-Committee and the House of Commons Exiting the EU Committee unanimously agreed that the UK should act unilaterally and that the time to act was now. This Bill is the only place to act if we are to end the debilitating uncertainty that is causing so much distress.

The Minister says that we have the right to amend the Bill; we also have a right to insist on our amendments, and precedent tells us that we should—that when issues of important principle or individual rights are at stake, your Lordships’ House can and does insist on its position and, if necessary, repeatedly pushes the issue back to the Commons. It did so on the 2014 Criminal Justice and Courts Bill, and on the 2012 Legal Aid, Sentencing and Punishment of Offenders Bill. It did so no fewer than three times over the 2007 Corporate Manslaughter and Corporate Homicide Bill, no fewer than four times over the 2006 Identity Cards Bill and no fewer than five time over the 2005 Prevention of Terrorism Bill. It has regularly insisted on amendments to Bills when far less was at stake than today: on the powers of the Learning and Skills Council; or the means by which the chairman of the Legal Services Board is appointed; or even on the fitting of retro-reflective tape—whatever that is—on heavy goods vehicles.

How then, when the rights of millions of people are on the line, could this House give up at the first attempt? How, when clear and unequivocal commitments were made to EU citizens in our country, could this House fail to insist that they are upheld? How, when the integrity of our country is at stake, could this House fail to insist that it is upheld? Many people will be watching us tonight: we cannot please them all, but we can show them that no matter what the pressures from the media or the threats from the Government may be, we are prepared to do what we know to be the right thing. I have no doubt that the right thing is to insist on this amendment to protect the rights of EU citizens in the UK and, in doing so, to uphold the honour and integrity of this country. I beg to move.

[Lord Davies of Stamford (Lab)]

My Lords, it is not in any way my intention to repeat the arguments I have used about Brexit in the various debates in this House over the last few weeks. But there is a question I must ask the Minister, the answer to which is very important to all of us. It goes to the heart of the earnest intention of the Government to be quite transparent with the House and the public as the Brexit negotiations, which will presumably start in a few days, continue—as they will for a long time.

I have not been very successful in getting answers to questions I have asked the Minister in previous debates. I console myself by thinking that that may be because I have touched on some rather delicate points that are potentially embarrassing for the Government. But it is not a great consolation: I would rather have full and frank answers and I hope that I will have one tonight—not at all in my interest but in the interest of the issues that I have just raised.

The Minister has just told the House, and the Prime Minister and Minister for Brexit have both said on many occasions, that it was their original hope and intention to negotiate a deal on the future residency rights of EU citizens here and of British citizens in the remaining part of the EU in advance even of giving notice under Article 50. That unfortunately proved impossible because some of the continentals were not willing to do it. The Government would now like to negotiate on that matter and resolve it in advance of negotiations on difficult economic and other subjects, so that those negotiations can start very quickly.

My question is: how can that possibly be? A negotiation on the future residency rights of British citizens in the EU or of EU citizens here is nothing whatever to do with the Commission. It is not a negotiation that can be pursued with Monsieur Barnier; it is not a matter for Mr Verhofstadt or Mr Juncker, either. Residency issues, requirements and regimes throughout the European Union concerning persons who are not citizens of a member state or another member state but citizens of a non-EU state are not a matter for the treaty: they are a matter for each individual member state. Every member state has its own different residency rules. What is more, the arguments and forces which will be brought to bear if there is any suggestion of changing those rules will be different in each country. So if you want to negotiate on that—as the Prime Minister says, and the Minister has said this evening—you will have to conduct separate, bilateral negotiations with 27 different countries.

Eventually, the result of that negotiation will have to be ratified by 27 different countries—28, actually, because it will have to be ratified here, I hope. That is not something that can be done in a few weeks, or even, I think, in a short number of months. If it had been attempted before notice was given under Article 50, it would have delayed by many months the issuing of a notice under Article 50, quite contrary to what the Prime Minister said her intention was. That is something which, if it is undertaken immediately we issue notice under Article 50, will itself delay the procedures for a very long time. How can the Government have thought that this was a way of accelerating progress on the Brexit negotiations? I think that is a question which nobody has asked. I tried to ask it the other day but I was not able to capture your Lordships’ attention. I ask it now because it is absolutely essential if the House is to achieve a complete picture of what is going on in this very important area.