Brexit: No-deal Tariff Schedules

Lord Davies of Stamford Excerpts

Monday 7th October 2019 Lords Chamber

[Lord Callanan]

I thank the noble Lord for his questions. I genuinely would like to be helpful, but I cannot go further than to say that the announcement will be made shortly. We have been responsive to business concerns. We have been listening to businesses and sectors since the original announcement, but, as I said in response to the first question, there is always a balance to be struck between the benefits for consumers and for industries that rely on imports for their productivity and domestic producers. These are difficult decisions; I am not hiding that. I did not say that there would be no changes; I said that there would be no significant changes. I can confirm that we will not be implementing these tariffs on the Northern Ireland border.

[Lord Davies of Stamford (Lab)]

How can our Irish and continental partners possibly be expected to take seriously the document they received from the British Government last week when it promises “an open border” but at the same time provides for customs controls internal to the island of Ireland?

[Lord Callanan]

I think the noble Lord is a Question behind. That is on the previous Question; on this Question we are talking about the tariff regimes.

Brexit

Lord Davies of Stamford Excerpts

Wednesday 2nd October 2019 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, I want to begin by commenting on two of the speeches made earlier on by the noble Lords, Lord Lilley and Lord Howarth. They were both very original speeches; those Members of the House always make original speeches. Both were the subject of considerable reflection. Nevertheless, I detected in those speeches a considerable degree of complacency about the threats facing us. I believe that complacency is such a danger in economics and in politics, in business and generally in life, that it needs to be commented on if it arises. I may say that both noble Lords have been long-standing personal friends of mine for over half a century, and we have been arguing about politics and economics together since we first met at a university in the Fens, 55 years ago. I hope that this is not the end of a beautiful friendship.

The noble Lord, Lord Howarth, said that we may go through some choppy water if we have a hard Brexit, but that is all right; we will get through that okay, with the help of the Bank of England, fiscal spending and so forth. I have to tell him that fiscal spending is not a cost-free policy. As you build up your debt—and public debt in this country has risen from less 20 years —you are gradually reducing your capacity to intervene in the future. We learned in the 1970s where that can eventually lead, and it is not something that one should do lightly.

The noble Lord, Lord Lilley, managed to make out that in fact there would be no increase in customs checks as a result of our leaving the European Union. That seemed to me inherently implausible; but he completely left out the subject of the longest delays in any border checks, which is the issue of certificates of origin, which is extremely complicated and a nightmare for those who are organising international logistics. I think that should be taken into account. I have to tell him, too, that the continental customs authorities do not share his very optimistic view. In June I happened to be in the Netherlands, with two or three colleagues who were equally interested in the subject. We were very kindly received by the head of the Netherlands customs in Rotterdam; we saw the port there and met many of her leading staff. They told us that they have taken on about 900 new employees, simply to deal with additional UK business after Brexit. The Dutch are serious people; they do not hire 900 people just to watch the traffic and do nothing. Noble Lords can make the arithmetical calculations as easily as I can, but you can imagine, if there are 900 people who intervene with a lorry every hour or two hours, for two minutes, three minutes or five minutes, how much that will induce delays in the process of clearing trucks through Rotterdam that are destined for the United Kingdom. There is clearly a material change happening there, and the same thing is happening in other ports and suppliers. Rotterdam is of course the major port that supplies us. I do not think that complacency is in order there, either.

[Lord Howarth of Newport]

I am most grateful to the noble Lord and very much appreciate his kind personal words. If he would be good enough to look at Hansard and see what I said, he will not find that I mentioned either the Bank of England or the Treasury. What I do believe, though, is that our businesses in this country have a great deal of resilience, a great deal of power and a great deal of creativity, and they will be able to weather the transitional difficulties. I do not think that that is complacent, but a reflection of reality.

[Lord Davies of Stamford]

I must apologise to the noble Lord for adding words that he did not pronounce. I got the distinct impression that what he was talking about by way of remedial action was monetary or fiscal spending. Fiscal spending would have had the consequences that I have just outlined. I apologise to him and hope that I have not unduly traduced the message he was delivering to the House. I feel very strongly on this matter of complacency, faced with a possible recession. I know that the noble Lord will agree with me on this: recessions are very unpleasant things. They destroy businesses, they destroy jobs, they destroy the jobs that people might have had and will never have. They destroy the economic sense of security of families. A lot of the human destruction and economic destruction takes a very long time to repair. It is not something that we should walk into lightly. I am very worried indeed and I hope that he understands why that is—that we may be heading in that direction.

[Lord Howarth of Newport]

I very much agree with the noble Lord about the damage that recessions cause. Does he have any reflections on the fiscal policy of the Government, which has now become quite explosive and puts the country at very great risk, of exactly the nature he has been describing?

[Lord Davies of Stamford]

I am so glad that I am once again in thorough agreement with my noble and long-standing friend. Of course, I am very worried about that; I mentioned it in our debate last week, so I will not go into that subject now, but I could not agree more on that subject.

I must turn to the proposal that the Government made today to the European Commission. It seems to me to be a thoroughly dishonest and disreputable document. It is exactly the sort of document that one would expect our Prime Minister to deliver and was probably not one where there was any expectation that it would be accepted. I suppose that Mr Johnson wanted to be in a position where he had made some offer, so that he could then say that it was all the fault of the European Union for not accepting it—albeit that he did not produce anything until a month before the deadline. The document does not address at all the matter that is of greatest concern to the Irish, which is the long-term avoidance in Ireland of an internal border or frontier. A border, in my definition—and in the definition of most reasonable people—is an administrative line on the map which, if you cross it, has practical and probably financial consequences. That does not mean that the border has to have an infrastructure at any particular point. It means simply that if you cross this line, you will be deemed to be liable in one way or another. That is exactly what we must avoid in Ireland, if we want to respect the Belfast agreement. It is what the Irish are determined to avoid. That is the position at present: there is no internal border on the island of Ireland. You can go between any of the 26 counties and the six counties, any time you want, with no consequences whatever of an administrative or practical kind. That is what we need to preserve. That is not achieved by this proposal and I imagine that for that reason alone it will and should be rejected.

The contradictions have already been pointed out by my noble friend Lord Adonis. They are quite serious because they have completely devalued the document. On page 3, the document says:

“This is entirely compatible with maintaining an open border in Northern Ireland”.


In the next paragraph, it says that,

“all customs processes needed to ensure compliance with the UK and EU customs regimes should take place on a decentralised basis”.

If there is an open border in Northern Ireland, why do you need customs processes and regimes? That is completely contradictory. I am taking a little more time, but I had two interventions.

The other notable contradiction in this document is on page 2, where it says that the proposal,

“provides for the potential creation of an all-island regulatory zone on the island of Ireland”.

Two paragraphs later, it says that under these arrangements,

“Northern Ireland will be fully part of the UK customs territory”.

These are blatant contradictions and devalue the whole document.

[Baroness Berridge]

My Lords, while there has been grace because of interventions, I remind the House that the advisory speaking time is six minutes.

--- Later in debate ---

[Lord Callanan]

The Chief Whip is not here, but the Leader of the House has heard the noble Lord’s comments. I am sure the usual channels will want to discuss how much time is available.

[Lord Davies of Stamford]

I thank the Minister for giving way. Is not the document presented to the Commission today thoroughly disingenuous? It refers to an open border. That is of course the position in Ireland today. If there were an open border, there would be no need for customs controls or checks of any kind, yet the Minister has just referred to the need to have those.

[Lord Callanan]

The situation is changing; that is why we need to agree new arrangements. We are leaving the European Union, the customs union and the single market, so clearly the arrangements will not be able to stay exactly as they are at the moment when we are part of those institutions. These proposals will allow us to move forward and focus on the positive future relationship that I believe is in all of our interests.

I have enormous respect for the noble Lord, Lord Empey, as he knows; he always makes insightful contributions in this House. He raised some important questions that I want to answer. We recognise that, for reasons of geography and economics, some things such as agri-food are increasingly managed on a common basis across the island of Ireland. Regulatory checks already take place on some goods moving between Great Britain and Northern Ireland. While the proposals would see an increase in some of these, there would be no need for traders to submit customs declarations and we would go ahead only with the consent of the Northern Ireland Executive and Assembly. In light of this progress, we must take the route suggested by my noble friend Lord Howell of Guildford and choose to continue to work together in a positive spirit. In that way, we will ensure the best possible outcome for the UK, so that we deliver on the instructions given to us by the British people.

The noble and learned Lord, Lord Goldsmith, the noble Lord, Lord Marks, and the noble Viscount, Lord Chandos, asked about the Benn Act. The noble Baroness, Lady Hayter, the noble Lord, Lord Wallace of Saltaire, and my noble friend Lord Trenchard referred to it as the “surrender Act”.

Brexit: Article 50 Period Extension Procedure

Lord Davies of Stamford Excerpts

Monday 18th March 2019 Lords Chamber

[Lord Callanan]

My noble friend makes a very good point and he knows I have some sympathy with his view. However, the will of the House of Commons was clear; it refused to pass the withdrawal agreement that would have resulted in us leaving in a satisfactory manner, and it has requested the Government to seek an extension to Article 50. That is what we will do.

[Lord Davies of Stamford (Lab)]

My Lords, the Government have had two and a half years to resolve this matter. They have spectacularly failed to do so, in such a way that we have now become a byword throughout the world for incompetence at the highest level of government. Parliament has now been trying to solve the problem for a few weeks, and has so far failed to do so. Is it not time to go to the final stage—the one that will produce the highest degree of legitimacy for a final decision—and ask the British people, knowing all that we now know about the conditions that would apply if we had an arrangement with the European Union, and so much more than any of us knew in 2016? Is it not time to let the British public take a considered and final decision?

[Lord Callanan]

I refer the noble Lord to the answer I gave earlier to the noble Baroness, Lady Ludford. I do not agree that there should be a further people’s vote; we have already had a people’s vote and we should implement that one first.

Further Discussions with the European Union under Article 50 of the Treaty on European Union

Lord Davies of Stamford Excerpts

Wednesday 27th February 2019 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, it is a great pleasure to follow my fellow Lincolnshireman, the noble Lord, Lord Cormack. He is a man I have known for many years—decades, really—and I find the two proposals that he has just made rather alluring. They are very characteristic of his continual commitment to finding consensus in our national affairs wherever it is possible to do so. I also thought that his quotation from TS Eliot was the most apt literary quotation that I have heard in the course of these debates—indeed, in all these years that we have been discussing Brexit.

I begin by correcting the noble Lord, Lord Callanan, on a point of constitutional convention. He criticised the Labour Party for resiling from its commitments in the last Labour election manifesto. I have to tell him that we cannot have resiled from those commitments because they disappeared the day we were defeated in the general election. If a party wins an election, it has a contract with the electorate and must fulfil that contract—that is how our democracy works—but if a party is defeated, it has no such obligation, and not only is it free to find other policies if it wishes to do so but, indeed, it is encouraged to do so. Not only constitutional principle but common sense leads in that direction. If the noble Lord thinks about this for a moment, and I hope he might, he will realise that on his approach the Labour Party would still be committed to the nationalisation of the means of production, distribution and exchange, while he and his party would still be committed to opposing Catholic emancipation or the abolition of the Corn Laws, although maybe the noble Lord opposes those things retrospectively. The only reason things move on is that when you are defeated in an election your commitment at that election disappears and you have to think anew. That is a vital part of the process of progress and renewal in a democracy.

Anyone who has been involved in negotiations knows, or ought to know, that your greatest enemy is complacency, self-delusion and a tendency to underestimate the challenges and obstacles you face, to underestimate the strength of the bargaining power of the counterparty with which you are dealing and to overestimate your own. This Government have always believed that, in the immortal words of Mr Gove at the time of the referendum:

“The day after we vote to leave, we hold all the cards”.


They have proceeded on the basis that that was true. They have fundamentally and systematically under- estimated the bargaining strength of the people they were dealing with. They thought that because the EU sells more to us than we do to it, and the Germans sell more than anyone else, the Germans would be running the show and would more or less instruct the Commission to be gentle with us and make whatever concessions were necessary because that would be in the interests of their own firms. The idea that the EU would take a permanent stand on behalf of the Irish, who are rightly defending their right not to have their country divided in half by a hideous permanent border, will not have occurred to them. They will have said, “Oh no. There’s no way that the EU, with 500 million people, will allow a country of 2 million or 3 million to stand in its way”. They were completely wrong on all those points—disastrously wrong. What is more, they were wrong for the wrong reasons, coming back to the TS Eliot quotation given by the noble Lord, Lord Cormack.

I am afraid the British have underestimated the Irish for 800 years. I am sorry that that dreadful tradition still continues in the Tory party of today. The Tory party has never understood the moral force or the genuine idealism behind the European Union, or its genuine commitment to the concept of solidarity. It does not understand those things at all. I suppose this is what Castlereagh called,

“a piece of sublime mysticism and nonsense”.

But it is not mysticism and nonsense; it is a fact that the Tory party should take into account. It will go on making this mistake. The continental countries will not abandon the Irish or ban the backstop. The sooner the Government realise that, the better.

The Government’s capacity for self-delusion does not end there. It goes right across the board and is an extremely worrying facet of the present Administration. It stretches into the economy. I do not want to be seen to be unduly critical of the noble Lord, Lord Bates, first, because I am very fond of him—in common with the rest of the House, I think—and secondly, because he is not in his place today. I regret that, but of course it is totally understandable and that is not a criticism of him either. Nevertheless, he is a government Minister and if he says something before the House, he is accountable for it and it is reasonable for us to continue to say what we need to say on the subject, whether the Minister is present at that moment or not.

I will quote what the noble Lord, Lord Bates, said last week in the debate we had on the same subject. We had been speaking about the economic cost of Brexit, a matter which has naturally come up this afternoon, and on which I want to say something else as well. The noble Lord said:

“What was not given was any potential up side to leaving the European Union”—


he was talking about an economic up side—

“and the ability to have our own trade deals and set our own economic and trade policy. That needs to be factored in, and we remain confident that we have a bright future outside the European Union”.—[Official Report, 20/2/19; col. 2280.]

The Government have now, at last, released their impact assessment of Brexit. It is frightening and appalling. As the noble Lord, Lord Callanan, must know, in the case of his part of the world, the north-east, it predicts that GDP will be 10.5% lower than it otherwise would be, as a result of Brexit. The average decrease throughout the country is between 6.3% and 9%. That is pretty horrific. If you say, “You have not taken the good things and the positive economic return into account,” I have to say: what is the positive economic return? No one has mentioned it. We have had these debates for months and years now, but I am yet to hear about it.

We are now told that we will have trade deals with a lot of countries around the world. However, the day we leave the European Union, we lose 40 trade deals, as we know. Dr Fox said, “Don’t worry, I’ll negotiate the 40 trade deals and have them ready for you by March or April 2019”. What has actually happened? We have five trade deals, I think. In aggregate, they represent about 2% of British exports. Even if he had got all 40 trade deals, it would not have made a penny’s contribution to offset the economic costs of Brexit. It would merely have meant that there would not have been any further costs from losing trade deals. I do not know whether he will get to 40; he is 12.5% of the way there. That is not particularly encouraging.

The big issue is whether we could ever have a trade deal with the United States, which represents 25% of our exports. Does any noble Lord in the House think that is a feasible possibility? That would mean we would have to accept from the United States beef impregnated with antibiotics—a serious and long-term threat to public health. We would have to accept our own beef producers being undercut by incredibly cruel methods of cultivation—such as zero grazing—in the United States. We would also have to accept chlorinated chicken, and so it goes on. Are we going to accept that? I do not think so.

The European Union had discussions with the United States on these features, which broke down, and discussions on the investment guarantee, which might also be a problem. Does any noble Lord believe that the United States would sign a free trade agreement with us, leaving aside agricultural products? No one who knows the United States could possibly believe that for a moment. The enormous influence of the farm states in the Senate is one of the first things that hits you about Congress. It has been the case for a long time. So it is out of the question. We are not going to do it—it is not going to happen. It is fairyland, dreamland.

What about China? Now we are moving a long way down the scale, because we are talking about people who receive a much smaller proportion of our exports, although that proportion could increase rapidly over time. But who, of those who know China, is not aware of the Chinese sensitivity to unequal treaties? Who could imagine suggesting to Mr Xi Jinping an unequal treaty under which we have free trade with China but place quotas on the import of Chinese steel? Do you suppose that any British Government could abolish those quotas and see the end of the steel industry in south Wales and elsewhere? Of course, the Government are committed to not abolishing those steel quotas. So, is there a realistic possibility of a free trade deal with China? No, there is not.

What about India? We know, from the noble Lord, Lord Bilimoria, during previous discussions on these matters, that Mr Modi—and India generally—has a tradition of not signing free trade agreements with developed countries, which is unlikely to change. Mr Modi has said that the one thing he really wants is more visas. Since a major factor in the result of the referendum was probably immigration, how are we going to turn around and say that now, as a result of that referendum, we are going to give many more visas to India on special terms? That is not likely to happen.

This is rubbish. That is the point: this is total rubbish. We are buying hot air. There is nothing in it at all. There are no countervailing economic benefits from Brexit, no economic gains or economic revenues. Not one has been mentioned in the months of discussion here, and not one exists. None exists outside the fantasies of the Government. It is a very serious matter. I do not know whether the Government have deceived themselves, but they must not be allowed to deceive the British people. Above all, the Government must not be allowed to deceive the British people and, as a result, lead them into a situation in which 10% of their wealth will be destroyed.

EU Withdrawal

Lord Davies of Stamford Excerpts

Wednesday 13th February 2019 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, I do not know if it has something to do with the algorithm used by the Whips’ Office to allocate the order of speakers in these debates, but this is far from the first time that I have had the pleasure and honour of speaking after the noble Lord. I have forgotten how many times it has been. His hatred of the European Union is so obsessive that it becomes quite amusing at times. Normally I do not have time to correct him, unfortunately, but I will correct him on just two points, since I think I can take that amount of time today.

The noble Lord referred to corruption in the European Union. That is a frequently used argument that one hears the whole time in Eurosceptic rhetoric. It refers to the Court of Auditors declining to sign the accounts of a number of operations involving the distribution of agricultural funds in the Union. The Commission itself has a very good record on corruption—much better, I might say, than the British Government. We are talking here about failures by the member states in their role distributing Union funds, such as structural funds and agricultural support. If, in fact, the Union were centralised as he says it is and all this was done centrally by the Commission, there would perhaps be less local democracy and less federalism, but there would also be less of what he calls corruption.

The second thing the noble Lord said—again, you hear this very frequently from Eurosceptics—was that the Union is undemocratic. In actual fact, if you suggested making it more democratic—I would be very much in favour of doing that, for example by having election of the President of the Union by universal suffrage as happens in the United States or France, say—he would be horrified and would say that was against national sovereignty. He cannot have it both ways. It is completely illogical. If he wants to charge the European Union with being insufficiently democratic, he cannot at the same time reject the obvious remedy, which would be to make it more democratic. I personally regret that that has not happened in the past and I trust it will happen in the future. It is more likely that it will happen in the future, because we will no longer be there. That is one of the ironies of this situation.

The present situation is obviously confusing for everybody, but one thing is quite clear: the Prime Minister, Mrs May, is playing games with the British people. She says that she intends to continue the negotiation with the European Union. She says that she has left some of her team in Brussels for that purpose. That is utterly absurd. The European Union has told her very clearly that it is not prepared to negotiate any further on her particular deal. That was a very reasonable answer and one that I would have given if I were in its shoes, because no sensible or business-like person agrees to reopen an agreement just a few weeks after it has been signed. It is utterly ridiculous. They were very helpful to Mrs May the other day when they gave her some explanatory letters, but apparently that was not good enough for her. The idea that she is continuing to negotiate is absurd.

Leaving her junior officials in Brussels and saying that they are somehow continuing the negotiation is even more absurd. If the Commission is not making concessions to her, it will hardly make concessions to junior officials. I imagine they are spending their time eating moules-frites and drinking rather nice beer. They cannot be doing anything else and presumably they are being paid on expenses for that purpose. It is all part of a charade mounted by Mrs May.

In the same way, a couple of weeks ago, Mrs May said that she wanted to discuss the Brexit situation with the Opposition and with parliamentarians across the board. It all sounded splendid, except that if she had had the slightest genuine intention of exploring the possibility of a consensual Brexit, she would have done all those things two or may be two and a half years ago. The thing is clearly a gimmick.

Why is she doing all this? She is clearly doing it, once again, to try to waste time. I have said this before in this House: the agenda is to waste time. She has done it on this occasion by simply cancelling votes or debates in the House of Commons or postponing them for a later date. Every time she gains a week or two, she gets nearer and nearer to 29 March. She thinks that on the eve of 29 March, everybody will be terrified of being blamed for a hard Brexit and will simply sign up to anything she wants as an alternative. That is the game that is being played. It is a very ruthless game, and it is hardly straightforward. It is perhaps a game that is not yet fully understood by the British public, but it will, no doubt, be dissected by historians in the future and we should have no illusions about it.

What should we do? I have no doubts about that at all. We are in a situation where Parliament cannot make a decision. There is notoriously no majority support for any solution in the House of Commons. There is majority support for a negative aspiration, which is not to have a hard Brexit. In a situation in which the normal leadership of an institution cannot agree on structural policies—on important corporate strategy, for example—it must go back to its stakeholders. A public company must go back to its shareholders. If you are a lawyer negotiating on behalf of your client and you cannot make any progress, you have to go back and ask for further instructions. The Eurosceptics rather like the word “instruction” in this context because they like to think that the referendum was an instruction to Parliament. I did not believe that and nor did the High Court. Nevertheless, perhaps if they like the word, they would like to chew it over and think about it again. That is a very normal situation which arises when an agent finds that he cannot make any further progress on the basis of instructions he has already been given. He must go back to his principal and ask for further instructions.

If the Executive branch of the British Government will not do it, Parliament must go back to the British people and ask for further instructions. That means that we should have another vote on this subject. Far from being undemocratic, it seems to me to be extremely democratic to give the people of this country a chance to judge the whole matter again. Lord knows, there has been fantastic change over the last two and a half years in this context. All of us, including very much myself, have learned an awful lot of things about Brexit which we never guessed before.

I like to think that I took a reasonably active part in the campaign. I never heard the words “customs union”—nobody ever mentioned it. Everybody talks about the customs union now. In the campaign, I did not hear any mention of the Irish dimension, until I raised it myself in a public debate in the Mansion House. My opponent clearly had not thought it through and so I had a considerable rhetorical victory there, which I enjoyed. However, it did not figure on the agenda in the referendum campaign.

Nothing could be more natural, democratic and transparent than saying to the British public, “We have been debating this for two-and-a-half years now. We have looked at it from many aspects and points of view. There are people in Parliament who are in favour of every conceivable possible solution. We would now like you, ladies and gentlemen, to take the decision”. I hope that is the way we will go forward—it should be. It is profoundly respectful of the electorate and the principles of democracy. Pragmatically, it is surely the only sensible and viable way out of the dilemma we now find ourselves in.

I wish to make one further point. There has been a great deal of concern, rightly so—not only in this House but in the other House, the media and in private discussions all over the country, particularly in industrial and commercial fields—about the damage that will be done to the British economy by any Brexit, particularly a hard Brexit, whenever it comes, be that in a month or two or at any other time. That nightmare faces us, and it is right that we should be mainly concerned about it.

However, the economic issues that I am most concerned about in this context are the longer-term ones. If we leave the European Union, it is goodbye to manufacturing in this country. That is a big statement, I know, but I am prepared to justify it. Of course there will still be some small manufacturing operations trading in the local market—manufacturing will not totally disappear—but it will go down from the present 8% of the economy to perhaps 2%, which is the kind of figure you find in Australia or Norway.

The reason for this is—I have been interested in this matter from many points of view, including my days in the City years ago—that almost every investment in manufacturing in this country is made for the purpose of establishing a base for supplying the single market, which many people have always wanted, and if you are no longer in the single market you do not qualify. As it is, we are in the single market but people who invest here and then sell in Spain, France, Germany or wherever have to face considerable transport costs and foreign exchange risks. They have accepted all those things up to now against the compensating advantages which we can offer in this country, but we have added, unfortunately, to the equation the substantial negative factors of the prospect of delays at frontiers and complete uncertainty about future British policy, including on regulatory divergence which could create non-tariff barriers. We have an unpredictable, incompetent Government, one member of whom has become a theatrical example of that incompetence. None of this reassures potential investors and it will be very bad.

I understand the economic theory which tells you that it does not really matter if we have a manufacturing economy; that it is just as good to have services, for example, or mineral extraction like the Australians. Theoretically that is true, but it makes a great deal of difference to individuals who have the skills required in manufacturing because it determines whether or not they have a job. It makes a great difference to areas of the country which have traditional manufacturing bases because it determines whether or not they become depressed areas. It is serious in human terms and should not be lightly thrust aside. It is a serious issue and that is why I mention it.

In other areas, there has been a complete failure to understand the long-term damage that will done. The noble Baroness, Lady Bonham-Carter, who is not in her place, made a good speech a couple of weeks ago about the broadcasting directive. No one contradicted her understanding of that, which is that if we leave the European Union it will no longer apply here. At the moment, as the House knows, that means that a television programme or a film which is released under licence in any EU country can be automatically shown anywhere else without further expense or bureaucratic procedures. That is a great advantage for our creative industries. If we no longer have the broadcasting directive, we shall be the last place anyone wants to make a programme or a movie, for reasons which are obvious to the House. That is an example of a services area—the creative arts—where we have a good record which will be damaged by leaving the European Union. It is so crazy.

Then there is the issue of the City and banking. Of course, bankers are unpopular people and no politician wants to be associated with defending their interests, and so the matter has never been properly mentioned here. Many people say, “Oh, it will be all right. Everyone will stay”. Some have said to me, “There has not been the exodus from the City of London which you expected”. I did not expect it at this stage in the game—I was right not to do so—but I read an article in a paper before Christmas which said that only 7,000 people from financial services have moved because of Brexit. That is an interesting use of the word “only”.

First, 7,000 people is not nothing at all by any means. The House will follow my elementary maths. You would not normally think it worth while to relocate someone who was not earning, say, £100,000 a year basic, with bonuses in a normal year being perhaps £200,000. So £300,000 earnings would be normal for someone in that category who is going to be moved for business reasons. If you multiply that by 7,000, it is close to £3 billion. Tax at 40% would mean about £800 million less for the Revenue. No doubt someone on that kind of earnings will save some money, but the rest of it will be spent. So there will be a considerable negative multiplier effect if people leave. It was 7,000 before Christmas—no doubt it is more now and might be more in the future—and that is not to be laughed at. It is a serious issue. It may not affect people in this Chamber, but we should think carefully about the prospect of running down such a British industry.

There will also be a loss of opportunities in that interesting sector—I worked in it for many years—for young people in the future, who had on their doorstep the biggest international financial market in the world. That will steadily no longer be the case. It will not happen overnight, but that will not be the case in 10 or 15 years’ time—certainly not to the extent it is now. We are debasing and devaluing a big national asset, and it is a sad moment.

Saddest of all is the fact that we are leaving the European family. We are rejecting our neighbours—not as neighbours but as close partners and friends in a common enterprise—and it is a grave and serious situation. We will be regarded inevitably as being stand-offish, arrogant and very foolish. People will not take pleasure in doing us favours in the future and they will not be particularly sympathetic if we run into reverses. It will change entirely our relationship with our closest neighbours and trade, defence and security partners in the future. We will no longer be working with them closely on all the causes we hold dear, from stability in the world, to the environment, to free trade, to human rights and so on. That will be a sad and grave day in the nation’s history, and I bitterly regret it.

Brexit: EU Commission

Lord Davies of Stamford Excerpts

Wednesday 10th October 2018 Lords Chamber

[Lord Callanan]

There were concerning reports. All live exports to Europe need to have a journey log approved by the Animal and Plant Health Agency. We would not approve a journey log in the unlikely event of disruption at the borders. Animals would instead be kept on farms or be redirected to abattoirs in the UK.

[Lord Davies of Stamford (Lab)]

My Lords, earlier this year, speaking on behalf of the Government, Mr David Davis said that in their negotiations with the EU the Government were committed to obtaining the exact same benefits that we now enjoy as a full member of the single market and the customs union. Does the phrase “exact same benefits” still represent government policy?

[Lord Callanan]

We are committed to obtaining the best possible deal for the United Kingdom, and we are negotiating hard to achieve that, as any Government should.

Brexit: Preparations and Negotiations

Lord Davies of Stamford Excerpts

Monday 23rd July 2018 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, I want to make four points, the first of which is a rather sad—perhaps very sad—observation. The British have been associated over the generations with different qualities—some positive, some negative. We have often been thought of as being arrogant, complacent, too self-satisfied. There may be something in all of those criticisms, but we have never ever, until now, been considered incompetent. That has now changed. We are in a situation in which the Government have been presiding over a shambles which has been watched right across the world, with, first of all, unbelief, sometimes amusement and, frankly, horror by all of those who wish us well in the world.

The Prime Minister decided to give notice, under Article 50 of the treaty, that we were leaving the EU, without any preparation whatever, without even establishing in a written document what her own view was. We have had to wait two years for that—in the paper before us, and we have heard about its many shortcomings today. This paper has been brought forward just eight months before the deadline, before the day we may go over the cliff. What an extraordinary way to plan for any kind of negotiation. We have had delays, an inability to keep to deadlines, vacillation, indecision, changes of mind, and the incoherence of the Government once the whole principle of Cabinet responsibility had been suspended. All of that is unbelievable. Whatever comes out of this, we have already lost, sadly, quite a lot of the soft power that we had in this world, as a result of this process—even long before the process itself has been terminated either by an agreement with our European Union partners or in any other way.

My second observation is this. If you read through the White Paper, it is impossible honestly to come to the conclusion that it is in the interests of this country to leave the European Union. On every single subject mentioned in this paper, except for one, which I shall come to in a second, it is quite clear that the deal we currently have is much more advantageous to the United Kingdom—in many cases, spectacularly more advantageous to the United Kingdom—than anything that is on offer, either in this paper, or having been suggested by anybody else, or having been asked for by ourselves as a substitute. That is a pretty extraordinary set of affairs. Before I go any further, I had better mention that the exception is fish, but even that is misrepresented in the paper.

The White Paper makes it apparently clear that, if we leave the European Union, we can claim all the fish within our exclusive economic zone and drive everybody else out. That is not true for three reasons which were not mentioned. One is that our British fishermen catch in other EU waters about a quarter of the amount they catch in UK waters, so they will presumably lose that, which mitigates the benefit. Secondly, quite a number—more than 10% some time ago, but I do not know the latest figure—of British licensed fishing boats, are licences held by other EU nationals, so that muddles the calculation somewhat. Thirdly, customary international law and positive law in the form of the 1964 fisheries convention makes it clear that the rights of traditional and historic fishermen cannot be ignored. They cannot just be driven out when they have been fishing in those waters for two generations or more.

The situation is almost unbelievable. If we look at everything in this paper, except for fish, such as Euratom, goods, services, civil aviation, pharmaceuticals, the very important security issues, our membership of Europol, the common arrest warrant, and so forth, on every single instance it is more advantageous to stay in than to leave. The present regime is more advantageous than any conceivable alternative.

The third observation I have on this paper, which hit me quite hard between the eyes when I read it, is the extraordinary abandonment of services in this country. I thought we were very proud of our success in services in the world—success in the City, success of our media industry, which is so important, the success we have in technology and IT. I thought that, as a nation, we were proud of that. I thought that all Governments considered it part of their obligation to nurture these strengths, these industries. Far, far from it, this paper rejects them completely. They are forgotten about and cut off. The paper suggests the means by which we can help producers of goods, but on services there is nothing at all. That seems to be a fundamental dereliction of duty by this Government, and would be by the Government of any country to do such a thing to large sectors of investment and employment with all the human and financial consequences that would flow from that.

My fourth point is this. The great issue in this country is: why? Why are we being condemned with this self-destructive policy? Why do we have a Government who are actually in the process of destroying important industries in this country? That is unprecedented. I cannot think of any historical instance of that being done, and certainly not in a civilised country in recent times.

When one asks why, one gets from Eurosceptics two different sets of answers. One is, “Because we are implementing the referendum”. Leave aside the fact that the Supreme Court made it quite clear that the referendum was an advisory referendum. Leave aside the fact that no Parliament can commit its successor, because Parliaments have to take a new view on where national interest arises—we have had a new Parliament and two years have gone by, so it is the responsibility of Parliament to look at the matter again. Leave aside the fact that the referendum has been very much discredited because it was corrupted by serious breaches of electoral law, by gross overspending which in a Westminster election would cause the immediate unseating of the apparent winner of the election. Apparently, that sanction does not exist in this particular context. Leave aside the fact that the whole referendum was based on a lie—the famous lie by Boris Johnson about the National Health Service, and now we have, no less, the Office for Budget Responsibility confirming that far from having a dividend from Brexit, we have a penalty—less ability to spend money on any public service, the National Health Service included.

The other answer from Eurosceptics and the Government is, “We have wonderful new opportunities around the world that we can seize”. We know that that is nonsense. I have spoken on this on several occasions. We will not get a trade deal with the United States. It is has nothing do with the volatility of Mr Trump personally, but because no US Congress would ratify a trade treaty that did not provide for the sale of American agricultural products, and we will not accept in this country, as would not be accepted anywhere else in the European Union, chlorinated chicken and antibiotic-infused beef, and so forth, which we would have to accept in the circumstances. We will not do a trade deal with China because the Chinese will never accept steel quotas against them, and we cannot accept getting rid of steel quotas unless we abandon the British steel industry and Port Talbot, which the Government have promised not to do.

That is all rubbish, complete nonsense and pie in the sky. Who believes it? I heard the other day on Radio 4 somebody asking Dr Fox, “Where will you start replacing all the business we may have lost in the EU?”. He said that India would be a good place to start. I have the figures here showing that our exports to the whole of the rest of the EU are about €300 billion and exports to India including goods and services are about €7 billion. What does that mean? It means that if you were to increase that by 50%—which we never would of course, but let us suppose that we were to increase them by 50% as a result of a a trade deal with India—we would gain another €3.5 billion of exports. If we lost 10% of our business with the EU, as we might well do, as a result of either new tariffs, quotas, or just the ill will we are generating, we would lose €30 billion, and on that basis we would lose €16.5 billion.

What businessman would accept that as a good proposition? No businessman would do so. What politician would accept that as a good proposition for his or her country? Only a Brexit politician, and only a politician for whom Brexit was more important than the future of the country that he or she is representing.

Brexit: North-East of England

Lord Davies of Stamford Excerpts

Wednesday 9th May 2018 Lords Chamber

[Lord Callanan]

Things are getting better for the north-east of England. I cited the unemployment figures. I would have thought that the Labour Party, as the party that is traditionally supposed to be concerned about these issues, would have welcomed—I will repeat it—the lowest unemployment for 40 years. It is a record that the coalition Government and the Conservative Government should be proud of. The area is booming under a Conservative Government.

[Lord Davies of Stamford (Lab)]

My Lords, whenever the Government attack on the economy, they always cite the employment figures. They seem to have forgotten their elementary economics. Employment is a lagging indicator, reflecting demand for labour in the past. If they looked at current and leading indicators such as growth and investment intentions, they would see a very bleak picture. As the Minister no doubt knows, growth is less than 0.5%, whereas it is 3% on average in the European Union. The most recent CBI Investment Intentions Survey showed that 48% of companies had cut back their investment intentions from two years ago and only 2% had increased them. These are very serious matters. Do the Government not look at these matters and think that they are in some way responsible for the decline in the British economy as a result of their disastrous Brexit policies? If not, what is the cause of this divergence between our economic experience and that of the rest of the European Union?

[Lord Callanan]

My Lords, I make no apologies for talking about our record levels of employment in a region of which I am proud to be a part. I am sorry that the noble Lord does not seem to recognise that. Unemployment is continuing to fall. There are record levels of investment. Last year, Nissan announced a new £57 million investment in the region, to last for 25 years. It said it was going to continue to produce cars in the region for many years to come. The region is booming; it is doing well. Unemployment is falling, and I am sorry that the Labour Party does not want to recognise that.

European Union (Withdrawal) Bill

Lord Davies of Stamford Excerpts

Report: 6th sitting (Hansard): House of Lords
Tuesday 8th May 2018 Lords Chamber

I would like to support the Government, but I need some reassurance before I can.

[Lord Davies of Stamford (Lab)]

My Lords, I think I agree with every statement that has been made in the course of this debate. A real consensus seems to be emerging from both Benches’ contributions. I just want to add briefly to that, because it is an important issue.

In my view, the treatment of secondary legislation in our country is one of the hidden scandals of our constitution. It is done better in this House than it is in the other place. I was in the other place for 23 years. When I was on the Front Bench, like everyone else, I was from time to time press-ganged by the Whips to sit on a secondary legislation committee. What I witnessed there was a travesty. I often commented on it by intervening in those debates to say how disgusted I was with the whole process. Nobody was given an opportunity to brief themselves on the subject—we would have actually been discouraged from doing so. Certainly, anyone who had an interest in the subject would have been disqualified from serving on the committee in the first place. Everyone brought in their constituency correspondence or read a book. Nothing was said and there was no investigation of the issues raised, which were sometimes important issues. This went on for weeks and months and years, and I am sure continues.

The great virtue of this debate is that Brexit has given us an opportunity—simply because of the vast volume of secondary legislation that will be generated—to look again at our procedures in both Houses of Parliament to deal with it. Some very interesting suggestions have been made this evening. I particularly support the proposals of the noble Lord, Lord Lisvane. Ultimately, of course, we need to solve this problem in a different context from the one we have tonight, but I was delighted to hear the noble Viscount, Lord Hailsham, say that the solution must be to rely on Parliament to amend statutory instruments—secondary legislation. Only that will ensure that we have the opportunity for proper debate on the substance of these laws coming through Parliament, which is so severely lacking at present.

European Union (Withdrawal) Bill

Lord Davies of Stamford Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Monday 26th February 2018 Lords Chamber

[Lord Stephen (LD)]

My Lords, while I strongly support all that has been said about the continuation of the EHIC scheme, I want to speak to Amendment 353 in my name and thank my noble friend Lady Jolly and the noble Lord, Lord Warner, for adding their names to it.

The amendment would require the UK Government to make arrangements for an independent evaluation of the impact of the European Union withdrawal legislation and of Brexit on the health and social care sectors across England, Scotland, Wales and Northern Ireland. It is intended to be a simple, common-sense amendment. In the Brexit debate, a lot of attention is on trade and the economy, or, today, on the customs union, but our care services and our NHS will also be affected in a major way by our withdrawal from the EU. There will be many impacts on care and support for children and young people, for people with disabilities, for people with long-term conditions and for those with additional support needs. Not all these impacts are yet known or understood. It is clear, however, that many are likely to be negative. That is certainly the risk and it is why we must be vigilant and aware.

So the purpose of the amendment is to say, “Let’s be concerned about these issues; let’s give them a higher priority than at present, and let’s monitor the situation very closely, because if we get it wrong, NHS services and the care of thousands of vulnerable people could be badly affected”. The proposal is to review such issues not more than one year after Brexit takes place to see what has happened, to understand the impact and to allow the Government, local authorities and the NHS to take appropriate action. The intention is to involve in this independent process the devolved Governments, the staff of the NHS and our care services, charities, voluntary organisations and others.

The amendment was inspired by Camphill Scotland, which has many EU staff and volunteers living and working in its outstanding care communities. Camphill also operates in England, Wales, Northern Ireland and right across the EU, and now around the globe, but its very first community was on the Camphill estate in Milltimber, near Aberdeen in Scotland.

More than 50 charitable and voluntary organisations support the amendment. These organisations do not care about the politics of Brexit; they care about the vulnerable children, disadvantaged adults, older people and those with mental health problems or long-term illnesses to whom they give support.

I believe that the amendment will be strongly welcomed also by many people in the NHS, not all of whom were entirely convinced by the message on the side of the “Boris bus” during the campaign. Staff from right across the EU work in our NHS and in our care services. More than 10% of our doctors in the UK are from EU countries and, in total, more than 60,000 staff from the EU work in our British NHS, with many thousands more in the charitable and voluntary sectors. If Brexit means that we lose only some of these people, we could still have big problems. If it becomes more difficult to recruit new staff from EU countries, this could become a major crisis for our hospitals, our care homes, our special needs schools and many other vital services.

I ask the Government and the Minister to respond positively to the amendment. It is the sort of amendment that makes sense and can so easily be agreed to, with little to lose and a great deal to gain.

[Lord Davies of Stamford (Lab)]

My Lords, I have put my name to Amendment 205, which has already been very ably explained by the noble Earl, Lord Clancarty. First, I want to say a word or two in support of the noble Baroness, Lady Finlay, who made a most impressive speech. I hope that, for once, the Government will listen to her; they certainly ought to because she has a very special position of respect in the medical world. The medical profession in this country has been, at least up to now, one of the leading professions in the world, and she has a great deal of experience behind her and behind the words she set forth just now.

On that matter, as the noble Baroness said, the decision to leave the EMA was completely gratuitous. There was no reason for it at all. It was going to be perfectly possible to carry on with full membership while we left the European Union. A lot of us did not want us to leave the European Union—your Lordships know that I am among them—but there is no point in throwing away the whole loaf if you can keep even 5% of the bread. In this case, there would have been no difficulty at all in our remaining part of the EMA. The Government have given no explanation for this extraordinary move, which is a threat, a potential threat at least, to the advance of medical science and a certain threat to the position of the British pharmaceutical industry and to the willingness of companies to set up pharmaceutical operations and research and development operations in this country in the future—indeed, to the willingness of British pharmaceutical majors to remain as committed to this country as they have been up to now. It has really quite devastating industrial as well as medical effects.

The only reason we have ever heard for doing this is that we could not stay in the EMA because it involves some contact with the CJEU. That is quite extraordinary when this is a matter involving the health of the nation and involving one of the major industries in this country, of which we are all very proud. We do not have all that much in the way of successful manufacturing these days, but we undoubtedly do extraordinarily well in the pharmaceutical area, or have done up to now, and this industry is now to be handicapped for no better reason than one of theological fanaticism. It is incomprehensible to most of the world, either inside or outside this country. I hope that the Government will weigh very carefully the words of the noble Baroness and the representations that I know they have received from many branches of the medical profession and of the pharmaceutical industry, and for once just take account, soberly, carefully, thoughtfully and calmly of the values involved that are being thrown away and threatened by this extraordinary decision. I give an undertaking that I shall not gloat in any way if the Government do a U-turn on this: I shall congratulate them, sincerely and openly and I hope that they can find the moral courage to do what is right in this case.

I turn to Amendment 205, which was very ably set out by the noble Earl, Lord Clancarty. I shall not repeat what he said, but I want to talk about one section of the population that will be particularly affected by the abolition of the health insurance card in the European Union, and that is older people. Perhaps I should declare an interest here because I am certainly an older person, but I may be lucky because I have not so far been refused health insurance by anybody or charged exorbitant sums and probably, if I did have to pay a premium on my insurance policy to travel aboard, I would be able to afford to do so. A lot of people in this country, probably the majority, would not.

We all know that healthcare costs can be enormous, particularly in areas such as North America. One American friend of mine, who can actually afford to pay, was recently given a bill for more than $35,000 after a two-day stay in the Houston Medical Center. It involved a number of diagnostic tests, admittedly, as well as the board and lodging in the centre, but it gives an impression of the kind of costs that one can incur. There are countries in the world where you can get first-class medical care much cheaper than you can in Europe, let alone America, such as India, but not many. Countries tend to have medical care which is not up to the standards of North America, Japan or the European Union, or the costs are quite exorbitant, or in many cases both. Switzerland is another example, like the United States, where it is both.

For people who are older or have some particular medical record which makes them a bad insurance risk, underwriters will want to charge a very strong premium for insuring them at all. It is already quite difficult for them to travel outside the European Union. Many of us know people, friends of ours, who for that reason will not now travel outside the European Union. They will not even go and visit their family in the United States or Canada. They hope their family will come and visit them here, of course, but they simply cannot take the risk of falling seriously ill outside the European Union.

If the Government have their way and we go down this road that they have set out for us, the effect will not be just that people cannot go outside the European Union; they will not be able to go to Calais, Amsterdam, Berlin, Dublin, Copenhagen or Stockholm. That is the most terrible restriction of the horizons of a very large number of people. People may not have much time to travel when they are younger. They have business and professional commitments and a lot of strains on their budget because they are bringing up children and so forth. A lot of people look forward to being able to travel when they have retired, and the Government are saying to them, “When we have got this Bill through, you guys will not be able to travel at all—ha ha! You will be stuck here in this country”, which of course will be wonderful because we will have had Brexit and paradise on earth will result. That is a terrible—indeed, devastating—piece of news for a very large number of deserving people in this country. Once again, I hope the Government will have second thoughts.

[Lord Wigley (PC)]

My Lords, I will speak to Amendment 353 in the name of the noble Lord, Lord Stephen. I thought I had appended my name to it but clearly it had not quite arrived. I also support the comments made on the other linked amendments. I particularly identify with the comments of the noble Baroness a moment ago about Great Ormond Street Hospital, whose brilliant services we as a family had to avail ourselves of some decades ago. I cannot speak too highly of it and I hope that the points that were so well made are noted.

This group of amendments touches on one of the most sensitive areas of public policy: health and social care. There is a widespread unease in Wales—as there is, no doubt, throughout the rest of the UK—about the potential impact of Brexit on these vital services. On one level, one might not expect changes in our trading relationships to impact this sector as severely as, say, manufacturing or agriculture, but in fact there are already discernible effects on that key component of healthcare: the availability of a skilled workforce with adequate resources. A totally unnecessary uncertainty has been created, both for the existing NHS workforce, many of whom have come to the UK from EU countries, and with regard to recruiting potential new staff from those countries.

First, I have heard from those involved in healthcare—in Wales and in England, as it happens—about skilled staff employed in the NHS now actively seeking similar posts in other EU countries, just in case they feel forced to leave at a later date, perhaps for professional or social reasons. They fear that others will do likewise and that the available jobs will then dry up and they will need to move quickly to look for them. Secondly, I heard from a very authoritative source that EU-based specialist staff are currently holding back from applying for jobs in the UK because of the uncertainty caused by Brexit. Incidentally, this is not impacting just hospital services but university medical research and manufacturing companies in the healthcare sector.

The potential reduction in the number of key workers available to the NHS needs to be very carefully monitored. If we are to go for a soft Brexit in which we will agree the free movement of those coming for specific jobs and guarantee no dilution of their employment rights, that is all well and good; we might not need the amendment. But at this stage we just do not know what sort of Brexit awaits us. If it is a hard Brexit, with no agreement, we most certainly do need the review mechanism contained in this group of amendments, and we need it for a purpose because in a no-deal scenario we may need to make alternative plans to import key workers from other parts of the world—if we can find them—and to do so quickly. For these reasons I support the amendment.

--- Later in debate ---

[Lord Callanan]

The important progress was announced in the agreement reached in December in the first phase of the negotiations. Reciprocal healthcare benefits were guaranteed for existing UK residents in the EU and for existing EU residents here. The next phase is what happens in the future.

[Lord Davies of Stamford]

The points I raised related not to the important matter of residents, whether continental residents living here or British residents living on the continent, but to travellers—people who may want to travel for a short period for tourism, family reasons or what have you. Has any progress been made on that front? If not, are the Government proposing to make any progress and, if so, what progress?

[Lord Callanan]

That will be for the next phase of the negotiations. We have guaranteed the right of existing residents from the EU in the UK and for UK residents in the EU. The next phase of the negotiations is for people who will travel there in future.