Outcome of the European Union Referendum

Lord Hannay of Chiswick Excerpts

Wednesday 6th July 2016 Lords Chamber

[Lord Hannay of Chiswick (CB)]

My Lords, I am delighted to follow the noble Baroness, Lady Jolly, because she mentioned something that has hardly been mentioned in this debate, which is NATO. I, too, want to say something about that at a later point.

Post-mortems are grim occasions at the best of times, but this post-mortem on the overturning by a relatively small majority of the policies which have guided 10 successive Governments during the past 55 years is about as grim as it could get. It is all the more so when one considers that the campaign which preceded the 23 June vote plumbed depths which public life in this country has not seen before, with the leave campaign relying on half-truths, untruths and straightforward bare-faced lies, the most notable being the claim that £350 million a week was sent to Brussels. Faced as they were with conclusive evidence not from the remain campaign but bodies such as the Institute for Fiscal Studies that their claim was simply untrue, with it being illustrated carefully how untrue it was, the leave campaigners demonstrated that they had picked up a lesson in the Middle East, where it is always said: “If you’re going to tell a lie, you’d better tell a big one, because then more people believe it”.

That we are now required to respect the outcome of that vote is a fact of life, but it in no way discredits the view that the vote represents a major strategic error of judgment. It merely illustrates the folly of submitting an issue of this complexity to a binary choice and the folly, too, I fear, of the Prime Minister playing Russian roulette with the basic foundations of Britain’s foreign policy.

The question we now face is what can be saved from this shipwreck. How best can we mitigate the negative consequences of this decision to withdraw from the European Union, negative consequences which have already, in the space of one week, moved from being that airily dismissed Project Fear to being a daily reality? In considering our options, I hope that we can discard the relatively trivial issue of when to trigger the provisions of Article 50 of the treaty, which is the only legal way of leaving the European Union and the only way that is consistent with our international obligations. It is reasonable enough to delay for the period necessary for a new Prime Minister to take office and a new Government to be formed and then to have the ability to look carefully into the policy choices before them, but to delay artificially beyond that could be, and probably would be, to turn that issue into a completely unnecessary bone of contention with our EU partners, who after all we will require to respond positively to the ideas we put to them when we get round to deciding what they are.

When the new Prime Minister and the new Government take office, probably in September, let us hope that they will then be put through a crash course by their Civil Service advisers on the fundamental differences between, on the one hand, continuing in the single market and, on the other, leaving it and either seeking to negotiate a free trade agreement or relying on the WTO. I hate to disillusion the noble Lord, Lord Desai, but if he thinks that rejoining the WTO is a negotiation-free option, he does not know that much about the WTO.

The superficiality in this distinction between the single market and a free trade arrangement is, frankly, pretty startling. We have heard so far some very slippery concepts, such as “access” to the single market, bandied around. The leave campaigners do not seem to understand what that means or does not mean. For example, they say that the Americans have access to the single market. Sure, they export to the single market, but why on earth are all those American banks stacked up in the City of London? They are there because they need to get a passport to operate and they need to be within the European Union to do that. They do not have access for their banks if they are sitting in New York. That is a simple fact. Let us take the Japanese car industry. The Japanese do not send very many cars to Europe; they make a lot of cars in Europe, and thank heavens they make a lot of them in Britain. They do that because it is a gateway for barrier-free, tariff-free, no-inspection-required access to this huge market of 500 million. That is why they have all the factories here. So please do not let us confuse these slippery phrases like “access” with the real thing, which is what you get if you are in the single market. The Government’s White Paper in February setting out the alternatives, which was given scant attention, explained fairly carefully how these different alternatives played out on our trade, and, clearly, remaining in the single market was the best of the bad lot—the best lot, of course, being to remain in the EU.

However, I suggest also that any external relationship that we may fashion with the EU must surely cover one or two other key areas of policy, in which I would identify foreign and security policy and our protection against international crime. The advantages of continuing to work as far as possible in lockstep with the EU in handling the major foreign policy challenges ahead of us—Islamic State, instability in the Middle East, the new assertiveness of Russia’s foreign policy, climate change or the pressures from migration—are obvious. However, securing that will require much dexterity and will need underpinning with new procedures and new institutional links which would be greatly helped if this weekend’s meeting in Warsaw leads to a much closer relationship between NATO and the EU, which I believe it is the intention that it should.

As for justice and home affairs, the whole network comprising Europol, Eurojust and the essential instruments such as the European arrest warrant, the European criminal information record system, the Schengen information system and the Prüm agreements—all that, and much more besides—is really important for us. As recently as 2014, only 18 months ago, huge majorities in both Houses confirmed that it was in our national interest to remain in all those areas. So this too would require to be built into any new relationship with the EU as an integral and properly smoothly functioning part of it.

I wish to say one word about the vexed issue of EU citizens in the UK. So far the Government’s response to that has caused more alarm and despondency than it has allayed. That is really sad because in so doing the Government have betrayed the main values that I think we all hold very dear. I ask the Minister simply to state clearly in winding up that the object the Government will pursue in this matter is to protect the acquired rights of EU citizens in this country. It would not take much to say that, and if she did then a lot of people would go away on holiday without the concerns that they have now.

Are the objectives that I have set out negotiable? That is impossible to say at this moment. Would their achievement reduce the gap between the benefits—

[Noble Lords]

Time!

[Lord Hannay of Chiswick]

I am drawing to a close. Would their achievement reduce the gap between the benefits that we get from membership and those that we could get from them? We cannot tell that now. It is fruitless to try to answer those questions before negotiations have even started, or to speculate on what should be done if positive answers cannot be given to them. Suffice to say, if given the choice, I would not start this journey from here.