Update on the Progress of EU Exit Negotiations

Lord Hannay of Chiswick Excerpts

Tuesday 5th September 2017 Lords Chamber

[Baroness Anelay of St Johns]

My noble friend, as ever, speaks from great experience in these matters. I am very interested in his proposal about a paper looking at further EU reform and the new pattern of co-operation. I recall in our years in opposition together listening to him examining, in a very intellectual way, how we could change the way that the EU worked for the better of all. I am very interested and will certainly take that idea back.

I agree with my noble friend that a customs partnership is better than a customs union because a customs union means that one is not in a position to carry out trade deals. The Department for International Trade is ready, willing and very able to carry out those deals. Earlier on, the noble Baroness, Lady Hayter, seemed to think that it lacked capacity. However, since its formation, DIT has increased to a global workforce of more than 3,200. The trade policy group has quadrupled in size, and in June 2017 the department appointed a new chief trade negotiations adviser with over 25 years of experience. I was a little bit cheeky there, because what I really wanted to do is add to the record my thanks to my noble friend Lord Price. It has been an absolute joy to be able to work with him over the last year and a quarter. I was very keen on his appointment because before that, for one month only, I am pleased to say, I was Trade Minister while also doing the work at the Foreign and Commonwealth Office. He was super.

[Lord Hannay of Chiswick (CB)]

My Lords, I thank the noble Baroness for the Statement. It seems to me to show that her right honourable friend in the other place has learned the good old American advertising adage that, when you have a fairly dodgy product, you must accentuate the positive.

I have two questions. First, on the jurisdiction of the European Court of Justice, the paper that the Government have put on the table, which the noble Baroness referred to, is interesting. It is a piece of rather academic research on the possibilities, but does not say a single word about which are the Government’s preferences among those options. It invents a rather peculiar concept, which is “indirect jurisdiction”, if I understand it rightly, because I assume that the opposite of direct jurisdiction is indirect jurisdiction, which is apparently not so rebarbative as direct jurisdiction. Perhaps she could say something about the Government’s preferences among those choices.

Secondly, can the noble Baroness also say a little bit more about the implications of the Government’s support for the idea of some transitional period after March 2019 for the budgetary issues which are causing so much trouble now? It strikes me, not being all that arithmetically advanced, that in fact if we stayed among many of the workings of the European Union—not in the European Union—for a transitional period, that might make quite a big difference to the way that the financial issues would be handled. Perhaps she could confirm that that would be so.

[Baroness Anelay of St Johns]

My Lords, with regard to the first question about the Court of Justice of the European Union, we set out options without saying which we were going to come down firmly in favour of because we were putting forward options for discussion on the basis that, as I said earlier, in discussions you scope out where there can be some early agreement and build upon that. The noble Lord is of course right to raise the question about indirect jurisdiction. I would just add that there are areas where the Court of Justice of the European Union will continue to have some indirect jurisdiction after we leave the European Union if there is an agreement, as is currently developing, with regard to pending cases at the court itself. There is already built into the current structure of the withdrawal Bill and the negotiations some room where there would be indirect jurisdiction—but indirect jurisdiction is not something that would change the law in the United Kingdom or direct us how to change the law. Therein lies the difference.

With regard to a transitional period and the matter of budgetary issues, the multiannual financial framework of 2013 applies between 2014 and 2020. Therefore, what we are doing in challenging the paper which was put out by the European Union is to see whether there is a basis for saying that there are duties upon the UK to continue paying beyond 2019—whenever the date of leaving may be—and when there are not. Although I cannot at this stage answer the noble Lord directly, he raises the important issue that we are trying to flesh out in the way that we are not only challenging the basis on which the European Union has said that it has a legal basis for claiming contributions from this country to the EU but also saying that we need to look, during those negotiations, at the liabilities of the EU to the UK.