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

Lord Hodgson of Astley Abbotts Excerpts

Monday 11th March 2019 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, like the noble Lord, Lord Rooker, I am a member of his noble friend Lord Cunningham’s Secondary Legislation Scrutiny Committee Sub-Committee B. My noble friend Lord Callanan was kind enough to say some nice words about the committee members in his opening remarks. I hope that that includes the staff, because our ability to perform well and effectively is very much dependent on the backup we get from the staff, who have done a terrific job. When my noble and learned friend comes to reply, I hope he will make it clear that the nice remarks, which I am sure the noble Lord, Lord Rooker, and I are happy to accept, include the staff, who have worked so hard to sort out and make sense of these extremely difficult and complex issues.

So many noble Lords speak this afternoon with great authority and certainty. I fear that I do not have certainty. I am a mild Brexiteer. I do not believe that the day after we leave the European Union the sun will come up shinier and brighter than ever before, nor do I believe that it will not come up at all, or hardly at all. Indeed, in many ways, following the remarks of my noble friend Lord Howard, I think that in almost any combination of outcomes we will find that commercial and other imperatives will drive this country and the European Union to find a way to work together and that for many people, therefore, despite some major changes, life will go on much as before. If that sounds eccentric, even complacent, perhaps I may underline my reputation for eccentricity by going a stage further. Despite all the sound and fury that is being devoted to this topic now, when we come to 2030 or 2035 and look back 10 or 15 years, I think that this will be seen to be a second-order event, because we stand the edge of two huge shifts of the tectonic plates which are going to transform the way this country lives and the way it relates to the rest of the world.

The first of these is the irreversible shift of wealth from the West to the East. In the 1990s the G7, of which this country was a member—the seven most prosperous countries in the world—accounted for about 56% of world output. By 2040, it is estimated that it will account for 22%. We are going to be, whether we are inside or outside the EU, in a very slow part of the stream. That will pose great strains on this country at every level, including our social cohesion. Social scientists will tell you that it is not absolute wealth that is the determinant of happiness; in many cases, it is relative wealth: how I am doing vis-à-vis my neighbour. As people in this country see other countries in the Far East begin to move up alongside us, they will begin to question what this country stands for, the way the system works, our approach and indeed our structures.

The second factor is the impact of the fourth industrial revolution. It is hard for us to estimate just what that is going to do for this country, the way we live and the way we work, over the next 10 or 15 years. The central estimate at the moment is that about 7.5 million jobs in this country will either disappear or be radically changed. My noble friend Lord Ridley, who is not in his place, will say not to worry about that too much, because we will be able to create more jobs: they will be destroyed, as has always been the case in the past. He may be right—indeed I hope he is—but it is a pretty heroic scale of job creation over a very much shorter period than in other industrial revolutions, which have lasted 50, 75 or 100 years. Whether he is right or not, it is going to be a time of great change which will also impose huge strains on our society. So the background to my Brexit position is the key question: does membership of the European Union help or hinder our ability to face up to and resolve these challenges? In short, will economic power, large power blocs, be the key determinant, or will it be the ability to be flexible and speedy in our response? I have concluded that, in fact, flexibility will be by far the most important factor. I fear that the structures and member states of the EU will not be able to react fast enough—a fast reaction will be critical—nor will they be able to forge a common purpose among them.

Against that background, I turn to the proposed transaction—the Prime Minister’s deal. During a lifetime in the City in which I watched and participated in negotiations on the outcome of which hung fame, fortune and reputation, two features predominated. The first was that, as these fierce negotiations drew to a close, both parties would feel dissatisfied and disappointed and that if somehow they had played the cards better, a better outcome could have been achieved. For me, the question is not whether this is a good deal; it was never going to be a good deal. The question is whether it is a good enough deal for us to want to back it. The second feature was that the toughest issues always had to be sorted out at the eleventh hour. The idea that hard issues could be sorted out early in a negotiation is fanciful.

The noble Lord, Lord Thomas of Gresford, referred to the old phrase, “the man on the Clapham omnibus”. Perhaps I may introduce a much more vulgar and politically incorrect phrase—“It ain’t over till the fat lady sings”. As we enter March, the fat lady is starting to warm up. That means that, as the noble and learned Lord, Lord Hope of Craighead, said—and as the noble Lord, Lord Hannay, did not say—any extension of the Article 50 period would be a great mistake. It is only the pressure of an end date that will force the concessions and agreements that have to be reached to make this deal happen. Otherwise, everybody relaxes and the fat lady goes back to her dressing room and waits for a chance to warm up in a month or two.

In my view the Prime Minister’s proposed deal is good enough, although we must remember, as the noble Lord, Lord Rooker, has just reminded us, that it is only half a deal. There is another whole chunk still to go in negotiating our future relationship. Of course it would be helpful to get some movement on the backstop, but I feel that the EU is unlikely to want to hold us within its structure if we are paying no subscription. Many of us have felt, and evidence is now emerging, that, given the relatively low volume of trade across the land border, technology will provide an answer.

It may be unfashionable to say this, but I believe that the Prime Minister has played an impossible hand pretty well. Assailed by equal and opposite forces within both the Conservative and Labour parties, she has plodded into the storm enduring unceasing ridicule and criticism. I hope she will get the necessary backing for her transaction so that this country can reorientate itself to the new situation and begin to address not only the big strategic issues I mentioned earlier in my remarks but the many short-term problems that we face.

--- Later in debate ---

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the noble Lord, Lord Hodgson of Astley Abbotts, says, “It ain’t over till the fat lady sings”. I am not sure whether he is expecting me to break into song to signal that we are near the end of this debate, or whether he was referring to the Prime Minister, who is touching down about now in Strasbourg.

[Lord Hodgson of Astley Abbotts]

May I say to the noble Baroness that I was not referring to her in any way? The man on the Clapham omnibus is a theoretical person and so is the fat lady in the example I gave.

[Baroness Hayter of Kentish Town]

Listening to Ministers—not tonight, but on other occasions—one might think that the lack of an agreement is all the EU’s fault. However, of course, it is we who chose to leave the EU: that is, we as a country, not necessarily as individuals. Mrs May chose her red lines before she understood the task or consulted those who did. Mrs May chose to trigger Article 50 and thus our exit day. It was the Prime Minister who chose our negotiating lead: he resigned. Mrs May chose our second negotiating lead: he resigned. Mrs May chose our third negotiating lead: he could not hack it, so she then sent the Attorney-General over, and now we find that he cannot hack it.

The truth is, of course, that all those faults lie with the Prime Minister. She failed to reach out to the 48% —who, my noble friend Lord Rooker reminded us, are 15.8 million people—who might accept that they lost the referendum but surely still have the right to a Brexit that would be the best possible one for the country. She failed to reach out to the Opposition, even after she lost her majority, to see whether a deal could be honed which could be supported across the Commons. She failed to heed anyone other than the ERG, whose concerns for the countries, regions and interests of the UK have yet to be demonstrated. She negotiated a deal that she cannot even sell to her own Parliament: it was defeated by 230 in the House of Commons and looks set for a similar defeat tomorrow. Is it any wonder that one Cabinet source told the Telegraph:

“I would say there are only two ministers in the Cabinet who still support her”?


We heard earlier that one of these is “Failing Grayling”.

How much better it would have been for the country and, indeed, for her premiership, had the Prime Minister heeded this House, but also the Opposition, and crafted a deal which would see us in a customs union with the EU, solving much of the Northern Ireland border checks issue and, importantly, preserving our supply chains and our manufacturers’ major trading routes. Blinded by those ludicrous red lines, the Prime Minister ignored the one path out of her dilemma. In doing so, she ignored the majority of those who voted in the House of Commons against her deal, seeking to bend only to a minority of those who voted against her: the hard Brexiteers. Of course, they fixated on the backstop because, truth be told, they had never considered the Northern Ireland dimension of Brexit before 23 June 2016. As the noble Lord, Lord Kerr, reminded us earlier, it was the UK which proposed a backstop. The EU agreed to it and now the UK is saying, “Oh, we do not now agree with our own proposal, so please will the 27 change it?”

Throughout this sorry saga, the Prime Minister and her team have shown little respect for the EU, its Parliament, which has to agree the deal, or its key players, who find themselves addressed via a lecture in Grimsby, rather than across the table.

The Government have failed to respect both the EU negotiators and staff who have devoted untold hours to implementing a decision taken by the UK and the 27 rather busy Prime Ministers who keep having to add this to their already demanding agenda. Indeed, it hardly seems conducive to a better outcome for our Foreign Secretary to threaten that relations with the EU will be “poisoned for many years” if Brussels fails to budge in the talks and that,

“future generations, if this ends in acrimony ... will say the EU got this wrong”.

There is no blame to our government; everything is the fault of the EU. Perhaps that is what leads the noble Lord, Lord Armstrong of Ilminster, to say that he has never felt a greater sense of shame.

As the noble Lord, Lord Finkelstein, has made clear, the one way not to leave the EU is without a deal, because of the sudden imposition of WTO tariffs and the ending of existing commercial relationships all built on zero tariffs and shared rules—all without even a transition period for business, importers, exporters and our ports to prepare. As for holidaymakers, perhaps 1.5 million of their passports may not work across the 27 member states because there is not enough time left on them. Their health cover will be lost; there will be queues at Eurostar and ports. This is to say nothing of their not being able to take their pets with them. They will not like that hard crash out as reality bites. Crucially, it would leave our UK citizens living across the 27 countries in a legal limbo, their healthcare, residency, jobs, and even driving licences uncertain. That is all without the opportunity costs mentioned by the noble Lord, Lord Horam, and the health, crime, housing and education issues that we are not dealing with because of the attention and money being spent considering no deal.

The noble Lord, Lord Howard of Lympne, warned of a loss of trust if we fail to leave on the 29th of this month. But there will be a much greater loss of trust if we leave in such a way as to damage the very people who voted for Brexit. So where do the Government go from here? It is possible they are going to need a Bill I have just been sent. It is the Bill on how to revoke Article 50—the draftsman was worried that the Government did not have it, so just in case they need it I offer it to the Minister.

If the Prime Minister fails to engage with the Opposition, with those willing to take the country forward on a consensual, constructive route, she risks being written up in history, either as my noble and learned friend Lord Goldsmith described—as Vladimir waiting for Godot, perhaps with the noble and learned Lord, Lord Keen, as the boy, waiting for an impossible majority to arrive—or perhaps, more seriously, as a chapter in the next Christopher Clark version of The Sleepwalkers. This is the book on how the 1914 leaders took Europe to war by simply sleepwalking into it. She may do the same by dozing on the job, so that the UK falls, heedlessly and unnecessarily, into the economic insecurity and diplomatic catastrophe of an unplanned, unwarranted and unnecessary no-deal exit from the near half-century of co-operation, growth and development we have had with our near neighbours in the EU.

It is not for this House to pass judgment on whether the Prime Minister has the confidence of the Commons. But I can say with absolute confidence that the Opposition have little faith in her approach to Brexit, in her deal and in her ability to negotiate an acceptable way forward in the interests of the whole of the UK. Our future is in her hands. I hope that makes others sleep easy, because it does not me.