Brexit: Preparations

Lord Howarth of Newport Excerpts

Monday 21st October 2019 Lords Chamber

[Lord Callanan]

I can certainly assure the noble Lord that we have had extensive discussions and that planning has taken place with the security services to ensure that they have all the data available to them to enable them to do their job. It is the case, of course, in terms of national security, that many of these discussions go on outside the European Union, and those good relationships will continue. With regard to law enforcement data, we are putting mitigation steps in place to make sure that we can still take full advantage of the procedures.

[Lord Howarth of Newport (Lab)]

My Lords, given the serial inability of the House of Commons to reach a constructive conclusion on Brexit even when presented with this deal, which reasonable people should surely be able to compromise on and agree with, and given the very real possibility that the EU Council—fed up with the dithering and indecision of our Parliament—will decide that it has had enough and refuse to grant us an extension, is it not mere common sense that the Government should redouble their efforts to prepare for the contingency that we leave the European Union without a deal on 31 October? In these circumstances, would it not also be appropriate for this House to express its appreciation of all those officials who are straining every sinew to make sure that we are adequately prepared for such an eventuality?

[Lord Callanan]

I thank the noble Lord for his comments. It is indeed common sense that we prepare for that eventuality. It seems to be a common sense that escapes a number of Members in this Chamber, but it is the sensible thing to do. I indeed want to pay tribute to the many officials who are working extremely hard, up and down the country, seven days a week. As I walked into a meeting in the Cabinet Office on Sunday morning to discuss these matters, I thought of that very fact.

Brexit: Preparations

Lord Howarth of Newport Excerpts

Tuesday 8th October 2019 Lords Chamber

[Lord Callanan]

I think it was a UK referendum, not just a Conservative referendum. We are committed to honouring the result. I entirely understand the position of the Liberal Democrats: they want to forget about it and disavow the result, hoping that it will all go away. That is an offence against democracy, but I am sure that we will have this debate when it comes to the next general election.

[Lord Howarth of Newport (Lab)]

My Lords, does the Minister accept that most people in this country will not share the indignation expressed by some noble Lords about the Government preparing for no deal, but will think that it is the obvious responsibility of the Government, while continuing to work towards a deal, to prepare for the contingency of no deal, which remains a very real possibility? Does he also accept that whatever the present intransigence of the Commission, the member states of the European Union will surely recognise that it is in their interests to work very closely and collaboratively with us on issues of security?

[Lord Callanan]

As always, the noble Lord makes very good points. Most people will of course accept that it is the legal default, and we should be preparing appropriately. I also entirely accept his other point. A lot of security co-operation takes place outside of the EU sphere, and we have been assured by the people responsible that that co-operation will continue, but of course, some security co-operation relies on access to EU databases et cetera. It is extremely disappointing that the Commission does not wish to discuss how we can better keep people safe in these areas.

Brexit

Lord Howarth of Newport Excerpts

Wednesday 2nd October 2019 Lords Chamber

[Lord Howarth of Newport (Lab)]

My Lords, let us remind ourselves that the case for leaving the European Union is to reclaim the legislative sovereignty that we lent to the European Communities in 1972—and that is a prize of great value. The delegation of so much policy and legislative responsibility to the democratically defective institutions of the European Union has been, I believe, a powerful factor in the growing disaffection with parliamentary democracy that we have witnessed in our country. To take back these responsibilities gives us an opportunity to renew our democracy.

Our country is indeed “full of passionate intensity”; that is not surprising, because Brexit is a struggle for the soul of the nation and the future of our democracy. When people were asked in 2016 to vote to leave or to remain, they were in effect asked, “Do you wish to preserve the status quo?”. That question prompted an outpouring of long pent-up anger against elites and a howl from those who had been failed by the neoliberal orthodoxy practised by all parties in government. Many leavers now take the view that their Parliament is intent on cheating them, while many remainers are fearful of the mob. This is a dangerous state of affairs and we urgently need an access of moderation and reason.

To resume self-government in the sense that Brexit would permit is not to consign our nation to Faragism, to reaction, to racism and to xenophobia. It will be open to us to choose to be a liberal and internationalist society, and that is what I believe people will want to choose. For the centre-left, so unconfident about a post-Brexit future, the challenge is to put forward a vision of a sustainable economy, social justice and policies for climate change, and to win elections.

It is hard to see how compromise between the leave and remain positions can be achieved. Leavers see the Brexit issue in terms of freedom and democracy; remainers choose to frame Brexit in terms of the economy and standards of living. These two sets of considerations do not engage. The withdrawal deal, which I believe was an honourable attempt to find a compromise, was rejected vehemently by both sides of the argument on three occasions.

Is the present condition of our politics therefore a massive failure? There is certainly immense frustration in the country and a paralysis of decision-taking. The parties appear to have descended into chaos. There is too much excessive language, whether of surrender or of catastrophe, in our political discourse. Abuse and threats abound. It was very wrong for the Prime Minister, in a system of parliamentary government, to rouse the people against Parliament. He should desist from the use of populist language and seek to speak for the country as a whole. Among the many divisions in politics is that between those politicians who seek to appeal to,

“the better angels of our nature”,

and those who conjure demons.

On the other hand, it could be said that what has been happening in our politics is rather admirable. There is a mighty contest between politicians who have passionately held but conflicting views of what will be for the good of the country. When the Government have been unable to advance, Parliament has chosen to take the initiative; the Speaker has upheld the right of the House of Commons to do so; politicians have worked across party boundaries and some have been willing to sacrifice their careers for their principles; and the Supreme Court has proved an effective check on arbitrary government—the Prime Minister should never have made that stupid and improper attempt to prorogue Parliament for five weeks.

Whichever view noble Lords may take, we now need as quickly as possible a resolution to the essential Brexit issue of whether we leave or remain, and we need a return to mutual respect and reconciliation. But I fear that neither a referendum nor a general election will produce those outcomes.

Meanwhile, as we look at the time horizon between now and 31 October, it is I suppose possible, although it seems unlikely, that the Prime Minister will negotiate a deal with the European Union. If he does, that deal will presumably be the withdrawal deal with the backstop tweaked. But for many leavers that will be viewed as Brexit in name only.

I will quote Professor David Collins, professor of international economic law at City University:

“We must keep in mind that there are many features of the Withdrawal Agreement which are just as bad as the Backstop, but which have received far less attention, notably from our Prime Minister. The Withdrawal Agreement would maintain the supremacy of EU law over the UK, including new laws created by the EU over which the UK would have no voice. This means that UK courts would be required to strike down Acts of Parliament if they are determined to be inconsistent with EU law. Worse, the jurisdiction of the European Court of Justice would be retained, either directly or through a dispute settlement system modelled on the one the EU has with the Ukraine through which a notionally neutral tribunal would be bound on issues of EU law by decisions of the ECJ. Since the UK would have no judge on the ECJ, it would effectively be under the jurisdiction of a foreign court”.


Have we come this far for that? What kind of sovereignty is that? There will be anger if that is the nature of the deal, and it is very questionable whether the House of Commons would vote for it.

Alternatively, we may leave with “no deal”—I use that as a term of art; the noble Lord, Lord Lilley, explained that there are many deals that mitigate the notion of an absolute no deal—should one of the member states of the European Union veto an extension. I believe that that would not be a catastrophe. We would of course have been much better prepared for such a contingency had the previous Chancellor, Mr Hammond, not forbade further public expenditure on preparations for no deal at a crucial phase—but the present Chancellor, Mr Javid, is seeking to make up for lost time. Yes, we would go through choppy waters, but we would go through no hurricane. We could come through, as we have come through many periods of economic disruption and difficulty before. Then, as we worked towards a free trade agreement, we would be doing so with our heads held high as a self- governing nation.

--- Later in debate ---

[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.

Brexit: Appointment of Joint Committee

Lord Howarth of Newport Excerpts

Wednesday 3rd July 2019 Lords Chamber

[Lord Howarth of Newport (Lab)]

My Lords, the Joint Committee that my noble friend proposes should be clear-eyed in weighing up the costs and implications of no deal by comparison with other options.

One option is still for us to leave under the terms of the Prime Minister’s withdrawal deal. Donald Tusk said yesterday that we should not expect the new leaders of the EU institutions to offer any other deal. However, the withdrawal deal is deeply objectionable to both leavers and remainers. Leavers see it as Brexit in name only; remainers think it a poor substitute for full membership.

Another option is to revoke Article 50, but the House of Commons is not going to vote for that either, and rightly so. For Parliament to repudiate the decision of the British people at the 2016 referendum would be catastrophic for our democracy. The two main parties pledged themselves to respect the verdict of that referendum. The esteem in which Parliament is held has been deteriorating throughout our political lifetimes, and Brexit has precipitated a crisis of confidence in Parliament. The House of Commons has failed to resolve Brexit, and voter support for the two main parties has never been lower. Here, as in much of the EU, we can see a more sinister politics emerging out of frustration with the main parties and parliamentary government.

A third option is another referendum. That would be a cop-out by Parliament. As Mr Heath discovered at the February 1974 election, the people do not expect their MPs to pass the buck back to them. A second referendum would be even more bitterly divisive; nor would it resolve the impasse. Whether it turned out that leave or remain had more votes, the majority would be narrow, leaving us with the same problem of consent and reconciliation as we have now.

Meanwhile, during the many months it would take to legislate and then organise and hold the referendum, the economy would continue to suffer. Uncertainty is the great enemy of markets and investment. The Governor of the Bank of England spoke yesterday of the drag from Brexit uncertainties intensifying. Our political paralysis has caused business paralysis. The latest PMI and ONS figures highlight the malaise. Do we want to extend from three to four years this vacuum in which little or nothing is done to address our uncompetitive productivity, in which businesses hoard cash, stockpile goods and defer investment decisions, and in which the number of people doing precarious and poorly paid jobs has soared, as has the number of people resorting to food banks? A second referendum is not in the interests of the poor and disadvantaged.

Alternatively, we might have a general election. This seems more likely to happen by accident than design, but there is a real possibility that an early general election could follow a vote of no confidence. If there were to be a general election, it would not take the politics of Brexit into clear water. A general election would be about more than Brexit. Neither leave nor remain could claim the outcome as vindication. The fragmentation of identity and political support among the electorate means in any case that, under first past the post, an election is unlikely to deliver a Government with a working majority.

So what other options are we left with?

Perhaps the new Prime Minister will be able, at the 11th hour, to pull a rabbit out of the hat and negotiate a new deal that is acceptable to Parliament. It is hard to foresee success in such an endeavour, but it must be right to try. In the circumstances of a serious new negotiation, possibly the EU would agree to another extension, but that is far from certain, and postponement is not resolution.

If negotiation does not work, we are forced on to so-called no deal. As is now the legal default, we could simply leave on 31 October. This is what people of a nervous disposition—and they are right to be nervous—call crashing out. Legal uncertainty, a sudden alteration of terms of trade and severance of contractual and administrative processes would indeed be disruptive and possibly very damaging in ways that even the committee my noble friend proposes could not altogether foresee. No one can responsibly advocate this. If it is what, through failure of negotiation and planning, we find ourselves having to deal with, no doubt as a country we will cope, as we have coped in other crises. Mitigations by the Treasury and the Bank, common-sense waivers of the rules and bold improvisations by Whitehall and business would limit transitional damage, but people would get hurt.

There can, however, be a relatively benign version of no deal. It is not too late to achieve a managed no deal. This is an option that the Bank envisaged in its response to the Treasury Select Committee last autumn. The Bank’s projection was that a managed no deal would provide for future growth to be only 1.5% less by 2023 than under the Prime Minister’s withdrawal agreement—no catastrophe, therefore. The Joint Committee, once it has examined the evidence, might consider that comparatively minor diminution of prospective growth a price worth paying in these circumstances, in which there are compelling objections and obstacles to all other options.

It has been grossly irresponsible on the part of the Chancellor, since the referendum, to have dragged his feet on preparing for no deal. Yesterday he repeated his adamantine opposition to no deal, but whatever he or others may have wished, no deal has always been a possibility and there are no excuses for failing to make the fullest preparations for that contingency. So much more could have been done to mitigate the risks of no deal and, of course, to strengthen our negotiating position. As President Macron also said yesterday:

“If you fear no deal you are the hostage”.


I was appalled to read in the Guardian of 11 April that, following the postponement of Brexit from 29 March, Whitehall transferred 6,000 officials who were at last preparing for no deal back to other departmental duties and stood down operational planning for no deal.

Be that as it may, we still have four months before our scheduled departure date of 31 October, and a great deal of useful preparation for a managed no deal can be made in that period to build on the reassuring plans for no deal that have already been made on both sides of the Channel in relation to transport, customs and so forth.

I know the EU believes it is politically necessary to show—pour encourager les autres—that it must be painful for a member state to leave the EU. But the 27 and ourselves continue to profess friendship. Good will, common sense and pragmatism can still, in the interests of our EU trading partners and ourselves, make no deal manageable, with much potential damage avoided.

My understanding, supported by eminent legal and academic authority and pace the noble Lord, Lord Kerr of Kinlochard, is that under Article XXIV of the GATT we can avoid new tariff barriers between ourselves and the EU, precluding the need for a hard border in the island of Ireland, if the EU makes a simple commitment in principle to start negotiations with us to achieve a free trade area.

It is a moment to remember the old maxim:

“Keep calm and carry on”.


A Joint Committee may find that, sensibly conceived and with determined preparation, no deal can well be manageable and transitional turbulence can be minimised. It may conclude that it would be the least unsatisfactory route to the resolution of Brexit.

Which would be better for our country? To pursue economic growth, regardless of other values, within an ailing EU or to nerve ourselves to seize the great prize that Brexit offers of the recovery of national self-government and the opportunity to renew our democracy and self-belief?

Brexit: Free Trade Agreement

Lord Howarth of Newport Excerpts

Tuesday 14th May 2019 Lords Chamber

[Lord Callanan]

To repeat the answer that I gave to the noble Lord’s noble friends Lady Hayter and Lord Tomlinson, we are prepared to compromise and we have offered what we thought were potential solutions. I understand that the Opposition Front Bench are considering them, and a dialogue is still taking place. The talks are not concluded and are still being undertaken, so let us hope that we can get an agreement and the matter can be put to bed.

[Lord Howarth of Newport (Lab)]

My Lords, taking the Minister back to his first Answer, what would be disorderly about leaving with a free trade agreement?

[Lord Callanan]

Of course there would be nothing disorderly about leaving with a free trade agreement, but we need to negotiate that agreement. It is a very detailed and complex subject. To get on to those negotiations, we need a withdrawal agreement to settle all the outstanding issues. If we do not have a withdrawal agreement, the EU has made it clear that it is not prepared to discuss any free trade arrangement until we settle all the issues.

European Union (Withdrawal) (No. 5) Bill

Lord Howarth of Newport Excerpts

Committee: 1st sitting (Hansard): House of Lords
Monday 8th April 2019 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, noble Lords are saying that it is for the other place to set a date. My understanding is that it will have one hour to consider our amendments and every aspect of the Bill. It is apparent from the speech made by my noble friend that there is an issue here. As I raised on Thursday, I do not understand why the Bill did not have a money resolution. It is perfectly possible that, in return for agreeing a date, the European Union could demand even more than the £39 billion already offered by the Prime Minister, and that the financial consequences could be considerable. This amendment seeks some kind of time limit on the process, which is sensible.

[Lord Howarth of Newport (Lab)]

My Lords, we should be grateful to the noble Baroness, Lady Neville-Rolfe, for her amendment and for inviting us to consider the issues she identified. Any damage our economy is experiencing at the moment is on account not of the people’s decision in the 2016 referendum but of the highly protracted process and continuing uncertainty that is paralysing economic decision-making, particularly in investment and consumer decisions. The noble Baroness is absolutely right: we need the best objective assessment available as to the damage that the continuation of this uncertainty would cause. The proponents of a long extension of Article 50 must address the question of their responsibility for the continuing economic damage that would result.

[Lord Robathan (Con)]

My Lords, in rising to support my noble friend, I am somewhat confused because this is a Private Member’s Bill that was absolutely pushed by the noble Baroness, Lady Hayter, who is not here today, from the Labour Front Bench only on Thursday. It was then taken forward by the noble Lord, Lord Rooker, who is not here today, and now it is being taken forward by the noble Lord, Lord Robertson. I am sure that that is all normal, but this is a huge constitutional step which seems to have, as my noble friend Lord Forsyth said, no parents. This is a very important step and we seem to be drifting into it without any considered thought at all.

European Union (Withdrawal) (No. 5) Bill

Lord Howarth of Newport Excerpts

2nd reading (Hansard): House of Lords
Thursday 4th April 2019 Lords Chamber

[Lord Howarth of Newport (Lab)]

My Lords, this Bill is misconceived in every aspect. It mandates the Prime Minister to seek an Article 50 extension, and in so doing its authors are pursuing what we used to call a chimera. I think we now call it a unicorn; the unicorn of soft Brexit. Where sovereignty is concerned there is no such thing, and it is sovereignty that is essentially at issue in Brexit. By sovereignty I do not mean power; the power of a nation is always circumscribed. I mean our right to make our own laws in our own democratic institutions, accountable to our own people and interpreted by our own courts. On that there should be no compromise. The choice in 2016 was between leaving and remaining. That is still the choice.

The people of this country took a robust view in 2016. They were warned of the possibility of economic disruption—indeed, they were warned in lurid terms by Project Fear. None the less, they voted as they did. Remainers are wont to say that no one voted to be poorer, but the people of this country voted as they did in full awareness of the potential consequences, including the possibility that leaving might make them poorer, and that was the decision they took. That was what they decreed.

The political parties committed themselves in advance of the referendum to accept the decision of the people, and in the wake of the referendum they committed themselves to respect it. It was therefore incumbent on the Government to pursue a clean Brexit. That meant being willing to leave the European Union and trade in the future on WTO terms, while of course seeking to achieve a free trade agreement as soon as possible—a Canada-plus-plus-plus deal. That would have been possible. Had the Government, following the referendum, stated that they were going to negotiate as soon as possible a free trade deal with the European Union, but that if the European Union was not willing to grant that for some time they would none the less be willing to leave with no deal, then our negotiating position would have been very much stronger. By now, this country would have been psychologically and organisationally much better prepared than it is today.

Remainers often assert that the real reason people voted to leave was fear of immigration. It is true that a minority were very much moved by that consideration, but there is no inconsistency between believing we should leave the European Union and being an internationalist—understanding and valuing the economic, social and cultural benefits of immigration. Reassuring those of our fellow citizens who are apprehensive and nervous about immigration is a very important challenge for our leadership. The best way to do that is to make it clear to them that in future we will have the power to make our own decisions about our own immigration policy. That is among the reasons why membership of the single market and the Norway option are inappropriate for this country.

From the point of view of democracy, no deal is indeed better than a bad deal, a phrase which the noble Lord, Lord Hannay, referred to rather contemptuously as “that appalling mantra”. It all depends on your point of view; if you believe that the issue of democracy is paramount in Brexit, then no deal is better than a bad deal. There is no such thing as a soft Brexit. It is not Brexit. Soft Brexit is actually soft remain. The Prime Minister’s withdrawal deal and the political agreement would entail the continuation of very important elements of lawmaking being controlled by the European Union, with the Court of Justice of the European Union hovering over our courts. A softer Brexit still, such as the customs union, would be Brexit in name only.

If as a remainer you believe that economics is what matters above all, you can well contemplate a soft Brexit. Of course there are degrees of separation that you may be willing to consider. However, the remainers paint a lurid picture of what our departure from the EU may mean. They suggest—the noble Lord, Lord Stern, made this case just now in stark terms—that to leave without a deal would be a catastrophe; my noble friend Lord Adonis described how the country would be “trashed” in such circumstances and talked of us driving at 100 miles an hour towards a cliff edge.

I prefer the sensible and calmer language of the noble Lord, Lord King of Lothbury, who is a very respectable economist—the noble Baroness, Lady Ludford, talked of reputable economists, but as far as I can see, her definition of a reputable economist is an economist who agrees with her. There are economists who do not. I prefer the view of the noble Lord, Lord King of Lothbury, to that of his successor, Mr Mark Carney, who has addressed this issue in rather alarmist terms, and I am amazed at the leaked document in which Sir Mark Sedwill, the Cabinet Secretary, described the possible consequences of no deal in melodramatic terms. How can he possibly contend that the price of food would rise by 10%? It is of course a possibility that there may be some devaluation of the pound at the moment we leave the European Union, but we will have the great opportunity—this is the crucial point—to abolish the tariffs on food and allow our people to have the choice of cheap food if that is what they want to buy.

It is not Brexit that is damaging our economy at the moment but the uncertainty associated with the Brexit process and the prolonged nature of it, which are paralysing decision-making and investment. Those who argue for a further extension, and that is what the Bill is about, are proposing to perpetuate this period of indecision and economic paralysis. The sooner we extricate ourselves from the close relationship we have with the European Union, the better the chances of our prosperity. Look at the condition of the German and Italian economies and at the structural flaws of the eurozone, with no integrated fiscal or economic policy. The European Union will change, because its present configuration is unsustainable. Either it will proceed to a much more integrated economy, as the President of France wants it to do—which I believe would be, politically, entirely unacceptable to us—or it will begin to disintegrate. The financial and economic consequences of that will be dire, and the more so if we are still in membership.

[Lord Judd (Lab)]

We all have immense respect for my noble friend, but he has associated concepts and thoughts with the position of remainers on which I simply cannot remain silent. Some of us have always believed with deep conviction that, while politics and economic relationships are the mechanisms that helped to build the European Union, the purpose of the whole European drive has been to build peace and security on the European continent, and it has certainly achieved that. We are anxious that we do not give an example to the world in that, having done that successfully, we are now going into retreat.

[Lord Howarth of Newport]

I have the greatest respect for my noble friend. He is of course right that that was the founding vision of the European Union, and that has been its great justification. However, I put it to him that today’s European Union is not an agent for peace and social harmony. If he looks at the levels of unemployment across the Mediterranean countries, the rise of neo-fascism in eastern Europe and the palpable tensions and indeed hostilities within the European Union, I fear that the model that attracted his idealism is no longer the European Union we have today.

[Lord Judd]

My Lords—

[Lord Howarth of Newport]

I must proceed, if my noble friend will allow me. I am grateful to him.

I find it extraordinary that those of us who believe that what is essentially at stake in Brexit is the future of our democracy and say that that is the most important thing should be characterised as hardliners. The fact that this language is used goes some way to explain the disillusion that there is among so many of our fellow citizens with politicians.

The endeavour of Brexit is about the self-respect of a country that has centuries of tradition of parliamentary government but gave away too much of its parliamentary government in 1972. It is significant that older people, who have longer memories of our parliamentary government and democracy, have been more disposed to vote leave, and that younger people, who have been brought up in a culture of cynicism about politics—a cynicism that I think derives from the democratic deficit of the European Union, in which we are implicated—are the main remainers.

The Bill, and the procedures under which it has been introduced and is being treated in Parliament, abrogate important elements of the constitution. It is flawed even in its own terms. As the noble Lord, Lord Norton, reminded us, it betrays a profound misunderstanding of the respective roles of the legislature and the Executive. Parliamentary government does not mean Parliament governing, and it is very wrong, as the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Judge, have intimated, that the Prime Minister should be dispatched by Back-Bench legislation to negotiate with the Council of Ministers with her hands so tied. That is an insult to her and her office. It is not in the gift of the Parliament of the United Kingdom to determine unilaterally the date of our exit.

As the constitutional proprieties have been so comprehensively junked in recent times, we would be well within our rights if we were to reject the Bill and ask the other place to think again. Of course, we will not do that, but I hope that we will seriously amend the Bill on Monday.

Meanwhile, I hope that we will indeed leave on 12 April. Our departure will be more ragged than it need have been because it has not been well prepared for. The House of Commons does not want us to leave with no deal but, as the noble Baroness, Lady Deech, asked: what would the extension be for? The House of Commons may not like no deal, but the House of Commons has been completely unable to determine what it wants. If we leave on 12 April or shortly afterwards, we can then embrace our birthright, renew our democracy, embark on a politics of reconciliation, address ourselves to the major issues that have been so badly neglected during this Brexit saga and seek a progressive internationalism for our country.

Brexit: Non-Disclosure Agreements

Lord Howarth of Newport Excerpts

Thursday 14th March 2019 Lords Chamber

[Lord Callanan]

I totally agree that business should not be gagged. Many businesses have rightly spoken out with their opinions on Brexit, both for and against. But we have been extremely open about no deal and the costs of Brexit. We published 106 technical notices and there has been extensive debate. A lot of economic analysis has been published. Nobody can say that they have not had all the relevant information.

[Lord Howarth of Newport (Lab)]

My Lords, if the Government subscribe to the democratic principles of transparency and accountability, should there not be a rule that Governments and their agencies do not enter into non-disclosure agreements where public interests are material? Should not pleadings for commercial confidentiality be treated with great scepticism?

[Lord Callanan]

I agree with the noble Lord that it is important for the Government to be as transparent as possible, but some of these contracts cover things such as payroll services. They are not an attempt to gag businesses or anything like that. The Comptroller and Auditor-General, the head of the National Audit Office, gave evidence to the Exiting the EU Committee in the other place that the use of NDAs in these government contracts was entirely appropriate.

Brexit: Preparations and Negotiations

Lord Howarth of Newport Excerpts

Monday 23rd July 2018 Lords Chamber

[Lord Newby]

I think that things have moved on since the last general election. At the time of the election, a lot of people believed the slogan on the bus; a lot of people believed a whole raft of things about EU membership, or leaving the EU, which have proved to be false. All I am doing is explaining how public opinion currently stands. The noble Lord might not like it, but that is where we stand. If we go back two years, it was different; if we go back five years, it was different again. When we first had a referendum, it was two to one in favour. Public opinion changes, and it has changed against the noble Lord’s view. That is why he does not like it and that is why he does not want to have a referendum.

[Lord Howarth of Newport (Lab)]

Does the noble Lord actually think there would be a majority in Parliament for the legislation necessary to introduce a referendum? Does he recognise the problem about timescale, as we are due to leave the EU at the end of next March? Does he think that leavers would accept a ruse so cynically designed with three choices to split the leave vote? Does he think that that would lance the boil?

[Lord Newby]

We are talking about what the options are. I am saying that there are three; perhaps the noble Lord believes that there are others. I believe that there are two relating to Brexit—no deal, or something broadly based on what the Government have produced. I believe the only other option is staying in, and the only way to get that accepted in the country, politically and morally, is through another popular vote.

As for timing, it would be perfectly possible to legislate quickly for such a referendum; it would be perfectly possible to get a very limited extension of Article 50 from the EU. It is typical of what happens when people are losing the argument—they come forward with administrative problems. Are we saying that we could not hold a referendum relatively quickly? Is it beyond our powers? Of course not. The truth is that, if we want to do it, we can do it. The arguments for not doing it are not administrative—they are political.

Finally, as this fractious Parliament takes its summer break, the position on Brexit is now clearer: there are only two options, neither of which can command a majority in the Commons. The only other option is to remain in the EU following a people’s vote, and the people would now vote to remain.

--- Later in debate ---

[Lord Howarth of Newport (Lab)]

My Lords, the noble Lord, Lord Heseltine, wondered what Brexit may actually mean. I think it is now very clear that soft Brexit is an illusion. The Chequers statement and the White Paper that elaborates it describe a Brexit in name only. This compromise, the nearest the Prime Minister has been able to get to a soft Brexit, is unacceptable to remainers and leavers alike, and today’s debate has underscored that. The EU has made it clear that it represents unacceptable cherry picking and offends EU ideology.

Martin Howe QC, dissecting the Government’s statement, has explained that the common rulebook for all goods, including agri-food, would be common only in the sense that the UK would have to obey and apply in complete detail the laws promulgated by the EU without having a vote on the content of those laws. The UK would be obliged to interpret the rules in accordance with rulings of the European Court of Justice under a system which would, whether directly or indirectly, bind UK courts to follow ECJ rulings: that was confirmed this afternoon in a significant speech by the noble and learned Lord, Lord Hope of Craighead. Moreover, the Government propose that the UK should commit by treaty to ongoing harmonisation in the extensive area covered by the EU rulebook. Parliament’s notional ability to reject future changes to the EU rulebook would be no more real than Norway’s right under the EEA agreement, which has never been successfully exercised. The common rulebook would prevent the UK making new trade agreements with other countries such as the US and Australia, because we would be required to apply EU laws against imports from third countries. This is not taking back control.

This long-awaited White Paper falls far below the level of events, as the noble Lord, Lord Kerr, just suggested. Here is a sample of its prose, from page 19:

“Diagonal cumulation would allow UK, EU and FTA partner content to be considered interchangeable in trilateral trade”.


At such an existential moment in our national life, when the country needs leadership, our Government express themselves in slogans that are contradicted by their policy and in incomprehensible bureaucratic mumblings.

What is to be done now? I am glad to see it reported that the Government may, instead, seek a free trade arrangement with the EU—including services, I trust—based on the EU’s existing arrangements with Canada, Switzerland and South Korea. M Barnier has signalled that the EU may be amenable to such an arrangement. If the EU can negotiate a free trade agreement with Japan, it could far more easily negotiate a free trade agreement with the United Kingdom. However, it is also reported that a deal of this kind is unacceptable to the Prime Minister, because it would mean a hard border in Ireland. It cannot be right that Brexit should be held hostage by the politics of Ireland. Here is an area where compromise is very definitely needed. With common sense and good will there need be no such problem. A system of trusted traders, intelligence-led checks and observation by means of cameras, drones and satellite surveillance would not amount, in any real sense, to a hard border. It is offensive to the Irish to assume that if they are not in a customs union, they will revert to murdering each other. I reject the alarmism of my noble friend Lord Adonis.

If the EU rejects a free trade agreement, we will have no choice but to leave without a deal and move to WTO rules. Let us not be bamboozled into supposing that that will be a disaster. Yes, some growth may be forgone, if forecasts are to be trusted, but we trade very successfully with major partners under WTO rules. Nor need the transition be remotely cataclysmic. We, on our side, can wave the lorries through and continue to operate air traffic control and all the other systems that facilitate movement, extended supply chains and innumerable legal and financial transactions. Even Messieurs Barnier, Juncker and Selmayr, for all their fundamentalism and punitive zeal, would surely not be so pig-headed and destructive as to set up hard borders between the EU and the UK and inflict grievous damage on their own businesses and people. The Government are right to be doing serious work to prepare us for no deal. The Treasury and the Bank of England should now refrain from fabricating fear. They must be willing to boost the economy to take us through the period following our departure.

People want a politics that can make us proud. The passion of leave voters is for our country and our democracy. There is no point in the Prime Minister and her Ministers spending the summer trying to sell the unsellable. She needs to speak to the nation about our future in visionary and compelling terms: in her own style, without rodomontade, she must brace us for some turbulence during the transition, and she must restore faith in those who doubt that we are a great country and that on leaving the EU we can renew our democracy and thrive. At present, however, we are effectively without a Government. Urgent problems of the health service, social care, poverty and inequality, crime, prisons, housing and education are neglected. Brexit absorbs all the energies of Whitehall and Westminster, yet the Government and the House of Commons are unable to rise to this challenge. Ruses such as a second referendum or a Government of national unity would only deepen and further embitter our divisions.

Support for UKIP is rising strongly. Machinations to form new parties abound. Steve Bannon and other US Republicans are fishing in the filthy waters of the far right here and across Europe. Mr Putin has his own ways of stirring the pot. The viruses of anti-Semitism and Islamophobia are infecting our body politic. The chaos at Westminster leaves the field open to the kind of neo-fascist populists that we can no longer assume our native British decency will see off. Salvaging the status quo for the sake of short-term economic comfort would be a wholly inadequate response to this crisis. Let us boldly and confidently accept that it is right for Britain to leave an EU that is economically sclerotic, that generates traumatic social divisions, that represses the democratic aspirations of its peoples and that has no remedy against the advance of the far right. It is absurd to suppose that the peoples of Europe will no longer want to work with us, trade with us, ally with us, study with us, share their lives with us. If their rulers try to stop them, it will not last. Let us grasp our future as a great trading nation and as an independent, strong, self-reliant people.

European Union (Withdrawal) Bill

Lord Howarth of Newport Excerpts

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

[Lord Mandelson (Lab)]

My Lords, this House has already voted in favour of the customs union to stop the imposition of trade barriers that would decimate our manufacturing base. We did so, I suggest, with the tacit support of half the Cabinet, and a majority of Conservative MPs, including in her dreams, I suspect, the Prime Minister. We have to do the same for Britain’s services industries as well. Unlike manufactured goods, cross-border services trade does not have effective WTO rules to fall back on in the absence of any preferential trade agreement between Britain and the European Union. It is absolutely fundamental for us to be clear in our minds that services are not the same as goods. WTO rules effectively provide for goods; they do not provide for services.

Such a free trade agreement between Britain and the EU would be extremely hard to negotiate services into; there is almost no precedent for it—goods tariffs quite possibly, but services very unlikely. Therefore we are not talking of a trade agreement between ourselves and the EU, which is Canada-plus, plus, plus. This is far from it. I have been both a British Trade Secretary and a European Trade Commissioner, so I have seen these issues from both ends of the telescope. It is not possible, given EU rules, and the red line of the British Government, for us to achieve anything like the sort of trade agreement that the Government speak of.

This, therefore, is the crux of the matter in the debate. Without effective WTO rules for trade in services, and without the likelihood of a full bilateral agreement covering all services, we have to maintain our services access by other means, and the only dependable means available to us outside the European Union is membership of the EEA. This would give us coverage by right of all the regulatory standards and rules, harmonised within Europe’s single market, and would give us what amounts to free trade in services. Such single market rules apply to Britain’s pre-eminent EU exports. Our exports to Europe in financial services, including other business services and broadcast services, are colossal. These sectors represent over half of our services economy, which in turn amounts to 80% of Britain’s economy as a whole. This is how important they are to our future economic well-being in this country. Financial and professional services alone account for 25% of all UK services exports, using the automatic passporting arrangements that presently come with our membership of the European Union and the single market.

If we quit the single market as a result of leaving the EU, without the access that the EEA gives us, these rights and their powers of enforcement would be forfeited—no ifs and no buts: that would be consequence that we would face. The impact on cross-border delivery of services to Europe would be savage. A significant proportion of our broadcast content production, as well as cross-border banking and insurance, would be hit for six. This will have a major knock-on effect on the whole of our creative industries in this country and on employment in Britain. In financial services, Frankfurt, Paris, Dublin and Amsterdam will be the principal beneficiaries, as we are already beginning to see.

Our economy simply cannot afford this loss. We are not talking about the next few months; we are not talking about the next couple of years. We are talking about the medium-term consequences, as investment strategies shift to reflect our exclusion from the single market. I understand why the hard Brexiters will probably not lose any sleep over this at all because, for them, it is not economic—it is political. But for the rest of the country, it is their jobs, their livelihoods and the future of their businesses, as well as our country’s income and, moreover, our public services and what we will be able to afford to spend on them, that will be at stake.

I know fully well the arguments about the obligations as well as the advantages of being out of the EU but in the single market via the EEA. We would indeed be presented with a dilemma over rule-making because we would no longer be full voting members of the EU. But no economy of our size and status as a former EU member has ever attempted to join the EEA before. We would be in a reasonable position to frame the negotiations over our EEA membership. It would be a first—but it would also be a welcome first for the EU 27 seeking to keep trade barriers to a minimum, and I think we would be entitled to expect and receive some flexibility.

As for free movement of labour, it is already open to Britain to operate less liberal labour market policies, and we can do so as EEA members. Let us be honest: we all know, do we not, what the Government’s intention is? They know fully well that businesses and public services in our country, including the National Health Service, will continue to need EU nationals as employees, which is why they intend to allow them to keep coming, whatever they say or do not say now. To pretend otherwise is simply to perpetrate another Brexit fraud on the British public.

As I say, as a former Trade Commissioner, I know only too well what is at stake and how we would need to navigate our EEA membership application to gain the maximum national advantage—and I believe it can be done. On Brexit, the time has come for economic reality and common sense to prevail over political dogma and wishful thinking. In this House, in making up our minds on these crucial issues, we are not so easily bullied, and we know why. That is the privilege we have of being Members of this House. This amendment gives us the opportunity to do the right thing for the country and, in my view, that is what we have a duty to do and why we should support this amendment.

[Lord Howarth of Newport (Lab)]

My Lords—

[Lord Forsyth of Drumlean (Con)]

My Lords—

--- Later in debate ---

[Lord Howarth of Newport]

My Lords, my noble friend Lord Alli addressed the House on the basis of principle and with passion—and so did the noble Lord, Lord Forsyth. I greatly respect the commitment to the national interest of all who have spoken, including of course those who have spoken in support of the amendment. I suggest that it would be good for our proceedings if, whatever side we are on in these passionate debates, we could all work on the assumption that each other’s motives are to be respected.

Of course the future of UK services industries is of immense importance—that is not in doubt at all, and it has to be a major concern of the Government as they develop their negotiations with the European Union on the terms of Brexit. My noble friend Lord Mandelson is pessimistic about their prospects, but it seems to me that it must be in the interests of the European Union as well as of the United Kingdom that the EU does not put impossible barriers in the way of our services exports.

I feel bound to point out that membership of the European Economic Area does entail certain conditions. Non-EU members of the EEA have agreed to enact a large volume of legislation similar to that of the European Union. Non-EU members are consulted on prospective legislation, but they are not represented in the governing institutions of the European Union. The Norwegians refer to the legislation that is presented to them as “fax democracy”: they wait by their fax machines in Oslo to find out what the legislation is that it has been determined in Brussels should govern them.

It is also worth noting, as my noble friend Lord Alli did, that agriculture and fisheries are not part of the terms of reference of the European Economic Area and, therefore, that membership of the EEA would do nothing to assist us in resolving the problems of the Irish border.

A second condition of membership of the EEA is to accept the principle of the free movement of people. My noble friend Lord Alli suggested that somehow this could be got around. My noble friend Lord Mandelson and the noble Lord, Lord Bilimoria, drew attention to the possibility that, under existing EU provisions, it would have been possible for us to have operated a tighter regime on immigration. Those things may be so, but the fact remains that, if you are a member of the European Economic Area, you accept the principle of free movement of people. The noble Lord, Lord Green of Deddington, explained calmly and clearly what the possibilities and the difficulties are.

A third condition of membership of the European Economic Area is that those who are in membership have agreed that they will pay in considerable sums of money to finance grant schemes intended to reduce the economic and social disparities within the EEA. We should note that the size of those payments greatly increased following enlargement in 2004.

As we all know very well, those who voted leave in the referendum—a majority of our people in, as the noble Lord, Lord Forsyth, rightly reminded us, the biggest exercise in democratic participation that we have ever seen in this country—voted advisedly to take back control of our laws, our borders and our money. In respect of the three principles of membership of the European Economic Area that I have just mentioned, it is clear that, if we remained in the EEA or applied to join it—whatever the precise status would be—we would not have taken back control of our laws, our borders and our money.

We were told again this evening that it will be a cataclysm for the economy if we do not find ourselves members of the EEA. I am afraid that the citizens of this country, who were unimpressed by the forecasts of doom that were presented to them when they were so strenuously advised that it would be a terrible mistake to vote leave, will not be impressed by renewed forecasts of doom. They expect the wish that they so clearly expressed in the referendum—a referendum which they were told by the Government would be determinative and not advisory—to be met. If they perceive, as I think they would if this amendment were passed, that your Lordships’ House is seeking after all to keep them effectively in the EU by another name and to thwart the very clear decision that they expressed at the referendum, they will, to use the term of my noble friend Lord Mandelson, feel that a fraud has been perpetrated on them.

We of course have the right in this House to send our advice to the other place by way of amendments. The question that we have to judge is not whether we have that right but whether it is wise in these circumstances to exercise it. It seems to me that now is a time for a politics not of confrontation but of healing.

[Lord Kerr of Kinlochard (CB)]

My Lords, I am sceptical about the EEA option. I am not sure that the EFTA EEA partners particularly want us—some of them tend to say that they do not—and I am not sure that the consultative arrangements that they find sufficient, or reasonably satisfactory, would be found satisfactory by this country.

I have always thought that the sort of consultative arrangements that we could secure would be best devised here and put forward in the proposal for the framework of the future relationship. I have always thought it very strange that the Government always insist on playing away—that it is for the other side to put forward the drafts. I do not know why we have not put forward our own prescription. I think we still should—but I begin to despair that we ever will.

I am very impressed by the argument of the noble Lord, Lord Mandelson. We have not yet done anything on services, and we really must do something. I am not sure that the EEA is right—but, as the noble Lord, Lord Mandelson, said, if we applied to join the EEA, it would be a different EEA that would emerge. It is not, therefore, a knock-down argument that the template that suits Liechtenstein would be imposed on the United Kingdom. I think we could do better. So, although it is not for me the ideal way to go, I would much rather that Britain put forward a British proposal optimised for the British relationship with the European Union that we will have left. If we are not going to do that, this is the next best thing. So, despite my doubts about the EEA option, I will vote for the amendment in the name of the noble Lord, Lord Alli, if he chooses to test the opinion of the House—and I hope that others will, too.