Brexit: Sanctions Policy (European Union Committee Report)

Lord Jay of Ewelme Excerpts

Thursday 3rd May 2018 Lords Chamber

[Lord Jay of Ewelme (CB)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Risby, with whom I entirely agree. I congratulate the noble Baroness, Lady Verma, and her committee on an excellent report on an extremely important subject.

I will start where the report ends and emphasise, as others have done, that sanctions are an important part of a wider foreign policy endeavour. They are essential in helping to fill that often difficult area on the foreign policy spectrum between doing nothing very much and going to war. However, sanctions are of little use on their own. They need to be combined with other foreign policy instruments: the appointment, or sometimes removal, of embassies and ambassadors; criticism of or expulsion from international organisations; and limited military activity. Proper co-ordination of those instruments is needed.

Equally, sanctions need to be properly targeted, as the recent debate on sanctions against Russia has shown. What is the most effective way to not just punish a country but attempt to change its policy? In Russia’s case, targeted sanctions against individuals—particularly those close to Putin—and their overseas assets would be far more effective than less focused sanctions. It follows that sanctions need to be as far as possible collective. The UK may be the fifth-largest or sixth-largest global economy—we are in a constant tussle with France, which I sometimes think has more to do with the fluctuating exchange rate than the real economy—but we can do little by imposing sanctions on our own. Sanctions are effective as part of an international effort, ideally through the UN, but if that is impossible—as is often the case, alas—through the European Union.

That is never straightforward, as I well remember from many often difficult negotiations over sanctions in the past. The UK’s interests, and in particular the potential effect of sanctions on the City of London, will not always coincide with the interests of other European Union member states, so compromise will always be needed. Even if they are imperfect, sanctions agreed by 28 states are a lot better than no sanctions or divided sanctions.

As others have said, the UK’s influence over the form that sanctions have taken up to now has been considerable and extremely important in ensuring an effective EU sanctions policy. That will present us with problems when we leave. We will not be part of the EU 27 mechanism that formulates EU sanctions—but if as a result we do not take part, those sanctions will be less effective and our foreign policy interests will suffer. Sir Alan Duncan put that point to the committee extremely well. I am not quite sure how his remarks are consistent with the quote from Boris Johnson, mentioned by the noble Lord, Lord Taverne, but I will leave that aside for the moment. Paragraph 74 of the report states:

“Sir Alan Duncan said that, after leaving the EU, it was ‘inconceivable that we will not be a strong and important part of collective governments’ action on sanctions, be it through the UN, in which we are a major player, the P5 … or’”—


this is the important point—

“‘replicating what the EU does’”.

I welcome this, but let us reflect on “replicating what the EU does”. Therein lies the dilemma. Without our influence, the design of EU sanctions will be less to our liking, and replicating them will be more difficult and domestically contentious. The risk is that there will be divisions not only among government departments but between government departments and the private sector. I therefore hope that we will succeed in developing some form of formal or informal consultation mechanism on sanctions, as indeed on other foreign policy issues, at both official and ministerial level, with the EU after we leave. Like others who have spoken, and like the noble Baroness, Lady Verma, I would be very grateful if the Minister would confirm that that is indeed our intention and give us whatever evidence he can of how far he thinks we are likely to succeed in reaching that objective during the negotiations.

Whether we succeed or not—and I hope we will—we shall need to intensify bilateral contacts to compensate for our absence from formal EU consultative and decision-making fora. We should do so particularly with France as a fellow permanent member of the UN Security Council. As I well know, the foreign policy relationship with France is not always straightforward—we should remember Iraq or relations within NATO before France rejoined the integrated military structure. There may be differences ahead as France pushes, after our departure from the EU, for a more integrated EU foreign and security policy with a stronger defence element than we shall like. But I hope we will not let those differences get in the way of the close co-operation we shall need after Brexit on sanctions and wider foreign policy issues with France and, indeed, with the EU 27 as a whole. As the Prime Minister often says, we will remain a European country after Brexit—all one has to do is look at a map—and a close relationship with the EU 27 on all foreign and security policy issues, including sanctions, will be strongly in the interests of all of us.