EU Withdrawal

Lord Kerr of Kinlochard Excerpts

Wednesday 13th February 2019 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

My Lords, I follow the noble Baroness, who had the misfortune to follow me in the great Lutyens house in Washington. It is said that every ambassador deplores his predecessor’s taste and his successor’s judgment.

I owe the House and the Minister an apology. I was called away and missed part of his speech.

The text for my sermon is the following:

“Taking back control is a careful change, not a sudden stop—we will negotiate the terms of a new deal before we start any legal process to leave”.


That is what the Vote Leave campaign said in June 2016. I repeat,

“we will negotiate the terms of a new deal before we start any legal process to leave”.

Here we are with six weeks to go, but we do not know what the new deal is and we are flirting with no deal.

Flirting with no deal is playing ducks and drakes with the country’s economy. It would be hugely damaging. British business is shocked because this is not what it was told to expect; it is not what it did expect; it is not what it is prepared for; and it is still in the dark about how to prepare for it. The noble Lord, Lord Newby, mentioned the British Chambers of Commerce’s 20 questions to the Government—20 basic questions that it has asked with six weeks to go. The noble Lord highlighted three of them; I would like to add three questions to the Minister.

First, supposing that there is no deal, what, on 30 March, will be our trade regime with our biggest trading partner—the 27 countries of the European Union? Am I right in thinking that the EU will apply its common external tariff and that the fascinating arguments about Article XXIV of GATT advanced by the noble Earl, Lord Cathcart, are a very elegant red herring? Am I right that the EU will apply its common external tariff in full on 30 March?

My second question is as follows. In the event of no deal, how many of the EU’s free trade deals with major third countries will have been rolled over? What about Canada, Japan, South Korea, Australia and New Zealand, which are all big trading partners? Am I right in thinking that the answer is, “None of the above”?

Thirdly, in the event of no deal, how many new trade deals with third countries will be in force? What about Canada, Japan, South Korea, Australia and New Zealand? Am I right in thinking that the answer is, “None of the above”?

With six weeks to go, if the answers are as I fear or if the Government do not know the answers or will not reveal them, it is grossly irresponsible not to take no deal off the table. This is not a Westminster game; real jobs are at risk out there in the real economy. The irony is that those who misled us back in 2016 by saying:

“Taking back control is a careful change, not a sudden stop—we will negotiate the terms of a new deal before we start any legal process to leave”,


are precisely the same people who are now saying that we do not need any new deal and that no deal will be just fine. That is irresponsible. It might be just fine for them; for the country it would be disastrous.

Of course, the Minister will say, yet again, that the way to avoid no deal is to vote for Mrs May’s deal—the one that both Houses rejected by large majorities. They rejected it because it is such a humiliating and one-sided deal, and it will not get much better in the next six weeks. Here, I disagree with the noble and learned Lord, Lord Hope of Craighead, whom I normally follow with great respect. As President Tusk and President Juncker said in their letter a month ago,

“we are not in a position to agree to anything that changes or is inconsistent with the Withdrawal Agreement”.

That draft treaty, on which they shook hands with Mrs May back in November, will not change in any significant respect, and I do not think that it is going to change at all.

It is perfectly possible to envisage changes to the political declaration, provided that they are not inconsistent with what is in the draft treaty. Of course, the political declaration is not legally binding. We in this House have spent very little time on it; we have spent most of our time on the treaty because we are so fascinated by the backstop problem. However, we should have spent more time on the political declaration because it is the most extraordinary document. It is astonishingly wide in scope and astonishingly shallow in substance. It does not settle anything for the future negotiation.

The political declaration kicks off well in paragraph 4:

“The future relationship will be based on a balance of rights and obligations, taking into account the principles of each Party. This balance must ensure the autonomy of the Union’s decision making and be consistent with the Union’s principles, in particular with respect to the integrity of the Single Market and the Customs Union and the indivisibility of the four freedoms”.


I wonder which side drafted that. The next sentence reads:

“It must also ensure the sovereignty of the United Kingdom and the protection of its internal market, while respecting the result of the 2016 referendum including with regard to the development of its independent trade policy and the ending of free movement of people between the Union and the United Kingdom”.


Who drafted that one? That is settled, then—there we have it. These principles will be respected, so the game is over and we might as well crack open the champagne straightaway.

Bits of the declaration do settle things. Paragraph 24 shows that we have accepted that we cannot be in the agencies, particularly the medicines agency, the chemicals agency and the aviation safety agency. Paragraphs 89 and 90 show that we have accepted that we will not have access to the European arrest warrant, the Schengen Information System and the European Criminal Records Information System. The police tell us that we will suffer greatly from that, but we have accepted it. The financial services paragraphs—paragraphs 37 to 39, which are astonishingly thin—make it clear that passporting and mutual recognition will not happen. That is not good news for the City.

However, most worrying are the really vacuous paragraphs about my old profession—the section on foreign policy co-operation. When you think of Peter Carrington moving the Council on the Falklands, of John Major moving the Council on a safe haven for the Kurds in 1991, and of the way that Hans-Dietrich Genscher, the other heavyweight in the Council, would defer to Douglas Hurd at the very time that the noble Baroness, Lady Meyer, was speaking about—I wish that Lord Hurd of Westwell were with us today—it is very sad to read where we have got to on foreign policy. The political declaration says:

“The Parties will shape and pursue their foreign policies according to their respective strategic and security interests, and their respective legal orders. When and where these interests are shared, the Parties should cooperate closely … To this end, the future relationship should provide for appropriate dialogue, consultation, coordination, exchange of information and cooperation mechanisms”.


There is no definition of “appropriate” there. This is sad. We have contributed a huge amount to the foreign policy of Europe over the last 40 years. Now, we and the EU will be following our own interests and, if they happen to coincide, there will be some mechanism for talking about it. That is very bad.

I should draw the House’s attention to an even more vacuous paragraph on space. Paragraph 107 says:

“The Parties should consider appropriate arrangements for cooperation on space”.


So that is done—it is settled.

This document settles nothing at all. It is not prescriptive or definitive. We should remember that the EU will be negotiating on the legal basis of Article 218, and it needs unanimity on its side. Any single member side on that side can block anything. If somebody decides that to allow access for British fish products to his market he will demand access to British fishing waters, there is nothing to stop him saying that this year, next year and the year after—until we agree. Remember that the outcome is subject to national ratification; it goes off to the Wallonia parliament and referenda in five EU member states.

There is nothing certain in this description of the future. The only thing that is certain is that we are heading for at least five years—probably 10, I would guess—of continuing uncertainty. I come back to agree with the noble and learned Lord, Lord Hope of Craighead, because it would be shocking if I only disagreed with him in my remarks. I strongly agree with the way he ended. We do not have to accept this choice. It is not a choice between being thrown over the Tarpeian Rock on 29 March or the slow strangulation of this rebarbative negotiation, which would poison our relations with our neighbours for a decade, and the certainty that the deal we would end up with is a hell of a lot worse than the one we have now. We do not have to buy that choice. The first thing to do is agree that we should seek an extension under Article 50(3) of the treaty.