Brexit: Appointment of Joint Committee

Lord Kerr of Kinlochard Excerpts

Wednesday 3rd July 2019 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

I agree that Mr Johnson’s Charge of the Light Brigade, do or die bravado risks disguising quite how momentous is the decision that he seems to contemplate with such insouciance. It is momentous for how the world sees us, for the prosperity of our people and for the security and unity of the kingdom. I leave these great themes to the two previous speakers. They have been well addressed. I will make four simple, factual and afraid rather familiar points and add two footnotes. My intention is simply to draw attention to the gravity of the step being considered with such surprising insouciance.

On fact one, the cliff edge, the noble Baroness, Lady Smith, has already said that without a withdrawal agreement there is no transition period. She is right, and even Mr Johnson has now spotted that. I am less sure that everyone understands that, if the Article 50 process ends on 31 October—and both contenders for No. 10 are against extending it—there is no way in which a transition period can be revived. The concept is dead because the concept is only in Article 50. Once Article 50 is discharged, there is no relevant legal base in the treaty, no specific article about ex-partnership relationships, and no relevant provision in the articles dealing with relations with third countries.

Mrs May’s withdrawal agreement is now denounced by both contenders—both the one who voted for it and the one who voted for it and against it. But if it is dead and if it is replaced by no deal, so is gradual transition. The cliff edge is a real crash out—it means crash out, straight down, on 31 October.

The second fact is that everyone I think now accepts that the decision to start the Article 50 process was a revocable decision, but I am not sure that everyone yet understands that the decision to end the process is an irrevocable decision. Article 50 spells out that, once the process ends, a member state cannot revive its membership, either wholly or in part; it can only apply de novo under Article 49 for accession. So there is no ladder back up the cliff after 31 October.

For the third fact, I am sorry that I will have to mention that GATT Article 24 Clause 5(b), even though the Government—and I pay tribute to the Minister—the Bank of England, the WTO and the EU Commission have all rightly pointed to its irrelevance on 31 October. We and the EU could not maintain the mutual tariff-free trade that Mr Johnson says he wants without having to eliminate all tariffs on all our trade with all WTO members. Clause 5(b) provides a glide path towards a customs union or a free trade agreement, provided that the destination is agreed and the schedule of reductions is approved, but it has never been used for a move in the opposite direction. The application would have to be made jointly by us and the EU, and the EU would not join us because it thinks that the application would fail and because there is no legal basis in the treaty that it could use to do so.

It follows that on 31 October we would either have to build a tariff wall against imports from our largest supplier, or remove all our tariff walls against all suppliers, or be in breach of WTO rules—from the start, on 31 October. The EU has long since said what it would do in that situation. If we go with no deal, the EU’s common external tariff will apply to us from day 1. There is no parachute for our importers or our exporters—for any of our traders there is no parachute. It will be our biggest ever step away from free trade on 31 October.

My last fact is that the legal base on which the EU could then negotiate a new relationship us would be Article 218, perhaps combined with Article 207 and maybe also Article 217. We would then find ourselves mourning the lost protection of Article 50. Under Article 50, the position of the 27 is decided by qualified majority, meaning that we cannot be held to ransom by any single member state. After 31 October, we could be. Since an Article 217 and 218 agreement would be a mixed agreement, including matters not of EU member-state competence, EU positions would require unanimity. Of the first three files that the EU has said that we would have to look at in negotiations—citizens’ rights, the money and the backstop—at least two raise issues well outside exclusive EU competence. So the whole negotiation could stall immediately. If a single member state were unhappy about how we proposed to treat its nationals or had some unrelated point, perhaps about fisheries, that it wanted to press upon us, once outside the EU, unprotected by Article 50 rules, we would find that no member of the 27 would have to persuade the others to seek a concession from us: it could insist. EU positions, up until now a majority-determined highest common factor of member-state positions, will become a unanimity-determined lowest common multiple of member-state demands. Life will be a little harder for our negotiators when the rules of the game change on 31 October.

My first footnote is this: if, acting on Mr Johnson’s proposal, we decide to withhold some or all of the money, the negotiations will not start. The EU runs on law. We made legally binding commitments, and the total has been jointly computed and agreed by our Prime Minister. Were we to resile, it would be self-defeating. It would not assist the negotiations to do so: it would prevent them. Equally, the 27 will not, in my view, agree to drop or time-limit the backstop. They take seriously their commitment to the Good Friday agreement—and outside Article 50, it takes only one of them to take a stand.

My final footnote is this: an Article 50 agreement does not require 27 national ratifications. A mixed agreement, such as any future agreement that we night have, will do. The Canadian agreement got stuck in the Wallonian Parliament; the Ukrainian agreement required a referendum in the Netherlands. The referendum requirement has two effects. First, it makes the negotiators look over their shoulders. They feel domestic pressure to use the veto given to them by the unanimity rule. Secondly, it adds a couple of years—perhaps more—after the deal is struck, for national ratification procedures, referendums or whatever. A no-deal Brexit is not just an event: it is a process. Leaving on 31 October would condemn us to a protracted period—five, seven, I do not know how many years—of continuing no deal.

I cannot see how Mr Johnson and Mr Hunt can tell us that that is what people voted for in 2016. In yesterday’s Times, Rachel Sylvester recalled the official Vote Leave campaign leaflet, ruling out no deal. The leaflet said:

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


Now we have Mr Johnson saying that we should end it with no negotiated deal. I think we know what electorate he is appealing to, but I cannot accept that it would be undemocratic to put his proposal to a wider electorate. It is so different from what he was saying three years ago that it must be right that Parliament, when it is required to take the no-deal decision, is made fully aware of the costs and implications before irrevocable decisions are taken that would have infinite effect and run for many years. So I strongly support the Motion in the name of the noble Baroness.