Brexit: UK-EU Relations (EUC Report)

Lord Lea of Crondall Excerpts

Monday 2nd July 2018 Lords Chamber

[Lord Lea of Crondall (Lab)]

My Lords, this is an excellent report—a gold standard, as one has come to expect. I add my appreciation to the committee’s members and the clerks, all of whom are to be congratulated. I acknowledge and thank my noble friend Lady Quin—neither of us is a member of the committee—for making reference to the TUC trio, if I may put it in those terms. I am glad that we are able to make a contribution more or less always on the same hymn sheet.

After the White Paper, there will no doubt be some parliamentary process. Then there will be the Recess and the parliamentary conference season. The only date that is clear in the autumn is that of the political declaration on 18-19 October, just two weeks after we get back. But the relationship between that date and the “finishing line”, to use the language of the report, is mentioned in paragraph 13 of the summary, which states:

“While the ‘political declaration’ may not be legally binding, we accept that at least at a political level it may bind future European Councils”.


Apart from that, all is still rather foggy—as in, “Fog in Channel: Continent Isolated”. I can imagine that particular dictum being put in rather different terms in Brussels, or indeed Paris or Berlin and so forth, where they think that we are trying to kick the can down the road indefinitely.

The analysis of each of the issues in turn is a model of its kind—for example, the succinct analysis of the EEA, EFTA, the EEA Joint Committee, the specific characteristics of Norway and Iceland and the question mark over the credibility of the idea that the EU might simply wish to do a free trade deal with Britain on its own. The Government have been far too quick to rule that out. Today’s Prime Minister’s Statement from the European Council states:

“Our White Paper will set out detailed proposals for a sustainable and close future relationship between the UK and the EU—a partnership that means that the UK will leave the single market and customs union, but a partnership which supports our shared prosperity and security”.


Apart from anything else, a point emphasised in the European Union Committee report is that at that stage it simply leaves on one side a fact that we are all conscious of: namely, that to a great extent it will be perforce the Irish tail which wags the UK and European dog. At paragraph 57 the report states that the Irish question is “uniquely” able to determine not only the process but the substance of the outcome. Churchill’s phrase,

“the dreary steeples of Fermanagh and Tyrone”,

is once again haunting us at the present time.

Against that background we have heard some extraordinary invective from Ministers in the Government. For obvious reasons I will not quote what the Foreign Secretary said recently about business, but, given his predilection for the Anglo-Saxon expletive, I would say that until now business has been very restrained in speaking out. I shall mention one statistic which came as a shock to me. I was at a small but well-informed meeting of the London representatives of multinational companies operating in Britain in terms of direct investment. I do not mean equity investment: I mean people who are typically involved in manufacturing, services and so on. They are saying that the foreign direct investment decisions on regards jobs, plant, technology and so on being made now to cover the next two years are in value terms some 80% down on what they were two years ago. If that is not a shock, I do not know what is.

The trade-offs set out in the report are well described, but I would go a little further. The trade-offs should be described as arising specifically between packages. There is a trade-off between trade-off package A and trade-off package B, but there are also trade-offs within each of the packages. I hope that, if the White Paper does one thing, it will be to copycat the reality of this point as it is described in the report. However, I fear not: say the phrase “trade-off” and not just the Foreign Secretary but many Members of the Cabinet smell a rat.

We are now stuck with these red lines. I admire the pithy remark by Frances O’Grady set out in paragraph 18:

“It is fine having red lines, but you do not publish them”.


My own bottom lines of course include the protection of workers’ rights, and that means not just relying on HMG’s good will but staying in the Maastricht treaty extension of the single market, that being the only way in which we can guarantee the rights negotiated in Brussels, whether we are in pillar I of the EEA, which is the EU, or pillar II, which is EFTA.

As my noble friend Lord Whitty reminded us in his report a few months ago, the EEA outcome would be the least destructive as far as trade is concerned. It is not the end of the story, but that is a very clear statement. I think that the opposition to the EEA has been considerably overstated. Of course we are not rule-makers as opposed to rule-takers, but let us take a current example that we will all understand: FIFA. We are rule-takers and rule-makers, are we not, and is that not true of most of the civilised things that we do together around the world?

In conclusion, I want to mention that as regards the association agreement, I think that I am with the implication of the remark made by the noble Lord, Lord Jay, and I can see the attractions of that label. Equally, however, we need to cast a beady eye over any idea that this is a magic potion and that with one leap Jack was free. We have to be a bit careful about supposing that the component parts of the EEA, embracing all the trade agreements around the world, will suddenly, with a wave of a magic wand, allow us to make trade agreements in place of the 50 or so made under the present umbrella. The referendum was a bit of prime ministerial party opportunism that went wrong. Perhaps we are now able to see whether we can unscramble this particular omelette—without, I hope, leaving too much egg on our respective faces.