European Union (Withdrawal) (No. 6) Bill

Lord Mandelson Excerpts

2nd reading (Hansard): House of Lords
Thursday 5th September 2019 Lords Chamber

[Baroness Neville-Rolfe]

My Lords—

[Lord Mandelson (Lab)]

My Lords, I must say I am slightly lost for words and do not know quite what to say in—.

[Baroness Neville-Rolfe]

My Lords—

[Lord Mandelson]

I think it is the turn of this side, but there is plenty of time.

[Baroness Neville-Rolfe]

My Lords, as a woman I find it very difficult to get in in these sorts of debate, but I rise to speak on the European Union (Withdrawal) (No. 6) Bill and to contribute to the scrutiny. I am delighted to follow the noble Baroness, Lady Deech. We should thank her for the excellent speech she made yesterday which helped us to move forward and to be here today to scrutinise the No. 6 Bill. I am also grateful for the midnight peace talks admirably led by the new Chief Whip. Thanks to him, we all had some beauty sleep.

My amendments were not reached yesterday, but I was horrified by the way the procedures of our House were being perverted. I knew a plot was afoot because on Tuesday I walked into the Moses Room by mistake. I was too well-behaved to eavesdrop or to tweet what was going on—I have a good convent education to thank for that. Scrutiny is at the heart of the work of this House, as I think we agreed yesterday. Today’s debate and tomorrow’s Committee and Report stages give us an opportunity to go through this Bill line by line, which is what I hope we will be able to do.

I believe there is growing evidence of the negative impact of Brexit on the economy and society. I am in business, and uncertainty has been rising. It is extremely difficult for all involved. Noble Lords will know that I am a remainer and have worked for most of my career on EU matters. However, I share the view of growing numbers of people in this country that we must get on with Brexit. Months, or even years, of delay to Brexit day, which I think this Bill accommodates, will make matters worse, not better. We cannot have another three years of going round in circles. I think that is a risk. We need an agreement.

However, as I have said on a number of occasions in this House, from my long experience in Brussels, we have to keep open the option of no deal; otherwise our negotiating position in the Brexit negotiations is undermined. Indeed, on the matter of no deal, I was glad to hear from the right reverend Prelate the Bishop of Leeds, who asked us to look critically at the actual impact of no deal. I took some comfort from the Statement earlier this week by my noble friend Lord Callanan, and I know that the Chancellor of the Duchy of Lancaster is heading up no-deal contingency planning with enormous drive and professionalism. I think the pace of transformation is at a completely different scale and rate from what we saw under the May premiership. That is just in case we cannot come up with the agreement that we want.

--- Later in debate ---

[Lord Mandelson]

My Lords, it is a pleasure to follow the noble Baroness, with whom I have seen eye to eye on almost all business questions—certainly the majority of them—in the past.

Before I comment briefly on the Bill itself, I shall make two preliminary remarks. The first is that, as a former Northern Ireland Secretary, I strongly endorse the remarks and arguments made by my noble friend Lord Hain. He was not indulging in hyperbole. This is reality; it is real-life politics in Northern Ireland. There is an enormous amount at stake and any of us would be very ill-advised if, for the sake of boredom with the subject, including the backstop, we were simply to pass over what he has said. There are genuine risks involved in relation to peace in Northern Ireland.

Secondly, I will comment on the intervention of the noble Lord, Lord Hayward. From the discussions I have had in national capitals and in Brussels, I can confirm that he is absolutely right that no proposals have been made by the British Government that are negotiable and would lead to a deal being concluded in October, November, December or any other month. However, certain ideas are being canvassed which concern the sectoral coverage of the backstop, its possible duration and the conditions surrounding both those aspects of it. The reason in my view that they have not been tabled is that a judgment has already been made that they will be unacceptable to those with whom we are going to negotiate. They involve a compromising and an undermining of the backstop which would negate its purpose and effect.

Therefore, the chances of what is being considered in Whitehall and was taken to Brussels by David Frost —who is a credible interlocutor and diplomat representing the British Government—being accepted in Brussels are hovering on zero. That is why we cannot take at face value the Prime Minister’s statement that he is negotiating in good faith. I do not believe that he wants to negotiate a deal. I think he would like to present, as it were, a fait accompli—something that he would ideally like to see—but not to negotiate. That is simply not going to happen.

I support the Bill for one reason, which is that crashing out of the European Union on 31 October without a deal would be, to put it mildly, highly sub-optimal for our country. It would prevent us from securing the continuity of our enforceable trade rights in what is our biggest export market in the world; it would prevent us from securing the continuity for many businesses operating in the European market of their enforceable business contracts. There are a host—a waterfront—of pacts, agreements and laws that underpin our commercial and related relationships with the European Union that have been built up over half a century, all of which we would be unable to guarantee the continuity of from the stroke of midnight on leaving the European Union without a deal.

I am not saying that aircraft would fall out of the sky or that many of these agreements would simply disappear and dematerialise before our eyes. However, over time they would come to be contested. There would be people, for a variety of reasons, wanting to pull threads and then pull a rug from underneath a variety of these pacts and agreements. If we were to leave without securing their continuity, we would create the risk of huge damage and jeopardy to our commercial relations, and therefore to our economy and to the jobs, livelihoods and investments of hundreds of thousands of people in Britain.

It would also do something else: it would destroy what lingering goodwill exists in Europe towards us. If we were to crash out and leave in such a disorderly way, it would inflict great damage not only on our own country but on all member states of the European Union. Such an act would make their willingness and our ability to negotiate a future free trade agreement between ourselves and the European Union infinitely harder to achieve. For that reason also, we should avoid crashing out without a deal.

[Lord Howell of Guildford]

I am listening to the enormous expertise of the noble Lord and indeed I am in considerable agreement, particularly about the crash-out, which in a way I am rather happy this Bill possibly postpones and possibly avoids. I am listening also to the great expertise of the noble Lord, Lord Hain. But are they both quite sure that the enormous amount of work that has been done on volumes such as the one that I have here on alternative arrangements in the unique circumstances of Northern Ireland, which is quite unlike any other border in the world, are non-starters before they are even discussed in Brussels? Is he quite sure that all the proposals for special regions, trusted traders and new arrangements for all-Ireland animal livestock and so on can be thrown out of the window before we even start? I am not so sure myself.

[Lord Mandelson]

Nor am I. I am not so sure that we should just push them all to one side as though they have absolutely no potential whatever. That is not my view. My view is that they are not realisable in the foreseeable future and that, in the meantime, we would put the Good Friday agreement and the peace process in Northern Ireland in great jeopardy in a way that would be unjustified and unforgivable. There is a very interesting discussion to be had about the future. It depends on certain modalities, technology and related approaches that have potential—I fully accept that—but they are not for now; in my view, they are for the future.

There is not only the obvious economic, business and commercial argument to be had concerning people’s jobs and livelihoods that are at stake; in my view, there is also a very strong democratic argument to which we should attach great importance in our consideration of this Bill. Quite simply, it is that there was no mandate from the 2016 referendum for a no-deal Brexit. I know that people will say that it was not explicitly ruled out, but to all intents and purposes it was ruled out by the fact that nobody referred to it, nobody explained it, nobody justified it and nobody set out the arguments for it. Not one of the advocates of the leave campaign ever entertained the idea that this would be the outcome of our leaving the European Union.

Such a possibility was almost literally airbrushed out of the picture by the promises that were made by the advocates of the leave campaign—that getting a deal would be “the easiest in history”. Plus, there was a later guarantee—I remember that “guarantee” was the word used by No. 10 in repeating what the then Brexit Secretary, David Davis, had said. The precise words used were that we would have the “exact same trade benefits” after we left the European Union. Not only has that promise of the easiest trade deal in history turned out to be wrong and unfulfillable but the exact same trade benefits will, as we know, be nothing of the kind. They cannot be anything of the kind. We will sustain frictionless trade that is exactly the same as the trade benefits that we have at the moment only if, at the very least, we stay in a customs union with the European Union and fully in the single market. That is the only way in which those promises that were made—that guarantee put forward by No. 10 —could possibly be redeemed, yet it is firmly, consistently and explicitly excluded by the Government.

[Baroness Deech]

I have a point of order about the non-envisioning of a no deal. Of course it was not raised at the time. First, Article 50 mandates that the EU shall negotiate a treaty, which it has failed to do. Secondly, it was never envisaged that the remainers would fight this all the way along for several years. Thirdly, the agreement that we talked about in a broad sense and was mentioned at the time was to do with trade. The actual withdrawal agreement, when we get to it, is about much more than trade. In that sense, it is perfectly understandable that there was no explicit discussion of no deal.

[Lord Mandelson]

I do not remember any of those intricacies, highways and byways being set out by anyone at the time or since—but, of course, the House will be interested in what the noble Baroness has to say.

The fact that any possibility of maintaining frictionless trade has been explicitly excluded by the Government is extremely serious for the manufacturing sector in this country and the long-term health of our economy. I do not see and cannot understand how, given the nature of just-in-time, sophisticated manufacturing supply chains and the way in which they operate between the UK and the continent, it will be possible for Japanese car companies or Airbus or any significant manufacturing enterprise to sustain production in Britain in the medium term.

That does not mean to say that they are all going to pull stumps, shut the doors and pull the shutters down and leave the day after tomorrow. Of course they are not, and any sense that they might is an absurd piece of hyperbole. However, over time—by which I mean between five and 10 years and probably on the shorter end of that spectrum—these great manufacturing companies are going to have to make new arrangements. They are going to have to move production in a way that enables them to secure continuity of their supply chains and the frictionless trade that they will no longer have when sustaining production in this country.

Let us not go back over all the customs union and single market arguments. I do not know what has happened to the Kinnock amendment and his and his colleagues’ advocacy of Norway. All I would say is that it would appear that there is no political possibility of those options being reintroduced or attracting and sustaining a majority, certainly in the other House. Let us acknowledge that they would in any case raise issues of regulatory dependence by this country on the European Union, while having no say in the making of those regulations.

I do not dismiss that. Having been on both sides of this as a UK Business Secretary and a member of the European Commission, I take rather seriously the idea that we in this country would simply be on the receiving end of laws and regulations made in Brussels over which we would have been able to express no view. There are real issues involved here and I acknowledge them.

In conclusion, the central point—and the right reverend Prelate the Bishop of Leeds made it earlier—is that the referendum in 2016 was an in/out one. It was an in-principle referendum. It was not about the how and the terms on which we would leave the European Union. No hint of those terms was spelled out between a soft and a hard Brexit, and of course there was absolutely no indication of leaving without n deal at all.

So now, as we find ourselves, at the behest of the new Prime Minister, hurtling towards a no-deal exit, I believe that the Government should accept that this really cannot and should not happen without the express approval either of Parliament or the public. I will wind up, if I may—it is nice to see the Government Front Bench intervening in a debate at long last. Here is my further point in conclusion. I do not believe that the express approval of the British public for how we leave the European Union can possibly be expressed by means of a general election.

[Lord Framlingham]

The noble Lord is maintaining that there is no debate about what would happen after the referendum. Does he not recall that the leave people made lots of forecasts—some of which have not happened—and that the Government spent a fortune sending leaflets to every household in the country, warning about all the problems in great detail? There was a huge amount of debate at the time of the referendum. It was not simply in or out and nothing else.

[Lord Mandelson]

Perhaps my recollection is at fault, but I do not remember a huge amount of debate about the respective merits of a soft and hard Brexit, let alone a no-deal Brexit.

In conclusion, I do not think that you can arrive at a clear choice about how we leave the European Union by means of a general election in which so many issues, subjects and personalities are at play. We should look to a clear-choice referendum where the options are properly explained and a full debate is had. The public can give their final say one way or the other about how—and, if the how on offer is unsatisfactory, if—we eventually leave the European Union.

It may be that the Government want one of these options to be a no deal. If so, it is up to the Government to put forward a no-deal option in a clear, final-say referendum. If they want to do that, so be it. If they have exhausted all the alternative negotiating possibilities, let that be put fairly and squarely to the public in a referendum. It must be a clear alternative—a clear choice—that the public are asked to make. Without it, I am afraid we are never going to find a way of resolving what is a most acute conundrum.