Future UK-EU Relationship on Professional and Business Services (EU Committee Report)

Lord McNally Excerpts

Thursday 22nd July 2021 Lords Chamber

[Lord McNally (LD)]

My Lords, like all the members of our committee, I was in awe of the ability of the noble Baroness, Lady Donaghy, to keep our unruly group in order and enable us to deliver a unanimous report. The way she conciliated and arbitrated between us you would almost believe she had spent a lifetime doing that kind of thing. As has been said, we were most ably aided by Dee Goddard and the staff.

I disagree with what the noble Lord, Lord Davies, said about us letting the Government off the hook. The hard truth that runs through the report, as the noble Lord, Lord Liddle, indicated, is that professional and business services were the forgotten army of the Brexit negotiations. Time and again, on topics ranging from intellectual property to data adequacy, from recognition of professional qualifications to business mobility, and the business and professional services mentioned by the noble Baroness, Lady Bottomley, we were met with responses to our concerns from Ministers that could roughly be described as “It’ll be all right on the night”.

As yesterday’s Statement on the Northern Ireland protocol clearly demonstrated, Boris Johnson’s much-vaunted “oven-ready” deal was in reality half-baked. We are now going to learn the hard way the consequences of signing in haste and regretting at leisure. I hope that Parliament will learn the lessons of this debacle. The noble and learned Lord, Lord Goldsmith, and his Committee on International Agreements will need to be particularly robust in examining the details and consequences of some of the trade deals that the International Trade Secretary, Liz Truss, is rushing to complete. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership is already being hawked round by the Brexiteers as the alternative safe harbour to the EU, yet concerns are already being expressed about the safety of patents and intellectual property under any CPTPP agreement. Of course, we have the promises of a US-UK trade agreement. We all know how we can rely on the special relationship with our American cousins when they come to talking about trade. The Northern Ireland experience shows that negotiating under political pressure to demonstrate that Brexit is done can lead to catastrophic mistakes. “Caveat emptor” should be the watchword for the committee of the noble and learned Lord, Lord Goldsmith.

In recent weeks, the noble Lord, Lord Frost, has made increasingly clear that the harsh new Brexit world in which whole sectors of the British economy will have to compete is the one that the Brexiteers intended. There will be no soft Brexit. For example, as the noble Baroness, Lady Neville-Rolfe, the noble Viscount, Lord Trenchard, and the noble Lord, Lord Liddle, pointed out, a settlement that would have allowed the important music and concert touring industry to have easy access to the EU markets could not be countenanced because it involved diluting the purity of quitting the single market in labour mobility. This is not an immigration or free movement issue. What is needed is to have negotiated simple, frictionless, cost-free arrangements for temporary paid workers in EU countries so that this important creative sector can continue to flourish. I pay tribute to the efforts of Sir Elton John to make the Government see sense—I did not think that I would ever say that in the House of Lords.

We also put on record our concerns about data adequacy. The recent announcement of a data adequacy decision by the EU Commission is, of course, welcome, as the noble Baroness, Lady Donaghy, said. But, to quote the Commission’s own press release, the decision included

“strong safeguards in case of future divergence such as a ‘sunset clause’, which limits the duration of adequacy to four years”.

This short rein imposed by the EU is in sharp contrast to the sense of urgency in bringing our domestic legislation into line with the GDPR in 2019. Is it because the Government are already planning to bring us into conflict with EU data adequacy? Do Ministers anticipate any conflict between remaining true to our EU data adequacy commitments and our ambitions to join the CPTPP?

What about our ambitions for a free trade agreement with the USA? I ask because in the last couple of days I have received two invitations to round tables looking at greater co-operation between the USA and the UK on data transfer. It would be helpful if the Minister was to give us some idea from the Dispatch Box of how the Government intend to use the four years of data adequacy now granted. Will they be working with the EU, as it refines its own data framework, and have influence in shaping the outcomes, as we did with the GDPR? Or will we be like the Bisto kids, sniffing the gravy but on the outside looking in? The report’s declaration that the

“free flow of data between the UK and EU is vital to professional and business service providers”

remains valid today. The Government owe it to the sector to spell out their intentions in this area and their priorities during the four years that we have been granted.

In the pages of this report are unanswered questions after unanswered questions about the prospects for financial services, the problems facing lawyers, the uncertainties about patents and intellectual property, the fate of our creative industries and other things that have been raised by noble Lords during this debate. The report shows that the Prime Minister and the noble Lord, Lord Frost, have delivered a Brexit with much unfinished business and with a mindset ill-suited to resolving the many problems that they themselves have created by their tunnel vision and ideological inflexibility.

The noble and learned Lords, Lord Hope and Lord Thomas, both wisely advised us not to try to turn back the clock but to look to the future. I realise that there is no chance of our returning to the EU in the near future or on the favourable terms negotiated by successive British Governments in our 40 years of membership. But there is an alternative to consistently seeing Europe as the enemy. At some time, there will come a British Government willing and able to work constructively with our nearest neighbours and most important trading partners. This report provides a useful checklist for how the most successful sector in our economy can have its interests protected and enhanced in that process.