Lord Taverne
Main Page: Lord Taverne (Liberal Democrat - Life peer)
Lord Taverne (LD)
My Lords, what surprises me is the complacency in the Government and in certain other circles about our trade prospects after Brexit. It is claimed that we are in a strong negotiating position but, when Article 50 is invoked, we have about a year and a half after the German elections to complete infinitely complex negotiations. We will be arguing against the clock—a very weak position.to be in.
The least bad deal after Brexit would be the Norwegian model, which would keep us in the single market—although it still has severe disadvantages, now well known, and will be unacceptable to Brexiteers. Alternative forms of access, or partial access, to the single market have even greater disadvantages. Negotiating a new free trade agreement with the EU will be much more complex than the Canadian agreement, which took ages and may never have effect. Any agreement, moreover, has to be approved by all 27 other members, each with different interests and a power of veto.
It is said that it benefits the European Union to give us a soft Brexit, but there is little good will towards Britain, especially after Mrs May’s speech at the Conservative conference, and several of the 27 have different reasons for not helping: they fear other separatists; Paris and Frankfurt would love to replace London’s financial services; Spain has offered a secure home within the EU for London banks; and, as the imposition of sanctions against Russia showed, the lobbying power of German industry, often invoked, does not outweigh Angela Merkel’s political concerns, which are mainly to keep the European Union together.
I fear the odds are that we will not reach an agreement before 2019. Can we negotiate an interim agreement, as many hope, to enable more negotiations after Brexit? That is very unlikely. The same obstacles have to be overcome and our partners know that temporary agreements often become permanent. So we will be left with a WTO solution which some advocate and which—as I understand from what has been written by Mr Peter Sutherland—involves having to submit new schedules of commitments to the WTO that will need approval by all its 164 members. That is not just a simple formality.
We will have to renegotiate, or rather negotiate, new bilateral free trade agreements with the 35 or 50—I am not sure exactly how many—countries that have them with the European Union, and with third countries with which the EU is currently negotiating. None of them will talk to us until they know what our relations with the European Union will be.
No agreement would be the hardest of hard Brexits. Our huge service industry will suffer most. As uncertainties grow, and as the prospects and implications of exclusion from the single market and the customs union become clearer, it is likely that domestic and foreign investment will decline; many companies will emigrate; the pound will fall further; and we would be in a severe Brexit recession. What price then the sunny uplands promised by the leave camp? As Donald Tusk, one of our friends in Europe warned, the choice will be between a hard Brexit and stay.
Anyone who challenges the June vote is immediately branded as anti-democratic. But why should a referendum vote be sacrosanct, unlike the result of a general election, especially when the choice of Brexit was not clear? Did it mean staying in the single market, which is what the Conservative manifesto pledged and what many leave voters thought it meant? It is the essence of a democracy that no decision is ever irreversible. Of course we cannot have a second referendum now, but with a major shift in public opinion it would be fully justified. To deny—before a final decision to leave—that there could be a new decision would be truly undemocratic.
Finally, will Article 50 allow us to withdraw? I quote the view of a former head of the Legal Service of the Council of the European Union, Jean-Claude Piris, who wrote that the article declares an “intention” to leave, which is a unilateral act that does not depend on the views of other EU members. He wrote that an “intention”,
“cannot be interpreted as a final and irreversible decision”,
and that nothing in the article prevents the UK from withdrawing its unilaterally declared “intention”.