Brexit: UK-EU Relations (EUC Report)

Lord Teverson Excerpts

Monday 2nd July 2018 Lords Chamber

[Lord Teverson (LD)]

My Lords, I again thank the noble Lord, Lord Boswell, for chairing the committee so well. It is perhaps not unreasonable to mention that we had a debate within the committee on whether to shelve the report until after the White Paper came out, because it was so imminent when we first considered our report, or whether we should continue. Of course, we have just been taken in so often: it was quite obvious that the White Paper was not going to be produced, and that it would be another month or two months until it was available—and we are already here at a debate on our report, so it must be well behind.

It is a great pleasure to follow the noble Baroness, Lady Quin, and all that she has said, but I also agree entirely with the noble Lord, Lord Risby, that issues such as Nord Stream 2 are key and on the importance of the financial services industry in the UK. However, I have to say to him that, after Brexit, we will be just like a third country as far as the EU 27 will be concerned —we will be the same as Singapore and New York. Although other EU capitals will probably benefit relatively marginally, certainly in Paris that marginal benefit will be important to them, and it is a foundation of building up their capability. That is how they see it. I do not think it is appreciated how important the City is, and that is a great loss because it is important not just to us but to the broader world.

I may disappoint the noble Lord, Lord Risby, in that I will probably be slightly more polemical than he would like in this debate. We are two years on—two years. We have eight months to go, and we will no longer be a member of the European Union. It is unlikely that this can be solved at five to midnight—sorry, five to 11 o’clock, British time—on 29 March, because the EU has to go down legal processes and, apart from anything else, it needs a vote of assent from the European Parliament. Therefore, the usual rules of stopping the clock will not work, because we are working within a strict legal framework.

So where have we got to in these two years that we have had? Of course, nothing is agreed because, as we are told by our EU 27 partners, nothing is agreed till everything is agreed and so we have nothing agreed. However, we sort of have a formula for payment: we have negotiated down to, I think, £35 billion to £39 billion in compensation, except that the National Audit Office has pointed out that, to taxpayers, it is actually some £10 billion worse than that—there is the £7 billion in refund that goes straight to the private sector and the £2.5 billion that we will owe the European Development Fund is not included in that figure because it is not technically part of the EU. So we are £10 billion worse off on that.

On citizens’ rights, I endorse the Government’s strong welcome to EU citizens to remain here but, strangely enough, it is the European Parliament that has criticised the EU 27 for not being able to safeguard the rights of UK citizens within the EU 27. The European Parliament and its rapporteur seem to have been stronger in this area than the UK Government themselves. We are clearly not there yet, and on Northern Ireland we are obviously nowhere at all. We are somewhere on those three areas of the withdrawal agreement, but not where we expected to be and nowhere on Northern Ireland.

We have agreed a transition deal in principle, but it is for 21 months. I cannot imagine that the future relationship, whatever it is, will not be a mixed agreement. We not only have to negotiate that agreement, and the UK Government have not yet decided what we want, but we have to agree it with the EU 27. It then has to go out to all the Parliaments—and one or two regional ones as well—to be ratified. It is an impossibility that this can be completed within 21 months. That means British business will go over at least two, maybe three, cliff edges and changes to regulations. The other side has already told us that we can forget areas such as the European arrest warrant and Galileo.

We hope to get the White Paper on the future relationship next week, but we are nowhere on it at the moment. We have no British ask whatever, but we have the red lines. The Prime Minister outlined these at the Conservative Party conference in 2016, when I am sure she got a huge round of applause for them from her party members. However, as a result of declaring them we effectively dug ourselves, and the EU, into the trenches from which we have not been able to move since. I do not commend the EU’s response either. We have—if Led Zeppelin were dead they would turn in their graves—a “Stairway to Brexit” from the EU side, which goes through all the different options. Against our red lines we are, at best, looking at a Canadian or a South Korean deal, which does not suit the UK in any way. The question is: how do we break out of this trench warfare? That is how our two MEP witnesses said it.

Following the theme of the noble Baroness, Lady Quin, the only way we can break out of this and come to some sort of sensible negotiation and agreement is by an association agreement. We have an excuse to go down that route, in that the European Parliament has mentioned it and written about it as a sensible option. We should use the European Parliament’s not inconsiderable leverage with the EU 27 to go down that route and start talking about an association agreement. The EU currently has those agreements with countries such as Moldova, Israel, various north African countries and some eastern European ones. They are not exactly the sort of agreements that we would necessarily want. Many of them, particularly in eastern Europe, are with countries aspiring to future membership rather than retreating from it. However, that is how this can be unlocked and we should move forward with it. I suggest that we get Guy Verhofstadt to intermediate for us. He seems to get on very well with David Davis, the Secretary of State. Perhaps he is the person to broker some movement on this.

As we have seen from the Statement this afternoon, Brexit is about number five on the EU’s priority list. We have lost leverage with the EU because of the lackadaisical and divided approach that the Conservative Government have taken. Immigration, the eurozone and the rule of law in eastern Europe are all more important issues to the EU 27 than our going, which they have already banked. It is a very sad situation, but that is where we are. Once the Conservative Party and the Government had lit the blue touch paper, we could have asked for—and got—a Brexit with dignity. It is such a shame that we could not even manage that.