Brexit: Negotiations

Lord Wallace of Tankerness Excerpts

Thursday 3rd October 2019 Lords Chamber

[Baroness Smith of Basildon (Lab)]

My Lords, I first thank the noble Baroness for repeating the Statement. I think that most of us listened carefully to what the Prime Minister has said today. The Statement was very different in tone to what we heard last Wednesday, so hopefully her entreaties to the Prime Minister had some impact.

When the Prime Minister took office in July, we were promised a fresh approach to Brexit, and that, despite actions suggesting the opposite, the Government really wanted to strike a deal with the EU. Having patiently awaited the result of the Conservative Party leadership contest, our EU partners were promised certainty by Mr Johnson. The de facto Deputy Prime Minister, Mr Gove, tells us that the new Cabinet Brexit sub-committee has had dozens of meetings over the summer, leading to a new plan for the Irish border being drawn up and dispatched to Brussels.

It is perfectly legitimate for the new Prime Minister to want to put his own plans to Brussels. In doing so, however, he would have been conscious that the Article 50 process was designed to take two years—not just the two weeks before the last European Council summit—for good reason. It was unfortunate that his advisers briefed the media that this would be a take-it-or-leave-it offer. Thankfully the tone has shifted to something much more conciliatory. We welcome that.

We must, however, face facts. Despite being welcomed by the DUP—I am sorry that our DUP colleagues are not here today for the Statement—the plan has been dismissed by all the other major political parties in Northern Ireland, as well by manufacturing and retail bodies. Retail NI’s Glyn Roberts said that the proposal was “worse than no deal”. Trevor Lockhart, the group chief executive of an agri-foods business, said on this morning’s “Today” programme:

“It is ultimately a balance between what works politically and what works economically. The UK backstop, for us, delivered economically but clearly did not work politically, and in the pursuit of getting a political solution the interests of businesses in Northern Ireland to some extent have now been sacrificed”.


Those are harsh words. For a plan centred on the principle of consent, there appears to be little consent for it.

Last night the noble Lord, Lord Empey, powerfully made the point that the Government were reneging on their commitment not to have a border down the Irish Sea. Like him, I struggle to understand the position of the DUP, as that party has opposed a border in the Irish Sea since the very start of the Brexit process.

Those in the know told us to watch out for the reaction from the EU 27. No news would be good news; it would mean talks were going into the tunnel for further discussion, and a deal was possible. Anything more than a basic acknowledgement of receipt would spell trouble. What, then, was the verdict? The Taoiseach warns that the texts tabled,

“do not fully meet the agreed objective of the backstop”.

The President of the Commission, while welcoming a degree of clarity about the UK’s intentions, noted several “problematic points”. The European Parliament’s Brexit steering group was less than enthusiastic, and that institution, which has to ratify any agreement, has already signalled that it will not support a deal without a backstop.

As I noted earlier, now that the party conference season is over, the Prime Minister appears to be approaching matters differently. I hope that talks will continue and progress will be made. However, given the leaked and very unwise memo calling on Conservative MPs to call the EU “crazy” if it rejects such a plan, it is vital that these talks take place in good faith.

So let us look briefly at the issues with the proposals. Despite warm words from the Government on the Good Friday agreement, it is not clear that this arrangement would uphold the UK’s commitments. The plans talk of a limited number of physical inspections taking place away from the border at the premises of producers, or perhaps further down the supply chain. I listened carefully to what the noble Baroness said, but is she able to confirm what arrangements are envisaged for such checks? Would the system operate in the same way as the Sweden/Norway border, with UK customs officials able to inspect premises in the Republic and vice versa—because that is how Norway/Sweden works?

The use of electronic submissions for trusted traders is surely part of the solution, but I am slightly concerned that the clue is in the name—it works only for “trusted” traders. What would the criteria be for a “trusted trader” under the new scheme? How do the Government envisage dealing with irregular traders, or those attempting to smuggle goods across the border, particularly if the UK ends up not participating in EU-wide intelligence and data-sharing schemes? Is the Prime Minister confident that his answer to that will reassure the EU 27 with regard to upholding the integrity of the single market?

Key to the plans is the inclusion of agri-food, a sector that relies heavily on cross-border trade, in a single regulatory area across the island of Ireland. Has the Lord Privy Seal had an opportunity to reflect on the comments of the Food and Drink Federation, which last night said that,

“these proposals don’t work for shoppers and consumers. That’s because they ask food and drink businesses operating in Northern Ireland to pay—through new bureaucracy and costs—for the Government’s inability to agree a comprehensive exit deal”?

Such concerns have been echoed by a variety of retail organisations across Northern Ireland and the Republic.

On these Benches, we are extremely worried by the Government’s insistence that there is,

“no need for … extensive level playing field arrangements”,

in the withdrawal agreement. The Leader of the House and the Minister sitting next to her will have heard the debates over the past couple of years in your Lordships’ House, and they will understand that what has been spoken about is more than mere customs procedures. Such arrangements cover social, employment and environmental standards, which completely underpin the contents of the political declaration. Can the Leader confirm whether the Government wish now to amend the political declaration? If so, have they prepared a new text? Do they believe that it is feasible to secure substantial changes to and ratify—including passing the withdrawal agreement Bill through both Houses—the withdrawal agreement and political declaration in the time available over the next two to four weeks?

Simon Coveney, the Foreign Minister of the Republic of Ireland, has indicated that if this were the final offer, the outcome on 31 October would be a no-deal exit. However, the Prime Minister has toned down his rhetoric since the Conservative Party conference and has talked about this being a “broad landing zone” for a deal, with the Government prepared for further discussions and further concessions. However, the fact remains that time is tight if Boris Johnson and his advisers stick to their “31 October or die-in-a-ditch” mantra. The fact is that the withdrawal Act No. 2 is a lifeline for the Government. It is an irony that the Prime Minister’s best chance of securing deal is an Act that he has opposed and done nothing but attack.

Noble Lords will recall that exactly this scenario was envisaged during our earlier debates on the first withdrawal Bill. We argued that it would be wrong to tie the Government’s hands if they were close to a deal but running out of time because of an inflexible exit date. The Prime Minister says in his Statement that,

“we are some way from a resolution”.

The extension legislated for in the most recent withdrawal Act gives the Prime Minister the flexibility he needs if he genuinely wants to get that deal over the line. Therefore, given that the Prime Minister feels that his proposal is the basis for further talks, does the Leader also accept that that is what he is suggesting? If a version of this proposal is agreed with the EU, are the Government confident that the necessary systems can be put in place during the transition period ending in December 2020? What are the Government doing to ensure, and is the Leader confident, that Stormont will be sitting by then?

[Lord Wallace of Tankerness (LD)]

My Lords, I too thank the Leader of the House for repeating a Statement that was written in much more measured tones than the one she was required to read last week. It is thanks to the purported Prorogation having been nullified that Parliament can now hold the Government to account on this important development. It is worth reflecting that if that had not happened, these important proposals would have been brought forward without Parliament being in session to examine them.

It is important that we examine these proposals, and the noble Baroness, Lady Smith, has asked a number of detailed questions on their application and how it is proposed that the arrangements will work. It appears that, from having no borders as a full member of the European Union, the Prime Minister’s proposals would give Northern Ireland two borders. Does the Minister believe that these proposals are better for the economy and, above all, for the security of Northern Ireland than what Northern Ireland has at present? It is important, too, that we closely examine the proposal of a “potential”— the word is there in all the documents—regulatory border between Great Britain and Northern Ireland and customs checks between Northern Ireland and Ireland. Simply to state that position must surely suggest that Northern Ireland’s economy would be in a worse position.

The noble Baroness, Lady Smith, quoted a number of businesses that have expressed considerable scepticism about the proposals. The Northern Ireland Chamber of Commerce and Industry said:

“Businesses are telling us that the potential increased costs will seriously damage … supply lines and indeed business survival.”


There are other quotes that could be repeated from spokespersons who have cast doubt on the workability and cost of these proposals. It would be interesting to see whether the Minister, when she comes to reply, can quote any business or business organisation which, in the last 24 hours, has given support to these proposals. The proposals depend on electronic and, in some cases, physical checks—possibly on business premises. What estimate have the Government made of these added costs to businesses as a consequence of such additional surveillance?

Last night, in response to a point that has been raised on a number of occasions, the noble Lord, Lord Callanan, said that the proposals did not breach Section 10(2)(b) of the European Union (Withdrawal) Act 2018,

“because they avoid checks, controls and physical infrastructure at the border”.—[Official Report, 2/10/19; col. 1765.]

I note his words, “at the border”, but if one looks at Section 10(2)(b) of the 2018 Act, it refers to creating or facilitating,

“border arrangements between Northern Ireland and the Republic of Ireland after exit day which feature physical infrastructure, including border posts, or checks and controls, that did not exist before exit day and are not in accordance with an agreement between the United Kingdom and the EU”.

I believe there is a difference between “at the border” and border arrangements; customs arrangements are by their very nature border arrangements. Can the Minister confirm that the proposals put forward by the Prime Minister conform with the provision, given the clear indication in his Statement that checks could take place at designated locations anywhere in Ireland and Northern Ireland?

The Statement referred to the,

“potential creation of an all-island regulatory zone on the island of Ireland, covering all goods.”

It goes on to say that it would eliminate,

“all regulatory checks for trade in goods between Ireland and Northern Ireland”.

So, of course, there would be checks between Northern Ireland and Great Britain. Will the Minister indicate whether this would be a two-way process? The Prime Minister, I understand, seemed to indicate in a reply that it would be only one way: for goods coming from Great Britain into Northern Ireland. Surely, however, if Great Britain has higher regulatory standards than the European Union, there would be checks for goods coming from Northern Ireland into Great Britain. Can she confirm whether that would indeed be the case, or is the Government’s working assumption that there will never be situations where the regulatory regime in Great Britain would be more stringent than that in the European Union? Have the Government had any discussions with the Scottish Government as to the implications of this proposal for any infrastructure required for such checks at Cairnryan?

The noble Baroness, Lady Smith, referred to the powerful speech yesterday evening by the noble Lord, Lord Empey, who wondered how the DUP could possibly sign up to it. He gave various quotes at col. 1744, quoting DUP spokespersons opposed to any form of regulatory divergence. Why would they? Maybe the secret is that the answer is in the word “potential”, if it is read in conjunction with the consent arrangements, which in the explanatory note provided, refer to consent,

“within the framework set by the Belfast (Good Friday) Agreement”.

There are people in your Lordships’ House who are far more expert in the intricacies of the Good Friday agreement and the procedures in the Northern Ireland Assembly than I am—I am conscious that my noble friend Lord Alderdice is behind me—but I understand there is a procedure called a petition of concern. Is it possible that a petition of concern could be used to ensure that these arrangements never take place, and could be vetoed by the DUP and others before they ever had a chance to take off? Does the Minister think that that enhances the chances of this arrangement being agreed to, not only by the Government of Ireland but by the European Union?

The Written Statement laid by the noble Lord, Lord Callanan, yesterday and reflected in the Prime Minister’s Statement, refers to a revised political declaration. The Statement says:

“In parallel, we will be negotiating a revised Political Declaration which reflect this Government’s ultimate goal of a future relationship with the EU that has a comprehensive Free Trade Agreement at its heart”.


While there is a lot of detail on the arrangements with Ireland, there is very little detail on what arrangements or provisions are sought for the political declaration. It would be helpful if the Minister, when she comes to reply, would indicate what provisions are proposed. Does it mean that the reassurances we had in times past about maintaining workers’ rights and environmental protections may no longer be the case?

The Statement from the Prime Minister also says:

“If our European neighbours choose not to show a corresponding willingness to reach a deal, then we shall have to leave on 31st October without an agreement and we are ready to do so”.


The noble Baroness, Lady Smith, has already indicated how the European Union (Withdrawal) (No. 2) Act might come to the assistance of the Government, but assuming this agreement does not pass, and that the House of Commons does not agree to no deal, can the Minister indicate in detail how the Prime Minister can state that in these circumstances, we shall have to leave on 31 October without an agreement consistent with the provisions of that Act?

Obviously, an orderly departure from the European Union is preferable to a disorderly one. However, we on these Benches do not believe there is any agreement that can be reached which gives us a better deal, in terms of our security, our prosperity, our trade, our jobs, or the future opportunities for our young people than the deal we have at present, as full members of the European Union. That applies to the United Kingdom as a whole and to Northern Ireland in particular.

[Baroness Evans of Bowes Park]

I thank the noble Baroness and the noble and learned Lord for their comments. I reiterate once again that we are committed to and focused on getting a deal, which is why we have brought forward these new proposals. I also remind noble Lords, who will be aware of this, that the House of Commons has rejected the previous withdrawal agreement three times; therefore, to get a deal, we have had to come forward with new proposals.

I reassure the noble Baroness that she is absolutely right: we believe that these proposals set out a reasonable compromise and that they are a broad landing zone in which a deal can take shape. We are pleased that our European colleagues have said that they will look at these proposals. Detailed discussions will now have to take place on them. I can reassure her that David Frost, the Prime Minister’s lead negotiator, is back in Brussels today. Intensive talks will be ongoing and we look forward to continuing them to ensure we can get a deal that everybody is happy with. We are committed to supporting the all-Ireland economy by avoiding checks and infrastructure at the border between Northern Ireland and Ireland, keeping Northern Ireland in the same customs territory as Great Britain and ensuring unfettered access for Northern Irish farmers and businesses to the UK.

The noble Baroness and the noble and learned Lord talked about the political declaration. Yes, we are in negotiations on changes to that. Those negotiations are ongoing and as soon as we are in a position to give further details on them, we will of course do so. I am happy to reassure them both that we are committed to strong standards in the areas of environmental protections and workers’ rights, as the noble Baroness set out. We have an excellent record in this country in these areas. There are numerous examples of where we exceed EU minima, such as on the length of maternity leave, shared parental leave, holiday entitlement and greenhouse gas targets. As I hope we have made clear continually at this Dispatch Box, we as a Government intend not only to maintain existing standards but to improve them. We will continue to hold this path.

The noble Baroness and the noble and learned Lord are right that these proposals will mean changes from the situation that prevails today—this was reflected in the Statement—but our driving purpose is to ensure that we minimise disruption. We understand the concerns of business. The noble Baroness mentioned concerns that have been raised. We will be talking in detail to businesses about the proposals, explaining why we believe there will be minimum disruption and making sure that their concerns are allayed. Part of the way in which we will do this is through our new deal for Northern Ireland. We will be making commitments to help boost economic growth and competitiveness, and to support infrastructure projects—particularly with a cross-border focus—so that we can work with our Irish partners as well to ensure that businesses and consumers across the island of Ireland are happy with what we are planning.

A limited number of goods movements will undergo physical inspections or checks. The system will largely be decentralised. It will be facilitated and minimised by the use of solutions such as electronic filing. We expect there to be a very small number of physical checks needed. These will be conducted at traders’ premises or other points in the supply chain. For instance, the UK currently checks around 4% of customs declarations, with fewer than 1% of these checks being physical in nature. This reflects our robust pre-clearance processes which involve the de-risking of high-risk traders and commodities. Our future system will be underpinned by continuing close co-operation between UK and Irish authorities, based on the existing customs legislations of both parties. It is our intention to make a series of simplifications and improvements to that legislation to ensure that the commitment in the new protocol to having no checks or infrastructure at the border is fulfilled.

The noble Baroness asked, for instance, about trusted traders. One of the ideas put forward is a special provision for small traders to ensure that requirements on them could be simplified. For instance, some small traders could be exempt from processes and paying duty altogether. These measures would need to be carefully designed so that they target the traders most in need of support, while continuing to ensure compliance.

The noble and learned Lord asked about Section 10 of the withdrawal Act. As my noble friend said yesterday, we believe that our proposals do not breach this provision but conform to it.

I can absolutely reassure the House that we are working very hard to get the Northern Ireland Executive back up and running. I think all of us in this House have been frustrated and disappointed about the lack of progress seen. I can reiterate only that this is an absolute priority and we are working extremely hard to ensure that it happens.

The issue of consent was also raised. The exact mechanism for consent will be discussed as part of these negotiations but in the context of the Good Friday agreement. We want to achieve the satisfaction of both communities in Northern Ireland. This is at the heart of what we look to do. We very much hope that these proposals will lead to a further, new and intense way in which we can move forward, so that we can present a Bill to the other place which can get through. Then we can move on and get a deal.