European Union (Withdrawal Agreement) Bill

Viscount Trenchard Excerpts

2nd reading & 2nd reading (Hansard): House of Lords & 2nd reading (Hansard)
Monday 13th January 2020 Lords Chamber

[Viscount Trenchard (Con)]

My Lords, I thank my noble friend Lord Callanan for his optimistic and confident introduction and congratulate my noble friend Lord Barwell and the noble Lord, Lord Mann, on their inspiring maiden speeches. I am enormously excited and heartened by the ringing mandate given to the Prime Minister in the general election last month. As he said:

“Now is the time to act together as one reinvigorated nation, one United Kingdom, filled with renewed confidence in our national destiny and determined, at last, to take advantage of the opportunities that now lie before us.”—[Official Report, Commons, 20/12/19; col. 146.]


During the years that I worked in Tokyo, and later when I worked in Brussels, I too believed that the UK should remain a member of the EU. However, with the passage of the Maastricht and Lisbon treaties, it has become increasingly clear that the EU is different from the body we joined. We had become increasingly uncomfortable passengers on the European train because we knew or suspected that its intended destination was different from where we wanted to go.

The Government have rightly recognised that there is nothing to be gained from providing for the possibility of an extension to the implementation period beyond the end of this year. Anyone who has experience of negotiations knows well that parties are willing to make their most significant concessions only when it has finally become clear that their interests depend on reaching agreement within a certain timescale. As long as the EU could hold out the hope that we would ultimately decide not to leave—or anyway not leave the customs union or the single market—it would continue to try to prolong the negotiations. As my right honourable friend Dr Liam Fox said at Second Reading in another place:

“We will face a political issue rather than a technical issue,”—[Official Report, Commons, 20/20/19; col. 154.]


if the EU were to prevent our reaching a satisfactory trade deal before the end of this year. The debate will not be about tariffs, fees and quotas, but about regulatory alignment.

There are two diametrically opposed systems for conducting global trade. One is to require your trade partners to harmonise their regulations with yours, as the EU is increasingly demanding. The only other major economy seeking to do this is China. The other system is to work towards outcomes-based equivalence, leaving each country free to determine its own rules and standards and to achieve that in a way which best reflects its legal system and its business practices. This way is consistent with parliamentary democracy, but the EU’s way is not. It is very important that our negotiators make it clear that we cannot accept any concept of dynamic alignment with EU rules. Mark Carney, who is not one of the strongest advocates of the merits of Brexit, has warned that the City must not be forced to accept EU financial regulations after we have left.

There has been much talk of the risk of damage to the City if it is denied access to European markets. However, surely a bigger risk is that faced by continental users of the London markets. For example, what damage would German car makers suffer in the event that EU regulators were to prevent them raising funds in the liquid international capital markets based in London? Their cost of funds would rise significantly. It is in our discretion to allow European financial institutions to continue to operate here, and I cannot believe that their regulators will really wish to circumscribe their activities here.

Finally, I shall say a word on the union. I believe that leaving the structures of the EU will of itself immediately start to reduce the support for independence for the constituent nations of the United Kingdom. EU membership, as the EU elite in Brussels perhaps knows better than we do, of itself diminishes the significance of being British and a part of the United Kingdom. Remove the European umbrella and the Scots will suddenly come to appreciate the British umbrella—especially the Barnett-lined umbrella—much more than they did. That is why I believe that the threat to the unity of the United Kingdom will be diminished, not enhanced, by Brexit.

European Union (Withdrawal Agreement) Bill

Viscount Trenchard Excerpts

Committee: 2nd sitting (Hansard continued) & Committee stage & Committee: 2nd sitting (Hansard continued): House of Lords
Wednesday 15th January 2020 Lords Chamber

[Lord Liddle (Lab)]

My Lords, I support the amendment moved by my noble friend Lady Hayter. I particularly support the speech of the noble Earl, Lord Kinnoull. He is already establishing himself in this House as an excellent chair of the EU Select Committee, succeeding a previous excellent chair. My only regret is that I am no longer on that committee to serve under his chairmanship.

In my experience from my four years on the committee, the attitude of successive Secretaries of State towards the committee was always one of good will but they made promises they never kept. At one stage, we were told, “Oh yes, every month you’ll see me and I’ll come to answer your questions.” My recollection is that we saw David Davis at intervals of perhaps five months during his time as Secretary of State. I think that we saw Mr Raab once; I might be wrong about that. Mr Barclay was the most attentive towards the committee. He seemed keen to improve in the next phase of the EU negotiations on his own degree of accountability. He saw maximum transparency in the conduct of the negotiations as being in the Government’s interests. I am sorry that No. 10 has decided to go for breach of promise on all this. That is a great shame.

Whenever the issue of the European Parliament’s rights to scrutiny is raised, you get a vigorous shaking of the head from the Minister, the noble Lord, Lord Callanan. I would love to hear his explanation of why those rights are not what we all know them to be. He seems to reject the notion that the European Parliament has many more rights than the British Parliament to access information and question officials to find out what is happening, but that is the case. The role of the European Parliament was greatly strengthened by the Lisbon treaty, and again by the ECJ judgment to make it easier for the Commission to negotiate on the EU’s behalf on services as well as on goods. It has also been strengthened by the brouhaha over the Canada agreement; a stronger role for Parliament clearly would have prevented the difficulties that the agreement then ran into in its ratification in member states. I think it is in the Government’s interests to be more transparent.

Yes, Brexit is happening—as I said in my Second Reading speech, I fully accept that—but the Government do not yet realise what trade negotiations are really like, because they have not done them for half a century. Having served for three years in DG Trade, or at least in the cabinet of the Commissioner, I can tell you that they are brutal. The people in charge of the EU side in these negotiations stand up for EU interests with tremendous firmness. I suspect that this is what we will encounter once we have allowed ourselves to become a third country, which in a few weeks we will be. They will treat us like any other third country.

One has to be transparent about the trade-offs. I will cite just one example. How do we rate the relative importance of the fishing and car industries? The fishing industry has tremendous political profile and thinks that as a result of Brexit it will get much more fishing in British waters and that we can keep continental boats out—but it represents 0.5% of GDP. How much are we prepared to sacrifice in our negotiating position for the fishing industry? The car industry employs up to 1 million people in this country, when you look at the supply chain. If we do not achieve the kind of customs partnership that Mrs May said she was in favour of, there is a real risk that inward investment by the overseas companies that rebuilt the car industry in Britain will go elsewhere over time. There has already been a lot of talk of that on their part. This would be a devastating blow to one of Margaret Thatcher’s main achievements in the 1980s and 1990s in being able, as a result of creating the single market, to attract to Britain huge amounts of foreign investment, which has greatly benefited our people. I repeat: 1 million jobs.

If there is not transparency, how do the Government explain to people that they are not guaranteeing the future of 1 million jobs but have put all their negotiating eggs in the basket of trying to give a few more opportunities—not actually saving any jobs—to our fishing? We need openness if we are to have a proper debate in this country about where our interests lie. That is what we need in the coming 12 months if we are to have any hope of a harmonious outcome to these rushed negotiations.

[Viscount Trenchard (Con)]

My Lords, I will comment on the views of the noble Lord, Lord Liddle, about the European Parliament and the relative degrees of parliamentary scrutiny. He has much more experience of Brussels; I have worked there, but not for nearly as long as he did. It is not correct to say that the European Parliament’s rights in this matter are greater than the United Kingdom Parliament’s. Article 218 of the Treaty on the Functioning of the European Union states that the European Parliament must be kept

“immediately and fully informed at all stages of the procedure”,

but does not give it a role in deciding the substance of the negotiations. However, it must pass the final agreement by a simple majority vote. So it has to agree at the end, but it appears not to have the right, stage by stage, to dictate to the Government what they are to do as they negotiate.

[Lord Liddle]

I never claimed that. I claimed that the Parliament was so fully informed that it had a grasp of the trade-offs that it would have to make in deciding whether to vote for this deal at the end of the day.

[Viscount Trenchard]

As far as I understood, the noble Lord said that the European Parliament had much more say in dictating the mandate, but perhaps I misunderstood him. In any case, it appears that during the last three years the UK Parliament has been exercising power to control the Executive, and the Executive have not been seen by their interlocuters on the European side as having the right to negotiate, because all the time noble Lords opposite, and others, were saying to individuals in Brussels, “Don’t worry, Parliament isn’t going to allow the negotiating team to do this. We will reverse it.” Now the people have spoken and the House of Commons has a strong majority of 80 Conservative MPs, all committed to a real Brexit. That is known. This amendment is designed to obstruct because the House of Commons will not accept it, and noble Lords know this well.

[Lord Wigley (PC)]

My Lords, I very much agree with the points made a moment ago by the noble Lord, Lord Liddle. In Wales during the 1970s, 1980s and 1990s, we were fortunate enough to attract more than 200 American companies and more than 50 Japanese companies to invest in Wales, largely through the work of the Welsh Development Agency. They came to Wales in order to sell to the European market: there is no question about that, and therefore these questions are of mainstream importance to the National Assembly for Wales. That is why Amendment 40, standing in my name, covers the matters involved in Amendment 27 and brings into the loop a role for the National Assembly for Wales, the Scottish Parliament and the Northern Ireland Assembly. I concur very much with the points made by the noble Baroness, Lady Hayter, in opening this debate.

Amendment 27 provides, in subsection (4) of the proposed section entitled, “Negotiations for future relationship,” that:

“A Minister of the Crown may not engage in negotiations on the future relationship with the EU unless … a statement on objectives for the future relationship with the EU has been approved by the House of Commons.”


My Amendment 40 extends the same principle to the National Assembly for Wales, the Scottish Parliament and the Northern Ireland Assembly.

The lead Amendment 27 does indeed bring in the three devolved legislatures, to the extent that it provides that copies of the proposed progress reports should be provided for each devolved legislature, and to the relevant Ministers of those three nations. The general arguments in favour of my amendment are similar to those for Amendment 27, so I will not repeat them. I support everything stated by the noble Baroness, Lady Hayter. However, I will again press that the devolved legislatures should be fully in the loop and that their approval should be obtained. They have as valid a right to be in the picture as Members of the European Parliament; it impacts directly on their work.

I realise that the Government may withstand the whole concept of getting prior parliamentary approval for their negotiating position with regard, say, to trade in sheepmeat, but they contend that the Government can negotiate exactly what they like, and they have it in their power to do so. In reaching their negotiating position and their proposals, they will no doubt have discussed their strategic objectives with their ministerial colleagues in charge of sheepmeat issues in England. It would be amazing if they were not to do so; indeed, it would be a chronic dereliction of duty. But, unless a provision along the lines of Amendment 40 is brought into play, the government team in charge of negotiating with the EU on the future sheepmeat trade will be totally ignorant of the views of Wales, Scotland and Northern Ireland. These need to be systematically built in.

--- Later in debate ---

This amendment also seeks to maintain UK access to participation in major funding programmes and the like, which I will not go into. The amendment sets out what we think is important around the level playing field issue. It maintains a beneficial framework—a framework jointly developed by the United Kingdom with the European Union; it was not foisted on us—and it helps to send the right messages to important businesses and sectors about how they can face the future. This discussion is a chance for Her Majesty’s Government to set out their approach because, at the moment, the messages have been confused, confusing or both, so we look forward to comments from the Minister.

[Viscount Trenchard]

My Lords, the noble Lord, Lord Fox, has talked at great length about a level playing field. The level playing field he refers to is the EU level playing field. It is not any other level playing field, such as the House of Lords level playing field, which seems to suit the Liberal Democrats, who are overrepresented in your Lordships’ House by 67% on the basis of the proportion of votes cast at the last general election.

[Lord Fox]

I congratulate the Member opposite on embracing proportional representation.

[Viscount Trenchard]

That is my pleasure. Proportional representation has its place but it may not be applicable everywhere.

I am very surprised that the noble Lord has sought to require the Government to adopt his amendment seeking a level playing field with the EU on workers’ rights and environmental and consumer standards. Is he not aware that it was a manifesto commitment of the Conservative Party, to which all Conservative candidates signed up, that the Government would get a proper Brexit done and that we would leave the customs union and the single market? It is essential that we do that to have the flexibility we need to develop and maintain our own independent trade policy, and to negotiate free trade agreements with third countries.

The noble Lord’s amendment requires close alignment with the EU single market, underpinned by shared institutions and obligations. “Shared institutions” sounds to me as though we could still be regulated by EU regulators even after we had left. The EU will seek to export its regulatory framework and standards to us in return for providing market access. Dynamic alignment on workers’ and consumers’ rights would completely subjugate us to the EU, ruling us out as a potential trade partner for others and denying us the benefits and upside of Brexit. We know that the noble Lord does not want to leave the EU but surely he understands that, given that Brexit is going to happen anyway, we should make sure that we can play on a level playing field at the global level. That means freeing ourselves from EU strictures, such as the noble Lord’s amendment would make worse.

[Lord Warner]

I am sorry to interrupt the noble Viscount’s flow but I cannot resist asking him, even at this time of night, whether the Prime Minister’s new best friends in constituencies in the north of England and the Midlands will welcome his robust approach to workers’ rights at the next election.

[Viscount Trenchard]

I believe that the policy which my right honourable friend the Prime Minister used to persuade his new supporters in the north of England and elsewhere to support is one that will produce more prosperity for the United Kingdom and a brighter future for all, and that those who voted for him in the north of England will see that it is in their interests to continue to vote for him and his successors, because his policy will have so clearly worked. Furthermore, since we will be free of the cash drain and the regulatory strictures of the EU, which have progressively stunted the United Kingdom’s voice in global fora—I speak as someone who has spent a large proportion of his working life outside the UK, looking in—the new supporters of the Conservative Party in the north will, I hope and trust, wish to continue to support it.

The noble Lord, Lord Fox, talked a lot about regression and standards. He is always trying to bind the Government not to resile or retreat from the high standards set by the EU. But standards are not about high and low; they are about what is proportionate, what properly balances the interests of the innovator with those of the consumer, and what sufficiently but properly protects the consumer against risk. EU regulation in many fields relies so much on the precautionary principle that it has a very negative effect on innovation. That places at risk the UK’s position as the best country in the world in which to conduct medical and scientific innovation, so for all those reasons I would resist the noble Lord’s amendment.

[Baroness Ludford]

Before the noble Viscount sits down, can I point out that the reputation he just mentioned, as the greatest country in the world in which to develop medical and other research, has been acquired while we have been in the European Union?

[Viscount Trenchard]

The noble Baroness is quite right—it is in spite of our being in the European Union. This precautionary principle regulation increasingly affects international pharmaceutical companies, which have said to me that it is important that we should not allow much more of that or we will be a less friendly place for innovation.

[Baroness Hayter of Kentish Town]

My Lords, I do not know about this talk of workers’ rights, but I started at 11 this morning, it is now nearly 10 pm and we are starting again at 11 tomorrow morning—sadly not being paid to be here; I am not a worker, so I cannot use the EU regulations. But that is rather beside the point. I am looking forward to the Minister’s “intellectual thoughts” as the noble Lord, Lord Fox, asked of him.

The Government’s aim is for a free trade agreement—“unfettered” trade—which, if we are not to undercut our competitors across the EU, is bound to involve a level playing field of regulations and state aid rules, as the noble Lord, Lord Fox, said. Michel Barnier has repeatedly stated that Boris Johnson’s ambition of a tariff-free, quota-free deal hinges on accepting this, and EU leaders suggest that level-playing-field commitments will be a precondition for the EU to conclude a free trade agreement. Emmanuel Macron has stated that

“the more ambitious the agreement, the more substantial the regulatory alignment”.

That does not mean all the same rules and institutions—we do not go along with that—but this is about the rules by which we can trade with the EU. Macron also said that a level playing field will make the negotiations “go pretty quickly”.

As we know, the Prime Minister keeps saying “Get Brexit done”, but this also means getting an FTA before the end of the year. If we do not uphold workers’, consumers’ and environmental rights, this will not help the Prime Minister to get his Brexit done. Appearing willing to undermine EU standards—and the Government are seen as undermining them—will immediately indicate to the EU that its companies may face unfair competition from ours. The Government’s deletion of the clauses upholding existing rights has already alarmed the EU and companies there, let alone our own workers and consumers.

Amendment 35 inserts the aims already set out in the political declaration—though of course they are not enforceable in that—where the Government agreed to

“maintain environmental, social and employment standards at the current high levels provided by the existing common standards.”

We are asking for this, from the political declaration, to be included in the Bill.

We have had 45 years of progressive integration of our employment rights and other standards alongside the EU. These regulations are good in themselves for the workers and consumers concerned and for the environment, but they are crucial for an open, fair and competitive continental market on whose growth and resilience all our well-being depends. Furthermore, as has been suggested, any future trade deal must incorporate these high levels of alignment and a level playing field with the EU in order to prevent an alternative vision—the deregulatory US deal—taking primacy over the EU deal. It sounds as though that it is something the noble Viscount, Lord Trenchard, would like, but we on this side of the House would not. Let us keep to the high standards that we have.