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House of Lords Hansard

A New Partnership with the EU

17 January 2017
Volume 778

    Statement

  • My Lords, with the leave of the House, I will now repeat a Statement made in the other place earlier today by my right honourable friend the Secretary of State for Exiting the European Union. The Statement is as follows:

    “With permission, Mr Speaker, I would like to update the House on the Government’s plans for exiting the European Union. Today, the Prime Minister is setting out a plan for Britain. It is a plan to ensure that we embrace this moment of change to build a confident, global trading nation that seizes the new opportunities before it; and a fairer, stronger society at home, embracing bold economic and social reform. It is a plan which recognises that the referendum vote was not one to pull up drawbridges and retreat from the world but rather, a vote of confidence in the UK’s ability to prosper and succeed. It is a plan to build a strong, new partnership with our European partners, while reaching beyond the borders of Europe too, forging deeper links with old allies and new ones.

    Today we set out 12 objectives for the negotiation to come. They answer the questions of those who have been asking what we intend, while not undermining the UK’s negotiating position. We are clear that what we seek is that new partnership: not partial EU membership, not a model adopted by other countries, not a position that means we are half in, half out. Let me address each of our aims in turn. First, we will provide certainty wherever possible, while recognising that we are about to enter a two-sided negotiation. So we have already made announcements about agriculture payments and student funding. Our proposal to shift the acquis—the body of EU law—into UK law at the point of exit is designed to make the process as smooth as possible. At the point of exit, the same rules and laws will apply, and it will then be for this Parliament to determine changes in the country’s interests. For we also intend to take control of our own laws, and end the authority of the European Court of Justice in the UK. Laws will be made in this Parliament, and in the devolved Assemblies, and interpreted by our judges, not those in Luxembourg.

    We will aim to strengthen the union between our four nations. So we will continue to engage with the devolved Administrations, and we will ensure that as powers are returned from Brussels to the UK, the right powers come to Westminster and the right powers are passed to Edinburgh, Cardiff and Belfast. Another key objective will be to maintain the common travel area between the UK and the Republic of Ireland. No one wants to see a return to the borders of the past.

    In terms of immigration, we will remain an open, tolerant nation. We will continue to welcome the brightest and the best, and ensure that immigration continues to bring benefits in addressing skills shortages where they exist. But we will manage our immigration system properly, which means free movement to the UK from the EU cannot continue as before. We want to guarantee the rights of EU citizens who are already in this country and make such a great contribution to our society, in tandem with the rights of UK citizens in EU countries being similarly protected. We would like to resolve this issue at the earliest possible stage. Already, UK law goes further in many areas than EU minimums, but as we shift the body of EU law into UK law, we will ensure that workers’ rights are not just protected, but enhanced.

    On trade, we want to build a more open, outward-looking, confident nation that is a global champion for free trade. Membership of the EU’s internal market means accepting its four freedoms in terms of the movement of goods, services, capital and people, and complying with the EU’s rules and regulations. That would, effectively, mean not leaving the EU at all.

    So we do not propose to maintain membership of the EU’s single market. Instead, we will seek the broadest possible access to it through a comprehensive free trade agreement with the EU. We want it to cover goods and services and to be as ambitious as possible. This is not a zero-sum game. It should be in the interest of both the UK and the EU. It is in all our interests that financial services continue to be provided freely across borders, integrated supply chains are not disrupted and trade continues in as barrier-free a way as possible. While we will seek the most open possible market with the European Union, we also want to further trade links with the rest of the world. So we will deliver the freedom for the UK to strike trade agreements with other countries. The Department for International Trade has already started to prepare the ground, and it is clear there is enormous interest around the globe in forging new links with the UK.

    Full membership of the EU’s customs union would prohibit new international deals. So we do not intend to remain part of the common commercial policy or to be bound by the common external tariff. Instead, we will seek a customs agreement with the EU, with the aim of ensuring that cross-border trade remains as barrier-free as possible. Clearly, how this is achieved is a matter for detailed negotiation.

    The UK is one of the best places in the world for science and innovation, with some of the best universities in the world, so we must continue to collaborate with our European allies.

    When it comes to crime, terrorism and security, we will aim to further co-operation with EU countries. We will seek practical arrangements in these areas to ensure we keep our continent secure and defend our shared values.

    Finally, we have said repeatedly that it will be in no one’s interests for our exit to be disorderly, with any sort of cliff edge as we leave the EU, so we intend to reach a broad agreement about the terms of our new partnership with the EU by the end of the two-year negotiation triggered by Article 50. But then we will aim to deliver an orderly process of implementation. That does not mean an unlimited transitional period where the destination is not clear, but time for both the UK and EU member states to prepare for new arrangements, whether that be in terms of customs arrangements, the regulation of financial services, co-operation over criminal justice, or immigration controls.

    So these are the aims and objectives we set out today for the negotiation to come. So our objectives are clear: to deliver certainty and clarity wherever we can; to take control of our own laws; to protect and strengthen the union; to maintain the common travel area with the Republic of Ireland; to control immigration; to protect the rights of EU nationals in the UK and UK nationals in the EU; to protect workers’ rights; to allow free trade with European markets; to forge new trade deals with other countries; to boost science and innovation; to protect and enhance co-operation over crime, terrorism and security; and to make our exit smooth and orderly. It is the outline of an ambitious new partnership between the UK and the countries of the EU.

    We are under no illusions: agreeing terms that work for both the UK and the 27 nations of the EU will be challenging, and no doubt there will be bumps in the road once talks begin. We must embark on the negotiation clear that no deal is better than a bad deal. As the Prime Minister has made clear today, the UK could not accept a punitive approach. We would still be free to trade with the EU, strike trade deals around the world, set competitive tax rates and embrace policies that would attract companies and investors, including many from Europe. Let me be clear: we do not expect this outcome. We are confident that if we approach these talks with a spirit of good will, we can deliver a positive deal that works to the mutual benefit of all. It is absolutely in our interest that the EU succeeds, and in the EU’s interests that we do too. So that will be one of our central messages: we do not want the EU to fail, we want it to prosper politically and economically, and we will seek to convince our allies that a strong, new partnership with the UK will help it to do so.

    Our approach is not about cherry picking but reaching a deal which fits the aims of both sides. We understand that the EU wants to preserve its four freedoms and to chart its own course. That is not a project the UK will now be part of. And so we will leave the single market and the institutions of the EU. We will make our own laws and decisions about immigration. And let me be crystal clear today, if there has been any doubt: the final deal agreed between the UK and the EU will be put to a vote in both Houses of Parliament before it takes effect.

    To conclude, we are leaving the EU but we are not leaving Europe. We will continue to be reliable partners, willing allies and close friends with our European neighbours. We will be ready for any outcome, but anticipate success, not failure. The UK will embrace its new place in the world with optimism, strength and confidence”.

    My Lords, that concludes the Statement.

  • I thank the Minister for repeating the Statement, which, regrettably, we saw on TV before it was given in the Commons.

    We welcome the commitment to a vote in this House on the final deal—but how much better had the Government committed to a vote on Article 50 rather than having to be dragged to the courts. We also welcome the objective of ending up with a fairer Britain—it would have been strange if they had asked to get to a less fair Britain. Our worry is the sting in the tail of saying that “no deal” and a new economic model was better than a bad deal. That sounds like lower taxes, which means fewer public services and therefore a price to be paid by exactly those ordinary working people whom the Prime Minister claims to prioritise.

    However, I do not want to dwell on the possibility of failure in negotiations. I want to welcome the commitment to as free trade as possible with the European Union—our major market, our closest neighbours, our security partners. I welcome the Government’s use of the word “partnership” as a grown-up relationship which benefits both sides. My concern is whether this is possible, since the Government are contemplating leaving the customs union. Without that, we are in WTO territory, with no protection for services, a poor deal for agriculture —the future of which got no reference at all in the speech—and higher prices for consumers as tariffs are imposed. The NFU estimates that there would be cheese and meat tariffs of up to 30%, with extra red tape adding a further 6%.

    More than this, if we are not fully in the customs union, we will not be able to import and export finished products or components without “country of origin” rules and checks. That is costly and time-consuming. If costs to business increase, how can we expect them to invest and innovate? Outside of the customs union, our financial services would also be at a disadvantage—a cost to industry as well as the services themselves. If our insolvency regime does not work, investors will think twice about locating here and putting their money at risk. If our insurance, hedging, clearing and other major services are weaker, so is the chance of entrepreneurs and investors risking their capital.

    We of course welcome the commitment to maintaining workers’ rights and hope that the Government will therefore support Melanie Onn’s Private Member’s Bill, which entrenches just that. Furthermore, workers are consumers too, yet they did not get a mention in the speech. Their rights to be protected from unsafe goods or food, their ability to travel visa-free, using their domestic car insurance, or to get compensation from delayed air travel—all these also need to be retained but were not mentioned. We were pleased to hear the acknowledgement of the importance of science, but we heard nothing as to whether we would be able to stay within the European Medicines Agency or other similar agencies, which are vital for our trading relationships.

    What of the future needs of our economy? The Government, quite rightly, want to protect EU citizens already here, but what of the future? A quarter of a million EU nationals work in public services, but there will be churn and, in care homes as well as hospitals, we may need these people in the future, as with the 100,000 EU nationals working in food and drink.

    I leave just three quite simple questions with the Minister. First, what impact assessment have the Government made of the UK being outside the customs union, and will he commit to publishing that? Secondly, does he accept that, even if we come out of the ECJ, any trade agreement requires some sort of dispute adjudication body? So what thought has been given to what might be appropriate for a free trade agreement with the EU? Finally, what response does he envisage from the EU 27 to these objectives?

  • My Lords, I too thank the Minister for repeating the Statement. We see that the Prime Minister, who pretended that she did not have to choose, has come to the end of her “cake policy” period and has made a choice, and it is the most damaging one possible in response to the referendum result and in terms of the values, vision and alliances that Britain wants to pursue. We do indeed need to take this opportunity to ask ourselves what kind of country we want to be, but the Prime Minister is deluding the country if she thinks that the UK will emerge stronger, fairer and more united from this Brexit plan.

    The attempt to rebrand hard Brexit as clean Brexit does not survive a moment’s scrutiny. It will be destructive, messy and antagonistic, as indeed the Government’s contemplation of “no deal” suggests. There is overwhelming public support for free trade with the EU to continue, and the only true free trade is inside the single market. That is why Mrs Thatcher created it, and the Conservative manifesto last year pledged to stay inside it.

    Do the Government expect to be thanked by millions of Britons, particularly young ones, who will lose their protection from data-roaming and flight cancellation rip-offs, as well as the freedom to live, work and study where they want? The Government’s claim that we will be a fairer country with workers’ rights enhanced is contradicted by Chancellor Hammond’s threat that we will be the Singapore of Europe, as a tax haven with slashed regulation.

    The Prime Minster claims that we need hard Brexit to be more outward-looking and to reach beyond the borders of Europe, but that is perverse. The most obvious example of international co-operation is on our door-step—the very EU on whose single market she is turning her back. The contention that the UK needs to reject the EU to “go global” posits a completely false choice. The EU, with over 50 free trade agreements, is a gateway to the global stage, not an impediment to it, and leaving it risks exposing the UK and its people to the coldest winds of globalisation that the EU helps protect them from.

    The Prime Minister is aligning the country with a protectionist incoming US President—ironically while the Chinese leader speaks at Davos in favour of free trade. She says that she wants the EU to succeed and for the UK to be its best friend, but the choice of hard Brexit aligned with Mr Trump and, through him, with President Putin and against Chancellor Merkel is a rejection not only of the single market and the European economic, social and human rights model but, indeed, a pact with those whose declared—not even hidden—objective is to subvert, divide and break up the EU and NATO, and thus the bedrock of our security.

    The Prime Minister says that she wants us to be tolerant and a magnet for international talent but, by refusing a unilateral guarantee, she is sending a message of denigration and rejection of the 3 million EU citizens who already contribute so much to Britain’s economy and society, putting them through agonies of insecurity and subjecting them to the most Kafkaesque Home Office bureaucracy.

    When the British people voted last year, they did not vote to live in a world where our values are replaced by ones set by Presidents Trump and Putin, so the case for a referendum on the Brexit deal, so that people can decide democratically whether they want a future as portrayed by this Tory Government, has been strengthened even further.

  • I thank the noble Baronesses, Lady Hayter and Lady Ludford, for their contributions. I start by addressing the point about no deal being better than a bad deal. I repeat what I said in the Statement and what my right honourable friend the Prime Minister said in her speech. The Government’s objective is to succeed in these negotiations. We are aiming for success but, as any responsible Government would do, we are preparing for a whole range of outcomes, and it is absolutely fair to say that we should be transparent in that. Being transparent all along is what I think this House would wish us to be.

    I think that the noble Baroness said that we would be leaving the customs union and therefore essentially going straight to WTO terms. Again, that is not exactly what the Prime Minister set out this morning—indeed, it is far from that. We are aiming for a comprehensive free trade agreement. Undoubtedly there are aspects of and concepts behind the customs union which, as my right honourable friend spelled out this morning, we do not want to be part of, such as the common external tariff. But there are other aspects of the customs union, such as frictionless trade and, as she and her right honourable friend giving the Statement in the other place mentioned, ensuring that we avoid impediments to trade.

    We are approaching these negotiations unlike how other countries have approached negotiations with the EU. Not only are we a considerable trading power in our own right, but we have spent the past 40 years as a member of the EU. Therefore, unlike other nations that are trying to ensure that trade barriers come down, we want to make sure that trade remains as frictionless and free as possible. That is an extremely good way to start these negotiations, and that is why I do not quite share the pessimism that I feel is coming from some of the questions we have heard today.

    As regards the point on an impact assessment, there is a wide range of possible outcomes to these negotiations and it would be impossible for us to model all of them. Furthermore, as the House has heard me say at this Dispatch Box on many occasions, and as the other place voted for, we must not undermine our negotiating position by giving our European partners information that might enable them to see the weaknesses in our position.

    A considerable amount of thought has gone into and continues to go into the issue of a dispute mechanism. The noble Baroness is absolutely right: there will need to be some form of dispute mechanism. She is quite right to observe that, in other trade deals, there are such mechanisms. We will be thinking about that and it will be a subject for negotiation.

    As regards the envisaged EU response, I know from the conversations that I have been lucky enough to have with our European partners’ ambassadors in London, and from conversations that my colleagues in my department have had with their counterparts, that there is considerable keenness, as there is in this House, for the Government to spell out their position on certain things, such as whether we wish to be a member of the single market, have a transitional arrangement or continue to be part of the common external tariff. We have done that today. I very much hope they will recognise that and note the fact that we are, as the noble Baroness so rightly said, approaching this in the spirit of good will, wanting to create a new partnership that is of mutual benefit to both sides. I very much hope that that will come to pass.

    Turning to the noble Baroness, Lady Ludford, who made a number of remarks, I have to say that I fundamentally disagree with the premise she is starting from. I do not agree that globalisation is an inherently bad thing. I think that competition and free markets are a good thing and that, over the past 10 to 20 years, the forces of globalisation have helped raise prosperity throughout the world. So I dispute that.

    As regards becoming the Singapore of Europe, as I said, I also dispute the suggestion that we should be not transparent with people about the potential outcomes of these negotiations and our potential response to those. It is absolutely right that we should be candid with the British people about this, and that is what we shall do.

    I am sorry to say that I disagree entirely with the noble Baroness’s remarks that, essentially, we are aligning ourselves with those who wish to see Europe break up. It is absolutely not in our interests to see that happen. The Prime Minister has made that clear, and I will make that clear at any opportunity I have.

  • My Lords, given that successive British Governments have trumpeted their success in creating the single market, I am sure I am not alone in thinking that this is a very sad day for our country. The new partnership that the Minister has described makes no mention whatever of EU environmental policy or, indeed, areas such as defence and security, where we have been involved in peacekeeping initiatives. Could the Government tell us what those priorities are in the negotiations ahead?

  • The noble Baroness makes a very fair point. I apologise that I have been unable to cover the complete waterfront in my remarks, but I am sure we will have the opportunity to discuss detailed points in the weeks and months ahead. As regards the environmental approach, let me first repeat what I said in my Statement: our approach to the great repeal Bill is that we will be porting EU law into UK law. That will be the case as of day one. Parliament will be able to decide if—I emphasise if—it wishes to amend or appeal any of those regulations in the months and years ahead.

    As for our approach to the common defence policy, let me repeat and underscore what I have said in my remarks. As I have said before, we wish to and continue to keep close co-operation and collaboration with our European partners where there are common challenges that we all face and where it is in our national interest to do so. Yesterday, I was fortunate enough to meet the Baltic ambassadors who represent their nations here, and we had a good discussion about what the UK is doing, for example, in Estonia, where we have increased our support for operations there. As I said in my Statement, I should like to underscore and allay any concerns that we are intending to pull up the drawbridge on that front.

  • My Lords, I welcome the commitment in the Statement that the final terms will be subject to parliamentary approval. That is very good news. However, against the possibility that Parliament will reject the final terms, or that the final terms might be rejected in a referendum determined by Parliament, surely part of the negotiation should include the provision that, in the event of negation in the terms I have just suggested, Article 50 will be deemed by consent to be withdrawn and we will remain a member of the European Union on the existing terms or as they may be modified by agreement between the parties?

  • My noble friend has made this point before. It is the Government’s position that, once Article 50 has been triggered, notice to withdraw will not be withdrawn.

  • On that point, is it not the case that two years is not a final deadline but only an interim stage where these broad principles are agreed? Is this not putting off the final decision to a point which could simply be a total failure quite outside the Article 50 process? Where would we be then in fact?

  • If I understand the noble Lord correctly, the Government intend to stick by the timetable as set out in Article 50. So at the end of the two-year period, the UK will withdraw from the EU.

  • I welcome the Government’s determination to strengthen the union that matters above all—the one that unites the constituent parts of our own great country. Is my noble friend able to say at this early stage anything more about how a common travel arrangement with the Irish Republic might be secured?

  • I know my noble friend is a doughty supporter of the union. I can underscore here that we will continue to engage closely with all the devolved Administrations and the parties in them to ensure that we continue to hear their views and consider their proposals. That will continue in spite of recent events in Northern Ireland. As to the common travel area, I can only go as far as I have in the past and assure my noble friend and your Lordships that it remains the Government’s view that we do not wish to return to the borders of the past. We are continuing to assess the various practical options open to us, both in terms of where the borders are and what digital technology might be at our disposal to deliver that outcome.

  • My Lords, the Government intend to reach broad agreement about the terms of our new partnership with the European Union by the end of the two-year negotiation triggered by Article 50. Is it not folly on the Government’s part to set negotiations to a 24-month timetable—realistically, a 14 month timetable taking into account the German elections in the autumn—because the calendar then imposes a particular kind of pressure on the demandeurs, the UK officials negotiating in this process? Does it not mean that the ambition, the intention, to conduct everything within two years is part of a wish list and not just a strategy?

  • I know the noble Lord speaks with considerable experience of the EU. All I will say is what the Prime Minister said this morning, which is that it is our aim to conclude an agreement within two years. The noble Lord will probably agree that our European partners wish to get certainty and clarity on these issues as quickly as possible, as clearly we do too.

  • My Lords, I will press the Minister further on the question of what happens if at the end of two years there has not been an agreement. If there is an agreement there will be an opportunity for both Houses to vote on it. If there is no agreement, will there still be an opportunity for them to vote, and to vote to indicate that they are not prepared to go ahead with the proposal as it stands, which, by then, will have been rejected and no agreement reached on it?

  • My Lords, I know it might be very tempting to the noble Lord, but I am sorry to say that I am not going to start hypothecating on those kinds of issues, simply because it is our intent to enter these negotiations to get a successful outcome.

  • My Lords, the Minister confirms that getting out completely from underneath the jurisdiction of the European Court of Justice is one of our fundamental objectives. I am very sorry that the Government have taken over this King Charles’s head from the Bruges Group and Sir William Cash, but clearly that is what has happened. I ask the noble Lord two questions. Given that the equivalent of Sir William Cash and the Bruges Group in the United States believe that the superiority of American common law—all Anglo-Saxon law to Roman law—is such that the United States cannot accept the supremacy of any international law or international court, would it be the Government’s intention that we should also challenge, for example, the right of WTO arbitration to override the British Parliament? How far do we wish to go in withdrawing from the whole network of international law, of which European law is part? My second, related question is: how do we intend to continue to co-operate on international security, sharing of data and intelligence, data protection et cetera with other European Union countries, as the Prime Minister has clearly said she wants to do, unless the European Court or some other court manages to maintain a degree of jurisdiction and supervision over that area?

  • As usual, the noble Lord asks some very good, forensic questions. On the second question, sharing data will be a matter for negotiation. Here we should look at the outcome we wish to achieve. As I said in the Statement, we wish to ensure we have arrangements with our European partners that continue to deliver the same level of security and stability we have now. That must be absolutely in our interest, given the criminal and terrorist threats we face. How we achieve that, given our position on the ECJ, will be a matter for negotiation. The noble Lord is right to highlight that. On the WTO jurisdiction, I have no knowledge that there is any wish by the Government to start unravelling that or any other jurisdictional court.

  • My Lords, will the noble Lord confirm that the common travel area will benefit only British and Irish citizens, otherwise what hope has he of controlling our borders?

  • That is a very good question. I am not going to go into details now on how the common travel area might operate. The noble Lord highlights a good point. It is one that we have absolutely highlighted and will continue to consider how to address.

  • My Lords, does it remain the Government’s policy that negotiations should not end with what the Prime Minister recently called a cliff-edge moment? How will we ensure that?

  • My noble friend enables me to highlight again that we absolutely do not wish that to happen. How we do that will be a subject for negotiation. As I said at the Dispatch Box last week, it is interesting that a number of other institutions and organisations, here and in Europe, see the benefits of avoiding that for both our mutual interests. As that realisation begins to settle in in the minds of those in Europe and here, I have every hope that we will reach that outcome.

  • My Lords, in the Statement, the Government quite rightly recognise the excellence of our university sector. However, warm words are not enough. In the organisational chart of the Minister’s department there is no mention of higher education—there is no person assigned to the task of listening to and incorporating the views of the sector in the Brexit negotiations. How will their views be taken into consideration?

  • A number of my officials have met those within the higher education sector and I have been fortunate enough to visit universities and meet them myself. I am delighted that we are so ably assisted by my right honourable friend Jo Johnson, who has been feeding in the views of those in the HE sector. Let me take this opportunity to assure the noble Baroness that we are determined to look at issues such as Horizon 2020, as the Statement implied, from the point of view of what is in the national interest in the years ahead. Where there is scope for continued co-operation and collaboration, we will look at what the options might be.

  • My Lords, there are good things in the Prime Minister’s Statement. I have no intention of turning it into a Christmas tree on which to hang many baubles so that it collapses under the weight of them. Nevertheless, although the Prime Minister referred in her Statement to immigration and to welcoming the brightest and the best, I am surprised that, as a former Home Secretary who worked hard on immigration and the issue of asylum seekers in particular, she made no reference to asylum seekers.

  • Let me first thank the most reverend Primate’s colleagues in the Church of England for so ably assisting me in meeting other faith groups as well as other representatives of the Church of England. We had a very good discussion about Brexit at Lambeth Palace shortly before Christmas. At that discussion, issues were raised along the lines of those just mentioned by the right reverend Primate, especially around immigration. Now is not the opportunity for me to set out in detail the Government’s approach to immigration post Brexit. His remarks are very well made; I absolutely note them. I know that my right honourable friend the Prime Minister, the Home Secretary and others are looking in detail at how we can continue to build on our reputation as a country that is welcoming, open and tolerant to those in greatest need.

  • It is the Cross Benches’ turn.

  • My Lords, I hope that the United Kingdom and the European Commission will reach agreement, but from my experience of the European Parliament I would not be surprised if it rejected that agreement. What would happen then?

  • I am sorry to disappoint noble Lords again, but I am looking for a successful outcome. We are not entering this in the spirit of looking for anything other than that. That said, and as I said earlier in the Statement, it is the responsibility of any Government to ensure that we prepare for contingencies were that not to be the case.

  • My Lords, I welcome the fact that No. 10 on the list of the Prime Minister’s priorities is making Britain the best place for science and innovation. Does the Minister agree with me that we need to spread the word rapidly and broadly throughout the country that Britain is now open for science and innovation, as it always has been, but that it has been held back by the overzealous application of the precautionary principle by the European Commission and the European Parliament?

  • Noble Lords

    Oh!

  • Up until the final bit, I think that my noble friend was carrying the House. I absolutely agree that there are potential opportunities before us. We have an extremely strong base on which to build. Many of our universities are truly world class. As I said earlier, I have had the opportunity to talk to a number of vice-chancellors and, being completely candid, a number of them raised issues such as immigration as regards both students and the ability to attract and retain academic staff. As I mentioned in the Statement, we are very mindful of those points. On what my noble friend said about the precautionary principle, he is obviously entitled to his views. Given the response of other noble Lords to that, I say that this can now be a matter for this House and this Parliament to consider and debate, and control the future of our regulatory system in the years to come. That is what delivering on Brexit is all about.

  • My Lords, it was announced before Christmas that the Mayor of London, Sadiq Khan, would have a monthly meeting with the Brexit Secretary so that the views of London would be known throughout this process. What arrangements has he made for the north-east of England, 58% of whose exports go into the European Union and which has a positive balance of trade, to have its views heard in this process?

  • The noble Lord makes a good point. My ministerial colleagues and I—and Ministers right across government—have been travelling to meet representatives of business throughout the United Kingdom. But if the noble Lord has a group of people he would like me to meet, my door is open.

  • My Lords, does the Minister agree that the usual methodology in treaty negotiations is that nothing is agreed until everything is agreed? Does that include the votes of the two Houses of Parliament?

  • My Lords, as we have made clear, the ratification process requires the votes of both Houses of Parliament. I have nothing further to add on that.

  • My Lords, pursuant to the point raised by the noble Lord, Lord Kinnock, will the Minister confirm that the two-year timetable for this is actually set by the EU’s own rules and not by anybody else? To follow up on the point just made about the rights of this House, can he see any circumstances in which this House might vote against an agreement that had been approved by the House of Commons and continue to survive?

  • My Lords, the second point is a matter for noble Lords but I would strongly suggest, were that to be the temptation of your Lordships, that we should tread carefully. As regards the first point, as my noble friend points out, the timetable regarding the exit treaty is indeed set under Article 50 and we will abide by that.

  • My Lords, if the deal as it comes to both Houses is judged by Parliament to be a bad deal, surely we have a duty on behalf of the people of Britain to vote against it. Given that most mainstream economists think that there will be a period of adjustment of at least 10 years, involving a permanent loss of national wealth, after exiting the single market and the customs union as the economy adjusts to new patterns of trade, why do the Government not come clean about the fact that there will be a loss of income to the people of Britain at least over this period?

  • My Lords, the noble Lord makes a number of assumptions. A number of economists made a number of predictions before the Brexit vote, a number of which have not come to pass, as the chief economist of the Bank of England admitted the other day. Indeed, only yesterday the IMF’s economic data showed that we are likely to be the fastest growing of all the largest economies in the world. I am not approaching this in quite the same spirit as the noble Lord. I am approaching this as the glass being half full, that we have a very strong basis upon which to grow, and that we will get a successful outcome to these negotiations.

  • Please can my noble friend explain something to me? I understand a customs union or a customs arrangement to imply the free circulation of goods within an agreed area, but if one is outside the common commercial policy and the common external tariff, does that not imply that if we were in an arrangement with Europe, goods that came to Europe from outside could come to the UK and escape quantitative restrictions or EU tariffs? That would necessarily be unacceptable to the European Union. I fail to see what is being explored by way of a customs arrangement that does not imply a common external tariff.

  • The noble Lord makes an interesting point about EU goods coming here and then being exported on to the EU. Clearly, that will be a matter for negotiation. As regards the customs union, the Prime Minister made it clear that we do not wish to be part of the common external tariff but we wish to explore what customs arrangements we might be able to agree on that will enable us to continue free and frictionless trade.

  • My Lords, the Minister has told us that under no set of circumstances will the Government withdraw the Article 50 notice. Presumably what will be put to Parliament at the end of this process will be: deal or no deal. If either House votes for no deal, we will simply leave without the benefit or otherwise of any deal that has been negotiated. Can he confirm that? If that is the case, does that not mean that Parliament should be fully involved throughout the negotiation process to make sure that at the end of that process we are not faced with such an invidious choice?

  • The noble Lord actually answers his own question. He is absolutely correct that we need to ensure, as my right honourable friend the Secretary of State for Exiting the European Union has said, that this Parliament is at least as well informed as the European Parliament, to ensure that we can continue to have these kinds of debates and this level of scrutiny, and therefore that the successful deal that we hope to achieve at the end of this process will have received the scrutiny it so deserves.

  • Would my noble friend care to give us a ballpark figure of how long a trade agreement in services would take to conclude?

  • My Lords, during the referendum campaign the Prime Minister said that it would be a disaster if we left the single market, because the British people would be poorer as a result. Can the Minister explain why she has changed her mind?

  • My Lords, it is since people voted to leave the European Union in the referendum on 23 June. The consequences of that vote and the options open have therefore been analysed and assessed, and the Prime Minister has set out the plan that we have heard today.

  • My Lords, it is quite clear from the Statement that after Brexit, the jurisdiction of the European Court of Justice will end. However, there is suggestion in some quarters that European law could in some way be rediscovered as the common law by the judges of our courts. Can my noble friend confirm that the continued application of EU law is a matter for Parliament alone?

  • My noble friend makes an interesting point. We have made it clear today as regards the ECJ. I will have further things to say about the application of EU case law, as and when we outline our proposals on the great repeal Bill, but the thrust of what he says is correct.

  • My Lords, further to that reply, why do the Government consider it necessary to shift the acquis—the body of EU law—into UK law before repealing it? I ask that because in 1997, I got a Second Reading of a Bill which would have withdrawn us from the European Union through your Lordships’ House—by four votes, I might add, in the largest vote ever in the House on a Friday. The clerks advised me then that the acquis was already part of British law and estimated that it would have taken, I think, about 12 parliamentary draftsmen about three months to identify those items which the Government wanted to repeal. Those could then have been put before Parliament and repealed under the negative procedure. It would obviously take rather more draftsmen rather longer now. What is the advantage of putting EU law into our law if it is already part of our law, or has the advice changed?

  • I am sorry to say that I think the noble Lord’s assessment of where we are currently is not strictly true. There are various regulations that are not part of our law but, again, we will outline more as regards this when we set out an approach to the great repeal Bill. There are two clear reasons why we are doing this. First, as I said in the Statement, it is to provide certainty for everyone—be they businesses or organisations in any walk of life—as regards the state of play on day one when we leave. Secondly, it is because the Government believe that it should be for Parliament to decide on what then to do. It can then be free to keep, amend or repeal EU law, once it has been transposed into UK law, as it so wishes.

  • My Lords, can I ask the Minister about the financial services sector, which is about 7% of our GDP? As he will know, if we are leaving the single market and the customs union, most of the financial services sector can essentially no longer operate across Europe unless it redomiciles something like a third of its operations. The Minister says that he wants a bespoke agreement and an implementation transition period. But how long does he think the industry can wait for those to be confirmed before it has to decide to relocate in order to meet the needs of its clients?

  • The noble Baroness makes a valid point; we have had good discussions about this issue and I thank her for that. I understand the needs of some parts of the sector and the fiduciary duty that certain businesses will be under to make contingency plans. I can only hope that they will look at the remarks made today and see that while we are coming out of the single market, we are intent on negotiating as free and as frictionless access to the markets as possible. Once again, I repeat my earlier remarks: we are obviously starting from a unique position here, in that we are not just equivalent to EU law but absolutely identical to it. This puts us in a good position.

    The second point is that, as the Governor of the Bank of England made clear yesterday, once again it would be to our mutual benefit—that is, our benefit and Europe’s benefit—to ensure that we avoid a cliff-edge. It was interesting to see that the German Finance Minister said today, “London as a financial centre will play an important role for Europe, even after Brexit”. I hope that those in Europe and in our financial institutions will be looking at these remarks and planning with due respect for what is happening and mindful of the fact that we are looking for this free and frictionless approach.

  • Is the Minister aware that the Secretary of State for the Environment, Food and Rural Affairs has already indicated that between 25% and 30% of current EU environment regulation, which we currently adhere to and which is vital for the future of British business, will not be capable of being brought over in the grand repeal Bill because it will be inoperable in its current form? This legislation and these standards will have to be reset for the benefit of British business and the environment by a process of secondary legislation. Will the Minister tell us how we are going to cope with that and how we can reassure British businesses that they are not going to be left without clarity about the important environmental standards that are vital for their businesses?

  • I thank the noble Baroness for that question. It is absolutely right. Since 23 June we have been looking at the entire statute book for cases exactly like the one that she has highlighted. I am very grateful to all the civil servants who have been undertaking this enormous task. I am not going to go into great detail today about how that process will work, but we are looking at how both Houses will be able to cope with the task ahead to ensure that we deliver on the aim of delivering as much certainty as possible while at the same time ensuring that such secondary legislation gets the scrutiny and debate it deserves.

  • My Lords, in the Statement the Prime Minister indicated that free movement and the common travel area between Northern Ireland and the Irish Republic should continue, but, as the House will know, the Northern Ireland Executive have abandoned the field, and there will not be an Executive in place before Article 50 is triggered. How do the Government intend to consult the people of Northern Ireland to ensure that our views are put forward on a coherent and consistent basis so that our interests are not lost, given that we have a particular series of problems to face? I hope that the Government will take those points on board.

  • The noble Lord speaks with considerable authority and experience. He makes a very good point. My ministerial colleagues are very mindful of the situation; we will ensure that there is a proper structured way in which we can continue to hear the views of the parties in Northern Ireland as we go through the period we are currently in. The noble Lord can rest assured. If he has other thoughts and ideas on how we might do that which he feels we are not adopting, my door is open.

  • My Lords, despite the carping that the Minister has heard this afternoon in this House, does he think that the majority of the great British public will be pleased to have heard the clarity with which the Prime Minister has enunciated our future with Europe?

  • I very much hope so. It is an end to having no running commentary, and we can now have a debate on a number of the substantial matters that the Prime Minister set out with such clarity today.

  • My Lords, I regret to say that we have concluded that repeated Statement and it is time to hear from my noble friend.