My Lords, as well as moving Amendment 1 standing in my name on the Order Paper, I shall refer to the other amendments that have been coupled with it for this debate. I declare some relevant interests, in that I own six acres of land that are rented out for agricultural purposes, and I receive a pension from two international manufacturing companies for which I worked, Mars and Hoover, both of which have major trading activities both in the UK and in continental Europe.
I should also make it clear that, while at later stages I shall certainly address those issues of particular relevance to Wales and the devolved regimes, I shall for the most part address issues that are of common concern across the United Kingdom. That is where I am coming from on the amendments before us now.
In tabling these amendments, it is categorically not my intention either to delay or to derail this Bill. I accept—yes reluctantly—that the UK will be leaving the European Union and that it would be totally inappropriate for this unelected House to overturn the decision taken by the referendum. Neither is it the role of this House to overrule decisions taken by elected MPs in the House of Commons. We have no mandate to do so. It is, however, both our right and our duty to clarify the Bill, make it more workable, iron out the inconsistencies and ensure that, in its impact on citizens and businesses in every part of the UK, it is both even-handed and transparent.
Having said this, I do not accept the proposition that, if we leave the EU, we must per se also leave both the single market and the customs union. That is just not true. While my side of the Brexit debate is to accept that the UK voted to leave the EU, that vote in no way explicitly or implicitly requires us to break our economic ties. Some people who supported Brexit said that they had voted in 1975 to join the Common Market and that, if it were still just the Common Market, they would still support it. Retaining our single market and customs union links goes at least a little way to meeting those aspirations.
Many of the problems associated with the Brexit process have emerged only gradually, as those affected by it come to realise the full implications. As the Bill worked its tortuous path through the Commons, only slowly did its full impact become appreciated. This was not helped by the unwillingness of the Government to indicate where exactly they are heading. Had MPs been fully aware of the Government’s objectives, they might well have come to different decisions on key parts of the Bill such as this.
It is our responsibility to pass amendments to this Bill that will give MPs an opportunity to address such matters in the light of developments in the negotiating process and give due regard to the Government’s objectives, which may even now be only partially understood. This is particularly relevant when one considers the finality of this Bill. Unlike other legislation, if MPs get it wrong, they cannot return next year with an amendment Bill. With Brexit, once the die is cast, it heralds a permanent, irreversible change. We have to help MPs to get it right by giving them the appropriate opportunities to think again.
Amendment 1 is a paving amendment for Amendments 6 and 7. I introduce it at the very beginning of this Bill for a deliberate reason: to flag up that the implementation of Clause 1—the repeal of the European Communities Act 1972—cannot take place in a vacuum. There are considerations and provisions that must be addressed before the 1972 Act can be rescinded. There are no doubt Members of this Chamber who take the absolutist view of these matters that, irrespective of the consequences and regardless of the impact that such a decision may have on individuals, families, regions, industries, businesses and interests, the referendum must be seen in black and white terms and that, consequently, Clause 1 must stand unamended even if the rest of the Bill were to be jettisoned in its entirety. That is not the view I take; nor do I believe it is the view of the vast majority in this Chamber or in the other place.
Amendment 6 goes to the heart of the misgivings felt by industry and commerce across these islands. The Government have made it clear both that they are hell-bent on leaving the single market, which is important to so many industries and businesses across the land, and that their intention is not to maintain membership of the customs union, which could maintain at least some of the trade arrangements that currently exist. Industry after industry and service sector after service sector have begged the Government to rethink their stance on these matters. They point out the devastating effects that trade barriers would have on their businesses.
The EEF told me yesterday of its concerns: 84% of its members export to the European Union and any tariff would have a serious effect on their competitiveness. UK manufacturers form critical parts of complex EU supply networks. Any sudden changes at borders could, it asserts, have a dramatic impact on operations, costs, profitability and even viability. It calls for any new arrangements to include: zero-tariff rates; agreed rules of origin; a common approach to warehousing systems; the facilitation of the movement of goods under customs transit; and seamless customs administration. Those are the types of issues which must be resolved before we press the button to eject ourselves from the present customs union, which in fact answers these concerns. Of course, if we remain in the customs union, even if we give up our EU membership, those problems will be overcome.
My Lords, I support these amendments, and in particular Amendment 5. The amendment proposed by the noble Lord, Lord Wigley, is a buttressing and an endorsement of the Sewel convention. As the House will recollect, the convention refers to the devolved authorities in this context: that the mother Parliament will not legislate in any way that is contrary to the will of the devolved authorities save in the most exceptional circumstances. The Westminster Parliament could not have gone any further at all without abrogating—
I think that the noble Lord is addressing Amendment 5, which is not in this group—and I shall no doubt be following in his footsteps when we do get to that amendment.
I am pleased to stand corrected and apologise.
My Lords, I will speak to Amendment 136, which is in my name alone. Clause 1 is the crux of the Bill. It calls for the repeal of the European Communities Act 1972 but is silent on the question of our membership of the European Economic Area and what the status of our membership of the EEA will be on leaving the European Union—or indeed what the status of instruments or amendments agreed under the European Economic Area will be, either as we leave at 11 pm on 29 March 2019 or in the future if we are in a position to negotiate remaining in the European economic area.
I will speak to a number of issues that flow from the comments of the noble Lord, Lord Wigley, about leaving the customs union. The Prime Minister has been quite clear about wishing to leave the single market and the customs union. However, at no stage has anyone in the Government explained to the great British public or indeed to Parliament what leaving the customs union will mean or what the consequences will be of negotiating a free trade area either with our existing European Union partners or with third countries. The first point to make is that we immediately become a third country at 11.01 pm on 29 March 2019.
I forgot to mention my interests as listed in the register. I am a non-practising Scottish advocate; I practised for a short time—for two and a half or three years—as a European lawyer in Brussels; and I was a Member of the European Parliament for 10 years and a Member of the other place for 18 years, so I will indeed be in receipt of a European pension.
I should like to consider the position of perishable goods. An example that is very much in the news at the moment is medical isotopes, but I am more familiar with the free movement of perishable foodstuffs from the time that I was a Member of the European Parliament, particularly between 1989, when I was elected, and 1992, when the United Kingdom joined the European Union single market. In leaving the customs union, we face the consequences of leaving the customs union. At Prime Minister’s Questions today, the Prime Minister repeated that we want to take back control of our own borders.
There is a conundrum here. I support enthusiastically what the Government and the Environment Secretary, Michael Gove, are trying to do—we are trying to increase the high standards of animal welfare that we already enjoy and to raise the standards of animal health, the safety of animal production and animal hygiene. However, particularly on the border between Northern Ireland the Republic of Ireland, there will have to be physical checks of animals and presumably of foodstuffs. I remember that as a newly elected MEP I got panic phone calls from companies in Essex, where I had been elected. People phoned or emailed and asked what I, as the local MEP, was going to do to move these goods along as they were time-barred. At the moment we seem to be going along on a wing and a prayer, hoping that everything will be all right on the night. I would like to hear from the Minister, when he responds on this group of amendments, what thought has been given to exactly what controls will be expected, particularly on the movement of perishable goods and the movement of animals, at borders such as the one between Northern Ireland and the Republic of Ireland.
I am also looking particularly at the fact that we are seeking to arrange new free trade agreements with countries such as Brazil and Argentina. It is no secret that they raise and rear their animals, and produce other products, to a standard that is considerably inferior to those in this country. I know that there is great concern in the Food Standards Agency about whether we will have time to put all the provisions in place governing how these imports will be considered.
The noble Baroness is herself a distinguished lawyer, and she has raised one of the critical issues that we shall have to address in our debates: whether our membership of the European Economic Area automatically lapses by virtue of our leaving the European Union, or whether leaving it would require a separate Act on our part. As she said, she was a Member of the European Parliament for many years, and has practised law in Brussels, so will she give the Committee the benefit of her advice on whether she believes that our EEA membership will lapse automatically on leaving the EU or whether it would require a separate and explicit Act of Parliament, and therefore a vote in Parliament, to leave it?
I am grateful to the noble Lord, but he places too great an emphasis on my legal abilities. I prefaced my remarks by saying that I am not an EU practising lawyer—although we do have a number of EU practising lawyers in this place. I would argue that no, our membership of the EEA will not explicitly lapse when we leave the European Union. This is a conundrum in which we find ourselves—or it could be the saving of us.
My Lords, I speak in support of Amendment 6, one of the earlier amendments in the group. It would simply require that a report be laid before Parliament,
“outlining the effect of the United Kingdom’s withdrawal from the single market and customs union on the United Kingdom’s economy”.
This is a starter for 10 for the Minister, which he should be able to agree to—because such an analysis already exists. The EU Exit Analysis—Cross Whitehall Briefing explicitly does what the amendment requires. This analysis is not desperately long—only about 30 pages —but it would undoubtedly help Parliament if it were made more widely available. It is, of course, possible for Members of the other place or of your Lordships’ House to see the document, if they go through a rather demeaning procedure and go to a curtained room— curtained, I was told by the civil servant who was invigilating me, because the document is so secret that the light of day, far less outside scrutiny, cannot be brought to bear on it.
I wrote to the Minister asking whether it would be possible for the Government to make the document public on two grounds. First, the document already is public, because Laura Kuenssberg has got it and has tweeted about it. Secondly, the argument for keeping it secret advanced by the Government—namely that if it were public it would undermine our negotiating position—is clearly false; it is a factual economic analysis and one that has been widely replicated by other think tanks and economic forecasters. I am very grateful to the Minister for the reply he sent me on 20 February. However, I was rather disappointed that he repeated the point that it was impossible for the Government to make this public because of their obligation to ensure security of negotiation-sensitive material. Most assuredly, this document is not that. He also said that it could not be published because it did not represent the Government’s view and that publishing it would likely be misleading to the general public.
Let me remind the House what the general public would discover if they had the opportunity to read this document. It sets out three scenarios, one of which is too appalling, I am sure, for the faint-hearted to contemplate—including, possibly, the maiden aunts of the noble Lord, Lord Lisvane. It says that if we exited on WTO terms, in 15 years’ time the economy of the north-east would have fallen by 16% below that than would otherwise be the case. You do not need to be of a sensitive nature to be somewhat frightened by such a prospect. It shows that if we had the sort of deal that Canada is negotiating, the economy of the country as a whole would fall by almost 5% and in the north-east by 11%. It states that if we had the Norwegian model, which is the closest model that anybody has contemplated, we would still see a fall in GDP of 1.6% and of 3.5% in the north-east.
There are those in another place who say that this analysis is far too pessimistic and who have castigated civil servants for deliberately including unrealistic assumptions in it. There is one very narrow respect in which I agree with the suggestion that some of the assumptions are questionable: they are far too optimistic. The analysis assumes that the UK will, over this period, have entered free trade arrangements with the US, China, India, the TPP, the Gulf Cooperation Council, ASEAN, Australia and New Zealand. There is not a single soul who knows anything about trade negotiations who believes that that is possible. In that respect this analysis is too optimistic.
If this document were published, it would at least allow people to see the likely range of consequences and to discuss them. They would also discover that in a Canada-type arrangement, which is nearest to what the Government’s centre of gravity seems to be:
“There are over 550 individual restrictions on the services trade”.
That is a quote from the document, which means fewer jobs across the board in the services trade, not here, there and in odd little places, but across the entire board. So is it surprising that the Government do not want to publish this document? Will it be surprising if the Minister, when he replies to this debate, says that they do not intend to do so? I suspect that it will not, but I hope that he will follow the advice of his colleague in another place, the former deputy Prime Minister, Damian Green, who only two days ago said:
“If analysis is being produced then publish it”.
I agree: he should.
My Lords, to take up the theme of the noble Lord, Lord Newby, yesterday I went to 100 Parliament Street to read the EU exit analysis papers to which he referred. I will not break the rules by revealing, even though some of it has been leaked, what was written in them. It is a bit of an otherworldly, Kafkaesque environment. I was there with two retired Supreme Court judges and watched by very courteous young civil servants who ensured that we placed our mobile telephones on a desk in the corner of the room. But we were allowed to take our notebooks and pens with us so I have some notes that ensure that what I say is correct.
For those noble Lords who, like myself, have a maths education does that not go beyond ordinary-level additional maths, I recommend before you turn up that you look up the term “computable general equilibrium” or CGE modelling as it is known. It is a form of prediction that may be marginally less ignorant than any other form of prediction of the economy.
As a criminal lawyer who has been in practice for the best part of 50 years, I have seen quite a lot of suicide notes. I have seen real suicide notes and fake suicide notes. This was most certainly not a fake suicide note; it is most certainly a real suicide note. I read it with enormous concern. I am absolutely astonished, and indeed rather insulted, that Her Majesty’s Government do not regard the documents—30 pages of slides, effectively—as essentially disclosable in the public interest. Every member of the public should have the opportunity to read them to understand what I mean by a suicide note.
It is very pleasant over there, if a little dark in a tiled basement. There are beautiful Victorian brick tiles on the walls. It is an architectural gem, so it is a pleasure architecturally. Noble Lords should just go there and read that document because I do not think we are well informed unless we do.
Having said that, I turn briefly to another subject that, because of time, was deliberately not mentioned other than in passing by the noble Lord, Lord Wigley, in his eloquent opening of this debate. That is the internal border within Ireland. This is in the context of the customs union. I was Independent Reviewer of Terrorism Legislation for nine and a half years until February 2011 and I have been carefully following the events and politics in Northern Ireland as a fascinated and interested observer since then. The Good Friday agreement was a remarkable document and has had stunning effects. It has brought together, in a democratic forum, people who used to kill each other. It has meant that people who used to behave in that way have been prepared to put aside their very strongly felt traditions—in many respects, hereditary, visceral traditions. It has led to the economies of both Northern Ireland and Ireland improving considerably. Above all, it has led to the saving of life.
We are not talking just about the saving of life in Northern Ireland. There are some residual terrorists who are still trying to kill people and occasionally succeed, but the numbers have been reduced dramatically. It affects all of us. Let us not forget the plaque above the doorway of the other place recording the murder of a very distinguished Member of that House as he drove out of the House of Commons car park, which some noble Lords also use to their advantage. Let us not forget that soldiers—British soldiers including some from Northern Ireland and indeed from the Republic—died as a result of bombings in London because of that dispute.
There is absolutely no way in which intelligent people could sit down to discuss customs union, be they UK politicians or EU negotiators, without the determination that the one thing which cannot be negotiated away is the liberty of the citizens of Ireland to pass in and out of Northern Ireland and the citizens of Northern Ireland to do the same vice versa. If by the time we get to the Report stage, either by a special provision in the negotiations or by a new treaty, the future of the Northern Ireland border as close to its current state is not guaranteed, I will be voting for amendments of this kind and I would expect a responsible Parliament to do the same.
My Lords, I begin with an apology to your Lordships’ House. Because of professional engagements I was unable to be present for the opening speeches of the debate at Second Reading, but I have been able to reassure my Front Bench, and most particularly the Whips, that they can be certain of my presence throughout the Committee and Report stages.
I should like to speak briefly on those amendments, particularly Amendments 6 and 7, that deal with the customs union and the single market. I wish to express my deeply held view that we need to remain members of the single market and the customs union, or something very like them. That is absolutely essential if we are to retain our national prosperity. I agree precisely with what the noble Lord, Lord Newby, said on this subject, and all the analyses thus far bear that out. Indeed, we are seeing current prejudice being caused in terms of reduced investment, reduced growth and reduced spending. You do not have to look into a crystal ball; it is happening now.
Perhaps I may also say—with some regret, because I am talking about colleagues of mine in the other place—that those who have criticised the analysis produced by civil servants have in my view brought discredit upon themselves. As a Minister, I worked with officials for more than 10 years. I never knew or encountered a conspiracy to frustrate the policy of Ministers. I believe profoundly that those analyses were made in good faith and broadly speaking are correct. I also agree with the noble Lord, Lord Newby, that they should be published. They may not be right to the nearest decimal point, but I am certain that they correctly identify the direction of travel. I have never thought that Brexit was a car crash, but I do believe it takes the form of a seriously deflating tyre and will cause the same kind of trouble.
Turning to the point made by the noble Lord, Lord Carlile, on Northern Ireland, I wholly agree with him and, if need be, I shall be voting accordingly in the same Lobby as him. We have talked about and agreed to a frictionless border between the Republic and the Province. I do not see how that can be achieved other than by the customs union or something very like it. Those who talk about technology are, I think, talking rubbish. I know of no technology that would achieve that purpose, and if there was such technology, I do not believe it would be affordable by a whole range of smaller businesses.
Incidentally, although it is to digress a little, I think that one of the surprising consequences of Brexit is that we will be asked to consider identity cards for British citizens. Once we have a frictionless border in Northern Ireland and once we have migration—as will happen—how can we operate our immigration controls without identity cards? That will be a very considerable consequence.
I want to make one final point, which echoes one made by the noble Lord, Lord Wigley. Nothing was said in the referendum that obliges this House or Parliament in general to do something that is deeply prejudicial to our national interest. Nor, indeed, is that the consequence of the general election, which was not, in all conscience, a great triumph for the Conservative Party. From time to time, one has to put one’s assessment of the national interest before any other consideration, most particularly before one’s assessment of one’s party interests. That happens at various times in one’s career. It happened early in my father’s career, 18 months after the Oxford by-election, when he was compelled to vote against Chamberlain. He was much criticised then. It happened at the end of my career in the House of Commons with regard to the second Iraq war, which I deeply deplored. I helped to craft the anti-war Motion and acted as a Teller to make sure that Motion was voted on. Both of us were criticised at the time, but I am bound to say that those criticisms have not survived the historical experiences that we have all seen.
I agree with my noble friend entirely about putting the country before party. He mentioned that nobody had said that we must leave the customs union and single market, but I recall very well that David Cameron—who I rate enormously—George Osborne and Michael Gove, from different sides, said that we must leave not only the single market but the customs union if we voted to leave.
It is the business of Parliament to form a judgment. We will come to other debates fairly soon—in the next group of amendments—that intend to give Parliament the decisive say. That is our function and we must not shelter behind constitutional niceties in order to refrain from doing our duty. I will certainly do whatever I can to ensure that we remain as close as possible to the customs union—and if I could, I would also frustrate the policy of Brexit.
My Lords, I wish to address Amendments 152, 197 and 206, on the matter of the customs union. Before I do so, perhaps I might be permitted to say a word of admiration about and pay tribute to the people outside this building—many of them waving British as well as EU flags—who have been there for several months, hoping to impress on us the importance of the case. We in this House—from the comfort of these Benches—should not be tempted in any way to neglect or slight efforts made by our citizens to bring their concerns to our attention. I have been most impressed by them. I have often spoken with them; one young lady, on a very modest salary, told me that she paid quite a lot of money on a fare from Manchester and was sleeping on a friend’s floor in order to stand for 12 hours outside this House. Her account was very typical. I counted more than 140 people one evening, when the temperature was getting very close to zero. I believe that sort of dedication and selfless concern for the future of the country is most impressive.
I am well aware that many of my colleagues in the House have come to this debate in the belief that they are carrying out an instruction from a referendum. I reject entirely that concept, which clearly contradicts the idea of a sovereign Parliament. By definition, if a body is sovereign, it cannot receive instructions from anyone. That is a matter of definition; it is what philosophers call an analytic truth. Even more absurd would be the idea that we could take instruction from a referendum in a previous Parliament. Heaven knows what Parliament would be subject to after a certain period in which we adopted that proposal. One can easily see to what ridiculous results that would lead. It would also make a nonsense of the fundamental principle of our constitution that no Parliament can commit its successor, and if you abandon the concept of parliamentary sovereignty and the belief that goes with it that no Parliament can commit its successor and therefore every Parliament after a general election can open a new page, there will be very little left of our constitution that people who take that line will still believe in.
Would it not be true to say that the sovereign Parliament gave the people the decision through the referendum?
My Lords, as I have explained, I do not accept that we are in any way under instruction from anybody. I have heard the word “instruction” and it deeply shocks me. As a matter of fact, I heard it from the then Leader of the House in the days following the referendum. For the reasons that I have already set out and I do not need to repeat, that is a pernicious doctrine that is extremely dangerous in its constitutional ramifications and should be rejected.
I will not give way for the moment; I would like to make a bit of progress.
I agree with the noble Lord, Lord Wigley, that even if you were to believe that we are under some kind of instruction relating to Brexit it certainly could not apply to the issue of our remaining in the customs union or the single market. I do not remember that issue being mentioned at all in the referendum, certainly on the customs union. As we all know, there was nothing on the ballot paper about it. The noble Lord, Lord Robathan, intervened to say that he remembered some mention of it by certain people during the campaign. I would be very interested if he could put on record the particular dates, times and places where those comments were made, because I reckon I was pretty alert to what was being said during that campaign, in which I took an active part. I never heard the issue of our remaining in the customs union being dealt with at all, let alone seriously analysed and considered. I do not think that the British people had any chance on that occasion to express a preference one way or the other on that matter. As the noble Lord, Lord Wigley, said, that is a matter of practical fact. Parliament must be sovereign and must take what will be a very important decision.
We all know the potential damage that this country will suffer from Brexit. A lot of it will be from our leaving the single market. Admittedly, some of that damage can be mitigated by our signing a free trade agreement with the EU, but that will not cover financial services, which is such an important part of the country’s economy. There will be great damage from our leaving the EU, even if we are able to sign such a free trade agreement.
On the issue of the customs union, an enormous range of businesses, sectors and companies see this as an existential threat to their continued survival in this country. That goes across all kinds of people, from automotive to aerospace, pharmaceuticals, the nuclear industry and the airline industry. Noble Lords are familiar with the arguments and the very depressing projections made by people from those industries about the costs that they would incur if we leave the customs union.
What is extraordinary is that we have not really heard any of the benefits. It is extraordinary that you can make a proposal for something involving undoubted costs—we can all disagree about the costs and what their extent might be, but we cannot possibly disagree with what sign is on the variable in the equation: it is a negative. The idea that we should incur costs and risks without really knowing what the potential countervailing benefit is seems extraordinarily perverse. No business would manage itself on that basis.
When you press the Government they say, “We need to leave the customs union because that enables us to sign customs agreements or free trade agreements with other countries outside the EU and outside those countries which have themselves free trade agreements with the EU at the present time”. When you actually look at the prospect of doing that you see that it is a mirage; it does not exist at all. Let us take the United States, which spent eight or nine years failing to negotiate the TTIP with the European Union, as the Committee knows very well. Those negotiations broke down partly because of disagreement about the investment guarantees that the Americans were demanding and partly because of the demands being made by the Americans about access for their agricultural products to the single market. Anybody who knows anything about America knows perfectly well that it is inconceivable that an American Administration, let alone a Republican Administration backed by so many Senators and Congressmen from the prairie states and farm states, would ever ratify a free trade agreement with anybody that did not include agricultural products. If it includes agricultural products, of course it includes hormone-impregnated and antibiotic-impregnated beef and chlorinated chicken. Are the British people any more likely than their continental partners and neighbours to accept such products on the market? Would they accept the very appalling animal welfare standards which the Americans have? They have virtually zero grazing for well over 90%, if not very close to 100%, of their cattle at the present time. The idea that you can go through Texas and see lots of longhorn being herded by cowboys as you could 100 years ago is wrong: you will not see a single Texas Longhorn now out in the open air. Those problems will remain and in practice I believe they will be insuperable for us, just as they have been for the rest of the European Union.
My Lords, I had not intended to speak in this debate but since it seems that no one else is going to speak up for the option of leaving the customs union, I thought that in the interests of attempted balance, at least, I should make a brief contribution.
I thought that the noble Lord, Lord Wigley, spoke with great passion—not, to me, entirely persuasively—and his sincerity was palpable. But some of the phrases he used do not really correspond with the reality of the situation as I see it. He talked about breaking our ties. It is not the Government’s intention that we should break our economic ties with the single market. He talked about this being an absolutist solution. No one is pursuing something out of dogma. We are trying to make an assessment of what we think is in the best interests of the country. I agree with the words that my noble friend Lord Hailsham used: we ought to be considering what is in the national interest. Noble Lords opposite may find it difficult to believe but that is actually what the Government are trying to do and what people on this side of the Committee are trying to do: come to a set of arrangements, once this decision has been made, that will maximise the welfare and interests of the country.
The noble Lord, Lord Wigley, was not comparing leaving the customs union with what the Government are trying to achieve. The Government are trying to achieve a free trade agreement with Europe. That is what you ought to compare the customs union with. In what respect would having a free trade agreement leave the country worse off than it is now? He was talking about a customs union. He did not make it clear but he said he was not disputing the decision to leave so he must have been talking about a customs union while being outside the EU. That is very different from being inside the customs union as a member of the EU. That is putting yourself precisely in the position of Turkey, which is inside the customs union and suffers all sorts of disadvantages, as I shall try to demonstrate.
Perhaps I could make a suggestion to the noble Lord. If he were to go to 100 Parliament Street and sit and read the assessment, he would indeed see the comparison between being in a customs union and being in a free trade agreement. If he were to look at Hansard again and read about the damage to the economy that my noble friend Lord Newby described, he would find a great deal of that detail which explains that the free trade agreement route still leaves an unbelievably damaged country, in every region, especially the north-east, and in virtually every single industry sector.
There are calculations that say that. No doubt when the noble Baroness comes to make her speech, she will give arguments. I am not going to be persuaded by just a piece of paper with a statistic.
Noble Lords jeer but are they really going to say that a piece of paper with a statistic somehow analyses the problem? I put it to the noble Baroness that if you have a free trade agreement you have access to the market. What is the disadvantage? The disadvantage, which I will come to, is that you have to trade against that the inconvenience of rules of origin. That is what it comes down to: balancing the advantages of free trade against the costs of rules of origin.
Nobody has said that there are any advantages to leaving the customs union and I would like to make a few points. First, obviously, the customs union that we are members of—on certain goods, not all—has quite high tariffs on goods that particularly affect the lower paid, especially food, clothing and footwear. That is not an inconsiderable factor. Despite what the noble Lord, Lord Davies, said, being inside the customs union would make it impossible for us to sign free trade agreements with other countries. He was pooh-poohing that and thinks we will not be able to do it. But I put it to him if he looks at the record of quite small countries such as Singapore or Chile or a medium-sized country such as Korea, he will find that when you add up the GDP of the countries they have signed free trade agreements with, it is very much in excess of the added-up GDP of the countries that the EU has signed free trade agreements with. That is to say: these small countries, precisely because they negotiate on their own and do not have to take into account the arguments of 27 other partners, have been very effective at signing free trade agreements. Switzerland, for example, has a free trade agreement with China but the noble Lord thinks it will be impossible for us to have one with it.
I assume this is not a point of order but a point of information.
I am grateful to the noble Lord and would like to give a point of information to him. We already have a free trade agreement with South Korea, as a result of our membership of the European Union. Our leaving the European Union would result in our losing our free trade agreement with South Korea.
I do not know whether the noble Lord misheard me, whether I misspoke or whether he misunderstood. I was not talking about having a free trade agreement with Korea but about the free trade agreements that Korea has signed with other countries across the globe.
Another point about a customs union is that it is not just a question of collecting tariffs. A lot of regulations go with it and there is a vast range of non-tariff controls on goods—you obviously have to have definitions. We would not be able to divert from these at all if we remain members of a customs union, or even to depart from them in our own domestic market. If we did that, the goods that were allowed in which had circulated in the other countries of the customs union would be in contravention of them. Again, I put it that there are some advantages which have to be put into the balance of the argument for leaving the customs union.
One mystery about this amendment is that if you are in the customs union, there is the collection of the tariff revenue where the individual countries are allowed to retain only 20% of the revenue. The rest of it goes to the EU, so would we be outside the EU and paying 80% of the revenue on the external tariff to the EU? That does not seem to make a lot of sense.
It is also possible to be outside the customs union and to have a free trade agreement with the EU. That is precisely what Norway, Iceland and Liechtenstein do but of course, to come to the noble Baroness’s point, if that is regarded as a cost you have to offset against it the fact that you have rules of origin. People have pooh-poohed the technology argument but is that really going to be such an insurmountable thing to do? Switzerland exports per capita five times as much to the EU as we do, and it has to operate rules of origin on many sectors when it sells goods to the EU. That does not seem to have had any inhibiting effect.
I would like to make a little more progress, as this is taking rather a long time. The rules of origin are one of the points for consideration. I know that a lot of British industry is worried about this but I noticed what Mr Azevedo, the Secretary-General of the World Trade Organization, said in a newspaper interview that he gave the other day. He pointed out that a large part of Britain’s trade, because we have a bigger percentage of trade with the rest of the world than some other European countries, already has to observe these requirements of documentation and rules of origin. He did not see that there would be a big problem in switching the rest of our trade to a similar regime.
I have also met representatives of some of the companies that run ports in this country, some of which operate on a WTO basis and some of which obviously operate on an EU basis. But when I talked to the management—I do not want to name them because they would not want to be too involved in political controversy—I was told that they did not see a huge difficulty in moving from one administrative system to another. Whether people agree with that or not, I put it to your Lordships that that is what the argument is all about: a trade-off between that and a free trade agreement with access to the market. It is not clear that the advantage is all one way.
Does my noble friend not agree with me and the noble Lord, Lord Davies, on animal hygiene? Given the high levels that the Secretary of State has insisted our farmers will meet on leaving the European Union, how can we physically check the animals coming into this country when we leave if we have customs controls at UK borders? It cannot be done by technology.
Even in Northern Ireland, we have some checks already. There will have to be checks, as there are checks throughout the European Union. I would be in favour of checks, but this is not an overwhelming argument against leaving a customs union.
I have one final point on the customs union. The noble Lord, Lord Wigley, seemed to be advocating being inside the customs union but outside the EU. That is the consequence of the amendment. That really gives us the worst of all worlds. Consider the position of Turkey. It has to agree to whatever free trade agreements the rest of the EU signs up to and has to have goods under those agreements circulating within its economy, even if it is totally opposed to that, because it has no say in negotiating free trade agreements between—
I would like to finish a sentence without being interrupted. The EU negotiates free trade agreements but does not take into account what Turkey wants, and Turkey has no say. I will give way one last time; then I will make one other point about the single market; and then, the House will be relieved to know, I shall shut up.
The noble Lord referred to Turkey twice. On the first occasion when he referred to Turkey he said that there were all kinds of disadvantages in its customs arrangements with the EU from being in the customs union but not being free to strike trade deals beyond that. Why therefore does he think that Turkey has willingly and freely stayed a member of the customs union?
As the noble Lord knows very well, Turkey aspires—that aspiration may now be fading—to join the European Union, so being in the customs union was for many a halfway house to joining the EU, just as for noble Lords who tabled this amendment it is a halfway house to rejoining the EU. That is what their amendment is really about.
Lastly and briefly on the single market, the noble Lord, Lord Newby, was exhorting us all to go to the Treasury, look at the papers, draw the curtains and see the forecasts that have been made. Of course those documents should be taken into account, but there are many other studies made outside Whitehall that take a very different view. I refer him to the research by the academic Michael Burrage, who was at the LSE and at Harvard. He has done an in-depth analysis, which is published on the Civitas website, of the effect of the single market on the British economy and British exports. He has come to the conclusion that there is no correlation between the single market and the growth of trade between the UK and the EU.
Furthermore, he has pointed out something that people have acknowledged in these debates before—namely, that many non-members of the single market, countries outside the continent of Europe, have increased their exports to the single market much faster than Britain has increased its exports to the single market. So the idea that this great liberalising force has had a huge impact on the British economy is absolutely not proven. I make these points simply because the debate so far has been very unbalanced and, as my noble friend Lord Hailsham said, we ought to be considering, in a sober, balanced way, what is in the interests of our own economy now that the decision has irrevocably been made.
On the customs union, as a pro-European in his youth, the noble Lord will be aware that the customs union was one of the founding acts when the European communities were established. I understand why Eurosceptics might make a lot of arguments that the European Union has become much more federal and political than the economic basis on which it started. But what, given the arguments that the noble Lord made so powerfully in the early 1970s in favour of membership of the customs union, now prevents us from staying in the customs union on leaving the EU?
I am sure the noble Lord is not intentionally misleading the House when he talks about the arguments that I made so compellingly and eloquently in the 1970s. If he has been studying my maiden speech in the House of Commons, I shall be astonished. The reason why I supported the customs union in the 1960s was that we then lived in a world of very high tariffs, and the EEC was a liberalising influence in the 1950s and 1960s. It was only after the American Administration started cutting tariffs in the mid-1960s that the relevance of the EEC in tariff negotiations became much less significant.
Since the noble Lord wanted me to get my feet again, I will say that my attitude towards the customs union is very different from his. I remember a debate in which he spoke about not being in the single market. He explained how he had been to a German car manufacturer which had explained to him—I could not believe my ears—how Germany was manipulating car standards in order to keep out goods from other countries. The noble Lord thought that was admirable and we were very stupid not to be part of this racket. Well, I do not want to be part of it.
My Lords, I am supporting and have added my name to Amendment 206 in the name of the noble Baroness, Lady McGregor-Smith. It is also supported by the noble Baroness, Lady O’Loan, and the noble Lord, Lord Alli. The amendment is simple but necessary and goes to the heart of Parliament’s consideration of the UK’s withdrawal from the EU. It says:
“It is a negotiating objective of the Government to ensure that the withdrawal agreement provides for the United Kingdom’s continued participation in a customs union with the EU”.
In today’s economy, business is integrated worldwide, transactions are global, goods and services cross national borders every minute of the day, our greatest customers are our nearest markets, and we know that half our trade is with the other 27 countries of the EU. A lot has been made of Canada having signed a free trade agreement with the EU, CETA, which took eight years. However, the comparisons made with our situation do not apply, because what people do not understand is that the EU makes up less than 10% of Canada’s trade. Who is Canada’s biggest trading partner by far? The United States, which is next door.
It is not just the finished goods that are sold to these markets; the components and ingredients of goods, food and of course drink can flow through as imports and exports. I was speaking in Dublin a week before last for the Irish Food Board, Bord Bia. There the example was given of Bailey’s Irish Cream, which is made in Ireland, sent across the open border into Northern Ireland and packaged there, brought back into Ireland and exported from there around the world. In this European marketplace, we have stopped referring to these exchanges as “imports and exports” because the transmission of goods is so frictionless and continuous that we now just talk about “arrivals and dispatches”. This really matters to business—I speak as someone who has been in business for a long time and started my own business—and to the people employed by these businesses, and it is the customs union that makes it a reality.
I think we take a lot of that for granted today, but this choice, this virtually instant array of products, was not always available to customers and entrepreneurs. We have to remind ourselves that this degree of tariff-free, seamless trade has arisen not by accident but by careful design and the sharing of decision-making on trade policy. We dismiss these benefits of a customs union with the EU at our peril.
I invite noble Lords to picture for a moment the 2.5 million lorries passing through Dover each year and how our ports will cope if, in a year’s time, the continuous throughput of traffic is no longer. A programme on Radio 4 today illustrated this on both sides. If goods need inspecting at ports for exit and entry, revenue collecting, labels and licences checking, sanitary conditions measuring, quota weighing and duties paying, all this can take a long time and clog up the arteries of our economy. If these delays and blockages occur, not only will we need to contend with frustrated truck drivers and motorway congestion, companies with a just-in-time business model—we heard examples from the noble Lord, Lord Wigley—will need completely to rethink their practices, and their investors and customers will pay the price.
The EU has obtained more than 50 trade deals with countries across the world. This represents approaching 20% of our trade and will lapse in 2019 on our exit from the European Union. We need to remain party to those existing FTAs, and this amendment is the best way to ensure that. At the moment, 50% of our trade exists with the European Union. If you add approaching 20% of our trade through the European Union, we have a total of almost 70% with and through the European Union at the moment. We as a country are thinking of throwing that away to go after the 30%. Within the 30% is the United States of America, at 18%.
I am a great fan of the Commonwealth. We have CHOGM coming up here in April. I would love this country to do more trade with the Commonwealth and have been speaking about that during the 11 years that I have been a Member of this House. But let us get real. The Commonwealth makes up less than 10% of Britain’s trade; 70% is with and through the European Union. We can drive a better deal for Britain by applying the strength of the whole of Europe, rivalling any other world power.
So often, we hear this talk of going global and that we are going to do trade deals with countries such as India. India would love to do a free trade deal with the UK, but the reality is that India has only nine bilateral free trade agreements with any countries in the world, not one of them a western country. If you speak to the Indian high commissioner over here, he says that India is very happy to do a free trade deal but, as the noble Lord, Lord Davies, said earlier, it is not just about goods and tariffs; it is about movement of people. The commissioner says: “What about international students? What about our IT workers coming here? What about the fact that the Chinese get two-year multiple-entry visas for business and tourists at £85 and we Indians have to pay £350? What about that? Then let’s talk about free trade deals”.
David Davis mentioned dystopian. To me, the Brexiteers are living in a utopian world. We can drive a much better deal for Britain by applying the strength of the whole of Europe, rivalling any other world power. There is no either/or choice between trading with the European Union and trading with the rest of the world; we need to do both successfully, just as the Germans manage to do within the customs union.
I have heard from the horse’s mouth where India is concerned. It is very clear: an EU-India free trade agreement is far more important to India than a UK-India free trade agreement. It is simple: 500 million people or 65 million people; there is no comparison. Let us get real.
Then we have talk that, the moment we leave, we will just roll over these 50-plus free trade agreements that the EU has and do UK free trade deals with those countries straightaway—again, utopian dream land. Already, countries such as South Korea have said, “Hang on! We have to renegotiate that. We did a free trade deal with the EU on the basis of 500 million people and the world’s biggest free market. You want us to treat you in the same way with 65 million people? Forget it. Let’s renegotiate”.
Does the noble Lord recall that we made very good progress in the European Union in trying to negotiate a free trade agreement with India? It was actually slowed down—indeed, blocked—by the United Kingdom.
Well, we have worked for a long time to do a free trade deal with India, and it is in the offing. The Canadian one took eight years. Let us again be absolutely realistic about this.
The majority in the Commons are for staying in the customs union because of the fear of the extra costs. We know about the BuzzFeed leaked reports that found that Britain would be financially worse of outside the EU under any model or any of the scenarios. Hilary Benn, the chair of the parliamentary Brexit committee, has said that the government’s decision to make leaving the customs union its policy without first assessing the impact of doing so is, in his words, “extraordinary”.
The CBI, which represents 190,000 businesses which employ 7 million people, has said very clearly that customs union membership would,
“resolve the question of how to keep an open border between Ireland and the UK”,
which as noble Lords have heard is so important for maintaining the peace. We should not jeopardise the Good Friday agreement for anything. We have to get our priorities right as a country.
My Lords, I will speak in greater length on the second group but I want to touch on just a few points, if I may, to support Amendments 162 and 197, tabled by the noble Lord, Lord Wigley. I begin by saying how much I agreed with the speech of the noble Lord who has just spoken and also the speeches of the noble Viscount, Lord Hailsham, and the noble Lord, Lord Carlile. I agreed with every word of them, and the best way those two noble Lords can express their passion about Northern Ireland and the dangers of having anything other than the same customs union and single market either side of the border is to support Amendment 198, which I hope, at least on Report, will be put to the vote.
The noble Lord, Lord Lamont, spoke with great eloquence. The problem is that he does not agree with his Government’s policy. The Government signed up in December to an agreement with the European Council for regulatory alignment. That is not what the noble Lord is arguing for. This brings me to Amendment 197, which does not say that we will be in the single market and customs union but that we will have,
“the same rights, freedoms and access”
as exist now. I thought that this was the policy of the Government: to leave but to have exactly the same opportunities for businesses as we have now. As the noble Lord, Lord Wigley, explained, it is of great concern to the Welsh Government, who I am close to. It is the same concern of the London governing authority, expressed through the mayor, and I am sure—since it voted to remain—it would be the same view of the Northern Ireland Government, if they were functioning.
Publishing impact assessments is the least that the Government can agree to. I ask the Minister, in responding to this debate, to explain why they are so afraid of publishing impact assessments for Wales, Scotland, Northern Ireland and, for that matter, England. Why are they afraid of doing that? What is wrong with doing that? Can the Minister also say why he does not accept Amendment 197, when I thought that was what his Government were arguing for? Or are the Government reneging on what they signed up to in December, despite the fact that it was a solemn decision between the European Union and the United Kingdom?
My Lords, my noble friend Lord Newby and the noble Lord, Lord Carlile, spoke of Kafka in the basement, but I was struck by another, more bizarre allusion earlier this week when the Brexit Secretary ruled out the “Mad Max” scenario post Brexit—I was not aware that the “Mad Max” scenario was on the table. I was concerned about whether he had actually seen the post-apocalyptic, low-budget film packed with ridiculous contraptions and strange fashion. Then, today, the European Research Group issued its ultimatum and it became clear how appropriate the Secretary of State’s imagery was. He clearly has seen not just the original “Mad Max” film but the sequels as well. We are living in a world where so many things are said that clearly cannot be true. We are living in a fantasy world, and we have heard some of those fantasies today.
In speaking to Amendment 89, I declare my interests as set out in the Members’ register, which of late have focused primarily around the aerospace and automotive industries. Last night, along with other Members of your Lordships’ House, I attended the Engineering Employers’ Federation annual dinner, which followed its extremely successful conference. The EEF was celebrating arguably the best year for manufacturers for at least a decade. This is not a justification of Brexit; it is a repudiation of it. The single market, the customs union, the free movement of people and many other facets of the European Union helped to facilitate this highly impressive performance, built on the back of increased trade not only with a burgeoning European economy but with non-European countries. This trade increased while we were still in the customs union. Increased trade with China, albeit from a low base, was achieved while we were still in that iniquitous thing, the single market. We achieved growth with both our European partners and partners in the rest of the world.
To be clear—I know that all noble Lords know this—the single market ensures that UK companies can trade with any of the 27 European Union countries without restrictions and arbitrary barriers. It is a question not just of tariffs, of course, but of regulations and standards and what the Government term “friction”. One of the most damaging things that the Government did from the outset was to rule out membership of the single market and the customs union post Brexit. We see the issues that that has caused, particularly in Northern Ireland. The noble Lord, Lord Carlile, has talked very eloquently about that issue but I shall address the business and industrial implications. The industrial fallout is extremely daunting. We heard evidence of that last night at the EEF dinner. Many companies are only just starting to realise the complexity and friction that will be introduced into their daily business dealings. Many more have yet to comprehend this. Certainly what this means for smaller SMEs is still beginning to dawn on them.
Amendment 89 is focused on the single market. As noble Lords can tell, I think the UK should remain in the single market permanently. However, in case that upsets your Lordships too much and they are reluctant to support Amendment 89, I should emphasise that that is not the point of that amendment. As the noble Lord, Lord Wigley, eloquently said, Amendment 89 is specific in seeking to ensure that the Government cannot use their regulation-making powers in a way that would lead the UK to diverge from the single market. Such divergence would introduce friction between the UK and the 27 in regulation and standards that would harm the very supply chains that manufacturers gathered to celebrate last night. Remaining in the single market would be the most desirable outcome. I hope that the Government will eventually see sense and realise that it is in the UK’s economic interests to stay in the single market and the customs union, as was eloquently expressed by the noble Lord, Lord Bilimoria. However, I trust that your Lordships will recognise that Amendment 89 has a much less ambitious aim than that and will see it essentially as a prudent way of ensuring that we do not increase friction in our trade with the EU.
Your Lordships will be interested to hear that last night the Secretary of State for BEIS, who addressed the more than 1,000 manufacturers from all over the United Kingdom present at the dinner, said that we are going to remain in the single market and the customs union throughout the transition and that nothing will change. Essentially, that means that nothing will change for three years from now. I have heard other messages from other members of the Government, so it would be useful if the Minister could take this opportunity to confirm that that is the settled view of Her Majesty’s Government. That being the case, I am sure that Her Majesty’s Government will have fewer qualms about supporting Amendment 89, because surely Ministers will not seek to erode those barriers to frictionless trade.
In short, it is important that nothing in the Bill hinders the operation of the frictionless, tariff-free trade arrangements in goods and services that we currently enjoy. Amendment 89 seeks to achieve this, and I hope that the Government will realise that and support this sensible addition to the Bill.
My Lords, I had intended to intervene after an hour to don a Wigan shirt against the Manchester City team arrayed in this Chamber. But then my noble friend Lord Lamont rose and scored the goal in a very interesting speech, which went to the core of the matter. I apologise, like my noble friend Lord Hailsham, for having been unable to be present at Second Reading, but I assure your Lordships that I intend to be present for however many days it takes to achieve what my noble friend said he would wish to frustrate, with the result that Brexit will go through as the British people requested.
The noble Lord, Lord Davies, took exception to the word “instruction”. As a democrat, I am not quite sure from whom our Parliament should take its instructions except from the British people. I quote the noble Lord, Lord Ashdown, who said after the referendum that,
“when the British people have spoken, you do what they command”.
What powerful words and instruction. Another gentleman said—
I have only just begun. I will give way later to the noble Lord. If I may continue this section of my remarks, I would like to do so. There were many interventions on my noble friend Lord Lamont, who spoke for the Wigan team, but there have not been so many interventions on the Manchester City team.
This is material to what the noble Lord is saying.
I will give way to the noble Lord later if he is kind and polite and stops interrupting. I will put on the record what another gentleman said:
“There are people in the party who don’t accept the outcome, who feel incredibly angry and feel it’s reversible, that somehow we can undo it. The public have voted and I do think it’s seriously disrespectful and politically utterly counterproductive to say ‘Sorry guys, you’ve got it wrong, we’re going to try again’, I don’t think we can do that”.
That was Vince Cable, since elected leader of the Liberal Democrat party. I hope that he will stand by those words as leader.
For those of us who sat through nearly 180 speeches at Second Reading, it is rather galling, when we are dealing with amendments, to hear people who could not make it give Second Reading speeches. If the noble Lords was a Member in another place, he would be drawn to order by the Speaker. Can he not bring himself to order and address the amendment?
My Lords, the noble Lord goes directly to the point. He wishes to know why I was unable to be here.
I was honouring an engagement. It was not a social engagement: I was teaching medieval Greek culture on a university course in Italy, which I hope disqualifies me from being either a Little Englander or stupid, as some Brexit people have been described. I am not making a Second Reading speech but I was going to say that I rather thought that we were hearing a Second Reading debate again. Like everybody else, I read the debate. Looking at the groupings list for today, every one of the lead amendments seeks either to reverse Brexit or to delay its implementation. They are not about implementation or about progressing the matter but about obfuscation and delaying matters. I believe that there is a very important question that we need to address on the customs union.
If I may, I will continue. The noble Lord has asked me not to talk too much. Let us have a debate on the customs union—a specific debate, not on a wide-ranging group. Let us hear the arguments. Maybe we will hear what the Labour Party’s policy is. The noble Lord, Lord Bilimoria, says that it is one thing and other people say it is another. We will then have a short debate, or maybe a long debate, and we will take a decision on the matter. That is the way to proceed. However, in a debate that has already lasted an hour and three-quarters, we have heard about ID cards, chickens, Ireland, animals and all sorts of things, and we are not even going to have a vote on the matter. We have nine other groups to go through. We are repeating the Second Reading but it is not me who is doing that; it is many of your Lordships.
The noble Lord, Lord Wigley, who made an interesting and impressive speech raising important points, should decide on Report which of those elements he wishes to put to a vote and we will then decide. For now, we ought to get on. This Bill has gone through the elected Chamber and it comes to us from there. That elected Chamber is entirely satisfied with it.
It passed the parliamentary rules. If a Bill goes through the other Chamber, it must be construed to have been approved by that Chamber. That is our constitutional arrangement. I beg to remind noble Lords that Manchester City is not the most popular football team in this country.
My Lords, if these amendments were adopted by the Government, it is possible that there would be a successful negotiation. Let us look at the possibilities of a successful negotiation, which it is generally assumed there will be.
First, the Government have to make up their mind what their aims are. Having renounced the idea of staying in the single market or the customs union, it seems that they are aiming for a new kind of customs union and for access to the single market under a special kind of bespoke single market. The idea of having a new kind of frictionless customs union without being a member of the single market is wholly unrealistic. Nobody outside Britain regards the arrangements suggested by the Government as in any way credible, and the idea of a bespoke single market arrangement has been rejected by one European leader after another. Therefore, why is it assumed that when the Government come forward with their offer, it will be a serious basis for negotiation? At that stage, the negotiations may well break down.
Next, it is assumed that there will be a transition agreement. The Government envisage a period in which there will be an agreement on the framework and we will work out the details. During this period, which they say will last for two years and will include an implementation period, we will continue with the status quo. Maintaining the status quo, with acceptance of membership of the customs union and the single market, of the jurisdiction of the European Court of Justice and of a continuation of our making contributions, has been described—fairly accurately, I think—by both the noble Lord, Lord Kerr, and Mr Jacob Rees-Mogg as meaning that this country will become a “vassal state”. I do not think it can be assumed that there will be automatic agreement by the EU 27—the Commissioners’ negotiators—to this kind of transition agreement. There must surely also be a question as to whether the Conservative Party itself will accept it. And if there is no transition agreement, there will be no deal.
Most importantly, the trade negotiations were allowed to continue because there was an agreement in December about the Northern Ireland border, and alignment of regulations between the UK and Ireland. It was a fudge, which had a completely different meaning to Dublin and to the British Government. To Dublin it meant that Britain would stay within the customs union, and to the British Government it was a way of getting the trade negotiations going and preventing a breakdown at that stage. It is clear that the Government’s frictionless border is not going to be a working proposition—and it seems to me that the negotiation over the Irish border will itself be a breaking point. If there is a breaking point then, of course that means no deal.
My noble friend Lord Newby was wrong when he said that on the whole people had been too optimistic. I think he was being too optimistic, because he assumed that there would be an agreement. All the signs are that we have very good reason to suppose that there will be no deal. If there is no deal the whole economic position will look entirely different—and unless some of these amendments are passed, the odds are that there will be no deal.
My Lords, in 1997, I—together with other Members of this House, including, I recall, the noble Lord, Lord Davies—was returned as a Conservative MP to the House of Commons. I quickly learned what it was like to be in a minority. I fear that I also find myself in a minority in this House today. I may be in a minority in this House, but it comforts me to know that outside this House I am not in a minority.
However, I think I am in a majority in this House when I say that I am not in favour of referendums. I think they are a terrible idea: look where they have led us. But whatever we think, we have had one. The noble Lord, Lord Newby, talked about misleading the British people. I shall be brief about this, he will be pleased to know, because that is where we should start, and finish. During the referendum campaign the Prime Minister at the time, and also George Osborne and Michael Gove, specifically said that we would have to leave the single market. People may not have paid attention, but that is neither here nor there. I think that we will also find that they said we would have to leave the customs union. But people were not very interested.
As regards the customs union, may I draw attention to the fact that the Conservative Party general election manifesto said that we would leave the single market and the customs union?
Does the noble Lord recall Mr Boris Johnson’s riposte to the Prime Minister? He said, “Nobody is even talking about leaving the single market”?
The noble Lord has a much better memory than me: no, I do not. But then I do not agree with everything people on my side say—or, indeed, people on the other side. On the Labour Party general election manifesto, perhaps someone on the Labour side can illuminate me. I do not know what it said, but I am pretty sure it was talking about leaving the single market—and what about the customs union?
This is where we stray in talking about misleading the British people. They are the people who have the say here, not people like ourselves, sitting round in this House, who are not elected—and in some cases have never been elected. We have heard about the curtain in 100 Parliament Street and all that sort of thing. Economic predictions are all well and good—and may, of course, be right. There is one out today by the Institute of Economic Affairs, which takes an entirely contrary view—and my noble friend Lord Lamont mentioned the Civitas review. Who knows, in 10 years’ time we may say, “Gosh, they were all wrong”. However, let us not put too much faith in one review. I am not criticising civil servants, but that applies especially when the people writing these things are the same people who wrote that we would have a recession, half a million people unemployed, an emergency Budget and so on, if we voted to leave the EU—not if we left, but if we even voted to leave.
Does the noble Lord accept that the analysis he has just been talking about was a cross-government analysis? I have with me the notes that I took in my little red book. It was on the first floor when I went over there to read it; it has now gone into the basement. I should imagine noble Lords will need to be quick, before it is buried altogether. Does the noble Lord agree that this analysis was put together across government departments by neutral civil servants and not by think tanks with certain axes to grind?
Of course it was put together by civil servants. I have worked with civil servants and I rate them: let me say now that I think they are good people working to the best of their ability in the service of this country. But that does not mean that they are always right. I am a bit worried that, by the time I get round to going to look at this document, it might have been flushed down the sewer.
I turn briefly to Northern Ireland. I see at least one Peer here with much greater knowledge on this than me, but when I worked in the NIO four years ago, we had a lot of issues around the smuggling of cattle and diesel across the border. There are customs officials on the Irish border, as noble Lords should know, but animals were smuggled back and forth because of the various subsidies, and diesel was smuggled, particularly from the south, because the duties were different. So let us not say that everything is perfect now, because it ain’t. I believe it is not beyond the wit of man that we can come to some decent arrangement with the Irish Government and use that border.
Will the noble Lord give way?
Of course; how could I resist?
Will the noble Lord tell us whether he agrees with those Conservatives who, in the past week, have said that it would be a good idea to end the Good Friday agreement?
That is slightly off the current debate, but no, I do not. I think that the Good Friday agreement has achieved a great deal. However, as in all agreements, sometimes things have to move on—not be changed necessarily, but move on. The reason for those people saying that there should be an end to the Northern Ireland agreement is the failure to get together a devolved Government; it was nothing to do with Brexit.
What would the noble Lord like to move on to?
This is nothing to do with what we are speaking about. I am not sure whether the noble Lord, Lord Hain, was involved with the Northern Ireland agreement, but some people in this House were, and a great deal of time was taken to get it together. But as life changes, so sometimes we need to adjust or amend things. I think that that is what the noble Lord is trying to do today.
My last point is on the national interest, which has been mentioned. I find it quite embarrassing and demeaning when it is suggested that those of us who believe that our national interest is better outside the European Union are in some way unpatriotic. I say, “I’m all right Jack”: I voted for the future of my country, not for my own future. I voted in the national interest and I hope that everybody in this House can agree that the national interest is what we should all be talking about.
My Lords, I intervene at this stage because it is important noble Lords know that the European Union Select Committee of this House received evidence from the customs officials who deal with the Norway border and with the Swiss border. We also took evidence on the policing of the Norway border and the Swiss border, to hear just how frictionless it is possible to be and whether technology is on the horizon that could enable us to have what we currently have in Ireland existing into the future without the customs union and the single market. I have to tell the House that the idea that technology is going to solve the problem is absolutely pie in the sky. Of course technology can be used in many positive ways when dealing with vehicles crossing borders; for example, containers can notify in advance the authorities as to what they are carrying and so on. There are methods for that. But you still have to have—even if it is mobile units—the possibility of stopping and searching and testing. Let us be realistic about this. Please do not imagine that there is some magical, technological method to solve the risks that we run in removing the arrangements that have created the current frictionless border.
It shocks me that people have such short memories. I do not have a short memory about the effects of the Troubles. I took part in many of the most serious trials involving the Troubles in Ireland and the way that they impacted on life here in our own cities in mainland Britain. I was involved in the Brighton bombing trial; I was involved in the Balcombe Street siege; I was involved in the Guildford Four appeal. I did many of those cases and I can tell you of the pain they caused for the victims of those acts of violence and the ways that people were affected by and lived in fear because of them. We have very short memories if we do not recall that.
If we are really concerned about the great achievement of getting through that peace treaty and peace process, and about not it putting it at risk, we would not be so cavalier about what is provided by a customs union and why it is so important. Sustaining it into the future must be one of the things we seek to do.
Can the noble Baroness tell the House what happened before the Republic of Ireland and the United Kingdom joined the EU? At that stage there was a seamless border between two separate countries.
Is the noble Lord at all aware of the number of times there were bombings of customs posts? Is he aware of the number of times there were attacks on those who policed the border? Do we really want to revisit that past? It seems that many do.
Can I ask the noble Baroness a couple of questions about the border? Does she think it is an extraordinary coincidence that the principal advocates of forgetting about the Good Friday agreement happen to be some of the most prominent Brexiteers in the party of which I am a member? As I say, that might be just a coincidence. Does she think that there is any imaginable technology in Silicon Valley that could provide frictionless controls in, say, Fermanagh or south Tyrone or south Armagh? I think it would be an act of laureate-winning genius to discover that. Does she also agree that the Good Friday agreement is part of an international treaty between the United Kingdom and the Republic of Ireland? Who in the rest of the world will believe that they can have a treaty with us if we do not keep our word about that?
I could not agree more with the underlying sentiments that have just been expressed by the noble Lord. I have said it in this House before: unfortunately, many of those advocates of Brexit are the very same people who do not believe in international law and treaties; who do not support human rights internationally and their protection; who do not want us to be part of the European Convention on Human Rights, which is an important protection for citizens in this country; and who have reservations about what the peace process in Northern Ireland brought about. I regret that there are those common factors, and it is something that is worth our reflecting on.
The answer to the noble Lord’s question is that we joined the European Union at the same time as Ireland. We were, therefore, in the same situation together outside it, and we have been in the same situation together inside it for over 40 years. What we are doing, for the first time since the historic situation of the common travel area and all the rest of it, is putting ourselves outside it and in a very different place. That is why the problem has arisen.
I should explain that the European Union Select Committee has just been in Brussels—in fact, we returned this afternoon. It always comes as a surprise to so many in this House to know that law that was made in Europe, and all the things we are talking about that emanated from Europe, was not thrust upon us. Many of those regulations and much of that law were created by British lawyers, politicians and representatives collaborating with people across Europe and with our Irish colleagues to make a fabric that makes trade and many other things work. The idea that we are in many ways rending that apart is a source of great regret and we are putting at risk the peace that we have created across Ireland.
Before the noble Baroness finally finishes, is there not a slightly troubling aspect to this? I take the point that we have an international treaty that we must keep, but there is a slight feeling that the threat of terrorism in Ireland is overruling all other considerations. It could be seen as strongly influencing our arrangements with Europe.
It is the very opposite. It is the fact that peace has been secured. That is one of the great achievements of our being in Europe and working so closely with our European neighbours. It is the product of collaboration. This is not about the potential threat of terrorism, but about a celebration of the fact that we have achieved peace and a recognition of one of the mechanisms that has helped to secure that.
My Lords, I wonder whether it might not be an idea to hear from the Minister at this stage. I have been watching the debate and it is clear that we are covering a lot of ground that we will cover in Committee. We are in Committee now and not at Second Reading. It would be appropriate if we heard from the Minister.
My Lords, I do not think that the noble Lord should intervene to cut short this debate. There are many amendments that have not yet been spoken to and my noble friend on the Front Bench has not had a chance to speak. Many other noble Lords seek to speak, too. The Minister should speak at the end of the debate after noble Lords who wish to speak have had a chance to do so. These are the most important issues that will face this country over the next generation and I do not think that we should be told by the Government Chief Whip that we have been speaking for too long.
My Lords, I shall speak to Amendment 89 to which I had the privilege of adding my name. I want to draw the House’s attention to that amendment because it addresses a constitutional issue. We are back to the issue of Henry VIII powers. This is to prevent the Government using Henry VIII powers in statutory instruments in order to drive through a separation from the customs union and from the single market rather than bringing those issues directly to this House for its decision. That is exceedingly important.
In supporting that argument, I want to underscore the importance of the customs union and the single market in response to the arguments put forward by the noble Lord, Lord Lamont. He said that without the customs union we can achieve what we need through a free trade agreement. What he did not say is that free trade agreements do not include services—or do so only at the margin. Our economy is an 80% service economy and a free trade agreement along the pattern and lines of other free trade agreements across the globe would leave us without the ability to sell our services freely as we do today across the European Union. Now the single market in services is not yet complete, but it is fairly close to completion and there is a great deal of opportunity.
The Government turn and occasionally say that there will be a mechanism to do this called mutual recognition. But within this House there are Members who will remember in the early days of Thatcher the development of the single market. This country thought that the route to be able to open up the single market and access across Europe was mutual recognition. But it was not effective, which explains the move towards regulation and harmonisation that currently overwhelmingly underpin our trade with the EU.
The EU has been very clear that it cannot see a way forward along the lines of mutual recognition except in fairly narrow terms. We have an example that the Government often cite with Switzerland where there is in effect mutual recognition through an equivalency agreement. But in December, when that agreement needed to be extended to provide for MiFID II, the EU would agree only to a one-year arrangement because it needed to be underpinned by a great extension of institutional arrangements to deal with disputes and a whole range of other issues.
Perhaps I may make a brief point. The noble Baroness is absolutely right about India. What is missing from this discussion, and the noble Lord, Lord Davies, referred to it, is that in the future we will be able to substantially reduce migration from the European Union, much of which is low paid and therefore of less value, and that will give us some leeway when talking to countries such as India.
The answer that I give to the noble Lord, Lord Green, is one that would be given by many people in this House. To reduce immigration to the tens of thousands means not only drastically and dramatically reducing European migration, it means drastically and dramatically reducing migration from elsewhere in the world. That is the reality that our employers in the various industry sectors face.
I will tell the noble Lord one more thing if we are talking about inconsistencies. Let me go back to the point I made to the noble Lord, Lord Lamont, about going to 100 Parliament Street, which I recognise. I will attempt to ensure that I do not breach the confidential content of the papers, but in the various scenarios, every one of which is frankly quite scary, there is a discussion about potential mitigations. Without breaching confidentiality I cannot define those mitigations—as I say, noble Lords should read the papers for themselves—but if one were to follow them, the speech that Michael Gove gave to the National Farmers Union is in absolute and complete contradiction to the mitigations. The speech given by David Davis about rising to higher standards is in complete contrast to the identified mitigations. The speeches or the comments that Theresa May has made about not weakening the rights of the workforce of the UK are completely contradicted. That is one of the reasons I recommend that people from this House should read the papers because all the contradictions in the statements being made are finally pulled together.
My Lords, at this stage of the debate and with the indulgence of the Committee, I wish to return to the debate on Amendment 6 in the name of the noble Lord, Lord Wigley. I thank him for his eloquent introduction to the debate.
The amendment calls on the Secretary of State to lay before Parliament a report outlining the effect of the UK’s withdrawal from the single market and customs union on the UK economy. That the Government have tossed away the UK’s commitment to the single market and customs union without seeking an impact assessment or providing evidence for this has to be a cause of real concern. There can be no doubt that membership of the EU single market and customs union has been of benefit to Wales. If the noble Lord, Lord True, will allow me, I wish to refer to my Second Reading speech in which I pointed out that it has given us tariff-free access to a market of 500 million people, it takes more than two-thirds of our exports and the freedom of movement for citizens and goods has led to the success of many of our industries.
The creation of a single market was at the UK’s insistence. We helped to create it, we have benefited from it and, until recently, we have wholeheartedly supported it. The Government’s position on the single market and customs union is confusing, to the say the least. They appear to want all the advantages of both while rejecting the institutions themselves. I have to say that I find the attitude of the Government and of the hard Brexit supporters to be almost anarchic. There is a certain gung-ho, jingoistic element to their desire to crash out of the EU, the single market and the customs union with no parachute or safety harness to protect the country—straight into the arms of the WTO.
Those who advocate the WTO option have, according to experts, made a basic but fatal mistake. Their obsession with tariffs has blinded them to the difficulties presented by non-tariff barriers such as border checks, visual inspections and physical testing. Industries that now rely on integrated supply chains working to a “just in time” regime could find that their systems start to snarl up and eventually grind to a halt.
We would be turning the clock back to the world of 1988, the year that Margaret Thatcher made her speech opening the single market campaign. It makes for interesting reading:
“We recognised that if Europe was going to be more than a slogan then we must get the basics right. That meant action. Action to get rid of the barriers. Action to make it possible for insurance companies to do business throughout the Community. Action to let people practise their trades and professions freely throughout the Community. Action to remove the customs barriers and formalities so that goods can circulate freely and without time-consuming delays. Action to make sure that any company could sell its goods and services without let or hindrance. Action to secure free movement of capital throughout the Community. All this is what Europe is now committed to do”.
All this we have succeeded in doing, so what has changed? It seems that the advantages we have gained by being members of this massive free trading bloc have been sacrificed on the altars of two perceived problems: lack of control of immigration and loss of sovereignty. But in reality, the Government have failed to control immigration from outside the EU, which they have always had the power to do. They have also failed to use the powers available under EU guidelines to control immigration from within the EU, and they have failed to admit to the benefits to this country that have come in the wake of immigration over the years. The Government have themselves admitted that there was never a loss of sovereignty. Along with 27 other nations, we pooled our sovereignty to come to common decisions on policies.
In throwing away all the benefits of the single market and customs union without providing the evidence to support their case, the Government are adding to the sense of injustice felt by many and to the concerns that this decision has been based on politics and preconceived views rather than what this amendment calls for, which is what is proven to be beneficial to the people of Wales and the UK.
I declare my interest as in the register: I am a businessman. I would love to lock horns with the likes of the noble Lord, Lord Bilimoria—he is not in his place—and other speakers who appear to have been overinfluenced by the briefings of the EU-funded CBI and similar organisations. Noble Lords laugh, but they do not deny it.
I am not a sponsor of one of the amendments. Having listened to the Second Reading debate, I am saddened by this group of amendments. I felt—and said so at the time—that the sense of the House was that the Bill would be improved, and examined with a view to improving it, whereas it seems that nearly all these amendments seek to obstruct, delay or simply wreck the Bill. I am afraid I cannot accept the assurance of the noble Lord, Lord Wigley, who said otherwise. I look at the Marshalled List and all these amendments seem to be wrecking ones.
I know that any suggestion of threatening our future causes resentment in your Lordships’ House, but I want to refer to a quotation from Committee in the House of Commons:
“I think their Lordships should know that if they try to wreck the Bill, many of us will push the nuclear button”.—[Official Report, Commons, 14/11/17; col. 197.]
Those words come from the very well-respected right honourable Member for Birkenhead, Mr Frank Field.
Is he not respected by the Labour Party? I thought he was. He went on to warn that we would be sounding our own “death knell”. That is probably good news to the Liberal Democrats; they have made no secret of the fact that they would like the House of Lords to be abolished, and therefore take licence with this institution.
That is simply untrue. The position of these Benches has been that the House of Lords has a very valuable role to play. At the time, we sought the support of the Conservative Members of the coalition to reform the membership of your Lordships’ House on a democratic basis. That is a very different proposition to seeking to abolish it.
The noble Lord did not see behind him, but there were some signs of affirmation there when I said that they were sympathetic. I think he needs rather more careful whipping on that Bench.
The timescales are important. This reason has not been mentioned. Article 50 determines the date—we will come to this later—by which those who are responsible for negotiation have to reach agreement or fail to reach an agreement. Therefore, it is completely absurd to try to add a flexible date.
The Bill is not the narrow economic interest it has been portrayed to be. Many of the minutiae covered by the amendments are important, but they are not what the Bill is about. The Bill takes us out of the European Union on 29 March next year, at the behest of the majority of people in this country. It is about what people thought about their identity, their community’s identity, their country’s identity and their country’s place in the world. Given the way that the Welsh voted, it seems to me that the noble Lord, Lord Wigley, does not take into account what his countrymen feel in this respect.
If the noble Lord had listened to the speech I made, he would know that I accept the fact that there has been a vote to leave the European Union, but there was no vote in Wales or elsewhere to leave the customs union and the single market.
That has been thoroughly debated. I think people did understand; certainly, people in Cumbria understood, even if the Welsh did not.
As for the power grab, it is just the opposite. Never again will Ministers be able to offer the excuse that their course of action has been followed at the behest of the European Court of Justice or the European Community. We ought to be extremely cautious about how we treat the amendments and reject them.
I am prepared to lock horns with the noble Lord on Amendment 206, which I support. I have some quotes of my own.
In October last year, the Secretary of State for International Trade said,
“believe me we’ll have up to 40”,
free trade agreements,
“ready for one second after midnight in March 2019”.
In July 2016, the now Secretary of State for Exiting the EU wrote:
“I would expect the new Prime Minister on September 9th to immediately trigger a large round of global trade deals with all our most favoured trade partners … So within two years … we can negotiate a free trade area massively larger than the EU”.
He goes on to say that,
“the new trade agreements will come into force at the point of exit from the EU, but they will be fully negotiated and therefore understood in detail well before then”.
Does the Minister agree with his Secretaries of State? Can he tell us how many trade deals the Government expect to be in place one second after midnight on 29 March 2019? Does he understand that the reality of what is happening, and the lack of progress, is driving an increasing number of voices to want to remain in the customs union—particularly those who voted to come out of the EU?
My Lords, I support Amendments 6, 7, 162, 197 and others, regarding protecting our position in the single market, customs union and European Economic Area, on the free and frictionless trade for goods and services with our closest partners, and on the integrated supply chains and free trade agreements with 60 other countries, which make up 70% of our trade. I echo the brilliant and inspiring contributions from my noble friends Lord Carlile and Lord Hailsham, the remarks from the noble Lords, Lord Wigley and Lord Bilimoria, and the remarks of the noble Baroness, Lady Kramer, with respect to Amendment 89.
The idea of losing our current free and frictionless trade and free trade agreements with other countries seems like industrial vandalism. That is not what the British people voted for. My noble friend Lord True and the noble Lord, Lord Davies of Stamford, talked about the instructions of the referendum result. We have listened to and respected the result by triggering Article 50. That was the decision made by the British people. However, we are not saying tonight that the British people got it wrong. The leave campaign got it wrong, and those pressing to leave the single market, customs union or European Economic Area got it wrong. They seemed to believe that we could have our cake and eat it. That is what people voted for; but now, in trying to find a way forward after triggering Article 50, we are discovering that far from eating cake, or having it, we may have to settle for bread—and not a loaf, but a slice. I echo the words of the noble Lord, Lord Hain, and support Amendment 197, which calls for the same rights, freedoms and access as now. Surely that is the least that British people who voted to leave would have expected. Leaving the single market, customs union or European Economic Area was not on the ballot paper. The leave campaign specifically ruled out leaving the single market on many occasions. It was the remain campaign that talked about it, and clearly those who voted leave did not take the remain campaign’s warnings seriously.
What did leave voters vote for? The leave campaign promised them wonderful new trade deals in addition to existing ones. We are about to lose the deals that we currently have outside the EU. The very best we can get from those is the same terms we currently have. Already some of those countries are saying that they will give us worse terms if we try to negotiate separately, as we must do. Leave voters wanted and were promised much more money for the NHS. The OBR has already estimated that, far from having £350 million a week more for the NHS, we will have about £300 million less per week. We are losing money.
The campaign promised no change to the border in Northern Ireland, yet we hear about possible changes to the Good Friday agreement. This cannot happen. We must stay in the single market, the customs union and the EEA to preserve UK jobs. My noble friend Lord Robathan talked about misleading the British people. It is the leave campaign that is misleading the British people.
I am awfully sorry, but I hope my noble friend has read the Conservative manifesto, which, in only June last year, received a staggering number of votes.
Not enough, but a staggering number.
My noble friend Lord Lamont and others have said that other countries manage without being in the EU, but their economies have not spent 40 years integrating and intertwining their industries and economies with the EU. The only country trading on WTO terms is Mauritania.
Could my noble friend tell me which country is more integrated with the EU: Switzerland or Britain?
The industrial success of the British economy is based on the integrated supply chains. The jobs in Sunderland and across the automobile industry, as an example, and the biotech industry and pharma industry depend upon those integrations. The foreign companies that own those operations will be unable to compete if we do not have the same kind of access that we have now.
The Government’s evidence, which is being hidden from the public, shows that Brexit will be a huge cost, the size of which depends on the hardness of the Brexit. I urge colleagues on these Benches and across the House to wake up to the reality that we face and to at least support these amendments to stay in the customs union, the single market, the EEA or equivalent.
My Lords, I have three amendments in this group, Amendments 4, 152 and 225, but I broadly support all the other amendments that have been discussed.
The most disturbing and alarming thing that has happened in respect of the Brexit process in the recent past has been the collapse of the power-sharing talks in Northern Ireland last week and the response of the DUP leadership and some prominent members of the Conservative Party, including a Conservative former Northern Ireland Secretary, since that collapse, who have said that they believe that the time may have come to end the Northern Ireland agreement, including a tweet from the said former Northern Ireland Secretary, Owen Paterson, saying that he thought that the Northern Ireland agreement had now served its purpose. I do not think I have heard more irresponsible words from a former Cabinet Minister in the recent past than those. As the noble Lord, Lord Patten, said, I do not think it is a coincidence that the people who are calling for an end to the Northern Ireland agreements, with all the potentially calamitous consequences for the people of Northern Ireland as well as the rest of us in the United Kingdom, are also almost to a man and woman ardent Brexiteers.
I know that the Prime Minister shares our concern, because in the Florence speech she said that,
“we and the EU have committed to protecting the Belfast Agreement and the Common Travel Area and, looking ahead, we have both stated explicitly that we will not accept any … infrastructure at the border. We owe it to the people of Northern Ireland—and indeed to everyone on the island of Ireland—to see through these commitments”.
I believe that we too in this House owe it to the people of Northern Ireland to see through those commitments. When I heard Mr Daniel Hannan say that he believed that the Good Friday agreement was a consequence and not a cause of peace in Northern Ireland, I could not think of any statement that is playing with fire more dangerously from a responsible official. He is a Member of the European Parliament.
Would my noble friend not agree that perhaps the most irresponsible aspect of the remarks that have been made in this debate on Ireland is that painstaking work has gone on for a number of years now in building trust between two communities, with those communities beginning to establish a tradition of working together?
My Lords, I could not agree more with my noble friend, nor with all those other noble Lords who have responsibility for Northern Ireland, or have held it in the past, including the noble Lord, Lord Patten, my noble friends Lord Hain and Lady Kennedy, and the noble Lord, Lord Carlile, not least in his role as reviewer of terrorism legislation. Everyone who has been engaged in this sees the continuing value of the Northern Ireland agreement. It is a solemn undertaking on the part of the United Kingdom. It is an international treaty. Playing fast and loose with peace in Northern Ireland in the cause of Brexit is utterly reprehensible.
We are looking forward to the Minister’s reply. I know that he has a mountain of amendments to reply to, but I am afraid that is the fault of the people whose responsibility it is to group them, who seem to want to group almost everything in the Bill into one group. I hope that when he replies he will begin by saying from the Dispatch Box that the Government remain committed to the Good Friday agreement, that they wish to see the restoration of devolved government in Northern Ireland, and that the Government will use every endeavour to do that and to ensure, as the Prime Minister also said in solemn undertakings at the end of last year, that all of the commitments that the Government of the United Kingdom reach in respect of Brexit will fully honour the Good Friday agreement. I take the amendments that we will discuss later, which my noble friend Lord Hain and others have tabled, which would enshrine a commitment to abide by the Good Friday agreement in the text of the Bill, to be immensely important to our consideration of the Bill, particularly in the light of comments made in the last week.
My amendments focus on two particular areas where I seek the Minister’s guidance, because we have many long debates to come, and we need to establish a good evidence base as we do so. I take to heart the words of the Minister for Exiting the European Union, Mr Baker, when the House of Commons was considering the Bill—I was glad to see him at the Bar earlier—and he said:
“The Government have always been clear that the purpose of the European Union (Withdrawal) Bill is to ensure that the UK exits the EU with certainty, continuity and control”.—[Official Report, Commons, 14/11/17; col. 206.]
We can have certainty, continuity and control only if we know what will happen as a consequence of enacting the Bill.
Therefore, there are two areas that I particularly wish to probe the Minister on. The first is the extremely important issue raised by the noble Baroness, Lady McIntosh, about the status of the European Economic Area and our membership of it. There is a debate that will range far and wide across our consideration of this Bill and future Bills as to what is the right status for the United Kingdom if and when we leave the European Union: whether we should be in the EEA, or in the customs union but not the single market, or in the single market but not the customs union; whether we should have bespoke trade arrangements, or whether we should belong to a customs union but not the customs union. The Schleswig-Holstein question was positively simple in comparison with the options and complexity of the options on offer but for our role as legislators, it is crucial that we understand the consequences of decisions that we take in respect of the Bill when we enact it. In many crucial areas—having read, as many other noble Lords will have done, all the debates in the House of Commons on the Bill—it is still unclear what will be the legal position in key respects after the enactment of the Bill.
The issue raised by the noble Baroness, Lady McIntosh, is of acute concern in this respect. The question that I hope the Minister will address himself to is: what is the procedure under which the United Kingdom will leave the European Economic Area if and when we leave the European Union? The noble Lord, Lord Owen, who I am sorry to say is not in his place this afternoon, has written, with help from serious lawyers—including, I think, one or two in this House—a very long and learned paper on precisely this issue. It says that there are two very different views as to what the position is, partly because the EEA agreement is itself ambiguous about the nature of the relationship between the European Union and the European Economic Area.
The European Union is itself a contracting party to the EEA agreement and on one reading—I am now going into areas where, seeing so many lawyers around me, I am waiting for them to leap in at any moment, but the definitive view from the Government is going to be important here—it is therefore not possible for those states which leave the European Union to remain a party to the EEA agreement. On another reading of the treaty, Her Majesty the Queen is the signatory to the treaty independently of the United Kingdom’s membership of the European Union, and we would therefore continue to be members of the EEA when we leave the European Union. As a layman in these matters, this looks to me to be an issue of huge consequence. When and if we leave the European Union on 29 March next year, do we or do we not continue as a member of the EEA simply by virtue of leaving the European Union? If we do not leave the EEA, what is the procedure under which we do leave the EEA? Does it require a vote, does it require legislation, or are the Government proposing that it should be done by the royal prerogative? These are big issues and I hope the Minister can address himself to them, because they will have a significant bearing on amendments we raise later in Committee and on Report.
The second issue concerning withdrawal from the European Union, which is what the half of the Bill that we are substantially debating at the moment is about, is whether it is necessary to withdraw from the entirety of the European Communities Act 1972, or whether it is in fact legally possible—or what would be the consequences of deciding—to withdraw from some parts but not from others. This is an issue of such importance because of the customs arrangements enshrined in Part 2, Section 5 of the 1972 Act, which sets out all the arrangements under which the United Kingdom agrees to abide by customs rules set by the European Union. That is, as I read it, a large part but not the entirety of our membership of the customs union.
The question that was raised in the House of Commons but not properly debated, and that looks to me to be of significance to our debates going forward, is whether, by not disapplying the customs clauses of the 1972 Act—Part 2, Section 5, and the appropriate schedules; if they remained in force and we repealed the rest of the Act but not those; by virtue of that fact, subject of course to an agreement with the European Union itself —we would remain in the customs union. Again, in terms of the legal means by which we might secure the objective which many noble Lords wish to see, continuing membership of the customs union and single market, that is a point of great significance.
Finally, in terms of the objectives we are seeking to achieve, in her Lancaster House speech, the second of the two significant speeches she has given on government policy in respect of Brexit, the Prime Minister, addressing our European partners, said:
“The decision to leave the EU represents no desire to become more distant to you, our friends and neighbours … We do not want to turn the clock back to the days when Europe was less peaceful, less secure and less able to trade freely”.
In my view it is impossible to see how we can have a Europe which maintains peace unless we start with peace within our own borders, which must mean peace guaranteed in Northern Ireland, hence the centrality of the Good Friday agreement to our consideration of the Bill. When it comes to,
“less able to trade freely”,
I take that to mean not entering into any trade arrangements which are less advantageous for this country and involve any more border controls than currently apply. I look forward to the Minister explaining to the Committee how leaving the customs union and the single market can make it easier for us to trade than the extremely advantageous arrangement we currently have as a member of the European Union.
My Lords, I cannot match the dazzling intellectual exposition of the noble Lord, Lord Adonis, but I completely endorse his remarks on the Good Friday agreement. The need to stay in the single market and the customs union in order to preserve the integrated economy and the peace and political enjoyment of the Good Friday agreement is one of the best arguments for doing so. I shall speak to Amendment 203 in my name and those of the noble Lord, Lord Adonis, and my noble friend Lady Smith of Newnham, who sadly feels that there is not time for her to speak. I shall also speak more generally on this group and second the remarks of noble friends who have spoken on it.
Amendment 203 requires a specific parliamentary vote on whether to leave the EEA. This would perhaps both remove any legal doubt about whether the Article 50 notification made that decision—I will slightly sidestep that issue—and be an explicit political decision in itself. Therefore I advocate the merits of Amendment 203.
We are in the dark about the future. The Cabinet is meeting again tomorrow at Chequers and we are all very hopeful that some white smoke will emerge from that meeting. As many noble Lords have said this afternoon, the implications of leaving the single market and the customs union are serious. Indeed, it has been described by my former noble friend Lord Carlile of Berriew as a “suicide note”—hence the need to have a specific vote on whether to leave the EEA, which would be a safeguard, at least against sudden death.
We learn from the Financial Times, in advance of having anything explained to us in the open by the Government, that the buzzword for the trade relationship that the Government will be aiming for is “managed divergence”. Apparently:
“Under this approach, economic activity between the UK and the EU would be divided into three baskets: complete alignment, where the UK would follow EU rules”—
presumably to at least encompass the famous paragraph 49 of the phase 1 agreement—
“‘managed mutual recognition’, where both would agree to common objectives but each would choose its own rules; and a third basket where the UK can abandon EU regulations and do whatever it wants”.
That sounds incredibly complicated for citizens and business, as against the simplicity of full membership of the single market and the customs union. This commentator says:
“The beauty of this approach is that it unites the cabinet”.
This is possibly because it has three variations. However, it does not have one single theme.
Of course, we have heard all variants, not least this past week. We had the speech from the Foreign Secretary and the letter from the European Research Group—I am not sure that it does a lot of research but it writes a lot of letters. It wants “full regulatory autonomy”. I hope that I will not embarrass the Minister if I quote him when he was in the European Parliament. He said in 2012:
“Surely one of the best ways for the EU to speed up growth is to scrap the employment and social affairs directorate in the Commission, repatriate its responsibilities to national governments, then we could scrap the working time directive, the agency workers’ directive, the pregnant workers’ directive, and all of the other barriers to actually employing people if we really want to create jobs in Europe”.
We will discuss on other days the maintenance of employment and other rights, but it is illustrative of the problem that we have that there is such an array of opinion within the Government. The advantage of having a parliamentary vote in the context of the implementation of the withdrawal agreement would be that it would allow Parliament to have the backstop of saying, “Actually, we want to stay in the EEA”.
If we have another referendum on the question of whether we should leave the European Union, to me that talks like a second referendum, walks like a second referendum and will be a second referendum.
As many of the noble Lord’s soulmates often say, it would actually be a third referendum—so you pays your money and takes your choice. But it would be quite different because it would be in the knowledge of the actual detail of what Brexit entails, which people did not have in 2016.
The noble Baroness talked about patronising the British people. I think that all politicians are capable of being patronising, but does she not think that we should accept that the British people are sensible and clever enough to work out what they voted for in 2016?
Actually, there is growing support in the opinion polls for people taking control themselves. I think it was the noble Lord himself who talked about how it is the people who decide, not us—and especially not us in this unelected House. I totally agree with him that it is the people who are now showing through opinion polls that they want to take control of the decision on what should happen to this country and on whether to give a verdict on the Brexit deal.
This has been an extremely valuable debate on the crucial decisions about the single market and the customs union. My last remark will be to mention, as my noble friends did, that being in the EU has not stopped other EU countries, such as Germany, exporting many more times the value of British exports to countries such as India. In fact, Germany is India’s top trade partner in the EU and its sixth biggest overall, and the UK is only India’s 18th-biggest trade partner. Even Belgium has a trade surplus with India, unlike the UK. So being in the EU has certainly not prevented other EU countries making a greater success of trade with India than we have. It is the problem of visas that has prevented a deepening of the trade relationship with India.
I cannot resist mentioning that the noble Lord, Lord Marland, who I understand is the Government’s trade envoy to the Commonwealth, was quoted recently as saying that it would be easy to do trade deals with Commonwealth countries such as Singapore, Malta and Cyprus. Malta and Cyprus of course are in the EU and are not free to do individual trade deals—so good luck with that.
To conclude, I give my full support to the amendments in this group which, one way or another, seek to keep us in the single market and the customs union, which is vital not only to the integrity of the United Kingdom, particularly on the intra-Irish border, but to the economic future of this country.
My Lords, this has been a valuable and, indeed, an enjoyable debate, but it is particularly important for two major reasons. The Bill is not about whether or not we leave but about how we leave, and there are two important aspects of why we have debated and heard these views today that we should not forget.
One is that Article 50—and its author is here, as always—by which we are leaving, requires that we have the framework for our future relationship with the European Union. That is what all these amendments are about. But the second reason we have to discuss that today is because the Government have absolutely failed to tell us what their vision for that framework is. That is why we are doing this now and why these amendments are key. Indeed, as has just been mentioned, it is only tomorrow that the Prime Minister will finally lock her little brood into Chequers for what the Financial Times today described as “Mission Impossible”, to thrash out some sort of consensus about the future of our country. Meanwhile, both in the UK and among our partners in the EU 27, there is a complete lack of clarity about the direction of travel. We need to know, as my noble friend Lord Adonis said, what is going to happen as we go into the negotiations.
What I have found rather strange is that, instead of the Prime Minister bringing her brood together earlier after the referendum 20 months ago, as we have just been reminded, she sent out her little chicks, and, indeed, a Fox, to make speeches far and wide—in fact, almost everywhere other than in Parliament—on their competing visions of what that post-Brexit future will look like. They are mostly doing that without a proper dialogue with consumers, with trade unions, with industry or with farmers. I will not have been the only one listening to “Farming Today” this morning to hear the responses to Michael Gove in Birmingham yesterday, when NFU members—not, incidentally, members of the Labour Party—lined up to say: “Where’s the beef”? They had heard his speech; they still did not know what was going on and wanted to know where this Government are taking us. They do not know whether they can sell their meat tariff and quota free in 13 months’ time. The fishermen in Newlyn have also been given little detail about their future and are beginning to worry about that, too.
Critical to this is the big issue: do we want tariff and barrier-free trade with the EU? Do we want no customs posts, particularly but not solely in Northern Ireland, no checks at borders and smooth, duty-free transit? The ports of Dover, Holyhead and Fishguard would like to know the answer to that, but so indeed would Calais and Rotterdam. But checks and paperwork will be avoided only if we produce and sell according to the same regulations, and if our internal systems of checks on food and manufactured goods are recognised and respected by the importing countries. Frankly, that means regulatory alignment. If that is not what the Government envisage, they must decide pretty quickly so that the plans, buildings, documentation, computer systems and, yes, the personnel can be put in place.
The big political question facing us is one that the Prime Minister seems not to dare ask those chicks: “Do we want to maintain our current, pan-EU high standards?” The Fox seems to think not. Reliable sources in his department—and I mean reliable sources—suggest that they hope trade deals with third countries will become materially easier when there is “less pressure”, in their words, to stick to the high levels of regulations required by the customs union and the single market, and easier because the so-called political factors, which I gather is departmental code for having less respect for human rights, would be “less of a problem”. Furthermore, the secret documents in Room 100 that have been referred to—I also saw them on the first floor—were, incidentally, reported in the Independent, so I am not giving any secrets away. My quotes are from that paper, which describe areas being explored where “maximising regulatory opportunities” are possible. It cited particularly what, as we have heard, was said by the Minister in an earlier life about the opportunity of ending the working time directive.
However, that is not what we heard from the Chancellor at Davos, nor what we heard from Austria yesterday when the Brexit Secretary stressed his support for,
“the principle of fair competition”,
which I would argue implies no lowering of standards to gain competitive advantage. Mr Davis said that the UK and EU should be able,
“to trust each other’s regulations and the institutions that enforce them … Such mutual recognition will naturally require close, even-handed cooperation between these authorities and a common set of principles”.
So the Viennese version is that standards and regulations are the building blocks of free trade. This is of course in contrast to the Foreign Secretary, who asserted:
“The great thing about EU regulation is that it is not primarily there for business convenience, it is not primarily there to create opportunities for companies to trade freely across frontiers, it is primarily there to create a united EU”.
There was not quite the same line coming out of Vienna.
We have also read—perhaps the Minister could confirm this when he comes to reply—that British and American conservative groups, including the Initiative for Free Trade founded by Daniel Hannan MEP, who I gather is his friend, are working on an “ideal trade agreement” that would allow the import of US meats such as chlorinated chicken and hormone-raised beef, along with drugs and chemicals currently banned in Britain. Is that the vision that they want?
My Lords, it is a great honour to contribute to the first day in Committee on this historic Bill. Let me say at the outset that I look forward to working constructively with colleagues from across the Chamber throughout the course of Committee to scrutinise and improve this vital Bill in the national interest.
Clause 1 is the shortest of all in the Bill—you would not believe it from the debate—but it could scarcely be more important. This debate has shown the House at its passionate best, but it was not really about Clause 1 at all. I think all noble Lords recognise that, when we leave the EU, we need to repeal the European Communities Act. So we have had a fascinating debate on the UK’s potential ongoing membership of or future relationship with the single market, the customs union, the EEA and EFTA. These are of course issues of profound importance and I understand that noble Lords have strong views on them, but everybody really knows that they are not matters which the Bill is designed to address.
However, I will happily rehearse the Government’s position once again. What this Government seek is a bold and ambitious economic partnership that is of greater scope and ambition than any such existing agreement. We have listened to EU leaders and we understand and respect the position that the four freedoms of the single market are indivisible, and that there can be no cherry picking. For that reason, we do not seek membership of the single market after we leave the EU, and nor do we seek membership of the customs union. By leaving the customs union and establishing a new and ambitious customs arrangement with the EU, we will be able to forge new trade relationships with our partners around the world and maintain as frictionless trade as possible in goods between the UK and the EU, providing a positive and powerful voice for free trade in the world.
Of course, I am talking about our future relationship with the EU. To answer the question which I think came from the noble Lord, Lord Fox, we also seek an implementation period which, we have been very clear, will be based on the existing structure of EU rules and regulations—but during which the UK will be outside the EU.
Let me take this early opportunity to draw the attention of noble Lords to our publication today of our proposed draft legal text for the section of the withdrawal agreement in relation to the implementation period. We have published this in part to facilitate parliamentary scrutiny. It is right, too, that the British public should be able to see our position. The details of that implementation period would be implemented in domestic law through separate primary legislation, after we have reached agreement with the EU and after these Houses of Parliament have voted on that agreement.
In the meantime, a number of amendments in this group seek to mandate our continued membership of one or both of the single market or customs union, presumably in perpetuity. But put simply, this is not something the UK Government could deliver unilaterally, even if we were so minded. The amendments tabled by the noble Lord, Lord Wigley, get around that by proposing maintaining the same rights, freedoms and access within the UK that we have currently, which in practice means staying in the single market in all but name but without any reciprocal guarantees from the EU. That would be the worst of all possible worlds.
Other amendments seek to mandate the Government to take a particular negotiating position or to pursue particular objectives. Leaving aside what I have said about those not being our objectives, the amendments raise constitutional questions about the role of these Houses of Parliament and they raise practical questions too. Who is to say whether the Government have truly made these things their negotiating objectives? How would they be judged? Would we see the courts ruling on the conduct of the negotiations, and what would be the consequences if they did so? I recognise the noble intention behind these amendments, but I do not think we can contemplate making them, especially when the repeal of the ECA or the exercise of crucial delegated powers becomes contingent on them. That is a recipe for undermining the essential certainty that this Bill is designed to create.
Other amendments call merely for reports to be published on certain things. In response to the question asked by the noble Lord, Lord Hain, we have confirmed that when we bring forward the vote on the final deal we will ensure that this House is presented with the appropriate analysis the Government have done to make an informed decision, and we will take such steps as we can to facilitate scrutiny in the interim. But the particular reports and timetables suggested are arbitrary and may not in fact serve Parliament well.
The Government intend to secure a new partnership with the EU. We will legislate in accordance with that and nothing in this Bill threatens that. This Bill is designed only to prepare our statute book; it is agnostic as to the outcome of the negotiations and rules nothing in or out. We will legislate for the agreement reached with the EU in due course.
Finally, let me say something about the EEA and the amendments tabled in the name of the noble Lord, Lord Adonis, and the noble Baroness, Lady Ludford, concerning the EEA. Amendment 152, for example, seeks to make continued membership of the EEA one of the UK’s negotiating objectives, while Amendments 193 and 203 require a parliamentary vote on withdrawal from the EEA before making regulations under the power in Clause 9. Amendment 225 seeks to prevent notification of the UK’s withdrawal from the EEA agreement. On that specifically, our legal position remains unchanged. Article 127 does not need to be triggered for the agreement to cease to have effect.
My noble friend Lady McIntosh also asked about the EEA. In the absence of any further action, the European Economic Area agreement will no longer operate in respect of the UK when we leave the EU. However, as the Secretary of State has said, our existing international agreements should continue to apply during the proposed time-limited implementation period.
Will the Government publish the legal advice they have had in respect of that proposed procedure on withdrawal from the EEA?
The noble Lord knows the answer to that question.
We are not going to publish confidential legal advice. That has been the position of previous Governments, and it is the position of this Government. Our aim is to ensure continuity with international partners
No, I have given way to the noble Lord once. I have answered his question. I have referred to his points. If he will forgive me, I will make some progress.
If I can have silence, may I address the Chamber? It is important that this debate proceeds, even at this terminal stage of the first group of amendments, in a courteous manner. The Minister has been accommodating in taking interventions. He needs—
He has taken one intervention so far.
I think the Minister can use his own discretion about what he considers appropriate. I do not think noble Lords would disagree for one moment that we have had a very extensive debate on the first group.
If I may say so, the Minister has limited experience of this House. He may not be aware that in Committee it is reasonable for him to take interventions on points raised in the debate which have not been properly clarified by his reply. He is not allowed simply to come to that Dispatch Box, read out the brief he has been given and not respond to the debate. That is not acceptable practice in your Lordships’ House.
I responded to the noble Lord’s question about the legal advice and to the other points that have been raised. I will respond further in my forthcoming remarks.
My noble friend has been most gracious in replying to one part of my question, but not the other part about the status of regulations. He has now accepted that we will remain in the EEA for the duration of the implementation period. The precise content of my amendment relates to regulations passed and decisions agreed by the EEA before the end of the implementation period. What will the status of those regulations be?
I understand that the regulations of the EEA will continue during the implementation period. For the period after the implementation period we will seek to negotiate an ongoing relationship with the other three member states of the EEA. Our aim is to ensure continuity with international partners and the EU during the implementation phase and certainty for businesses and individuals. This approach will mean that we seek the continued application of the EEA agreement for the time-limited implementation period to ensure continuity in crucial elements of our trading and non-trading relationship with those three EEA states. Participation in the EEA agreement beyond the implementation period would not work for the UK. It would not deliver on the British people’s desire to have more direct control over decisions that affect their daily lives and it would mean accepting free movement of people. As I have said to my noble friend, once the implementation period ends we will no longer participate in the EEA agreement. We will instead seek to put in place new arrangements to maintain our relationships with those three countries: Norway, Iceland and Liechtenstein. I hope I have made the Government’s position clear, and I hope as a result the noble Lord, Lord Wigley, will feel able to withdraw the amendment.
There were a number of other questions, such as the one I raised on regulations, that are absolutely pertinent to the Bill. We will come later to how the regulations will be brought over and put into our law, and we will have debates on that on days three, four and five, I think. The question I asked the Minister specifically is: does he know about the work being done by Conservatives, along with Americans, to change regulations to assist a different form of trade? This is relevant to this Bill because we will be coming on to how we secure those regulations and their status in our law. I think the Minister’s understanding of those discussions is relevant today.
My Lords, there is a huge amount of work being done by various economists, lobby groups, institutions and think tanks on regulation and various agreements. I am not aware of the specific work the noble Baroness talks about. Of course I know some of the individuals she mentioned—they are good friends of mine—but I am not aware of all that work. Now she has mentioned it, I will go away and have a look at it. I am sure it is very good, but I cannot comment until I have seen it.
The Minister puzzled me slightly just then by saying that once the implementation phase—that piece of Orwellian language —is complete, the object will be to negotiate with the EEA partners of Norway, Iceland and Liechtenstein to preserve our present relationship, but that includes free movement.
With great respect to the noble Lord, I do not think I said that we would preserve the present relationship. We will want to establish a new relationship with those states. We have always had close and friendly relationships with them. Ultimately that will be a matter for the negotiations.
I do not feel that any of my questions were addressed. I apologise to the Committee, but I have to say to the Minister that he has not addressed whether he agrees with the estimate of the Secretaries of State about progress on trade deals. This is paramount information to understand what needs to happen in terms of customs union, single market and so on. I wonder whether my questions can be addressed.
My Lords, I thought we were here to discuss the Bill. We have spent three hours and 20 minutes debating so far, and I have listened very carefully to what everyone has said. I have sought to answer a lot of the questions where they were relevant to the contents of the Bill. The clause that we are debating repeals the European Communities Act. I understand that many Members want to raise concerns about the referendum, whether they thought the campaign was right or not and whether various people said various things or not, but I really do not think they are that relevant to the clause of the Bill that we are debating.
I apologise; I will make another attempt because I do not feel that I am making my questions understood. My questions are based on Amendments 191 and 206, and the purpose of the amendments is to seek answers so that we know whether we need to press them to a vote. My question is very clear: how is progress going? Does the Minister believe that the estimates given by the two Secretaries of State in the other place can be relied upon, and how are we getting on in terms of progress on the trade deal? This is paramount to understand what needs to go in the European Union (Withdrawal) Bill, and those amendments are before the House.
I am sure that the statements made by the Secretaries of State in the other place are true and valid and that they will be endeavouring to fulfil them. There will be further legislation, as we have said, on the withdrawal agreement and implementation Bill when we have sought and obtained agreement with the EU, and I am sure that further international trade Bills will follow in due course as well. However, that is not the subject of this legislation, as the noble Baroness well knows.
My Lords, the Minister was on his feet for just 12 minutes dealing with a debate that had taken over three hours. There are four sets of amendments here that deal with delegated powers. He has not addressed that issue at all in this debate but it is very much the focus of those amendments. That is a pretty shabby performance, actually, and this House is entitled to be extremely dissatisfied with the response that we have had. Further, we have had a big debate about the single market and the customs union but the Minister dismissed that in his opening comments. He said the Government were preparing themselves for a customs union-lite type of arrangement but failed to set out any details of what that might look like. This House deserves better explanations to its amendments than that, and I hope this does not give rise to an equally shabby performance on all the other amendments that we have to consider; there are over 300 of them.
I realise that. I apologise if the noble Lord is disappointed but I was trying to address what is actually in the Bill. As I said, further legislation will follow. We have spent three and a half hours so far debating one grouping of amendments, and we have eight further groupings to get through this evening on the timetable agreed by all the usual sources.
I am sorry to say this, but the amendments were taken by the Public Bill Office as being in scope. They are therefore relevant to the House.
My Lords, before the Minister finishes after the very short intervention that he has just made, I point out that he did not respond at all to the points made by noble Lords from around the Chamber about the Good Friday agreement. Would he give the view of the Government, since it appears to be in question at the moment, about the future of the agreement and whether he agrees with the former Secretary of State for Northern Ireland who said it had now served its purpose?
I am happy to clarify for the noble Lord that we remain completely committed to the Good Friday agreement.
My noble friend has been accused of not being very experienced. I point out to those Members opposite that we are in Committee but we have had three and a half hours of Second Reading speeches, not speeches on the amendments.
My Lords, since we have come to the end of this interesting debate, as the mover of the first amendment I thank everyone who has taken part in it. I have no doubt at all that the points that have been raised are relevant to the Bill, otherwise they would not have been accepted, and that the arguments in relation to those amendments are therefore equally pertinent and we are all entitled to have the Government’s response if they have one.
One thing that has come through loud and clear from the Minister’s statement is the fact that he regards this, yes, as a debate about the single market and the customs union rather than about the contents of Clause 1. Well, if it was mainly a debate about the customs union and the single market, as it was, the message that has come from this House is loud and clear: four out of five of those who have taken part in the debate want to see the countries of these islands remain part of the customs union and the single market. If the Government are not going to face up to that, we shall undoubtedly come back on Report with an amendment that can get support across this House, and the Government will then have to defend their case in another place. I beg leave to withdraw the amendment.
My Lords, I shall also speak to Amendment 3, which would leave out “on exit day” and insert,
“on a date to be determined in the Act of Parliament enacted for the purposes of section 9(1) of this Act”.
The first and crucial significance of the Bill is the repeal of the European Communities Act 1972, and a critical issue that noble Lords will wish to address themselves to is the date on which that happens. The provisions in the Bill in respect of that date are not straightforward. Clause 1 provides that the European Communities Act 1972 will be repealed “on exit day”. Clause 14(1) defines exit day as,
“29 March 2019 at 11.00 p.m.”,
but Clause 14(4) provides that,
“A Minister of the Crown may by regulations … amend the definition of ‘exit day’ in subsection (1) to ensure that the day and time specified in the definition are the day and time that the Treaties are to cease to apply to the United Kingdom”.
So exit day is set, but there is a provision for the Government to amend the date. However, my reading of subsection (4) is that a Minister of the Crown may only substitute one date with another date. He cannot suspend the operation of the Act entirely even if there is no agreement and it is in fact the intention of Her Majesty’s Government not to proceed with leaving the EU.
My first question to the Minister is: what is the Government’s understanding of the scope of Clause 14(4)? Is it only possible to substitute 29 March 2019 with another precise date under regulations or is it possible for the Government, by the exercise of the powers under Clause 14(4), to suspend the operation of the Act either indefinitely or in perpetuity? Secondly, in respect of the procedure under Clause 14(4), if the Government wish to change the date of 29 March 2019, what would that procedure be? I would be grateful if he could set it out so that we had it clearly established in Hansard, because I think it is an issue to which the House will wish to return in due course. The procedure for amending the exit date could be of crucial importance if the withdrawal agreement that the Prime Minister presents later this year or early next year leads, either by her intention or by a decision of Parliament, to a desire to extend the Article 50 period and apply for an extension beyond the end of March 2019.
I have those two specific questions for the Minister, but I wish to make a general point for this debate, about the concept of the exit day and the repeal of the European Communities Act 1972. It is clearly the case that Parliament needs to make provision for the substitution of the 12,000 regulations which have currently been made under the European Communities Act 1972, and there must be a procedure for those to be enshrined in United Kingdom law. There obviously needs to be a functioning statute book on 29 March 2019, or whenever the country leaves the European Union, and therefore there need to be procedures in place for that statute book to be fully in place by the end of March. We will have many debates in due course about what that procedure will be, how far it can be done by the Government making regulations and orders, how far it requires parliamentary consent and what the parliamentary procedure should be—all the issues which your Lordships will be familiar with under the broad heading of Henry VIII powers. We will have long debates on that question.
However, I do not think it reasonable for Parliament at this stage to give the Government a near-unilateral power to set the date of leaving the European Union when it is still not clear that it is the will of Parliament that we should leave the European Union. We have not seen the withdrawal agreement that the Prime Minister will negotiate or undergone the new procedure instituted by the amendments passed in the House of Commons, which will need to be followed before the withdrawal agreement is ratified by Parliament. As Parliament will itself make the decision on whether we leave when it can fully consider the terms which the Government have negotiated for leaving, it seems to me that the appropriate time to set the date under the Bill for repealing the European Communities Act 1972 is when Parliament agrees or does not agree to the withdrawal agreement that the Prime Minister has negotiated. To do it in advance in this Bill is a classic legislative case of putting the cart before the horse. The right time to set the date on which the European Communities Act will be repealed is surely when Parliament actually takes the decision and sets the date when it intends the treaty of withdrawal to take effect.
This is significant is because otherwise the danger is that we get into a convoluted and potentially destructive process in terms of relations between Parliament and the Government concerning the operation of the Bill when enacted with the withdrawal agreement. At the moment, the Bill stipulates that the European Communities Act 1972 will cease to have effect on 29 March 2019 or on some other date that a Minister may set. That process is set out in the Bill, but there will then be a withdrawal agreement that will set out the date, to be agreed by Parliament, when the treaties replacing our current European Union commitments will take effect. It seems to me and, I think, to other noble Lords much more straightforward, simpler, less confusing and possibly more conducive to harmony between Parliament and the Government for the decision on the date of the repeal of the European Communities Act to be taken at the same time as Parliament takes its decision on the treaties which will replace it.
These are probing amendments seeking the Minister’s guidance on the scope of Clause 14 (4), but I also wish to start a debate in Committee, which I think will probably continue into Report, on whether this is the appropriate piece of legislation for setting the date of departure from the European Union in respect of the repeal of the European Communities Act independently of Parliament reaching a decision on the withdrawal treaty. I beg to move.
My Lords, having added my name to the amendments in the name of my noble friend Lord Adonis, I want to explain that they are designed to give back to Parliament control of when the European Communities Act 1972 is repealed and to strengthen the effect of the amended Clause 9(1), which was designed to give Parliament a meaningful vote on the final terms of withdrawal and which required that a new statute be put in place before any regulations are made to implement the withdrawal agreement.
I do not need to remind your Lordships’ House that what is at stake is more than a matter of process or procedure. It is ultimately about whether either Parliament or a group of hard Brexiteers who are trying to manipulate the Government will decide the future of the people of this country. What is at stake is people’s jobs and standards of living, which depend on our trading relationships; the protection of labour rights and environmental standards; the alliances on which Britain’s future security depends; and the future of the Good Friday agreement, which has brought peace and stability to the island of Ireland for generations to come but is itself now under attack from assorted Brextremists—including, astonishingly and recklessly, a former Secretary of State, Owen Paterson, who should know a great deal better. It is reckless and downright dangerous to put Brexit dogma before peace and stability on the island of Ireland.
My Lords, the noble Lord concluded his remarks by saying, effectively, that it should be Parliament that decides the terms. I am wholeheartedly in favour of that. It is an essential part of representative democracy, by which I mean that Parliament, at the end of the day, should be in a position to determine whether the terms that have been negotiated are acceptable, whether the absence of terms is acceptable, whether no deal is acceptable or whether we should remain in the European Union. It is Parliament, not the Executive, that should make that decision.
The amendments that have been tabled by the noble Lords, Lord Adonis and Lord Hain—it is remarkable that I find myself in agreement with the noble Lord, having been in disagreement with him for, I suppose, 25 years or so—are absolutely right. Give Parliament the power to determine the exit date and you greatly reinforce the control that Parliament has as to the outcome.
My Lords, I want to make clear my unequivocal support for the last three speeches. The critical issue that my noble friend Lord Adonis raised on the interplay between the various clauses that deal with the timing and the possibilities of how that could go wrong and the points made by my noble friend Lord Hain and also the noble Viscount, Lord Hailsham, on the sovereignty of Parliament seem to me to be right at the very heart of what the whole process in this House is about. It is either about us assuming the responsibilities that we are supposed to have and display, or it is about giving Ministers what they have plainly wanted throughout, which is the ability to take decisions irrespective of what Parliament might wish. I hope that Ministers will not be tedious enough to get up and deny that this is what they have been trying to do. At every key stage of this process, whether in front of the Supreme Court or elsewhere, it has been essential to force out of the Government an understanding of the role of Parliament and that Parliament will not be set aside.
Like everybody else, I have of course thought hard about why anybody would put a hard date into a clause of a Bill of this kind. Why would you do it? The answer is that it is a party management issue—and only a party management issue. I am sure that many noble Lords on the Government’s side of the House will recognise that there are costs and disadvantages alongside what they might regard as advantages in taking the steps that they have taken. But the advantage they perceive—which seems to outweigh everything else—is that they can say with conviction to the people who are determined that we leave, crash out, or go any which way out of the European Union that they have set a hard date and have in some sense given certainty by virtue of that. I believe—and I think in this debate the House overall is likely to believe—that the complexities with which this country and this Parliament are faced in trying to deal with this absolutely massive constitutional, economic, security and every other kind of issue means that the setting of a hard date is about as arbitrary a thing as you could conceivably do in the circumstances.
In his response to the last debate, which I regret I found very limited, the noble Lord, Lord Callanan, said of a number of the amendments that they required reports to be made and the dates for many of those reports were arbitrary. There could scarcely be a more arbitrary date than this date, when almost nothing has been learned so far about the Government’s intentions and when there is absolutely no certainty that we will learn any more about those intentions. The fact is that setting a dates makes it more or less impossible to conceive of all the different elements being drawn together with sufficient coherence for any of us to exercise that final act of parliamentary authority that we have all been promised.
I recall just three, four or perhaps five weeks ago, the noble Lord, Lord Heseltine, spoke on industrial strategy. He made the telling point that, whenever we deal with people from other countries who have strong industrial strategies, strong industrial histories and a great deal of success in all those, we go about it believing that our native wit and wisdom is so superior to all of them that we can constantly get exactly what we want from them and they will never have a presentable argument to put to us. The noble Lord, Lord Heseltine, quite rightly said that if you look at the countries where we tend to take that view—Germany, Japan, China now and the United States—you come across people who are extremely competent at developing industries and strategies, who have views and will argue for those views and who may very well prevail. In this discussion about what future trade will be like, those arguments will be displayed with great ability and, I have no doubt, will not be the pushover that many on the Government Benches seem to think they will be.
I suspect that one argument that will be made about having a hard date is that it focuses negotiation and is a means of drawing a negotiation to some sort of conclusion. I have said before in your Lordships’ House—and I do not say it to cause offence—that my experience is that, by and large, politicians are not the best negotiators that you ever come across. Many of us have spent parts of our lives as trade union negotiators or general secretaries of trade unions, have done negotiation in government, in the Foreign Office—in my case—and so on or have spent a great deal of their lives negotiating in business and in industry. I say without any doubt in my mind that if I wanted to make my life more difficult in any negotiation, I would say, “Here is the deadline”, and let everybody else stretch me out across the rack that I had made for myself, because that would be the easiest thing that they could conceivably do—and they will do it. If you are in a position of enormous strength, I guess you could say, “Well, we have set a date, we are going to push everybody else along”. But if you are not in a position of enormous strength and if, peradventure, you are in a position of enormous weakness, everybody else will take the maximum possible advantage and they will succeed.
I have heard some of the comments made by others who have business experience, and I draw attention to my entries in the register as well. In business, I have never once seen the weaker party in a negotiation have any advantage out of a fixed deadline. If we ever needed to learn that in spades, we would look at what is happening in Northern Ireland now and the constant setting of deadlines—which has happened in the past—only to find that the people of violence, or the people who have been prepared to allow people of violence to push the envelope further, have always been those who took the greatest advantage of it and made it more or less impossible for anybody else to make real progress.
I hope that we will not trap ourselves in that way. These amendments give us a means of not trapping us in that way, and I urge all noble Lords to give us the best chance we can have, rather than the worst.
My Lords, I do not wish to emulate either the forensic skill or the eloquence of those who have already contributed to the debate but rather ask the Minister a very specific question. He will be aware that in Clause 14—the interpretation clause—there is a specific reference to exit day, which is spelled out in subsection (4):
“A Minister of the Crown may by regulations—
(a) amend the definition of ‘exit day’ in subsection (1) to ensure that the day and time specified in the definition are the day and time that the Treaties are to cease to apply to the United Kingdom, and
(b) amend subsection (2) in consequence of any such amendment”.
As the noble Lord, Lord Hain, said, that is secondary legislation. The Minister will be only too well aware that the Delegated Powers and Regulatory Reform Committee, on which I serve on behalf of your Lordships’ House, is already very critical of the number of powers that Ministers are taking under this Bill, not least because it sets a precedent for powers that will be expected by Ministers under subsequent Bills in the series that relate to Brexit. Therefore, it is important for your Lordships’ House to be told very clearly at this stage by what process the Government intend to put that secondary legislation before the two Houses of Parliament. Will it be by the negative resolution, the affirmative resolution or, indeed, the super-affirmative resolution, as that completely changes the way in which Parliament will be able to exert its control, as noble Lords have suggested? If the process is to be undertaken by negative resolution, that is very limited and the powers of the two Houses of Parliament would be so undermined as to be laughable. If it is to be done by the affirmative resolution, there is more opportunity for discussion and either House can decide what should be done in those circumstances. However, I suspect we will be told that this has to be done with such speed that it will have to be done by an accelerated process, which will inevitably mean that there is no proper opportunity for either House to decide whether we agree with this process.
The super-affirmative process may well be selected. The Minister may be better informed than most Ministers on the Government Front Bench but I defy him to spell out to the House this evening which of these options will be put in place. This is of critical importance. We should not just sweep away this opportunity to take this decision. As all noble Lords who have spoken in this debate have said, it is an extremely important one which will colour the views of your Lordships’ House when we look at some of the other powers that Ministers seek to take under the Bill. Again, I refer to the recommendations of the Delegated Powers and Regulatory Reform Committee. If we really are taking back control, here is an early opportunity for the Government to show who exactly is taking back control.
My Lords, I am somewhat confused by this debate because it has been suggested that the Government have taken a hard line in saying that a decision should be reached on our future relationship with the EU by 29 March next year. It is not the Government’s date; it is the Article 50 date as drafted—as the noble Lord, Lord Hain, acknowledged —by the noble Lord, Lord Kerr of Kinlochard, one afternoon in his garden in Brussels, when he decided that it should be two years from the moment when Article 50 was moved. Therefore, it is not our date, it is the EU’s date, or, more precisely, the date of the noble Lord, Lord Kerr. I do not quite know why we are now saying that somehow this is the Government taking a hard line. When the House of Commons voted by an overwhelming majority to move Article 50, surely that was on the understanding that the negotiations would be completed in two years from when it was moved. Therefore, we now seem to want to go against the other place and tell it that it has decided on the wrong date.
On top of that, the EU has made it clear that it wants the negotiations to be completed not by 29 March 2019 but by October or November this year, so it is bringing the date forward. I do not accept the remarks of the noble Lord, Lord Triesman, on deadlines. Perhaps he found deadlines inconvenient when he was a trade union negotiator, but it strikes me that they are the only thing which works when you are negotiating with the EU, and that everything seems to be decided at the last minute. It is important that we keep to 29 March next year and I would be very unhappy if that were changed.
My Lords, we have heard some excellent speeches on these amendments. I particularly commend the brilliant analysis of my noble friend Lord Hain and the very penetrating questions asked by him and my noble friend Lord Triesman. I hope that those questions receive a serious response from the Government at the end of the debate on this group of amendments, and that they receive the clear and authoritative answers which Parliament deserves.
I wish to speak briefly about the transition or implementation phase, however you want to describe it, which emerges very much from the issues addressed by these two amendments. I am deeply worried about the way these negotiations are going. The Government seem very muddled in their own mind and have a completely false appreciation of the situation they confront. I will explain why I think those two provisions apply in a moment. There are surely just three logical possibilities. One is that we do not have a transition phase at all and go straight from the present regime of full membership of the EU to some future but permanent post-Brexit arrangement. Another possibility is that we have a special so-called bespoke intermediate regime between full membership of the Union and whatever ensues on a long-term basis in our relations with the EU. The third possibility is what we have by way of a transition period—namely, that we continue with the present regime until after agreement has been reached on the future regime and continue with it for some time—I hope at least a year or two—to give businesses the maximum amount of time to adapt to what they will know at that point is the new regime that is coming.
The first of those possibilities—that we have no transition at all—is rightly regarded, I think on both sides of the House and certainly throughout commerce and industry, as a disastrous prospect which would involve immense risks and costs for our businesses, quite unnecessarily so if a suitable alternative is available. I think there is general agreement on that. I would hope there would be agreement that the sensible thing to do is to choose the third option and continue with the present regime for some years after full detailed agreement is reached on its successor, so there is time for adaptation by everybody concerned. That seems to me thoroughly sensible. Unfortunately, I am told that that has been vetoed by the Eurosceptics in the Tory party. We know that Mrs May is very much under the heel of Mr Johnson and Mr Gove and is terrified that someone is going to send 41, 47 or 48 letters to Sir Graham Brady, and does not know how many have already been written. In these circumstances, she cannot move on that. She cannot accept that because, apparently, the Eurosceptics think that is an extension of our membership of the EU and they do not like it on symbolic grounds. I may misunderstand the situation but I am told on good authority that that is the position, so what might seem the most rational and sensible answer to this problem, which would certainly get strong approval from both sides of this House, is excluded for party political reasons.
Therefore, we confront what appears to be the Government’s preference at the moment, which is the second possibility: the bespoke regime. I say that the Government are in contradiction with themselves, which they certainly are, because while that arrangement is supposed to reduce risks for business and industry, it actually doubles them. It has already been pointed out by my noble friend Lord Hain that under those circumstances there would be two future regimes for business to go through. There would be two thresholds into that new regime rather than one or two cliff edges in that context, to use that cliché which everybody seems to be so fond of at present. That is a serious matter: a Government who are in contradiction with themselves.
The second problem I have is that the Government clearly seem to have misunderstood the position of their counterparties in these negotiations and, once again, to have been quite excessively euphoric about the impact of any proposals that they would make on their negotiating partners. In short, they are overreaching themselves. That is of course again a worrying situation when you go into any kind of negotiation. I say that because it is inconceivable that our continental partners would agree to have some bespoke intermediate regime; it would be quite extraordinary if they did. It would mean that any member of the European Union could issue notice under Article 50 and immediately negotiate some special bespoke arrangement, maximising, presumably, its own benefits and minimising its own costs at the expense of other members of the Union, quite contrary to the whole purposes of the Union. Therefore I cannot believe that very intelligent and competent people, which the European Commission and leaders of our partner nations certainly are, would go down that road for a moment. That leaves a strong possibility that the Government will find that they have a rough time ahead of them.
I suppose that you can go into a negotiation with a self-contradictory proposal, although that is rather a handicap and not a good augury for the success of the outcome, and you can go into a negotiation making a fundamental misjudgment about the objective situation in which you find yourself. However, to do both is clearly to be at a considerable handicap. I fear that these negotiations will not result at all in a favourable outcome in this country and that there will be a lot of gnashing of teeth, shedding of tears and, no doubt, shouting and imprecations of all kinds. The Government will no doubt say that it is all very unfair, everyone is being beastly to them and that it is not their fault, and there will be a mixture of paranoid self-pity and nationalist demagoguery, which the Tory party seems, sadly, very often to fall victim to. That will be a sad day if it happens to this country. I hope that it can be avoided, that my analysis is wrong and that the Minister will explain to me exactly why it is wrong.
My Lords, the noble Lord opposite who just spoke constantly makes disparaging references to members of the Conservative Party. I suggest that he might have been better informed about what happens inside the Conservative Party if he had remained a member. I do not consider him a great authority on the subject.
I would also like to deal with a canard which I find offensive and which I hope will not colour the next 10 days of debate. This is this business about people who favour Brexit wanting to repudiate the Good Friday agreement. The noble Baroness, Lady Kennedy of The Shaws, spoke with great passion on the subject, and I agreed with a great deal of what she said, certainly in the emotional content. She referred also to the cases she had taken which involved people in the Brighton case. Some of us were at Brighton on that day and many of us have lived with the consequences of the terrible events that took place and are passionately attached to the peace process and what happened in Northern Ireland. I am very proud that I served under a Prime Minister who had the courage to start the process that led to the peace agreement, Mr John Major. This false syllogism—it is the worst kind—which says, “Somebody who favours Brexit said that we might move away from the Good Friday agreement; therefore, every Conservative who favours Brexit is against the Good Friday agreement” is one that I find evil and offensive, and I hope it will be dropped. Those who express that view can answer for it, but I do not share it and I do not think that many on this side do.
Those are general points; the noble Lord, Lord Davies, took the debate a little wider, but I thought that, admirably, this debate had focused on a precise subject, which was raised clearly and forensically by the noble Lord, Lord Adonis, and by the noble Lords, Lord Hain and Lord Triesman, which is how we deal with this question of a date. The problem of the date is that exit day for the purpose of the Bill—it is in the Bill, although I note that there are now amendments to these clauses—is mentioned in Clauses 2(1) and 3(2)(a), which define laws which are retained as those which are in effect “immediately before exit day”. If exit day were not on the same day as the Article 50 date, as my noble friend Lord Hamilton of Epsom said, there would potentially be confusion. You would have a position where the UK had left the European Union but it was not clear what would happen with regard to retained law. This would create the very kind of uncertainty that noble Lords opposite say they wish to avoid. Therefore those two things have to march in parallel.
Here we come to the crux of the real argument behind these amendments and suggestions, which is that we should not leave so quickly as 29 March 2019; we should delay the matter; we should delay the implementation and extend the Article 50 period. As the noble Lord, Lord Kerr, said in one of our recent debates, we might want to be members again and might come back to reapply. In the first place, as has been pointed out in this debate, those things would require unanimity on the other side, and in the second place it would require legislation in this House and an Act of Parliament, as the Gina Miller case suggested. The reality is that we would have an Act of Parliament if we were taking the thing further down; we are already having an Act of Parliament on the withdrawal agreement. The two things have to march in parallel. At the moment that date is set, accepted and understood in this Parliament and across Europe as 29 March 2019.
This is an Act of Parliament, so if Parliament wanted to define a date—we may not like the date of 29 March 2019, but it is the one in the process that has been set in motion—it would be legitimate. I do not particularly care for the amendment that was put in in the House of Commons—at the last minute in Committee, as someone pointed out—to give a power to the Secretary of State, but that is what the House of Commons has sent us. If that needs to be dealt with, deal with that question directly: ask the House of Lords. But do not decouple the date in the law from the date that is working in Article 50. That would create uncertainty and difficulty. It does not require a further Act of Parliament to set the exit day because this is an Act of Parliament; the Bill has already been approved by the other place and it is already there—we can just do it.
However, of course that is not the course that is being taken, because both these amendments seek to strike out the phrase “on exit day”. The noble Lord, Lord Adonis, has got out his dandelion clock—you used to blow on it when you wondered whether you would ever have a girlfriend, when you first came to be aware of those things. “This year, next year, sometime, never”, was it not? Many of the British people rather thought in 2016 that it might be this year. It has now been two years; many people in this House would agree that we have not got that far in two years, which is a bit disappointing, but it will not be this year. At least the Bill says that it will be next year: 29 March 2019. But along comes the noble Lord, Lord, Adonis, and—next year? No. It is now sometime. His amendment gives the impression that it will be on a date to be determined sometime, but we know that he means “never”. I know, the House knows, and the noble Lord, Lord Adonis, knows, that he would never vote for any exit day to be voted for by this Parliament.
Therefore we should not support a dandelion clock amendment. If we want to deal with the Secretary of State issue, that is a separate debate, but let us not create new and unnecessary uncertainty by removing the date and uncoupling the exit day and the Article 50 day.
I should like to respond briefly to what the noble Lord, Lord True, has said. He refers to the Article 50 date. Without deciding where we wanted to go, we chose to send in an Article 50 declaration on 29 March. That meant that we chose when the clock would start ticking. That is my answer to the noble Lord, Lord Hamilton—like Nelson, I cannot resist provocation from a Hamilton. However, there is not a single Article 50 date. There is provision in the article for the possibility of an extension and there is also provision for the exit date to be after the two-year period. If you read the article carefully, you will see that you are out after two years or when the withdrawal agreement comes into effect, so there is the possibility of a post-dated cheque.
In my view, the noble Lord, Lord Triesman, is exactly right. Flexibility in negotiation is extremely important. Giving yourself deadlines is crazy, as is surrounding yourself with red lines. The reading of Article 50 by the noble Lord, Lord Hain, is, in my humble view, completely correct. However, the big point in this debate is not that; it is the question of who takes back control. Who decides? Is it the Executive or the legislature? So the point raised by the noble Lord, Lord Tyler, is extremely important.
I end by saying that I warmly welcome what the noble Lord, Lord True, said about the Good Friday agreement and the Belfast treaty of 1998, and in particular what he said about Prime Minister Major. To someone like me who was an observer at the time, it is completely correct. I remember when the leader of the Opposition, Mr Blair, went to Washington when I was the ambassador there. He was asked about Northern Ireland and what he would do if he became Prime Minister. His reply at my dinner table to assorted Senators and the Vice-President was that he would try to do exactly what John Major had tried to do and he would be very pleased if he could do it half as well. It is very good to hear that the solid voice of the Conservative Party is not that of the Patersons and Hannans but is in favour of retaining all the good work done by the Conservative Government and then by Mr Blair’s Government in that astonishing first year.
If the House of Commons voted by an overwhelming majority to move Article 50, surely that was done on the understanding that the negotiations would be completed in two years. If the date was to be changed, surely that would need a vote in the other place.
Perhaps I may ask a question for elucidation—I may have missed something. The noble Lord, Lord Adonis, and others have spoken as though Parliament is not to be consulted by the Minister making the order. However, paragraph 10 of Schedule 7 states:
“A statutory instrument containing regulations under section 14(4) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament”.
It may not be sufficient scrutiny, but there is scrutiny—Parliament is not being completely bypassed.
I would like to offer an addendum to what the noble Lord has said. In a way, it is a response to my noble friend Lord True. All those who feel as passionately as he and I clearly do about the Good Friday agreement—I think that it would be slightly unsavoury to try to compare who did what about that agreement, and I am glad to see that my noble friend agrees with that—can later support the amendment to the Bill which will write the Good Friday agreement on to the face of the Bill. I look forward to having the support of my noble friends Lord True and Lord Hamilton and others when that amendment comes before the House. Perhaps even some of the duty Privy Council Brexiteers on their Bench down there will be able to support it too.
Perhaps I may ask the noble Lord, Lord Kerr—the supreme oracle on Article 50—a question which, again, I think will be important for our deliberations later on. An extension of the Article 50 period requires unanimity in the Council. However, if Her Majesty’s Government wished to extend Article 50 for the purposes of holding a referendum, or conceivably for a parliamentary vote, thus completing our established constitutional procedures, would the Council recognise that automatically because it recognises the domestic procedures of member states when it comes to the ratification of agreements?
I would like to follow that up with a relevant question to the noble Lord, Lord Kerr. I agree with all the excellent speeches in favour of this amendment. To me, the politics of the amendment is the question of whether, when exit day is discussed, Parliament knows what it is exiting to. That is the question. If Parliament does not know what it is exiting to, surely the logic is that the date should be extended until it does.
Along with my noble friend Lady Kennedy, I have recently been on Select Committee visits to Brussels, and she can confirm that there is much uncertainty about what information will be available to Parliament in the autumn of this year. If things go well, we might have a withdrawal agreement and a transition period, but the only thing on the future relationship that we will have is a political declaration. There is no question at all of there being a trade agreement when Parliament votes; it will be a political declaration. The European people to whom we talked said that they wanted that to be clear and precise. However, at the same time, people said to us, “We think that possibly your Government might quite like to get away with a fudge”. Why should Parliament be put in the position of taking this crucial decision when all the British Government are offering is a fudge?
To respond simply to the noble Lord, Lord Adonis, it would be a political issue, not a legal or a treaty issue. My view has only the same weight as anybody else’s, but I would say that if one sought an extension in order to carry on a negotiation, it would be very doubtful that one would get it. However, if one sought an extension because Parliament had decided that the terms of the deal available were such that they should be put to the country at large in a second referendum, I am convinced that that request for an extension would be granted.
It is very interesting that the noble Lord, Lord Adonis, has added a fifth element to the dandelion clock: this year, next year, sometime, never, and a second referendum. The idea of a second referendum is spreading across the Committee. However, returning to the point that the noble Lord, Lord Kerr, made, I was taken up for using a phrase as a lay man, just as my physics teacher used to take me up for not really understanding “light”. When I talk about an Article 50 date, it is the date that flows as a consequence of the article and the decision that Parliament has taken by an overwhelming majority, as my noble friend Lord Hamilton said. The date of 29 March is the date that everybody, from Monsieur Barnier to everyone else, is working to. Therefore, in lay man’s terms, that is what I mean by the date which would have to be changed, and I submit it would have to be changed in tandem. That is why I oppose moving “exit day” and the date out of the Bill.
My Lords, this issue is linked to those under Clauses 9 and 14 about the withdrawal agreement and the exit day in that context. No doubt we will come back to some of these issues, because they are all interlinked and it is quite difficult to get a holistic view. The noble Lord, Lord Liddle, is quite right: one key issue is what we are going to be exiting to. Flexibility is one thing but an excess of uncertainty is another—particularly, as my noble friend Lord Tyler said, when it is coupled with ministerial discretion.
We have the exit date, we have the date when the treaties cease to apply, and we can add on the layer of what is going to be in the transition terms—I have not had time to read the Government’s proposal today. We also have the question about whether Article 50 might be extended, and the question of whether Parliament might want to put the deal to the citizens for a final say. There is also the question of the post-dated cheque. So, all in all, they went all round the houses in the other place—no fixed date, then an attempt to fix it, then a date movable by Ministers. In all this brew, the amendments raise a very reasonable point about Parliament being in the driving seat—something that has been the theme of so many of our debates in the last year and a half.
We have no idea exactly what being subject to EU law, or even respecting the remit of the ECJ, whatever that will turn out to mean, during transition and even in the longer term—because that was the implication of the Prime Minister’s speech on Saturday—means. That sits uncomfortably with the Bill as a whole, and especially with the specification of exit day. We are being asked to fall into a black hole and trust Ministers to get it right—which on current experience is not a very wise thing to do.
The amendments have been described as probing, but answers from the Government—I am sure that the Minister is about to give very precise answers—will be very helpful to our understanding of how the jigsaw will fit together. At the moment it all looks far too uncertain for anyone to be comfortable.
My first question to the Minister is: why did the Government slot in the calendar date at Committee stage, when that was never foreseen in the original Bill? Was it for some good legislative reason, or was it, as my noble friend Lord Hain suggested, to satisfy a certain hard Brexit group of MPs sitting on the Prime Minister’s shoulder, rather like the 60 who have been writing her helpful letters today? It certainly looks as if this was more to do with party management, in the words of the noble Lord, Lord Triesman, than being in the national interest, which we have been advised should control everything we do.
Secondly, I ask the Minister to comment on the point discussed a few moments ago—the exact wording of Article 50. The Bill as it stands would allow the date specified to be extended in exceptional circumstances, but this probably deals only with the possibility of an extension to Article 50, which, as the noble Lord, Lord Kerr, has said, provides:
“The Treaties shall cease to apply to the State in question”—
that is us—
“from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification … unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.”
The date could be amended in accordance with what is in the withdrawal agreement. We indeed might come to an agreement that, for some other reason, chooses an earlier or a later date. Or we might want to amend the date if the withdrawal agreement were not finalised. On the evidence of negotiations so far, it is quite unlikely that this divided Government, seeking to negotiate something which, I have to say in all fairness to them, has never been undertaken before, will keep to their timetable. They should therefore want the flexibility.
There is another issue. Even if we had a deal, what would happen if the European Parliament voted it down? I understand that that vote could be as late as one year from now; it could be as late as February 2019. And the European Parliament has the right to vote any deal down. Guy Verhofstadt told Andrew Marr at the weekend that a thumbs down from the European Parliament meant exit with no deal. So if in a year’s time the Parliament were to vote a deal down, I assume that we would be out a month later, on WTO terms with no transition deal, which would also mean no safeguards for EU citizens—either ours living in EU countries or theirs living here. I do not think that the European Parliament would do that, but my judgment is that if it did, the 27—or indeed the 28, with our Government as well—would speedily get themselves into a room and row back from that. I cannot imagine that we, or they, would want to be in that position. Again, that would mean a change in the date, so the flexibility needs to be there.
I am sorry to disappoint the noble Baroness, but we will be having a number of Brexit Bills, not least of which will be the withdrawal agreement and the implementation Bill, once we have reached agreement. I shall endeavour to respond to all the questions that I have been asked.
Repealing the European Communities Act is an important step to ensure that there is maximum clarity on the law that will apply in the UK after we leave the EU. I cannot see the sense in needing a separate Act to repeal the European Communities Act. This repeal in Clause 1 is front and centre of the Bill; indeed, this Bill was originally called the great repeal Bill. To prevent this Bill from repealing the European Communities Act would undermine perhaps the most important part of it.
I suspect that I have read the intention of the noble Lord, Lord Adonis, correctly when I say that he would prefer the European Communities Act to be repealed in the withdrawal agreement and implementation Bill that was announced by the Secretary of State in November. That Bill would then deal with the implementation period and our relationship to EU law during that period. This may be founded on the misconception that, if Parliament does not repeal the European Communities Act and appoint an exit day, that will somehow prevent the UK exiting the EU. If that is the case, I am sorry that I have to disappoint the noble Lord: our leaving the EU is a matter of international law, and we are leaving no matter what is or is not done to the European Communities Act.
I will address the noble Lord’s question about exit day and procedure. What will become Section 14(4)—currently Clause 14(4)—could be used to change the exit day in the Bill only if the Article 50 period were to be extended; it could not be used to prevent us leaving the EU. That is a matter of international rather than domestic law. The exercise of Section 14(4) to alter the exit day in domestic law in accordance with Article 50 would be subject—in answer to the noble Lord, Lord Tyler—to the affirmative procedure in both Houses. I will give more detail on that in a minute. We do not expect to use this power and we are leaving the EU on 29 March 2019.
The noble Lord, Lord Hain, and the noble Baroness, Lady Hayter, asked further questions about our exit day and the amendment. In the other place we tabled an amendment which set exit day in order to provide certainty and clarity, and we accepted further amendments on the issue, again to provide further clarity. The amendments set the exit day in the Bill as 11 pm on 29 March 2019, while retaining the technical ability to amend the date at a later stage. As I said, that can happen only if the European Council—including the UK, of course—unanimously decides to change the date on which the treaties cease to apply to the UK, as set out in the famous Article 50. We do not intend this to happen.
I will give the noble Lord, Lord Tyler, more detail on his point. Any change to exit day in domestic law under the power of what will become Section 14(4) will be by the affirmative procedure, guaranteeing a vote in both Houses. The affirmative procedure in this instance is provided for in paragraph 10 of Schedule 7.
Providing for the date of the repeal of the 1972 Act in the Bill that implements our withdrawal agreement might seem tidy in certain scenarios, but it would put the legislative cart before the diplomatic horse in what I feel would be quite a dangerous way. Both the withdrawal agreement and the implementation period are, of course, still matters for negotiation. This Bill, being agnostic on the negotiations, is designed to prepare the statute book for our withdrawal. I say to the noble Baroness, Lady Hayter, that there will be additional legislation to implement our withdrawal agreement. As I said a moment ago, this Bill is designed to implement the clearly expressed will of the British people to leave the EU, and therefore the date of repeal is set at the point that the UK will fall out of the Treaty on European Union and the Treaty on the Functioning of the European Union.
There are many demands on parliamentary time, as we know to our cost, and this is the Bill that will prepare our statute book for exit. The amendment would force the date of repeal into the agenda of another Bill. This is the right time and place for the debate on the repeal of the ECA, and the debate should incorporate all the additional context and provisions necessary for a smooth exit. Indeed, if we did not reach an agreement and the second of the noble Lord’s amendments were agreed, we would be in a state almost of paradox. To repeal the ECA, the Government would be compelled to enact a statute for the purposes of Clause 9(1) of the Bill— a clause which itself is predicated on the existence of a withdrawal agreement. So we would be forced to enact a statute enabling us to approve the final terms of the withdrawal agreement and set the date of the repeal of the European Communities Act without such a withdrawal agreement existing. That is too much of a logical conundrum to ask any Bill to bear, and not an acceptable way to go about legislating.
Clause 1 will provide certainty to businesses and individuals that the European Communities Act will be repealed on exit day. Any attempt to change this while negotiations are ongoing would lead only to a lack of clarity on the law that will apply in the UK after we leave the EU. This would run counter to the primary aim of the Bill, so I hope that the noble Lord will be willing to withdraw his amendment.
I am grateful to the Minister for seeking to clarify the point about process, and I take on board what he said about paragraph 10 of Schedule 7. But will he give an absolute undertaking to the Committee that there will be no attempt to accelerate the process? I think he would accept that, if the Minister in this case were seeking to do something at speed, for expediency’s sake—surely that would be the only circumstance in which it would be necessary to change the date—it would be extremely difficult to give both Houses of Parliament advance notice and the usual time for consultation. Is the Minister giving us an absolute undertaking that the normal process and timescale will apply and that there will be no attempt to accelerate the process?
Yes, I am giving the noble Lord an assurance that the normal timescale of the affirmative procedure for statutory instruments would apply in this case.
My Lords, I am very grateful to the Minister and to all noble Lords who have spoken. We will need to study the Minister’s statements with care before we decide what course to take on Report.
If I may, I will echo the remarks of the noble Lords, Lord True and Lord Patten, about the Good Friday agreement. I fully recognise the huge contribution made by many noble Lords on all sides of the House in negotiating and taking forward the Good Friday agreement. I was very reassured indeed to hear from the noble Lord, Lord True, who from my experience of him in this House I take to be on the right of the Conservative Party, that not all of those on the right of the Conservative Party are turning against the Good Friday agreement. I take that to be a commendable statement, and hope that he manages to persuade his colleagues, including former Ministers, who are starting to call for an end to the Good Friday agreement that that is not an appropriate course. I beg leave to withdraw the amendment.
Committee (1st Day)
Relevant documents: 12th Report from the Delegated Powers Committee, 9th Report from the Constitution Committee
Clause 1: Repeal of the European Communities Act 1972
1: Clause 1, page 1, line 3, at beginning insert “Subject to subsections (2) and (3),”
Only last Friday, I met people involved in the mussel industry in the Menai Strait. They told me that their main market is on the continent and that they need to ensure that their produce reaches the processors in France within 14 hours. If it does not, the quality will suffer and in due course that will undermine the market. Having physical customs borders at Dover, delaying shipments for, say, 12 hours, could kill their business. Another example in my old constituency involves a company making diagnostic medical products. It prides itself on its claim that any order it receives before noon today can reach its destination within the EU before tomorrow evening. It depends on frictionless movement by road to reach many of these destinations. Time is of the essence. It can sometimes be a matter of life and death. Our withdrawal from the customs union with our European partners would not lead to the closure of that factory, but it would certainly lead to the global parent company thinking carefully before making new investments in the UK.
Thirdly, there is the position of our hill farmers, both in Wales and in other parts of the UK. Currently, 90% of their exports go tariff free to continental European markets. If we have no customs agreement, their products could be subject to a levy of up to 70%. That would kill off the industry overnight. It is examples such as these which make it essential that such produce from the UK has unfettered, tariff-free access to European markets in future.
No doubt to assuage the phalanx of extreme Brexiters whom she has in her Cabinet, Mrs May is rejecting our current customs union. She would rather that we faced the massive uncertainties of the World Trade Organization agreement than even consider leaving the EU on terms similar to those enjoyed by Norway. Earlier this month, some of us were fortunate enough to hear the president of the CBI spell out in no uncertain terms that his members need such an agreement and that the Government must clarify where they stand on these objectives. The amendments address these issues.
Amendment 6 would require the Secretary of State to lay before Parliament a report outlining the Government’s assessment of the effect on the UK economy of our withdrawal from the single market and the customs union. Bits and pieces of the Government’s assessment have been dribbling out into the public domain, but we need a comprehensive report, sector by sector, region by region and year on year. This surely must have been undertaken by the Government. They could not possibly be taking such a massive step that potentially dislocates our trade with our biggest trading partner without first having undertaken such a comprehensive analysis. Could they?
Amendment 7 would require it to be written on the face of the Bill that the Government come clean about the UK having a negotiating objective of securing a withdrawal agreement which maintains the same trading rights and access with the EU for UK businesses as are provided by the UK’s membership of the European Union.
The Committee may be aware that, a year ago, the Welsh Government published a White Paper with cross-party support that acknowledged the significance to Wales of our EU trade and called for single market participation. On Monday this week, a report was drawn up by the Welsh Government’s energy, planning and rural affairs sub-working group. Its findings are staggering. Food prices are set to rise, especially for people on low incomes. The UK would operate under World Trade Organization rules that could be hugely disruptive for Welsh meat and fish producers. Land sector tariffs of anything over 20% could cause market collapse. WTO rules would cause considerable disruption for beef exports, and Welsh fishing would collapse, with devastating implications for shellfish production. The report concluded that evidence is piling up in favour of a Brexit deal which strays as little as possible from the status quo and that access to the EU single market would result in the least change for farms and within supply chains. Leaving the single market and the customs union would wipe £5 billion off the Welsh economy, and families, businesses and famers will pay the price with tumbling wages and a soaring cost of living.
If the Welsh Government can generate such a report, why on earth cannot the UK Government—or have they in fact produced such a report and realise that to publish it would be devastating? The leaked UK Brexit analysis published by BuzzFeed shows that, under the three most plausible Brexit scenarios based on existing EU arrangements, there is no scenario that does not leave the UK worse off. My party, Plaid Cymru, will seek to force a vote in the Assembly next week on maintaining our membership of the single market and customs union, but of course what happens in this Chamber and next door matters in this context. The issue will not disappear.
I will not address the Irish question, because I realise that time is pressing, but we will no doubt return to that and its great significance in the context of maintaining the customs union.
I will briefly refer to the other four amendments which stand in my name in this group. First, Amendment 89, which is also sponsored by the noble Baroness, Lady Kramer, and the noble Lords, Lord Fox and Lord Dykes, aims to prevent the UK Government bringing forward regulations that would weaken, remove or replace any requirement of law which is in effect in the United Kingdom immediately before exit day which was a requirement up to the exit day of the UK’s membership of the EU single market and customs union. Essentially, this amendment would prevent the UK diverging from the frameworks which underpin our membership of the EU single market and customs union, and by inserting this safeguard we would help to ensure that businesses in the UK can continue to trade freely with our closest neighbours.
Amendment 162, which the noble Lord, Lord Hain, has also sponsored, is similar to Amendment 6 in that it would require the Chancellor of the Exchequer to lay an assessment of the impact of leaving the EU single market and customs union on the level of GDP growth before making any regulations to implement the withdrawal agreement. Crucially, these assessments would include specific assessments for Wales, Scotland, Northern Ireland and England.
Amendment 189, which is also sponsored by the noble Lords, Lord Hain and Lord Judd, was submitted to the House of Commons by a cross-party group, which included the Westminster leaders of the Liberal Democrats, the SNP and the Greens, as well as Plaid Cymru. That amendment demonstrates the growing willingness of parties to work together formally to withstand the worst effects of Brexit. It restricts the Ministers of the Crown from being able to make regulations implementing the withdrawal agreement unless the Secretary of State has signed an agreement with the EU that the UK will remain a full member of the EU single market and customs union—arguments I have already made.
Finally, the proposed new clause in Amendment 197, which is also supported by the noble Lords, Lord Warner and Lord Hain, would require the UK Government to commit to adopting the principle of participation in the single market and customs union. As a negotiating objective, it would require the UK Government to secure the same rights, freedoms and access available to the UK as exist through our membership of the EU. This is the position adopted by the Welsh Government’s White Paper.
As always, these amendments tabled in Committee are probing amendments which seek to clarify the Government’s thinking on these key matters. In the event that the Government do not provide us with satisfactory answers, I shall certainly return to these matters on Report with amendments along these or similar lines which can be voted into the Bill to enable MPs to give further consideration to these vital issues—which are matters of life and death for so many companies, businesses and families in these islands. I beg to move.
The noble Lord, Lord Wigley, touched on other issues, and I shall not repeat them, but I question the size of the market that we are giving up—505 million existing consumers—for these so-called new markets, which are as yet unidentified. Vietnam, for example, is a market to which we could export more meat and other foodstuffs, but Vietnam is not of a size commensurate with the market of 505 million consumers that we are wilfully giving up.
This is clearly a probing amendment. I seek clarification of the future status of our existing membership of the European Economic Area. Does it cease automatically with our leaving the European Union, or do we need a separate Bill to consider how to extricate ourselves from it? I think something that all of us—in the Committee, in the House and across Parliament—can unite around is the idea that an alternative to leaving the single market and the customs union could be either our continuing membership of the European Economic Area or applying to join EFTA.
I am seeking reassurance that either we will confirm today what our future relationship with the EEA will be, and whether we will remain members of it, or whether we intend to adopt the instruments that have currently been adopted through our existing membership of the EEA and through the EU, with other EFTA countries. Perhaps the most difficult unresolved issue of leaving the customs union is, as I have already identified and set out in speaking to the amendment, the fact that we will not be in the customs union—as the Government have clearly stated that we shall take back control of our customs borders—and that will intrinsically lead to potential disputes with our existing European partners and other third countries, of which we will be one. Can the Minister tell us, in replying to the debate, precisely what dispute resolution mechanism the Government have in mind in these circumstances?
Let us take China. Of course, it is a very nice idea to have a free trade agreement with China but does the Committee seriously think that the Chinese would accept and sign a free trade agreement which provided for the continuation of quotas on Chinese steel exports? Can the Committee seriously imagine that the Chinese would allow such a precedent to be created? Can the Committee possibly imagine that the Chinese are so far away from their reputation of being concerned with face that they would ever accept an unequal treaty of that kind? Of course not. On the other hand, if we were to sign such an agreement and accept that Chinese steel quotas should be abolished, what is the future then of Port Talbot? What is the future of the British steel industry? We know that and we know that the Government have given an undertaking to the people of Port Talbot that they will not abolish the quotas on Chinese steel exports. There is a fundamental contradiction there. The Government have been completely unclear about it. I could use a less parliamentary term than “unclear”; they have really attempted to obfuscate this issue.
Let us take India. India is another apparent great prize but Mr Modi has said quite seriously that the first priority of India in negotiating a free trade agreement with this country would be a greater quota for Indian immigrants into this country. If we are acting on, or even being influenced by or taking account of, the referendum campaign then we know perfectly well that immigration was one of the most sensitive issues, if not the most sensitive issue, driving the result of that campaign. It would be extraordinarily perverse if the British Government now said that as a result of Brexit we would actually have more immigration from India or from anywhere else. Without more immigration, Mr Modi has said he is not interested in doing a deal.
I think there would be a good chance of our getting a free trade agreement with Australia and New Zealand, but of course it would be totally at the expense of the British livestock industry. We would have, every week, enormous frozen meat containers arriving on big ships from Australia and that would knock the bottom out of the British beef market and the British lamb market. Anybody who is familiar with those markets, including the NFU, is very well aware of that. The Government have again been very unwilling to be clear and frank about the fact that if they want a free trade agreement with Australia and New Zealand they will have to accept their agricultural products. Actually there is nothing very much that the Australians are interested in selling us otherwise. There are minerals, such as copper, uranium and so forth, but they could sell us that anyway; they do not need an agreement, there are no quotas on that, it is an international commodity, an international raw material.
So if you break it down a bit further than the rhetoric you see that there is no such thing as this vast, wonderful, countervailing benefit to leaving the single market and the customs union, as the Government have been pretending. There is a fundamental falsehood here and we should use the opportunity that this Committee provides to try to expose some of the illusions which the Government have been putting forward, and to throw light in corners which the Government have been trying desperately to keep dark, of which this is undoubtedly one.
Chuka Umunna, the former shadow Business Secretary, said that it was inevitable that it was “inevitable” that Labour would pledge itself to remaining in the customs union “in some form”. He said:
“It is the only way we have of ensuring that we can protect one of our greatest legacies, the Good Friday agreement”.
And lo and behold, what happened just now? The UK will have to have a customs union with the EU after leaving the bloc—Jeremy Corbyn has said that just now. Asked how Labour’s position differed to that of the Government, Corbyn said:
“We have to have access to European markets, we have to have a customs union that makes sure we can continue that trade, particularly between Northern Ireland and the Republic of Ireland. That is key to it”.
Emily Thornberry, the shadow Foreign Secretary, has said that it,
“seemed inevitable the UK would have to stay in some sort of customs union after Brexit”.
“we cannot see a way forward when it comes to Northern Ireland or to tariff-free trade across Europe without us being in some form of customs union that probably looks very much like the customs union that there is at the moment, and that’s our position on that”.
It is an important task for the UK to try to rebuild all these other deals. David Davis said that it would be possible for the UK to negotiate trade deals,
“massively larger than the EU”.
Where is the reality in this? Has he learned mathematics or arithmetic at school? I have just gone through the sums with noble Lords—but he says they will be massively larger than the EU.
Of course, on the sequencing on the negotiations, a US trade representative has said that,
“informal discussions won't be possible until decisions have been made about the UK and EU relationship. Even then, many countries will want to be clear about the UK's membership of the WTO before they open negotiations”.
The no-deal scenario and falling back on the WTO would be the nightmare scenario—the worst of all options.
Finally, before I conclude, there is the number of business groups that are backing staying in the customs union. There is Carolyn Fairbairn of the CBI, whom I mentioned earlier. For the TUC, Frances O’Grady said:
“Working people’s jobs, rights and livelihoods depend on maintaining our trade with Europe. Staying within the customs union is really important to achieving this”.
The National Farmers’ Union’s policy is that,
“the best outcome … would be that the UK remains part of the European customs union”.
The Farmers Union of Wales, as noble Lords will remember, voted to leave overall, but its president, Glyn Roberts, has said that,
“the only sensible outcome is to ensure we are still members of the common market and customs union on the day we leave the EU”.
The chief executive of the Irish Business and Employers Confederation said:
“The UK plan to leave the customs union is at odds with the economic interest of both the UK and EU … The UK remaining in a customs union would partially offset the negative impact of Brexit on jobs and the economy in the UK, Ireland and the wider EU. It would also go some way to resolving the challenges posed by the trade border with Northern Ireland”.
And 70% of Scottish businesses want to remain in the customs union and single market, according to a survey.
Finally—I am an alumnus of the Harvard Business School—the Harvard Kennedy School carried out a survey of small and medium-sized enterprises that concluded:
“Almost all businesses we interviewed expressed a preference for remaining in the Single Market and the Customs Union”.
I conclude that our involvement in the customs union is a decision that this Parliament has to make, especially as it was not referred to in the referendum ballot paper. In fact, a lot of people when they voted to leave did not realise that they would have to leave the customs union and the single market. As someone who has built a business from scratch, Cobra Beer, it is a challenge to start a business, and that challenge continues as you try to grow, thrive and build. British businesses do not need more barriers, more bureaucracy or more expensive administration at the borders for goods—and there is a way to avoid that. This Bill provides a crucial opportunity for Parliament to express its preference for continued participation in a customs union with the EU.
I commend this amendment to the House and conclude by saying that it is not just about staying in the customs union but also the single market. I took part in a debate in the Cambridge Union on 8 February and one of my opponents was Jacob Rees-Mogg. Do not ask me the result—do not ask him the result either. It was closed by one of my contemporaries from Cambridge who concluded by asking, “Why is Lord Bilimoria so negative about Brexit? Why doesn’t he realise that we as a country are the best of the best in so many fields? Look at that—we should be proud. We can go global”. I then concluded for the opposition by saying, “Helena Morrissey rightly pointed out that Britain is the best of the best—at aerospace, automobiles, beer, architecture, accounting, lawyers, creative industry, museums, film and music. We are the best in the world. Isn’t it amazing that we have done that in spite of being in the European Union for 44 years?” What we need to do is continue to remain in the European Union.
The notion that a mutual recognition system is available without the creation and adjustment of a whole series of institutions is extraordinary. Barnier has been fairly clear that he might be able to get one or two countries to vote for such an arrangement, but the chances of getting all 27 and their regional governments to vote for fundamental changes in EU institutions to accommodate a mutual recognition environment that the UK thinks is so easily available is completely impossible. That is why he repeats that, essentially, financial services with free access across the EU is not possible and that applies to the range of services. There is a critical issue here that affects our future relationship and our trade, and although someone like the noble Lord, Lord Lamont, says that this is all solved by a free trade agreement, it absolutely is not. In fact, the core issue is not addressed at all.
The noble Lord talked about the customs union. The only real issue if we have a different arrangement—and I say this to the Labour Front Bench as well, which wants to go from “the” customs union to “a” customs union—is with rules of origin. Let us not dismiss rules of origin so immediately and quickly. Members of this House will have talked with companies such as the automotive companies, and asked them what the costs would be for non-tariff barrier rules of origin declaration requirements whether done through pre-clearance, at a border or whatever else. The number that I keep hearing—and I am happy for the Government to correct me because they must have explored this number—is that it adds to costs somewhere in the range of 3% to 4%.
When I was a Minister in the Department for Transport and talked with some of our automotive companies, I asked one of them how it was successful in winning investment from its parent company to put in a new production line, which had to be on a competitive basis against factories all over Europe. I asked by what margin they won that particular investment and was told that it was roughly under 1%. If a bid to get foreign investment into a new factory or production line here is on such a narrow margin and we are knowingly putting in place a burden that runs to a 3% or 4% benchmark, the economic consequences are huge. Rules of origin are not to be trivialised and tossed away as if this were some sort of barrier that we can talk ourselves out of.
I can humanise this in a particular way which addresses the Irish question. I was over in Dublin and the border country with some of my colleagues a couple of weeks ago. I did not understand until I went there that the economy of the island of Ireland has fundamentally changed in the past four or five years. It is now a single economy. There are mergers, acquisitions, and movement by companies. It functions as one single economy. I have a small example. I talked to a gentleman who sells stationery in Northern Ireland. The only wholesaler of stationery is in the south. Every week, a little van comes up to bring him his supplies. He has investigated rules of origin and every possible mechanism to find a technological answer—the same experience discussed by the noble Baroness, Lady Kennedy—to complete the necessary declarations for his van load. He has come to the conclusion—and if the Minister has a better number he can tell me—that every category of declaration will cost him roughly £40. So, six staplers in the van will cost £40; 10 boxes of copier paper, £40; two filing cabinets, £40 and five boxes of pencils, £40. Noble Lords will get my point. Every single item needs a separate declaration, and as far as he is concerned it means that he is out of business.
I talked with the owners of other small businesses who said exactly the same thing. If a clothing shop sells the suit that the Minister is wearing, that will cost £40. If it sells the suit that the noble Lord, Lord Forsyth, is wearing, that will be another £40 because of the different fabric and style, and the same applies to the suit being worn by the noble Lord, Lord Lamont. Understanding the impact of this is absolutely necessary and I do not believe that we should be able, through statutory instrument, to make those kinds of changes. I hope very much that this Committee will stick on them.
I want to pick up on the India issue. We quickly googled this to make sure that we have fully understood the point made by the noble Lord, Lord Patten. The EU was indeed close to making a free trade agreement with India, but it was not just the UK Government who stood in the way, it was Theresa May herself. She refused to agree to the visa arrangements that were acceptable to the Indian Government. This is the same Theresa May who sits there today and makes the same statements about immigration that she has made in the past and repeats the same commitments to reducing immigration. The Government have to accept that they are making offers which they are not willing to actually fulfil. I hope very much that we will pay attention to the detail and to the amendments.
All the cherry picking and cakeism which these three variants represent—you could call it having your cherry cake and eating it—mean that it is pretty unlikely to be acceptable to the EU, as well, as I have just said, as being very complicated for citizens and businesses to work out which of the three phases they are in. The other thing, of course, is that we have no idea what dispute resolution mechanisms are envisaged for any of this. Are we going to get three types of dispute resolution? We already know that the Prime Minister is proposing to respect the remit of the European Court of Justice—indeed, for the long term—in the security field. What will happen in other fields?
We are in this state of huge uncertainty now 20 months after the referendum, as opposed to the great certainty and security of staying in the single market and the customs union. Other noble Lords have talked about the difficulties of being outside the customs union; the magical thinking of technological solutions; the problems of rules of origin, which the noble Lord, Lord Lamont, said were not important but which, as my noble friend Lady Kramer said, the car and aerospace manufacturers regard as absolutely crucial to their operations; and if we left the single market we would have to have checks for compliance with standards in, for example, food and agriculture across the Irish and other borders.
My noble friend Lord Newby talked about the Brexit study, which absolutely must be published. It is an insult to the citizens of this country that they are patronised to the extent that they are denied the knowledge that the Government have about the likely impact of their plans. Why is that? Because they might actually want to say to the Government, “No, we do not want to go in this direction”. I say to the noble Lord, Lord True, that my right honourable friend Vince Cable did not and does not call for a rerun of the June 2016 referendum. What he and the Liberal Democrats, who are solidly united behind his leadership, are calling for is a final say on the deal itself. That is a completely different animal and it would be quite nice if some noble Lords opposite could actually grasp that point.
Here we are, a year and a month before we are due to leave, and neither we nor the EU have clarity about the Prime Minister’s route map. Again favouring a non-British and non-parliamentary forum—I do not know what is wrong with speaking in Parliament—the Prime Minister went to Munich to speak. She offered some hints on one area, security, that she knows something about from the Home Office and said that she could foresee a role for the ECJ. If she could prioritise trade as well as security, perhaps some of the hurdles that she has put in the way could be rubbed out.
These amendments today are critical to the way in which we are going to leave. That is what the Bill is about, and Article 50 demands that the framework should be there. They therefore pose absolutely crucial questions and I am looking forward to the Minister’s response to them. I hope he can indicate whether the Viennese view of Secretary of State Davis or the “bridge across the channel” Johnson view that will guide the future of this country.
Amendment 1 withdrawn.
2: Clause 1, page 1, line 3, leave out “on exit day” and insert “on a date to be determined by a further Act of Parliament”
As noble Lords will be aware, the notification of the UK’s intention to withdraw from the European Union under Article 50(2) of the Treaty on European Union was served by the Prime Minister on 29 March 2017. Article 50(3) provides:
“The Treaties shall cease to apply to the State in question”—
in this case, us—
“from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period”.
Therefore, Article 50 in its entirety means something quite contrary to the widespread impression, often reinforced by Ministers, that there can be no flexibility about exit day. As the noble Lord, Lord Kerr, the author of Article 50, has made it clear, the article contains provision for a possible extension of the period if that is needed to come to an agreement.
The main purpose of our amendments is therefore to give Parliament rather than Ministers the power to control the UK’s position on the date of exit day. By specifying that the European Communities Act 1972 can be repealed only on a date to be determined either by a further Act of Parliament or in the Act of Parliament enacted for the purposes of Clause 9(1), Amendments 2 and 3 support the amended Clause 9(1) by ensuring that Parliament stays in control of the timing of exit day under Article 50, and is thereby in a position to influence the withdrawal agreement and its provisions for the framework of the future relationship between the UK and the EU.
Our amendments are of particular importance in view of the earlier government amendments to Clause 14, moved on the final day in Committee in the other place, which gave Ministers power to fix the date of exit day. In their initial draft of the Bill, the Government were apparently satisfied that, for the purposes of the Bill, the date of exit day could be left to Parliament. Then, for what appear to be purely internal party factional reasons, the Government introduced an amendment to fix exit day in the Bill for 29 March 2019 at 11 pm for all purposes. The Government also supported amendments by Oliver Letwin which allowed the date to be changed by Ministers if the withdrawal agreement provides that the UK will leave on a date different from that set out in Clause 14.
I trust that your Lordships’ House will agree that Parliament rather than Ministers should be in control of the process. However, the government-supported amendments in the other place allow the date to be changed only by Ministers, not by Parliament, even if Parliament has a different view to that of the Executive. In addition, this could happen only if an alternative date on which the treaties ceased to apply to the UK was included in the withdrawal agreement—that is, only if Ministers agreed an alternative date with the EU.
Under the Bill, Ministers would in these circumstances therefore be able to use secondary legislation to change the date in UK legislation as well, thereby bypassing Parliament. Surely, that is completely unacceptable on a matter of such crucial historical importance. Therefore, there are a number of important and worrying implications of the government and government-supported amendments approved in the other place, which can be overcome by the amendments that my noble friend Lord Adonis has tabled, giving Parliament control over the date when the European Communities Act 1972 can be repealed, thus forcing the Government, if necessary, to go back into the negotiations with the EU under Article 50(2).
One example, as the former Attorney-General, Dominic Grieve, made clear in the other place, is that it was always the intention behind his amendment to Clause 9, which the other place voted for, that the powers in the Bill for implementing the withdrawal agreement, including fixing the withdrawal date, should not be used until after the final statute had been approved by Parliament. However, because of the government-sponsored amendments referred to earlier, those powers for Parliament in relation to the date of exit day are effectively removed from the scope of Clause 9, the other place having voted for that amended Clause 9. This could conceivably mean, for instance, that, given the first-phase agreement of December 2017 stating that,
“nothing is agreed until everything is agreed”,
if negotiations were deemed to have failed, the date of exit could be made earlier than 29 March 2019, thereby pre-empting Parliament’s consideration and implementation of a statute approving exit. As things stand, if there is no withdrawal deal, Parliament will be bypassed without any right to a vote. The Government’s amendments relating to the date of exit day have therefore been seen by some as potentially paving the way for a pre-emptive no deal—a so-called “hard Brexit”—by hard-line Brexiteers.
Another potential outcome of leaving the power to change the date of exit day in the hands of Ministers only is that this could be used by them to fail to pursue issues where Parliament wishes to see progress in the negotiations, on the grounds that they do not need Parliament’s support for Brexit in order for them to proceed on the pre-determined date. By the time any such vote comes on the withdrawal agreement, perhaps as soon as the end of this year, it could be difficult, if not impossible, to make substantive changes to the outcome. Neither the EU Commission, nor the member states, will be keen to renegotiate it. The European Parliament has its own agenda, and it seems highly likely that the choice facing the UK Parliament, as a result of Theresa May’s premature triggering of Article 50, would in these circumstances be to either accept the terms or reject them, with no leverage to force the Government back into renegotiations, so risking precipitating the UK crashing out of the EU with no deal. Surely, it is incumbent upon both Houses of Parliament to prevent this scenario by ensuring that Ministers are obliged to refer back to Parliament during the negotiations to ensure they win the ensuing vote.
Another danger is that the transition period, which the Prime Minister has inappropriately referred to as the implementation period, and which Labour, with the support of the CBI and the TUC, has advocated, could be at risk in the negotiations if Ministers alone control of the date of exit day. This transition period is necessary to prevent a so-called “cliff edge”, involving a legal and regulatory void, with chaos resulting for our businesses and services and gridlock at our borders after exit day. A transition period covering as many years as necessary would also ensure that exporters would not have to adapt to two new customs and regulatory arrangements in succession by first dropping out of the EU framework and falling back on the totally inadequate WTO rules and then later, possibly much later, becoming part of arrangements negotiated as part of a comprehensive trade deal with the 27 countries of the EU, which currently take almost half of our exports.
In addition, even if a transition period is agreed, the UK will drop out of the over 60 trade deals with “third countries” which we have access to through our membership of the EU. However, it appears that the Government’s concept of “on current terms” in the transition period excludes the European Court of Justice from its role in arbitrating commercial and other disputes. This is one effect of those government amendments relating to exit day, which would potentially end the jurisdiction of the ECJ on 29 March 2019, thereby preventing agreement on a transitional period “on current terms”. The UK also apparently wants to object to the application of new EU laws and to treat European citizens who come to this country differently during the transition period. All this makes it less likely that a transition period will be agreed in detail at the next EU summit, just weeks away on 22 March, in which case discussions will not move on to a framework for the future relationship. There are, therefore, now fears that the talks on the next phase, the post-transition end state, including the outline of a future trade deal, will have to be delayed, casting the whole timetable into doubt. The more things are delayed, the greater the danger that the EU will simply impose a very narrowly drawn trade deal on the UK or, worse still, the UK might crash out without a deal, to the evident glee of Brextremists such as Jacob Rees-Mogg.
Many people have imagined that the text of Article 50(2) of the Treaty on European Union—and I speak with some trepidation, given that its author, the noble Lord, Lord Kerr, sits opposite me—implies that any withdrawal agreement will constitute a new trade deal with the EU. It does not. However, anyone familiar with major trade deals knows that they reflect the judgment by states of what will be in their own interests and the relative economic power and weight of the parties involved, and that they take years to negotiate. That is presumably why the noble Lord, Lord Bridges of Headley, a former and very recent Minister for Exiting the European Union, said that he did not believe that it would be possible to sort out the divorce bill, the implementation period and the final deal on our withdrawal within the timeframe envisaged. It is therefore completely unrealistic to imagine that the detail of a new trade agreement with the EU will be finalised before the specified exit day or even before the end of the transition period, assuming one is agreed, which, for reasons relating to its budget period, is currently being set by the EU for the end of 2020.
The Dominic Grieve amendment to this Bill, carried in the other place, makes implementation of the withdrawal agreement subject to parliamentary approval. But all that is likely to be agreed by October this year, the deadline for giving time for consideration and ratification by the European Parliament and the other 27 member states of the EU, is just what the treaty states; that is, a,
“framework for its future relationship”,
with little flesh on the bones, which may therefore fall very short of the guarantees which I believe that a majority both Houses of Parliament wish to see: namely, access in the future to EU markets equivalent to what the UK has now to prevent a “cliff edge” for businesses and services and to protect the hard-won benefits of the Good Friday agreement and a completely open border on the island of Ireland.
The Irish question is a crucial reason for Parliament being in charge of the exit date. The serious near-breakdown in the December negotiations between the UK and the EU was eventually resolved only through both sides pledging no regulatory divergence between the Irish Republic and the UK. However, although this cleared the way for the next phase of the Brexit talks, the task of giving it legal effect in the withdrawal agreement remains. Brussels has asked for “precise, clear and unambiguous” proposals to avoid reimposing a hard border between the Republic and Northern Ireland, linking this to progress on transition. Brussels and most dogma-free analysts interpret this December agreement to require the whole of the UK to remain in the single market and customs union, or its exact arrangements, if there is not to be “regulatory divergence” between the Irish Republic and the rest of the UK. Yet the Prime Minister has dogmatically excluded that. It is in everyone’s interest, surely, including the DUP’s, that the exit date is not set in concrete, as it is in this Bill, giving sufficient time both to find a solution on the Irish border and, as the CBI and the TUC have argued, the economy.
Parliament should not be asked passively to sanction a transition to an unknown destination by Ministers—what could be a suicidal leap into a chasm of chaos and uncertainty. We surely have a duty to ensure that, if no deal is struck, or the terms of such a deal are deemed inadequate by Parliament, the provisions of the European Communities Act 1972 continue in force and the timing of exit day will be delayed in order that these critical issues for the nation’s future are properly addressed. The purpose of Amendments 2 and 3 is that, on the precise date of Brexit, Parliament—not Ministers—should have the final say on our country’s destiny and on whether any deal either preserves or threatens peace and stability on the island of Ireland.
Furthermore, it looks as though the present let-out provision would not be enough to cover an equally fundamental, but less pressing, issue—which is whether there is a single exit day. To be fair to the Minister, I shall use the word “implementation”, because he does not like the word “transition”. If the implementation phase is as we envisage it, and we will be within the single market and the customs union, and under the jurisdiction of the European Court of Justice, a single exit day for all purposes is completely unworkable. On 29 March Clause 6 would remove us from being under the ECJ, yet obviously we would continue to need it in the transition period, not least for the EU citizens who, under the original wording of the agreement, although not in legal terms—I have not seen the letter that has come out today—would be able to go to the ECJ during that period. But the exit day would, of course, exclude that, because it ends any ability for us to use the ECJ.
I must say that as I approached today I was rather against my colleagues’ amendment, for the obvious reason that the trade union of thee and me does not want another Brexit Bill. However, I do find their arguments immensely persuasive. We will come back to this matter, because we have tabled amendments to Clause 14 to remove the date from the Bill and put things back as they were—but as I say, I find some of the arguments for the amendments immensely persuasive.
Amendment 2 withdrawn.
Amendments 3 and 4 not moved.
House resumed. Committee to begin again not before 9.27 pm.