European Union (Future Relationship) Bill

Baroness Donaghy Excerpts

3rd reading & 2nd reading & Committee negatived & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Committee negatived (Hansard) & Committee negatived (Hansard): House of Lords
Wednesday 30th December 2020 Lords Chamber

[Baroness Donaghy (Lab) [V]]

My Lords, I support my noble friend Lady Hayter’s Amendment. I chair the EU Services Sub-Committee, which conducted an inquiry into the future UK-EU relationship on professional and business services, including financial services. I had no expectation that these topics would be covered in this thinnest of thin treaties, even though they are vital to the UK economy. Professional and business services accounted for almost 12% of the UK economy, £224 billion in gross value added, 4.6 million jobs and 23% of all registered businesses in 2019. The UK has a trade surplus of £12.4 billion with the EU.

What we do know is that the Government have failed to achieve mutual recognition of qualifications or to maximise short-term mobility of labour, which will have a detrimental effect on creative industries. Anything involving selling goods or services will require a work visa. These barriers will have a disproportionate effect on small and medium-sized enterprises.

On the wider issues not yet covered, if we fail to achieve a data adequacy agreement, the cost to business, at a conservative estimate, will be between £1 billion and £1.6 billion to arrange standard contractual clauses. Agreements on equivalence and regulatory co-operation in financial services, intellectual property, cross-border supply of services, rights of establishment and business mobility, in addition to the mutual recognition of qualifications, are all vital ingredients to professional and business services’ continuing success. What priority will the Government give to these areas?

Finally, the decision to leave Erasmus+ is a political one. My committee will scrutinise the detail of any alternative, to ensure that our students and universities are not worse off. In reply to a Question in the Commons, the Prime Minister said that

“the hon. Gentleman is talking through the back of his neck. There is no threat to the Erasmus scheme”.—[Official Report, Commons, 15/1/20; col. 1021.]

I suppose that that is technically correct; Erasmus will thrive without us. Is that what he really meant? It is still not too late to try to negotiate to stay in Erasmus and I urge the Government to do so.

Economy

Baroness Donaghy Excerpts

Monday 28th September 2020 Lords Chamber

[Lord Agnew of Oulton (Con)]

I am not quite sure that I heard the full question from my noble friend, but I absolutely agree that inward investment is crucial for the future. As I mentioned in response to an earlier question, I believe that the huge infrastructure projects that we have committed to in the Budget will form part of the regeneration of the economy.

[Baroness Donaghy (Lab) [V]]

The Government modelled this scheme on those adopted in France and Germany, but in a rather half-hearted way. The German scheme is set to last for two years, compared with six months for the UK scheme. How did the Government reach that decision, when it would have added stability to employers’ plans to have two years?

[Lord Agnew of Oulton (Con)]

My Lords, I think the noble Baroness is looking too narrowly at the comparison. If we summarise the total fiscal interventions of the various economies over the last few months, the UK contribution has been somewhere just under 11%, those of Canada and France under 10%, Germany’s about the same, and Italy’s is about eight and three-quarters. My point is that you should not look at any one of these individual interventions as the single solution; we have tried to aggregate them.

EU Exit: End of Transition Period

Baroness Donaghy Excerpts

Thursday 24th September 2020 Lords Chamber

[Lord True (Con)]

My Lords, I did not hear that I was asked about customs agents originally, and I apologise to the House; £80 million was set aside for that. Not all that has been drawn down, but a good deal has. As for the specific IT we are talking about—the “Check an HGV” and the smart freight—next month detailed contacts and practice in that system will begin in concert with the road haulage industry. The target is to have that fully operational by December and the Government are confident it will be.

[Baroness Donaghy (Lab) [V]]

My Lords, the Government are urging businesses to prepare, even though many are in survival mode because of the pandemic. It might be wishful thinking that 43% of businesses think the transition period will be extended. They want the Government to do their job and negotiate a deal. We know we are leaving the EU, but we did not know we were leaving Kent. Instead of lecturing business, when will the Government make available the granular information promised? When will real help arrive?

[Lord True (Con)]

My Lords, there are a number of questions wrapped up there, and I did not answer the noble Lord, Lord Kerr, on one question. The Government are not blaming anybody. We are certainly not blaming the haulage industry or any other industry. We are pleading for everybody to work together to achieve the best outcome. I have said to the House that the specific freight IT which we have been talking about will be being tested next month and be operational by April. We have already published an iteration of the border operating model. There will be a new iteration of that published very shortly.

European Union: Negotiations (European Union Committee Report)

Baroness Donaghy Excerpts

Monday 16th March 2020 Lords Chamber

[Baroness Donaghy (Lab)]

My Lords, I made very few contributions during the Brexit debates but, now that we have reached the very beginning of the negotiating stage, I am interested in the stance taken by both sides. At one stage in my career, negotiations were my bread and butter. My comments are intended to be practical rather than principled. As the great Tommy Cooper said, “It’s not the principle, it’s the cash”.

First, I thank the noble Earl, Lord Kinnoull, for setting out the questions that the Government should try to clarify, if not immediately then as the negotiations proceed. The document from the EU Select Committee was produced in double-quick time by its staff, and I pay tribute to them for their hard work and to the Select Committee, which gave it careful scrutiny. In case the noble Baroness, Lady Ludford, accuses me of self-congratulation, I confess that I am a member of that committee. The image produced by the noble Earl, Lord Kinnoull—that the negotiating stances are the equivalent of the haka—is quite disturbing. I shall be studying any changes of clothing by the noble Lord, Lord True, as the negotiations proceed.

Secondly, I thank my noble friend Lady Hayter for emphasising the scrutiny role of our Parliament and the need to keep it fully informed. I recognise that this Government can force their view through Parliament, within certain limits, and that the real deadline of 31 December 2020 will concentrate minds. I also recognise that ECJ involvement over time is regarded as a red line by the Government, but there is nothing to stop a deal that recognises that reference to the ECJ, and that is how the EU 27 will proceed—by the way, if they are wise enough, they will try to limits its scope in the future—and also recognises an infrastructure that the UK will use in the future. If the quality of that infrastructure is satisfactory to the EU, a deal is possible.

I also recognise that the language of state aid versus subsidy and the definition of “level playing field” have changed. This is not something to go to the wall about if the Government are sincere when they say that they will not lower standards in consumer rights, workers’ rights and environmental protections. I winced a bit—but I am trying hard not to fight old battles—when the noble Lord, Lord True, read out the Statement on 27 February by the right honourable Michael Gove, that:

“The United Kingdom has a proud record when it comes to environmental enhancement, workers’ rights and social protection.”—[Official Report, Commons, 27/2/20; col. 468.]


I could not help remembering that, before we joined what I think was called the EC, our beaches were so filthy that we were known as the “dirty man of Europe”, and that we waited 10 whole years in the late 1980s and 1990s for a single improvement in workers’ rights. But let us celebrate late conversions.

The noble Lord, Lord True, also said that we were

“seeking … an agreement based on full respect and friendly co-operation, and centred on free trade.”—[Official Report, 27/2/20; col. 286.]

I cannot argue with that or that fisheries, internal security and aviation will be dealt with separately, so I will not deal with them in this debate. The success of any negotiation will be the acceptance by the parties of the deal, not necessarily its quality. It will have to be something that both sides can live with. It will not be as good as the deal that the UK had before 31 January but will have to be good enough.

I do think—this is where I do not agree with the noble Lord, Lord Hamilton—that proximity is important. All the charts that we have seen in my EU Sub-committee B show the enormous weighting of existing trade with the 27 and the very much smaller weighting the further away that a country is from the UK. However, let us just say for the sake of argument that the noble Lord is right and that proximity is not important. How then can it be explained that Germany’s trade with China has knocked the UK’s into a cocked hat? Does it have better-quality politicians or better-quality goods? Do the Germans try harder? Germany’s success was done within what some call the strict and debilitating bureaucratic confines of EU membership. How does the noble Lord explain that?

I return to the negotiations. I understand that some of them will be conducted by videoconferencing because of the coronavirus pandemic. I can only hope that the technical quality is adequate, and certainly a lot better than in this Parliament building. There is something to be said, as my experience in ACAS shows, for keeping the parties in separate rooms; it may be that sooner or later a deal may be more productively done in that way. When it is done, though, there has to be some clarity on precisely what “standards”, “ongoing alignment” and “subsidy” mean and, as has been well covered by the noble Lord, Lord Kerr, and others, what the Northern Ireland protocol really amounts to, because that is one of the things that cannot be squared.

I will make three more brief points. First, the devolved Administrations may well have been kept informed, but they have certainly not been consulted. “Consult” does not mean “veto” in anybody’s language; it means being consulted. This has led to a fear that the devolved competences will not be respected in the outcome of the negotiations. Will the Minister give some assurance to the devolved Administrations on the matter of competences?

Secondly, the Prime Minister’s speech of 3 February 2020 suggests that the UK will maintain a subsidy control system after the end of the transition period, albeit not necessarily based on EU state-aid rules, which are likely to change in any case as a result of its recently published industrial policy. The UK has a consistent record of compliance on state aid—or “subsidy”, as the UK Government now call it. Successive Governments were so strict that they did not even use the flexibility in the system to increase state aid that was allowed. It is acknowledged in the EU that UK Governments led the way in trying to ensure discipline in this area, but it is a fact that France, Germany and Italy were always looking to take advantage of the flexibilities. If we are so good, and if we led the way, why not take the lead again? Why not make a clear declaration about what the UK’s subsidy infrastructure will look like on 1 January 2021? Is the Minister able to assist the House in this matter? It is one area where we could declare our independence by setting out the structure that we believe will work.

Finally, Sub-committee B on internal markets, which I have the privilege to chair until Easter, is conducting a brief inquiry into state aid and level playing field definitions and possible outcomes. It is hoping to finalise its report by 26 March, before it disappears into the sunset. I very much hope that the work done by my committee will prove helpful to the general debate.