Brexit: Negotiations

Lord Callanan Excerpts

Thursday 6th September 2018 Lords Chamber

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

My Lords, alongside negotiations with the European Commission, the Government have regular engagement with EU member states to explain our position. In all the UK’s engagement, it respects the unity of the EU 27. Member states have welcomed the White Paper as a serious proposal for negotiations and share our desire for an ambitious deal. We will now hold continuous negotiations with the EU to secure a good deal.

[Lord Framlingham (Con)]

I am grateful to the Minister for that Answer. I urge him not to listen to the doom-mongers on this issue who constantly talk about crashing out and falling off the cliffs. I ask him to sell the idea that this Brexit is a very positive effort. We are going to be able to trade globally after Brexit, not least with the other European countries.

Further to that—oh gosh, I have had one of those moments. Ah, I know what I wanted to say—it is the most important bit, really. Perhaps noble Lords can see that I have a bad eye and have had quite a bump; it is amazing what Remainers will do to stop you asking Questions. I return to the fact that the Chequers proposal is quite clearly dead in the water and not going to work, whereas “Canada plus plus plus” is supported by us and by Mr Barnier and Europe. It seems the obvious way forward. In order to get the initiative back on track and make Brexit the success that it can be, I urge the Minister to press that kind of agreement.

[Lord Callanan]

I thank my noble friend for his questions. Of course the Government share his desire for Brexit to be the success that we know it can be. We remain committed to the Chequers proposals and are negotiating on them. As the Prime Minister has said, the problem with a CETA-style arrangement is that it would mean a significant reduction in the access that we currently enjoy to each other’s markets. Crucially, of course, it would mean customs and regulatory checks at the border, particularly the Northern Ireland border. So we remain committed to our proposals and to making Brexit a success.

[Baroness Quin (Lab)]

My Lords, will the Minister confirm that we can and do trade globally now; that countries such as Germany and France—which, for example, already export more to China than we do—can do so from within the EU; and that what is being put forward here is a completely false choice between trading with Europe and trading with the rest of the world?

[Lord Callanan]

We have never said that it is a choice between the two. Our ambition is to do both. Of course we can trade with the rest of the world. The question is whether we can do it more efficiently with trade deals with our partner allies across the world. The EU has been uniquely bad at negotiating trade deals with many of the other big economic blocs across the world—for instance, China, Canada, New Zealand, Australia and so on.

[Baroness Ludford (LD)]

My Lords, I agree with the noble Lord, Lord Framlingham, only to the extent that Chequers is dead. As reported by George Osborne’s Evening Standard, the French Europe Minister Nathalie Loiseau,

“scoffed at British media reports that her boss President Emmanuel Macron was softening to the Prime Minister’s proposals”.

Instead of trying to dodge, weave and divide and rule, could the Government not just concentrate on honest and competent negotiating?

[Lord Callanan]

We are concentrating on honest and competent negotiating. In fact my right honourable friend the Secretary of State for DExEU is actually in Brussels today meeting with Michel Barnier. I have met the French Foreign Minister and she certainly did not say that to me. The Latvian Foreign Minister said that Chequers constitutes a good ground for trying hard to reach a deal, the Danish Finance Minister said it was a realistic proposal for good negotiations and Michel Barnier said he was also confident that we would reach a deal.

[Lord Grocott (Lab)]

Will the Minister consider following an objective that I have stuck to for many years, which is never to take any notice whatever of anything said by George Osborne?

[Lord Callanan]

The former Chancellor speaks with great authority because of the excellent job he did in managing the country’s economy. We take his—and all—contributions extremely seriously.

[Lord Dykes (CB)]

My Lords, does the Minister not realise at long last that all the 27 member states think the Government are bonkers?

[Lord Callanan]

No, they do not.

[Lord Tebbit (Con)]

My Lords, does my noble friend not agree that we have to get those who are opposed to our proposals to leave the European Union used to the idea that the people of this kingdom are well capable of running their own affairs? We did it successfully for rather a long time before our friends on the continent got round to the idea. We have constantly, over the centuries, had to come to their rescue against the dictatorships which have sprung up on the continent. This is another case of a dictatorship springing up on the continent from which we have to break free.

[Lord Callanan]

I am delighted to say that, in his advancing age, the noble Lord has lost none of his robustness. I am not sure I quite share his sentiments but we are committed to Brexit. In future, we want to be a nation in charge of our own laws, our own borders and our own money. This is what Brexit is all about. This is what people voted for and that is what we will deliver.

Brexit: Negotiations and No-deal Contingency Planning

Lord Callanan Excerpts

Tuesday 4th September 2018 Lords Chamber

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

My Lords, with the permission of the House I shall now repeat a Statement made in the other place. The Statement is as follows:

“With permission, Mr Speaker, I would like to provide the House with an update on the progress of Brexit negotiations and the Government’s no-deal contingency planning. On Friday, I was in Brussels for the fourth time since I became Secretary of State for a further round of talks with Michel Barnier. We had an extended discussion covering outstanding withdrawal agreement issues, internal and external security, and our future economic partnership. We have injected some additional pace and intensity into the negotiations as we reach the final phases.

The vast majority of the withdrawal agreement has been agreed. When signed, the agreement will: safeguard the rights of EU citizens in the UK and UK nationals in the EU so that they can continue to live their lives broadly as they do now; provide for a time-limited implementation period, giving businesses and citizens the certainty they deserve until we reach a new partnership; and allow for the UK to make an orderly and smooth exit as we move towards a future deep and special partnership with the EU. In August, we made further progress across the outstanding separation issues, including protection of data and information, the treatment of ongoing police and judicial co-operation in criminal matters and ongoing Union judicial and administrative procedures after exit. The scope and contours of the withdrawal agreement are now clear, subject to some further technical details we will continue to work on.

At the same time, we continue to work to complete a backstop to deal with the position of Northern Ireland and Ireland, as we committed to in the December joint report with the EU. As the Government have made clear, the EU proposals are unacceptable because they would create a customs border down the Irish Sea. We are determined to reach a solution that protects the Belfast agreement and avoids a hard border on the island of Ireland. We will not permit a customs border down the Irish Sea, which would put at risk the constitutional and economic integrity of the UK. Of course, this can be done without compromising the EU’s core principles. Importantly, we look to meet our commitments to the people of Northern Ireland through our future partnership so that no backstop would ever need to come into effect.

The White Paper we published in July has served as the basis for constructive discussions on our future relationship with the EU. I, my right honourable friend the Prime Minister and other Cabinet colleagues have made visits across Europe, explaining our proposals and making the case for what we have put forward for our future relationship. Since the publication of the White Paper, Ministers have had more than 60 engagements with their counterparts across Europe. I met the French Europe Minister in Paris and recently saw the Swedish and Irish Foreign Ministers in London. I also met Guy Verhofstadt, the European Parliament’s Brexit co-ordinator, last week.

We have received a wide range of positive and constructive feedback. Equally, just as we have presented our proposals in a spirit of compromise, so they have proved challenging in some respects for some in the EU. But our friends across Europe are engaging seriously with our proposals on the substance. As my right honourable friend the Prime Minister set out, we are committed to delivering on the vision in the White Paper and delivering a future relationship that will see the UK leave the single market and the customs union, an end to freedom of movement so the UK will control its own borders, the end of the jurisdiction of the European Court, and the UK and the EU meeting their shared commitments to Northern Ireland and Ireland, as I have already described.

At the same time, we want to build up the foundations of a bright, strong and enduring new relationship for the future with: frictionless trade across our borders; continued close co-operation on law enforcement and security; the UK free to develop its own independent trade policy; and broader UK-EU co-operation from research to student exchanges in many of the areas that we prize on both sides. We approach these talks with ambition, pragmatism and energy. If our EU friends match us, we will strike a deal that is in the clear and overwhelming interests of both sides.

I should also like to update the House on steps the Government have taken over the summer to prepare for the unlikely event that we do not reach a deal with the EU. While we expect to reach a deal with the EU—while it remains the most likely outcome, and while it remains our top and overriding priority—as a responsible Government, we have a duty to prepare for any eventuality. So on 23 August, we published 25 technical notices, intended to inform people, businesses and stakeholders about steps they may need to take in the event of a no-deal scenario. They build on the steady and patient work that has taken place over the last two years to prepare this country for life outside the EU—irrespective of the outcome of the negotiations. That work has included passing vital legislation to ensure a smooth Brexit, including the EU withdrawal Act. It includes recruiting the staff in Whitehall and our operational agencies so we have the teams in place, and preparing our institutional capacity—from the Competition and Markets Authority to the Information Commissioner’s Office.

The technical notices continue this same, responsible, practical approach to preparing our country for Brexit. Among the technical notices, there is advice for businesses on some of the new processes they would be expected to follow when moving goods between the EU and UK in a no-deal scenario. Our technical notice on workplace rights sets out how workers in the UK will continue to be entitled to the rights they have under UK law. We have set out how, in the event of no deal, the UK will recognise the testing and safety approvals of existing medicines, if they have been carried out by an EU member-state regulator, to minimise any disruption to the supplies of medicines or medical devices from the EU.

The notices are proportionate, they are measured and they prioritise stability for our citizens, businesses, public bodies and NGOs. The 25 notices published in August were the first in a series of updates which we will be publishing over the coming weeks to keep stakeholders informed about what, if any, action they need to take.

Our approach acknowledges that there are some risks in a no-deal scenario and demonstrates that we are taking action to avoid, minimise and mitigate these potential risks, so that we are equipped to manage any short-term disruption. While it is not what we want, a no-deal scenario would bring some countervailing opportunities. We would be able to lower tariffs and negotiate and bring into effect new free trade deals straight away. There would be the immediate recovery of full legislative and regulatory control, including over immigration policy and, while mindful of our legal obligations, a swifter end to our financial contributions to the EU.

So, I will continue to meet regularly with Michel Barnier, confident that a deal is within our grasp, if the ambition and pragmatism that we have shown is matched by our EU friends. This House and the British people can rest assured that the United Kingdom will be ready for Brexit deal or no deal—prepared, whatever the outcome, so that this country will go from strength to strength. I commend the Statement to the House”.

--- Later in debate ---

[Baroness Ludford (LD)]

My Lords, the DExEU website today displayed a rather apt message:

“We’re experiencing technical difficulties. Please try again later”.


That perhaps sums up the incoherent, divided and irresponsible position—or, rather, positions—of this Government. That the Trade Secretary could on Sunday dismiss the Chancellor’s forecast of the need for extra borrowing of £80 billion by 2033 while staying in post shows the Prime Minister’s utter, weak inability to impose rationality or discipline on her Government. The Chequers plan is a dead parrot, so the important question is: where do the Government go from here? I would like an answer and I think that Parliament deserves an answer, as do the people.

The Statement claims that the no-deal notices, of which we expect another batch, “prioritise stability”. The way they seek to get any continuity at all in the event of no deal is, in fact, by relying on a series of mini-deals to prevent the absolute disaster of grounded planes and the absence of crucial trade. The Government are saying, “Please, Brussels, can you rescue us from our absurd no-deal threat?”

There will be a particular set of 5 million people who will be badly hit by no deal: the 3 million EU citizens in this country and the 2 million Brits in the rest of the EU. The failure to give a unilateral guarantee two years ago—which would have been reciprocated, as the noble Lord, Lord Lawson, said at the time—is creating an agonising limbo of anxiety and depression. Meanwhile, Brexiteers are moving assets or citizenship to other EU countries.

To get a little personal, I do not know whether the Prime Minister gets her glucose patches—on which I can comment, as she is commendably open about them—from abroad, but my type 1 diabetic husband gets his glucose sensors and insulin from elsewhere in the EU. There are many other people with medical conditions who are vitally dependent on such imports. That a Government could calmly contemplate upsetting such a flow and creating distress and potentially worse is breath-taking in its dereliction of a basic duty of care.

The prominence of no-deal planning seems to fulfil a number of purposes, all of them within the Tory party. It is a sop by the Prime Minister to the hard Brexiteers, who positively want this outcome, and a warning to the “chuck Chequers” brigade to accept Chequers as somewhat less bad. There are two things that it does not do: it does not put pressure on the Brussels negotiators and it does not inspire confidence in the public—on the contrary.

There is this sentence in the Statement:

“While it is not what we want, a no-deal scenario would bring some countervailing opportunities”.


This is obviously a bone thrown to the ERG faction. What exactly are the “countervailing opportunities” for small businesses losing their export markets, or patients losing their essential medical supplies? The no-deal scenario means lots more costs to businesses, higher prices for consumers, an avalanche of new bureaucracy—such as pharmaceutical companies having to register medicines twice, showing that EU red tape ain’t got nothing on Tory red, white and blue tape—and more taxpayers’ money spent on quangos and civil servants, stockpiling and so on.

Panasonic and Muji are but the latest companies to announce that they are moving their HQ across the Channel. We face this dire outcome because the Tory Government have proved totally unable to deliver a workable or tolerable Brexit deal. Indeed, not only do they provide absolutely no reassurance about how to resolve issues between the UK and Ireland in the event of no deal, they actually advise businesses and individuals to contact the Irish Government. We know that the Tory Government love outsourcing, but this surely goes shamefully too far in abdicating responsibility for the border communities.

Can the Minister tell us that the Government will reverse their refusal to guarantee that MPs will see the full impact analysis of a no-deal Brexit before the final vote on any departure from the EU? Both the previous and current Brexit Secretaries have, in the past, supported a second referendum, so presumably they think that it is a demonstration of democracy, exposing the PM’s comments as a sham. We on these Benches insist on a final say on the deal. We are joined, it is announced today, by 70% of Mumsnet subscribers: a very sensible bunch.

[Lord Callanan]

I thank both noble Baronesses for their comments, which I thought were long on criticism but a bit short on workable alternatives. I am delighted that the noble Baroness, Lady Hayter, enjoyed her holiday so much—discussing sperm and Portaloos seems to have had a positive effect on her vitality. I say to her that we are providing serious leadership and have a serious plan, in stark contrast to the Labour Party, from which I have heard no plan at all, apart from one that says that we should remain in a customs union—but then it cannot even bring itself to vote for the trade deals that are negotiated under that customs union. So we are providing a way forward through serious negotiations in the national interests.

I thank the noble Baroness, Lady Ludford, for her comments and I can tell her that the citizens’ rights part of the withdrawal agreement is agreed. She mentioned medical supplies. The Department of Health and Social Care is working with its partners across government, in the health sector and in industry, to prepare for the possible disruption to the supply chain of medical supplies including medicines, vaccines, medical devices, clinical consumables and blood products. And, yes, we will provide a full economic analysis of the deal that has been negotiated before the House of Commons and this House have their meaningful vote.

[Lord Maude of Horsham (Con)]

My Lords, is it not now clear that, despite the best efforts of my noble friend and his Secretary of State, whom I admire greatly, the Chequers proposal could be agreed only at the expense of further, very substantial concessions extracted under duress, which would lock the UK indefinitely into a highly disadvantageous one-sided arrangement? Is it not now clear that there is a growing and powerful case for the UK to exercise its right to join the European Economic Area, very much as a holding arrangement, so that businesses could have a line of sight for the next few years on how they can trade and invest? That would create a period in which, when emotions have settled, a substantive free-trade agreement could be negotiated with the EU. Would he accept that this argument is most powerful not for those who want to reverse the result of the referendum and prevent Brexit happening but for those who, like myself, believe that it must happen?

[Lord Callanan]

I thank my noble friend for his comments; he brings a lot of informed commentary on the subject. I am afraid that I do not think the option he set out is particularly practical. Were we able to carry on with membership of the European Economic Area, of course freedom of movement would continue, which I think would disappoint a lot of people who voted for Brexit, while the legal options are not straightforward. It would require the agreement of existing EEA countries and the ongoing agreement and co-operation of the EU, which would not necessarily be forthcoming. I know that the option has been put forward in good faith by a number of people, but I am afraid that the legal and practical difficulties would be considerable. That is why we default to our proposals, which we continue to negotiate on in good faith in Brussels and in other member state capitals.

[Lord Berkeley (Lab)]

My Lords, the Minister’s Statement today says that there will be no frontier between the island of Ireland and the mainland and no frontier between Northern Ireland and southern Ireland. It is not about time that he told us how this would work practically unless there is customs alignment between the two? I would like to hear the nuts and bolts of how it would work.

[Lord Callanan]

I can send the noble Lord a copy of our White Paper, where we have set out exactly how that can be provided through the facilitated customs arrangement and the alignment on goods. I am sure that, if he read it in full, he would see exactly how that could be delivered.

[Baroness Smith of Newnham (LD)]

My Lords, with reference to the question from the noble Lord, Lord Maude, is it not the case that the United Kingdom has to serve notice to leave the European Economic Area and that that is separate from leaving the European Union? Therefore, unless we technically serve notice and give a year’s notice of leaving the EEA, we will remain members of that organisation.

[Lord Callanan]

I do not think that the noble Baroness’s analysis is correct. The European Economic Area is an agreement between EFTA countries and EU member states, and our membership of it will lapse when we leave the European Union. In order to join the European Economic Area we would have to become a member of EFTA, we would require the agreement of the EFTA countries and we would then need the agreement of the European Union in order to continue in that membership. That presents a number of legal and practical difficulties—but I would be happy to write to the noble Baroness in more detail about how it might not work.

[Lord Howell of Guildford (Con)]

Does my noble friend feel that the point has been put sufficiently strongly to the Brussels establishment and the Commission that the Chequers plan is already a compromise and is a compromise of compromises? That does not seem to have penetrated, judging by some of the comments from the Brussels Commission. Does my noble friend also feel that the Brussels Commission understands that a great many of the fundamental principles to which it refers have already been modified throughout the European Union, particularly in relation to labour movement, frontier controls, airport entry controls and the movement of services where there is no single market? Have those points got over to the people we are dealing with in Brussels?

[Lord Callanan]

Of course we are dealing with a lot of different interlocutors as well as the official EU negotiating team, represented by Michel Barnier, and the Article 50 working group. We are also liaising with individual member states. It is fair to say that there is a variety of opinions. We think that we have set out a compromise. It was obtained at some difficult political cost, but it offers a way forward. A number of member states and individuals in the EU have commented that it offers a workable and viable way forward and they look forward to engaging on it. Of course, it is a negotiation. There have been various noises off, but we still await the official Commission response. Senior members of the task force have made it clear that they think it offers a viable discussion and way forward.

[Lord Wigley (PC)]

My Lords, the Minister referred to the Statement mentioning the wish of the Government to cover every eventuality. In those circumstances, can he confirm that a question was raised in Brussels about the position on 29 March if we are within reach of an agreement but are unable to reach it within that deadline, and whether the deadline can be adjusted in order to seek and achieve agreement if that is possible?

[Lord Callanan]

The noble Lord is correct that Article 50 sets out a mechanism by which the process can be extended, but we are very clear that we are not going to apply for it to be extended. We leave on 29 March and we believe that an agreement can be negotiated well before then. It will need to be done so that we can pass the appropriate legislation in the House of Commons and in this House.

[Viscount Hailsham (Con)]

My Lords, does my noble friend agree that it is truly extraordinary that the Government are advising the stockpiling of medicines and other necessities not as a result of war or of some natural calamity but rather as a result of a self-imposed policy which may well lead to yet further direful consequences? Should the country not be made urgently aware of the folly of what we are about?

[Lord Callanan]

The noble Viscount forgets that we had a referendum on the subject and the country as a whole decided that it wished to leave the European Union. We are implementing that decision. The technical notice to which he referred merely makes the point that we need to make sensible, pragmatic preparations in case there is no deal. We do not want or desire that outcome, but a responsible Government—he has been a member of such a Government in the past—have a duty to make clear what preparations may be necessary in the event of that unfortunate eventuality.

[Baroness Miller of Chilthorne Domer (LD)]

My Lords, the Minister says that citizens’ rights are agreed, but in the Government’s own words, nothing is agreed until everything is agreed. Is he aware of just how worried British citizens throughout the EU are? What instructions have the Government given to British embassies to get out there and give some help to people who need to start planning for all the contingencies? It may be that their pensions cannot be passported through or that their driving licence will not be acceptable. I must declare an interest as my principal home is in France and I spend a lot of time there. This week the British embassy in Paris is running Rentrée receptions. It sounds pretty frivolous. We want to see people from the embassy in all the regions, giving advice—not just sitting in Paris, having receptions.

[Lord Callanan]

Of course we say that nothing is agreed until everything is agreed, but the noble Baroness will find that the European Commission says exactly the same. Yes, we are engaging with UK citizens in other European countries. Whenever I visit other European capitals, I try to meet expat citizens living in those countries. Of course we are trying to provide the necessary advice. Ultimately, it is for individual member states to make the appropriate preparations, and we urge them to do so through embassies and contact with their Governments.

[Lord Green of Deddington (CB)]

My Lords, does the Minister agree that there is a heavy responsibility on the Commission to ensure that arrangements for British citizens in European countries match those that we have offered to those in this country, which we are much more efficient at implementing?

--- Later in debate ---

[Lord Callanan]

The noble Lord is correct that that is the responsibility of the Commission and other member states. We have been very clear that in the event of no withdrawal agreement, we would want to act as quickly as possible to guarantee the rights of those EU citizens who have chosen to make their home in the UK, and we would hope that other member states will do that for UK citizens abroad.

[Lord Browne of Ladyton (Lab)]

My Lords, why, in the relevant technical notice, did the Government advise those who trade in Northern Ireland, in the event of a no-deal Brexit, to ask a foreign Government for advice as to how they should continue? Secondly, how is that consistent with us taking back control through Brexit to the British Government and the British Parliament? Finally, if the Minister wishes to criticise me for having no alternative, will he give me his resources for a week, and I will come up with better advice for the people of Northern Ireland?

[Lord Callanan]

Of course, in the event of no deal—which, as I repeat ad nauseam, we do not want to happen—we can be responsible for what happens in this country but it is the responsibility of other member states and the European Union to fulfil their side of the bargain and agree what will happen on their side. The border has two sides to it. We can say what will happen on the British side, but what happens on the Irish side is the responsibility of the Irish Government and the European Commission.

[Lord Cormack (Con)]

My Lords, does my noble friend accept that many people in this country in all political parties are looking for leadership? Will he convey to the Prime Minister, whom I wish to see remain to lead us through these difficult times, not only my very good wishes, but that it would be a very good idea if she were to consult leading figures in other political parties in this country and if she were to use the facilities of Chequers to invite some of our European friends and neighbours over for private discussions? We have to compromise, whichever side we are on, but if we allow ourselves to be led by the European ruination group in the other place, the future will be dire.

[Lord Callanan]

The noble Lord was doing so well until he got to the second part of his question. Yes, of course we will provide leadership, and we are. We have set out a plan as to how we think this can be delivered. I am not sure it is a practical suggestion that we consult the leader of the Opposition, who I think is providing a dire example at the moment, but we in our department and other Cabinet Ministers are having ongoing, regular discussions with other European leaders and Ministers. I am travelling abroad regularly myself, as are other Ministers, to try to convince other member states of the viability of our plans and the options that we have presented.

[Lord Lea of Crondall (Lab)]

I follow up one more time the question raised by the noble Lord, Lord Maude, and the noble Baroness, Lady Smith of Newnham. It may be technically correct to say that we do not need legislation to leave the EEA, but in practice is that not splitting hairs? I remember rather well, in December 1972 in Vienna, chairing the last meeting of the EFTA consultative committee that we were then a member of. On 1 January 1973, we joined the European Economic Area. Those were back to back for obvious reasons. Whatever the merits of the EEA, is it not obvious how it would work?

[Lord Callanan]

I refer the noble Lord to the answer I gave earlier. The option of EEA membership is not straightforward. It is not uncomplicated and it does not present a solution to many of the difficulties that were addressed in the referendum campaign.

[Lord Hannay of Chiswick (CB)]

Will the Minister go back to the issue of citizens’ rights? If I understand it rightly, he has replied to various questions by saying that the Government will make up their mind on the situation for European citizens here in a no-deal situation when that arose. Are the Government not giving any consideration to whether it might not be both humane and valuable for our negotiating position if they were to make it clear now, unilaterally, that they will apply the provisions in the December agreement, come what may, deal or no deal? Surely that would be better, and it would also be a better way of protecting the interests of our citizens in other member states.

[Lord Callanan]

The Prime Minister has made it clear on a number of occasions that EU citizens who have chosen to make their homes in the UK are welcome to stay. We have protected their rights, and the rights of British citizens abroad in the draft withdrawal agreement. If there is no withdrawal agreement, we will want to move swiftly to guarantee the rights of those people. We may not want to do it in exactly the same way as set out in the withdrawal agreement at the moment, but we would want to guarantee their rights and emphasise the fact that they have made their home here and are welcome to stay. The Prime Minister has made that very clear.

[Lord Beith (LD)]

My Lords, does the Minister not recognise that we will not know until perhaps a few weeks, or even days, before the exit date whether a deal has been agreed or it is a no-deal exit? In that case, is his advice to organisations and companies to behave as if there is to be a no deal from now on, and prepare themselves accordingly? Conversely, if there is a withdrawal deal, how does the Minister expect both Houses of Parliament to legislate it into effect in the few days that may lie between it being agreed and the exit date of March next year?

[Lord Callanan]

If it were only a few days, clearly the noble Lord would be correct that it would be impossible. The need for appropriate legislative scrutiny in both Houses is one of the reasons why we are still targeting an agreement in October this year. We are working towards that. It may not be possible, and I cannot absolutely guarantee that, but we are mindful of the fact that once we have negotiated a withdrawal agreement, there needs to be a meaningful vote, which we have promised, both politically and now legislatively. We will put it to the vote in both Houses, and if the meaningful vote goes through, we will have to legislate, which will take time. That is one of the reasons, and the EU has agreed with us, that we are approaching the end state of negotiations now. We need to have an agreement in the not-too-distant future.

[The Earl of Erroll (CB)]

If we were to stay in the EEA, would it be permitted and allowed under the rules to negotiate trade deals with the other countries which have about 7 or 8 billion people around the world, or would that be blocked?

[Lord Callanan]

The only way of joining the EEA, if it were possible, and I have set out the difficulties, would be to join EFTA because of the EEA’s agreement between the EU and EFTA. In that case, we would not be negotiating our own individual trade deals—EFTA would be negotiating. That fails the independent trade policy test.

[Lord Campbell of Pittenweem (LD)]

The Minister made a brave, if failing effort to try to ascribe responsibility for the border issue to Dublin. We have a responsibility—it is called the Good Friday agreement. We have a responsibility both morally and legally not to do anything that undermines that agreement. Do the Government accept that, both morally and legally?

[Lord Callanan]

Yes, of course we are fully committed to the Good Friday agreement. I did not say it was solely the responsibility of the Republic of Ireland; I merely made the point that any border has two sides. We can be responsible for the UK side, and we can guarantee no hard border on the UK side. We would hope that the Irish Government and the EU would be able to reciprocate on their side as well, and produce no hard border. These are the issues that we are negotiating to make sure that the Good Friday agreement is respected and that no hard border is reintroduced into the island of Ireland.

[Lord Dubs (Lab)]

My Lords, has the Minister been to Dover and talked to the people who run the harbour? I went with a Select Committee a few weeks ago. If trade does not remain frictionless then, unless there is a long period during which the Dover people can reorganise the port, it will come to a halt and vehicles will back up all the way to the M25. Surely the Minister must accept that places like Dover need more time than they are going to get under the current timetable.

[Lord Callanan]

I have not been to Dover recently myself, but ministerial colleagues have and officials are, of course, in regular correspondence and discussions with the officials there. One reason we put forward our proposals was to produce a frictionless border which would ensure that there are no queues at Dover or any other port. One reason why we are proposing a facilitated customs arrangement, and negotiating on it, is to produce frictionless borders both in Ireland and at Dover.

[Lord Whitty (Lab)]

My Lords, given the complications and the failure to get anywhere close to an agreement, does the Minister wish to reconsider his answer to the noble Lord, Lord Wigley, that in no circumstances would we seek an extension of the deadline? If we have only got six weeks and we are still so far away, should we not now be formally seeking an extension of that deadline?

[Lord Callanan]

No, because we are leaving the European Union on 29 March 2019.

Brexit: Parliamentary Processes

Lord Callanan Excerpts

Tuesday 24th July 2018 Lords Chamber

[Lord Lea of Crondall]

To ask Her Majesty’s Government what assessment they made of the precedents for Parliament providing them with a mandate for international negotiations, including the effect of section 7 of the European Communities (Amendment) Act 1993 on the Maastricht Treaty negotiations, when deciding to oppose Lords Amendment 20 to the European Union (Withdrawal) Bill; and whether they consider any such precedents conclusive in supporting the view that Parliament mandating them in negotiations is not consistent with the constitutional role of Parliament in relation to the conduct of international relations.

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

My Lords, we are not aware of any precedent for Parliament mandating the Government in international negotiations conducted under the royal prerogative. The Government were not prepared to accept such a significant constitutional shift in the amendment the noble Lord referenced.

[Lord Lea of Crondall (Lab)]

I thank the Minister for that reply, but on what basis do the Government claim the prerogative to decide unilaterally what the constitutional position on this is, as if they were the Vatican producing some doctrine covered by infallibility? Secondly, why are we able to pass amendments on the customs Bill, on the single market or, hypothetically, the European Economic Area, but not able to consider the trade-offs, the framework or the mandate? Albeit that we vote against, there could be a parliamentary position with the result that Parliament would be responsible for something. At the moment, Parliament is not responsible for anything coherent. It is irresponsible. Is that wise?

[Lord Callanan]

I have never been compared to the Vatican before. Is Parliament responsible and wise? Parliament is always responsible and is extremely wise in whatever it says and does.

[Baroness Ludford (LD)]

My Lords, it is apparent to all that the mantra of taking back control and parliamentary sovereignty has been a fig leaf for an executive power grab, as exemplified by the disrespectful publication, on the last day of Parliament, of the White Paper on implementation. I guess that, like last time, we will be lucky to see it before the Statement. Will the Government, even at this late stage, change the habits of a lifetime and emulate the arrangements in the European Parliament, which has full involvement and information on the Brexit negotiations?

[Lord Callanan]

We will discuss the White Paper later, and the noble Baroness will have a chance to ask further questions on it then. The Executive are accountable to Parliament. DExEU Ministers have given evidence to a broad range of committees on a total of 37 occasions, we have made 108 Written Statements in both Houses, and I think we spent about eight hours last night discussing the very issues that the noble Baroness refers to.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, it is perhaps fitting that John Major’s papers are released today. They show how he had to take on, and indeed vanquish, the Eurosceptic Rees-Mogg—that is, Rees-Mogg the elder. Can we hope that today’s Prime Minister will show the same courage with Rees-Mogg the younger, and can the Minister take seriously the need for the Government to find a negotiating mandate as to how we exit that would find favour not just within the governing party but within Parliament?

[Lord Callanan]

As we have said, Parliament will get a vote on the deal. We will discuss the legislation to implement that deal later, and there will be a parliamentary vote on the issue. We hope that it will find favour with Parliament, and no doubt we will extensively debate the legislation to implement it.

[Lord Foulkes of Cumnock (Lab)]

Will the Minister clarify the position regarding the vote on the deal? Does he envisage that one of the options that Parliament might consider is that we remain in the European Union?

[Lord Callanan]

The vote that Parliament will have will be whether to accept the deal or reject it.

[Lord Whitty (Lab)]

It is bizarre in this day and age that we hide behind the medieval doctrine of Crown prerogative in relation to treaties. In relation to future trade treaties in particular, does the Minister not accept that for the past 40 years we have had effective scrutiny by a Parliament, the European Parliament, in mandates, negotiation and outcome? We are therefore going backwards in parliamentary scrutiny terms if free trade agreements with the EU or anything else do not follow the same pattern. Of course, free trade agreements have the same pattern in the United States Congress. Will the Minister at least concede that we need a proper trade treaty scrutiny committee post Brexit?

[Lord Callanan]

Scrutiny committees are not a matter for the Government; they are a matter for Parliament. I think the noble Lord will find that the European Parliament gets similar arrangements. The Commission negotiates trade deals that the European Parliament votes to accept or reject, and the position will be the same for this Parliament.

[Lord Wallace of Saltaire (LD)]

My Lords, it was quite clear from the Minister’s wind-up remarks last night that the Government are still at a very early stage in negotiating the future relationship. How will it be possible to have a meaningful vote before March 2019 if all that we have is an agreement about the principles of withdrawal and the sketchiest of ideas about the nature of the future relationship in the many different and complex areas discussed in the debate yesterday?

[Lord Callanan]

We are hoping that the framework that we agree will be a detailed exposition, and the noble Lord will be able to scrutinise it alongside the withdrawal agreement.

[Lord Dykes (CB)]

My Lords, following the question from the noble Lord, Lord Foulkes, does the Minister not realise that, if there is no option in a parliamentary vote and a vote of the people to remain in the European Union after all that has happened and all the Government’s mistakes, there will be total uproar in this country?

[Lord Callanan]

I think there would be total uproar in this country if we did not implement the referendum vote. I am slightly confused about why this call for a second referendum is now being labelled a people’s vote, as if somehow the people did not get to vote in the first referendum.

[Lord Watts (Lab)]

My Lords, can the Minister say what the Government will do if Parliament rejects the deal?

[Lord Callanan]

We hope that Parliament will not reject the deal, but if it does, clearly the Government will have to contemplate that and come back to Parliament with a statement on how we proceed.

[Lord Grocott (Lab)]

My Lords, has the Minister had any advice from any of the remainers on the difference between a people’s vote and a referendum?

[Lord Callanan]

No, I have not had any advice on that, as the noble Lord will probably suspect. This seems to be some sort of spin put on to try to convince the public that there would be another vote, as opposed to a second vote on the same subject.

Brexit: Legislating for the Withdrawal Agreement

Lord Callanan Excerpts

Tuesday 24th July 2018 Lords Chamber

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

My Lords, I shall now repeat a Statement made in the other place. The Statement is as follows:

“With permission, Mr Speaker, I would like to make a Statement on the White Paper which has been published today, setting out the Government’s plans for legislating for the withdrawal agreement and implementation period.

On Friday 29 March 2019, the UK will leave the European Union, giving effect to the historic decision taken by the British people in the 2016 referendum. The Government are committed to delivering a smooth and orderly Brexit. That is why we have already passed the EU withdrawal Act through Parliament to ensure that our statute book functions after exit, whatever the outcome of the negotiations. I am grateful to this House and the other place for the many hours of scrutiny devoted to that vital piece of legislation. We are now embarking on the next step in the process of delivering a smooth Brexit for people and businesses.

Since June last year, the UK has been negotiating with the EU to decide on the terms of our withdrawal. We have made substantial progress: protecting the rights of EU citizens in the UK and UK citizens in the EU; deciding the terms of the financial settlement; and agreeing a strictly time-limited implementation period. Most of the withdrawal agreement, around 80%, has now been agreed with our EU partners, and we have isolated the outstanding issues for further focused negotiation. I will be meeting Michel Barnier again on Thursday to take forward the negotiations at this critical time. We have already agreed a financial settlement, estimated at £35 billion to £39 billion, well below the figures being bandied around by some when we started this negotiation.

The implementation period agreed is finite and allows for the negotiation and conclusion of free trade deals. Many of these arrangements will require new domestic legislation to deliver them in UK law. That is why, last November, we announced our intention to bring forward a new piece of primary legislation to implement the withdrawal agreement in UK law. Today, we are publishing a White Paper setting out our proposals for this important legislation, which will be introduced once the negotiations have concluded and Parliament has approved the final deal. Our expectation is to reach agreement in October. Under the terms of the EU withdrawal Act, Parliament will then have its say on the final deal. If approved, we will bring forward this legislation so that it can be in place for when we leave the EU on 29 March 2019.

In setting out our proposals today, we are giving Parliament the opportunity to scrutinise the plans well ahead of the Bill’s introduction, given the need to enact the legislation in the time available and mindful of the importance of maximum scrutiny in this House. By publishing the White Paper today, the Government are providing further certainty to people and businesses here in the UK and across the EU. It also sends a clear signal to the European Union that the United Kingdom is a reliable and dependable negotiating partner, delivering on the commitments that it has made across the negotiating table.

Of course, while we are making good progress, discussions are still ongoing in various areas. This means that some parts of the Bill will become clearer only as we settle the remaining parts of the withdrawal agreement. In the light of that, the White Paper we have published today focuses on those parts of the withdrawal agreement where the text has already been agreed. Let me take them in turn.

The UK’s first priority in negotiating its withdrawal from the EU was to reach agreement on the rights of our citizens. That includes the 3.5 million EU citizens who live in the UK, who are valued members of their communities and play an integral part in the life of this country. Likewise, the approximately 1 million UK nationals who currently live in the EU are equally valued by their host countries and communities”.

Excuse me, my Lords. I have a Theresa May cough.

“The agreement reached on citizens’ rights will allow EU citizens in the UK, and UK nationals in the EU, to live their lives broadly as they do now and will enable families who have built their lives in the EU and the UK to stay together. The most important next step will be to provide a continued right of residence for those citizens. EU citizens lawfully residing in the UK on 31 December 2020 will be able to stay.

This month, the Home Office published further details about how EU citizens and their families can obtain settled status in the UK. That statement confirms that the settlement scheme will be simple and straightforward for EU citizens and their families to secure their long-term status in the United Kingdom. This Bill will ensure that EU citizens can rely on the rights set out in the withdrawal agreement and enforce them in UK courts. It will also establish an independent monitoring authority to oversee the UK’s implementation of the deal on citizens’ rights, providing further reassurance to citizens.

All EU member states must implement the agreement in full and provide certainty to UK nationals on the continent. As the Home Secretary recently stated, we now need to know more details on how each member state will fulfil their obligations and implement their side of the agreement. We will be further pressing for those details over the summer.

The next chapter of the paper deals with the strictly time-limited implementation period that the UK agreed with the EU in March. The UK will leave the EU on 29 March 2019. After this, we have agreed an implementation period that will ensure that people and businesses will have to plan for only one set of changes as we move towards our future relationship.

From 30 March 2019 until 31 December 2020, common rules will remain in place, with EU law continuing to apply, and businesses will be able to trade on the same terms as they do now. During this period we will not be a member state and we will have the flexibility we need to strike new trade deals around the world, something many argued we would not be able to achieve in the negotiations.

To legislate for the implementation period, we must ensure that the UK statute book continues to reflect the relevant provisions of EU law as they apply to the UK during this time-limited period. As the House will know, the current mechanism for bringing EU law into UK law is the European Communities Act 1972. Under the EU withdrawal Act, that Act will be repealed on 29 March 2019. Therefore, as set out in the White Paper, the EU withdrawal agreement Bill will contain a time-limited provision so that parts of the ECA are saved until 31 December 2020. These changes will ensure that our statute book functions properly throughout the implementation period, according with the agreement that we have made with the EU.

I turn to the financial settlement, the structure of which was agreed in December on the basis that it would sit alongside our future partnership.

As we have said from the start, nothing is agreed until everything is agreed. That is in keeping with Article 50 and with the guidelines given to the EU for the negotiation.

We will have a framework for our future relationship with the EU alongside the withdrawal agreement. Our approach to that future partnership is set out in our White Paper published earlier this month. There must be a firm commitment in the withdrawal agreement requiring the framework for the future relationship to be translated into legal text as soon as possible. It is one part of the whole deal that we are doing with our EU partners. Of course, if one party fails to honour its side of the overall bargain, there will be consequences for the deal as a whole, including the financial settlement. In addition, we have agreed an obligation for both parties to act in good faith throughout the application of the withdrawal agreement.

The White Paper published today explains that the EU withdrawal agreement Bill will include a standing service provision to allow the Government to meet the commitments of the financial settlement. In the interest of transparency and oversight, it also includes proposals to enhance the existing scrutiny arrangements for the payments made to the EU.

This White Paper sets out our approach to delivering the withdrawal agreement and implementation period into law. I look forward to discussing all the proposals with honourable Members across the House. It is a necessary part of our leaving the European Union and ensuring a smooth and orderly departure. It provides clarity and certainty to EU citizens living here and UK nationals abroad that their rights will be properly protected. It will enact the time-limited implementation period, giving businesses greater certainty and giving the public greater finality with respect to our relationship with the EU. It provides for the appropriate means of paying for the financial settlement.

Above all, with 80% of the withdrawal agreement settled with our EU friends, this White Paper is another key milestone on the United Kingdom’s path to leaving the EU. I commend this Statement to the House”.

My Lords, that concludes the Statement.

--- Later in debate ---

[Baroness Ludford (LD)]

My Lords, before I comment on the Statement, I note the Prime Minister’s Written Statement on a machinery-of-government change, which was published but surprisingly not covered in the Statement. It says that the Prime Minister will lead on the negotiations with the EU, with Mr Raab demoted to being her deputy and with the Cabinet Office Europe Unit having,

“overall responsibility for the preparation and conduct of the negotiations”.

That does not seem to be much of a vote of confidence in DExEU, which, with its Secretary of State, and I am afraid to say the Minister here, has been somewhat sidelined. Perhaps the Minister can comment on that.

I welcome this White Paper, although its publication on the last day of term is perhaps somewhat disrespectful to Parliament, as I said in Questions earlier. There is a sense of unreality threaded through it. The Statement says that the Government are,

“committed to delivering a smooth and orderly Brexit”—

this while Ministers continue to sabre rattle about no deal, which makes the assertion later in the Statement about being “a reliable negotiating partner” somewhat difficult to believe. I am afraid that even the Minister could not keep a straight face when he repeated that part of the Statement.

There is a clear assertion that the financial settlement is already agreed, so why does the Secretary of State for Exiting the European Union continue to question the Government’s commitment to honouring this bill? We chop and change. We hear one thing from a Statement in Parliament and then we hear quite other things from Ministers in the media, which is completely unacceptable.

On citizens’ rights, some of us noted that the Statement says that EU citizens in the UK and UK nationals in the EU will be allowed,

“to live their lives broadly as they do now”.

That is quite a loaded word, “broadly”. What does it mean? What rights that they have now does it rule out?

Will the withdrawal and implementation Bill incorporate the full text of the withdrawal agreement and the framework on the future relationship? It would be useful to know. Before Parliament comes to the Bill, there will be a Motion, after the negotiations are concluded, on whether Parliament approves the deal—I look at the Chief Whip at this point, as the noble Baroness did. Are the Government planning a decent gap between the tabling of the Motion for approval of the deal and the debates in Parliament? Also, how many days are they scheduling for debate on that Motion? We went round the houses on whether the Motion should be amendable. Are the Government committed to allowing it to be amendable?

The White Paper repeats the commitment,

“to providing Parliament with appropriate analysis prior to the vote”,

on the approval Motion so that Parliament can make an informed decision. Will there be independent input into the analysis?

The application of EU law will continue at least until December 2020. The Statement rather glosses over the implications for the EU withdrawal Act, some of which were picked up by the noble Baroness, Lady Hayter. We have to look at the White Paper to attempt to understand the full interaction with the EU withdrawal Act. Paragraphs 63 to 67 will bear much detailed scrutiny. Paragraph 73 proposes the extension of the correcting power until December 2022. Could the Minister bring out the full implications of that? Paragraph 75 says that the new Bill will have provision to “defer, revoke or amend” the SIs that will have been passed under the withdrawal Act. That sounds like Henry VIII powers squared. How shall we deal with it all? It sounds incredibly complicated.

In last night’s debate, I talked about how the Government were disingenuous, bordering on dishonest, about some items—and that is certainly true about the reference to the European Court of Justice in this Statement. We have the usual assertion, which the Minister did not quite repeat last night, that the direct jurisdiction of the ECJ ends when we leave. But that is not true, is it? The White Paper also says:

“EU mechanisms for supervision and enforcement will continue to apply to the UK”.


Does that include Commission infringement proceedings? It certainly includes the supervision and jurisdiction of the European Court of Justice—which, of course, will have been deprived of its UK judge. Do the Government think we are stupid, and do not understand the full implications of what will happen during the transition period, and even afterwards? The jurisdiction of the ECJ is not ending even if we leave next March, and it would behove the Government to be a little more candid about the reality of the situation.

[Lord Callanan]

I thank both noble Baronesses for their comments, and I shall take each of their questions in turn. I thank the noble Baroness, Lady Hayter, for her kind wishes for the holiday. Let me extend the same wishes to her: I hope she enjoys reading the White Paper alongside her bucket and spade on the beach. I take her point about timing, but we thought it was important to get the White Paper out before the Recess to give Members of Parliament in another place and here the chance to look at it carefully before we come back in September.

Northern Ireland is not in the White Paper because those provisions are not agreed yet. We did not want to leave the White Paper until everything was agreed; we wanted to give Parliament the opportunity to scrutinise the provisions now. Obviously, those provisions are not agreed, and we will come back to the House when we have an agreement.

As for the implementation period, the EU withdrawal Act will repeal the European Communities Act 1972 on 29 March. We will, however, have to ensure that the UK can continue to apply EU law during the implementation period. This will be achieved by way of transitional provision in which the EU withdrawal Act will amend the Act so that those elements of the ECA strictly necessary for the operation of the time-limited implementation period are preserved for its duration; I hope that is clear.

On no deal, yes, obviously if there is no withdrawal Act, all the issues agreed under the withdrawal Act will cease to apply. We will need to look at those matters again, but preserving the rights of EU citizens would be a top priority in such circumstances. As for timing, yes, we are still targeting an agreement in October, and the EU also agrees with us in targeting that. I repeat the obvious point that if we do not have an agreement in October, parliamentary time to implement the necessary legislation will, of course, start to get extremely tight.

With regard to a debate on the White Paper, happily the Chief Whip has been sitting here and he tells me that he thinks that a very positive suggestion. Provided that other business is dispensed with in an appropriate way, he will endeavour to find the time for that debate. I hope that summarises his view correctly.

Moving on to the noble Baroness, Lady Ludford, the Prime Minister is of course leading the negotiations. On something of such crucial importance to the United Kingdom, I think it would be expected that she would lead on behalf of the country but she will be ably supported by the Secretary of State, who will back her up in all the critical areas. On citizens’ rights, let me repeat the answer that I gave to the noble Baroness, Lady Hayter: of course we want to see citizens’ rights preserved and we expect to see them broadly or essentially preserved. I would be happy to write to her with all the details but it is a hugely complicated area. We published the details in December. I am sure that days on debate for the Motion will be agreed by the usual channels.

With regard to the ECJ, as set out in the draft withdrawal agreement the Court of Justice will have an ongoing role on citizens’ rights but this role will be temporary and narrowly defined. Our courts can ask the CJEU for a legal view on the interpretation of the citizens’ rights parts of the withdrawal agreement if they need answers to questions before they can decide on a case. It will be for the courts to decide whether they need that legal view on interpretation.

[Baroness Ludford]

Before the Minister sits down, what then does paragraph 78 mean? It says that,

“during the implementation period, the existing EU mechanisms for supervision and enforcement will continue to apply to the UK” .

That means the ECJ.

[Lord Callanan]

I will write to the noble Baroness but I am conscious that Back-Bench Members want to have some time for questions as well.

--- Later in debate ---

[Lord Callanan]

There is always wisdom in my noble friend’s suggestions but I think whether there should be a Joint Committee of both Houses is a matter for Parliament rather than the Government. We are working through the details with the EU at the moment on exactly what the composition of the joint committee will encompass. However, we expect it to be multilayered, possibly with one level of officials similar to UKRep and one ministerial level as well, but that agreement has still to be made.

[Lord Liddle (Lab)]

My Lords, returning to paragraph 7, which was referred to by the noble Lord, Lord Cormack, paragraph 7.b. refers to Northern Ireland but the only commitment it makes is that,

“the Government has been clear about its steadfast commitment to the Belfast Agreement”.

Is there any reason why, in this document, the Government’s commitment to no hard border has not been put down in black and white or why the amendment that this House passed on Northern Ireland and the avoidance of a hard border, which was accepted by the other place, has not been repeated? Do the Government continue to accept what they accepted in December: that there needs in this withdrawal agreement to be a backstop agreement on the avoidance of a Northern Ireland hard border?

[Lord Callanan]

There was no need to repeat that in the text because it is of course now part of the withdrawal Act, which is the law of the land. We remain committed to there being no hard border and to the backstop, as agreed in December. Negotiations are ongoing with that at the moment and, as I said to the noble Baroness, Lady Hayter, the reason that it is not in this White Paper is because it is not agreed yet.

[Lord Kilclooney (CB)]

My Lords, as someone who lives at the border, I welcome the Minister’s Statement and I accept that the Government are fully in support of the Good Friday agreement—the Belfast agreement—which I helped to negotiate. That is not in question. There are two types of crossings at the Irish border. One is by people, one is by trade. It was suggested earlier in the discussion that there was no agreement on the Northern Ireland issue. Can the Minister confirm that the crossing of people—the common travel area between Northern Ireland and the Republic of Ireland—is already agreed by Brussels, Dublin, Belfast and London and is not in question? Let us remove that from the debate.

Secondly, since so many people from Northern Ireland drive into the Republic and back again, will United Kingdom driving licences issued in Scotland, Wales, England and Northern Ireland have the same respect in European Union countries, including the Republic of Ireland, after Brexit?

[Lord Callanan]

Yes, I can confirm that the common travel area has been agreed. If the noble Lord reads the White Paper we published last week, he will see that driving licences is one of the areas that we need to discuss with the EU. It is a matter of negotiation, but of course it is something that we want to agree and we expect it to be relatively uncontroversial.

[Lord Beith (LD)]

My Lords, I remind the Minister that paragraphs 78, 79 and 80 make it absolutely clear that the jurisdiction of the Court of Justice of the European Union remains throughout the implementation period and that the UK Government can, as if the UK were a member state, take cases to that court should they find that there is a reason to do so. This is a welcome example of having your cake and eating it.

Can the Minister give a guarantee that the necessary domestic legislation which will be required to preserve the rights and entitlements of the Norwegian community in Britain will be in place so that there will be no break or discontinuity for that important group who contribute to our economy?

[Lord Callanan]

Yes, I can confirm what the noble Lord said about the European Court of Justice. With regard to the Norwegian community, we are currently in negotiations with EEA member states and hope to reach an agreement on citizens’ rights similar to that which we have agreed with the EU.

[Lord Hamilton of Epsom (Con)]

I congratulate the Government on the agreement on citizens’ rights. Is this not a vindication of not taking unilateral action to guarantee the position of EU citizens in this country without simultaneously guaranteeing the rights of British citizens in the EU? Are we saying that the meaningful vote will be on a Motion or will it be incorporated into the Bill, which will take in the whole EU withdrawal agreement which is part of this Statement?

[Lord Callanan]

With regard to UK citizens in the EU, it is of course equally important for us to reach agreement on their behalf. That is one of the areas that we are pursuing with other EU member states. Of course, the matter is agreed. We are making preparations to implement our part of the bargain and we need to make sure that EU states are doing similar things for British citizens.

With regard to the exact form of the Motion to be agreed, the meaningful vote is now incorporated into the withdrawal Act.

[Lord Adonis (Lab)]

The Secretary of State has apparently told the House of Commons this afternoon that the Government are making preparations to stockpile food in the event of no deal. Does the Minister think that that is sensible? Secondly, paragraph 118 of the White Paper states, with no qualification whatever:

“The UK will pay its share of the EU’s liabilities as at 31 December 2020”.


Are there any circumstances whatever in which Her Majesty’s Government will not honour that commitment?

[Lord Callanan]

Obviously I have not had the benefit of listening to what my right honourable friend the Secretary of State said in another place, so I will read what he said before commenting on it, but I am not aware of any plans for the stockpiling of food. It seems to be a fairly ridiculous scare story. It will not have escaped the noble Lord’s notice that there are many countries outside the European Union that manage to feed their citizens perfectly satisfactorily without the benefit of EU processes.

[Lord Adonis]

The Minister has not answered my second question.

[Lord Callanan]

Remind me what it was again.

[Lord Adonis]

Paragraph 118 of the White Paper states:

“The UK will pay its share of the EU’s liabilities as at 31 December 2020”.


Are there any circumstances in which the Government will not honour that commitment?

[Lord Callanan]

I go back to what I said earlier: this is an agreed part of the withdrawal Act. Article 50 states that there needs to be agreement on the withdrawal Act and on the future economic partnership. Both parts go together. If both are agreed, both are satisfactory and both are approved by this House, of course there will be no problem, but if there is no deal, nothing is agreed until everything is agreed. That applies as much to the financial settlement as it does to the future economic partnership.

[Lord Wallace of Saltaire (LD)]

My Lords, the White Paper makes it crystal clear that the one thing that will change in April 2019 is that we will no longer be present in any of the discussions on security, foreign policy, economics, rules and regulations or whatever, but apart from that, all EU rules and regulations will continue to apply to Britain. That seems to me to fit exactly Jacob Rees-Mogg’s definition of vassal status. Surely, the shorter the transition period the better and if, as now seems unavoidable, we are incapable of making much more progress in defining the future relationship after we leave before March 2019 because the Government are still divided on what they want, surely it would be preferable to delay leaving until we have a clearer sense of what our future relationship might be.

I ask a second question, about paragraph 10, which states:

“After the UK has left the EU, power will sit closer to the people of Scotland, Wales and Northern Ireland than ever before. The devolved institutions will see a significant increase in their decision making powers as a result of the UK’s exit”.


I tried extremely hard, but I could find no reference to the English regions in the document. As the Minister will know, Yorkshire, the north-west and the north-east stand to lose disproportionately more than the rest of England from Brexit, yet there appears to be no awareness that they will also need devolution and, perhaps, a new consultative mechanism. Are the Government considering that?

Lastly, I see that EU citizens will be treated under the Immigration Act 1971 as they move towards settled status. We are well aware that the Home Office charges considerably for moving towards settled status and UK citizenship. Can we be assured that the Home Office will not impose substantial charges as EU citizens in this country go through that process?

[Lord Callanan]

There are a number of questions there and I will try to answer them as quickly as possible. I agree that the shorter the transition period, the better. We will not take up the noble Lord’s option of delaying leaving. As I am tired of repeating, we are leaving on 29 March 2019. To delay leaving presents the fundamental problem that the EU is legally prohibited from agreeing a future trade deal as long as we are still a member state, so that would just delay the period when we could formally have negotiations and legally agree a trade deal. I certainly agree that the shorter the period, the better.

With regard to the regions and finance, the noble Lord will be aware that the Treasury is currently considering a shared prosperity fund to replace some elements of EU regional finance. With regard to future regional devolution, I fear that those are not matters for me. He will have to ask colleagues in government about that. With regard to EU citizens, the settled status fee is fixed at £65. I am not aware of what charges the Home Office is likely to impose for any other form of citizenship, but I am sure we can find out and write to him.

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank my noble friend for the White Paper. Perhaps I may clarify two points with him. In preparing for yesterday’s debate on the other White Paper, I had the distinct impression from the food industry, which is quite dependent on third-country citizens, particularly current EU citizens, that it is not entirely clear that its long-term status has been secured. Can my noble friend redouble his efforts to ensure that all sectors, whether food, care or health, are made aware of the arrangements?

I declare my interest, in that I practised EU law in Brussels for a while. What will be the certification procedure for those who wish to convert their EU qualifications into UK qualifications post Brexit? Paragraph 40 of the White Paper refers to the,

“Mutual Recognition of Qualifications Directive”,

and states that the,

“arrangements will be provided for, as necessary, in separate legislation”.

Will my noble friend explain what the timetable for that legislation will be? Will the certification be clear before we leave the European Union on 29 March?

[Lord Callanan]

I do not think that I understood all of the questions. The same provisions of settled status apply to workers in the food sector as in every other sector. We are trying to communicate the offer to EU citizens as much as we possibly can after a number of events, in collaboration with various EU embassies, to provide information to their citizens on the processes and procedures for applying, along with DExEU and Home Office staff. We will be doing more of those events.

With regard to lawyers, I do not know whether this answers her question but the existing professional qualifications were recognised as part of the withdrawal agreement for existing citizens. The future recognition of qualifications, after the end of the implementation period, is a matter for negotiation. It is in the White Paper. It is something that we want to agree and we think it mutually desirable, but it has not yet been agreed.

[Baroness McIntosh of Pickering]

In connection with the mutual recognition of professional qualifications, I would like to know whether the legislation will come before this House and the other place before 29 March. It is a perfectly innocent question. The document states that in,

“the Government’s recent White Paper on the future relationship, the UK has proposed that, after the implementation period, there should be a system for the mutual recognition of … qualifications”,

but legislation will be needed. I simply want to know the timetable for that legislation.

[Lord Callanan]

We have still to agree a system of recognition of professional qualifications for after the implementation period. That is in last week’s White Paper. Maybe I should write to my noble friend on the exact detail of that.

[Lord Lexden (Con)]

Turning to Northern Ireland, will my noble friend confirm that no arrangements will be made that create any form of difference or division between that part of our country and the rest of the United Kingdom?

[Lord Callanan]

Yes.

Brexit: Preparations and Negotiations

Lord Callanan Excerpts

Monday 23rd July 2018 Lords Chamber

Moved by

[Lord Callanan]

To move that this House takes note of the preparations and negotiations connected with the United Kingdom’s departure from the European Union.

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

My Lords, negotiations on the United Kingdom’s withdrawal from, and future relationship with, the European Union continue at pace. The publication last week of the Government’s White Paper on the future relationship—a detailed and credible proposal—has given impetus to these negotiations.

Last month we published a joint statement that set out the substantial progress that we have made on the draft withdrawal agreement since the March European Council. We have reached agreement across the majority of the remaining separation issues. Last week my right honourable friend the Secretary of State travelled to Brussels to meet his counterpart, Michel Barnier, where they had constructive discussions on the details of the White Paper and took stock of the negotiations. While there are still issues to agree, our negotiating teams are working to ensure that these are finalised by October and that we reach a positive settlement for both the UK and the EU.

Domestically, we continue to prepare the legislation needed to implement the withdrawal agreement in UK law. We will publish a White Paper tomorrow setting out more details on this. On the future relationship, we believe that the White Paper that we have published is a principled and pragmatic plan for the relationship that we wish to build—an ambitious and innovative proposal that respects the position, interests and concerns of the European Union. It delivers on the decision of the British people to take back control of our laws, our money and our borders, while preserving and building on the historic ties with our European friends and neighbours, in areas such as trade and security, which we both rightly prize.

[Lord Foulkes of Cumnock (Lab)]

My Lords, the Minister said a minute ago that the White Paper will be published tomorrow, the day the House rises, which seems rather strange. What time tomorrow will it be published?

[Lord Callanan]

My right honourable friend the Secretary of State will be making an Oral Statement in another place tomorrow. I do not know whether we have an exact time for that yet.

Leaving the EU offers us an opportunity to forge a new role for ourselves in the world, to negotiate our own trade agreements and to be a positive and powerful force for free trade. Central to our proposal is a free trade area for goods, supported by a common rulebook for those rules necessary to provide frictionless trade at the border and a new facilitated customs arrangement. This will help to secure the complex supply chains and just-in-time manufacturing processes that we have developed with the EU over the past 40 years. This will give businesses certainty and clarity and preserve those jobs that rely on frictionless trade at the border.

A key component of the free trade area will be our proposal for a facilitated customs arrangement, or FCA. This is a business-friendly model that removes the need for any new routine customs checks and controls between the UK and the EU while enabling the UK to control its own tariffs and boost trade with the rest of the world. Under this arrangement, the UK would apply the EU’s tariffs to goods intended for the EU and its own tariffs and policy to goods intended for consumption here in the UK.

In contrast to the earlier proposal for a new customs partnership, the FCA will be an up-front system. This means that most businesses would pay the right tariff to begin with, rather than receiving a rebate at the point of final consumption. Other businesses could claim a tariff repayment as soon as possible in the supply chain. We will agree the circumstances in which repayments can be granted with the EU and, as the White Paper makes clear, we will negotiate a reciprocal tariff revenue formula, taking account of goods destined for the UK entering via the EU and goods destined for the EU entering via the UK. This model has the specific advantage of protecting UK-EU supply and value chains and the businesses that rely on them. For example, Airbus manufactures wings for all its civil aircraft in north Wales. These are then transported to the continent for final assembly. In Dagenham, Ford manufactures diesel power trains for export to the EU. As well as supporting businesses, this approach would meet our shared commitment to Northern Ireland and Ireland in a way that respects the EU’s autonomy without harming the UK’s constitutional and economic integrity.

[Lord Forsyth of Drumlean (Con)]

On the reciprocal nature of the FCA, is it realistic to expect 27 other countries to put in place the bureaucracy and systems necessary to execute this in order to accommodate our wish for this compromise?

[Lord Callanan]

It probably would be unrealistic, which is why we are not asking them to do that. We will agree a reciprocal tariff formula, but we will not ask our EU partners to put in place specific arrangements at their borders.

Alongside these close arrangements for goods, we will negotiate a wide-ranging deal on services and digital.

[Lord Tomlinson (Lab)]

My Lords—

[Lord Callanan]

I am sure one or two noble Lords will have points to make about this, so I will have a bit more to say to it at the end of the debate.

Alongside these close arrangements for goods, we will negotiate a wide-ranging deal on services and digital. This would protect businesses from unjustified barriers or discrimination, cover mutual recognition of professional qualifications and, importantly, preserve our regulatory freedom. This balanced approach to services is based partly on the absence of any of the risks of border disruption that might affect trade in goods, coupled with the distinct advantages of regaining domestic regulatory control as well as the ability to forge new trade deals with fewer fetters so that we are well placed to grasp the opportunities of the future, including across growth sectors such as digital. It would allow the UK to trade with greater freedom with the rest of the world and seize the opportunities for more liberal and energetic free trade with the export markets of the future, from Mexico to Japan.

In leaving the EU, free movement will end. Our immigration policy will be set not in Brussels but by this Parliament, which is accountable to the British people. We will design a new immigration system that enables us to control the number of people coming to live in the UK and place stronger security checks at our border. However, the UK will be an outward-looking nation, attractive to investment and open to business. In line with the arrangements that we will negotiate with close trading partners around the world, we want provisions with the EU that will support businesses to provide services. We want tourists and business visitors to be able to travel without a visa and students to continue to have opportunities to study at universities across Europe. We can agree common-sense reciprocal arrangements while regaining control over our immigration policy. That is the balanced approach that we believe best serves the UK.

Next is our vision for a security partnership that covers the vital security interests that we share. Our proposals build on existing operational capabilities to protect our citizens. They will enable rapid and secure data exchange, practical cross-border operational co-operation and continued participation in important agencies, including Europol and Eurojust, which already have partnerships with third countries. We will also pursue arrangements for co-ordination on foreign policy, defence and development issues, joint capability development and wider co-operation.

When it comes to the return of democratic control of powers and authority to the UK, our laws will be decided by this Parliament and the devolved legislatures. The White Paper proposals will also end the jurisdiction of the Court of Justice of the European Union in the UK. UK courts will no longer refer cases to the CJEU, nor will the CJEU be able to arbitrate disputes between the UK and the EU. Instead, rights will be enforced in the UK by UK courts and in the EU by EU courts.

[Lord Campbell of Pittenweem (LD)]

Has the Minister read paragraphs 146, 147 and 148 of the document, which make it plain that questions of jurisdiction are not to be as exclusive as he has just described?

[Lord Callanan]

Yes, I have read them. We have made it clear that the jurisdiction of the CJEU will of course apply to European law and those areas of the common rulebook, but disputes will no longer be arbitrated by the CJEU.

[Lord Hannay of Chiswick (CB)]

Can the Minister explain how this exclusion of the European Court of Justice will apply to the operation of the European arrest warrant, which involves individuals and not Governments?

[Lord Callanan]

The European arrest warrant is of course part of the security partnership that we seek to agree. It has some challenges at the moment, given the constitutional bars that one or two member states have, but we continue to discuss with the EU how we can take that proposal forward.

In a limited number of areas, we would choose to adopt a common rulebook to ensure the free flow of goods. That body of law is relatively stable, and when there are any changes, Parliament would have to approve them.

We are taking a principled and practical approach. Yes, we have shown flexibility as we strive for a good deal for both the UK and EU. As we demonstrate our ambition for a close partnership through the White Paper, it is worth emphasising two key principles that we share. The first is that Article 50 dictates that a withdrawal agreement must come alongside a framework for the future agreement. The second, flowing from that, is that nothing is agreed until everything is agreed.

We will not sign away our negotiating leverage or spend taxpayers’ money without anything in return. In December we agreed that the financial settlement would sit alongside a framework for a deep and mutually beneficial future partnership, but if either side should fail to meet their commitments—and I should say that we certainly do not expect that to be the case—it would have consequences for the package as a whole that we agree.

[Lord Bowness (Con)]

I am most grateful to my noble friend for giving way, but he is touching on a matter that is particularly topical at the moment. In Florence, the Prime Minister was unequivocal in her statement that the United Kingdom will honour commitments we made during our period of membership. It was not conditional, and “honour” was the word. Are those in favour of Brexit now reneging on the Prime Minister’s word of honour?

[Lord Callanan]

Of course we are not reneging on the Prime Minister’s words, but my right honourable friend the Secretary of State for Exiting the EU made it clear yesterday that we expect a future partnership to be agreed at the same time; it will sit alongside the withdrawal agreement and no money will be paid unless the future partnership is delivered. In these circumstances, it is the duty of any responsible Government to prepare for every eventuality, including the unlikely scenario that we reach March 2019 without agreeing a deal. It is essential that plans are in place to mitigate the risks and ensure stability, whatever the outcome of these negotiations. The Government’s legislative programme in this Session provides for a range of negotiation outcomes, including that of no deal.

In the last few months we have passed the Nuclear Safeguards Act, the Sanctions and Anti-Money Laundering Act and the Haulage Permits and Trailer Registration Act, preparing the UK for a future outside the European Union. I am grateful to the House for the constructive way it has engaged on this legislation.

We have been taking other practical action to ensure that we have the infrastructure in place—for example, recruiting 300 extra Border Force staff, with a further drive to recruit another 1,000, launched earlier this year. The Government have been working on nearly 300 no-deal plans for almost two years. Some of these are already in the public domain. As we announced last week, over August and September the Government will release a series of technical notices to set out what UK businesses and citizens will need to do in a no-deal scenario. This due diligence is designed to provide reassurance that the Government are prepared.

I note the great number of speakers listed for today’s debate and I look forward to hearing all the contributions. Before I resume my place, let me make it clear that we strive to strike the very best deal with the EU, and whatever the outcome of our negotiations, we stand ready to make a success of Brexit.

[Lord Liddle (Lab)]

Before the Minister sits down, will he answer the question raised by the noble Lord, Lord Forsyth, about the facilitated customs arrangement? Paragraph 17 of chapter 1 of the White Paper states clearly that,

“the UK is not proposing that the EU applies the UK’s tariffs and trade policy at its border for goods intended for the UK”.

I understand that in the other place last Monday, an amendment was carried saying that this arrangement would not come into effect unless the other member states agreed to apply this dual tariff. What now is the Government’s policy on this critical point?

[Lord Callanan]

That paragraph confirms the answer I gave earlier. We will agree a tariff-sharing formula with the EU. That is part of the discussions we will have, but we are not asking other EU member states to change their arrangements at their borders. We do not believe that the amendment passed last week is incompatible with our White Paper proposals.

--- Later in debate ---

[Lord Callanan]

My Lords, I am profoundly grateful for the many contributions that we have had to this wide-ranging debate. I had almost forgotten how much I missed spending my Monday evenings debating our exit from the EU with fellow EU obsessives—the noble Lord, Lord Adonis, is still here, which is good—following the passage of the EU withdrawal Act. I shall try to address as many of the points raised this evening as possible. I apologise if it is not possible to respond to every point raised by noble Lords, but I am conscious of the late hour.

The White Paper sets out detailed proposals for a principled and pragmatic future relationship with the EU, delivering on the result of the referendum and taking back control over our money, laws and borders. We have made significant progress on the withdrawal agreement, including on citizens’ rights and the terms of an implementation period. As my noble friend Lord Bridges noted, both sides must now work at pace to deliver a mutually beneficial, sustainable deal later this year.

Our proposed free trade area for goods, including agri-foods, would be enabled by: a common rulebook covering only those rules necessary to provide for a frictionless border; participation in EU agencies that provide authorisations for goods in highly regulated sectors; and a new facilitated customs arrangement. In designing this model, the Government have responded to feedback on overcoming the shortcomings of both the new customs partnership and the highly streamlined customs arrangement. Unlike previous models, the FCA allows many businesses to pay the correct tariff at the start so that they will not need to interact with the repayment mechanism at all. For businesses that do not qualify, HMRC has committed to making the rebate process as simple and streamlined as possible. Even then, the rebate mechanism is voluntary. Businesses will be able to choose whether they wish to take advantage of any lower UK tariffs.

Noble Lords, including my noble friend Lord Forsyth and the noble Lord, Lord Liddle, raised the Government’s acceptance of new Clause 36 of the customs Bill in the other place. The clause would prevent the implementation of a new arrangement that would see HMRC collecting duty on behalf of the Government of another territory or country, unless it was reciprocal. The Government have been clear that under the FCA the UK and the EU would agree a mechanism for the remittance of relevant tariff revenue. We proposed a reciprocal tariff revenue formula, taking into account goods destined for the UK entering via the EU and goods destined for the EU entering via the UK. This clause is therefore consistent with the White Paper. To my noble friend Lord Forsyth, I reaffirm that we are not proposing that the EU applies the UK’s tariffs at its borders for goods destined for the UK.

In response to the noble Lord, Lord Hannay, yes, the FCA model is consistent with WTO law. The UK will be an independent member of the WTO and we will be able to set our own tariffs. We will be able to pursue trade agreements in line with the UK’s interests.

In response to my noble friend Lord Bowness, we want to be part of the network of the EMA but it has to be on the right terms and meet the objective set out in the White Paper of our being an active participant and making an appropriate financial contribution. That is why we decided to oppose the amendment. However, we will revisit it when it comes to this House.

In response to the argument made by the noble Lord, Lord Howarth, and my noble friend Lord Farmer, under the terms of the withdrawal agreement the UK will be free to negotiate, sign and ratify free trade agreements during the implementation period and to bring these into force from January 2021.

A number of noble Lords raised our proposals on services. As the White Paper sets out, we want an ambitious deal on services and digital that allows us to exercise greater regulatory freedom for the UK’s world-leading services-based economy. In response to the points on financial services raised by noble Lords, including the noble Baroness, Lady Hayter, my noble friend Lord Hunt, the noble Lord, Lord Mandelson, the noble Baroness, Lady Kramer, and my noble friend Lady Wheatcroft, we are proposing a new economic and regulatory partnership based on binding bilateral commitments.

We have listened carefully to the EU’s concerns and we agree that, particularly for reasons of financial stability, market access should be a decision that remains autonomous for each party. However, this could work only with improvements to the current EU system to reflect the fact that equivalence as it exists today is not, in our view, sufficient to support the close relationship that we seek. The UK will continue to be the most open financial services market in Europe, with the best environment for innovation, an unparalleled talent pool and a legal system that is respected around the world. Furthermore, we will have the flexibility to agree new global financial partnerships with other countries.

I say to the noble Lord, Lord Green, and others that the Government are clear that free movement will end and that we will take back control over the number of people who come to live in the United Kingdom. However, in reference to the points raised by my noble friend Lord Heseltine and the noble Baroness, Lady Smith, we are not closing our borders to the talent that an outward-looking global Britain needs to succeed. The UK will remain an open and tolerant nation, and we will want to continue to attract people from the EU and elsewhere to work here.

The noble Lords, Lord Boswell and Lord Hannay, also touched on the future immigration system. The UK will design an immigration system that works for all parts of the UK. To inform this, the Migration Advisory Committee report due in September will provide important evidence on patterns of EU migration and the role of migration in the wider economy.

On leaving the EU, we will end the jurisdiction of the Court of Justice of the European Union in the UK. The proposal set out in the White Paper delivers on that commitment. No longer will UK courts refer cases to the CJEU; nor will the CJEU arbitrate disputes between the UK and the EU. Additionally, the CJEU will no longer have the power to make laws for the UK, and the principles of direct effect and of the supremacy of EU law will no longer apply to the UK.

The noble and learned Lord, Lord Hope, raised the resolution of disputes. We have proposed a robust and appropriate mechanism, including through a joint committee and, in many areas, binding independent arbitration. In response to the remarks of the noble Lord, Lord Hannay, on the proposed framework, these arrangements are proportionate and necessary for the depth of the relationship with the EU that the UK envisages. They will ensure that the co-operation functions properly and that the relationship is transparent and accountable.

Where we have a common rulebook and there is a dispute between the UK and the EU, the joint committee, by mutual consent, or an independent arbitration panel will be able to ask the CJEU to give a binding interpretation of the rules in question. It will be for the joint committee or the arbitration panel to decide the dispute, consistent with the essential principle that the court of one party cannot resolve disputes between the two.

In areas where we have a common rulebook—a question raised by noble Lords including my noble friends Lord Bridges and Lord Cavendish—it will be important for the UK and for EU businesses and citizens that they are interpreted and applied consistently. This will be done in the UK by UK courts and in the EU by EU courts, because preliminary references from UK courts to the CJEU will have ended. Therefore, where the UK agrees to retain a common rulebook, our courts will pay due regard to the relevant CJEU case law when deciding a case. In practice this is what our courts would do anyway. But it will be for UK courts to decide the cases before them, applying UK law.

In response to the points raised by the noble Lords, Lord Adonis and Lord Bew, I should say that the Government’s proposal for a principled Brexit will deliver for our union—for England, Scotland, Wales and Northern Ireland—while protecting the economic and constitutional integrity of the United Kingdom. Our proposals mean that goods and agri-food will flow freely between Northern Ireland and Ireland, so the backstop would not have to be used. In response to the noble Lord, Lord Hannay, I should say that we remain committed to agreeing a legally operative backstop in the withdrawal agreement, and we are continuing to negotiate that with the EU over the coming weeks.

In response to the points made on the security partnership by the noble Lords, Lord Wallace and Lord Browne, I emphasise that. although there is no off-the-shelf model for third countries, the UK is indeed no ordinary third country. We have been intimately involved in the evolution of EU security architecture, we will continue to be a European neighbour, facing the same threats and sharing the same values and interests, and it is clearly in our mutual interest to stand united in our efforts to ensure the collective security of UK and EU citizens.

On foreign policy co-operation, the UK proposes continued consultation and combining efforts to the greatest effect where it is in the EU’s and the UK’s shared interest—for example, in the application of sanctions. The EU discusses foreign policy issues with a number of third countries, which can provide the basis for this new relationship. But the UK’s proposals are for a broader and deeper dialogue, underpinned by the exchange of information and expertise.

Noble Lords including the noble Lords, Lord Razzall and Lord Browne, raised the issue of Galileo. The UK is home to a world-leading space technology sector which has helped drive the EU space programmes. Our clear preference remains to participate in Galileo in a new balance of rights and obligations after we have left the EU. The programme must also, of course, offer value for money to justify an ongoing UK contribution. As a logical consequence of the exclusion and uncertainty surrounding future UK participation, the UK is exploring alternatives to fulfil its needs for secure and resilient position, navigation and timing information.

Many noble Lords, including the noble Lords, Lord Birt and Lord Liddle, and the noble Baroness, Lady Hayter, raised the prospect of leaving without a deal. The Government are confident that, with the good will of both sides, we will achieve a deal, but, as a responsible Government, we must prepare for all scenarios, whatever the outcome of the negotiations. As I said earlier, we have been working on nearly 300 no-deal plans for nearly two years, and to prepare businesses and citizens for a no-deal scenario we will make more of this planning public by issuing a series of technical notices over August and September. Rest assured that the Government are clear that a mutually beneficial deal is in the interests of both sides, and that our firm objective is for our negotiating teams to reach an agreement by October.

I will respond to the point made by the noble Baroness, Lady Falkner, by saying that both the UK and the EU have been clear that the withdrawal agreement and the future framework form a package. If either side should fail to meet its commitments—although we certainly do not expect that to be the case—this would have consequences for the package as a whole that we agree.

Many noble Lords have returned to their favourite topic. They include the noble Lord, Lord Newby, the noble Baronesses, Lady Ludford and Lady Kramer, my noble friend Lord Heseltine, the noble Lords, Lord Taverne, Lord Butler and Lord McNally, my noble friend Lady Wheatcroft, the noble Baroness, Lady Randerson, and the noble Lord, Lord Skidelsky. We are back on to the subject of a second referendum—or, as it has now been renamed, the people’s vote—which leads me to wonder who voted in the first referendum. Aliens, perhaps, or farm animals?

[Lord Skidelsky]

I should not be on that list.

[Lord Callanan]

I did not think I had mentioned the noble Lord, but I apologise.

--- Later in debate ---

[Lord Mandelson]

I should have been on that list.

[Lord Callanan]

I was going to mention the noble Lord as responsible for renaming it as the people’s vote in a worthy spin operation, but perhaps he was not involved. I apologise.

The Government’s position remains unchanged, noble Lords will not be surprised to hear, from the time of the first referendum. I agree with the noble Lord, Lord Skidelsky—to mention him—and others that it is essential for our democracy that we respect the result of the referendum. I am pleased to say that this appears to be a position that we share with the Labour Party. Last week the Huffington Post reported that the shadow Foreign Secretary categorically ruled out a second Brexit referendum. She said that,

“we went ahead and had a referendum and we lost it and overwhelmingly, above everything else, we are Democrats, so we have to do as instructed”.

On this one occasion, I agree with Emily.

Furthermore, in response to points made by the noble Lords, Lord Wigley and Lord Kerr, let me make it clear that we will not be seeking an extension of Article 50. We are leaving the EU on 29 March 2019 and we will deliver the necessary legal framework in time.

The Government are delivering a principled and practical Brexit. For our economy, we are developing a deep trading relationship with the EU; for our security, we are building on our close co-operation with the EU to keep all of our citizens safe; for our communities, we are ending free movement and responding to concerns raised during the referendum; for our union, we are meeting our commitments to Northern Ireland, and for our democracy, we are restoring sovereignty to this Parliament. For the UK’s place in the world as a champion of democracy and free trade, we are building on progress made so far in negotiations and the ambitious and credible proposals in our future relationship White Paper and must now redouble our efforts to achieve a sustainable and lasting settlement with our European partners.

[Lord Balfe]

Before the Minister sits down, the noble Baroness, Lady Young, and I raised a point on the European Aviation Safety Agency. We asked whether the Minister could write to us dealing with the points we made, and I repeat that request.

[Lord Callanan]

As the noble Lord knows, we have made a commitment to remaining part of the European Aviation Safety Agency if that can be negotiated. There are four or five paragraphs in the White Paper on future aviation agreements, but I would be very happy to write to both noble Lords with clarification.

House adjourned at 11.52 pm.

EU Exit: Future Relationship White Paper

Lord Callanan Excerpts

Thursday 12th July 2018 Lords Chamber

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

My Lords, with the leave of the House, I shall now repeat a Statement about the UK’s future relationship with the European Union. The Statement is as follows:

“Let me start by paying tribute to my right honourable friend the Member for Haltemprice and Howden, and his Herculean efforts along with those of my honourable friend the Member for Wycombe and the wider DExEU team to get us to this point in both the negotiations and the successful passage of the EU withdrawal Bill through Parliament. It is a striking achievement. My right honourable friend is a loss to the Government, but I suspect, with the mildest apprehension, a considerable gain to this House.

Shortly, we will publish the Government’s White Paper on the UK’s future relationship with the European Union. It is a new and detailed proposal for a principled, pragmatic and ambitious future partnership between the UK and the EU in line with the policy agreed at Chequers last week. I am placing a copy of the White Paper in the Libraries of both Houses, but let me briefly set out the key proposals.

Mr Speaker, the Government are determined to build a new relationship that works for both the UK and the EU, one grounded in our shared history but which looks to a bright and ambitious future: a relationship that delivers real and lasting benefit to both sides.

First, the White Paper confirms that the UK will leave the European Union on 29 March 2019, forging a new way in the world outside the single market and outside the customs union. It safeguards the constitutional and economic integrity of the UK. It reclaims the UK’s sovereignty and it protects our economic interests by minimising the risk of disruption to trade. It delivers on the instruction we received loud and clear from the British people: to take back control of our laws, our borders and our money.

In delivering on this vision, the Government propose an innovative and unprecedented economic partnership based on open and free trade. We will maintain frictionless trade through a new UK-EU free trade area for goods underpinned by a common rulebook covering only those rules necessary to provide for frictionless trade at the border. This will support business and meet our shared commitments to Northern Ireland and Ireland, thus avoiding any reliance on the so-called backstop solution. A key component of this will be our proposal for a facilitated customs arrangement, a business-friendly model that removes the need for new routine customs checks and controls between the UK and the EU, while enabling the UK to control its own tariffs to boost trade with the rest of the world.

We want a deep and comprehensive deal on services based on the principles of international trade. Our approach minimises new barriers to service provision, allowing UK firms to establish in the EU and vice-versa, and provides for mutual recognition of professional qualifications.

On financial services, we propose a new economic and regulatory approach with the EU that will preserve the mutual benefits of our uniquely integrated markets while protecting financial stability and our autonomy of rule-making. Crucially, our proposals on services provide the UK with regulatory flexibility in the sector, including our dynamic, innovative digital sectors, which will, in turn, open up new possibilities relating to trade with the wider world.

As we leave the EU, free movement of people will come to an end. We will control the number of people who come to live in our country. We will assert stronger security checks at the border. The Government will also seek reciprocal mobility arrangements with the EU, in line with the approach we intend to take with other key trading partners. In practice, having ended free movement, this is about enabling firms to move their top talent across borders to deliver services; facilitating travel without a visa for tourism and business trips; and making sure that our students and youngsters, in the UK and the EU, continue to benefit from the educational opportunities in universities, colleges and the rich tapestry of cultural life across the continent.

Next, the White Paper addresses Europe’s security, which has been and will remain the UK’s security. This is why the Government have made an unconditional commitment to maintain it. The Government’s proposal is for a new security partnership with the EU to tackle shared, complex and evolving threats, enabling the UK and the EU to act together on some of the most pressing global challenges. It is important that the UK and the EU can continue operational co-operation on law enforcement and criminal justice to keep people safe across Europe. Our proposals extend to other areas of co-operation of vital importance to the UK and the EU, including the continued protection and exchange of personal data, new arrangements on fishing and co-operative accords on science and innovation, culture and defence research.

When we leave the EU, the European Court will no longer have jurisdiction over this country. At the same time, we need to be able to interpret what we have agreed accurately and consistently and manage any future bones of contention sensibly and responsibly. Our proposals provide for proper accountability and the consistent interpretation of UK-EU agreements by both parties. We envisage resolving disputes that may arise through arbitration, which is fair, balanced and reflects global practice. To provide the foundation for an enduring new relationship, the agreement must be flexible enough to enable us to review and, if necessary, revise its operation over time, as is common in free trade agreements across the world.

Finally, I will make one thing clear: we will not sign away our negotiating leverage, or spend taxpayers’ money in return for nothing. The financial settlement agreed in December, which was substantially lower than EU demands, was agreed on the basis that it would sit alongside a deep and mutually beneficial future partnership. We agreed that we would meet our commitments as they fall due, with ever declining payments over a finite period, which add up to a tiny fraction of what would have been our net contribution.

Both sides have been clear that nothing is agreed until everything is agreed. Indeed, that is in keeping with the spirit of Article 50. There should be a firm commitment in the withdrawal agreement requiring the framework for the future relationship to be translated into legal text as soon as possible. If one party fails to honour its side of the overall bargain, there will be consequences for the whole deal. For our part, the UK Government are today demonstrating our ambition and resolve to ensure that we build that deep and special partnership with the publication of this White Paper.

The Prime Minister first outlined a blueprint for a deep and special relationship with the EU at Lancaster House and expanded it further in her speeches in Florence, Munich and at Mansion House. Those speeches have shaped, and they continue to shape, our negotiations with the EU.

I am confident that a deal is within reach, given the success that the Prime Minister and her negotiating team have already had so far. Most issues under the withdrawal agreement have been resolved, with a deal in place to secure the rights of more than 3 million EU citizens living in the UK and around a million UK citizens living in the EU, and we have agreed a time-limited implementation period that gives businesses, Governments and citizens the certainty to plan their lives and invest for the future. Next week, we will publish a White Paper on the withdrawal agreement and implementation Bill, setting out how we will give effect to the withdrawal agreement in domestic law and demonstrating to the EU that the UK is a dependable negotiating partner—one that will deliver on its commitments.

Our discussions with the EU will squarely focus on our shared future. This White Paper sets out how we can achieve that new partnership. Now, it is time for the EU to respond in kind. We approach these negotiations with a spirit of pragmatism, compromise and friendship. I hope that the EU will engage with our proposals in the same spirit, and I plan to meet Michel Barnier next week to discuss the detail in person.

At the same time, the Government are preparing in the event that this spirit of pragmatism and good will is not reciprocated. On Monday, I spoke with my right honourable friend the Prime Minister. We agreed to step up our planning for a no-deal scenario, so that the UK is ready for Brexit no matter what the outcome of these negotiations. It is the responsible thing for a Government to do.

This White Paper sets out the right Brexit deal, delivering on the result of the referendum by taking back control over our money, laws and borders; supporting the economy by maintaining a strong trading relationship after we have left; ending free movement, while avoiding a hard border between Northern Ireland and Ireland, or between Northern Ireland and Great Britain; restoring the sovereignty of Parliament and the authority of the UK Supreme Court; seizing the opportunity to forge new trade deals around the world; and maintaining co-operation with the EU in many other areas that we prize, including vital security co-operation to keep our people safe.

This is our vision for a bold, ambitious and innovative new partnership with the EU. It is principled and practical, faithful to the referendum. It delivers a deal that is good for the UK and for our EU friends, and I commend this Statement and the White Paper to the House”.

--- Later in debate ---

[Baroness Ludford (LD)]

My Lords, naturally it is a landmark moment that we finally have a government position on Brexit after more than two years, but that exhausted sense of relief is tempered by a huge number of caveats. The first of these is that it has in fact not calmed tempers within the Conservative Party but ignited an all-out war within the governing party: strong and stable this plan is not.

I will have to mix my foodie metaphors. On Monday, I said that the Chequers plan looked like a series of fig-leaves—over the sovereignty of Westminster to reject EU regulations, over the autonomy of the UK legal order, over the pretence of business-friendliness—and I maintain those critiques now that we have the White Paper. However, in addition I suggest that the White Paper describes not a soft nor a hard Brexit but a scrambled Brexit. This is exemplified by the farce of the Secretary of State for Exiting the EU starting his Statement in the other place before MPs had a copy of the White Paper. He actually tried, after the uproar, to suggest that the clerks might be to blame, but actually the Statement is predicated on being delivered before the White Paper is published. It says:

“Shortly, we will publish the Government’s White Paper”,


on Brexit. So it was always intended that the Statement would be made before the White Paper. I think this is executive arrogance rather than taking back control for Parliament.

The scrambled incoherence of the White Paper is exemplified by the suggestions on the agri-food sector. Page 16 of the White Paper talks about,

“a common rulebook for agriculture, food and fisheries products, encompassing rules that must be checked at the border, alongside equivalence for certain other rules, such as wider food policy”.

There are quite a few contradictions there. How is it frictionless trade if there have to be checks at the border? How does that common rulebook for agri-food work if the UK is outside the common agricultural policy and the common fisheries policy? How can you have a common rulebook for some aspects of food but equivalence for other aspects of food policy? Perhaps the Minister will explain and unravel some of that. The fact is that the facilitated customs arrangement is baroque, complicated and bureaucratic; it is likely to collapse under the weight of its own contradictions.

As the noble Baroness, Lady Hayter, said, how on earth can you separate goods from the services that are essential to their production, whether that is legal services, software, intellectual property or others? There is also the serious worry about the potential for fraud and smuggling with these differential tariffs that are meant to be applied at the border; that is leaving aside the question of whether the EU will agree to operate its intended side of the arrangement.

Michel Barnier is surely right. He said that only staying fully in the single market and the customs union can guarantee frictionless trade, yet the Government maintain this claim of “frictionless trade”. That is an absolute term; it does not mean a little bit of friction—it means no friction. How do the Government intend trade to be frictionless? How can there be an independent trade policy, which is alleged in the White Paper, if the UK has committed itself to a common rulebook, including on agri-food products? How will that work when the US invites us to accept the famous bleached chickens and GM food?

The cakeism which runs throughout this White Paper is exemplified by the comments on services—a massive hole in the plan—which are 80% of our economy, and which we do not intend to be part of the single market. When one thinks of the efforts previous Conservative and other Governments have made to try and deepen the single market in services, this is a betrayal of everything that Mrs Thatcher tried to do.

Can the Minister tell me how,

“new arrangements on financial services”,

will,

“preserve the mutual benefits of integrated markets”,

while maintaining the autonomy of rule-making? Those two are surely in contradiction. We will not have integrated markets with autonomous rule-making.

I fear that what the Government are setting up is a further loss of trust in the public. There were so many deceitful statements that came out of the three pages after the Chequers meeting last Friday, which appear to be repeated in the bits of this White Paper which I have been able to read. For instance, the White Paper says:

“We share an ambition for our country to be … more prosperous than ever before”.


But the Government’s own impact statements, which we finally wrestled out of them, all show that we will be poorer. Our economy will shrink; we will have less money for public services. So how will we be more prosperous if the Government have committed to the statements made by the OBR? There are so many statements in here that are just not true, such as that this will,

“return accountability over the laws we live by”,

to the UK Parliament. We will comply with the common rulebook, and yet we will have autonomy over our laws. It does not add up; we are setting up for the people to be let down and it is the people, therefore, who should have the final say on what the Government come back with. Otherwise, the forces that led to the decision in the referendum two years ago will just be magnified.

[Lord Callanan]

I thank both noble Baronesses for their comments. Let me address some of the issues that they raised.

First, I am grateful to the noble Baroness, Lady Hayter, for her comments about the prompt delivery of the White Paper in this House. I am glad to see that our processes are more efficient. When I was preparing for appearing here, I was listening to the exchanges in the House of Commons, so I dashed to the Printed Paper Office here to check that they had sufficient copies to deliver to everybody. Noble Lords were busy collecting them at the time and said they had them available in good time; I am pleased she got hers and I hope the noble Baroness, Lady Ludford, received hers in time as well. There was some information that was released to the press under embargo, as is normal practice, but it was released only once the Secretary of State stood up—

[Baroness Hayter of Kentish Town]

My Lords, I am really sorry, but it was at 9 o’clock this morning.

[Lord Callanan]

My information is that the embargo was not allowed to be lifted before the Secretary of State rose to his feet.

In answer to her other questions outside the process of delivering the White Papers, I can confirm that it is our ambition to reach a comprehensive deal on services. Will it be acceptable to the European Union? I hope so. We approach the negotiations in good faith and we will engage positively. We hope there will be a positive reaction because we want to reach a deal and get an agreement.

The noble Baroness asked about freedom of movement. I confirm that freedom of movement will end and she should be delighted to hear that, seeing as both my party and hers stood on promises at the last election to say that we would end freedom of movement. We have said that, in line with the commitments given in many free trade agreements, we will seek to negotiate a mobility partnership with the EU, but that will not be the same as freedom of movement. This will cover things such as intra-company transfers, students, tourists and service providers, but it will not be the same as freedom of movement.

The noble Baroness made some quite good points about how to distinguish between goods and services; that is something we need to explore further with the EU, but a “good” is traditionally defined as something that physically crosses a border.

The noble Baroness asked about Gibraltar and the devolved Administrations. I can confirm that we did consult extensively with devolved Administrations, including sharing some drafts of certain parts of the White Paper where they were relevant to them. We did take on board and accept some of their comments.

I am not sure where the noble Baroness, Lady Ludford, was going with her fig-leaves analogy. Perhaps this was reference to the agri-foods being able to cross borders, so she will be delighted to know that, with the common rulebook on agri-foods, her fig-leaves will be able to seamlessly cross over the borders.

Again, in terms of delivery of the White Paper, I think I have answered that question from the noble Baroness, Lady Hayter.

I can confirm that we will be outside the common agricultural policy and the common fisheries policy, although we have said that we want to try and agree a common rulebook on agri-foods. We do not believe that will be a barrier. As the noble Baroness knows, the EU itself argues that CAP subsidies are not market distorting within the WTO, so there should be no problem in agreeing our own policies on environmental and CAP protections.

In terms of the common rulebook, we have been clear that we only want to agree a common rulebook in terms of those regulations that are necessary to enable frictionless border controls—or rather, no border controls because of a friction-free border.

In terms of free trade agreements, one of the benefits of the FCA partnership, if we can agree to it, is that it will allow us to set our own tariffs. I confirm that it is a priority of this Government to negotiate a free trade agreement with the US, and the noble Baroness will see references in the White Paper, as well as to our ambition to negotiate similar agreements under the Trans-Pacific Partnership.

In terms of financial services, we have been clear that we want to agree a close future relationship with the EU that preserves the mutual benefits of our uniquely integrated markets and protects financial stability. At the heart of this new partnership will be a set of binding, bilateral commitments that provides certainty and stability of access to each other’s markets and firms, while allowing the UK and the EU to exercise autonomy of regulatory decisions through their own domestic processes.

On the final point about accountability of laws, this will be a different arrangement. As the noble Baroness well knows, under the European Communities Act European law has direct effect in the UK; Parliament has effectively no choice about it. If we agree the common rulebook, then Parliament will have to adopt any future EU goods regulations, but it will have a sovereign choice about whether to do so. If it chooses not to, then we will have to accept the market consequences of that, but it will be a choice that this and future Parliaments will be able to make, so that is a different situation to that which pertains under the existing European Communities Act.

[Lord King of Bridgwater (Con)]

My Lords, does my noble friend recognise that this Statement and the White Paper do rather better than one or two of the statements that came out of Chequers in continuing to emphasise the point that frictionless trade is as important for jobs among our friends in the European Union as it is for jobs in this country? If that does not exist in any way, that would be hugely damaging to jobs in Europe as well as in this country.

[Lord Callanan]

I totally agree with my noble friend, who speaks great sense as always on these matters. Of course, free trade is in the mutual best interest of both parties; we cannot say that too often.

[Lord Kerr of Kinlochard (CB)]

My Lords, I am grateful to the Minister for making sure that we, unlike our friends in another place, were able to read the White Paper. I have got as far as page 16 and it is there that I would like to ask for some elucidation. It is very good that we have at last put some cards on the table. That is a couple of years too late but better late than never. The White Paper is clearly a very substantial body of work, which will take a lot of reading by us and, I would have thought, a great deal of negotiating in Brussels.

I want to start on an element which the Minister highlighted. The FCA or facilitated customs arrangement, referred to on page 12 of the Statement and pages 16 to 18 of the White Paper, says:

“As if in a combined … territory with the EU, the UK would apply the EU’s tariffs and trade policy for goods intended for the EU. The UK would also apply its own tariffs and trade policy … However, the UK is not proposing that the EU applies the UK’s tariffs and trade policy at its border for goods intended for the UK”.


I have two questions. First, what happens at Dover to goods from, say, Asia which entered the EU via, say, Rotterdam? Where do the customs dues, tariffs and quota checks take place?

Secondly, as the Minister will be well aware from his long experience in the European Parliament, customs dues are an own resource which go straight into the common EU budget and it is 11 years since OLAF, the antifraud agency, started warning us that our border controls on Chinese textiles and footwear were inadequate. We are now in court for unpaid duty, calculated at more than €3 billion over a 10-year period. As he will be well aware, too, we are also in court over VAT fraud at Felixstowe, where the charge against us is $3.2 billion. Does he really think that once we have shaken off the ECJ, the Commission and OLAF, we will be accepted as trustworthy collectors of the EU’s external tariffs and customs duties at our ports, against the background that it believes that we have consistently under-counted for the last decade, having admitted false invoices and incorrect value declarations? How are we going to persuade the European Union that, as non-members of a customs union, we should collect the duties which go straight into its common budget? Would it not be simpler simply to have a customs union, as this House voted for by a majority of 123?

[Lord Callanan]

To answer the noble Lord’s last point first, for the sake of repetition, we have been clear that we are leaving the customs union. The reason why we are leaving is that we do not want to contract out our trade policy to the European Commission. He might think that is a good thing but I do not and I disagree with him. We want to come to an independent trade policy and this model would allow us to do that. I accept that there will be some challenges in negotiating this matter. However, we have put forward a proposal in good faith and intend to persuade the EU of its virtues and benefits.

On the noble Lord’s question about collecting duties, we intend to agree with the EU a mechanism for the remittance of relative tariff revenue. The UK is proposing a tariff revenue formula, taking account of goods destined for the UK entering via the EU and goods destined for the EU entering via the UK. I am afraid I cannot comment on the court proceedings that are taking place but I understand that we are vigorously resisting the sums that have been claimed.

[Lord Campbell-Savours (Lab)]

My Lords, does not the chaos and division preceding the publication of this White Paper point once again to the approach that I have argued for in this House over the last two years? The people, by majority, voted leave because a majority of them wanted reform of free movement and control of our borders, which is what all the pre-referendum polling data showed in many national polls that were carried out. I hold copies of that polling data myself. In the changed conditions that now exist in Europe, can I once again suggest that, despite the difficulties, we pursue that limited objective and, at the same time, seek a new formula that would redefine our net contributions as gross, then let the people decide once again in a second referendum?

[Lord Callanan]

I commend the noble Lord for his perseverance in pursuing this avenue but I respectfully say to him that I do not think a second referendum is the way forward. He refers to chaos. I do not agree with him on that but were we to go down the road of a second referendum we would have months and months, if not years, of arguing about what the question should be, what its effects would be and how we would resolve them. We would need legislation to go through both Houses and to try to accomplish that would be extremely controversial. What would happen if the country voted differently? Would there be a best of three, and would we seek to reopen the whole question? If anything, that would be a recipe for massive chaos.

I said quite a bit about freedom of movement earlier. Freedom of movement is ending and I agree that that was one important factor in the referendum result. However, it was not the only factor. People voted leave for many different reasons, of which I think freedom of movement was one. That is why it is ending.

[Lord Cormack (Con)]

My Lords, I thank my noble friend for remaining in the Government to fight for meaningful negotiations. Will he do all in his power to convince the triumphalist brigade of Brexiteers, of whom there are far too many, that they represent only a small fraction of the population and have to accept that the solution at the end of the day cannot be winner takes all? We have to have realistic negotiations in a spirit of constructive compromise. Will he assure the House that that is how he will play his part in going forward from this document, which is much more realistic than many of us feared it might be?

[Lord Callanan]

I thank my noble friend for his comments. I never had any intention of resigning, despite the optimistic tone in the Twitter feed of the noble Baroness, Lady Ludford, which somebody pointed out to me. It was a great amusement to wake up on Monday morning and find the number of people—including the noble Lord, Lord Adonis, the noble Baroness and others—who had been speculating on my demise. Of course, these are difficult times. There were always going to be difficult and tricky negotiations and I have always said that we need to try to come up with a solution which everybody in the country can support. That will be a challenge but we will do our best, because we have to move forward in a spirit of unity and not division.

[Lord Hannay of Chiswick (CB)]

My Lords, will the Minister perhaps enlighten the House on whether the customs arrangement proposed will be in full conformity with World Trade Organization rules, which normally lay down that when a third country sends goods to somewhere such as the UK, it knows what tariff rate it will be faced with? That would be the UK tariff rate but apparently, under certain circumstances, it would be a different tariff rate. Does that conform to the WTO?

My second question is about the migration partnership. The Statement makes it clear that this will fall within the ambit of the negotiations with the EU 27, but what on earth are the negotiations going to be about since the White Paper says nothing about the migration partnership? When the Minister’s right honourable friend arrives in Brussels next week, what is he to say when asked what we are putting in place on freedom of movement? Finally, I notice that the Statement states categorically that the Government are not going to spend taxpayers’ money on nothing but, if they get their way and there is a deal, they will have spent millions in taxpayers’ money on preparing for nothing.

[Lord Callanan]

I do not know if the noble Lord has a copy of the White Paper but, if he looks on pages 32, 33 and 34, he will see a substantial amount on what we see as the mobility partnership, the ending of freedom of movement, et cetera. Maybe he would like to look at those pages. Of course anything we seek to negotiate will conform with WTO rules. We will be an independent member of the WTO. We look forward to resuming our seat and we will be a global advocate for free trade, in conformity with WTO rules.

[Lord Monks (Lab)]

My Lords, I am sure that no one wants to undercut the position of government negotiators in the continuing talks with the European Union, but how realistic is it for the Government to pick out those bits of EU structures they like and want to retain and jettison the other bits that they do not like? Is it not cherry picking on an epic scale, almost like the England football team looking for some special dispensation from the rules in the World Cup to gain an advantage? Is the White Paper an opening basis for talks or will it be plastered with red lines laid down by elements of the Cabinet and the Conservative Party? Is this a basis for negotiation or an inflexible position?

[Lord Callanan]

No, this is not cherry picking. All trade agreements are bespoke. This proposal puts our rights and responsibilities in a new balance that fulfils our joint ambition to establish a deep and special partnership. The reason that we believe in free trade is that it is unambiguously positive for both sides. The EU has a surplus of goods trading with the United Kingdom, so it has an extra incentive to agree a partnership on that basis. We want to discuss these proposals with it and hope it will be able to accept them but, as with all these things, we have already made considerable compromises in the negotiations, as has the EU. Those of us who have been MEPs in the past know that all EU negotiations result in considerable compromise from both sides. It is difficult to see how we can compromise much further in the proposals but, nevertheless, we will engage in the discussions in good faith.

[Baroness Oppenheim-Barnes (Con)]

Some of our greatest earnings are from carriage by sea, and a great many of our goods go through Europe but are destined for countries outside it. Will those goods be exempt from the new regulations or will they be required to accept them, if it is no longer in their interest to pass through European ports?

[Lord Callanan]

All exports need to be WTO-compliant. A lot of the rules for maritime and sea transport are set at an international level, and exports will need to continue to comply with those regulations.

[Lord Lea of Crondall (Lab)]

My Lords, on the theme of cherry picking, I take an example from paragraph 10 of the Oral Statement:

“In delivering on this vision, the Government propose an innovative and unprecedented economic partnership”—


you can say that again—

“maintaining frictionless trade through a new UK-EU free trade area for goods underpinned by a common rule book”,

but,

“covering only those rules necessary to provide for frictionless trade at the border”.

Given the multiplicity of borders—there must be hundreds across Europe—is this meant to apply to all of them and, if so, what can we expect of other countries? It would surely strike them as a bit strange, if not unreasonable, if it applied only to borders in which we had some interest but not to everybody’s border.

[Lord Callanan]

I am not sure I totally understand what the noble Lord is getting at there.

[Lord Lea of Crondall]

Is this going to apply to all the borders between all the countries of Europe?

--- Later in debate ---

[Lord Callanan]

This is concerned with the border between the United Kingdom and the rest of the EU, whether at Dover/Calais or the Northern Ireland/Ireland border. That is principally what we seek to address with these proposals.

[Lord Bridges of Headley (Con)]

My Lords, I congratulate my noble friend and his colleagues on the White Paper. I entirely agree with the thrust of it, the balance of it and, at long last, that we have grasped the need for compromise and being honest about the challenges that we face. In that spirit, therefore, I urge him and his colleagues to be honest and transparent about the consequences of the compromises contained in the White Paper, specifically about the role of the ECJ. Yesterday afternoon, I received an email from one of our colleagues in the Conservative Party, Mr Brandon Lewis, who said that the plan and proposals at Chequers meant that we would control our laws. It is apparent, when you read paragraph 42 on page 93, that the CJEU—the European Court of Justice—will continue to have a role in the interpretation of the laws and regulations of this country. I urge my noble friend to be honest about that, so that we can go forward together as a country, united and clear about our direction.

[Lord Callanan]

I thank my noble friend for his comments. These judicial areas are complicated, so perhaps I should briefly set out our position for the House. Where we have a common rule book and there is a dispute between the UK and the EU, the Joint Committee, by mutual consent, or an independent arbitration panel will be able to ask the CJEU to give a binding interpretation of a common rule. If we are allowed to participate in EU agencies, the Prime Minister has already said that we will accept the remit of the ECJ in the application of the rules of those agencies, but that is far from the overreaching impact that the ECJ has at the moment.

[Lord Jay of Ewelme (CB)]

My Lords, I welcome the White Paper and look forward to reading it. I am afraid I have got to only page 14 so far, but my noble friend Lord Kerr was always ahead of the game. When the former Secretary of State for Exiting the European Union appeared before the EU Committee of your Lordships’ House, he talked about the negotiations on economic, security and foreign policy issues taking place at a different rhythm and pace over the next few months. Could the Minister say more about how he sees the negotiations taking place now, based on the White Paper that we have just received?

[Lord Callanan]

The Prime Minister has been clear that we want the negotiations to proceed at pace. They are all important issues—on security and external affairs as well as the economic partnership—so they are all going on in parallel. The new Secretary of State will be meeting Michel Barnier shortly and the negotiating teams are ready and willing to work over the summer, which is unusual in Brussels. Nevertheless, there is willingness on both sides to address these issues and to push forward at pace, in the hope of reaching an agreement by October, as we have targeted.

[Baroness Wheatcroft (Con)]

My Lords, the Statement refers to the “flexibility” that we will retain on financial services and the services sector generally, but the White Paper acknowledges that in doing so we will reduce our access to EU markets. Could the Minister put a figure on the cost of this change?

[Lord Callanan]

We want a deep and ambitious partnership on financial services. I set out earlier exactly how we see it working. We think that is in the interests of both parties, but it is impossible to put a cost on or indeed outline the benefits of anything until we have agreed it.

[Lord Skelmersdale (Con)]

Would my noble friend be good enough to accept that trade is like Gaul—divided into three parts? You have direct trade between, say, India and the United Kingdom, trade between the EU and the United Kingdom, and re-export. All those will need different solutions, unlike the ideas put forward by the two parties opposite.

[Lord Callanan]

My noble friend makes a good point, which is why we need to try to reach agreement with the EU using our new customs model, which we believe will be a good solution.

Brexit: European Commission Discussions

Lord Callanan Excerpts

Monday 9th July 2018 Lords Chamber

[Lord Dykes]

To ask Her Majesty’s Government whether they expect the current discussions with the European Commission to include (1) a solution for trade across the Irish border; and (2) a commitment to the United Kingdom’s membership of the Single Market and Customs Union.

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

My Lords, the Government have been clear that in leaving the EU we will also be leaving both the single market and the customs union. The proposal that we laid out on Friday will create a UK-EU free trade area, thereby avoiding friction in terms of trade, protecting jobs and livelihoods and meeting our commitments in Northern Ireland through the overall future relationship between the UK and EU.

[Lord Dykes (CB)]

Thanks for the non-Answer, but I am sure that the Minister is relieved not to be at the meeting in Room 10 at this very moment. As the total Tory pantomime has now become just too complicated, why not consider the other option of simply staying in the most effective and impressive international club of sovereign member states working together for peace and prosperity in Europe?

[Lord Callanan]

Of course, I am delighted to be here with your Lordships instead of in Room 10, but the noble Lord obviously forgot that we had a referendum on the subject and the people have voted to leave.

[Lord Stevenson of Balmacara (Lab)]

My Lords, will the Minister confirm that what he actually meant in his first response is that the Chequers agreement commits the Government, of which he remains a part—we are very glad to see that—to a soft Brexit? We now know that a soft Brexit involves a common EU-UK rulebook. His former Secretary of State and Minister of State have resigned, the former saying that this approach makes any reclamation of sovereignty purely superficial. He has a point. Can the Minister say why he does not agree with his former boss?

[Lord Callanan]

The former Secretary of State can speak for himself, but I am focused on helping to deliver the Brexit that the country voted for: one that leaves the single market, one that leaves the customs union, one that leaves the common agricultural policy and common fisheries policy and one that brings back control to this Parliament and this country.

[Lord Cormack (Con)]

Is my noble friend aware that throughout the Conservative Party, many, many people will be delighted that he is staying, supporting the Prime Minister in trying to achieve a sensible settlement?

[Lord Callanan]

I thought there was going to be a “but”, there, but obviously not. I thank my noble friend for his kind remarks. I was somewhat surprised to wake up this morning to find that the noble Lord, Lord Adonis, had apparently announced my resignation on Twitter overnight, which was perhaps wishful thinking on his part.

[Lord Watts (Lab)]

My Lords, can the Minister set out the difference between the existing system and the one now being advocated by the Government?

[Lord Callanan]

I am not sure what system the noble Lord is referring to, but if he waits until later in the week, we will be producing a White Paper, which I am sure will provide him all the details that he wishes to see.

[Lord Newby (LD)]

My Lords, if I were an exporter to the EU, what difference would I notice between the Government’s plan for a free trade area and continued membership of a customs union?

[Lord Callanan]

We have been very clear that we are leaving the single market, we are leaving the customs union, and we want to set up a UK-EU free trade area based on the principles set out in the Chequers agreement.

[Lord Hain (Lab)]

My Lords, I compliment the Minister on keeping upstanding and reciting his lines repetitively, as that may be the best way in which to keep him standing. May I ask his advice on the Irish border? Will he accept that it is not simply physical security obstructions that cannot be implemented, but the things that lie behind those—the common standards, the regulatory equivalence, the phytosanitary standards in respect of food and agriculture movement, and all of that? That is what I think the Prime Minister was trying to get at when she came up with her proposal on Friday. Does the Minister accept that that is what has to be dealt with to keep an open Irish border? And what about services? I did not see much about that in the Cabinet agreement, and a lot of services cross the Irish border.

[Lord Callanan]

Of course, we share the noble Lord’s desire to avoid a hard border in Northern Ireland, and take on board many of the points that he makes. What is innovative about the Chequers proposal is that it delivers precisely that: it enables the UK to maintain our own tariff schedules, but also avoids the imposition of a hard border in Ireland between Northern Ireland and southern Ireland. We look forward to discussing those proposals with the Irish Government and the European Commission.

[Lord Tomlinson (Lab)]

If this is the Brexit that the Government have always wanted to put forward, can the Minister explain to the House, particularly to those with limited understanding, why the Secretary of State for Exiting the European Union thought that the proposals were so divergent from past policy that he found it necessary to resign?

--- Later in debate ---

[Lord Callanan]

The noble Lord will have to read the letter, which has been extensively publicised, on his reasons for resigning. We have always been clear on the policy we advocated. We have always accepted that, of course, there needs to be compromise on both sides if an agreement is to be reached. We think that we have made sensible and realistic proposals that provide a way forward, and we hope that the EU will now engage positively with them.

[Lord Grocott (Lab)]

Will the Minister confirm that, although there will doubtless be many comings and goings between now and next year, the essential truths remain: in line with the decisions of this House and the other place to implement Article 50, and to pass the European Union (Withdrawal) Act, come 29 March next year, both in European and UK law, we will have left the European Union?

[Lord Callanan]

As in so many of our recent debates, the noble Lord, of course, speaks great sense on these matters, and what he says is correct.

[Lord Harris of Haringey (Lab)]

Will the Minister tell us precisely where he differs from the analysis set out by the former Secretary of State in his resignation letter?

[Lord Callanan]

The former Secretary of State has set out his reasons, which noble Lords can read for themselves. I am happy that we will be continuing to leave the European Union on the terms that I set out earlier, and I look forward to playing my part in delivering the referendum result.

[Lord Bassam of Brighton (Lab)]

My Lords, what is the difference between a facilitated customs arrangement with a common rule book and a customs union? Where is the difference in policy?

[Lord Callanan]

The difference is that we are allowed to set our own tariff schedules under the facilitated customs arrangement.

[Lord Stevenson of Balmacara]

Perhaps the Minister would like to rephrase his original answer to me, given the news that the Foreign Secretary has just resigned.

[Lord Callanan]

I am obviously sorry to hear that the Foreign Secretary has resigned, if what the noble Lord says is correct. He has been a towering figure in government. What I said earlier still remains the Government’s policy.

[Lord Lansley (Con)]

Does my noble friend agree that the proposals set out in the Chequers statements from Friday differ from a customs union in that there will be a requirement for goods to carry certificates of origin to establish where there is a divergence in terms of tariffs or any other standards over time? Have the Government estimated the costs to the business community of undertaking the necessary certification?

[Lord Callanan]

I suggest that the noble Lord waits until we publish our White Paper later in the week for more details of the proposal. I shall be happy to write to him and set it out in greater detail for him then.

Brexit: UK-EU Relations (EUC Report)

Lord Callanan Excerpts

Monday 2nd July 2018 Lords Chamber

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

My Lords, it is my great pleasure to respond to tonight’s debate on the European Union Committee’s report. I am grateful for the opportunity and start by extending my thanks to the noble Lord, Lord Boswell, to all members of the committee for their contributions to the report and to everybody who has spoken in tonight’s debate.

I assure noble Lords that a response to the committee is in full preparation, and we expect to be able to publish it over the summer. As I expected, many of the points raised by noble Lords about our future partnership with the EU relate directly to the ongoing negotiations. As such, I hope noble Lords will understand that it will be difficult for me to go into great detail on some of the areas at this stage. Nevertheless, I will endeavour to respond to as many of the points as possible. Noble Lords have raised a wide range of issues this evening; let me start by going through some of those points in greater detail.

On our ambitions for the future relationship, as the Prime Minister has made clear, we want our future relationship with the EU to be a deep and special partnership, taking in both economic and security co-operation. The Prime Minister set out the Government’s vision for a future partnership in her Mansion House speech in February, which contained what she referred to as the five foundations that must underpin our trading relationship with the European Union.

First, our agreement should create a deep and broad economic partnership that supports trade and co-operation between the UK and the EU. That should be supported by reciprocal and binding commitments to ensure fair and open competition. The level of integration between the UK and EU markets mean that these reciprocal commitments will be particularly important in ensuring that UK business can compete fairly in EU markets and vice versa. Secondly, we will need a completely independent arbitration mechanism—again, something fairly common to free trade agreements. This will ensure that any disagreements about the purpose or scope of the agreement can be resolved fairly and promptly. Thirdly, given the close relationship that we envisage, we will need an ongoing dialogue with the EU and to ensure that we have the means to consult each other regularly. Fourthly, we will need an arrangement for data protection. The free flow of data is critical for both sides in any modern trading relationship. Fifthly, we must maintain the links between our people. EU citizens are an integral part of the economic, cultural and social fabric of the UK, and UK nationals are viewed in entirely the same way by communities across the EU.

The Prime Minister has also set out, in her Munich speech in March, her vision for a future security partnership with the EU. This would encompass both internal and external security cooperation. On internal security, the Prime Minister has proposed a new UK-EU treaty that would cover practical co-operation on law enforcement and criminal justice matters, including on extradition, co-operation with and through EU agencies and exchange of data. Furthermore, this treaty would need to respect our sovereign legal orders and be dynamic to respond to emerging and future threats to our common security interests. It would also, clearly, need to be supported by comprehensive data protection arrangements.

On external security, we are seeking a partnership that will enable the UK and the EU to combine our efforts where it is in our shared interests. Let me say in response to the noble Lord, Lord Jay, that that future relationship on foreign policy, defence and development is focused on three key areas: regular consultation on global challenges and sanctions; co-ordination on the ground, including through EU mechanisms for defence and development, where appropriate and mutually beneficial; and continuing to develop new capabilities to meet future threats. Underpinning arrangements for the exchange of information and expertise will support this partnership.

For more than half a century, the UK has worked with our European partners to forge our common security, based on the fundamental values we all share. Close co-operation has been, and will continue to be, the most effective response to the common threats that we face. As we leave the European Union, our commitment to the security of Europe is undiminished. We want to continue using our assets, capabilities and global influence in support of our common security interests. Our proposed future security partnership builds on the breadth and depth of our shared interests and values, and must be a partnership that underpins practical collaboration to tackle real-world challenges, both within Europe and beyond.

Let me turn to the negotiations so far. The Government have published a joint statement with the European Commission that sets out the significant progress that we have made in finalising the text of the withdrawal agreement on the majority of the remaining separation issues. While there are still some key questions that remain to be resolved, we have had constructive discussions and our negotiating teams are currently working hard and at pace to ensure these are finalised by October. We remain confident that a deal is in the interests of both sides, so we approach these negotiations anticipating success. We do not want or expect a no-deal outcome. However, as the Leader of the House said earlier today, a responsible Government should prepare for all potential outcomes, including the unlikely scenario in which no mutually satisfactory agreement can be reached, and we are doing that. But I stress that we do not want or expect a no-deal outcome. The most important issue for us now is focusing on negotiating the right future relationship.

Let me address the point made by the noble Baroness, Lady Quin, on the impact on the north-east of England. We are undertaking extensive work to consider the impact on all regions of the UK of all the potential outcomes, and the impact on particular regions will be at the forefront of our minds. We will continue to undertake that analysis and, where it is possible to share it without compromising our negotiating position, of course we will do so.

We have, jointly with the European Commission, published the topics for discussion on the future framework. This incorporates the economic and security partnerships outlined by the Prime Minister as well as the institutional framework that will underpin them and other cross-cutting issues. The joint publication reflects the determination of both sides to achieve a broad partnership that stands the test of time after the UK leaves the EU. It remains our view that it is pragmatic common sense that we should work together to deliver this outcome for both sides. So we are continuing to work hard to have all of this agreed by October. We have been having regular discussions with the EU on the future framework, outlining our positions on a wide range of topics covering the future security partnership and the future economic partnership. We have continued to publish key documents on these topics.

The noble Lord, Lord Boswell, and other noble Lords asked me about the White Paper. The Prime Minister announced that the Government will publish this the week beginning 9 July, and it will set out the UK’s position on a future relationship. In response to the noble Lord, Lord Monks, I am not sure exactly how cunning he will find the plan when we publish it, but the Secretary of State for Exiting the EU has said that it will offer,

“detailed, ambitious and precise explanations of our positions”,

and will set out what,

“will change and what will feel different outside the EU”.

This answers the first question asked by the noble Lord, Lord Jay. His second was: will the EU rubbish it? I leave him to reflect on what the reaction to it might be. Following the White Paper, we hope to see our negotiations accelerate and intensify and, as I said earlier, we remain confident of reaching agreement on the withdrawal agreement and future framework by October.

The noble Baroness, Lady Quin, the noble Lords, Lord Teverson, Lord Jay, Lord Soley, and Lord Whitty, raised the issue of association agreements. Guy Verhofstadt and a number of Members of the European Parliament have also raised this when I have met them. We are considering the merits and drawbacks of such an agreement. It has the merit that the EU understands it; it is an established legal procedure. However, it has some drawbacks: it is not possible to agree things outside it. We are not ruling it out; we are exploring it and looking at whether it might be the appropriate model. In response to the noble Lord, Lord Teverson, I know Guy Verhofstadt well. I used to sit next to him for many happy hours in the EU Parliament’s conference of group presidents. He has many virtues but being a trusted intermediary whom we should use is perhaps not one which we should explore on this occasion.

The noble Earl, Lord Kinnoull, and the noble Lord, Lord Whitty, asked me about the UK’s membership of different agencies. The Government have said on a number of occasions that we will want to explore membership of some agencies with our EU partners. The Prime Minister mentioned a few of them in her speech. Where there is a demonstrable national interest in pursuing a continued relationship with an agency or other EU body, the Government will carefully examine whether or not we should do so. No final decisions have yet been made on that future relationship with those EU agencies, but where there is one we will happily contribute to the costs. The Prime Minister has said that we accept that there will be a role for the EU’s Court of Justice in such circumstances. If noble Lords can contain themselves, there will be some more detail on this in the White Paper.

The noble Lord, Lord Monks, raised the issue of joining the EEA/EFTA and the customs union. Neither the EEA/EFTA countries—Norway, Iceland and Liechtenstein—nor Switzerland are currently, individually or through membership of EFTA, part of the customs union, though they are members of the single market. The customs union has a single external border which sets identical tariffs for trade with the rest of the world. International trade policy is consequently an exclusive competence of the EU, to avoid the creation of different customs rates in different parts of the EU’s customs union. To make a political point, we are criticised extensively by the Labour Party. Of course, the Labour Party is now in the somewhat bizarre position of being in favour of a customs union but then, in the House of Commons, voting against the trade agreements that the EU negotiates as part of that customs union, so I do not think that we will take its criticisms too seriously.

Turning to trade and our future customs arrangements with the EU, the Government are working towards a customs solution that will allow us to trade goods and services with the EU as frictionlessly as possible but also free us to strike trade deals around the world and, crucially, avoid a hard border between Northern Ireland and Ireland. As has been reported, the Prime Minister has set up working groups on the two options—the highly streamlined customs arrangement and the new customs partnership—but of course the exact nature and form of the final customs relationship will be subject to negotiation.

The noble Baroness, Lady Quin, raised the issue of free trade agreements, which, as she correctly said, concern tariffs, although it is equally important to discuss non-tariff barriers and regulatory standards. She was essentially correct in the points that she made, but of course these are valuable tools and we should still seek to agree them as far as possible.

The noble Earl, Lord Kinnoull, asked me about equivalence in financial services. The Government have been clear that they want a comprehensive and ambitious deal with the EU. We think that it should cover financial services and protect the role of the City of London as a top global financial centre. That point was also well made by my noble friend Lord Risby. Reaching an agreement will require detailed technical talks but, as an existing EU member state, we will begin those talks from a unique position, having the same regulatory frameworks and standards. As we move from our current relationship to our future partnership, people and businesses in both the UK and the EU will benefit from the implementation period that we have agreed. We want to establish access to each other’s markets, based on maintaining the same regulatory outcomes over time with a mechanism that determines proportionate consequences where those outcomes are not maintained. It is important that we take that forward into the future negotiations.

On the subject of Northern Ireland and Ireland, the UK has been clear that we are committed to turning all the commitments made under the joint report into legally binding text. I think that that answers the point made by the noble Lord, Lord Jay. Again, as I am sure noble Lords are aware, there are some aspects of the Commission’s proposals which we agree with—particularly the preservation of the common travel area—but the Prime Minister has made clear our position on the other elements of the draft text and has said that we should never accept a border in the Irish Sea. That remains our position, and that is why those parts are marked as not agreed in the withdrawal treaty text. However, we are taking discussions forward with the European Commission and the Government of Ireland to try to resolve this issue.

Turning to the vital subject of security, I welcome the report’s conclusions on both internal and external security. I reiterate our unconditional commitment to a close relationship with our European partners to keep all our citizens safe as the UK leaves the EU. I believe that the Government’s approach is in alignment with the principles in the report, in that it is practical and legally viable and would maintain and build on the areas of greatest value to our common security. There is now a need to agree with the EU structures to allow this to happen. The Prime Minister made clear in her Munich speech that we must do whatever is most practical and pragmatic to provide security for our citizens and not allow rigid institutional ideology to inhibit our co-operation and jeopardise their security.

My noble friend Lord Risby, in his excellent contribution, talked about the importance of energy security in this context. I agree that that, too, will be an important part of our security partnership. That is why, on internal security, the Prime Minister has proposed a stand-alone UK-EU treaty that would ensure that we continue to co-operate where it is of mutual benefit and would minimise any disruption as we move to the future relationship.

To be fully effective, this treaty should meet three requirements. First, it should be respectful of both UK and EU sovereign legal orders. Secondly, it should include comprehensive data protection arrangements. Thirdly, it should be adaptable in the face of future threats. This new relationship should of course be underpinned by shared rules and agreed safeguards that are strong enough to provide trust and legal certainty for all sides. We believe that our proposal is legally viable, and has precedent in the comprehensive strategic relationships that exist between the EU and other third countries. It would serve our common security interests, while respecting both of our sovereign legal orders. Of course, there will be challenges to be overcome, but it is in all our interests to get this right, and with the ambition and political will on both sides, we are confident that this can be achieved.

On external security, we have proposed a future partnership that offers us the means and choice to combine our efforts where it is in our mutual interests. Our proposals set out a framework of consultation and co-ordination, enabling co-operation on shared priorities, including the ability to scale up in a time of crisis— a point reiterated by the noble Lord, Lord Jay. The UK will pursue an independent foreign policy after leaving the EU, but we will continue to defend our shared security and project our shared values. The partnership that we have set out therefore respects both the decision-making autonomy of the EU and the sovereignty of the UK.

The noble Earl, Lord Kinnoull, also spoke about access to information. There is no legal barrier to the EU agreeing to establish an internal agreement giving a third country access to the Schengen information system. As I have noted, the UK is at a unique starting point, with a strong history of working closely with member states as partners and allies. We make a key contribution to security and justice both in Europe and globally and we will seek an agreement with the EU that recognises the unique position that we hold. The exchange of criminal records between the UK and the EU is key to effective law enforcement co-operation. The Government are exploring options for continued criminal records information exchange between the UK and the EU to ensure that appropriate mechanisms are in place to prevent criminals evading justice. This will be a key part of a future agreement with the EU on internal security. Following a vote in Parliament in December 2015, the UK has now rejoined the Prüm Council decisions. Prüm implementation continues and we expect to start exchanging data through Prüm in the near future.

Agriculture and fisheries were only lightly mentioned, so I will move on.

I agree with much of what my noble friend Lord Cormack said on the subject of the ongoing relationship. He made clear that he voted remain and I have been clear that I voted leave. I, too, have many friends across all European countries, including, incidentally, in Finland. The current Foreign Minister of Finland is a good friend of mine. In fact, he is a great football fan and he texts me regularly during Newcastle matches. He is a fan, bizarrely, of Millwall—the explanation for which would take too long to bother noble Lords with tonight. But my point is that we all have friends across Europe and in different European countries. Of course, many of them regret the democratic decision that we have taken to leave, but we will want to maintain those friendships into the future.

I also agree with my noble friend that it is important that we take on board all opinions—the 52% who voted to leave but also of course the 48% who voted to remain. I do not know whether he made that point to the committee during his evidence, but my friend Daniel Hannan MEP has said on a number of occasions that we need to construct a Brexit that can take all parts of the country with us and accommodate all the different points of view. That would include those who voted remain as well as those who voted to leave.

To conclude, the Government are committed to getting the best possible deal for the United Kingdom in the forthcoming negotiations. We will continue to update Parliament on the negotiations for our departure from the European Union. Again, I reassure noble Lords that we are working to publish our formal response to the committee’s report as soon as possible. I am grateful to all noble Lords who contributed to the debate tonight, which was fairly wide ranging and informative. I am sure that the House will continue to play a valuable role in the work of the Government and contribute towards securing a deal that works for everyone, however they voted in the referendum.

European Union (Withdrawal) Bill

Lord Callanan Excerpts

Monday 18th June 2018 Lords Chamber

Moved by

[Lord Callanan]

That this House do not insist on its Amendments 1 and 2 and do agree with the Commons in their Amendments 1A and 1B in lieu.

1A: Page 9, line 21, at end insert the following new Clause—
“Customs arrangement as part of the framework for the future relationship
(1) A Minister of the Crown must lay before each House of Parliament a statement in writing outlining the steps taken by Her Majesty’s Government, in negotiations under Article 50(2) of the Treaty on European Union, to seek to negotiate an agreement, as part of the framework for the United Kingdom’s future relationship with the EU, for the United Kingdom to participate in a customs arrangement with the EU.
(2) The statement under subsection (1) must be laid before both Houses of Parliament before the end of 31 October 2018.”

--- Later in debate ---

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

My Lords, the issue of continued participation in a customs union with the EU was debated at length in our House. It has now been debated twice in the House of Commons. Most recently, the other place chose to reject those amendments put forward by the noble Lord, Lord Kerr. Instead, it chose to accept an amendment tabled in lieu by my right honourable friend Sir Oliver Letwin, to which this House is now invited to agree.

My right honourable and learned friend the Solicitor-General set out why the Government were unable to support Lords Amendments 1 and 2 and I do not intend to repeat those arguments at length. I will simply reiterate that the UK, in its entirety, is leaving the customs union. We will seek a new customs arrangement with the EU that allows us to trade goods and services as frictionlessly as possible with the EU, frees us to strike trade deals around the world, and avoids any return to a hard border between Northern Ireland and Ireland.

The amendment sent to us from the other place ensures that Parliament is informed, through a Statement before both Houses provided by 31 October 2018, of the steps we have taken to seek to negotiate an agreement for the United Kingdom to participate in a customs arrangement with the EU. The Government believe that this alternative to the amendment tabled by the noble Lord, Lord Kerr, provides the right balance between ensuring Parliament is informed of the steps the Government are taking to secure a future customs relationship, and ensuring that we follow through on the objective of delivering the referendum result by leaving the EU and, therefore, also leaving the customs union.

I therefore hope noble Lords will be content to accept the amendments from the House of Commons this afternoon. I beg to move.

[Baroness Smith of Basildon (Lab)]

My Lords, this is the first of the Motions before us today. In addressing it, I will briefly reflect on the role that your Lordships’ House played in consideration of this Bill, and, for the avoidance of any doubt, our approach to today’s business.

Despite attracting perhaps a little more excitement, this is the same procedure that we have for every legislative Bill that comes before your Lordships’ House. I have said before that the process of Brexit cannot be left to those who have no doubt. It is only through consideration and challenge that we get better, if not the best, outcomes for any legislation. This Bill came to us deeply flawed and divisive. Together as a House, we approached it thoughtfully and diligently. We have had some long days and some long nights in Committee and on Report. We are grateful to those Government Ministers across departments who have been willing to engage on some of the less controversial but equally important issues.

Of around 200 amendments passed, 15 did not enjoy the full or initial support of the Government. Of these, one was totally accepted on agencies and another largely accepted, with minor changes, on Northern Ireland. Eight were rejected, although on some of these enhanced protections for EU-derived protections the Government have since made further concessions, or, in the case of sifting, reinstated earlier amendments. Five have been replaced with amendments in lieu. We will consider these today, including the one we are talking about now on the customs union and the publication of primary legislation to enforce environmental protections.

We are grateful to the Government for their consideration and acceptance of so many of the points raised in your Lordships’ House. Even before the Bill returned to the other place, significant changes were made on a range of issues, including removing the power to levy taxes or establish new public authorities by statutory instrument, which is particularly important for the new environmental enforcement body; additional explanatory statements and reports to Parliament; the introduction of sunset clauses on some issues; the prevention of the repeal or amendment of devolution clauses by secondary legislation and significant amendments in your Lordships’ House on devolution provisions; and clearer guidance for courts and tribunals relating to future decisions of the CJEU. Importantly, we have seen the removal of a clause that I had never seen before in legislation; that is, one giving a Minister the ability to amend the Bill via an SI. That has gone.

Despite disappointment at the rejection of some Lords amendments, this legislation is better for the work that we have undertaken. We have not exceeded our defined and limited role, but we have used our remit to provide for greater consideration, further reflection and meaningful changes. As the Leader of the House has said previously, reinforced by Ministers in the other place, there is no legislation that does not benefit from scrutiny in your Lordships’ House.

We understand that in a democracy this can be both an asset and, at times, a source of frustration to government. Canadians describe their second Chamber as a Chamber of sober second thought—a further opportunity to think things through and fine-tune legislation. That makes the outbursts of some pro-Brexit MPs all the more ridiculous. As we discuss these final amendments from the House of Commons, we have seen a fair bit of sabre-rattling from some of the most enthusiastic Brexiteers and supporters. Inaccurate and misleading press headlines such as “Enemies of the People” and “Saboteurs” may add excitement and drama, but they do nothing to improve the quality of debate or journalistic integrity.

We have also heard calls for this House to be abolished, to be replaced with a committee of experts or an elected House. I know that many hold honourable and genuine positions on different kinds of reform, but to base a case for fundamental change to and abolition of the current system on disagreement on a Bill shows poor judgment. In response to proposals for an elected House or House of experts, I suggest that such a House might not be quite so compliant in accepting the primacy of the House of Commons.

Today, our role is very clear. This House does not and should not engage in ping-pong lightly or without thought. The process of ping-pong is not to challenge the elected House, but to provide an opportunity. Where matters are clearly and obviously unresolved in the House of Commons, that is where they should be dealt with. The reported disagreement since Friday between the Government and their own MPs is not one we should seek to intervene in, other than to provide an opportunity for MPs’ consideration, and it can be resolved only by those elected to the House of Commons.

Lords Amendments 1 and 2 on a customs union have been returned to this House with, in effect, just one amendment, changing “customs union” to “customs arrangement”. This is unnecessary, but I understand why the Government have done it. It is because the Government do not yet know, even today, what they want. Currently, they have two work streams: a customs partnership and maximum facilitation. However, when the Dutch Government are advising their manufacturing industry not to buy car components from the UK because our future customs relationship with the EU is unclear, we know that there is a problem that needs to be addressed urgently. As a result of the amendment from your Lordships’ House, the Government are now committed to return to Parliament in just over four months, by the end of October this year, with a Written Statement on what they have done and how they will proceed. I do not now feel that this is an issue that we should return to the other place.

--- Later in debate ---

[Lord Callanan]

My Lords, I thank all noble Lords who have contributed to this debate. Not many people had much to say about the issue of the customs union and the customs partnership; nevertheless, I thank them for their contributions. I thank the noble Baroness, Lady Smith, in particular for her comments; I think that in general they were wise words. As I said at Second Reading and repeatedly throughout the progress of the Bill, of course we are prepared to look at constructive suggestions that have been made for improvements to the legislation. We were in listening mode, we have had extensive debate internally in government about many of the points that have been raised and, where we have been able to, we have moved to reflect some of the comments, amendments and Motions that have been made by Members of this House. However, I say to the noble Lord, Lord Newby, that our position has always been that many of the debates we have had—and the customs union one is part of them—were not necessarily core to the central purpose of the Bill; rather, they were about the Government’s negotiation priorities. Of course, when we have an agreement there will be further legislation and we will be able to come back and discuss these matters in more detail.

Bearing in mind the wise words from the noble Lord, Lord Grocott, I am sure many English Members will want to try to watch the game later. I hope Scottish, Welsh and Northern Irish noble Lords will not want to unduly frustrate this process to enable us to do that.

On the issue of the customs union, the Government have been clear that we are leaving the customs union and that we will seek new arrangements that allow us to trade goods and services as frictionlessly as possible with the EU, free us to strike trade deals around the world and avoid any return to a hard border between Northern Ireland and Ireland. I hope noble Lords will be able to accept the amendments that were made in the other place. Once more, I beg to move.

Motion A agreed.

Moved by

[Lord Callanan]

That this House do not insist on its Amendment 3 and do agree with the Commons in their Amendments 3A and 3B in lieu.

3A: Page 9, line 21, at end insert the following new Clause—
“Maintenance of environmental principles etc.
(1) The Secretary of State must, within the period of six months beginning with the day on which this Act is passed, publish a draft Bill consisting of—
(a) a set of environmental principles,
(b) a duty on the Secretary of State to publish a statement of policy in relation to the application and interpretation of those principles in connection with the making and development of policies by Ministers of the Crown,
(c) a duty which ensures that Ministers of the Crown must have regard, in circumstances provided for by or under the Bill, to the statement mentioned in paragraph (b),
(d) provisions for the establishment of a public authority with functions for taking, in circumstances provided for by or under the Bill, proportionate enforcement action (including legal proceedings if necessary) where the authority considers that a Minister of the Crown is not complying with environmental law (as it is defined in the Bill), and
(e) such other provisions as the Secretary of State considers appropriate.
(2) The set of environmental principles mentioned in subsection (1)(a) must (however worded) consist of—
(a) the precautionary principle so far as relating to the environment, (b) the principle of preventative action to avert environmental damage, (c) the principle that environmental damage should as a priority be rectified at source,
(d) the polluter pays principle,
(e) the principle of sustainable development,
(f) the principle that environmental protection requirements must be integrated into the definition and implementation of policies and activities,
(g) public access to environmental information,
(h) public participation in environmental decision-making, and
(i) access to justice in relation to environmental matters.”

3B: Page 15, line 13, at end insert—
“( ) section (Maintenance of environmental principles etc.),”

[Lord Callanan]

My Lords, the issue of environmental protections spanned several hours of debate in our House, both in Committee and on Report. Indeed, an amendment was made to the Bill, tabled by the noble Lord, Lord Krebs. The Government considered the noble Lord’s amendment but decided instead to give our backing to an alternative amendment put forward by my right honourable friend Sir Oliver Letwin. That amendment provides further reassurance to Parliament of the Government’s intentions to uphold environmental protections after exit and sets out in legislation that the Government will publish a draft Bill no later than six months after Royal Assent to this Bill. It delivers robust protections. In particular, it acknowledges that there may be circumstances where the new independent environmental body should be able to take the Government to court, which I know was a desire of many noble Lords. This power will be proportionate and appropriate and will supplement established processes, including of course parliamentary scrutiny.

The amendment also requires that the draft Bill includes a list of the environmental principles, such as the “loser pays” principle and the precautionary principle within it. The draft Bill and the forthcoming policy statement will provide further details of how these environmental principles will be interpreted and how they will apply. These proposals will ensure that the primary focus of the principles will be the formation of policy at a national level.

As we made clear in our consultation document and in last week’s Commons debates, the amendment applies only to England and to reserved matters. The draft Bill itself will similarly apply only to England and to reserved matters. That means that neither the amendment nor the draft Bill that will flow from it will trigger the legislative consent process. I understand that the Welsh Government do not share our view, and it is of course open to them to put forward a legislative consent Motion in the Assembly. That is clearly a matter for the Assembly and it would not change the UK Government’s view.

The noble Lord, Lord Krebs, has tabled a further amendment on this subject for consideration today. I fear that the Government are unable to accept it as we do not believe it is appropriate to use this Bill fully to design the policy for the creation of the new independent statutory body and the new statutory policy statement. We have already supported an amendment in the other place to ensure that there is a statutory commitment for government to set this body up. We are consulting stakeholders and will bring forward policy proposals and a draft Bill in due course. Deciding further detail on the body through the amendment would undermine that very consultation process.

The UK has a long history of environmental protection, and we will safeguard and improve on this record as we leave the European Union. This commitment underpins our 25-year environment plan and the Government’s pledge to leave the environment in a better state than we found it. Leaving the EU means that we now have a unique opportunity to design a set of policies that drive environmental improvement with a powerful and permanent impact tailored purely to the needs of our country.

I hope that noble Lords will accept the amendment sent to us from the other place and recognise that it underpins our pledge to use the opportunity that Brexit provides to strengthen and enhance our environmental protections, not to weaken them. We continue to welcome consultees’ views as part of the ongoing consultation on environmental principles and governance. I therefore urge noble Lords to accept the government amendment and beg to move.

Motion B1 (as an amendment to Motion B)

Tabled by

--- Later in debate ---

[Baroness Jones of Whitchurch (Lab)]

My Lords, government Motion B follows the debate that we have been having throughout the passage of the Bill on the enforcement of environmental principles. On each occasion, noble Lords have voted on a cross-party basis around the Chamber to send a message that the Government’s proposals are not good enough and do not represent the protections for the environment that we currently enjoy in the EU.

At Third Reading this House supported, with a significant majority, an amendment that set out how current EU rights could be replicated in UK law. I am sorry that the Government did not feel able to support it when it went back to the Commons. They did, however, finally and reluctantly—as the noble Lord, Lord Krebs, said—come up with their own alternative. It is a step forward, and I am pleased that many of the arguments made by our side of the House, and across the Chamber, have had some impact.

As the Minister will know, the views that we expressed are supported by tens of thousands of individuals, activists and NGOs around the country who have campaigned vigorously on these issues. So we have made progress, but there remains—as my noble friends said—unfinished business. We will continue, therefore, to use every opportunity to achieve what we have been promised. All we are trying to do is replicate what we already have—and to be assured that it will be in place on Brexit day.

At the heart of environmental protection we need a green watchdog, on a statutory footing and independent of government, that can take appropriate enforcement action against Ministers and arm’s-length bodies when they ignore their environmental responsibilities: in other words, a watchdog that replicates the current role of the EU Commission. We also want an obligation on Ministers to act in accordance with the provisions of the Bill, rather than simply to “have regard to” the provisions, which is a much less stringent legal requirement and could lead to considerable legal uncertainty. Finally, we want to ensure that our exit from the EU does not end, by accident or design, in a diminution of rights and powers otherwise enjoyed in the EU.

It is important that these issues are resolved because, as we debated at Third Reading, the Government’s proposed alternative—the environmental principles and governance Bill—will not be available, at the earliest, until after the next Queen’s Speech. For many of us, moreover, the consultation document produced in advance of that Bill is a thin and unpromising start to the promises made by the Secretary of State to deliver a world-leading environmental body, with independent, statutory backing, to hold the Government to account.

I hope, therefore, that the Minister will address our ongoing concerns, despite the progress that has been made. I hope that he will make it clear that what we have before us is a minimum set of proposals and that negotiations will continue on the details. I hope, too, that he fully understands that we are not going away and will press these arguments at every opportunity.

[Lord Callanan]

My Lords, as I said at the start of this debate, the issue of environmental protections has been widely discussed during the Bill’s passage through both Houses, and I thank all noble Lords who have contributed today. In particular I say to the noble Baroness, Lady Jones—who I know feels passionately about these issues—that we agree with her that the environment should be left in a better state than when we inherited it, and that we want to use the opportunity of Brexit to design environmental policies that in many respects are more advanced than those of the European Union but are tailored purely for the benefit of the United Kingdom. I am sorry that the noble Baroness feels disappointed, but she has the commitment of the Government—and the Secretary of State—to take these matters forward in the Bill once the consultation is finished.

I will address some of the points that were made. As I set out earlier, the consultation document is clear that these proposals are for England only. They cover areas that are the responsibility of the UK Government. The amendment requires the Secretary of State to publish a draft Bill and makes no substantive change to the law in Wales or anywhere else. This goes to the heart of the point made by the noble Lord, Lord Wigley. We will work closely with the devolved Administrations on the new body, including on whether they wish to take a similar or, indeed, different approach themselves. The UK Government view is definitely that this amendment does not meet the test for legislative consent.

I reiterate that the amendment sent to us from the Commons represents an opportunity to strengthen and enhance our environmental protections, not to weaken them, and I hope that your Lordships will agree it today. I emphasise that we are still out to consultation on the main legislation. There will be plenty of opportunity to contribute to that consultation. I know that noble Lords and noble Baronesses who feel passionately about these matters will be able to contribute to that consultation—and then, of course, once the draft Bill is launched, there will be frequent opportunities in this House to debate the issues at great length, which I am sure noble Lords will take full advantage of.

Motion B agreed.

Motion C

[Lord Callanan]

Moved by

That this House do not insist on its Amendment 4, to which the Commons have disagreed for their Reason 4A, and do propose Amendment 4B as an amendment to the Bill, and Amendments 4C to 4E as amendments to its Amendments 9, 161 and 162, in lieu—

4A: Because the Bill already contains sufficient protection for the areas of EU law concerned.

--- Later in debate ---

[Lord Callanan]

My Lords, we now come on to the issue of enhanced protection of retained EU law. We have always understood the concerns that motivated noble Lords, but were concerned that the original amendment proposed by the noble Baroness, Lady Hayter, did not strike the right balance. In short, that amendment, as discussed in the other place, would have risked weakening rather than strengthening the rights in retained EU law. It would have left us unable to ready the statute book for exit or update it after exit, wreaking havoc across our domestic statute book in the process. However, in the best traditions of this House, both sides have now found more common ground. The noble Baroness, Lady Hayter, has tabled another amendment, which is aligned in its purpose if not in the mechanism used, with the amendments in lieu standing in my name. I am glad that the noble Baroness has been able to table a Motion to agree to some of those amendments.

Noble Lords will recall that at Report we brought forward amendments assigning a status to the different categories of retained direct EU law. The noble Baroness, Lady Hayter, herself mentioned, when tabling her original amendment, that there is a class of law where our amendments at Report did not provide for enhanced protection. That is our domestic implementation of EU directives, which is preserved through Clause 2 of the Bill. Much of this domestic implementation has happened under Section 2(2) of the European Communities Act 1972, which has historically been the delegated power used to implement many, if not most, of our EU obligations.

The Government are alive to the unique position that regulations made under the ECA to implement directives hold in our domestic legislation. They implement law which was negotiated at the EU level and which the UK as a member state was under a binding obligation to implement. They could in the past be modified only within the constraints of EU law. That is why the Government have tabled Amendments 4B, 4C, 4D and 4E, to reinforce protections for regulations created by Section 2(2) of the ECA and put in place an enhanced procedure once we have left the EU for secondary legislation amending such regulations.

We will have left the EU and be free to change these laws, but it is right that this is possible only within the constraints placed on us by active and informed consideration by Parliament, via an enhanced procedure which will involve everything the noble Baroness has called for. This proposed enhanced procedure for amendments to Section 2(2) regulations reflects their unusual nature and unique status in our legislative framework, and will complete the tapestry of protection that is threaded throughout the Bill’s provisions for retained EU law in all its many different forms. These government amendments deliver the noble Baroness’s goal, and I hope I can persuade her of this.

I will also explain the four reasons why the Government cannot accept the noble Baroness’s alternative Amendment 4F and why I believe, happily, that our amendment resolves all of those issues. The first issue is devolution. I know that the noble Baroness is fully committed to the devolution settlements, as am I and my ministerial colleagues. As it is written, the noble Baroness’s amendment only allows amendment by primary legislation or subordinate legislation made under an Act of Parliament. This means that no subordinate legislation at all made under devolved Acts can amend retained EU law in these areas, even when it is within the competence of the devolved Administrations. Where Acts of this Parliament allow the devolved Administrations to make subordinate legislation, the amendment would require devolved legislation to be subject to a procedure before this Parliament.

I know that it will not have been the intention of the noble Baroness to impinge on the competence or procedures of the devolved Administrations and Parliaments, and I am sure it was not her intention to create an unprecedented position in which devolved legislation made by a devolved Minister should be considered by this Parliament. This could, of course, be solved by some radical changes in the drafting, but the issue has been addressed in our amendment by providing that it applies only to instruments made by UK Ministers before this Parliament. This is doubly important at this late stage in the Bill’s passage, when there is no time to seek supplementary legislative consent from the devolved Assemblies.

Our second concern with the noble Baroness’s amendment is the range of still significant issues where it would create legal uncertainty. Amendment 4F refers to retained EU law “relating to” various policy areas. Quite apart from the fact that there are certainly other areas potentially worthy of protection, we are concerned that it will never be clear what law falls into these categories. An example would be a piece of EU legislation relating to which classes of investor may or may not purchase certain financial products. Does that relate to consumer protection or financial conduct, or both? Will it depend on the intent of the modification in question?

As we have said before, if anybody feels that their private interests have been adversely affected, would they be able to challenge any SI on the basis that it had improperly either undergone, or not undergone, the enhanced procedure referred to in the amendment? Even if an SI had undergone the higher of the two procedures, confusion over which procedure should have applied could very well give rise to a host of legal challenges on procedural grounds and risk crucial corrections to ready our statute book for exit or future improvements being struck down. Again, happily, we believe that the government amendment resolves this issue by being clear that it focuses on the legislation made under Section 2(2) of the European Communities Act to implement EU directives, and which is preserved by Clause 2 of the Bill. This will apply to all policy areas. We have also ensured that instruments can be combined and that, where there are grey areas, an instrument can safely be upgraded to our enhanced procedure. Our amendment provides both certainty and enhanced protection across the board.

The third concern is the interaction with other provisions in the Bill. I am very pleased that both Houses have now accepted the provisions on status which the Government tabled on Report. These set out how EU regulations, tertiary legislation, decisions and treaty rights will be amended, in particular ensuring that EU regulations and treaty rights will only be amended as if they were primary legislation. However, these provisions do not account for those others. If there is an EU regulation relating to one of the areas in the noble Baroness’s amendment, this Bill would provide two competing procedures and potentially conflicting instructions for how to amend it, and the scrutiny which would apply to any amendment by secondary legislation. In some cases, we might be able to muddle through but that would not be good law. As I said a moment ago, it would also open any changes to these important EU regulations being struck down. This cannot be good for the certainty that any enhanced protection is meant to provide.

The fourth issue is that we wish to say more in the Bill itself and less in SIs, as the Opposition have pushed for throughout the passage of the Bill. The noble Baroness’s amendment asks us to set out an enhanced procedure in an SI, including for the approval of both Houses and consultation. I am pleased to assure the House that we have done this already in the government amendments, which will provide that any changes made to these regulations by existing powers within our statute book will go through the affirmative parliamentary procedure. There will therefore be—this cannot be stressed enough—a debate and a vote in both Houses on every one of these statutory instruments. But they also go one step further, providing that these changes will also attract a new, enhanced pre-laying scrutiny requirement, which will ensure that there is a proper opportunity for public and parliamentary consultation on its content before the draft is laid.

This amendment proposes that any SI created by an existing power in our statute book which amends or revokes any Section 2(2) regulation must be published 28 days in advance of a draft being laid before both Houses of Parliament—a period, I hasten to add, which does not include recesses. This is not merely if the Minister thinks it is warranted, as the noble Baroness’s amendment suggests. This 28-day period presents both the public and parliamentarians—as well as parliamentary committees—with the opportunity to comment and make recommendations on the content of the statutory instrument. Any recommendations will then be reflected upon by the Government, who will consider whether to amend the SI ahead of laying it before Parliament. When introducing the SI to Parliament, the Minister or relevant authority will then also have to provide a “scrutiny statement”, which details the Government’s response to the recommendations they received and any representations from other quarters, and their consideration of them. This statement is designed to sit alongside and complement the statements which the Bill already requires Ministers to make alongside any SI amending Section 2(2) regulations, explaining them and the “good reasons” for them, and therefore for any departure from EU directives as they stood on exit.

I apologise to noble Lords that I have dwelt at length on the details here, but before closing I will also draw the House’s attention to the numerous other commitments the Government have made to ensure that rights and protections within equalities, workers’ rights and consumer protection and other rights and standards are not diluted or damaged as we depart from the EU. In regard to equalities, a government amendment to the Bill from its initial Commons stage ensures that the Government provide confirmation that they have had due regard to the need to eliminate discrimination, harassment, victimisation and any other conduct prohibited under the Equality Act 2010 when using the powers in the Bill. The UK has a long and proud tradition of upholding and championing rights and protections, both domestically and internationally. This is a legacy the Government are determined to build on as we move into the next chapter of this country’s history. I hope that the government amendments are welcomed by this House as the best solution forward in this matter, and I beg to move.

Motion C1 not moved.

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

My Lords, I give my strong support to government Amendment 4B in its unamended form and to Amendments 4C, 4D and 4E, and I encourage others to do so, if necessary. Throughout the passage of the Bill I have been concerned about serious mistakes that might creep on to the statute book if statutory instruments made under the Act are not published and consulted on. Proposed new paragraph 5CB(2) responds well to those concerns with, 28 days in advance, publication of the drafts of any instruments making changes to provisions enacted under Section 2(2), which has been the parent of much UK law over the last 45 years.

If I have understood correctly, there is cause to celebrate and to thank the Minister for this change and for the other scrutiny changes. They will allow all relevant stakeholders, whether they are consumers, trade unions or from business, or indeed from other countries, to review such drafts and help the Government to address any concerns and correct any errors of the kind that we all want to avoid as EU rules are carried over into UK law on Brexit day.

[Lord Callanan]

First, I thank the noble and learned Lord, Lord Goldsmith, for his comments and for his support, which I think I detected, for the Government’s amendments. I am also very grateful for the comments of my noble friend Lady Neville-Rolfe, who has taken a close interest in this matter. It is a very technical but important matter, and I know that she has engaged on it with Ministers and officials. She brings the benefit of her experience in government and we are grateful for her contributions.

As I said in opening the debate on this Motion, the government amendments are the final thread in the tapestry of protection woven by the Bill. On Report, we addressed protected EU regulations and treaty rights, and now we are adding, as requested, an enhanced procedure to protect the legislation implementing directives. Most importantly, the government amendments deliver the procedure and the protection that underlies it. I therefore commend them to noble Lords.

Motion C agreed.

--- Later in debate ---

Moved by

[Lord Callanan]

That this House do not insist on its Amendment 20, to which the Commons have disagreed for their Reason 20A.

The Commons disagree to Lords Amendment 20 for the following Reason—

20A: Because it is not consistent with the constitutional roles of Her Majesty’s Government and Parliament in relation to the conduct of international relations.

[Lord Callanan]

My Lords, in the other place, much was made of the constitutional and practical concerns that applied to the amendment in the name of the noble Viscount, Lord Hailsham, on parliamentary approval of the outcome of negotiations. These concerns extend also to the amendment in the name of the noble Lord, Lord Monks, on parliamentary approval of a mandate for future negotiations.

Let me begin by setting out once again that Parliament has a critical role in scrutinising the Government’s negotiating position. It is our responsibility as a Government to provide both Houses with ample opportunities for scrutinising both the approach that we are taking to exiting the EU and any implementing legislation. And we have done so. This has included the Secretary of State’s Oral Statements after every negotiating round; committee appearances; ministerial and Prime Ministerial speeches; position and future partnership papers—I could go on. Most recently, we have committed to produce a White Paper on our proposed future relationship with the EU, which we have said will be published next month.

The scrutiny received during these parliamentary appearances, and in the multitude of reports from the committees of this House and the other place, have been of great value and done much to help inform the Government’s work so far. There has also been a wide range of engagement activity by government with key stakeholders across business, civil society and other interested groups.

Debates in this place and the work of the committees of both Houses represent valuable forums and opportunities for parliamentary scrutiny, and we have used Parliament’s input to shape our approach to the negotiations. While some think that Parliament should have a greater role in setting the terms of our negotiations, this cannot be accepted for either principled or practical reasons.

Practically, we simply cannot hold up the already tight negotiating timetable by providing for a further approval process prior to negotiations ending. On principle, as the Secretary of State said in the other place, the Government cannot demonstrate the flexibility necessary for a successful negotiation if their hands are tied midway through the process. That will do nothing but guarantee a bad deal for this country. It must be for the Government, not Parliament, to set our goals for the negotiations on the UK’s exit from the EU and to conduct them.

Of course, the Government are always mindful of the fact that further legislation will have to be introduced where it is needed to implement the terms of the future relationship in UK law. Any such legislation must, of course, make it through both Houses of Parliament.

It is a long-established constitutional principle that the Government set the direction during international negotiations, and that principle exists for good, practical reasons. The other place recognised this when it voted down the amendment in the name of the noble Lord, Lord Monks. As the House of Commons has clearly taken this view, I hope that noble Lords will agree that we should not insist on the amendment. I beg to move.

[Lord Monks (Lab)]

My Lords, I am disappointed that this amendment did not gather more support in the other place than it did; it was rather crowded out in the shadow of the previous amendment, on which the vote has taken place. My co-signatories and I wanted Parliament to give a steer to the Government on the approach to take in the talks about the future relationship between the UK and the EU. I do not accept that that is unconstitutional. The British constitution evolves, changes and moves. It was not so long ago that Parliament insisted on having a say when Britain went to war, which was unprecedented in our history. This initiative was therefore justifiable.

At present, the Government are flying rather blind in the negotiations. The Cabinet is split; the White Paper has been delayed again. I understand that there is to be another brainstorming session at Chequers soon to see whether the Cabinet can find agreement on what that future relationship should be. Parliament cannot just sit in the stand and watch this fumbling go on in government, the Cabinet and the Conservative Party.

We will therefore return to these matters when the White Paper is eventually published. We will hope to see what criteria the Government and others have in mind to judge the final deal, whether it is a good deal, a not-so-good deal or a turkey. In those circumstances, Parliament will have to step up to the mark and cannot just pretend that it has nothing to do with it until the final deal’s shape emerges.

[Lord Callanan]

I thank the noble Lord, Lord Monks, for his speech. I did not agree with the sentiments, but I take his point. We are fully committed to involving Parliament throughout the process of our negotiations to leave the EU. We have given what may be an unprecedented level of parliamentary scrutiny of Ministers across the Government and of the preparations and negotiations on exit. However, this amendment is not the right way for Parliament to scrutinise the negotiations. The House of Commons has taken a clear decision on it and I urge noble Lords therefore not to insist on it.

Motion G agreed.

--- Later in debate ---

Moved by

[Lord Callanan]

That this House do not insist on its Amendments 37, 39 and 125, to which the Commons have disagreed for their Reason 37A.

37A: Because it is better for a default “exit day” to be specified in the Bill rather than appointed by regulations made under the Bill.

[Lord Callanan]

My Lords, we come again to the issue of exit day. Both Houses have debated this issue extensively during the Bill’s passage. There is therefore little new to say about how exit day operates in the Bill. It is an appointed day on which a significant number of the key provisions of the Bill have their material effect. As that provision entered this place, it followed international law clearly and precisely. It was in line with the precise date and time at which we would leave the EU; it was not a date that the Government picked arbitrarily. There was also a mechanism to change the date in the Bill if that were so agreed, with specific reference to the circumstances in which that international law mechanism would be activated.

This House chose to send for reconsideration by the House of Commons amendments that undid the careful consideration and multiple amendments that its Members had provided. I understand that many here wanted to ensure that there was as much flexibility as possible in the Bill but I repeat that it is international law, not domestic law, that determines when we leave the EU. I am afraid that I am not surprised that the other place has rejected our amendments. I hope noble Lords accept that the Commons has had the chance to think again, and has come to the same conclusion that it did previously. I suspect that many knew what the Government’s position would be before they saw it on the Order Paper, but I hope that having framed it in this way it is clear why I am asking the House not to insist on its amendments today. I hope the House is content that it has played its revising role on this point by asking the other place to think again but, having done so, will now let the matter rest. I beg to move.

[Lord Hannay of Chiswick]

My Lords, I was one of those who proposed the amendment that has not found pleasure in the other place. I recognise that, as the Minister has said, the date of our departure from the EU will actually be determined not by what we put into the Bill but by international law—namely, Article 50. If under Article 50 it is decided that a longer period than the two years is needed, no doubt that will be agreed by common accord with Brussels, and the Minister will be standing at the Dispatch Box telling us that after all 29 March is not set in stone. At that moment, I will try not to remind him of the various times at earlier stages of the Bill when he said it was set in stone.

My own view was that the date has no place in the Bill, and that was actually the view of the Government at the outset. However, they changed their minds as part of a political manoeuvre. As the Minister has said, there is some flexibility built into what is known as the Letwin formula, which is the one that the House of Commons has reverted to, and I do not think we should trouble the scorers any more on this matter.

[Lord Callanan]

I thank the noble Lord, Lord Kerr, for his remarks.

[Noble Lords]

Hannay!

[Lord Callanan]

I do apologise; the time is getting late. It is right that this be laid down with clarity and certainty for the public. It is strange that I get Hannay and Kerr, confused, isn’t it? It is also right that our law be aligned with the international law that has determined this date. The Bill reflects both the date on which we and the EU are committed to the UK exiting the EU. I am therefore glad that noble Lords are not insisting on these amendments.

Motion K agreed.

--- Later in debate ---

Moved by

[Lord Callanan]

That this House do not insist on its Amendment 51, to which the Commons have disagreed for their Reason 51A.

51A: Because it is not the policy of the government for the United Kingdom to continue to participate in the EEA as part of its future relationship with the EEA States.

[Lord Callanan]

My Lords, the Commons voted by an overwhelming majority of 201 to reject the amendment tabled by the noble Lord, Lord Alli, which requires continued participation in the European Economic Area to be a negotiating objective for the Government. As set out by the Solicitor-General in the other place, seeking to participate in the EEA agreement beyond the implementation period would not pass the Prime Minister’s test that our future partnership with the EU must respect the referendum result. It would not deliver control of our borders or our laws.

The other place also voted by a majority of 82 to reject the alternative amendment tabled by the Opposition Front Bench replacing the requirement to remain in the EEA with a requirement to make it a negotiating objective for the UK to maintain full access to the internal market. The Commons objected to that amendment for a range of reasons. It did not respect the indivisibility of the four freedoms, it did not deliver control of our laws and it did not respect the referendum result. That is why the Commons, and indeed several members of the Labour Party, chose to vote against it. Instead, the elected House opted for the certainty put forward in the Government’s position, which is not to seek membership of the single market after we leave the EU but instead to seek the broadest and deepest possible partnership, covering more sectors and co-operating more fully than any free trade agreement anywhere in the world today.

The view of the other place is clear and I hope noble Lords will be able to respect it. I beg to move.

Motion N agreed.

--- Later in debate ---

Moved by

[Baroness Evans of Bowes Park]

That this House do not insist on its Amendments 110 and 128, to which the Commons have disagreed for their Reason 110A, and do propose Amendments 110B to 110J in lieu—

110A: Because the Commons prefer their proposed arrangements for sifting.

Brexit Transition: European Parliament Membership

Lord Callanan Excerpts

Thursday 7th June 2018 Lords Chamber

[Noble Lords]

Declare!

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

I am not in receipt of a European Parliament pension.

[Noble Lords]

Yet.

[Lord Callanan]

As the Prime Minister set out in her Florence speech, from 30 March 2019 the UK will no longer be a member state of the European Union. The United Kingdom will no longer sit at the European Council table or in the Council of Ministers, and we will no longer have Members of the European Parliament.

[Lord Kirkhope of Harrogate]

Is my noble friend aware of the decision taken and published on 7 February, which was a proposal to the European Council—currently going through the consent procedure between the European Council and the European Parliament—not to reallocate the number of Members of the European Parliament from the United Kingdom until and unless the United Kingdom is no longer either part of the EU or involved in any of its processes?

[Lord Callanan]

As the noble Lord is well aware, Article 50 states:

“The Treaties shall cease to apply to the State in question … two years after the notification”,


of Article 50. The UK notified its intention to leave the European Union on 29 March 2017 and will therefore leave on 29 March 2019. After that date, we will no longer have MEPs.

[Lord Wallace of Saltaire (LD)]

My Lords, the Government have heard a lot from the European Research Group about how appalling it would be for Britain to become a rule-taker rather than a rule-maker. As we are heading towards a rather extended implementation or transition period of at least two years, does it not sound sensible to make sure that Britain continues to have some influence over decisions taken in that period, rather than cutting ourselves off but then continuing to follow all the rules, including those that continue to be negotiated, for that implementation or transition period?

[Lord Callanan]

During the implementation period, we have agreed to establish a joint committee of representatives from both sides, which will be able to resolve concerns if and when they arise. Of course, we have also agreed a duty of good faith on both sides.

[Baroness Hayter of Kentish Town (Lab)]

Might I ask the Minister to quote Article 50 accurately in future? It does not say that we will leave two years afterwards, it says two years afterwards or such date as is agreed in the withdrawal agreement. Given that the Government seem to be quite unable to get that withdrawal agreement anywhere near ready, can the Minister also say—in agreeing to the wording I have just given—whether they have discussed perhaps reverting to appointing Members of the European Parliament, as we used to do, should that be necessary?

[Lord Callanan]

No, we have not agreed to that because we are leaving on 30 March 2019.

[Lord Pearson of Rannoch (UKIP)]

My Lords, is the Minister aware that the UK has been outvoted on all 77 laws that we have opposed in the Council in the last 20 years? We have been outvoted more than any other country in the so-called Parliament. Does this Question not make the fundamental mistake of suggesting that there is any democratic accountability in the EU, which it is designed to expunge?

[Lord Callanan]

The noble Lord will no doubt be very happy that we are leaving on 30 March 2019.

[Lord Cormack (Con)]

My Lords, what arrangements have been made for representation on the committee to which my noble friend referred and which will operate during the transition period? Are there going to be Members of both Houses or of one House on that group? What parliamentary input will there be?

--- Later in debate ---

[Lord Callanan]

The details of the membership of that committee are still to be resolved.

[Lord Hannay of Chiswick (CB)]

My Lords, will the Minister perhaps go a little beyond his very selective quotation from Article 50, because he invariably takes out the reference in it to the possibility of prolonging the period of two years? I know that is not government policy, but the Government appear to be doing contingency planning on a lot of eventualities. What contingency planning are they doing about the membership of the European Parliament, if a decision were taken by unanimity to extend the period of two years?

[Lord Callanan]

We are not doing any contingency planning on it because we are not going to apply for an extension. An extension is not going to be granted because, as I have said on at least three different occasions today, we are leaving on 30 March 2019.

[Baroness McIntosh of Pickering (Con)]

Does my noble friend agree, pursuant to the question of the noble Baroness, Lady Hayter, that there would be some merit in allocating observer status to existing Members of the European Parliament, or a number of them, for the very good reasons that my noble friend gave in his question? We should have some democratic representation in the European Parliament at that stage.

[Lord Callanan]

Whether that would be a good idea or not, it would have to be agreed with the European Parliament and as we will no longer be a member state, I cannot see that Parliament being happy about the prospect of a non-member state sending representatives to it.

[Lord Foulkes of Cumnock (Lab)]

Will the Minister join me in commending the Electoral Commission for making provision for elections to the European Parliament, should we still remain as members?

[Lord Callanan]

We will not be remaining as members. The Government think it is a waste to spend money on an election that would be pointless because we will not have Members of the European Parliament. We also think it is pointless for the Electoral Commission to spend money preparing for an election that will not happen, and we have made that very clear to it.

[Lord Watts (Lab)]

My Lords, the Minister says he is not going to make any preparations in case we do not leave in two years because we are going to leave in two years. Is it not the case that that would require the consent of the House of Commons? If it does not happen, he will not have a plan B.

[Lord Callanan]

We are leaving on 30 March 2019 because the House of Commons and this House agreed to the European Union (Notice of Withdrawal) Act under which Article 50 was notified, so the House of Commons has already agreed to it, as has this House.

[Lord Garel-Jones (Con)]

My Lords, is it not the case that the Supreme Court has ruled that while Parliament did indeed authorise the referendum, it has yet to authorise the outcome of these discussions?

[Lord Callanan]

Well, Parliament will get the opportunity to do so when we have negotiated the withdrawal. We have said that we will put it to a meaningful vote in both Houses.

[Lord Wigley (PC)]

My Lords, in answering me yesterday the Minister said the Government felt it was important that they planned for all eventualities. Why is he not planning for this one?

[Lord Callanan]

Because we think this is an eventuality that is not going to come about.