European Union (Withdrawal) Bill

Lord Kerr of Kinlochard Excerpts

2nd reading (Hansard - continued): House of Lords
Wednesday 31st January 2018 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

My Lords, it is hard to follow the noble Lord, Lord Saatchi, and it is hard to follow Warwickshire cricket. I was going to say that the speech which has made the most impact on me so far in the debate was that of the noble Lord, Lord Bridges, yesterday. He spoke of the need for us to decide what kind of country we want, because only when we know what we want to be will we know what relationship with Europe is right for us. Not for the first time, he called on the Government to be,

“honest with themselves and the public about the choices we face. Then, the Prime Minister and her Cabinet must make those choices … to govern is to choose. As we face the biggest challenge this country has faced since the Second World War, keeping every option open is no longer an option”.—[Official Report, 30/1/18; col. 1423.]

I could not agree more. I could not put it better. I am very uneasy about the silence of the sphinx. I am very uneasy when I see free-market wolves in cuddly sheep’s clothing promising undiminished farm support. I am very uneasy about fierce critics of the working time regulations promising that there will be no change to labour rights, employment rights, social rights and equality rights, and that we do not need to worry about giving Ministers the power to make changes to such rights by statutory instrument.

More generally, the Government need to come clean on whether taking back control means a bonfire of controls, and whether we are going to change our socioeconomic model, as in autumn 2015 the Chancellor said we might have to do. We need to know for two reasons. First, the Bill asks us to give them the matches to light the bonfire if they want to. Secondly, our partners across the Channel need to know. They will decide what access we can have to their markets depending on how far we will stick to the model of how their economies—most western European economies—work.

It will not do any longer just to say that we want something deep, special, unique and bespoke: we have to define what it is. It is not enough to say—as we said, far too soon—what we do not want. Mrs Merkel is quite right: we have now to say what we do want. When the 27 say that the British red lines mean that the British can have no more than a “Canadian” deal, we must stop putting our fingers in our ears and chanting “la la la—I can’t hear you”. It is their call: they will say what deal we will get. There are red lines, but it is their call. Getting a Cabinet to agree and stick to a line is always difficult, but that is the job. A sphinx- like silence will not do any more.

Of course we must pass this Bill, for all the reasons mentioned by so many noble Lords. If in the end we leave the EU, EU law has to be instantly repatriated to ensure legal continuity. We must, therefore, pass the Bill, and I am confident that we will improve it. I would like to see improvements in four areas.

The first is the area that the noble Lord, Lord Lisvane, among others, drew attention to: I do not see any need for such a massive transfer of power from legislature to Executive, and on that I very much agree with the warning from the noble and learned Lord, Lord Judge. For me, the lightbulb moment was spotting Clause 9(2), where Ministers take the power to change—by delegated regulation—this Act. So we spend the next three months working day and night to improve the Bill and when it is on the statute book the Minister, with a flick of his pen, can cross out our work. That cannot be right. In the words of the Constitution Committee, it gives Ministers,

“far greater latitude than is constitutionally acceptable”.

Secondly, as a Scotsman I of course listened very carefully to the noble and learned Lords, Lord Hope, Lord Wallace of Tankerness and Lord Mackay, and it seems to me that they are right: there is no need to attack and overturn the central principle of the devolution settlement—and there will be a huge price to be paid if we do. I do not understand the sphinx-like disdain for consultation with the devolved Administrations. It is exactly a year since the Prime Minister last met her devolved Administration colleagues in the JMC, the top-level committee set up for consultation with the devolved Administrations—a whole year. That cannot be right. I very much hope that the Minister will bring forward an agreed amendment to Clause 11 very soon, but we may need to nudge the process a bit and perhaps also make sure that the Belfast principles, as set out in the Northern Ireland Act 1998, cannot be undercut by powers taken in this Bill.

Thirdly, like the noble Lord, Lord Hannay, I have difficulty understanding the link between this Bill and the stand-still transition period that, it seems, we want. The 27 reminded us in the mandate that they agreed on Monday that in the transition period the ECJ’s jurisdiction will rule. The Prime Minister acknowledged that in her Florence speech. Why, therefore, does the Bill strike out the ECJ’s jurisdiction? We will only have to put it back again if we get a transition period.

Lastly, I am uneasy that Ministers may try to duck out of the meaningful vote that we have been promised when the outcome of the negotiations is clear. Suppose that there is no deal. Suppose also that by then we have a different Prime Minister—the sphinx sits on shifting sands. Suppose that we have a Prime Minister who believes that Brussels should whistle for the money. Suppose that the negotiations break down. Will we get the meaningful vote to ensure that Parliament cannot be bypassed? This Bill has to guarantee that in all circumstances the moment of truth will definitely come—and come at a time when we still have the options of extending withdrawal negotiations, taking back the Article 50 notification letter or consulting the country about doing so.

European Union (Withdrawal) Bill

Lord Kerr of Kinlochard Excerpts

Committee: 1st sitting (Hansard): House of Lords
Wednesday 21st February 2018 Lords Chamber

[Lord Robathan]

My Lords, in 1997, I—together with other Members of this House, including, I recall, the noble Lord, Lord Davies—was returned as a Conservative MP to the House of Commons. I quickly learned what it was like to be in a minority. I fear that I also find myself in a minority in this House today. I may be in a minority in this House, but it comforts me to know that outside this House I am not in a minority.

However, I think I am in a majority in this House when I say that I am not in favour of referendums. I think they are a terrible idea: look where they have led us. But whatever we think, we have had one. The noble Lord, Lord Newby, talked about misleading the British people. I shall be brief about this, he will be pleased to know, because that is where we should start, and finish. During the referendum campaign the Prime Minister at the time, and also George Osborne and Michael Gove, specifically said that we would have to leave the single market. People may not have paid attention, but that is neither here nor there. I think that we will also find that they said we would have to leave the customs union. But people were not very interested.

As regards the customs union, may I draw attention to the fact that the Conservative Party general election manifesto said that we would leave the single market and the customs union?

[Lord Kerr of Kinlochard (CB)]

Does the noble Lord recall Mr Boris Johnson’s riposte to the Prime Minister? He said, “Nobody is even talking about leaving the single market”?

[Lord Robathan]

The noble Lord has a much better memory than me: no, I do not. But then I do not agree with everything people on my side say—or, indeed, people on the other side. On the Labour Party general election manifesto, perhaps someone on the Labour side can illuminate me. I do not know what it said, but I am pretty sure it was talking about leaving the single market—and what about the customs union?

This is where we stray in talking about misleading the British people. They are the people who have the say here, not people like ourselves, sitting round in this House, who are not elected—and in some cases have never been elected. We have heard about the curtain in 100 Parliament Street and all that sort of thing. Economic predictions are all well and good—and may, of course, be right. There is one out today by the Institute of Economic Affairs, which takes an entirely contrary view—and my noble friend Lord Lamont mentioned the Civitas review. Who knows, in 10 years’ time we may say, “Gosh, they were all wrong”. However, let us not put too much faith in one review. I am not criticising civil servants, but that applies especially when the people writing these things are the same people who wrote that we would have a recession, half a million people unemployed, an emergency Budget and so on, if we voted to leave the EU—not if we left, but if we even voted to leave.

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[Lord Kerr of Kinlochard]

I should like to respond briefly to what the noble Lord, Lord True, has said. He refers to the Article 50 date. Without deciding where we wanted to go, we chose to send in an Article 50 declaration on 29 March. That meant that we chose when the clock would start ticking. That is my answer to the noble Lord, Lord Hamilton—like Nelson, I cannot resist provocation from a Hamilton. However, there is not a single Article 50 date. There is provision in the article for the possibility of an extension and there is also provision for the exit date to be after the two-year period. If you read the article carefully, you will see that you are out after two years or when the withdrawal agreement comes into effect, so there is the possibility of a post-dated cheque.

In my view, the noble Lord, Lord Triesman, is exactly right. Flexibility in negotiation is extremely important. Giving yourself deadlines is crazy, as is surrounding yourself with red lines. The reading of Article 50 by the noble Lord, Lord Hain, is, in my humble view, completely correct. However, the big point in this debate is not that; it is the question of who takes back control. Who decides? Is it the Executive or the legislature? So the point raised by the noble Lord, Lord Tyler, is extremely important.

I end by saying that I warmly welcome what the noble Lord, Lord True, said about the Good Friday agreement and the Belfast treaty of 1998, and in particular what he said about Prime Minister Major. To someone like me who was an observer at the time, it is completely correct. I remember when the leader of the Opposition, Mr Blair, went to Washington when I was the ambassador there. He was asked about Northern Ireland and what he would do if he became Prime Minister. His reply at my dinner table to assorted Senators and the Vice-President was that he would try to do exactly what John Major had tried to do and he would be very pleased if he could do it half as well. It is very good to hear that the solid voice of the Conservative Party is not that of the Patersons and Hannans but is in favour of retaining all the good work done by the Conservative Government and then by Mr Blair’s Government in that astonishing first year.

[Lord Hamilton of Epsom]

If the House of Commons voted by an overwhelming majority to move Article 50, surely that was done on the understanding that the negotiations would be completed in two years. If the date was to be changed, surely that would need a vote in the other place.

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[Lord Liddle]

I would like to follow that up with a relevant question to the noble Lord, Lord Kerr. I agree with all the excellent speeches in favour of this amendment. To me, the politics of the amendment is the question of whether, when exit day is discussed, Parliament knows what it is exiting to. That is the question. If Parliament does not know what it is exiting to, surely the logic is that the date should be extended until it does.

Along with my noble friend Lady Kennedy, I have recently been on Select Committee visits to Brussels, and she can confirm that there is much uncertainty about what information will be available to Parliament in the autumn of this year. If things go well, we might have a withdrawal agreement and a transition period, but the only thing on the future relationship that we will have is a political declaration. There is no question at all of there being a trade agreement when Parliament votes; it will be a political declaration. The European people to whom we talked said that they wanted that to be clear and precise. However, at the same time, people said to us, “We think that possibly your Government might quite like to get away with a fudge”. Why should Parliament be put in the position of taking this crucial decision when all the British Government are offering is a fudge?

[Lord Kerr of Kinlochard]

To respond simply to the noble Lord, Lord Adonis, it would be a political issue, not a legal or a treaty issue. My view has only the same weight as anybody else’s, but I would say that if one sought an extension in order to carry on a negotiation, it would be very doubtful that one would get it. However, if one sought an extension because Parliament had decided that the terms of the deal available were such that they should be put to the country at large in a second referendum, I am convinced that that request for an extension would be granted.

[Lord True]

It is very interesting that the noble Lord, Lord Adonis, has added a fifth element to the dandelion clock: this year, next year, sometime, never, and a second referendum. The idea of a second referendum is spreading across the Committee. However, returning to the point that the noble Lord, Lord Kerr, made, I was taken up for using a phrase as a lay man, just as my physics teacher used to take me up for not really understanding “light”. When I talk about an Article 50 date, it is the date that flows as a consequence of the article and the decision that Parliament has taken by an overwhelming majority, as my noble friend Lord Hamilton said. The date of 29 March is the date that everybody, from Monsieur Barnier to everyone else, is working to. Therefore, in lay man’s terms, that is what I mean by the date which would have to be changed, and I submit it would have to be changed in tandem. That is why I oppose moving “exit day” and the date out of the Bill.

European Union (Withdrawal) Bill

Lord Kerr of Kinlochard Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Monday 26th February 2018 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

Exactly. I strongly support what the noble Lord, Lord Liddle, has just said. I would like to be helpful to the Minister—it is my main purpose in life. I detect that this debate is at present all going one way, although I do not know if the Minister agrees with me on that. If he is a cynic, he might say that that is not altogether surprising, as the collective noun for a group of chancellors, vice-chancellors and university chairmen is the House of Lords.

It is important that the Minister should listen to the Cormack-Deben advice. It really would not do to answer this debate with the same answer he started off with to the last debate about medicines and Amendment 11—where, as I recall, his line was that publishing a strategy would introduce an unwelcome, undesirable and impossible delay to commencement. I may have misunderstood him, but it seems to me that the time when we need such a strategy—the strategy that is called for in this amendment—is now. We need it to be helpful to the Minister because if on Report we do not see a strategy, there is absolutely no doubt how the House would vote. This debate has made very clear, from all sides of the House, that continued membership or a close relationship with the research framework programme and with Erasmus is seen as sine qua non. If the Government do not give us the strategy which they think may achieve that, I am confident we will vote for these amendments.

The strategy would have to contain a little more than a declaration of intent. In relation to Erasmus, it would, as the noble Lord, Lord Liddle, said, have to include something about visas. I think it would also have to include something about fees. It is relatively easy to see what one would have to say. On the much bigger issue of research, it would have to include something from the Treasury. If the sensible suggestion from the noble Lord, Lord Patten, was accepted by the Treasury, that would be excellent. But it seems to me that the Treasury is going to have to accept a lesser commitment, which is that when it is pay as you go—which is what it is going to be, as my noble friend Lord Hannay has pointed out—we will pay for whatever we get. That seems to me to be a sine qua non.

It is of course the case that we will not be taking the decisions or laying down the policy anymore. But it will still be essential for our universities to have access to these networks. This would not just be helpful for the Minister on Report and in the negotiations in Brussels, where such a Cormack-Deben voluntary offer would go down extremely well, but also be something to deal with the uncertainty problem which the noble Baroness, Lady Royall, drew attention to. We are no longer desirable partners in research networks, because it is assumed that we will be country cousins or non-players.

We are no longer receiving the same demand from foreign students to come here to research. We are damaging the sector now—this is an area where the damage of Brexit precedes the deed. So in three contexts, it would be helpful to the Minister if he would say that he will take this away and think about producing a government strategy in both areas before Report.

[Lord Adonis]

My Lords, I agree with every word that the noble Lord, Lord Kerr, has just uttered. The noble Lord, Lord Patten, said that we were not expecting miracles from the Minister. I think even the Minister’s most ardent admirers do not credit him with miraculous powers, and he is not going to able to produce any rabbits out of a hat for us this evening. But it is not miracles we need here: all we need is a continuation of the status quo. This is one of those areas we come back to time and again—we had it in the long debate on Euratom last week: all we need to do is to avoid massive, self-inflicted damage.

There is no need to create whole new programmes and ways of working. We have Horizon 2020 and Erasmus; the latter has been going on for the best part of 30 years and is a highly successful programme. When you are doing something well, the usual trick is just to keep on doing it. There are so many things that do not work that the idea that Parliament and Government should be spending their time dismantling things that do is clearly crazy. What we want to hear from the Minister is simply that he is open-minded to continuing with the present arrangements. The sooner the Government are prepared to say that, the better.

The most telling contribution to this debate came from the noble Baroness, Lady Brown of Cambridge. In the higher education world, there is—I shall choose my words slightly diplomatically—a pronounced air of self-congratulation on how excellent everything is in this country and how brilliantly we do it, and if only the rest of world copied us then they would be a great deal better off. In many areas that is true, but in one we have a very poor international record: the propensity of our students to study abroad. According to the Erasmus figures, twice as many European students come to Britain as Brits go abroad. The noble Baroness was right to say there is a big problem with students from poorer backgrounds studying abroad. When I was preparing figures for this debate, I found that it looks as if Singapore, a country less than one-tenth the size of the UK, has about as many students studying abroad as we have in our entirety.

The fact is that we do not have nearly enough of our students studying abroad. When I visited Singapore as Minister for Schools, they were aiming—by about now, so maybe they have achieved it—at requiring all students at the National University of Singapore, regardless of their course, to spend at least six months, one semester, studying abroad. Can your Lordships imagine if we had anything like that commitment here? It might be a good thing if in due course we did. The great irony is that one of the great slogans to emerge from this Brexit policy as it has developed is “Global Britain”—but how can there ever be a global Britain unless far more of our students go and see the rest of the globe and spend time studying there? The first requirement for that is that we should not make the situation worse than it currently is.

The noble Lord, Lord Kerr, was right that what we seek from the Minister is not a miracle; we are clearly not going to get that from the present Minister. We simply expect a commitment to continue with the current programmes, and it is absolutely within the scope of the Government to say unilaterally that the negotiating position of Her Majesty’s Government now, in 2018, is that these programmes will continue with full British participation after 2020. If the Minister does not say that, he is staring at near-certain defeat on this issue on Report.

European Union (Withdrawal) Bill

Lord Kerr of Kinlochard Excerpts

Committee: 2nd sitting (Hansard - continued): House of Lords
Monday 26th February 2018 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

My Lords, I agree with the assessment of the noble Lord, Lord Campbell of Pittenweem, of the Prime Minister’s speech in Munich—it is exactly right—but he forgot one thing: at least the Prime Minister did not set out to insult the conference as the Foreign Secretary had the year before. Things are getting a lot better.

I rise to support Amendments 12 and 185 and to say why I cannot support Amendment 166 and therefore Amendments 164 and 165. Amendment 166 states that we should remain in the Foreign Affairs Council after we have left the European Union. We have to be realistic—that is not possible. If we decide to leave the European Union, we will not have a seat in any of the councils of the European Union. That is a fact. We may be able to negotiate some kind of seat in the directing bodies of agencies; if we are operating alongside the European Union in, say, a defence deployment, we may be able to arrange some joint command structure for that particular operation, but the direction of common foreign, security and defence policies and PESCO will be set by the 27 and we will have no say in the decisions they take. This, I fear, is undeniable.

[Lord Patten of Barnes (Con)]

Will the noble Lord concede that at least European Ministers after they have had their discussions and made their decisions will be sure to tell us afterwards what they had decided?

[Lord Kerr of Kinlochard]

I suspect we will find out. To me personally, this is an extremely sad moment. When I was ambassador to the European Union I found that the things I was allowed to suggest as policy prescriptions were taken seriously in Brussels, partly because it was assumed that if the EU followed the British prescription, the British would ensure that the Americans came in behind it. When I was ambassador in Washington I found the same. Access to and influence on the President was a function partly of the perception that, on a foreign policy issue, the British could call the shots in Brussels.

I am glad that this discussion started with a tribute to Lord Hurd of Westwell, who was the exemplar of how to handle common foreign and security policy. I am glad too that it started also with a tribute to Lord Carrington. The original EPC was, in many ways, a British construct. CFSP as it emerged, with the strong support of the Healeys and the Callaghans, was Douglas Hurd’s construct. The European External Action Service was a British proposal. We punched more than our weight but we have to accept that when we leave the European Union, if we do, that is all gone and we should not pretend that we will have the same influence from outside. What should we do?

[Lord Cavendish of Furness (Con)]

Can the noble Lord explain to us why it is not in the interests of our European partners—100% in their interests—to co-operate as we have always co-operated before?

[Lord Kerr of Kinlochard]

I am coming to that. I agree entirely that co-operation is in everyone’s interests. This is one of the areas of negotiation where we are not talking about a zero-sum game; rather, we are talking about a common interest, so I agree with the noble Lord. The point I am making is that we are in the next room. We are not in the room where the decisions are taken. We need an offer and an architecture for the next room. We need to come forward very soon and say, “We are prepared to consult on everything in the area of the common foreign and security policy. We are prepared to consult before every great debate at the United Nations. We would like to consult about every conflict area where Europe should have a view and possibly a presence. We would like to go on contributing our analysis and our intelligence. We would like you, o European Union, to build an annex to the Council—the room next door where we, who we hope will be your closest partner in co-operation on foreign policy, will be consulted by you and will consult you”.

A moment ago the noble Lord, Lord Liddle, made the point that the timing is very important. If we leave the European Union in March 2019, we will leave the Council and there will be no such structure in existence. I should think that something will be invented in the end, but there will be a period of hiatus when we will do the best we can. It would be much better if the United Kingdom were now to put forward an offer and an architecture. It would be much better if there had been a third section to the Prime Minister’s speech in Munich in which she had said, “This is how we envisage it working”. I do not see, particularly on the common foreign and security policy, why we should leave it to the European Commission. There is no great expertise on this in the Commission. It seems that it would have been better on a number of the dossiers in this negotiation if we had actually decided to play at home rather than play on their turf. It would have been better if on every issue we had not waited for the other side to make a proposal.

This is the locus classicus. This is the area of our greatest reputation in Europe. We invented the existing structures in this area, which we are now going to walk away from. This is the area par excellence where the other countries would like to co-operate with us. Why do we not put forward a proposal now? That is why I can support very happily Amendments 12 and 185, but I fear that there is no point in pretending that we can remain, on particular issues, a member of the club. We will have left the club, so the best we can do is try to be its closest partner on the common foreign and security policy.

[The Earl of Sandwich (CB)]

My Lords, following on from what my noble friend has just said, I should like to ask a favour of the Minister. I am not going to make a speech because I had my chance at Second Reading. My request is that she will respond to the question of international development. The noble Lord, Lord Wallace of Saltaire, mentioned it, but it was not in his amendment. However, it is very connected. I am thinking in particular of Kosovo at the moment as an example of the bridge between security, defence and international development. It is still going on. At this moment the Prime Minister of Kosovo is in the House of Commons seeking our support in the context of the European Union, of which we are still a member. This is something that is happening now. I hope that the Minister can respond on that subject and I will probably table an amendment at the next stage.

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[Baroness Goldie (Con)]

My Lords, I thank you all very much indeed for contributing to a genuinely extremely interesting and useful debate. I thank the noble Lord, Lord Adonis, for his very warm words of welcome. I fear that it is inappropriate to say this to someone bearing the name Adonis, but I fear I may be doomed to disappoint him. I will try to deal as best I can with the various points that have been raised.

The Government share with this House the objective of building a close and co-operative relationship with the EU on issues relating to defence and security, as referred to by the noble Lord, Lord Wallace of Saltaire, or to foreign affairs, security and intelligence, as referred to by the noble Lord, Lord Adonis. These are indeed vital matters. The continued security of Europe and of our citizens is paramount to us. It would just not be in our interests to see that co-operation diminish.

The purpose of the Bill is, I suppose, mechanical and rather tedious, but it is a mechanism to try to ensure that the UK statute book continues to function after we leave the EU and that it is not riddled with gaps and holes. That is what this Bill is all about. Amendment 12, as proposed by the noble Lord, Lord Wallace of Saltaire, is about the future relationship with the EU and securing it. That is vital—nobody disputes that—but it is of course inevitably, and I am sorry to use the platitude, subject to the current negotiations. Given that the Government have already committed to providing Parliament with a meaningful vote on any final deal, I respectfully suggest to the noble Lord that perhaps this Bill is not the appropriate forum to raise these concerns. I still think that the debate is an appropriate forum in which to articulate them.

[Lord Kerr of Kinlochard]

Could the noble Baroness reassure me that there is a negotiation going on on the future relationship between the UK when it has left and the common foreign and security policy of the EU? Is there a negotiation going on? I have the impression that there is not. I was trying to say that we should start one by making a proposal now.

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[Baroness Goldie]

I am sorry, I think that I may have been misunderstood. I did not talk about the United Kingdom withdrawing from being a P5 member of the United Nations Security Council. I said that when we withdraw from the EU, the EU will be left with only one member, which is France. The position of the UK in that respect is powerful and influential, and I am pointing out that Taskforce 50 thought that it could certainly merit a specific dialogue and consultation mechanism with the UK.

It is pretty clear, particularly when there are many in this Chamber much more knowledgeable than I am about these important and technical matters, that to underpin our future co-operation we will seek regular institutional engagements, including specific arrangements on secondments and information sharing—that would seem to be at the heart of constructing any relationship. The nature of the threats that we face mean that we should seek a framework that could be scaled up in times of crisis. One needs a relationship which can be tested against need if situations arise when the partnership, agreement or whatever it is to be has to swing into action.

The United Kingdom intelligence community already works closely with other members of the EU. The heads of the German BND, the French DGSE and the UK secret intelligence services issued a joint statement at the Munich security conference committing to close co-operation and stating that cross-border information sharing must be taken forward on themes such as international terrorism, illegal migration and proliferation of cyberattacks after the UK leaves the EU. We want to do all that. I am trying to explain to your Lordships that there is straw with which to make my bricks. I am not just clutching it out of the air; I am trying to indicate that there are substantive matters that can be the foundation for something very firm and enduring.

Perhaps I may try to deal with one or two particular points raised. The noble and gallant Lord, Lord Stirrup, raised the important matter of sanctions. We have just passed a sanctions Bill which will provide the UK with the powers to implement our own independent sanctions regime, but we would delay these powers coming into force if we could agree arrangements with the EU concerning sanctions co-operation during the implementation period. On sanctions, as with co-operation on foreign and security policy more generally, we seek to consult and develop a co-ordinated approach before decisions are made. To enable such co-operation, we will need consultation mechanisms; for example, regular sanctions dialogues. I was very struck by the contribution from the noble Earl, Lord Listowel, who raised real and poignant issues. Nobody would disagree with that, which underlines why we need close co-operation on these vital issues.

On Amendments 164 and 166 tabled by the noble Lord, Lord Adonis, the Political and Security Committee and the Foreign Affairs Council are of course bodies of the EU. They are attended by member states and are intended for the development of the EU’s policy.

We are leaving the European Union and are not seeking to participate in these meetings on the same basis as EU members. The noble Lord, Lord Kerr of Kinlochard, identified these problems. But, given our historic ties and shared values, we are likely to continue sharing the same goals and we will therefore want to co-operate closely on a common foreign policy. The noble Lord, Lord Kerr, said very cogently that we are not talking about a zero-sum game. It was racy language for the noble Lord, Lord Kerr, but I totally agree with him. We are not talking about a zero-sum game: well established and good relationships already exist which will not just evaporate. We will seek to bind these and tie them in to our new post-Brexit relationship. We want to establish an enhanced partnership with the EU that reflects the unique position of the UK. This will include close consultation in a variety of fora. Attending the Political and Security Committee and the Foreign Affairs Council, however, is not the only means by which we can achieve that.

Amendment 165 was also tabled by the noble Lord, Lord Adonis. This amendment seeks to bind the UK—“bind” is the important word—to follow the EU’s foreign policy objectives regardless of our own views. This would limit the UK’s ability to respond independently to developments in the world post Brexit, and such a restriction would be profoundly undesirable. Of course, on many foreign policy issues the UK and EU will continue to share the same goals and will want to co-operate closely, whether that is by continuing to support the Middle East peace process or by tackling the threat of piracy off the Horn of Africa—but, again, I do not think we need texts and primary legislation to underline what are already our shared values and beliefs.

Amendment 185 was also tabled by the noble Lord, Lord Adonis, and refers to the EU Intelligence Analysis Centre. I reiterate the Government’s unconditional commitment to European security. In the exit negotiations we will work closely to ensure that the UK and EU continue to co-operate closely, including through the sharing of information, to safeguard our shared values and to combat common threats, including threats of terrorism, organised criminal groups and hostile state actors. The precise modalities and arrangements to enable this partnership will be decided in the negotiations. I do not expect this to satisfy the noble Lords, Lord Adonis and Lord Wallace of Saltaire, but I hope that it will provide them with sufficient reassurance of the Government’s commitment to continue close co-operation with the EU and its agencies and that, in these circumstances, they will see fit not to press their amendments.

I will say in conclusion—I reiterate it because the noble Lord, Lord Hannay, raised the point—that the Government have been clear that the UK remains unconditionally committed to European security. In the exit negotiations we will work to ensure that the UK and EU continue to co-operate closely to safeguard our shared values and to combat common threats, including terrorism. A partnership where we can build on the existing structures and arrangements—because it is not a zero-sum game—to improve processes will enable us to go further to respond to the reality of these. I hope that this will provide your Lordships with sufficient reassurance of the Government’s commitment to continue close co-operation with the EU and its agencies.

[Lord Kerr of Kinlochard]

Before the Minister sits down, perhaps I may say to her that she will have responded to this debate admirably if she can think of a way of conveying to the Foreign Secretary—it might be relatively easy since he is here—that there are at least some in this House who believe that the right way of advancing the dossier of co-operation with the EU that we have left on a common foreign and security policy would be for us to put forward a draft treaty now—not waiting for the other side, not waiting for the Commission, the expertise of which is not on foreign policy, but putting forward a treaty drafted by the Foreign Secretary, with all his detailed, forensic skills.

[Lord Wallace of Saltaire]

My Lords, of course I shall withdraw the amendment, but I shall make a couple of comments. It is clear that we will have to return to this at the next stage if the Government do not provide any more detail. First, on the role of the Lords in considering Bills such as this, the noble Baroness said—as the noble Lord, Lord Callanan, said on a couple of occasions—that this is a largely mechanical Bill. Well, it is a mechanical Bill that gives very wide discretion to the Government to design our future relationship with our most important security, political and economic partners. So a House that concerns itself not with whether the principle of the Bill is correct but with the detail is entirely in accord with its role to ask for detail on what that discretion will be used for.

It would be easier to accept that this is a mechanical Bill and not to raise these difficult questions one after another if we had some confidence that the Government actually know what they want in these areas. Part of our problem is that many of us have no such confidence. I do not think that the Foreign Secretary has a clue about what he wants by way of a future relationship with Europe: I doubt whether he has really thought about it for more than three or four minutes. He is too busy thinking about the next anecdote he is going to tell or the next joke he is going to make. His speech last week was a disgrace for a Foreign Secretary: the Prime Minister’s was of an entirely different quality. For a Conservative Party that has always prided itself on its commitment to a strong foreign policy, it must be a real embarrassment that we still have someone in place who is incapable of giving a serious speech on foreign policy. So this House is fulfilling its proper role in asking for detail on the implications of the Bill.

Secondly, I take up what the noble and gallant Lord, Lord Stirrup, said: the engine room is important.

European Union (Withdrawal) Bill

Lord Kerr of Kinlochard Excerpts

Committee: 5th sitting (Hansard): House of Lords
Wednesday 7th March 2018 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

Does the noble Lord agree that although on the legalities we have heard an extremely lucid explanation that in my view nobody could disagree with, delivered with all the noble and learned Lord’s customary charm, what we have not heard is any indication that anybody is aware of the reality in the outside world: that these people are choosing to go home? The people we need are going back because the Government are not giving them an assurance. These people believe that we agreed something in November. What we are seeing now in this intellectually fascinating legal debate is a total betrayal of their belief that we had agreed something. The pace at which people move away from this country—people who we need—will speed up if we do not get this right.

[Lord Foulkes of Cumnock]

I am obliged to the noble Lord, Lord Kerr of Kinlochard, for pointing out that although the Minister has all the legality behind him, perhaps his argument is lacking in humanity. It is humanity that the European Union citizens deserve, not the legality that we have heard.

I was about to conclude by saying that this may not be the right time but it is certainly the right place. I look forward to returning to this, and I know that many noble Lords who have spoken do also, to argue and to fight for the rights of not just UK citizens on the continent, who matter as well, but the European Union citizens who have given so much to this country over the years and continue to do so.

European Union (Withdrawal) Bill

Lord Kerr of Kinlochard Excerpts

Committee: 6th sitting (Hansard - continued): House of Lords
Monday 12th March 2018 Lords Chamber

[Lord Wallace of Tankerness]

My Lords, as a co-signatory to the amendment, I shall briefly make three points. My first is to correct something said by the noble and learned Lord, Lord Hope of Craighead. He said that the smooth running of the early years of devolution was because we had a Labour Government in Westminster and a Labour Government in the Scottish Parliament. In fact, it was a Labour-Liberal Democrat coalition in the Scottish Parliament. That is an important difference.

Secondly, I endorse what the noble and learned Lord said when he gave the example of orders under the European Communities Act 1972 and the memorandum of understanding between the Scottish Government and United Kingdom Government on consultation, and how these might be taken forward. My experience in the Scottish Executive at the time was that it worked. I can say that because I cannot remember an issue over which there was any major dispute. It is also fair to say that I cannot think of any major dispute on that kind of area, some of which was very technical, while the Scottish National Party was in either minority government after 2007 or majority government after 2011. It is possible on a whole range of technical issues to get some common- sense agreement. That is why we should persevere.

Thirdly, the noble Baroness, Lady Finlay, said that underlying the amendments is an effort to have building blocks for trust. I shall not repeat the arguments I made in the previous debate other than to say to the noble Lord, Lord Bourne, that, like the noble Lord, Lord Deben, I appreciated his comprehensive response to it. He seemed to suggest that I had spoken about allowing a veto over areas that were non-devolved. Given that the previous amendments were about modifications to the Scotland Act, I do not think anything I said could have given that implication. Here, where we are talking explicitly about matters within the devolved competence of Scottish Ministers, that cannot be said either. I think there is something we can build on there.

[Lord Kerr of Kinlochard (CB)]

I share the admiration of the noble Lord, Lord Deben, for the way in which the Minister summed up the previous debate. He was a rather brilliant performer of the work of the fire extinguisher. Foam was spread over all of us and calm ensued. It was a brilliant performance.

I am sorry that, this time, the Minister has to deal with pyrotechnics from a pyromaniac, in his colleague, the noble Lord, Lord Forsyth of Drumlean. It is rather a pity that the attacks of the noble Lord, Lord Forsyth, on the party now governing in Scotland are responded to only by a Welshman, the noble Lord, Lord Wigley. He responds very well, but, as a Scotsman who does not support the Scottish National Party, it seems to me rather an easy trick to score pyrotechnical victories against an opponent who is not in the room.

Trust is what this is all about. I can see nothing wrong with this amendment; I cannot see any reason why Ministers should not buy it now. If they cannot, a discussion needs to start. It does not help to insult the party in office in Edinburgh by implying motives. It may well have such motives, but they were not those it explained when it published a perfectly reasonable economic analysis at the end of last year which established clearly the damage that will accrue to Scotland from leaving the single market. The scale of the damage was almost exactly the same as what we have now seen in the Treasury analysis for the United Kingdom as a whole—eight, five, two: the same numbers pop up in both studies. The Scots are not being unreasonable or necessarily malicious when they say that they would prefer to remain in the single market. Of course, the market of the United Kingdom is more important to Scotland than the market of the rest of Europe, but that is not the point; they do not want to have to choose. That seems a perfectly reasonable position to adopt. It does not help establish trust to insult them.

[Baroness McIntosh of Pickering]

My Lords, I had no intention to speak, but having added my name to Amendment 124, I want entirely to endorse what was said by the noble and learned Lord, Lord Hope of Craighead, in introducing it. I want also to refute any allegation that I am an ideologue; I have always considered myself a pragmatist. It is unfair to impute a position to a party that is not represented in this House and cannot answer back to any of the allegations made previously.

I believe that this amendment goes to the heart of the consent and trust that has been debated here at great length. I declare a vested interest in that I am doing some work and I visited the offices that my noble friend Lord Forsyth opened: the Water Industry Commission for Scotland is doing some great work across the European Union, as indeed is Scottish Water, providing technical assistance. Obviously, one hopes that that work will continue after Brexit day. I do not see this amendment, spoken to by the noble and learned Lord, Lord Hope, or the amendment of the noble Baroness, Lady Suttie, as the tail wagging the dog: this is simply an effort to bring the Scottish, the Welsh and the Northern Irish people with the Government of the day.

European Union (Withdrawal) Bill

Lord Kerr of Kinlochard Excerpts

Committee: 7th sitting (Hansard): House of Lords
Wednesday 14th March 2018 Lords Chamber

[Lord Liddle]

My Lords, I just want to get Amendment 196 on the record, because it makes helpful points which should be taken into account by noble Lords when we come to devise a composite amendment on Report. That is why I am anxious to speak and I am sorry if I have upset the noble Lord, Lord Hannay.

We have had many excellent speeches. I think the three by the noble Viscount, Lord Hailsham, the noble Lord, Lord Patten, and my noble friend Lord Reid are among the best I have heard on this Bill and perhaps even since I have been a Member of this House. I fully support what they said.

The purpose of Amendment 196 is to build on the Grieve amendment that is now incorporated in the Bill. En passant I will say from this side of the House how much I respect the bravery of the Conservative MPs who voted for that amendment and put the national interest first. If they had not done that, a lot of the point of our proceedings would have been removed—so I respect them enormously.

The merits of Amendment 196—I will be very brief—are, first, that it specifies a date by which the Government have to produce their withdrawal agreement: 31 October 2018. That would prevent any attempt to bounce a last-minute decision through Parliament. Secondly, it attempts to deal with two eventualities: not just the eventuality of no agreement and no deal being reached in Brussels but also a failure on the part of the House of Commons to agree to and adopt the resolution that the Government will put forward seeking to endorse that agreement.

It does not give the House of Lords a veto. I agree with what the noble Viscount, Lord Hailsham, said: these matters fundamentally have to be decided by the Commons. This amendment allows the Commons to consider a whole series of options, including the extension of Article 50.

[Lord Kerr of Kinlochard (CB)]

I am grateful to the noble Lord. I agree very much with what he said about the speeches from the noble Lords, Lord Reid and Lord Patten, and the noble Viscount, Lord Hailsham.

I am concerned about the point he is on now. Subsection (2)(b) of the clause proposed by Amendment 196 seems to me to open the possibility of a period after we have left the European Union before we have any agreement with it in respect of the terms of withdrawal. That would be an extremely dangerous legal vacuum.

One of the desirable features of the Mansion House speech was that we had no more nonsense about no deal being better than a bad deal. It was clear that the Prime Minister wished to do a deal. It is very important that, if we leave the European Union, we do so on the basis of agreement with it on the terms of our withdrawal. If not, our position with third countries would be impossible and they would be unable to do business with us until we had established a secure position with the European Union—and, of course, our position with the European Union would be pretty bad. So I agree with the spirit of this amendment—indeed, I agree with the spirit of all the amendments in this group—but it seems to me that there is a real danger lurking in the wording of subsection (b).

[Lord Liddle]

If the noble Lord, Lord Kerr, thinks there is a danger, we will have to look at it again because I so respect his judgment. I certainly do not want to create a legal vacuum; I want to see the possibility of an extension of Article 50 as one thing that Parliament might do if it decided to reject the Motion on the withdrawal agreement. I also think that it would be appropriate for the Commons to decide on any other course—and certainly I agree with the noble Viscount, Lord Hailsham, that a referendum would be a possibility in those circumstances. How can we possibly judge at this stage what those circumstances will be? We have to have in our amendment—while maintaining legal certainty—the possibility of the Commons being able to decide on a number of different things.

European Union (Withdrawal) Bill

Lord Kerr of Kinlochard Excerpts

Committee: 10th sitting (Hansard): House of Lords
Monday 26th March 2018 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

To follow on from what the noble Lord, Lord Wigley, has said, I am tempted by the reverse approach of the noble and learned Lord, Lord Mackay, and the mechanism that he has described. I have just one point to add to the debate: I am worried about the emphasis on the single market—the internal UK market. There was a debate in Europe, following the Cockfield White Paper 30 years ago, about how much uniformity was needed in a single market; how much you could rely on mutual recognition; how much you did not need to standardise at all and how much you could harmonise. Noble Lords will remember that that debate became quite controversial at times. Some of us argued that the Commission took a more expansive view of the need to harmonise and standardise, rather than to recognise diversity. In my view, devolution inherently means a recognition of diversity. I do not agree with the noble Lord, Lord Morgan, that the Government have an evil, malign intent here. However, the way that this dossier has been handled has created suspicions in Scotland and Wales of such an intent.

Looking at the criteria set out in the amendment tabled by the noble and learned Lord, Lord Hope, there is no difficulty with a common framework in areas necessary to,

“safeguard the security of the UK”,

or,

“provide access to justice”,

or,

“enable the management of common resources”,

or,

“ensure compliance with international obligations”,

obviously. I pause on,

“new trade agreements and international treaties”,

because there are suspicions that the fox might get into the hen house. The real suspicion arises over the first item:

“enable the functioning of the UK internal market”.

I do not think “enable” is a transitive verb. As all noble Lords recognise, “ennoble” is, but “enable” is intransitive. However, that is not the main reason that I object to this section of the amendment. The phrase,

“the functioning of the UK internal market”,

could be interpreted very widely, and there are those in Scotland and, presumably, in Wales who assume that the Government might want to interpret it widely.

We do not have a single market in the UK now; it is variegated, as are the views on the extent to which it needs to be further harmonised or advanced. I wonder whether it would not be better if the Government could drop from their presentation on this dossier, on Brexit and devolution, the references to the UK internal market. There would be very few areas where it needed to be used and they would all be covered by one of the other criteria in the noble and learned Lord’s amendment.

[Lord Wallace of Tankerness]

My Lords, I will pick up what the noble Lord, Lord Kerr of Kinlochard, has just said. The criteria set out in this amendment—and in one tabled by the noble Lord, Lord Griffiths of Burry Port, to which the noble Lord and I both put our names but which was not moved—reflect a set of principles for common UK frameworks agreed at a Joint Ministerial Committee on EU Negotiations last October. They are certainly a basis for moving forward and already have a buy-in from the United Kingdom Government and the devolved Administrations in Scotland and Wales.

When creating United Kingdom frameworks, we do not want to find a situation where, when we come out of the European Union, there is something which impedes a Scottish beef producer freely selling their beef in Wales or a Welsh sheep producer selling lamb in Belfast. These benefits predate our entry into the European Common Market. It is also important to remind ourselves that the restrictions on the Scottish Parliament relate not only to reserved matters or EU law, but to what is in Schedule 4 to the Scotland Act. That specifically constrains the Scottish Parliament from doing anything which modifies Articles IV and VI of the Union with Scotland Act 1706 and the Union with England Act 1707. If one reads these two articles of the Acts of Union, drafted 280 years before the Cockfield report, one finds not a bad model, in the language of its time, for a customs union and a single market which have served us well over three centuries.

I also note that as well as the criteria that have been agreed, the Scottish Government themselves, in their legislative consent memorandum to the Scottish Parliament in September last year, said at paragraph 19:

“The Scottish Government has made clear, repeatedly, its willingness to negotiate UK frameworks in certain areas previously covered by EU law. This could be, for example, to support the functioning of UK markets, or to facilitate the management of common environmental resources”.


Therefore, I believe there is a basis for reaching agreements here, but it is important that these are not imposed.

In giving evidence to the Scottish Affairs Committee in the other place last year, the Secretary of State for Scotland, Mr Mundell, stated at paragraph 21 of that committee’s first report of Session 2017-19:

“The Secretary of State for Scotland agreed that any common frameworks should be agreed with the devolved administrations, stating:


A UK framework is not a framework that the UK Government imposes; it is a framework that is agreed across the United Kingdom”.


It is important that we approach this issue with that in mind. That is why I think the amendment suggested and spoken to by the noble and learned Lord, Lord Mackay, is helpful. Indeed, that Select Committee went on to recommend that:

“Any common framework must require the consent of the governments of Scotland, Wales and Northern Ireland, where relevant”.


It is important to have a dispute resolution mechanism, as referred to by the noble Baroness, Lady Finlay of Llandaff, because there is potential for some disagreement in setting up these frameworks—I hope not as much as is sometimes thought—for which a dispute resolution mechanism is required. One assumes that once these frameworks are established—that goes beyond the ambit of this Bill—they will not be static but will develop. It might be useful at some stage—not in this debate or in this Bill—to get an indication from the United Kingdom Government as to how they see these frameworks working after they have been established. Do they want to see common standards apply across the United Kingdom, but have diversity within that as to how they are implemented in Scotland, Wales and Northern Ireland, or in England through the United Kingdom Parliament? That too will require some form of dispute resolution mechanism. The Select Committee, to which I have referred, recommends that,

“the UK Government and the devolved administrations agree a mechanism by which disputes can be resolved in the event that common frameworks cannot be agreed”.

I think that that is a two-stage process. First, there is the establishment of the common frameworks, where the amendment of the noble and learned Lord, Lord Mackay, is very pertinent, and, as we move forward, there is the issue of how we look at the operation of the common frameworks, which I believe will also need some form of dispute resolution mechanism. However, it is important that we move forward with the common frameworks. The amendment in the name of the noble and learned Lord, Lord Hope of Craighead, certainly reflects agreements that have already been reached between the United Kingdom Government and the devolved Administrations.

European Union (Withdrawal) Bill

Lord Kerr of Kinlochard Excerpts

Committee: 11th sitting (Hansard - continued): House of Lords
Wednesday 28th March 2018 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

I have the greatest respect for the noble Lord, Lord Wigley, but my head says that this will not work and that the noble Lord, Lord Adonis, is absolutely right. Citizenship is defined in the treaty as being a citizen of a member state. When we cease to be a member state, we all lose our citizenship, unless we are lucky enough to live in Northern Ireland or to be born in Northern Ireland. I do not think the Greenland precedent works, on the grounds of chronology. It was not actually Greenland seeking independence, and it preceded the concept of citizenship emerging in the European Union in the Maastricht treaty.

[Lord Wigley]

Does the noble Lord not accept that although it happened chronologically before the treaty of 1992, the rights continue afterwards and therefore are respected?

[Lord Kerr of Kinlochard]

I am afraid it does not apply to 60 million of us. It did apply to 40,000 Greenlanders a long time ago. My concern is that we should be careful in what we ask the Government to do. The noble Lord, Lord Wigley, said that this is purely a matter of political will, and that the Government could fix this if they chose to. I am afraid that this is not the case.

I would like to ask the Government if they could construe for us the missing paragraph 32 from the draft withdrawal agreement of 28 February. The Minister will remember the Leader of the Opposition’s question on the Statement on Monday. Paragraph 32 was in the draft of the withdrawal agreement of 28 February. It read:

“In respect of United Kingdom nationals and their family members, the rights provided for by this Part shall not include further free movement to the territory of another member state”.


It seems to me that the Government should exercise political will here and carry on negotiating. I was encouraged to see that the paragraph had dropped out, because it limited the rights of UK citizens living in continental Europe after we leave, if we leave, to the particular country in which they live. It seemed to me that these rights ideally should be portable, so that somebody living in France could live in Italy or Spain and retain these rights. I have always thought it a little harsh of the European Union side in this negotiation to take the opposite view. I was encouraged to see that prohibition on the rights extending to residence in another member state had dropped out of the text that was looked at in the European Council.

I hope this means that the Government have either succeeded in killing that prohibition or, perhaps more likely, are themselves continuing the fight to try to get rid of that prohibition. It would be very useful to know. I think that leaving the European Union will be a disaster for all of us. I resent the fact that I will no longer have any rights as a citizen. But it seems to me that it is particularly awkward for those people whose legitimate expectations when they chose to live in France, Italy, Spain or wherever will be reduced. They will still be able to exercise their rights when they live in the country to which they chose to move, but they will not be able to choose to move to another country and retain these rights. I would be glad if the Minister could elucidate the answer to the Leader of the Opposition’s question on the Statement on Monday.

[Baroness McIntosh of Pickering (Con)]

My Lords, it might be helpful if I, as a half-Dane, set out the position of Greenland. The noble Lord, Lord Wigley, raised the interesting point of what the status of UK citizens will be when we leave the European Union but continue to benefit in some places from it. Greenland is an autonomous Danish dependent territory, with only limited self-government and its own Parliament. It withdrew from the European Union but nevertheless is now associated with it under the Overseas Associated Decision and is eligible to benefit from funding from the EU’s general budget through the EU-Greenland partnership. That begs the question of whether the Government are minded to apply for such associated status so that citizens from parts of the UK can benefit in the future.

--- Later in debate ---

I hope this amendment is helpful to the Government, because it draws attention to something that will need to be fixed in the light of the withdrawal agreement taking place. In those circumstances, I look forward to hearing what the Minister has to say and beg to move.

[Lord Kerr of Kinlochard]

My name is to this amendment, but I have little to say because the case for the amendment has been brilliantly put forward by a lawyer, and I am no lawyer. It seems to be a common-sense amendment. If, as I think will be the case, the European Union side in the negotiation continues to insist that, if we want a standstill period in which we act as if we were members of the customs unions and the single market until January 2020, the jurisdiction of the Court of Justice as the umpire of the single market must continue. It seems to me we have to accept that if, as I expect, the European Union insists on taking the position it is now taking. In that case, as explained by the noble and learned, Lord Goldsmith, Clause 6 would have to be struck out. Clause 6 is in flat contradiction to what is going to be agreed on the standstill agreement. Therefore, it seems sensible to avoid having to repeal part of the law that we would have passed for us instead to introduce this small amendment that simply says that Clause 6 does not come into effect until the end of the transition period.

The concept of a standstill transition is extremely unsatisfactory. It is necessary but it is insufficient to deal with the huge problems that British industry and business will face. It is inconceivable that by January 2020 we will have negotiated a full agreement with the European Union covering the full gamut of our future relationship, including trade. That is just not feasible. Even if we had done that—if we had achieved the impossible—we would have a mixed agreement which would require national ratification in all capitals. All the standstill agreement does is give us the position for 21 months that we will accept and operate under laws that we have not written, on which we have had no votes; with no judge in the court but the court having jurisdiction; with no Members in the European Parliament but the European Parliament writing our laws, with the Council; and with no one in the Commission. I find that ignominious and insufficient because all it has done is move the cliff edge out to 1 January 2021. We will not have the long-term, permanent successor relationship defined in treaty form in a ratified treaty at the end of this period.

Moreover, it is my judgment that for legal reasons it will not be possible to extend the period. It seems to me that one cannot use Article 50, which is about withdrawal, to produce an extended period of future relationship. There are other articles in the treaty which define association agreements and relationships with third countries. I do not think the lawyers will allow us to use the withdrawal agreement as a treaty base for an extended period of new relationship. Therefore, although it is absolutely necessary to have a standstill because otherwise the cliff edge is very close, it does not solve the problem of the cliff edge but merely postpones it for a bit. But the amendment moved by the noble and learned Lord, Lord Goldsmith, must surely be right. It does not make sense to have a lengthy Clause 6 explaining a relationship which will not actually be the relationship we follow during the standstill period.

[Lord Davies of Stamford]

My Lords, I am mystified as to why there is any controversy at all on this matter and why the Government have come forward with a Bill that includes Clause 6 in its present form. After all, it is us who have asked for some withdrawal or transitional arrangement, and very necessarily so—I quite agree with the noble Lord, Lord Kerr; the whole matter is extremely unsatisfactory from many points of view.

Although our position will change constitutionally in March next year if we go ahead with Brexit, and we will not have been involved in the legislative process and so forth, the whole purpose of the transitional arrangement as I and I think everybody has understood it—that is the way the European Union has understood it, because after all, it is our request—is that the regime affecting all economic agents, traders and so forth, will be completely unchanged. They will carry on after March next year until January 2021 in exactly the same way. The rules they operate under will be the same. Their contracts will be interpreted in the same way as before. Their obligations to the state and so forth will be interpreted in the same way and therefore they will know exactly where they stand. They will not need to have any new regime introduced during that period. If that is the case, surely the legal regime must not be subject to any change—quite obviously so —because if it is going to continue as it presently is, the judgments of the courts which oversee that must be the same as they otherwise would have been.

Therefore, I am completely mystified as to why the Government have proposed that Clause 6 should come into effect on Brexit rather than at the end of the transitional period. I just hope that we will have a satisfactory and credible explanation from the Government. They might even admit that they have made a slight slip on this occasion and accept the amendment which is now before them.

--- Later in debate ---

[The Duke of Montrose (Con)]

I had a son who worked in the European court. As far as I understand it, if an issue comes up which is relevant to the United Kingdom, it is unlikely that a United Kingdom judge would be part of the panel asked to rule on it.

[Lord Kerr of Kinlochard]

There will be no United Kingdom judge: when we are not members of the European Union, we will not be entitled to have a judge at the European Court of Justice. The noble and learned Lord, Lord Hope, is absolutely right, I am afraid.

[Lord Vinson (Con)]

My Lords, the ECJ works at a snail’s pace. There will be a massive amount of undigested legislation one way or the other at the end of the transition period—how does this affect the issue?

--- Later in debate ---

[Lord Keen of Elie]

We have been clear that the withdrawal agreement and implementation Bill will legislate for the withdrawal agreement. That may involve us amending the terms of the present Bill, but we should remember that the present Bill is intended to accommodate the situations where there is a withdrawal agreement and where there is no withdrawal agreement and therefore no implementation period. It is to bring certainty to the statute book in that context. Clearly, there may be a situation in which we have to bring forward amendments to the present Bill in the second withdrawal agreement Bill. I recognise that.

[Lord Kerr of Kinlochard]

The Minister has just been paying tribute to the delicacy of the drafting of the noble and learned Lord, Lord Goldsmith, whose language in this amendment copes with both eventualities. It sets out the contingency that there is a transitional agreement. I do not see the difficulty.

[Lord Keen of Elie]

It is not a question of difficulty; it is a question of how we have decided to approach dealing with this in a legislative manner. The intention is that the present Bill will legislate for legal certainty whether there is or is not a withdrawal agreement. In the event of a withdrawal agreement, we will legislate to ensure that in the withdrawal agreement and implementation Bill the terms of the present Bill will be brought into line with the terms of the withdrawal agreement in order that we can discharge our international legal obligations. We have consistently pointed out that that is the approach being taken to legislation in this context. It is really quite inconceivable to suppose that the Government are going to enter into a withdrawal agreement and then not implement that international legal obligation in our domestic law. That is the intention. It is simply a question of the order in which these things are being done, and it has always been maintained, and will be maintained, that it is not for this Bill to deal with the eventuality or the prospect of the implementation period.

European Union (Withdrawal) Bill

Lord Kerr of Kinlochard Excerpts

Report: 1st sitting: House of Lords
Wednesday 18th April 2018 Lords Chamber

Moved by

[Lord Kerr of Kinlochard]

1: Clause 1, page 1, line 2, at end insert—
“(1) Subsection (2) applies if, and only if, the condition in subsection (3) is met.”

[Lord Kerr of Kinlochard (CB)]

My Lords, the Eugene O’Neill play “Long Day’s Journey Into Night” is very good, but it does go on a bit. We have already had 13 long days and 372 amendments, which at least enables us to be quite brisk and brusque at this stage. The arguments have all been advanced already, and it falls to me to speak to Amendment 1, in my name and those of the noble Lord, Lord Patten of Barnes, and the noble Baronesses, Lady Hayter and Lady Ludford. The amendment is a call to the Government to explore a customs union.

I intend to distil simply five points out of our previous debate—five arguments for a customs union. The first argument is that made by manufacturing industry, and it does not need repeating: it has been made very clearly in our debates and in public debate, and has been supported strongly by the CBI and the TUC. We know what Airbus Industrie thinks and we know of its worries. We know about the motor industry’s worries. We know that 60% of a UK-built motor car consists of components that come into our country. The motor industry believes that, if those components came across a customs frontier, its costs would rise by between 5% and 10%, which is serious. We know from the Government’s economic analysis that the hit on manufacturing would represent, over time, 1% of GDP. That case does not need to be explained any more.

Secondly, the case for export to the European Union explains itself too. Fifty per cent of our exports go to the European Union—indeed, 70% of our agricultural exports. The Government are rightly concerned not to introduce new frictions in this trade, but a customs frontier is an inevitable friction; the delay, not just at the Irish frontier but at Dover and elsewhere, would be considerable and would have considerable costs. The Government are right to minimise frictions, not just for that reason but because to replace trade with the European Union with trade further afield will not be an easy task. A further 20% of our exports go to countries which have preferential arrangements with the EU or are negotiating them, including 60 free trade agreements, 32 of which are with Commonwealth countries. To simply replicate such preferential arrangements when we are out on our own, representing a smaller market—offering the concession of access to a smaller market—will not be child’s play, as the Australians and New Zealanders have already demonstrated to us through their demands on agricultural quotas. If we look at America—which accounts for 15% of our exports today—and the TPP, TTIP and NAFTA sagas, or listen to the inaugural speech with its paean for protectionism, we can see that that will not be easy.

The further afield you go, the more difficult it gets. The population of Canada is three times the population of Switzerland but we sell twice as much to the Swiss because they are closer. The ineluctable rule is that as distance doubles, trade halves. I am talking about trade in goods, but it is a fairly standard rule. So it is well worth looking further afield, but it will be hard not to see a fall in overall exports if our trade with the European Union is made more complicated, and it will be much more complicated if we do not have a customs union. We must try to limit the damage of leaving our largest, because closest, market.

My third point is about the nature of customs union, and here I will admit the downside of customs union. It is about goods, not services, and it would prevent us abolishing our tariffs on imports into this country. It would prevent us doing what Professor Minford wants to do, and that is, for some, a serious downside. I do not believe that the Government intend to follow Professor Minford’s prescription. I do not think the Government intend to take us to a tariff-free, low-welfare, low-tax, low-regulation, low-standard sweatshop economy. The Prime Minister has been pretty clear that she is not planning to do that.

More importantly, as I said, the customs union is only about goods—it is not about services. It would leave us entirely free to go on doing our trade promotion, as we do now, but also to negotiate new arrangements for trade in services, investment protection, remittance of profits, intellectual property, data protection, access to government procurement—all the new ideas and new issues which are now much more important in trade negotiation than tariffs. Therefore, there is very little economic downside to customs union. It would stop us doing what no sane Government would want to do and would in no way inhibit us from doing what every Government would want to do.

The fourth issue is the Irish border. Even if cross-border trade is tariff free, as I hope and believe it will be, rules of origin, phytosanitary and other checks will require a hard border. They will make that inevitable unless we have a customs union. A customs union is not in itself a sufficient condition for an open or soft border—there will still have to be a degree of regulatory alignment, particularly in the agricultural sector—but it is a necessary condition for an open border.

--- Later in debate ---

[Noble Lords]

No! Keep going.

[Lord Kerr of Kinlochard]

At paragraph 4 of their guidelines, they say that it is the UK’s positions,

“which limit the depth of such a future partnership”,

and that:

“Being outside the Customs Union and the Single Market will inevitably lead to frictions”.


But they also say at paragraph 6 of their guidelines that if the UK’s positions on the customs union and the single market,

“were to evolve, the Union will be prepared to reconsider its offer”:

in other words, to improve its offer. We do not know how far-reaching such improvements would be but, if we go on refusing to allow our negotiators to explore the idea of a customs union, we will never find out, and that in my view will be irresponsible—hence the wording of the amendment. I do not recall at the time of the referendum any debate about a customs union.

[Lord Grocott (Lab)]

My Lords—

--- Later in debate ---

[The Countess of Mar (CB)]

My Lords, the noble Lord should be allowed to develop his arguments. The amendment is not on the table yet—it has not been put by the Speaker. So I ask the noble Lord, out of courtesy, to let the noble Lord, Lord Kerr, finish speaking.

[Lord Kerr of Kinlochard]

Perhaps I may continue. I recall no debate at all at the time of the referendum on a customs union. The country voted narrowly to leave the European Union, but no one can argue that it voted knowingly to leave the customs union with the European Union.

The red line was laid down in October 2016 in the “citizens of nowhere” speech. One hears that there had not been much discussion in the Government; there certainly had been no discussion with Parliament. One wonders to what extent the economic consequences of the decision on customs union had been fully assessed and analysed within the Government; I have no idea. Other red lines have since been sensibly blurred; in my view, it is time to blur this one.

The House knows that I was and remain a keen remainer. I believe that, when a deal is struck, the country should be given a chance to say whether it is what it wants. That would be fair, but it is nevertheless our duty to help improve the deal and see how it could be made better. If in the end we do leave, it should be in a way that limits the damage to the country’s well-being and to the future of our children. That is why I believe that it makes sense for the Government to be asked to explore customs union. I beg to move.

[Lord Grocott]

I simply wanted to ask for information on the wording of the amendment, which requires the Government to put a statement to both Houses about the contents of an agreement on a customs union. I simply want to ask this: if such a statement is presented to both Houses, as his amendment requires, and if the House of Commons says yes and the House of Lords says no, what happens next?

[Lord Kerr of Kinlochard]

Am I allowed to respond? I thank the noble Lord for his question. The Government would be required to negotiate for a customs union and make a statement about the outcome of the negotiations, which would be before the withdrawal implementation Bill came to the House. It seems to me that the requirement on the Government is simply to negotiate. I may be wrong about the willingness of the other side to envision a customs union—we cannot require the Government to come back with a customs union—but we can require the Government to explain how hard they have tried and what kind of customs union they think might be available.

[Lord Patten of Barnes (Con)]

I am delighted to second the amendment moved by the noble Lord, Lord Kerr, and I will seek to do so as briefly as he did, partly because he was so comprehensive in the arguments for a customs union and partly because we chewed over many of these issues in Committee and we plainly should not deal with them again. So I will not go into the issue of Northern Ireland’s border with the Republic of Ireland, because I spoke twice on that in Committee.

I assume straightaway, because I have a regard for his intelligence, that the Minister responding to this debate is not going to suggest that the referendum result or the Conservative manifesto disqualifies us from proceeding in the direction suggested by the noble Lord. If I am wrong about that, I would be delighted to come back to it later. But there is one point made in the manifesto that I will dwell on for a moment—and, as clergymen occasionally say at the end of sermons, share with you all—because it allows me to bridge to the main argument we have today, which is about trade and trade opportunities for this country.

I confess to the House straightaway that I used to make my living helping to write manifestos, and so I have a certain regard for these things. The manifesto said at the beginning:

“People are rightly sceptical of politicians who claim to have easy answers to deeply complex problems”.


So I ask the House to turn its attention to what we have been promised on trade.

We are told by the Secretary of State for International Trade that a free trade agreement with the EU will be one of the “easiest in human history”. He also told us that, by the end of March 2019, the Government will have put in place or drafted or agreed up to 40 trade agreements with other countries. That is the backdrop. It seems to me that those propositions invite a little scepticism, and in a moment or two I will suggest to the House why that is the case.

I have a degree of expertise in this area for which I do not seek to make extravagant claims—I do not know as much about trade as the noble Lord, Lord Mandelson, does, and I know that expertise is a dangerous thing in the present climate. But I did, either on my own or with others, negotiate free trade agreements between the European Union and Mexico, Chile and most of the countries of the Mashreq and Maghreb region. We were part of the negotiation team for China’s accession to the WTO. We failed with Russia—for all sorts of reasons which the House will not be surprised about—and we made only limited progress with Mercosur, the San José dialogue and the Andean pact countries. So I know how difficult these things are, and some of the problems that will be faced in addressing the agenda mentioned by the noble Lord, Lord Kerr.

The first thing we have to do is secure our market in the European Union—50% of our trade. We then have to think about the 12% of trade with countries with which the European Union has concluded agreements already and the 8% with which it is negotiating trade agreements already. That adds up to about 70%. Of the remaining 30%, about half is with the United States, a quarter with China and Hong Kong, and the rest with everyone else.

How are we going to manage with the countries with which the European Union has negotiated deals already? I spent a particularly dreary afternoon on Maundy Thursday looking through the European Union-South Korea trade deal. It was dreary not because it is not a good deal—indeed, it is such a good deal that the Foreign Secretary not long ago boasted about the great increase in British trade with South Korea—but because it is even longer than a long day’s journey into night. It runs to 1,400 pages, 900 of which just list tariffs. The idea that you can simply Snopake the words “European Union” and insert “United Kingdom” and grandfather that trade agreement in nanoseconds—even nanoyears—is absurd.

First of all, the South Koreans know that we are the demandeur. They will know that we have a trade surplus with South Korea at the moment, which might make them a little resistant to being as helpful as they were with the European Union, which is, anyway, a much bigger market than the United Kingdom—500 million to about 65 million. There are technical issues as well that will be particularly demanding. I will not try to explain to the House—because I have only a vague notion of what it means—the problem with trigger volumes preventing surges of agricultural imports to a country. But that issue is one that will involve not just negotiations with South Korea but tripartite negotiations between us and the European Union as well as the South Koreans.

Even more important are rules of origin—something that used to be well understood by the Secretary of State for Exiting the European Union. Not long before the Foreign Secretary made a speech saying that there was no reason why we should not, after leaving the European Union, stay in the single market, the Secretary of State for Exiting the European Union pointed out that, on balance, he was in favour of staying in the customs union because, even though you would not then be able to do independent trade deals on your own, the issue of rules of origin was so important that we had to stay within the union so that that did not present problems for us.

--- Later in debate ---

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

My Lords, it is a great pleasure for me to resume our debate after the Easter Recess. I hope that all noble Lords enjoyed a good break. I spent most of it studying amendments to this Bill. I hope that some doubts about how seriously the Government take these debates have now been dispelled, as noble Lords will have seen that the Government have already tabled many amendments on key aspects of the Bill. Further amendments will follow, relating to the provisions on delegated powers and on devolution. It is our firm and consistent desire to find consensus in this House on the contents of the Bill wherever possible, and I hope that our debates can proceed on a reasonably collaborative basis.

Unfortunately, as in Committee, we start our proceedings with some amendments to the Bill that the Government cannot envisage accepting—or indeed any variant on them. That is not, of course, to impugn the motivation of those supporting the amendments or to deny the importance of the subject matter. Put simply—this will probably surprise nobody in the House—the Government simply do not agree with the proposed approach.

I am, of course, grateful to all those who have taken part in this debate on the vital issue of our future economic relationship with the EU. As the Prime Minister stated in her Mansion House speech, we are seeking the broadest and deepest possible partnership, covering more sectors and co-operating more fully than under any free trade agreement anywhere in the world today. The Government have been clear that the UK, in its entirety, is leaving the customs union. For the sake of clarity, a customs union—as has been pointed out by many noble Lords—has a single external border and 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 customs union.

The nub of the issue is this. If the UK were to remain in the customs union and be bound by the EU's common external tariff, it would mean providing preferential access to the UK market for countries that the EU agrees trade deals with, without necessarily gaining preferential access for UK exports to such countries. Alternatively, we would need the EU to negotiate with third countries on the UK’s behalf. This would leave us with less influence over our international trade policy than we have now, and would not, in our humble assertion, be in the best interests of UK businesses.

By leaving the customs union and establishing a new and ambitious customs arrangement with the EU, we will be able to forge new trade relationships with our partners around the world and maintain as frictionless trade as possible in goods between the UK and EU, providing a powerful and positive voice for free trade across the globe. There are real opportunities for the UK from increasing our trade with fast-growing economies around the world. The EU itself predicts that 90% of future world GDP growth is expected to be generated outside Europe—a trend expected to continue over the next five to 10 years.

In assessing the options for the UK’s future customs relationship with the EU, the Government will be guided by what delivers the greatest economic advantage to the UK, and by three key strategic objectives. First, we want to ensure that UK-EU trade is as frictionless as possible. Secondly, we want to avoid a hard border between Ireland and Northern Ireland—a commitment that was solidified by December’s joint report. Thirdly, we want to establish an independent international trade policy.

Last year, in its future partnership paper, the Government set out two potential options for our customs arrangements with the EU. These were reiterated by the Prime Minister in her speech at the Mansion House earlier this year. I will give a few more details of those options.

Option 1 is a new customs partnership between the UK and the EU. At the border, the UK would mirror the EU’s requirements for imports from the rest of the world whose final destination is the EU—including by applying the same tariffs and the same rules of origin as the EU for those goods. By following this approach, we would know that all goods entering the EU via the UK would pay the correct EU duties, removing the need for customs processes at the UK-EU border. But, importantly, we would also put in place a mechanism so that the UK would be able to apply its own tariff and trade policy for goods intended only for the UK market.

The second option would be a highly streamlined customs arrangement under which, while introducing customs processes between the UK and the EU, we would jointly agree to implement a range of measures to minimise frictions to trade, together of course with specific provisions for Northern Ireland. This option would include measures to simplify the requirements for moving goods across borders; it would reduce the risk of delays at ports and airports; and it would see the continuation of existing levels of UK-EU customs co-operation, with mutual assistance and data sharing.

Of course, the precise form of any new customs arrangements will be the subject of negotiation, and this will form a key part of our future economic partnership with the European Union. The Government have formed this policy not arbitrarily but because we do not believe that a customs union is in the best interests of the UK and of UK businesses.

I understand that many noble Lords disagree with our analysis, or believe that our goals are unreachable. However, we cannot support Amendments 1 and 4, tabled by the noble Lord, Lord Kerr, and Amendments 2 and 5, tabled by the noble Lord, Lord Wigley, which would have the effect of requiring the Government to make a Statement to Parliament on the steps taken towards the delivery of an objective the Government have clearly ruled out.

We in the Government are trying to seek the best possible future arrangements for the UK. I am confident we will succeed, and the progress we have made already in areas that many thought impossible demonstrates how all sides have been willing to break new ground in order to move forwards. We have set out our two potential options for a future customs relationship with the EU, but these amendments would send a signal that the Government will not seek to negotiate them, and instead pursue an outcome that the Government have ruled out.

I hope that noble Lords will accept our sincerity in our negotiating goals. I will also add, before noble Lords make a final decision, that I do not seek to give false hope that the Government will reflect further between now and Third Reading. I therefore hope that the noble Lords, Lord Kerr and Lord Wigley, will not press their amendments.

[Lord Kerr of Kinlochard]

I thank all noble Lords who have taken part in this fascinating debate. Some made speeches that were more predictable than others, and the Minister’s was a classic restatement of the position that the Government have explained all along; I am grateful to him for repeating so clearly what he has said so many times before.

I ought to pay tribute to my past—my various masters from the past—who are marking my homework so harshly. I owe the noble Lord, Lord Lawson, an apology. I am sure that he explained to the country at large the truth about the customs union and that he did it every day, morning, noon and night, but I am not sure that the country was listening. What I remember is the man who is now the Foreign Secretary telling the country, “Nobody is even talking about leaving the single market”. He published that the day after the referendum, having said it throughout the referendum campaign. So I exonerate the noble Lord—I have to; he was my boss.

As for the noble Lord, Lord Lamont, and a number of others, including the noble Lord, Lord Howarth, I ask them to please read what the amendment says. We are not asking for Britain to stay in the EU customs union—we cannot. As a non-member of the EU, we cannot be a member of the customs union. We are asking for an arrangement that enables us to participate in “a” customs union, and I say to the noble Lord, Lord Lamont, that it does not follow that we can only get the deal that the Turks got. At the time, Turkey’s main concern was the export to the EU of its walnuts. I do not believe that that would be the principal concern if the Government were to act on this and start negotiating for a customs union. I cannot answer the noble Lord, Lord Forsyth, but he is much better informed about Labour Party policy than I am.

In the course of my speech I was very worried to see the noble Viscount, Lord Ridley, nod enthusiastically. I hesitated, but I realised that it was only because I had cited Professor Patrick Minford. I will know not to do it again.

Although the Minister’s response was a beautiful restatement of government policy, it did not deal with any of the arguments advanced by those of us who tabled the amendment. The best argument made in the debate was that of the noble Lord, Lord Wigley. The customs union was not fully debated in the House of Commons as it dealt with this Bill. It is the job of the House of Lords to give the House of Commons the opportunity to debate whether we should seek a customs union. There are plenty of customs unions of various kinds between various countries around the world, and they are all sui generis. I do not know what terms we could get but we will never know unless we find out. I should like to test the opinion of the House.

European Union (Withdrawal) Bill

Lord Kerr of Kinlochard Excerpts

Report: 2nd sitting (Hansard): House of Lords
Monday 23rd April 2018 Lords Chamber

[Lord Judd]

My Lords, I thank our noble friends on the Liberal Benches for having put this amendment forward. It seems self-evident in its logic. Indeed, not to respond to what it calls for would be to forgo the responsibility of government to put the defence and well-being of our people in Britain first and foremost. I have had posts in defence and in the Foreign Office and it seems inconceivable that in any significant conflict in which we would be involved we would not want to work with our allies and friends. It is much better to prepare for that and to have the arrangements in place to make sure that we make the best of it. This is not just a matter of fixing something when a crisis arises; it is a matter of having a culture of co-operation in which people feel they have a shared responsibility, that they want to develop that responsibility together, they understand each other and their training and organisation are geared to co-operation with others. From that standpoint, this is a wise amendment and I hope the Minister will respond positively.

[Lord Kerr of Kinlochard (CB)]

My Lords, in 1982 the amazing unanimity of the Security Council in favour of the British position when the Falkland Islands were invaded was the result of discussion led by President Mitterrand in Europe. Mitterrand was the first to ring Thatcher to assure her of his support. The remarkable performance of our Prime Minister at the last European Council on the Skripals, Salisbury and sanctions against Russia deserves high praise. As has just been said, it will be very difficult to replicate the kind of contacts, co-ordination and pressure that can be brought about when you are a member of the club. When you are outside the club, that is going to be more difficult.

The Prime Minister has made two very good speeches this year on this theme. The noble Lord, Lord Wallace of Saltaire, tellingly quoted from the Mansion House speech. I was in Munich and heard the February speech in which the Prime Minister made it absolutely clear that our commitment to the security of our allies and friends, partners and ex-partners-to-be, was absolute and was in no way conditional on any kind of outcome of the current negotiations. That was a very important statement. Some thought that the Lancaster House speech had created doubt on that score. I thought that was unfair, but certainly it was settled in Munich.

I do not think we need any more speeches. I do not think we need great papers and plans. I think we need wiring diagrams. I think it is in everybody’s interest that we should stay plugged in. It is in the European Union’s interest as much as it is in our interest. This is not a zero-sum negotiation. It has been a mistake that throughout the withdrawal negotiations we have tended to negotiate on their papers. We have not put forward our own papers. This is a locus classicus for a UK proposal, and I do not think it should be a grandiose proposal—they have been made in speeches. It should be an architectural blueprint. We should be proposing joint assessment staff and co-ordination cells. These things are not glamorous. We should be proposing a calendar of meetings and a joint crisis management procedure. That is the kind of wiring diagram that is needed now.

This is an important amendment because it asks for arrangements to be set in hand. The noble Lord, Lord Wallace of Saltaire, is quite correct that are we are now talking not about the end of the transition period but about the end of our membership, and if that comes in March next year, something has to be ready. I do not think it is terribly difficult to do, and I do not think the Government need fear, as I think they have done regarding a number of files in this negotiation, that if they put forward a proposal but did not get all that they had proposed then the Daily Mail would attack them. This dossier is a bit different because it is not zero-sum; it is possible that the kind of architecture that would come out at the end of the day might be slightly different but no one is going to kill anyone for that. The case for putting forward a down-to-earth, practical series of proposals quickly is very strong because the 27 will need to take a view, as will the Council Secretary. This is primarily not Commission business but the Commission will take a view, and the European Parliament will take a view. If we do not start soon then it will not happen by March, so I support the proposal of the noble Lord, Lord Wallace.

European Union (Withdrawal) Bill

Lord Kerr of Kinlochard Excerpts

Report: 3rd sitting (Hansard): House of Lords
Wednesday 25th April 2018 Lords Chamber

Moved by

[Lord Kerr of Kinlochard]

43: Clause 8, page 6, line 40, at end insert—
“( ) impose or increase taxation,”

[Lord Kerr of Kinlochard (CB)]

Amendment 43 is in my name and those of the noble Baronesses, Lady Hayter and Lady Kramer, and the noble Lord, Lord Cormack. It would add to the prohibitions in Clause 8(3) a prohibition on increasing or imposing taxation by regulation. There are already similar prohibitions in Clauses 7 and 9 that you cannot impose or increase taxation by regulation made under these clauses.

Noble Lords might have noticed that my fox is ever so slightly shot by the admirable Amendment 47A from the noble Lord, Lord Callanan, which proposes the dropping of Clause 8. I welcome it and many of the government amendments in the group. It is clear that the noble Lord has been listening hard and I am very grateful for the changes he proposes. However, I want to say a word about Amendment 104, which is lurking in this thicket of government amendments and is also in my name and those of the noble Baronesses, Lady Hayter and Lady Kramer, and the noble Lord, Lord Cormack. It would insert the same prohibition against making new taxes or increasing taxes by regulation in paragraph 1(3) of Schedule 4. Schedule 4 is about fees and charges, not taxation. The idea of the amendment is to add a prohibition on eliding from fees and charges into taxes.

When I was young, irresponsible and committing multiple misdemeanours I was sentenced to five years in Her Majesty’s Treasury—a sort of borstal or juvenile detention centre. Now that I am old, irresponsible and committing multiple misdemeanours I have very few memories of the Treasury, but one that stands out clearly is of being in the Box behind the Chancellor of the Exchequer—I was a private secretary—at the time of the Budget speech. At the end of the Budget speech there is an interesting ritual that takes place in silence in the House of Commons, where the Chancellor of the Exchequer and the leader of the Opposition stand up and sit down three times. They are passing the Motions that permit the instant changes of taxes that might be pre-empted. The Chancellor can say something like, “So the price of petrol at the pumps will go up by 5p at 5 pm”. When you go home and look, by God, they did go up. It is an astonishing thing. That is because since 1913, I think, it has been clear that it is not possible to increase taxes or to create a new tax other than by legislation in the House of Commons. That is what happens in that ritual immediately after the Budget: they are passing new taxes for a limited period of three to five months maximum while the Finance Bill goes through the House. The Finance Bill contains these changes and in due course becomes law.

I worry about Schedule 4, which creates the power for Ministers to create public authorities and confer on them the power to impose or create taxes. It seems a fairly fundamental breach of the principle that only Parliament may create or change tax. I am reinforced in this view by the excellent reports from our Delegated Powers Committee, which takes serious exception to the powers in Schedule 4. It points out in its 12th report of this Session, published on 31 January, that the powers are “very wide” and notes that the delegated powers memorandum submitted by the Government spells out that they would enable,

“the creation of tax-like charges, which go beyond recovering the direct cost of the provision of a service … including to allow for potential cross-subsidisation or to cover the wider functions and running costs of a public body”.

The committee comments:

“A ‘tax-like charge’ means a tax. Although regulations under clauses 7 and 9 cannot impose or increase taxation, regulations under Schedule 4 may do so. Not only can Ministers tax, Ministers can confer powers on public authorities to tax. Indeed, they can do so in tertiary legislation that has no parliamentary scrutiny whatsoever”.


The committee concludes:

“Taxation, including ‘tax-like charges’, should not be possible in fees and charges regulations made under Schedule 4. Fees and charges for services or functions should operate on no more than a full cost-recovery basis. Taxation should be a matter for Parliament, a principle enshrined in Article 4 of the Bill of Rights 1688”—


a powerful case, which persuades me.

The Delegated Powers Committee has reported again this week, in its 23rd report, having looked at the government amendments, which I have just welcomed. It remains of the view that,

“taxation, including ‘tax-like’ charges, should not be possible in regulations made under Schedule 4”,

and spells out three or four reasons for that, including the fact that it would offer,

“little consolation to be told that one is being taxed under Schedule 4 rather than under clause 7 or clause 9”.

The prohibitions are clear in the Bill in Clauses 7 and 9, although there was a prohibition that we would have added in Clause 8, had Clause 8 been there, by way of Amendment 43.

However, Amendment 104 seems to make a very valid point which I think the House should hear more about, so I look forward to hearing the Minister’s answer on it. Why do the Government feel it is right to confer on themselves and whatever public authority they wish the power to levy taxes or increase taxes, against what is usually thought to be a fairly fundamental principle of parliamentary control? I beg to move Amendment 43.

[Baroness Ludford]

My Lords, we on these Benches support the points made by the noble Lord, Lord Kerr, who is arguing for consistency throughout the Bill that taxation or “tax-like charges” should be imposed only by primary legislation. That is all I need to say at this stage.

--- Later in debate ---

[Baroness Goldie]

My Lords, I thank all noble Lords who have contributed to this debate as well as those who have worked very constructively with the Government behind the scenes to reach the position we are in today. This is an important group of amendments and, if noble Lords will excuse the football metaphor, I can say that this is an amendment grouping of two halves. In the first half we have Clause 8, where I believe the Government and the opposition’s thinking are aligned, and in the second half we have Schedule 4, where there remains some disagreement.

I will begin with Clause 8, perhaps specifically in response to the points raised by the noble Lords, Lord Kerr and Lord Beith. The Clause 8 power was originally included in the Bill to ensure that the UK’s withdrawal from the EU did not affect its reputation as a nation which honours its promises and respects its international obligations. The power also includes the ability to prevent breaches of international obligations outside retained EU law and to meet any existing obligations requiring an imposition or increase of taxation. This element of the power, in particular, has been the subject of much debate in both Houses, as Amendment 43, tabled by the noble Lord, Lord Kerr, demonstrates.

We were concerned that this power might be necessary to ensure that the UK could continue to comply with all its existing international obligations. As the Bill has progressed through Parliament, the Government have continued to plan for multiple scenarios and it has become clear that there are better and more effective ways to ensure that the Government’s international obligations continue to be met than through the use of Clause 8. Therefore, in line with our policy to take delegated powers only where there is a clear and present need for them, the Government have tabled amendments to remove Clause 8 and the corresponding power for devolved authorities in Schedule 2, Part 2. I am grateful to noble Lords who have indicated that the Government’s proposition has found favour.

Any measures still required to remedy or prevent breaches of our international obligations will be made in other primary legislation—perhaps that reassures the noble Lord, Lord Beith—or under other delegated powers where that is permissible. I think we have now managed to reassure noble Lords that the Government are very sensitive to the points which have been raised in debate in Committee and on Report. As a consequence, the Government do not now think that there is a need for an entirely separate clause in this Bill, hence our amendment to remove Clause 8. Given that, I hope that the noble Lord, Lord Kerr, will be happy to withdraw his amendments in light of the Government’s proposed offer. I hope that this offer demonstrates that the Government are willing to act on the constructive discussions that take place in this House. We try to consider all amendments carefully as long as they do not undermine the primary purpose of the Bill and, where we can, we act upon them where appropriate.

I turn briefly to my noble friend Lady McIntosh of Pickering’s Amendment 47. It has rather interposed itself into this group so I am doing a bit of shuffling of notes here. I might begin with a point raised by the noble Baroness, Lady Smith: my understanding is that once the implementation period ends, the EEA agreement will no longer apply to the UK. I also understand that in triggering Article 127 our legal position remains unchanged. Article 127 does not need to be triggered for the agreement to cease to have effect. I hope that clarifies the points that my noble friend sought clarification on.

[Lord Kerr of Kinlochard]

I agree with the reading by the Minister and the noble Baroness, Lady Hayter, of whether one has continuing membership of the EEA after one has left the EU: one does not. However, I am struck by what the Minister has just said about the moment when one leaves. I am not sure that it is at the end of the transition period. I think it may be at the moment when we leave the EU—in other words, in March next year, not 21 months later. I am not quite sure why the lawyers in the EEA, EFTA and the EU should accept that once we have left the EU we still remain in the EEA.

[Lord Cormack]

Write a letter.

--- Later in debate ---

Without an element of taxation in some of the charging regimes planned under this Bill the charging regime could not be established, and the costs of specialist services described previously would fall on the public purse. Nor could we continue to adjust under the Bill the charging regimes created under Section 56 of the Finance Act 1973 after exit. However, it is important to say that any new fees or charges established under the Bill cannot extend beyond charging or raising fees in relation to a function that a public authority has been granted under the Bill. They therefore cannot be general taxes on the public, or even on a subset of the public. In the light of these observations, I hope that noble Lords will feel able not to press their amendments, and that my noble friend Lady McIntosh will feel able not to press her Amendment 47.

[Lord Kerr of Kinlochard]

I thank the noble Baroness for her response and I look forward to a letter on the EEA/EFTA membership point.

I am left a bit concerned about Amendment 104. There is clearly major disagreement between the Minister and the Delegated Powers Committee on the issue. For me, there is a bigger issue than that here. The European Communities Act 1972 is absolutely explicit that it cannot be used as a basis for taxing. When we take back the powers conferred in the 1972 Act, if we are allowing Ministers under Schedule 4 to set up public authorities that may tax and Ministers themselves to tax, we are doing something new. It is different. I am puzzled about that. I am sad that this amendment, which seems to me to raise a rather important issue, has been placed in a wider group with many other amendments. I wonder whether the Government would like to think a bit further about this before we come to Third Reading.

If the Government are happy with the prohibition in Clauses 7 and 9, why can it not also, for consistency, be in paragraph 1(3) of Schedule 4? It is a very long time since I was in the Treasury—I served quite a short sentence and got let out for bad behaviour—but I still feel that there is an unsatisfactory feature here which we have not quite got to the bottom of. Nevertheless, I beg leave to withdraw the amendment.

Amendment 43 withdrawn.

European Union (Withdrawal) Bill

Lord Kerr of Kinlochard Excerpts

Report: 4th sitting (Hansard): House of Lords
Monday 30th April 2018 Lords Chamber

[Lord Faulks (Con)]

My Lords, I will not go into the virtues of remaining in the European Union or leaving it, but simply concentrate on the amendment. I was one of the Minsters who had the privilege of taking the referendum Bill through your Lordships’ House. As many noble Lords will recall, there were debates about the extent of the franchise, among other matters, but there was no suggestion by any of the major parties of a threshold, let alone a second referendum. One can only imagine the response there would have been following the results if it had been the other way around and there was an attempt then to have a further referendum—surely what is sauce for the goose.

It must be remembered that the Bill went through Parliament when a general election was looming. Any party, or combination of parties, could have formed the next Government. Surely it was incumbent on each party to make clear that it would not honour the result of the referendum without a further vote or the option of one.

There are a number of uncertainties about the amendment. Can we revoke the notification of withdrawal under Article 50? I know that the noble Lord, Lord Kerr, says that we can, but, with the greatest respect to him—I really mean that—that is ultimately a matter that could be determined only by the European Court of Justice in Luxembourg. We cannot predict with any certainty what the outcome might be. Similarly, we do not know whether we would be able to seek an extension of the Article 50 period, which is also a necessary part of the amendment as provided by proposed new subsection (3), although I know the noble Lord, Lord Newby, has had some secret soundings. But the whole premise of the amendment is legal uncertainty—precisely the opposite of what the Bill is intended to achieve.

There is yet another unsatisfactory aspect to the amendment. If a further referendum were held, it would give two options: acceptance or revocation of the notification of withdrawal, which would lead to our remaining in the EU should there be agreement by all parties or—this is uncertain—the ECJ rules that we are entitled to revoke unilaterally, notwithstanding the objection of any or all of the other 27. But what about the option in the event of a referendum that we should leave the EU without a concluded agreement? This is the no deal scenario. I—and, I suspect, most of your Lordships’ House—would much prefer that we did not leave without a concluded agreement, but there must surely be an opportunity for those voting in this referendum, having been informed by the lengthy and highly publicised process of negotiations between the Government and the EU, to conclude that they do not wish to remain in the EU and nor do they want to accept the deal that has been concluded. The proposed referendum in the amendment precludes that option.

If Parliament now denies voters a chance to leave the EU, except on onerous terms imposed by a combination of parliamentary fetters and/or unreasonable conduct from the EU, surely we should not deny the people the chance to leave without a deal. That would be treating people with contempt, and would be inconsistent with the EU referendum Act passed by both Houses of Parliament and what was or was not said by all the parties when the Bill went through Parliament. I do not need to elaborate on how divisive a further referendum would be—the first one was quite divisive enough.

Finally, is it not time that the Labour Party made clear what its approach to a second referendum is? If it thinks that voters should have an opportunity to think again, should it not say so rather than hover waiting for some political advantage?

[Lord Kerr of Kinlochard (CB)]

I shall speak briefly on two technical points. First, the noble Lord, Lord Green, asked whether we would have to pay a price if we chose to withdraw the Article 50 letter. Secondly, the noble Lord, Lord Faulks, asked whether we are confident that we could withdraw the Article 50 letter unilaterally. The answer to the noble Lord, Lord Green, is that given by the noble and learned Lord, Lord Brown of Eaton-under-Heywood. Of course we could not be charged a political price if we withdrew the Article 50 letter during the period of the two years’ negotiation because we would never have left. We would have exactly the rights of a member because we would never have given them up. There would be no question of opt-outs or rebates being taken from us. Of course, the converse would apply if, having left the European Union, we decided that we wanted to come back. There would then be no chance of securing opt-outs or rebates. But, as a member in good standing, operating under the normal voting rules—the rebate is removable only by unanimity and I rather suspect we would not vote for its removal—there is no question that we would be paying a political price.

On the question of whether we would legally be able to withdraw the letter unilaterally, the noble Lord, Lord Faulks, who is a much better lawyer than I am—I am not a lawyer at all—said that that would be a matter for the ECJ. With respect, I do not think so. If the Prime Minister of the United Kingdom appeared in the European Council and said that, as a result of an election or a referendum, there had been a change of view in the United Kingdom and that we would like to stay in the European Union, there is absolutely no doubt what the European Council’s answer would be. It is on the record. The President of the Council, the President of the Commission, the President of the Parliament, the President of France and the Chancellor of Germany are all on record as saying that, although they respect our plan to leave, they would rather we changed our mind and stayed. There is absolutely no doubt that the European Council would say yes. It is conceivable that, three years later, a case might go to the European Court of Justice. Were the European Council correct and intra vires when it agreed that the British might take back their Article 50 letter, I have absolutely no doubt how the ECJ would rule in that case when it came up.

The second point I want to touch on is whether an extension of the two-year negotiating period would, if we sought it, be obtainable. This seems very relevant to the amendment we are considering. If the House of Commons were to choose to adopt the option—it is only an option in the amendment—of putting the deal to the people, it would require an extension. It would be impossible to do that before 29 March. We do not have a referendum law in our statute book; we would have to pass one. There would then have to be a campaign. Realistically, we would be looking at June or perhaps September. We would be looking for, say, a six-month extension.

Would we secure the necessary unanimity in the European Council for that extension? It is a matter of judgment. In my view, it would depend entirely on the reason we gave. If, for example, we said, “We’d like an extension to carry on negotiating. We’d like to send David Davis across for a few more months”, it is conceivable that we might not get the necessary unanimity. If, on the other hand, we were to tell 27 democracies that we needed an extension because the House of Commons had voted in a way that meant there had to be a referendum, or an election, there is no question but that we would get the necessary unanimity—in my view; that is only a judgment. The option in the amendment, and it is only an option, therefore seems reasonable, foreseeable and possible, and I shall vote for it.

[Lord Green of Deddington]

My Lords, would we still be members of the European Union for the period of the extension and therefore have all the rights of a member?

[Lord Kerr of Kinlochard]

Of course.

[Lord Dobbs]

My Lords, I shall be brief, but I do not expect it to make me many friends. I cannot believe how many noble Lords have said, “I hate referendums, but I want another one”. It is like falling down the rabbit hole and landing on our heads. The noble and learned Lord, Lord Brown, said that a second referendum would be decisive. I suggest that it would not be. If there is a second referendum, why not a third referendum or a fourth? A second referendum would not settle the issue; it would only prolong the agony. The noble Lord, Lord Kerr, has just explained clearly how extended that uncertainty and agony might prove. Which of those referendums—the second, the third or the fourth—would be, in today’s parlance, the “meaningful” vote?

I have to take the noble Lord, Lord Newby, slightly to task when he responded to the noble Lord, Lord Lamont, about the words of Mr Clegg that he waved in front of him. They had nothing do with the Lisbon treaty. I will quote Mr Clegg. He said:

“It’s time for a real referendum on Europe … Only a real referendum on Britain’s membership of the EU will let the people decide”.


He also asked voters to sign a petition, to give the people “a real choice”. There was not a squeak, not a little chirrup, about a second referendum—no ifs, ands or buts, and no suggestion that people might change their mind.

While we are talking about Lib Dem policy, it is interesting that, in 2011, they forced through the AV referendum Bill. It was their Bill, their policy. I voted against it—I got myself into terrible trouble with my Whips, but I think the noble Lord sitting on the Front Bench has forgiven me. It was a binding vote; it was obligatory. There was no suggestion that we could change our mind. It was, I believe, the only binding referendum in our legislative history. There was no chance of Parliament, let alone the people, changing their mind. That until now has been Lib Dem policy, and I do not believe they can have it both ways.

I talked earlier about Mr Clegg’s position on the instructions of the electorate, so perhaps I may briefly wrap up—

--- Later in debate ---

[Baroness Goldie (Con)]

My Lords, let me start on a positive note. My noble friend Lord Callanan was indeed pleased to add his signature to Amendment 53, tabled by the noble Lord, Lord Lisvane, which will remove the ability under Clause 9 to amend the Act itself. I note that this amendment is supported not just by the noble Lords in whose names it lies but by the Delegated Powers and Regulatory Reform Committee of this House. It was one of that committee’s recommendations for the Bill and, given that the Government are happy to support this amendment, we are pleased to be in such illustrious and learned company. It is a heady experience, I have to say.

I am sure that noble Lords will welcome this amendment to a part of the Bill that has continued to cause concern to many throughout its passage. It is important to explain why the Government included such a measure at the time of introduction—this may partly address the point raised by the noble and learned Lord, Lord Goldsmith. When the Bill was first drafted, this provision was not an attempt to hold open a back door to circumventing or undoing any of the protections or constraints in the Bill. Rather, it was seen as a necessary step to provide the flexibility to respond to developments in negotiations. Indeed, the fact that aspects of the Bill may need to be amended, depending on the outcome of these negotiations, still remains. Our acceptance of this amendment does not reflect a change in that regard. Rather, the decision to introduce in due course a withdrawal agreement and implementation Bill, which will give effect to the implementation period, the citizens’ rights agreement and the financial settlement, among other provisions of the withdrawal agreement, provides another door through which the Government may make all the changes required.

Without a strong justification for retaining Clause 9’s ability to amend the EU withdrawal Bill once it becomes an Act, the Government are indeed content to remove that ability. As with our amendment to remove Clause 8, I hope this shows the Government’s commitment to working with Parliament and I reassure the noble and learned Lord, Lord Judge—

[Lord Kerr of Kinlochard]

Before the Minister moves on, can she clarify what the answer is to the question asked from the Opposition Front Bench? On the face of it, if the words “including modifying this Act” are removed, it leaves simply this sentence:

“Regulations under this section may make any provision that could be made by an Act of Parliament”.


Do you make a substantive change by withdrawing those words? It is not clear to me that you do.

[Baroness Goldie]

I listened with interest to that point, but I am not sure that I entirely agree with that construction of the change to Clause 9(2). Amendment 53 means that we will not be able to amend the Bill when it is an Act. It therefore restricts the scope of the power, which seems to have met with the satisfaction of those who have put their names to it. As I have said, that is a positive and, I hope, a helpful reassurance from the Government.

European Union (Withdrawal) Bill

Lord Kerr of Kinlochard Excerpts

Report: 5th sitting (Hansard): House of Lords
Wednesday 2nd May 2018 Lords Chamber

[Lord Keen of Elie]

I am obliged to the noble Lord. There may be a situation in which powers go to the devolved Administrations and yet they do not deal with those powers, and it may be considered that upon further consideration there are additional areas where frameworks ought to be based on a UK-wide determination and where regulations would be made. But as the noble Lord himself observed, that regulation-making process would involve us consulting the Scottish and Welsh Governments—and, I hope at that stage, a Northern Ireland Executive—so that we could secure their consent. Only if there was a failure to secure the consent would the matter go forward to this Parliament, with two clear safeguards. First, the Minister of the Crown would have to explain to Parliament why he was seeking to make those regulations without the consent of a devolved Administration, and secondly, there would be an opportunity for the devolved Administration to make their representations to this Parliament as to why they felt it appropriate to withhold their consent. But, as I said, there may be a period after exit when it occurs to parties that it might be appropriate to proceed in that way.

Turning to the question of where we are with the Scottish Government, I begin by saying that the door—

[Lord Kerr of Kinlochard (CB)]

Before the noble and learned Lord moves on, did I miss it or has he answered the point made by the noble and learned Lord, Lord Mackay, on when the sun will rise before it spins across the sky for five years? When does it start? Is it with the particular regulation?

[Lord Keen of Elie]

I am obliged to the noble Lord, Lord Kerr. My understanding is that the five-year period will commence from the point at which the regulation is made.

[Lord Kerr of Kinlochard]

So in practice we could be looking quite a long way ahead—it is five plus X.

[Lord Keen of Elie]

I am tempted to mention here the noble Countess, Lady Mar.

European Union (Withdrawal) Bill

Lord Kerr of Kinlochard Excerpts

Report: 6th sitting (Hansard): House of Lords
Tuesday 8th May 2018 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

My Lords, I agree with the noble Baroness, as I think it is extremely sad. I think the noble Lord, Lord Wigley, speaks for a huge proportion of the younger people of our country who resent seeing their rights as EU citizens, particularly the right of movement, being taken away from them.

My objection to the amendment moved by the noble Lord, Lord Wigley, is even more objective than the objection of the noble Viscount, Lord Hailsham. We are asking the Government to do something impossible. It is not possible to be a citizen of the European Union if you are not a citizen of a member state of the European Union. That is how citizenship is defined in the treaty. It is left entirely to member states to decide who their citizens are, but if you are a citizen of a member state, you are a citizen of the European Union. When—I hope if—the UK leaves the European Union, every British citizen ceases to be a citizen of the European Union, and there is nothing that we can do about it. Although my heart is with the noble Lord, Lord Wigley, my head says that this amendment does not make sense. The only way that the young people of this country can retain the rights they now enjoy as EU citizens is for us to decide not to leave the European Union.

[The Earl of Clancarty (CB)]

Before the noble Lord sits down, this is being tested in the courts in Europe, so not everyone is of the opinion that you cannot have European citizenship. I believe that in June we will hear the result of the appeal by the Netherlands.

--- Later in debate ---

[Lord Howarth of Newport]

My Lords, my noble friend Lord Alli addressed the House on the basis of principle and with passion—and so did the noble Lord, Lord Forsyth. I greatly respect the commitment to the national interest of all who have spoken, including of course those who have spoken in support of the amendment. I suggest that it would be good for our proceedings if, whatever side we are on in these passionate debates, we could all work on the assumption that each other’s motives are to be respected.

Of course the future of UK services industries is of immense importance—that is not in doubt at all, and it has to be a major concern of the Government as they develop their negotiations with the European Union on the terms of Brexit. My noble friend Lord Mandelson is pessimistic about their prospects, but it seems to me that it must be in the interests of the European Union as well as of the United Kingdom that the EU does not put impossible barriers in the way of our services exports.

I feel bound to point out that membership of the European Economic Area does entail certain conditions. Non-EU members of the EEA have agreed to enact a large volume of legislation similar to that of the European Union. Non-EU members are consulted on prospective legislation, but they are not represented in the governing institutions of the European Union. The Norwegians refer to the legislation that is presented to them as “fax democracy”: they wait by their fax machines in Oslo to find out what the legislation is that it has been determined in Brussels should govern them.

It is also worth noting, as my noble friend Lord Alli did, that agriculture and fisheries are not part of the terms of reference of the European Economic Area and, therefore, that membership of the EEA would do nothing to assist us in resolving the problems of the Irish border.

A second condition of membership of the EEA is to accept the principle of the free movement of people. My noble friend Lord Alli suggested that somehow this could be got around. My noble friend Lord Mandelson and the noble Lord, Lord Bilimoria, drew attention to the possibility that, under existing EU provisions, it would have been possible for us to have operated a tighter regime on immigration. Those things may be so, but the fact remains that, if you are a member of the European Economic Area, you accept the principle of free movement of people. The noble Lord, Lord Green of Deddington, explained calmly and clearly what the possibilities and the difficulties are.

A third condition of membership of the European Economic Area is that those who are in membership have agreed that they will pay in considerable sums of money to finance grant schemes intended to reduce the economic and social disparities within the EEA. We should note that the size of those payments greatly increased following enlargement in 2004.

As we all know very well, those who voted leave in the referendum—a majority of our people in, as the noble Lord, Lord Forsyth, rightly reminded us, the biggest exercise in democratic participation that we have ever seen in this country—voted advisedly to take back control of our laws, our borders and our money. In respect of the three principles of membership of the European Economic Area that I have just mentioned, it is clear that, if we remained in the EEA or applied to join it—whatever the precise status would be—we would not have taken back control of our laws, our borders and our money.

We were told again this evening that it will be a cataclysm for the economy if we do not find ourselves members of the EEA. I am afraid that the citizens of this country, who were unimpressed by the forecasts of doom that were presented to them when they were so strenuously advised that it would be a terrible mistake to vote leave, will not be impressed by renewed forecasts of doom. They expect the wish that they so clearly expressed in the referendum—a referendum which they were told by the Government would be determinative and not advisory—to be met. If they perceive, as I think they would if this amendment were passed, that your Lordships’ House is seeking after all to keep them effectively in the EU by another name and to thwart the very clear decision that they expressed at the referendum, they will, to use the term of my noble friend Lord Mandelson, feel that a fraud has been perpetrated on them.

We of course have the right in this House to send our advice to the other place by way of amendments. The question that we have to judge is not whether we have that right but whether it is wise in these circumstances to exercise it. It seems to me that now is a time for a politics not of confrontation but of healing.

[Lord Kerr of Kinlochard (CB)]

My Lords, I am sceptical about the EEA option. I am not sure that the EFTA EEA partners particularly want us—some of them tend to say that they do not—and I am not sure that the consultative arrangements that they find sufficient, or reasonably satisfactory, would be found satisfactory by this country.

I have always thought that the sort of consultative arrangements that we could secure would be best devised here and put forward in the proposal for the framework of the future relationship. I have always thought it very strange that the Government always insist on playing away—that it is for the other side to put forward the drafts. I do not know why we have not put forward our own prescription. I think we still should—but I begin to despair that we ever will.

I am very impressed by the argument of the noble Lord, Lord Mandelson. We have not yet done anything on services, and we really must do something. I am not sure that the EEA is right—but, as the noble Lord, Lord Mandelson, said, if we applied to join the EEA, it would be a different EEA that would emerge. It is not, therefore, a knock-down argument that the template that suits Liechtenstein would be imposed on the United Kingdom. I think we could do better. So, although it is not for me the ideal way to go, I would much rather that Britain put forward a British proposal optimised for the British relationship with the European Union that we will have left. If we are not going to do that, this is the next best thing. So, despite my doubts about the EEA option, I will vote for the amendment in the name of the noble Lord, Lord Alli, if he chooses to test the opinion of the House—and I hope that others will, too.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am most grateful to my noble friend, who supported my amendment both in Committee and on Report. I am very taken by what the noble Lord, Lord Robertson, said. This is not just a Labour tactic. I believe that there has been genuine cross-party consensus on choosing a few very precise issues. I will not rehearse the arguments again—they are there for your Lordships to see—but the noble Lord, Lord Alli, paid me the compliment of saying that he has used those arguments in crafting the amendment before us this evening.

We have had this discussion at Second Reading, in Committee and on Report. I believe that the time to bring this back is during the scrutiny of the trade Bill. The reason I say this is not that my arguments in favour of remaining within the EEA are any weaker, but if we send too many amendments back to the other place, where I served for 18 years, we will dilute its focus. I am putting all my confidence in the fact that there will be a majority in the elected House for our remaining in a customs arrangement or a customs union.

As I have argued previously—I have not had a definitive answer—lawyers are split on whether or not we need to formally leave the EEA and trigger an application to leave. I argue that without such a formal application to leave, the UK will remain a member of the EEA. I have worked closely over years with the food manufacturing industry and I continue to work closely with the farmers in North Yorkshire. I accept that the point on services has to be addressed. I understand that negotiations are going on to which we are not privy, and that is the difficulty in all the discussions on this amendment.

On the basis that I believe there will be a further opportunity to discuss this, and because I gave a commitment that I would wait until that time to discuss the EEA in a different context, and on my genuine understanding that we will remain members of the EEA, I urge the noble Lord not to put this amendment to the vote this evening but to keep it up our sleeve for a different occasion.

European Union (Withdrawal) Bill

Lord Kerr of Kinlochard Excerpts

3rd reading (Hansard): House of Lords
Wednesday 16th May 2018 Lords Chamber

[Lord Wigley]

My Lords, I am delighted to support the amendment moved by the noble Lord, Lord Thomas of Gresford, and to speak to the amendment tabled by the noble and learned Lord, Lord Wallace, both of which I support. I do so having listened to every moment of the debate in the National Assembly yesterday and to large parts of the debate in the Scottish Parliament yesterday evening. What came through loud and clear was the incredulity—across party lines, even though the National Assembly for Wales accepted the agreement reached by the Minister, Mark Drakeford—on the very point touched on in the amendment from the noble Lord, Lord Thomas, namely that consent can mean consent or that consent is refused or consent has not been approved. For consent to be interpreted in that way was just unbelievable to Members there, and there was some doubt as to whether the Minister was carrying his troops with him. Indeed, Mark Drakeford himself was clearly not at ease in defending the agreement that he and the Welsh Government had approved. In his closing speech he said:

“Of course we should be ambitious for even more ground to be gained, and we are too. And I said in my opening remarks: there is more that we want to achieve. We have ambitions beyond the agreement”.


The fact is that a form of words has been reached, which are in the Bill, but they do not succeed in getting hearts and minds behind them. When one is going to something as fundamental as this agreement, which will need to be tested when real issues arise, there needs to be buy-in from all parties. Will the Minister therefore confirm that further discussions may take place with Mike Russell and his Scottish ministerial colleagues? If progress is made there to move the settlement to a form of words that is more acceptable, will the Minister confirm that that form of words would be equally available for Wales and Northern Ireland and not just be a reward for Scotland for standing out against the decisions that have been taken?

What hit Members in both the Scottish Parliament and in the National Assembly was the implication of these agreements when it comes down to the nitty-gritty. The element that stood out most clearly, in both debates interestingly enough, was public procurement. As Dr Dai Lloyd, an Assembly Member in Cardiff, spelled out, it could mean privatisation by the back door for the National Health Service. That came as quite a shock to many Labour Members, and that very point was made in the Scottish Parliament. In his closing remarks, the Minister, Mike Russell, mentioned that public procurement that leads to probably hundreds of thousands of jobs in Scotland would be affected. As the reality of the settlement hits home, there is a growing unease. We should be heading that off, and if we cannot do so tonight, the opportunity should be taken by the Government in another place, where the new clause can be amended by Members of Parliament. I believe that such amendments are needed.

One consideration that they could perhaps apply themselves to is one not covered by this amendment but which could be covered by further amendments in another place. In bringing regulations that will potentially overrule what the Scottish Parliament or the National Assembly for Wales would decide, or the attitude they might take towards certain proposals, if it is done by instrument through both Houses of Parliament, that lays the whole process open to the fact that the solution is being imposed. Perhaps the Minister and the Government could consider the possibility of dealing with those instruments in the Scottish Grand Committee and the Welsh Grand Committee by Members of Parliament from the two countries, so that at least there would be a feeling that people from Wales and from Scotland are dealing with solutions that are so important.

I personally believe that there need to be changes in the Bill along the lines proposed by the noble Lord, Lord Thomas of Gresford, and the noble and learned Lord, Lord Wallace. I look forward to the Government’s response.

[Lord Kerr of Kinlochard (CB)]

My Lords, I will speak in support of these amendments. I do so with great trepidation as a non-lawyer, knowing that the noble and learned Lord will be marking my homework—and doing so in front of the noble and learned Lord, Lord Hope.

The noble Lord, Lord Thomas of Gresford, is completely correct to draw our attention to the fact that a constitutionally significant moment has arrived. He is quite right to repeat the questions that he asked before. Whether one considers it a good thing or a bad thing, what happened in Edinburgh yesterday was certainly a big thing—and it could have very serious repercussions.

I agree with the noble and learned Lord, Lord Wallace, in wanting to bring out the principles agreed in October, and I am grateful to him for reading them out. But it seems to me that much is going to depend over time on how they are interpreted. Will they be interpreted narrowly or widely? The two key common frameworks are to enable the function of the UK internal market and to ensure that the UK can negotiate and implement international trade agreements. How are these principles going to operate?

--- Later in debate ---

[Lord Foulkes of Cumnock (Lab)]

The noble Lord is very well-meaning in what he suggests. However, is he aware that Mike Russell actually agreed to the same proposal from the United Kingdom Government that the Welsh Government agreed to? He went along with that and then went back up to Scotland and was told by Nicola Sturgeon that it would not be approved because she did not like it. She runs it: not Mike Russell. How on earth can the United Kingdom Government—as noble Lords know, I am no fan of the United Kingdom Government on most things—legitimately deal with someone who says he goes along with it and then goes back up to Edinburgh and gets overruled by his First Minister?

[Lord Kerr of Kinlochard]

The noble Lord probably knows more about it than me. I only know what I read in the UK press, which is almost nothing, and in the Scottish press. But my point is a slightly different one. I thought I would be attacked by the noble Lord on slightly different grounds. I want SNP representation in this Chamber. On previous occasions the noble Lord has reminded me that it is entirely the theology of the SNP that prevents it being represented in this Chamber—and he is completely correct about that. I do not understand why the SNP, represented in the other place, adopts towards this House the policy that Sinn Féin adopts towards the other House. I do not understand it at all. The onus is of course on members of the SNP to change their minds if they wish to take part in our debates, but I would ask the Minister to say what some of his colleagues in the past have said: if SNP MPs were to change their minds, the Government would be delighted to see them represented in this place.

[Lord Mackay of Clashfern]

My Lords, it is certainly not my purpose to say or do anything that makes it more difficult to reach an agreement with the Scottish Government—that is the last thing I want to do. But I want to say, in answer to one of the points that the noble Lord, Lord Thomas of Gresford, made, that the provisions that we are talking about in relation to the frameworks are provisions in which the Scottish Parliament does not have jurisdiction because the framework is for the United Kingdom as a whole. Therefore, it is not within the jurisdiction of the Scottish Parliament. That is why I have said so far that the consent of the Scottish Government is not necessary at that stage. But I would like to see a consent to the arrangements: then they can go through pretty well formally in the Parliament of the United Kingdom.

I had understood from Mr Russell from the early days—I will say a little more about this when we come to considering the Bill passing, which I hope we will do in due course—that the Scottish Government have said that they require to consent to the Parliament of the United Kingdom passing these. But, so long as their views are fully heard by the Parliament of the United Kingdom, that is the correct way to approach this. The legal competence in this matter lies with the Parliament of the United Kingdom. Therefore, technically, consent is not necessary from any of the devolved legislatures: otherwise, one of them could make these regulations impossible for the others. So consent at that stage is not necessary. It is highly desirable, which is why I was trying to concentrate on an arrangement under which it should happen.

I think that I am right in saying that the memorandum provides that, in effect, the Sewel convention will apply before these things are put to the United Kingdom Parliament. As I said before, the amendment and memorandum that the Government proposed went slightly further than I had suggested, by giving the opportunity for the dissenter, whichever Government it was, to put their point of view in their terms before the Parliament of the United Kingdom before it was considered.

So far as the question of consent is concerned, the technical question is: what is required? The intention of the legislation so far is that a decision has to be taken by each of the devolved Governments before anything is put in this connection before the UK Parliament. In other words, every opportunity is given for them to reach consent in their committees. I would like to see this settled, but the decision as to what is required is a legal decision, which, so far as I am concerned, does not require as a matter of law the consent of the Scottish Government—although that is very desirable. I am entirely in favour of doing everything that we can to deal with these matters.

Talking of papers going out and so forth, I saw an article about papers dealing with fisheries. It said that the document contained the idea that the UK Parliament can deal with fisheries in the world. Of course, we do not need to have discovered that in this paper, because it is in the reserved matters in the original constitution of 1998. The fact that the UK Government and the UK Parliament are responsible for international relations is well known; it is not a discovery one makes from a recently leaked document. That sort of thing does not help the atmosphere.

I certainly support strongly all that has been said about doing our level best to get the best atmosphere with the Government of Scotland as well as with the Government of Wales—and I would love to see a Government in Northern Ireland as well.