Brexit: Options for Trade (EUC Report)

Baroness Donaghy Excerpts

Thursday 2nd March 2017 Lords Chamber

[Baroness Donaghy (Lab)]

My Lords, I am pleased we have the opportunity to debate this report, and I thank my noble friend Lord Whitty for his skilful steering of the two committees—and, of course, the noble Baroness, Lady Verma—through a complex subject. The secretariat has done a marvellous job in presenting the options for trade with clarity and thoroughness, and I add my thanks to all those who submitted evidence, whether in person or by correspondence, for sharing their knowledge and wisdom.

I want to say something about the timing and context of the report and why its recommendations are still valid, as my noble friend Lord Whitty has said. I also want to explore what precisely is meant by open-mindedness in the context of the Government’s approach. It is 75 days since our report was published, and most of our hearings took place in September and October last year. Some would argue that it has been overtaken by events—in particular the Prime Minister’s speech on 17 January when she said:

“What I am proposing cannot mean membership of the single market”.


It is important to remember that when the sub-committee saw the noble Lords, Lord Bridges and Lord Price, on 13 October, we were told that the Government were,

“looking at all the options”,

and “not ruling anything out” for a future trading relationship between the UK and the EU. We took that statement on its merits and looked at four options, and their implications and risks. This is set out in our report. It is my contention that, although the politics may have changed, it does not invalidate our report or its analysis.

The risks and uncertainties are still there. Following the Prime Minister’s January speech, the White Paper was published on 2 February. It says:

“We have an open mind on how we implement new customs arrangements with the EU”.


It is not my intention to put the Minister on the spot. I appreciate that the open mind of 13 October is very different from the Government’s open mind of 2 February, and she has her instructions from her boss, but in our report we say:

“We therefore had to adopt an open mind and following chapters consider all four potential frameworks”.


Our mind was genuinely open and we carried out that remit. From a personal point of view, I regret that two of the four potential options have been ruled out by the Government.

Two key recommendations in the report are about business confidence and the need, as the noble Lord, Lord German, said, for a clear game plan for a future transitional agreement. We referred to the fact that businesses are operating in conditions of considerable uncertainty, which is a significant threat to the UK economy. Our report is clear that business confidence is of the utmost importance. In these days when international compliance on quality, standards, country of origin agreements and dispute resolutions are the norm, it makes nonsense of the kind of free-trade buccaneering of Mr Patrick Minford’s world, for instance. Will the Minister give us an assurance that industry will be fully consulted and involved in the negotiations and that that will be a government priority?

Secondly, we recommended the need for a clear game plan. It could be argued that the Prime Minister’s 12 principles are as clear a game plan as could be had, but they are not principles but objectives, many of which depend entirely on the agreement of others, and I think the Government accept this. When I was chair of ACAS, I would see many so-called principles presented by both sides of industry. The trouble was that they were never the same. That is why language is going to be extremely important.

Looking through the Government’s belated response to our report, much of which is a reiteration of the White Paper, I welcome the emphasis on dispute resolution and I am duly impressed by the volume of contacts with interested parties listed in the annex to the letter. I particularly welcome the statement that,

“we do not want to undermine the Single Market, and we do not want to undermine the European Union. We want the EU to be a success and we want its remaining member states to prosper”,

politically and economically. There are some Europhobes who would delight in seeing the dismantling of the EU, so this statement by the Government is important.

Finally, there is an intriguing answer by the Government to recommendation 3 of our report, on the World Trade Organization. It says:

“As we leave the EU we will be the more able to play a full role in underpinning and strengthening the multilateral system”.


So we are leaving the EU to take over the world. Now that really is open-minded.