UK and EU Relations

Baroness Neville-Rolfe Excerpts

Tuesday 12th September 2017 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, I congratulate my noble friend Lady Anelay of St Johns. In my view she has the hardest job in our House.

I am a new member of the EU Select Committee. I should perhaps declare an interest as a previous Commercial Secretary to the Treasury and as the UK Minister on the Competitiveness Council from 2014-16, preparing vigorously for the UK presidency which never happened. My whole career has involved negotiating in Brussels as a civil servant, business executive, chairman of the European retailers’ organisation and then as a Minister. I have experienced good and bad times and dealt with serious matters, but none more serious than those facing us today.

Given my love of European culture, I was a natural remainer. On referendum night, I was on a plane with the German Minister, returning from a digital summit in Mexico. We went to bed with Nigel Farage admitting defeat and woke up to Cameron’s resignation. It was a difficult night for both of us.

I have always disliked referenda, but the then European Union Referendum Bill was not opposed by any major party and was passed with massive majorities. Those concerned with its passing have to live with the consequences. Certainly, if we were to go against a clear instruction from the electorate—as senior but discredited figures are now advocating—our body politic would degenerate in ways we cannot now see clearly. So we have to make Brexit a success.

So far the process has not been impressive. I am not clear why we agreed to discuss divorce before our future relationship with the EU. My reading of Article 50 would support our refusal to do so. It says,

“the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union”.

So, to my mind, it is misguided both for the Commission to have refused to discuss future trade alongside withdrawal and for the UK to have accepted that refusal.

I also worry about the documents that have been produced on both sides. I have looked at those on customs and on data protection. The UK Government and the EU seem poles apart, suggesting that our negotiators are barely engaged. The UK papers try, rightly, to look forward but are written largely in isolation. As the noble Lord, Lord Newby, said, our proposals for frictionless trade across the Irish border have attracted major EU criticism. It is regrettable that we do not seem to have the knack of taking account of where the EU is coming from—a skill we were famous for in the Council of Ministers when we worked on policy together. The EU documents are even worse because they deal only with withdrawal and do not try to look forward to a new partnership at all. It would be good to have explanatory memoranda from the Government on these proposals.

So how do we move forward? First, we need to accept a significant exit payment to the EU over a number of years. It is painful, but it is dwarfed by the business disruption that a cliff edge would bring. But—and it is a big but—the payments must be dependent on a future agreement covering all aspects. Not a penny should be paid in advance and, in the Commission’s own words,

“nothing is agreed until everything is agreed”.

Secondly, both sides must agree to treat existing immigrants of the EU 27 and the UK well, as the case may be. However, for the future, post-2019, we must bring in a much greater degree of control and the leaked Home Office document could represent a real start. We need a guest workers’ scheme to help farming and a few other industries, with or without EU agreement, and we need continued access for the talented to secure the future of our financial, tech, research and international businesses.

However, we also have to recognise that the EU has failed to construct a proper border for third countries, especially across the Mediterranean. Indeed, Brexit was in large part the logical consequence of a succession of unfortunate drivers of immigration—the wars in the Middle East, social breakdown in North Africa, Chancellor Merkel’s encouragement of asylum seekers and the failure of our own referendum negotiators in 2016 to find a creative solution on the movement of people.

Thirdly, we need a transition period to ease the strain of adjustment on both sides, on issues ranging from financial services and border controls, to Euratom, telecoms, contracts and intellectual property. Two years transition should be enough but the direction of travel for each sector should be set out by 2019. Transition cannot become an elastic article 50.

Finally, we should agree on the outline of trade arrangements with our European partners and be ready to move into active third country agreements from 1 April 2019.

Those with an expertise in European matters want to help the Government in the biggest change since the war, as the noble Lord, Lord Jay, has said. The EU Committee is also seeking to maintain relationships with Parliaments and countries beyond narrow party politics, as well as with the Commission with Michel Barnier making us welcome in July. This can pay long-term dividends.

There are some hopeful signs amid the gloom, The French seem to be rethinking on the sequence of discussions since it became apparent that Frankfurt could do much better than Paris in financial services if London was to take a big hit. We can also have a more constructive conversation once the German election is behind us.

Of course there is some risk of a cliff edge in the Brexit negotiations, which we must prepare for and be prepared to accept if the other side is totally unreasonable. However, this is not where we want to be. We want to develop new partnerships with our European neighbours, new machinery for collaboration and dispute resolution, new and refreshed fora for the exchange of ideas, free trade and the tackling of common problems.

The Brexit process is hard and often depressing but we can move to a more prosperous Britain after these turbulent times. However, a significant injection of energy and realism into these negotiations is needed soon from both sides.