Brexit: Negotiations

Lord Callanan Excerpts

Tuesday 20th November 2018 Lords Chamber

Moved by

[Lord Callanan]

That this House takes note of the statement by the Prime Minister repeated by the Lord Privy Seal on 15 November relating to the European Union exit negotiations.

[Baroness Goldie (Con)]

My Lords, this will be an extremely interesting and important debate. It is a long one and time constraints are very restrictive. I ask your Lordships please to observe the speaking limit for Back-Benchers of four minutes. If the Clock shows four and the noble Lord or noble Baroness shows no sign of sitting down, I may have to attend to that physical exercise for him or her.

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

I am sure that nobody wishes to incur the wrath of my noble friend Lady Goldie.

My Lords, as the Prime Minister set out in her Statement last week, we have now agreed the provisional terms of our exit from the European Union, set out in the draft withdrawal agreement. We have also agreed the broad terms of our future relationship, as set out in the outline political declaration, also published last week. Both the UK and the EU are now preparing in earnest for a special European Council taking place this Sunday 25 November, where we hope to be able to agree the full political declaration on our future relationship.

Before I speak further about the draft withdrawal agreement, I am sure that noble Lords will have noted the appointments last Friday of my honourable friend the Member for North East Cambridgeshire as Secretary of State for Exiting the European Union and of my honourable friend the Member for Spelthorne as Parliamentary Under-Secretary of State in the Department for Exiting the European Union. I look forward to working with both colleagues as the whole Government deliver on a Brexit deal that honours the result of the referendum and takes the country from strength to strength, but I must add that both the UK and the EU have reiterated, time and again, that nothing is agreed until everything is agreed. To that end, we will not sign a withdrawal agreement without a full political declaration and we will ensure that Parliament can make an informed decision and that business and citizens have a clear understanding of our future relationship.

What we agreed last week is a draft treaty that means that we will leave the EU in a smooth and orderly way on 29 March 2019 and sets the framework for a future relationship that delivers in our national interest. It takes back control of our borders, our laws and our money; it protects jobs, security and the integrity of the United Kingdom; and it delivers in ways that many said could simply not be done. The outline political declaration sets out an arrangement that is superior for our country than options such as Canada-plus, Norway-minus or even Norway-plus—a more ambitious free trade agreement than the EU has agreed with any other country. On security co-operation, the outline political declaration sets out a breadth and depth of co-operation also beyond anything the EU has agreed with any other country.

I shall now set out the details of the agreement. First, the full legal text of the withdrawal agreement has now been agreed in principle. It sets out the terms on which the UK will leave the EU on 29 March 2019. We have secured the rights of the more than 3 million EU citizens living in the UK and around 1 million UK nationals living in other countries in the EU. We have agreed a time-limited implementation period that ensures that businesses have to plan for only one set of changes. We have agreed protocols to ensure that Gibraltar and the sovereign base areas in Cyprus are covered by the withdrawal agreement and we have agreed a fair financial settlement, estimated to be far lower than the figures many mentioned at the start of these negotiations.

As the Prime Minister has made clear since the start, we have been committed to ensuring that our exit from the EU addresses the issue of the border between Northern Ireland and Ireland. We believe that this issue can best be solved through our future relationship with the EU, but the withdrawal agreement provides an insurance policy, meaning that should the new relationship not be ready in time for the end of the implementation period, there will still be no hard border between Ireland and Northern Ireland. As noble Lords will know, the original suggestion from the EU was not acceptable, as it would have resulted in a customs border in the Irish Sea and cast doubt upon the integrity of our United Kingdom, so last month the Prime Minister set out for the House the four steps we needed to take. This is what we have now done, and the EU has made a number of concessions towards our position.

First, the EU proposal for a Northern Ireland-only customs solution has been dropped and replaced with a new UK-wide temporary customs arrangement that protects the integrity of our precious union. Secondly, we have created an option for a single, time-limited extension of the implementation period as an alternative to bringing in the backstop. As we have said many times, we do not want to extend the implementation period and we do not believe that we will need to do so. This is an insurance policy, but if it happens that at the end of 2020 our future relationship is not quite ready, then the UK will be able to make a choice between the UK-wide temporary customs arrangement and a short extension of the implementation period.

Thirdly, the withdrawal agreement commits both parties to use their best endeavours to ensure that this insurance policy is never used. In the unlikely event that it is needed, if we choose the backstop the withdrawal agreement is explicit that the backstop is temporary and that the Article 50 legal base cannot provide for a permanent relationship. There is also a mechanism by which the backstop can be terminated. Finally, we have ensured full continued access for Northern Ireland’s businesses to the whole of the UK internal market.

[Lord Howard of Lympne (Con)]

I am very grateful to my noble friend for giving way. Under Article 50, the United Kingdom has a unilateral, untrammelled right to leave the European Union. Under the backstop provisions of the withdrawal agreement, the United Kingdom can leave only with the consent of the European Union. How can that be described as taking back control?

[Lord Callanan]

There are mechanisms to bring the backstop to an end but my noble friend is right that they would need to be mutually agreed. A joint committee has been set up and independent arbitration is foreseen within that, to which we can apply the solutions. They are set out in the agreement. I would be happy to write to my noble friend with further details but I understand the point he is making.

The Brexit discussions have been about acting in the national interest and that has necessarily involved making what we believe to be the right choices, not the easy ones. By resolving this issue, we are now able to move on to finalising the details of an ambitious future partnership. The outline political declaration we have agreed sets out the basis for these negotiations, and we will negotiate intensively ahead of the European Council this weekend to turn this into a full future framework.

Under the future relationship we will see an end to free movement. As the Prime Minister stated yesterday at the CBI conference, we will have our own new skills-based immigration system, based not on the country people come from but on what they can contribute to our United Kingdom. We have worked hard to deliver for the economy—to deliver a deal that puts jobs, livelihoods, prosperity and opportunity first. This is what Brexit should be about: getting a good deal that unlocks the opportunity of a brighter future for this country and all our people.

[Lord Forsyth of Drumlean (Con)]

I am most grateful to my noble friend. Just going back to the point about the position of Northern Ireland, given that the backstop in the agreement provides for a different regulatory regime in Northern Ireland, why is this not creating a border down the Irish Sea?

[Lord Callanan]

This is only within the backstop itself. As I said, we hope that the backstop will not be required and that we will be able to put in place future arrangements that will render the backstop unnecessary. There are some regulatory differences now between Great Britain and Northern Ireland. But it is true that under the backstop, if it comes into operation, Northern Ireland will align with many parts of the single market acquis that are necessary for the creation of a borderless Ireland.

The declaration reached common ground on services and investment, including financial services. It also ensures that we will be leaving the common agricultural policy and the common fisheries policy. The UK will become an independent coastal state once again.

We have been able to agree on key elements which will help keep our people safe. These include effective extradition arrangements, as well as mechanisms for data exchange on passenger name records, DNA, fingerprints and vehicle registration data. We have also agreed a close and flexible partnership on foreign, security and defence policy.

[Lord Davies of Stamford (Lab)]

I am very grateful to the Minister for giving way. What precisely are the arrangements on financial services that have been agreed? I have failed to find any concrete measures in the large amount of paper in front of us.

[Lord Callanan]

I have a copy of the document here. There are three paragraphs on financial services in the outline declaration. The noble Lord will find them on page 2. I could happily read them out but time is short. Obviously, we will be fleshing out the future partnership document this week and we hope to publish more details on that shortly.

[Lord Davies of Stamford]

That document does not contain any specific measures at all.

[Lord Callanan]

It contains measures for protecting financial stability and market integrity, and for the commencement of an equivalence assessment, which is extremely important to many in financial services. But, as I said, this is one of the things that we are fleshing out. This is an outline declaration and the final details are being negotiated as we speak.

[Lord Liddle (Lab)]

Will the Minister give way again?

[Lord Callanan]

I am happy to give way but this is all subtracting from the time that is available for the rest of the debate.

[Lord Liddle]

The Minister suggested to his noble friends that the Northern Ireland arrangement was temporary. Why then is it said in the political declaration that what is set out in the backstop is the basis for the future economic relationship between Britain and the EU? Can the Minister explain that inconsistency?

[Lord Callanan]

It is actually stated in the withdrawal agreement that the backstop is intended to be temporary and is not intended to be a basis for the future relationship. But it says in the future partnership document that the future relationship will build on the customs arrangements that are outlined within the backstop facility. I will let the noble Lord make his own interpretation of those words.

We have worked hard to deliver the result of the referendum and to ensure that the UK leaves the EU on 29 March 2019. We have made a decisive breakthrough. Once a final deal is agreed, we will bring it to the Commons for what is being called a meaningful vote, and of course there will be an opportunity in this House for extensive further debate. The Government understand that the British people want us to get this done and to get on with addressing the other issues they care about: creating more good jobs in every part of the UK; helping our NHS provide first-class care; and focusing our efforts on building a brighter future for our country.

The choice is clear: we can choose to leave with no deal or we can choose to unite and support the best deal that can be negotiated—this deal. It is a deal that ends free movement; that takes back control of our borders, laws and money; that delivers a free trade area for goods with zero tariffs, to benefit our manufacturers; that retains the security co-operation to keep our people safe; and that protects jobs in the United Kingdom. This deal honours the integrity of our United Kingdom. It delivers on the referendum result. It delivers the Brexit that the British people voted for. I beg to move.