European Union (Notification of Withdrawal) Bill - Second Reading (2nd Day) (Continued)

Part of the debate – in the House of Lords at 9:20 pm on 21st February 2017.

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Photo of Baroness O'Neill of Bengarve Baroness O'Neill of Bengarve Crossbench 9:20 pm, 21st February 2017

My Lords, I wish to declare an interest. Noble Lords may be rather surprised that on a Bill of this length one could declare an interest, but it is the following: my father, Con O’Neill, negotiated the UK’s entry into the Common Market. I do not, of course, know how he would have judged all the later developments of the European project, but I think that some aspects of his experience may be relevant to the negotiations that will have to be entered into if and when the UK invokes Article 50.

The Bill we are discussing is, of course, minimal—incredibly minimal—but it is also quite opaque and obscure. Clause 1 simply confers on the Prime Minister the power to notify under Article 50(2) the United Kingdom’s intention to withdraw from the EU. That much seems clear enough; it is only a matter of notifying the EU of an intention. The rub comes later, after notification has been given and the UK seeks to act on this intention and negotiate withdrawal. This may be where my father’s experience might be in some ways relevant.

It is obvious that in negotiations one does not always get the deal one wants. Folk memory in the UK has it that the UK got a harder deal on entry than it might have done otherwise because of the action or attitude of the French and, in particular, of General de Gaulle. My father had a more complex view. While he thought that the negotiations had achieved less than might have been achieved if we had got serious about entering the EU earlier, in his view the difficulties were not solely or wholly to be attributed to de Gaulle or to France.

I do not think that we have reason to think that negotiations to exit the EU and form a new relationship with the 27 after Article 50 is invoked will inevitably go more smoothly or that they will deliver everything that is desired, or everything that would be in the interests of the UK, any more than in the past. We often hear enthusiasts for Brexit pointing out how many EU states and EU companies have strong interests in specific sorts of engagement and trading relationships with the UK. That is surely true. However, such interests are often dispersed and are not shared by all member states or by all companies. Indeed, some member states and some companies will have considerable interests in securing the exclusion of the UK or of UK companies with which they would have to compete. They may seek to obstruct that solution. In short, there is likely to be the most enormous co-ordination problem in these negotiations because so many interests will not be widely enough shared to make agreement simple or obvious. As the noble Lord, Lord Armstrong, said, we are now dealing with 27 not six other parties.

The negotiations may not go smoothly despite the fact that many have an interest in reaching an agreement and it would irresponsible of us not to be clear about that reality from the start, so I wonder whether the Minister could take time in winding to state what happens in the event that negotiations lead to no deal or that the only deal on offer is unacceptable or very harmful to the UK. What happens in the event of no deal and what happens in the event of a bad deal? I do not think that we know, but it is something that has to be understood when invoking Article 50.

Two different possibilities are mentioned. By one account, if there is no deal, nothing has changed and we are still a member of the EU. By another account, though, we will have left the EU with no agreement in place. That is one pair of views on the matter. If the latter, then on some views we would be able to trade on WTO terms, but on other views WTO terms are not an automatic default, since our membership of the WTO hinges on our relationship with the EU and a failed negotiation would not deliver WTO terms. Again, this needs to be clear not merely to Members of your Lordships’ House but to our fellow citizens. It is important, before the Bill passes, to understand the situation in the event of either no deal or an evidently bad one. That is why I hope that the Minister will set out the Government’s present understanding of the situations in the event of no deal or a conspicuously bad deal.