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My Lords, I, too, welcome the noble Baroness, Lady Anelay, to her new role. I have always seen her as a voice of pragmatism and realism—by God, that is what we need in the present situation.
It is four and a half years since David Cameron made his fateful Bloomberg speech which promised a referendum. His political motive was to preserve the unity of the Conservative Party and he also claimed that this would resolve the European issue for all time. Now, does anyone think that the Conservative Party is united as a result of the referendum? More importantly, does anyone think that we are any nearer national unity on this question? In fact, whereas in 2013, according to the opinion polls, only 10% of the public regarded Europe as one of the most important issues that they cared about, today remainers and leavers are at each other’s throats. It has not resolved anything.
What has the general election resolved? The Prime Minister chose to frame her pitch as being about Brexit. That is what she said on the doorstep of No. 10 Downing Street. She asked the British people for a strong, increased majority to deliver her version of Brexit. She attacked the Labour Party, the House of Lords and our European partners as obstructive forces in her way. What did the British people do? The Conservatives lost seats. They are now a minority Government and it was only in Scotland, where the Scottish Conservatives take a pro-European position, that they gained seats. Surely after this it is time for a thorough rethink of where we are.
The Government need to face up to the total unreality of their present negotiating position. David Davis claims he is going to achieve “exactly the same benefits” as we have in the single market, and it is all very simple because we already conform to EU rules. This is a completely unnegotiable proposition. It claims that we can have all the benefits of single market membership without fulfilling any of its obligations in terms of money, rules or jurisdiction. There is a massive trade-off between sovereignty and market access. The question of whether or not we accept ECJ jurisdiction is of fundamental importance because that is what the Europeans are worrying about with regard to the rights of EU citizens here, and it is also at the heart of the economic relationship because if our European friends think that we can go in for regulatory competition without any judicial check, they will not allow us free access to their markets. I am sceptical about the proposition of the noble Lord, Lord Tugendhat, that we can negotiate a satisfactory bespoke arrangement. At best, it will be a trade agreement in which perhaps we avoid tariffs but even to avoid tariffs I think we will have to accept membership of the customs union and some form of arbitration mechanism. Of course, it would leave out services, which is the United Kingdom’s main competitive advantage.
I think that the only way forward for us is to go for continued membership of the single market, not just as a transition but as a permanent arrangement. The noble Baroness, Lady Anelay, said that this would be wanting to be half-in, half-out. I do not take that view. I regard it as a precondition for a continued close relationship—the deep and permanent partnership that we seek with our European friends. I know that it is politically difficult, because it involves acceptance of free movement, but I would argue that we can still go for a reformed free movement if we have the right political leadership. We need to convince voters at home of this—that jobs matter more than immigration. We need to convince our partners that while we accept the fundamentals of free movement, important reforms are necessary; and we need ourselves to make domestic political changes in areas such as training and employment protection to deal with abuses of free movement.
That is why tonight I shall support the amendment of the noble Lord, Lord Adonis. I know that my colleagues on the Labour Front Bench have some reservations about this. Let it be said that I will always be their strongest supporter in this House. We have a wonderful Front Bench here. But the argument is made that we in the Labour Party should not be talking about Europe but talking about austerity. Let me tell your Lordships that if we come out of the single market on a hard basis, austerity will be a far bigger problem for Britain than anything else.