UK and EU Relations - Motion to Take Note (Continued)

– in the House of Lords at 6:31 pm on 12th September 2017.

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Photo of Baroness Goldie Baroness Goldie Lord in Waiting (HM Household) (Whip) 6:31 pm, 12th September 2017

My Lords, before we recommence our debate on withdrawal from the European Union, I again remind your Lordships about the advisory time limit. I know that it is purely advisory and I am totally in noble Lords’ hands, but it is to keep an eye on the clock and on the fortunes of our colleagues who will be speaking later. I would be very grateful for your Lordships doing everything you can to facilitate compliance with the advisory limit.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Crossbench

My Lords, reading the 12 papers—I am afraid I have managed only to get to 12 because the Minister added one that arrived at lunchtime today—has struck me as a pretty depressing experience, even if one does not throw in for good measure the leaked paper on immigration policy which we are told is not government policy, or at least not yet. It is depressing because there are so many words yet so little substance, so few clear indications of what sort of outcome the Government are hoping to achieve in the Brexit negotiations—and that when a quarter of time for their completion has already been frittered away.

It is hard to avoid the conclusion that the Government are still playing hide-and- seek with Parliament. That is bad enough when it is Parliament which is meant to be taking back control from Brussels over these matters, but what is worse is that the Government seem to be playing hide-and-seek with our negotiating partners, too. No doubt there is an element of the tactical in the complaints from Brussels of a lack of clarity in the Government’s negotiating position, but these papers demonstrate pretty graphically that those complaints are not simply tactical. That is serious indeed, because successful negotiation requires each side to have some clarity about what the other is seeking to achieve.

Many of the papers are just “cut and paste” jobs; for example, the paper on The Exchange and Protection of Personal Data. Often, it is simple common sense, as in this case it is, to conclude that it is essential to avoid the fragmentation of a currently frictionless entity, the exchange of data right across Europe, but the paper is remarkably coy about the fact that to achieve that objective on a lasting basis, we will need to mirror here any future changes in the EU’s data protection regime and any rulings on it by the European Court of Justice. That data protection iceberg conceals a mass of other EU regulatory functions, some 35 at the last count, on which the Government have not yet revealed their hand.

Other papers were obscure to the point incomprehensibility. I instance the paper on Enforcement and Dispute Resolution. It is fairly clear that the Government have at last realised that the line that the Prime Minister drew at last October’s party conference on the outright rejection of any jurisdiction of the European Court of Justice is simply unnegotiable. So they are moving crab-wise away from it, inventing a new description, “direct” jurisdiction, and juxtaposing it with “indirect” jurisdiction. We are now told that direct jurisdiction remains taboo, but indirect, by admission, is not. How is that to be done? Just producing an academic list of the options, which is what the Government’s paper does, is not a negotiating strategy. If, as I would suspect, something along the lines of the EFTA court is required, why not simply say so?

Then there are the papers such as the one on Northern Ireland and that on customs arrangements, which suddenly surface completely unprepared and out of the blue new and untried solutions—what the Secretary of State for DExEU called blue-sky thinking—but without a trace of any detail or any evidence-based underpinning. Indeed, the new customs arrangements are described in the paper as “unprecedented” and “challenging to implement”—words that could have come from a script for “Yes Minister”.

The paper on co-operation on science and innovation is welcome if belated, but it conceals that this chapter of EU budget expenditure—one of the most rapidly growing chapters of that budget and set to continue to be so—is one from which we have derived huge net benefits. That is surely unlikely to survive any new arrangement when we are outside. The paper glosses over rather unconvincingly the fact that we will no longer have a full say on the EU scientific and research programmes, which will be decided by the 27 without our participation.

Is this all unduly critical of the Government’s approach? I do not think so. The Brexit negotiations are not going particularly well and there is little or nothing in these papers that we are debating today which will help them to do any better. Nor, I fear, is the Government’s relationship with this House over Brexit going particularly well. Last week, the Government’s response to your Lordships’ report on the Irish dimension arrived one hour before the debate began and seven months after it should have been available. Today, the Government produced a new paper in the series that we are debating which was available only an hour or two before the debate began. That, frankly, is no way to run a railroad, let alone a Parliament.

Photo of Lord Framlingham Lord Framlingham Conservative 6:37 pm, 12th September 2017

My Lords, in a moment, I intend to indulge in some special pleading, but let me first say that I am delighted with last night’s result in the House of Commons, which further paves the way for us to leave the European Union. The vast majority of the British people will also be pleased, I am sure. We are being told from every side, “Just get on with it”, and that is exactly what we are doing.

I continue to hope that opponents of Brexit will finally bow to the weight of public opinion, common sense and, most importantly, the long-term good of the country. I am rather tired of people saying that they accept the result of the referendum when they clearly do not, and, instead of using their undoubted talents to help make a success of Brexit, are foot-dragging and putting every possible obstacle in the way of a successful outcome. It is very hard for a team to win if half the team want you to lose. In this category, sadly, I place the BBC. In due course, we shall be able to convert all EU law into UK law and then alter it where appropriate. It is a very sensible approach.

One area not yet dealt with in position papers—it is not really a headline issue but it is of particular interest to me—is the protection of our urban trees and our woodlands from imported diseases. In this, Brexit will prove invaluable. Your Lordships will, I am sure, remember Dutch elm disease, when an infected shipload of elm logs resulted in the loss of every elm tree in the country. You may also be aware of the problems caused in the more recent past by ash dieback, which was also imported on trees from Europe. What your Lordships may not know is just how many other tree diseases are present in Europe and which, unless we are fiercely vigilant, could enter this country with devastating consequences. Forty-two thousand plane trees lining France’s historic Canal du Midi are being felled because of a fungus now spreading across Europe. This disease, sometimes called plane wilt, would be devastating if it infected our London plane trees. A bacterial disease, xylella fastidiosa—I apologise for the Latin but there is no common name that I know of—is present in Italy and France and could infect a wide range of plants, including our native oak. To date, there has been just one interception of that disease in this country—on an ornamental coffee plant, which was destroyed.

The emerald ash borer is an exotic beetle pest that causes significant damage to ash trees, resulting in the death of many within two or three years. There have been no incidences so far in the UK, but the Forestry Commission is asking tree owners to remain vigilant and report any suspected sightings.

There are existing regulations governing the importation of trees into the United Kingdom, but they are far from watertight and are designed to work for countries with land borders with each other, who do much trading of trees across those borders. The regulations are not as tight or rigorously policed as they should be. We are an island, and should make the most possible use of that to protect our trees from infection. It may even be appropriate to revisit the question of a quarantine period for imported trees.

Brexit presents us with a golden opportunity to look at this matter afresh, to put biosecurity at the top of our agenda and ensure we are doing all we can to protect Britain’s trees. My concern for all our trees and what, thanks to Brexit, we can do to protect them is just one example of the opportunities now being presented to us if we have the courage to take them. Be it in trade, defence, immigration or any other aspect of our national life, I hope we can work together as a nation to make the most of the opportunities that Brexit presents.

Photo of Lord Cashman Lord Cashman Labour 6:41 pm, 12th September 2017

My Lords, not for the first time am I delighted to follow the noble Lord, Lord Framlingham, and give a completely different perspective. As someone who voted to remain in the EU, I assure him that I will certainly not finally bow on what I believe was a wrong decision that does not serve the future of this country.

In recent weeks, there has been much speculation about a Brexit transition agreement. Sadly, the position papers—or “shifting position” papers, as I call them—have not helped matters. There is now greater uncertainty, not less. Where there should be clarity on the Government’s position and intention, there is only confusion—especially within the negotiating chamber in Brussels. I have to admit that there seems to be confusion too within my own party on where we want to be post Brexit, but I look forward to a speedy resolution.

I voted to remain. I oppose Brexit, as is my democratic right, and believe that we must maintain membership of the single market and the customs union at the very least, even if it is along the Norwegian model. Anything else would be national suicide as we throw away the rights fought for by previous generations, such as my father and grandfather, who fought in two world wars for a united Europe—for a Britain in solidarity with Europe, not isolated and aside from Europe. We would be throwing away, too, the rights of younger generations and generations yet to come.

There are over 3 million EU citizens in this country who face a starkly uncertain future. Everything is no longer certain: their homes; the education of their children; learning and life choices for their families; their employment and retirement prospects; indeed, their very right to reside in a country that they have lived and worked in and where they have played by the rules. Instead of offering those people certainty, the Government use them as cheap bargaining chips in shoddy negotiations. It is entirely unacceptable.

We cannot even negotiate to offer certainty to British citizens living and working in the EU 27. The emails and messages I have received are truly heartrending: people who have married other EU nationals and raised their families in a country where they thought they were welcome and wanted, only to find that they are now feared by some, resented by others and misrepresented elsewhere. In that regard, elements of the British press have played a despicable and reprehensible part.

Let me come to some facts about where we are from two surveys. London First and the Lloyds Banking Group have worked together on a UK-wide survey of over 1,000 businesses, both large and small. They found that over half of businesses have faced a negative impact from Brexit. They have been forced to put investment and recruitment decisions on hold and to revise their supply chains. They are seeing reduced demand for products and services. Some 40% of UK businesses believe a transitional agreement will have a positive impact, enabling them to unblock investment or recruitment decisions. Those businesses that see a transition agreement as having a positive impact want to see an agreement that covers all the elements of the existing EU relationships, including freedom of goods, services, capital, talent—yes, that means people—a common set of tariffs and EU legal arrangements. For those businesses, continued access to the people they need is their number one concern; they call for the Government to give a unilateral, unconditional guarantee to the EU citizens already living and working in the UK, and to set out plans for a fair and managed approach to future immigration policy—a call I am sure every decent person would endorse.

In another survey, Focus on Labour Exploitation—FLEX—and the Labour Exploitation Advisory Group explore how migrant worker vulnerability to exploitation has been affected by the UK referendum. Sadly, they highlight uncertainties creating conditions for vulnerability. There is a rise in hate crime and hostility post referendum that contributes to a general sense of being unwelcome and makes migrant workers feel like second-class citizens in the UK.

These are the human consequences of Brexit. We must keep these people and their families and their deep and all-consuming concerns at the forefront of our minds in all our deliberations and negotiations. In the Brexit negotiations, now more than ever before, we need leadership allied with courage, imagination, flair and daring. Sadly, as I look out across the Brexit horizon, I see none.

Photo of Viscount Ridley Viscount Ridley Conservative 6:47 pm, 12th September 2017

My Lords, it is a delight to follow the noble Lord, Lord Cashman, and, like him, to give a different perspective on these matters and address the position papers. In the interests of brevity, I will confine my remarks specifically to the Euratom and nuclear safeguards papers.

A lot of people have made a lot of mischief over this issue, scaremongering about the reasons for leaving Euratom and the consequences of doing so. In my view, the claims are mostly baseless; the Government's position papers on nuclear materials and safeguards issues makes it clear that that is true. There is genuinely nothing sinister, worrying or difficult about replacing the Euratom treaty arrangements with new and comparable intergovernmental arrangements with Euratom countries, other countries and the International Atomic Energy Agency.

I welcome the fact that the position paper makes it clear that withdrawal from the Euratom treaty will in no way diminish our nuclear ambitions. There need be no threat to non-proliferation, the UK nuclear industry, how we handle nuclear waste, research and international collaboration and, above all, to cancer treatment—a myth that has been shamefully spread by those who frankly should know better.

Had the Euratom treaty been separate from the EU treaties, and not justiciable by the European Court of Justice, there would be no need for us to leave Euratom. The Government say—I believe them—that they have no animus against Euratom. During the referendum, that was not an issue for those who voted to leave. The whole thing is a purely administrative matter—a tidying up exercise that cannot be avoided. Compared with other aspects of negotiations to leave the EU, this one is simple. The Euratom countries want a deal with us, and vice versa, that replicates as closely as possible the harmonious relationship that exists now.

So why leave at all? It is because the treaties are “uniquely legally joined”, as the position paper says. It is as simple as that. I, for one, would be thrilled if the lawyers said they had changed their minds and we do not have to leave Euratom after all; but that is not what they are saying. The noble Lord, Lord Teverson, summarised well the issues behind Euratom. In the debate on 20 July, the Minister—the noble Lord, Lord Prior—stated:

“We are preparing a domestic nuclear safeguards Bill; we are opening negotiations with the EU; we are talking to third countries about bilateral agreements; finally, of course, we are talking to the International Atomic Energy Agency. My officials have met with IAEA officials in Vienna and had constructive conversations about a new voluntary offer agreement, to replace the current one that we have by virtue of our Euratom membership”.—[Official Report, 20/7/17; col. 1796.]

That sounds like good progress on several fronts at once. Will my noble friend the Minister confirm this and update the House on those negotiations?

Let me deal briefly with the medical isotopes issue. As noble Lords know, medical radioisotopes are not classed as special fissile material and thus are not subject to nuclear safeguards. Thus, radioactive material used in cancer treatments is not subject to nuclear co-operation agreements that deal with trade in nuclear materials. The import or export of medical radioisotopes is not subject to any Euratom licensing requirements. Euratom places no restrictions on the export of medical isotopes to countries outside the EU. They are subject to the same EU customs rules as any other good. Therefore, as I understand it, the UK’s ability to import medical isotopes from Europe and the rest of the world as a result of leaving Euratom will not be affected—full stop. Will the Minister confirm that? Scaremongering to the contrary has caused needless concern among cancer patients and their relatives, fanned by irresponsible journalism. It is the reddest of red herrings, a scarlet sardine, a magenta mackerel, a vermilion vendace. I hope noble Lords who raised this issue will use the opportunity to concede that it is a non-issue according to the UK Government and international authorities. In conclusion, I welcome the Government’s position paper on nuclear materials and safeguards issues, and look forward to a smooth transition to new arrangements outside Euratom.

One final point: I listened with care to the noble Baroness, Lady Smith, who is now not in her place. I was left in the dark on one point. Could she produce a position paper on the Labour Party’s position on the single market? Some of us are very confused about that.

Photo of Lord Taverne Lord Taverne Liberal Democrat 6:51 pm, 12th September 2017

My Lords, I will concentrate on the effect of the Government’s decision to stay out of the customs union, their plans for controlling immigration even though that is not yet an official paper, and the prospects of a new referendum.

First, I find so depressing the Government’s complacency and lack of realism. This is one factor why our negotiators seem much better at losing friends than making new allies. One example is the way the Government keep boasting about how strong our economy is. The fact is that it is very fragile. Our 16 to 18 year-olds rank in the bottom four of the OECD’s 35 members for numeracy and literacy. As a result, we lack the skills that industry needs. Our growth is now the slowest in the G7. Nine out of northern Europe’s 10 poorest regions are in Britain. Our productivity is about 20% less than the average of the G7 and has not improved for a decade. Brexit will make matters worse.

There was an important and impressive recent report about leaving the customs union by the All-Party Parliamentary Group on EU Relations. Unfortunately, I have time only to quote part of its summary. It says that leaving will gravely damage our industry, and the damage will affect business across many important sectors of the economy, such as food and the chemical industry, and will be particularly damaging to industries with just-in-time supply chains such as the motorcar industry and aerospace. Leaving the customs union will see UK companies having to comply with high levels of new bureaucracy. Requirements on rules of origin alone could add costs of up to £21.5 billion for UK exporters. IT systems will need to be improved and we will more than double the number of traders making customs declarations.

All the trade deals that the UK currently enjoys with third-party countries as part of the EU will have to be renegotiated, starting from scratch. Deals with new markets will take many years to negotiate. It seems clear from the report that the likely loss of trade with the EU and these third countries cannot be offset by new trade deals around the world. The report points out that the Government’s important promise of,

“the freest and most frictionless possible trade in goods between the UK and the EU”,

is ludicrously optimistic at best and dangerously misleading at worst. As the noble Lord, Lord Hannay, added, no details are given of how that is to be achieved, except that it will need new and untried imaginative IT technology—or “magic” as the noble Lord, Lord Adonis, called it. In fact, the Government’s record in introducing grand IT schemes is not particularly encouraging. One of the most disturbing of the report’s conclusions is that the only certain way to avoid a hard border between the economies of Ulster and the Republic, which almost everyone agrees would have a devastating effect on both, is to remain in the customs union.

On the leaked plans for immigration control, although those are not yet official policy they obviously represent what Mrs May wants, given her record in the Home Office. They went down badly with the CBI and the Institute of Directors because of the loss of skills and their effect on productivity. However, for the public the most serious impact of strong curbs on immigration of the kind outlined in that paper will be on the NHS, which is already heading for a crash. A third of new nurses each year come from the EU and yet applications from EU countries are down by 94%. EU doctors also play a vital role; many of them are leaving as they no longer feel welcome. Other public services will also suffer grievously. One example is the Government’s plan to build more than a million houses in the next few years. This requires a 35% increase in the construction workforce. Instead, that is forecast to decline by 6% as Poles and Lithuanians want to leave.

The fact is that negotiations are going badly. Indeed, it seems that the Government and their allies are already preparing for the consequences of a hard Brexit or no deal by blaming Brussels. However, this time that strategy may not work because the public have begun to see the Government as incompetent and no longer believe what they say. Living standards are falling. As wages barely increase if at all, inflation heads for 3% and may well be rising. The pound is likely to fall further. This can hardly be blamed on Brussels. It will become only too obvious that Brexit is making Britain poorer.

What, then, are the prospects of a new referendum? I admit that at the moment there seems to be no majority in favour. However, polls show that public opinion is beginning to move quite sharply towards the idea of what would not be a rerun of the last referendum but a new one, now we know what Brexit means. It is not £350 million a week for the NHS but instead a worsening shortage of nurses and doctors, and a big divorce bill. People did not vote to lower their own living standards and did not expect that to follow. It is now plain that it will. A referendum would give them a chance to change their view. I may be completely wrong, but I would be surprised if there were not increasing support for a new referendum. It is interesting that more and more people now surface who accept that “no Brexit” cannot be ruled out. It is no longer an impossible dream.

Photo of Lord Inglewood Lord Inglewood Conservative 6:59 pm, 12th September 2017

My Lords, during much of the summer and the Recess, for reasons which I need not go into, I became very much preoccupied with non-political things. At the beginning of the autumn I awoke rather like a slightly insomniac Rip Van Winkle and took stock of Brexit. We are now on the road which, unless something intervenes, inexorably means we head off over the cliff edge of a hard Brexit. I was struck by the irony of how voting to take back control had conferred on the EU a veto over all our subsequent relations with it concerning everything in the treaties. If there is a possibility we go over the cliff edge, we have to plan for that because if it happens and we do not, complete chaos will ensue. All our relationships therefore via the treaties have to be rearranged under public and private international law when the EU law falls away. These new arrangements have to be comprehensive and will almost certainly involve choice and value judgments. At the same time that this is happening, there appears to be a widespread, although not universal, doubt about the wisdom of going off the cliff edge; and the Government appear to be looking, in their own words, for a new “deep and special relationship”, which I consider sensible, since we cannot unilaterally decouple from an interdependent world.

Both these strands are found woven together in the position papers. The inherent problem that we end up with is that we are going to be simultaneously arguing for two separate and sometimes incompatible things, unless and until we know what the final position is going to be. I would hazard a guess that, if the EU were asked what was the best possible deep and special partnership we might have with it, it would say the EU membership that we have now. However, we have rejected that and we are entitled to do so, and we want this new relationship. That being the case, it seems entirely reasonable to me for it then to come back to us and say, “Tell us what you want and we will consider it”. It is entirely up to it how it responds and how it might or might not negotiate thereafter.

At the heart of the position papers, and where we are politically in these negotiations, are these two strands. I would like to briefly touch on two of them. First, I turn back to last week’s debate on the EU Committee’s report on Brexit and Ireland, which seemed very illustrative of the problems that we are facing. I have never spoken in the British Parliament on Ireland although I have a significant Ascendency component in my background, even though—rather surprisingly—the only members of my kith and kin who anyone may have heard of were really quite prominent nationalists. Nevertheless I follow, and always have followed, what is going on there. Two things emerge very clearly. First, it is fiendishly complicated. Secondly, honourable and intelligent people have very differing, honestly held views. This is symptomatic of the wider background to the quest for our new deep and special partnership. It is not going to be easy.

Secondly, and it has just been referred to by my noble friend Lord Ridley, is the position paper on Euratom. As a Cumbrian, much of whose political and business life has been associated with and touched one way or another by both Europe and the nuclear industry, I suspect I am as familiar with the criticisms of both—my goodness, there are a lot from time to time—as anybody. Never can I recall though any criticisms made of Euratom membership. Listening to my noble friend Lord Ridley and the noble Lord, Lord Teverson, it struck me that if ever there was a case that Paris was worth a mass, this must be it. After all, as Alexander Pope put it:

“For forms of government let fools contest;

Whate’er is best administered is best”.

We are arguing simultaneously in two slightly different directions in respect of two possibly separate outcomes to Brexit. This is both difficult and hazardous. It is always said of politics, and it was said by Jimmy Maxton, that if you cannot ride two horses at once you have no business to be in the circus. Of course that is true but the problem and the risk is that, if you are trying to ride two and you slip off one, you are likely to end up having fallen off the other as well and find yourself lying on the ground with your face in the mud.

Photo of Lord Dykes Lord Dykes Liberal Democrat 7:04 pm, 12th September 2017

I followed very closely the wise words of the noble Lord, Lord Taverne, and shared his feeling of gloom about the economic situation, which is the dreadful background to the paralysis which the Government are now going through, without admitting it, on these impossible negotiations. The situation is now so bad that one shares the views of Ian McEwan, that very famous brilliant author, who has been joining a lot of the marches and demonstrations against Brexit, and is a fervent European and remains so. He says: “I still say to myself when I get up in the morning, I can’t believe that it’s happening. It’s a dream. No, it’s a nightmare. It can’t be happening that the Government is pursuing such a foolish course”. I share that view as well.

It is a pleasure to follow the equally wise words of the noble Lord, Lord Inglewood, with his vast experience of the European Parliament. I hope he agrees that when the European Parliament decides to express its view on the negotiations—if it can actually proceed to some kind of tangible conclusion, and that is a big if—I doubt very much whether it will show much enthusiasm for what the British Government appear to be preparing to propose, on the basis of the very flimsy collection of words that we have already. I agree with the criticisms that have been made in this debate about the flimsy nature of the Government’s various little booklets on negotiation policy areas and so on. They do not really amount to much other than mainly blue-sky—or dark-green-sky—thinking instead of wise and tangible specific proposals about how to proceed.

I was beginning to muse that, instead of having the Department for Exiting the European Union, the name should be changed back to “DTI”, because then we could emphasise the second stage of the Government’s wishes, which are still unachievable with what is going on so far—namely, building up some kind of trade situation. But I do not mean “DTI” in that old sense; I mean the department of total insanity, with what is going on with these negotiations. They are totally stuck. The Government do not know what to do further, and there is no reason why the EU should respond by saying, “We will make it easier for you by bending forward with these daft ideas and trying to help you out of your own mess”—a mess created by this Government’s maladroit decisions, and by an inexperienced and clumsy Prime Minister who has lost a mandate now as a result of the 8 June election. That mandate to pursue Brexit was writ large in the first election campaign and in the words of her manifesto in the second election campaign, but completely destroyed by the vote. Even Sky News said—and its announcements are not normally taken with this kind of direction in mind—that a majority of people in that total vote for all parties voted strongly to remain.

That applies particularly to the younger voters in this country. When the next decision comes forward in due course, sadly and according to the laws of nature, several millions of people who took part in these votes so far will have passed away, into heaven I hope. Two million youngsters, including the ones who will be voting at an earlier age in any decision that will be made, will be voting for the first time, and we know what their views are. We know why they are supporting the Labour Party more. That tallies not only with their domestic political priorities, but with what they think about Brexit: a total disaster facing this country.

The Government are responsible for this nightmare and they have to respond to the growing feeling of dislike about what is going on and what is being so-called “negotiated”. It is not really being negotiated properly. There is no confidence at all in the Ministers in charge of this process. They cannot even speak French to have a discussion in another language just for a change, like all our other EU colleagues can do vis-à-vis ourselves. It is such a depressing scene that I find it very difficult to really concentrate on what the Government are actually saying because none of it is realistic.

I conclude with the Irish question, raised quite rightly by the noble Lord, Lord Wigley. It is a matter of huge concern because anything the British Government propose is literally undoable. Nothing the Government propose will be able to succeed without damaging at the margin at least, and probably a very big margin, the rights of Ireland as a free state in the EU to have those EU powers and privileges which it now possesses. That border situation therefore is unachievable without some kind of miracle which no one yet has been able to propose.

Finally, I am also worried about the link between this Government and the DUP. The only way for this ailing, weak Government, who have less of a mandate now than before and no sense of realism at all, to proceed in Parliament is with the support of a fairly dodgy and questionable group of politicians—if I may put it like that without sounding too harsh—in the DUP. There is a Tammany Hall snag to this, too, because along with the questionable alliance the DUP is also a party to the Anglo-Irish treaty. Without a functioning Stormont Administration, there are serious questions about policy formation and money usage. If we had a written constitution in this country—I fervently hope to get a better voting system in future as well—that would not be possible. It would be illegal in most serious European countries. Should a £1 billion bribe be used for public budget purposes to keep a weak Government in power artificially? I think not. These matters will come home to haunt the Government in future and I urge them to think again.

Photo of Lord Hamilton of Epsom Lord Hamilton of Epsom Conservative 7:10 pm, 12th September 2017

My Lords, I would like to use my five minutes to talk about the progress of the negotiations with the EU or, perhaps more accurately, their lack of progress. Michel Barnier, the EU negotiator, has made it clear that he needs to see progress on three issues: the rights of EU citizens living in this country and British citizens living in the EU; the Irish border question; and, of course, the money.

It strikes me that if there was any political will behind it, agreement would already have been reached on the EU citizens. We want them to stay here and it cannot be impossible to find the means by which that happens. We do not have to agree to the jurisdiction of the European Court of Justice for its citizens who live in this country because that would admit that our legal system was rather inferior to that of the EU. I do not think that anybody in this House would really go along with that.

At the same time, the Irish border issue is one where there seems to be complete unanimity. Everybody seems to agree that we should continue with the frictionless border between the north and southern Ireland, which existed decades before anybody joined the EU. If there was any political will there, I believe that issue could have been solved. The problem is that if it were solved, that would create a template of frictionless borders which could then be applied to the rest of the EU. That would then draw the EU into the question of the next phase of discussing our trade relationships with it.

Then there is the money. I always think that the whole debate about how much we should pay the EU was rather snarled up at the beginning by its absurd claim that we should pay it €100 billion. Not unnaturally, the UK position seems to be to go back to the EU and say, “We will of course honour our international obligations, but produce us the evidence that we actually owe you money. If you do, we’d be more than happy to pay up if we are clearly liable for those debts”. That does not seem an irresponsible position to be in.

However, the problem is that the question of whether we are making progress on these issues is a subjective judgment in anybody’s language. I expect that the noble Lord, Lord Liddle, was right to say that the advice to be given to the Council of Ministers in October will be that insufficient progress has been made, so we will not be able to move on to the more serious issues of our future trading relationship with the EU.

The most important question put in this Chamber today came from my noble friend Lord Caithness. I repeat it to my noble friend the Minister: is it right that the United Kingdom made a proposal to the EU that we should have a rolling programme of negotiations, which should just continue, and that the EU turned this down by saying that we had to wait for the next scheduled meeting? If that is the case, it is quite clear that—as per the alarm bells sent ringing by my noble friend Lord Blencathra—it does not want an agreement but wants to push it right to the end of the period. If you have negotiations going on between two parties, one of which wants an agreement and one of which does not, it will clearly be very difficult to get an agreement. This brings us back to the remarks of the noble Lord, Lord Jay, who made it clear that we might reach the end of the period without any agreement because it has just been impossible to get any agreement during that period.

If there was an agreement, it does not follow that it will be ratified and agreed by the European Parliament, which might well take the view that it does not want to encourage anybody to leave the EU. It would therefore be very important not to approve it in the European Parliament. The agreement then has to go to 27 different countries in the EU. There are also something like 11 regional Governments—I do not know whether they all have a veto on it as well. So there are many hurdles to be cleared and it seems not inconceivable that we might end up, through no fault of our own, with no deal whatever.

There are moments when I feel quite sorry for Michel Barnier. He is trapped between businessmen and sensible people in the nation states, who want to go on trading with the United Kingdom, and lunatics in Brussels who want to punish anybody who has the nerve to leave the club.

Photo of Baroness Crawley Baroness Crawley Labour 7:16 pm, 12th September 2017

My Lords, I usually enjoy a few improbable detective novels as summer reading. However, this year the Government supplied their own—some might say, improbable—reading matter over the Summer Recess. Some of the position papers I read were wildly optimistic: “hope” and “belief” appeared several times. Some of the papers were thin to the point of emaciation. The Confidentiality and Access to Documents paper ran to a full one and a half pages, as did that on Privileges and Immunities, while the Nuclear Materials and Safeguards Issues position paper did little better. It came in at a full four pages.

On the vastly important issue of the border with Northern Ireland, which will become the EU’s new external border, we were treated to more detail on the Good Friday agreement, the free movement of goods, the common travel area and energy supply on the island of Ireland. However, the paper still does not meet the EU’s concerns that there is a distinct possibility of a return to a hard border and of damage to the existing frameworks of funding for the peace process, such as the EU-funded peace programme. The EU believes that the issues relating to the Irish border, created by Brexit, are the UK’s responsibility to resolve and it is right. Both Northern Ireland and the island of Ireland have been well and truly dropped in it by our decision to leave the European Union. The complex and difficult issues created by Brexit, as it relates to Ireland, would be far better tackled if the UK stayed in the single market and the customs union.

The position paper on safeguarding EU citizens living in the UK and UK nationals living in the EU raises so many new questions that it is hardly a comfort to those left in limbo as to their future status. The paper states that we—the UK—are,

“ready to make commitments in the Withdrawal Agreement which will have the status of international law”.

What does that mean if we are not going to recognise the Court of Justice of the European Union? Is it the case that those EU citizens who have already obtained a certificate of their permanent residence must still reapply? How much better for everyone, and how much more humane, would it have been for the Government to have said, the day after the referendum result, that those EU citizens legally residing in the UK were more than welcome to remain—full stop?

The science and innovation position paper ran to an impressive 16 pages but it managed to do so only by having page 1 marked as page 3, oddly. We are reminded in the paper of the Government’s achievements and how, in the years of our collaboration within Europe, the UK has brought about so much in the field of research and innovation. We have been there in the development of new therapies and in the medical technologies that have benefited all EU patients. We have, in so much, been participatory leaders in science and innovation in the EU. There is an attempt in the paper to say, “It’s not going to be so bad. We can continue to do all this innovation and science after Brexit, but as a non-EU country”. Yet, it does not take much probing to see that, as a non-EU country, we cannot lead projects as we have done in the past—projects in CERN, the European centre for nuclear research, for example.

In another part of the paper is the suggestion that we, the UK, could have special access to these research programmes that other non-EU countries have never had. This, I suggest, is wishful thinking, and so we will go from leading in research, as we do now, to having no influence, no vote and bringing our own credit card to the table every time, as a non-EU country. We would have indeed voluntarily put ourselves out of the Premier League and settled for the Vauxhall Conference, or whatever its equivalent is today.

April 2019 looms, as many noble Lords have said, and these position papers, with their wishful thinking and special pleading, do not yet make for the detailed road map that this country so desperately needs.

Photo of Lord Kakkar Lord Kakkar Crossbench 7:21 pm, 12th September 2017

My Lords, I thank Her Majesty’s Government for providing the opportunity for a debate specifically on the position papers. I will confine my contribution to the paper on science. In so doing, I must declare my interest as professor of surgery at University College London, chairman of University College London Partners and UK business ambassador for healthcare and life sciences.

The president of the Royal Society, Sir Venki Ramakrishnan, in providing his response to the position paper on science, on behalf of the Royal Society, recognised the Government’s commitment to the science agenda and the aspiration in the tone of the paper, but remarked that there was much work still to be done. That is true, and important, because science and innovation play such a vital part in our economy. When we look at research output from the United Kingdom, 50% is results from international collaborations. Of the internationally co-authored publications from UK science, 60% are co-authored with European collaborators. The £1 billion a year of funding that we receive from the Horizon 2020 programme and the regional development research funds of the European Union represent 10%—or the equivalent of 10%—of the expenditure in research and innovation provided by government, and about 5% of gross expenditure on research and development, for both the public and private sectors. If we look at UK scientists’ collaborations globally, the country with which there is the greatest amount of collaboration is of course the United States of America but, of the top 10 countries for UK collaboration, seven are from the European Union. So this is a very important issue.

There is considerable anxiety still in the science community over the way forward, despite the publication of the science position paper. There are three areas where it will be vital to make early progress to provide the detail attending the aspirations laid out in the paper. The first is research funding. There is a commitment to continued funding obligations for Horizon 2020 until the time of departure from the European Union, but that important commitment needs to continue throughout the Horizon 2020 commitment period and beyond to the next framework of research—framework 9. Discussions are now starting on the nature of that programme to support research and research excellence. It will be vital for our country to find a way to influence both the discussions on and the structure of those programmes, and to be in a position to make commitments on our longer-term participation and funding in that area.

The second area is research scientists—that is, people. Again, there are substantial anxieties. There are fewer applications now to UK institutions as a result of that uncertainty, with regard to collaborative scientists coming to work here. However, a very interesting observation was made in the science position paper on the Rutherford Fund. This fund has been developed to promote excellence in collaboration and to encourage both early-career scientists and established investigators to come from around the world and be able to work—funded—here in the United Kingdom. Is it possible that this programme might be extended, both in the scope of funding available—currently £100 million a year in this interim period—and that some mechanism might be found to guarantee the visa status, and therefore the ability, of scientists wanting to come to work in our country, when they have programmes of research funding by those UK Government-designated research funding opportunities?

The final area is regulation, again identified in the science position paper. The point is made that our country will be uniquely positioned with regard to regulation post-Brexit, because we have been part of the regulatory frameworks in science to date. These are all vital, and relate to such issues as clinical trials and data protection, as we have heard in this debate. The issue is that we are not only well aligned in regulation at the moment but we have influenced much of the nature of that regulation. A mechanism must be found to ensure that we can continue to influence the development of regulation, so that we can remain completely aligned with it and, therefore, can participate in the research programmes, collaborations and networks going forward. We must also ensure that our innovation and technology businesses continue to be able to participate in the important European markets.

Photo of Lord Cavendish of Furness Lord Cavendish of Furness Conservative 7:27 pm, 12th September 2017

My Lords, how hugely refreshing to follow a speech which is so constructive and given with such authority, hoping to make these negotiations work. I congratulate the Government on their use of the long recess to provide us with a large folder of position papers, and I thank my noble friend the Minister for giving the House the opportunity to debate them. I also thank her for introducing the debate with her customary clarity.

I have tried to read all the position papers as they appeared and, as a result, I feel that I have gained a clearer view of what the Government have in mind in the different areas under discussion. That surely is what they are intended for. They are not dogmatic and frequently offer alternative approaches to problems. They have formed the basis of intelligent debate in various quarters, not least among a number of your Lordships. I have also read them in conjunction with the European Council’s document on guidelines for Brexit which, aside from the usual self-promoting claims that one might want to challenge, held no real surprises. But what I have found striking is how sparse the EU negotiator’s response is. I can understand that the EU will indeed miss our financial contribution, but I would have thought that there were aspects of Brexit, other than money, and especially those set out in the position papers, which merited a greater reaction than has so far been forthcoming.

Much of the criticism that I have seen in the press and which has been articulated this afternoon has been, in my view, largely synthetic. We have heard that there has been both too much detail and too little detail. More broadly, I rather miss the days when convention held that, in international affairs, criticism of one’s own country and Government was measured. Sometimes I hear and read things that suggest there are elements in Britain which appear not to have their country’s interests at heart. Their disappointment at the outcome of the referendum is manifested in an apparent wish for the negotiations to stall or fail.

The message of the position papers suggests to me that Ministers recognise that Brexit has implications for all our EU partners as well as ourselves, and that we stand ready to make the process as painless as possible.

On many occasions since the referendum result, I have paused to reflect on how common ground might be found between we leavers and the almost, but not quite, equal number of my fellow citizens who took the opposite view. Although I continue to rejoice at the decision that was reached and to feel a free man at last, I do not understand the rationale of those who wish to retain membership of the EU. It still eludes me, but I know that I need to keep in mind that 48% of voters represents a very substantial minority. It is for those of us who won by a not-great margin to go on listening to those we disagree with and respect their feelings.

Conversely, the 48% should not seek to derail the decision reached by the British people. As for those who seek to abort the whole process, I invite them to reflect on what might be the reaction. They might also give some thought to the kind of terms Britain would be offered if we crawled back in supplicant mode. Like my noble friend Lord Ridley, I await patiently and with interest for the Labour Party to find a settled position on Brexit. There is little to say until it does. The Liberal Democrats were the only party at the last general election that campaigned to reverse the referendum decision. Voters hardly flocked to support that policy, and unless they are listening only to themselves, one might think that some restraint would be appropriate when the repeal Bill arrives in this House.

Photo of Baroness Ludford Baroness Ludford Liberal Democrat Lords Spokesperson (Exiting the European Union)

I thank the noble Lord for permitting me to intervene. For his benefit, I will just clarify that we did not seek to reverse the referendum. What we are saying is that the referendum last year was rather like buying a house subject to a survey and that once the details are known, there should be a referendum on the concrete details of Brexit. That is not a reversal or a second referendum.

Photo of Lord Cavendish of Furness Lord Cavendish of Furness Conservative

I will read very carefully what the noble Baroness has said and I hope I will be clearer.

I will now briefly look to the future, because I believe there is a vision for this country behind which we could reunite and thrive—the vision of global free trade. There are people I know devoting energy and talent beyond the minutiae of current negotiations who see in the ancient notion of free trade a means to worldwide prosperity and peace. When we leave the European Union, we will also leave behind a protectionist organisation, whose policies harm the poorest of the world. I say to the noble Lord, Lord Newby, no, trade is not good for all. The European Union is an organisation where the producer is placed above the consumer, where the powerful prosper at the expense of the weak, where huge youth unemployment is deemed acceptable and where government comes before the governed.

On leaving the European Union there is a real opportunity to work towards global free trade. Although no one pretends this will be easy, it has this extraordinary feature: it can be done unilaterally. If a country dismantles tariff and non-tariff barriers while others do not, that still brings benefits that others come, in time, to emulate. That is the lesson of history. It is a vision that offers peace, fairness and prosperity to a country and to a world that has become full of self-doubt. My right honourable friend the Prime Minister has spoken of a post-Brexit Britain becoming the “global leader” in free trade. Can I ask the Minister what the current thinking is on that? I can think of no greater ambition, and it must be ever present in our minds in the months and years ahead.

Photo of Lord Davies of Stamford Lord Davies of Stamford Labour 7:33 pm, 12th September 2017

My Lords, I always enjoy debating this matter with the noble Lord, as we have done on a number of occasions over the last year or two, but a tone crept into his speech this afternoon that rather worried me: the suggestion that those of us on our side of the argument are either politically irresponsible or maybe not entirely patriotic. I must tell the noble Lord very forcefully that those of us on this side of the argument regard ourselves as being every bit as patriotic as those who are on the Brexit side. We think of Brexit as a great threat to this country’s interests and are prepared to argue specifically why we believe that to be the case. That is why most of us are here this afternoon. We believe it is our patriotic duty not to go through with Brexit, and if we do have to go through with it, to go through with it as far as possible in a way which enables us to remain inside the single market and the common customs area.

I will direct my remarks this afternoon specifically to the common customs area. It is very important for two reasons, which I think the House recognises. First, it is a matter of existential importance to a number of industries that there should not be unpredictable customs delays at the frontier. That includes, obviously, anything to do with perishables—fresh food, cut flowers and so forth—some quite interesting parts of the pharmaceutical industry and nuclear materials, such as radioactive isotopes, many of which have half-lives of a few days or even a few hours, such that timing is absolutely vital. It also includes those manufacturing industries which depend on just-in-time inventory replacement. They have already expressed a lot of concern about the prospect of our leaving the common customs area.

Secondly, there is a whole political dimension to the threat involved in our leaving the common customs area, which is the Ireland issue. We debated that last week in great detail, so I am not going to go into it now, but I think the Government recognise that staying in the common customs area is the only way of reconciling our commitment not to have a hard border in Ireland with their determination to leave the European Union.

This is very important, and the great question is whether we can leave the common customs area in such a way that those business that I have just enumerated could continue to survive here. Many of them are making contingency plans at the moment to leave this country, which is a matter of very great concern. The implication of those who are happy to go ahead on that basis, including the Government, is that there is enough slack in the system to accommodate customs controls without causing undue delays. Representatives from the Port of Dover came here yesterday and kindly entertained a number of us at a reception in the House of Commons—I dare say Members of this House who are present in the Chamber at the moment went there—and I was able to have some interesting discussions with them. On an average day, 16,000 lorries go through Dover or the Channel Tunnel to the continent. Noble Lords can do their own maths, but that means about 700 an hour, or 11 or 12 every minute. That is a pretty tight schedule. if you hold up a lorry by two minutes by reading the driver’s certificates of origin or talking to him about that or something, that means you immediately have two dozen lorries held up. If you hold them up for half an hour, you have a backlog of 3 miles, I am told. If you have an hour’s delay, that means a backlog on the motorway of 6 miles. If you had a 24-hour hold-up for any reason, you would have trucks backed up the M20, around the M25 and out to Hemel Hempstead. It is a very serious matter; there is no slack in the system.

The Government have produced a paper, which of course I have read, which says, “Oh, there are all kinds of new technologies which mean there won’t be any delays at all”. But those new technologies, which are described I must say in a very vague fashion and not necessarily always very persuasively, are all based on leaving out three very important issues. One is the fact that there must always be spot checks in any system. It is no good having just an electronic system: if you never have spot checks, the whole thing will become a farce in no time at all. The second thing is that you always have to take account of human error and delays. For example, a truck may not work, so at the last minute the cargo is put on to another truck, which has a different number plate which is not recognised by the computer system, and there is a big hold-up. That sort of thing can happen the whole time. Thirdly, and very importantly, all those systems described in this new paper all involve prior clearing and a connection to a computer system and so forth—a lot of prior arrangement and registration. They are not suitable for, and do not accommodate, people who move across the Channel or the frontier at the last moment—which they should be entitled to do if their business drives them to do that—or small businesses that have not yet managed to get round to registering or are not regarded as being sufficiently large scale to be worth taking on. None of those issues are dealt with in the paper at all, so I am very much less than convinced by it.

I have very little time left. The great question arises of why we are taking these risks with these potentially enormous costs. The Government have a simple answer, which I think shows up the compete falsity of their logic. They say, “Well, we are going to be leaving the European Union, so we shall no longer be able to trade in that area on the present favourable terms”. That is 45% of our trade. When we leave we shall also leave preferential access to the other markets which have free trade agreements with the EU, which represents about 22% or 23% of our total exports. That leaves about 30%, and the Government say, “Well, that’s all right: with the 30% we are going to do so well, and so much more incremental business will come as to compensate us for the loss of business from the 70% where we shall be at a disadvantage”. That is completely implausible and unrealistic—not to mention the fact that it takes many years to negotiate a free trade agreement with anybody; it has taken seven and a half years already for the EU to negotiate with Japan, for example.

The whole of this potential threat to very important industries, to employment and to our relations with Ireland is all based on a very flimsy assumption, and it really is about time that the Government looked at these assumptions again. At present, I do not believe that those assumptions would get through the board of directors of any half-competent or half-viable business in this country. It would be very frightening indeed to think that this country is being managed on that sort of basis.

Photo of Baroness Stroud Baroness Stroud Conservative 7:40 pm, 12th September 2017

My Lords, I thank my noble friend the Minister for securing this debate on the position papers. Although this topic covers a number of papers, I shall limit my remarks to the subject of the Irish border.

As we all know, in March 2019 we will embark upon a new era in the history of this great nation. We are the world’s fifth-largest economy, supported by the world’s most dynamic, creative and resourceful people. We should therefore be optimistic about our prospects. But it would be wrong not to acknowledge the real challenges that, as we have heard this afternoon, lie ahead. We must work together to find a pathway to minimise potential disruptions at the Irish border, so that we can ensure a future for the UK and the Republic of Ireland that is open and inclusive, creates growth and jobs, and encourages innovation and enterprise.

We must ensure continued ease of movement for people and goods, so that we can ensure border controls do not have a detrimental impact upon businesses, families and communities. Finding a solution to the issues created at the Irish border by the UK leaving the EU is very much in the interest of both parties. Here I refer to my entry in the Register of Members’ Interests as CEO of the Legatum Institute, which this week published its paper on resolving the issue of the Irish border.

In my limited time, I want to focus on two main priorities for the border. First, as we have heard, we must ensure the continued ease of movement for people. The UK Government’s paper recommends the continuation of the common travel area and ease of movement of people across the Irish border. Secondly, we must ensure the continued ease of movement of goods. The UK Government’s paper talks about there being no physical infrastructure for a customs border for goods—achieved either by the UK simply not applying such infrastructure, or by the UK acting as an agent for the EU in the collection of duties. It offers all Irish people the chance to live and work in the UK if they so choose.

In the report that the Legatum Institute published yesterday, we echo and support many of these proposals, and offer a few of our own. The Government are right to specify that we should facilitate the free movement of people between Northern Ireland, the Republic of Ireland and the UK mainland by the indefinite continuation of the common travel area. The process of delegated immigration controls should continue, with the Republic of Ireland authorities handling the administration of EU citizens arriving there, including those wishing to travel onward to the UK.

Potential infrastructure to ensure proper implementation of the border agreements is already in place in the form of existing bodies such as those created by the Belfast agreement, which could be used to create a joint committee with that responsibility.

When focusing on ensuring the continued ease of movement of goods, the most important point is that one simply cannot solve the problems of the Irish border without understanding the trade relationship between the UK and the EU. Our data show that the trade of both the Republic of Ireland and Northern Ireland is overwhelmingly with mainland Great Britain, so it is critical for all parties that the trade arrangements between the UK and the EU are resolved quickly. While we do not underestimate the disruptions at the border for which real solutions must be found, these trade data are evidence that the most important disruption for businesses and people in both the Republic of Ireland and Northern Ireland would be to their trade with mainland Great Britain.

The most effective way to reduce border disruption for trade in goods between Northern Ireland and the Republic of Ireland is by the UK and the EU agreeing a smooth customs arrangement. This is an opportunity to deploy the latest technology available, similar to that deployed on the Norway-Sweden border, and even for the London congestion zone, in a limited area which could become a prototype for other regions.

In addition, the Governments of the UK and the Republic of Ireland, as well as the EU Commission, should focus on the appropriate mechanisms to minimise the disruption to relatively low-volume high-frequency trading across the border, including trusted trader programmes that are easy to use, and appropriate mechanisms to minimise risk so that frequent traders face fewer obstacles. It should be pointed out that the challenges posed by the border mirror those that must be resolved between the UK and the EU. If we can get this right, it could become a model for other border arrangements around the world.

We owe it to all the people of the UK, regardless of how they voted last June, to ensure the best possible Brexit. We have a duty and an opportunity to create a prosperous, imaginative and ambitious future for this nation, taking the challenges and opportunities of this unprecedented change, and ensuring that we continue to be the outward-looking and leading nation we are known to be.

Photo of Baroness Humphreys Baroness Humphreys Liberal Democrat Lords Spokesperson (Wales) 7:46 pm, 12th September 2017

My Lords, I am grateful for the opportunity to contribute to this debate on the Government’s position papers, and in the short time available I will confine my comments to the paper on future customs arrangements.

As I and other speakers have said in the past, the customs union is vital to Wales: 67% of Welsh exports go to the EU, the Welsh Government have called for “free and unfettered” access to the single market and the customs union—and, of course, my own party has recognised the importance of the two and has called for continued membership of both.

It was with great interest that I read the position paper, and I was struck by how much the Government hope to achieve by the end of March 2019 in order to ensure a “smooth and orderly transition” when, as they hope, we leave the EU. If we are destined to leave the EU on Friday 29 March 2019, it will not have been lost on many in your Lordships’ House that our bright new future outside the EU will begin on Monday 1 April 2019. To some of us, that is a rather apt date to start on this new venture.

In the paper, I found what we might call the “current positon” statements useful, but the proposals for future relationships were vague and gave very little information or detail—relying, I thought, on a certain element of wishful thinking. How, for example, would the idea of a “highly streamlined customs arrangement” work in reality? Given the reputation of previous government IT systems, its dependence on new technology seems unrealistic, and the idea that these systems would be operational in 18 months’ time appears far-fetched. To ensure that the system can deal with the number of declarations associated with leaving the customs union, the Government must guarantee that the customs declaration service system is fully operational by January 2019, so that it can be tested before 1 April.

Those of us on the remain side of the debate were cautioned last week to avoid repeating the same arguments as we have used in the past. But the arguments, concerns and worries we have still persist, because we receive no concrete proposals or answers when we put them forward. The position paper fails to address a number of challenges that the Government face.

There is nothing here to enable me to assure farmers in the Conwy valley, where I live, or farmers in the rest of Wales and the UK, that the markets they have today in the EU will exist on 1 April 2019, or that any clear pathway exists to replace those markets. There is nothing to prepare farmers for increased prices if tariffs are placed on their goods, or for the extra paperwork involved in “taking back control” of our borders.

There is nothing to calm the fears of the design engineer I met on the train yesterday morning that the car industry he works in will suffer a 10% tariff on vehicles and an average 4.5% tariff on components, or that the industry will suffer delays if parts are held up as customs officers check their country of origin.

Where is the forward planning for ports? Holyhead on Anglesey can seem rather remote to those living on mainland Britain, but it is the busiest roll-on-roll-off port in the UK after Dover, dealing with 400,000 trucks a year making their way from all over Europe to Dublin. The National Assembly fears that a hard customs border between Northern Ireland and Ireland will mean chaos in Holyhead, with extra customs checks in operation. Already there are concerns that Dover may have to operate an Operation Stack policy. Will Holyhead have to operate a similar system? Have the cost implications been considered?

In the coming weeks I will be paying a visit to Airbus in Broughton where the wings of the A350 are manufactured. The company relies heavily on the free movement of goods and people and it fears that a hard Brexit, with the inevitable tariffs, will push it out of the UK. I can find nothing in this document that realistically assuages those fears.

Finally, nowhere is there an analysis of the impact of leaving the customs union on various sectors of the UK economy, although I believe that the Government have carried out up to 50 such analyses. When will they be published?

Photo of Lord Suri Lord Suri Conservative 7:51 pm, 12th September 2017

My Lords, I have heard a great deal of gloomy talk in the past few months on the prospect of success in the Brexit negotiations. I have lost count of the editorials and columns loudly proclaiming that no deal is hurtling down the tracks.

In every negotiation in which I have been involved, there needs to be some fundamentals in place. First, both sides must have some good will. I think that while there is less than there was previously, the UK and the EU do not loathe each other to the extent that some in the media portray. Secondly, there must be a position which benefits both sides. Of course, this exists here, as the trade relationship is a net plus for us and the EU. Finally, we need realism. That is: proposing unworkable positions must be curtailed. This issue of realism is probably the biggest sticking point to moving talks onward. With that in mind, I will outline where the Government and the EU need to be more realistic.

The Government’s papers on Northern Ireland and the customs union are not adequate in correctly explaining the need for, or consequences of, a hard border. The reliance on technological solutions to speed up the process is not credible. Neither is the idea that the Government will be able to get in place a full scan and track customs movement system in less than two years. These systems are extremely complex, and can confuse exporters even when well administered. The record of British Governments of all stripes on large IT projects is, I am afraid, not good. There is either a hard border for goods moving from one side of the island of Ireland or there is not. All indications now suggest that a hard border in Ireland is the only workable solution if one wishes to leave the customs union. It may be very quick and hassle free, but it must be described for what it is, if the Government are serious about leaving the customs union. The Minister may have visited the Canada-USA border in her previous department, and if she has, she will see that it is a hard border, but various solutions have been used to make it as easy as possible—solutions we should learn from.

There is also the need for some realism on the EU side, on two issues in particular: the divorce bill and citizens’ rights. I am not one of those Conservatives who opposes any divorce bill, like in that letter circulating around Conservatives in the other place. We have obligations and ought to uphold them in return for similar good-will gestures. But waving around figures of £100 billion and demanding that we create the rationale for calculating the contribution is patently absurd.

The further obstructionism on trade talks is also unhelpful. Why should the Government commit to a large payment without being sure of anything in return? To further claim that the CJEU ought to have jurisdiction over citizens in the UK post leaving is also fantasy. Some combined court or EFTA Court referral mechanism would work perfectly well, as laid out in the position papers, but a foreign court claiming supremacy over its citizens abroad is neo-imperial.

I think these talks will be declared dead another few times, and our position papers will be declared to be unrealistic. I think these are puffs of hot air, and I will be supporting the Government in the EU withdrawal legislation coming to this place.

Photo of Lord Robathan Lord Robathan Conservative 7:57 pm, 12th September 2017

My Lords, having listened to most of this debate, I have changed a few notes that I wrote and the tenor of my speech. I do not think that I am alone in being very disturbed, indeed astonished, by some of the views that have been expressed in this debate. Leaving aside the absolutely risible idea of a second referendum—not wanted by almost anybody in the country—why do some speakers imagine that Monsieur Barnier and Monsieur Juncker, or indeed the Irish Foreign Minister, must be right, and that their views must be heard, while considering that the UK Government in obeying the instruction of the British people must be wrong? It shows a complete lack of confidence, and personally I have confidence in the ability of both this country and the British people to flourish, as they have done in the past.

In this brief contribution I want to speak about general points, but I may try to come on to one or two particular position papers. Leaving the EU will not be in any way easy. We all know that—after 40 plus years of legislation and ever-closer union—but some in this debate seem to imagine, or create, greater difficulties than exist. I might expect it from BBC journalists, but I wish that some politicians would not wish to frustrate the democratic will of the people.

Before 1973—and I am younger than the average age in this House—there were no visas to travel to Europe. We could work and travel easily, pace the Iron Curtain. In the 1960s, I went on holiday to France, Germany and Spain; I trekked and skied; and travelled by train in Austria and Italy. We did not need visas; we just went. In 1973, just after we had joined, I hitch-hiked across the continent. I had friends who were teaching and working in France and Italy. So let us get things in perspective. Of course, we can cross borders without visas if we want to. We can work and live on the continent, and EU citizens can do the same, although there may be work permits both ways.

I want to raise three points, if I may, from the position papers. The first, which has been very well covered by my noble friend Lord Ridley, is on Euratom. Why on earth should there be problems about co-operating on civil nuclear issues and safeguarding material, et cetera? France and the United Kingdom are the only two nuclear powers in Europe—I remind the House that Germany has abandoned its nuclear programme. Of course, there are many other nuclear-energy countries, and of course we can continue to co-operate with all others on material, on energy, on medical research and so on. So what exactly is the problem that people raise? I thought that my noble friend Lord Ridley did an excellent job on that.

On defence, the only threat to NATO that I can see is that of the proposed European army, which would side-line NATO and exclude our North American allies, Canada and the United States. NATO has defended the West since 1949. It has grown from 12 countries then to 29 now. On security, we will of course co-operate with Europol and its European counterterrorism centre. Apparently we provide over 50% of the intelligence on crime and security, especially CT, to those organisations, so why would they not want to co-operate with us?

On Ireland, I turn very briefly to the border there. It has, of course, had a vexed history over the past century, but we should remember that not 100 years ago there was no border between the south and north; it was one country. Then, between 1922 and 1973, they were separate countries with border controls. But there were not really any border controls. There was an open border for so much of the time. I do not think we need to talk about reviving old enmities. Why should that be the case? It is not beyond the wit of man to come to a perfectly reasonable agreement with the Irish Republic—and indeed with the EU—over this matter. I was particularly asked to raise this point by somebody who knows much more than I do about this subject. While the British position paper is not perfect—none of them is, of course—the EU paper is inflexible and small-minded, and one should not just accept that paper as gospel. We should look at it very carefully and see whether we cannot come up with a very much better solution for the good of the people of both north and south Ireland.

These continental countries are our friends and allies, even if Monsieur Barnier wants to, as he said, educate us—which, to me, means teach us a lesson. Jean-Claude Juncker thinks David Davis is unstable. Guy Verhofstadt of the European Parliament rages against us. I prefer to be confident in the abilities of the United Kingdom and its people and its citizens to prosper outside the EU in co-operation with our friends and allies on the continent for our mutual prosperity and benefit.

Photo of Baroness Smith of Newnham Baroness Smith of Newnham Liberal Democrat 8:02 pm, 12th September 2017

My Lords, I rise feeling a sense of déjà vu. Two years ago, after the 2015 general election, when it became clear that there was to be a referendum on the UK’s membership of the European Union—which now sounds a very long time ago indeed—there was a discussion about what the Prime Minister really wanted. There was frustration in Brussels: “We don’t know what the Prime Minister wants”. Members of your Lordships’ House, particularly on the Labour Benches, were saying, “We don’t know what Cameron is asking for”.

It was actually quite straightforward what was being asked for in the renegotiation. The then Prime Minister had made clear in the Bloomberg speech what he was looking for. It was repeated in the 2015 Conservative Party manifesto. There was a broad sense of what was being asked for. To some extent, I feel the same today. There is a lot of shadow boxing going on, not just in your Lordships’ House—where I would never suggest there is shadow boxing going on—but in Brussels and in the negotiations so far.

So far, we have had six months of not very much negotiation happening. The noble Baroness, Lady Smith of Basildon, suggested in her opening remarks that there is not enough progress. We are in a period when, if we were joining the European Union, we would be going through something called screening. I think that is what the European Commission calls it. In that very preliminary process, the European Commission explains what it is looking for and what it expects of would-be member states, outlines the process and explains what needs to happen. With departure, surely we would expect something similar. We need, on both sides, to identify what it is that we are leaving and how we are to go about it. Accession negotiations take many years because there is so much detail associated with membership of the European Union, so at this stage perhaps we should not expect a huge amount of progress in the negotiations, if that means David Davis can come back and say, “I have agreed X, Y and Z”.

Last week, the noble Baroness, Lady Anelay, who has just returned to her place, said that nobody had talked numbers yet in discussions about the budget. They have not discussed numbers precisely because at this stage we are looking at what is at stake and what are the lines in the EU treaties that we need to think about to get to the point of looking at numbers. The fact that we have not made major progress in the negotiations yet, particularly before the German elections, is perhaps not that surprising. But with the position papers and the future relationship papers, there seems to be something akin to what we were saying about the then Prime Minister, David Cameron. What is in these papers? What are we expecting? When he made his Bloomberg speech, it seemed quite clear. A year later, when he spoke to Chatham House, he said almost exactly the same things as he said at Bloomberg, but rather less eloquently. With the position papers that we are getting at the moment, there is a sense that we are hearing the same points rehearsed again and again.

The current Prime Minister, Theresa May, in her Lancaster House speech in January, may have been clear about what sort of relationship—a deep one—we should be having with the European Union. But the position papers do not seem to have got us very much further. I confess that I have not yet read them all in detail. Some of them do not take very long and will not have much detail. But what seems to come across in all the position papers bar one is that the United Kingdom wants to keep as close a relationship as possible with every aspect of the European Union that we are leaving, with one exception: the European Court of Justice. After listening to the noble Lord, Lord Adonis, this afternoon when he talked about the customs union, saying, “Actually, why don’t we just stay in?”, I have got to the point of thinking, on almost every one of the position papers, that the conclusion seems that the best response is: why do we not just stay in? Clearly, however, the one difference is the European Court of Justice.

The noble Lord, Lord Hannay, suggested earlier that the paper looking at the European Court of Justice was rather academic. I slightly take exception to that because he was rather critical, thinking it was not a very good paper. But there is a sense in which all these papers are superficial. They are words almost without meaning, and they do not take us very far forward. Last week, the noble Baroness, Lady Anelay, was able to explain what has happened in the budget negotiation so far. Can she explain how much further detailed work has taken place? In the covering pages, we have a suggestion that extensive work has been done in the past year. So far, the position papers do not show us that. Greater elaboration would be most welcome.

Photo of Lord Howard of Rising Lord Howard of Rising Conservative 8:08 pm, 12th September 2017

My Lords, Her Majesty’s Government are to be congratulated on the number of quality position papers, which provide good bases for discussion. The papers are a fine rebuttal of the arrogance of EU representatives slinging mud at British negotiators—for instance, as my noble friend Lord Robathan mentioned, Herr Juncker accusing David Davis of instability, which is a fine example of a very well-oiled pot calling a clean kettle black. The route of Brexit, and therefore these position papers, is the wish of the majority of the people of Great Britain—they want to leave the European Union—but reacting to what the electorate would like is a strange and alien idea to European Union officials. They see themselves as responsible not to the people but to an unelected and arrogant bureaucracy, which has been criticised by its auditors for making payments—in the words of the auditors—not being “free from material error” for over 20 years.

It comes as no surprise that the EU negotiators’ main preoccupation is how much money they can extract from the British public to fund their extravagance. They spend money in a way which would be intolerable if they had to account directly to an electorate. As my honourable friend Jacob Rees-Mogg has pointed out, if the position was reversed and Britain was a net recipient, Monsieur Barnier would not have been showing the same enthusiasm to give us handouts as he is to take our money.

This lack of concern for the people of Europe is a cause of unhappiness and distress in many countries within the Union. For example, the response of European officials to the immigrant and refugee crisis in Italy and Greece has not been to address the cause of the problem but to try to force others to take unacceptable numbers of immigrants. Guy Verhofstadt tweeted:

“Happy to read that the Hungarian & Slovak Govs have failed to sabotage a European response to the refugee challenge we face”.

That tweet demonstrates the contempt with which European officials view the peoples of Europe. There are signs that this contempt may be backfiring. Viktor Orbán has accused Herr Juncker of trying to change the culture of Hungary and is refusing to accept the ruling by the European Court of Justice that his country should open its doors to immigrants and refugees assigned to it by the Europeans.

In Germany, industrialists are asking their Government to create a special body to protect their interests during Brexit negotiations. Ultimately, the European Union will have to respond to electorates, especially those benefiting from the £90 billion a year trade surplus the Union enjoys with Britain. This pressure on the European Union negotiators will accelerate, so enabling Britain to take a firm stand in negotiations. It is of supreme importance for Britain to stick to the core principles—and achieve these by 2019—of no longer being subject to the European Court of Justice; leaving the customs union so that this country is free to make trade agreements with others; and having the right to decide who shall come to live in this country.

Photo of Lord Hutton of Furness Lord Hutton of Furness Labour 8:13 pm, 12th September 2017

My Lords, I bring the attention of your Lordships’ House to the interests I have declared in the register. I am chairman of the Nuclear Industry Association. It probably follows on from that that no one will be surprised to learn that I will confine my remarks largely to the decision which Ministers have made to take the United Kingdom out of membership of the European Atomic Energy Community. These follow the remarks of the noble Lord, Lord Teverson, and the noble Viscount, Lord Ridley.

It is probably true to say that the decision to leave the Euratom treaty was one of the unintended consequences of the referendum. I do not recall a single supporter of the leave campaign banging their fists on the table and saying: “The UK must leave the Euratom treaty”. No one mentioned it, and for a perfectly good reason. The UK’s membership of this treaty has been the bedrock on which our nuclear industry has thrived and to which it owes its pre-eminent position today as one of the leading nuclear nations trading in goods and services, fissile and other material around the world. It has been essential for the growth of our nuclear industry. It is worth a little bit of context: the nuclear industry makes the same contribution to the UK economy as aerospace does, in terms of jobs, wealth creation and the taxes it pays to the Treasury. We should do all we can to protect and secure this strategic industry.

I welcome the publication of the Government’s position paper on exiting the Euratom treaty. It sets out six high-level principles and it is very difficult to pick an argument with any one of them because it is all common sense. No one in their right mind wants to see such an industry compromised or its trade around the world affected by a rash and badly implemented decision to leave this fundamentally important legal instrument. To answer the noble Lord, Lord Robathan, the principles are fine but there are still two fundamental problems at play. First, how are we going to achieve these principles in the most effective way? There is nothing in the position paper which gives an answer to that. Secondly, and more significantly, how are we going to do all the things which are necessary to do that in the 18 months that we have left before we leave the treaty?

It is worth reminding ourselves what we have got to do if the Government’s high-level principles are to be secured. We have got to agree a replacement voluntary offer safeguards agreement with the International Atomic Energy Authority. It would be useful if the Minister could tell us when she envisages this being in place. The particular problem is that we are going to have to renegotiate a number of nuclear co-operation agreements with our nuclear partners: the Euratom community itself, China, the United States, Canada, Australia, South Korea and Kazakhstan. What progress has been made on these new bilateral agreements? As a lawyer, I always study the precedents. Looking at the precedent established in the United States, in particular, these nuclear co-operation agreements have the status of international treaties and have to be approved by the United States Congress. Any student of politics will tell you that there has never been a treaty like this agreed by Congress in 18 months. So what do we do?

We clearly also need to clarify the validation of the UK’s current bilateral nuclear co-operation agreements with Japan and other states. Has that process begun yet? The Government must also set out the process for the movement of nuclear materials—goods, people, information and services—to be agreed, when we leave the treaty, with the Euratom Supply Agency. Have we made any headway with that? We have to agree also a new funding arrangement for the UK’s involvement in future fusion research and under the wider European Union nuclear R&D programme—

Photo of Lord Robathan Lord Robathan Conservative

I am very grateful to the noble Lord who speaks with real authority on this. I understand the Swiss are associate members of Euratom. Would that be one way forward?

Photo of Lord Hutton of Furness Lord Hutton of Furness Labour

It certainly could be one way forward, but it has been ruled out by Ministers to date. It might well be that the best outcome is some form of associate membership. No one in this House, or outside this House, wants to see any harm done to the nuclear industry by leaving the Euratom treaty. But, if we are going to avoid that outcome, Ministers will have to show considerably more pragmatism than they have done to date in making sure harm is not caused to the industry in the way that the Article 50 negotiations are handled. The most obvious need of all, given the difficulties in negotiating these agreements, is that we do not actually leave the Euratom treaty until all the nuclear co-operation agreements are in place and are legally robust.

Trade in nuclear goods and services is different to trade in goods elsewhere. Unless there is a clear, robust legal framework for the movement of goods and services in nuclear materials, in most jurisdictions that we trade with, that trade becomes instantly illegal. It is a cliff edge which is much more apparent and real than the consequences and dangers of exiting the European Union without an agreement on future trade arrangements under Article 50. This is the ultimate cliff edge. If there is no agreement with other nuclear states within the 18-month period we have left, we are in a serious position. I urge the Minister and her colleagues in the Government not only to confirm tonight that they are willing to be pragmatic and look at extending the transitional periods of membership of the Euratom treaty, but to keep this House more fully updated on the progress of these important negotiations.

Photo of Lord Fairfax of Cameron Lord Fairfax of Cameron Conservative 8:19 pm, 12th September 2017

My Lords, I too would like to congratulate the Government in publishing their recent position papers; it is also good to hear from the Minister about the concrete progress made in negotiations on many items of substance, which is contrary to the impression given in certain quarters.

This of course is to be contrasted with the Opposition, which sadly often snipes unconvincingly and inconsistently from the side-lines. This is a shame in view of the huge importance of this subject. As many others have said, it is impossible in five minutes to do this subject justice, so I confine myself to a couple of remarks.

Firstly, as it was mentioned earlier, and as it illustrates the Opposition’s party-political opportunism in voting against it, I would like to touch briefly on the repeal Bill, which was debated yesterday in the House of Commons. As we know, it repeals the European Communities Act and repatriates sovereignty to the UK. It converts EU law into UK law and, in Section 7, about which much heat has been generated, it provides temporary powers to correct laws imported from the EU so that they may function appropriately. I understand the Section 7 power cannot be used to make policy changes; that must give some comfort to those who have criticised it so greatly.

Apparently there are as many as 20,000 EU regulations and statutory instruments resulting from EU law. I would like to ask, where were the strident voices we now hear about pernicious secondary legislation when this veritable forest of regulations and statutory instruments was being introduced into UK law? The noise now compared with the silence then seems a little inconsistent.

For the benefit of the noble Lords, Lord Taverne, Lord Dykes, and others, I would like to make a couple of comments about the stance of EU negotiators. In the published words of a Frankfurt-based German financier who, incidentally, is a senior finance officer in Mrs Merkel’s own party, he said:

“It is about as obvious to us Germans as it is to the Brits—the EU cannot tolerate the thought of a successful UK outside the Brussels sphere of influence because, if that were to happen, others might decide to start leaving the club too”.

It is this attitude on behalf of Messrs Barnier, Selmayr and others that threatens to put at risk the win-win outcome to the negotiations that, otherwise, by good will, might be achievable by the EU and the UK. But the divorce bill and the size of it is the number one issue for the EU negotiators, which may likely be colouring some of Monsieur Barnier’s wilder utterances. If it is €100 million, then it is no wonder we voted to leave.

I wish Her Majesty’s Government and the Minister as well as possible in their mammoth undertaking, which is so important for the future of this country. I add a few comments to comments made earlier, by the noble Baroness, Lady Kramer, and the noble Lords, Lord Taverne, Lord Dykes, and others. This is in relation to “Project Gloom”. Are they aware, for example, that Deutsche Bank recently signed a 25-year lease on a new London headquarters building and that the Norwegian Sovereign Wealth Fund—which, incidentally, is the world’s largest—has just increased its target allocation of UK Government bonds? Reference was made to Lloyd’s by the noble Baroness, Lady Kramer, as if it were not the Lloyd’s corporate establishment of a few tens of—or even a hundred—people leaving for Brussels, but the thousands of brokers who work in that industry. They are not going off to Brussels; it is only the corporate staff who are doing so.

I have personal experience of this—and it is in the register—as I am a director of a marine insurance company based in Newcastle. We, along with many other financial services firms, have been required by the Prudential Regulation Authority to look at passporting options, should there not be a successful outcome from the negotiations. That is certainly something that many firms are having to look at, because they are required to do so by the PRA. It does not mean, as many people have suggested, that financial services are going to move wholesale from this country. We should forget “Project Gloom”. More of us should talk matters up rather than down.

Photo of Lord Judd Lord Judd Labour 8:24 pm, 12th September 2017

Meanwhile, my Lords, in the real world very many people in industry, commerce, business and universities, and not least countless ordinary families, are waiting for some kind of certainty about where their future lies. They have to plan and make arrangements for the future but at the moment that is just not possible.

Nowhere is that more important than in the sphere of law. I serve on the Justice Sub-Committee. We took evidence on civil law and listened to very distinguished barristers in this country. I was quite moved when, one morning, they broke off and said, “Look, what we want to say to you as a committee is not in our selfish commercial and financial interests. There are a lot of families who cross borders and a great number of broken families. There has been a real problem with the children of broken families, with one country giving a verdict on their future but one of the partners rushing off to get a verdict elsewhere. For the first time, we are beginning to work in a sane, constructive atmosphere in which a verdict given on the future of children will run across frontiers”. What are we doing? Cross-border realities are the nature of life in Britain.

On Ireland, a great deal has been said but I want to say only this. Fixing the Irish problem is not just a technicality; it has been a peacebuilding process. People have been engaged in building a new future for Ireland. If we jeopardise that, history will never forgive us.

I am afraid that there has been a fundamental flaw in Britain’s relationship with the Community from the very beginning—right from the time of the European Coal and Steel Community, when we were not a member. We have always insisted on looking at it as a financial or commercial arrangement, but the driving force behind it has not been financial or commercial arrangements; it has been the political objective of a stable and peaceful Europe. Our failure, intellectually and emotionally, to engage in that process of building Europe has meant that we have not built up a great well of good will towards us. I was a Minister for Europe a long way back and I know that we are seen as always being concerned about what we can get out of it, as distinct from what we can contribute to it. That is a cultural difference and, if I may say so, a moral challenge that we have to face.

In conclusion, in the face of the world as it is, we have no alternative but to regenerate a good working relationship with Europe. Whether it be terrorism, events in south-east Asia and Burma, the Korean peninsula or the United States, or climate change and an accelerating increase in the flow of refugees across the world, there is no way that we can face those things without working with our European partners. We have to generate a sense of joint commitment with Europe on these matters. If we do that, we can then approach together much more constructively the practical challenge of how we organise ourselves.

Photo of Lord Kerr of Kinlochard Lord Kerr of Kinlochard Crossbench 8:30 pm, 12th September 2017

My Lords, I want to make three points. First, there was a document on citizens’ rights that we put forward in the negotiations in June. That was a genuine negotiating document. None of the documents since is a negotiating document. None of the documents we are talking about today gives the negotiators anything to get their teeth into. They are lists, options, essays—some are rather interesting little essays—but clearly they are aimed mainly at a domestic audience and the aim is to avoid any new outburst of disagreement in the party. So they do not say anything.

My second point is that this is counterproductive. The papers have gone down rather badly in Brussels. On 31 August, Mr Barnier said:

The UK wants to take back control, it wants to adopt its own standards and regulations. But it also wants to have these standards recognised automatically in the EU. That is what UK papers ask for. This is simply impossible”.

A further cause of doubt in Brussels is the confusion between what we say and what we do. If it is the case that, as the CBI and the TUC want, the Government now think that the right course—at least for an interim period—is to stay inside the single market and possibly the customs union, there is a real negotiation to be had. Why do the Government publish a withdrawal Bill that eliminates completely the umpire of the single market—the European Court of Justice—on Brexit day? You cannot say, “I want to play in your game, but I don’t respect the umpire”. If we want to stay in the customs unions, why does somebody not switch off Dr Fox? There is an inconsistency inside the Government. We need them to come forward with a clear, achievable objective and then with precise negotiating proposals which would get us towards that objective. They need to avoid actions and speeches that are inconsistent with it.

Thirdly, the worst feature of the papers we are talking about is that there is not one on money. I agree that the bill that the European Union—the 27—has presented is grossly inflated. Of course it is. It is far higher than the first draft which Mr Barnier produced. Do not attack Mr Barnier: it is the member states that inflated the bill. I agree that the decision on sequencing that the European Council took was the wrong one. It is a pity that their position is, “Agree on the money before we talk about anything else”. I understand why they reached that decision. It is because they had heard too many people in this country saying that we were just going to do a runner and they could whistle for the money. That is why they said, “You’ve got to show us sufficient progress on money before we move on”. That was a mistake, but we are where we are. Unless we have put forward counterproposals on money and a real negotiation has started, it is not conceivable that next month’s European Council could conclude that sufficient progress has been made.

I have one final point to add. All these papers describe—in rather optimistic, aspirational terms—a special relationship or special partnership with the European Union, which we will have left. The European Union runs on law. If there is no agreement on money—if we go to a court of arbitration to settle a dispute over real or alleged legal commitments—there will be no agreements on anything. The European Union will be unable to conclude agreements on anything. The special partnership will not exist and all these little papers will be so much waste paper. We need to put some money on the table and start a real negotiation. If we do not, we are risking the cliff edge—no relationship at all—and that would be very bad indeed.

Photo of Baroness Bloomfield of Hinton Waldrist Baroness Bloomfield of Hinton Waldrist Conservative 8:34 pm, 12th September 2017

My Lords, I, too, congratulate the Government on this extensive set of position papers and welcome the opportunity to comment. In common with the noble Viscount, Lord Ridley, and the noble Lords, Lord Robathan and Lord Hutton, I will restrict my remarks to those papers which relate to the nuclear industry.

The UK’s scientific community has benefited enormously from membership of the EU and Euratom in terms of research, funding and the free movement and exchange of scientists and ideas across borders. We are at the forefront of research and development in pharmaceuticals, biotech, space and indeed the nuclear industry. The Joint European Torus project at Culham in Oxfordshire is evidence of our being a key player in this field. International teams, both here and in southern France, are leading research into nuclear fusion, the holy grail of sustainable energy.

Europe has benefitted in equal measure, however, and there is no reason why this should not continue. As the position papers on the collaboration on science and innovation and those relating to nuclear materials stress, it is in all our interests that our joint enterprises continue.

There are complexities and a very challenging timeframe. The position paper on nuclear materials and safeguards makes it clear that we need to ensure a smooth transition to a UK nuclear safeguards regime to provide both certainty and clarity to the industry, which already employs more than 66,000 people and, crucially, wishes to invest significantly in a new generation of small modular nuclear power stations. We need this generating power to secure our future supply of power at prices we can afford.

The UK must also address the issue of nuclear supply contracts, which extend beyond the date of our EU withdrawal. Equally, we shall seek to ensure continuity of existing trade agreements on materials, spent fuel, radioactive waste and radioactive sources.

The fundamental principle that spent fuel and radioactive waste remain the ultimate responsibility of the state in which it was generated is reaffirmed under international law to which both the UK and the other Euratom member states are parties. The UK will be seeking reciprocal assurances in relation to spent fuel and radioactive waste, whether generated here or in another Euratom country.

The UK is known to be both a responsible nuclear state supportive of international nuclear non-proliferation and a state which has a strong desire to protect its own nuclear power industry. While we shall no longer be a member of Euratom, many of the standards it sets are legally binding and arise from obligations to which the UK is in any event committed under the IAEA as well as the Nuclear Energy Agency within the OECD.

In the Queen’s Speech the Government announced a new nuclear safeguards Bill. This is intended to establish a UK nuclear safeguards regime and will delegate responsibility for this to the Office for Nuclear Regulation. There is little doubt that this fine but already overstretched body will need extra resources to take on these expanded responsibilities, and some of this expertise will have to be sourced from overseas.

So what will be the way forward for a United Kingdom that will be outside Euratom but wishes to continue co-operation? According to Article 206 of the Euratom treaty:

“The Community may conclude with one or more States or international organisations agreements establishing an association involving reciprocal rights and obligations, common action and special procedures”.

Switzerland became an associate member in this way in 2014. Many believe that pursuing this route would be the most beneficial for the UK. Alternatively, under Article 101 we could apply to acquire the status of a third country in the same way as have the United States, Australia, Canada, Japan, South Korea and Kazakhstan.

In a policy paper in May the Prime Minister noted that, while the Government was of the view that Article 50 covered Euratom, Britain still wanted,

“to collaborate with our EU partners on matters relating to science and research, and nuclear energy is a key part of this”.

The paper also suggests that we may indeed look further afield than Europe, noting that Britain is a world leader in nuclear research and development and that,

“there is no intention to reduce our ambition in this important area”.

We have confidence that it is in our mutual interests for the EU and the UK to continue their joint research. We must hope that all sides can work together speedily and with the active input from industry bodies to bring about a satisfactory outcome to negotiations. The end result might even be one in which the nuclear industry, when freed from some of the strictures of Euratom, becomes more nimble and better placed to pursue research and business opportunities globally.

Photo of Lord Soley Lord Soley Labour 8:39 pm, 12th September 2017

My Lords, I have never liked referendums, not least because they rarely solve disputed problems in political parties. But if you have a referendum, the golden rule is to have a strategy for what to do if you win and a strategy for what to do if you lose. The tragedy is that the Government at the time—David Cameron’s Government—had a strategy for winning but not a strategy for losing. We are now paying the price for that.

The issue is important because, before the referendum, Europe had been a divisive issue in Britain but the referendum has deepened that division. That is one reason why, although I voted remain, I do not think we can go back in any time soon, and I do not think any attempts should be made to reverse that referendum decision because all you will do is aggravate the divisions in the country. The divisions in the Tory party are serious, particularly in the House of Commons, where the party is divided much like it was over the corn laws in the 19th century. The problem for the Labour Party is rather different. It is much more to do with the divisions in our voters: working-class voters largely voted for Brexit while middle-class voters tended to vote remain. In other words, both the country and the two main political parties have divisions which make it difficult to come up with a proper structure.

One of the things I welcome, particularly in these position papers, is at last the Government saying that they want a good and positive relationship with the European Union. I wish that had been said more loudly and clearly at first, and that some of the more insulting comments that were made about the European Union had not been made; we are paying a high price for that. We now have to concentrate on how we deliver that better relationship, because we are all saying that, and these papers say it loud and clear. That is good, but the problem is in achieving that outcome.

One thing that troubles me about the papers is their relative vagueness. I understand that we are still, despite the time limit, at a relatively early stage of negotiations. It will not be the first time that the European Union has pushed negotiations up to the wire, and then made decisions at the last moment. That happens; we have done the same, and it is not a unique experience by one party. To get there, so much detailed work has to be done—much of which is being spelled out in this debate today—that we really have to work on this very hard if we are not to run into major problems. I would like to know from the Government how much we see equivalence on some of these areas of difficulty being a stepping stone on the way forward.

Look at the paper on the exchange of personal information and data, an important area for Britain. We are a world leader in many respects; we are also one of the countries that sets the standard in Europe. But somehow we are going to have to maintain that data protection standard at the same time as we are pulling out of the European Union, so we will probably need some form of equivalence system to make sure that the EU and the UK stay in step. Ultimately data protection will be something we need throughout the world to trade in increasingly complex areas, and we will need that relationship with Europe to do it in the rest of the world as well.

If we have to have an equivalence agreement—and I can see the logic of that and suspect the Government are looking at it—then you also have to have enforcement and dispute resolution, and that brings me to the other paper. The Government have turned their face against the European court, I understand that, but in the paper on the European court they say they will need international agreements on some of these things. That might be one way forward. We will have to come up with international agreements with the European Union without acting as a foreign power towards it as a power. That means we will need much more of that spelled out and will have to look at ways of getting international agreements which have the force of law without necessarily using the European court or the British courts, but just using conventional international law. That will apply to a number of these papers.

The last thing I wanted to mention—and I would have liked to have talked about it in much more detail but the document came out only today—is the foreign policy and defence issue. My noble friend Lord Judd mentioned this; one of the big problems for Britain is that for years Britain has been a drag anchor on the European Union. The Europeans really did see this as a political union; the British saw it as an economic union. I have put it before, in simple terms: the Europeans saw it as a political state; the British saw it as a supermarket. That role has made it very difficult for us to be seen as one of the strong members of the European Union. Very largely, we have been seen as a drag anchor. It remains my view that it is in Britain’s interest to see greater political union in Europe. Those who argue for the European Union breaking up are making a serious mistake. We need only to look at the history of it to see how wrong that can be.

We have a lot of work to do on this. If we are to use equivalence in a number of these areas, we have to come up with some method of dispute resolution, either via the courts or by setting up agreements of some type. It is on that that I want to hear more from the Government.

Photo of Lord Bridges of Headley Lord Bridges of Headley Conservative 8:45 pm, 12th September 2017

My Lords, as this is the first time that I have spoken since leaving the Front Bench, I would like to start by thanking all of your Lordships who spared the time to discuss Brexit with me while I was a Minister. It reinforced in my mind not just the vast talent that this House has to offer but the basic point that talking to people, even if one disagrees with them, is better than throwing brickbats from a distance.

My shoes have been filled by someone with much greater experience than me, my noble friend Lady Anelay, who has already shown her prowess and skill. Her Secretary of State, for whom I have the utmost admiration and for whom it was a pleasure to work, is lucky to have her on his team.

Many of the position papers that we have been discussing today share one aim: to help us make sufficient progress in the negotiations on our withdrawal so we can move on to negotiate our future relationship with the EU. While my noble friend the Minister says that we have made progress, it appears to me that we are still some way off that immediate goal of sufficient progress. So I want to discuss briefly the situation as I see it in its entirety.

Although I voted to remain, I believe firmly that we must honour the result of the referendum. We are to leave the European Union, period, not stay in part of it. So the question before us is how we should achieve this without damaging our nation in the process.

First, an observation: faced with any challenge, one must acknowledge the truth. If we are not honest with ourselves, our plans will be built on sand. Consequently, we will lose the trust of those who look to us for leadership, and those with whom we are negotiating. We must be honest about the task we face—its complexity and scale. We must be honest about the need to compromise and about the lack of time that we, and Europe, have to come to an agreement on our withdrawal.

I hope that we can agree on a new relationship with the EU by the winter of next year, but even if we do so, we will need time to implement that agreement. Alternatively, if we manage to agree on a heads of terms—“the framework” as Clause 2 of Article 50 calls it—we shall have to negotiate the details after March 2019. So, either way, we will need more time before any new agreement finally kicks in or the details are negotiated.

I am delighted that the Government have grasped this, but I now urge them to make a much bolder move and break the impasse that we are in. My suggestion is this, and it echoes points made by a number of your Lordships today: first, we should clarify that, as part of the Article 50 process, we want to agree—at the very least—an extensive heads of terms of our new relationship with the European Union and, crucially, that this new relationship would begin, I suggest, at the end of 2020.

Secondly, we should be clear that we want to negotiate a bridge—I am obviously keen on bridges—that takes us from 30 March 2019 to when that new relationship begins. We must not agree to a transition with no end. That would be a gangplank into thin air, increasing uncertainty and fuelling a suspicion that it would be a means to stay in the European Union permanently by stealth. During this period, we should keep, as far as possible, the existing arrangements we have today with the EU. Why? Because that would avoid Governments and businesses, here and in the EU, having to change processes twice: once to reflect the terms of the transition and again to reflect the terms of the new relationship.

Thirdly, we should make it clear that we are willing to continue to contribute to the EU budget as we cross the bridge—in other words, between March 2019 and the end of 2020. That would help us to address the EU’s concern that our withdrawal blows a hole in its budget. We would be honouring commitments we have made for the rest of the EU’s budgetary period; the EU would then need to justify why we must contribute more than that. Such an approach would give assurance to those who fear that a transition means we would never leave the EU. There would be a double lock: both the date and the destination would be clear. That would comfort those here, and in the EU, who are concerned that we may face a cliff edge in 2019 and it would give us more of the thing we have so little of at the moment: time.

The challenge of creating a new partnership touches on every aspect of our lives, as we have been discussing. It is a gargantuan task; so, let us be honest about this too. I hear the Government talk of not wishing to be defined by Brexit. Brexit is the biggest change this nation has faced since 1945. To say we do not wish to be defined by Brexit is like Winston Churchill saying in 1940 that he did not want his Government to be defined by the war. Such careless talk costs time, as it allows the machinery of government to be distracted from the task at hand. The priority for every department must be to help Ministers to get the best possible deal, prepare us for Brexit and ensure we prosper once we have left. Nothing is more important.

That brings me to the paper that is still missing. Much of the debate has been focused on the process of withdrawal, and how we are—to coin a phrase—to take back control from Brussels. Fair enough—but what are we going to do with those powers once we have that control? What kind of nation do we want to build? That question is unanswered. That dog has not barked. As Sherlock Holmes might remark, this is a “curious incident”.

Let me conclude by saying this: just as the Government will need to make compromises in the negotiations in Europe, so too will people here, who hold passionate views on both sides of the argument. Future generations will not forgive us if we put dogma before fact, or party before country. At this pivotal moment in our nation’s history, all of us here have a part to play. Parliament’s role in this debate is absolutely crucial and, having heard today’s debate, it is a role I am sure this House will fulfil.

Photo of Lord Spicer Lord Spicer Conservative 8:53 pm, 12th September 2017

My Lords, before I forget, I want to ask a question that I have not heard anybody else ask. Coming to what the noble Lord, Lord Kerr, said about money, I ask: whose money? This country has put massive investment into infrastructure in the European Union: research establishments, offices, conference halls, and so on. That infrastructure must have gone up in value, so there is a case for arguing that it should be pounds down the end of the table he is talking about, rather than euros.

I am speaking in the gap, so I have four minutes to say what I want to. As a matter of fact, it will take me only half a minute to say what I really want to say, which is that the main point on the negotiations is that we should come out on 29 March 2019. That seems to be absolutely crucial to me, because I believe, and always have done, that the nation state is the best unit of accountability and democracy. It is therefore essential for this country, from the point of view of democracy alone, that we come out on that date.

Now it is true that there is detail to be discussed and of course we cannot go forward without detail. There are good negotiations and bad negotiations. I would argue that a good negotiation would move us closer to free trade and a bad negotiation closer to what I have always believed the European Union is about, which is protectionism—for instance, protecting the high-cost German standards of technology and low-cost Greek technology.

In saying that, we must understand something. The noble Lord, Lord Liddle, who does not appear to be in his place, asked why Britain should on its own be particularly good at negotiating these trade deals. The answer is partly mechanistic and a question of numbers. When we negotiate we do so for ourselves, whereas when the European Union negotiates on our behalf it does so for 27 or 28 countries. It is partly that, but it is also something much more fundamental, to do with the fact that we believe in free trade and the Europeans on the whole believe in protectionism. That is perfectly fine; we just happen to believe in free trade.

Historically, we happen to be rather good at free trade, too. We started as pirates in the 16th century, but have moved on from then. We have been very successful. We are a high-seas trading nation. It is a pity that we did not do something about our airport entry limit. Had we built the third runway at Heathrow, it would have made us even more successful in future trading. We are a high-seas trading nation and for that reason must assume that we will negotiate much more effectively on our own behalf.

Photo of Baroness Ludford Baroness Ludford Liberal Democrat Lords Spokesperson (Exiting the European Union) 8:56 pm, 12th September 2017

My Lords, to start, while I fully share the concerns of the noble Lord, Lord Framlingham, about the spread of diseases, the sealing of our borders is not the answer. If instead of co-operating we start blaming each other—Britain needs to remember its own track record on exporting animal diseases—we are doomed to hang separately. I thought Brexit was supposed to mean global Britain, not closet Britain.

The Government’s attitude to parliamentary scrutiny of its conduct of Brexit negotiations is rather perfectly illustrated by the publication of the foreign, security and defence paper today: the Minister appears on the “Today” programme, the media have the paper under embargo, and parliamentarians and the public get it many hours later at lunchtime, when it finally appears on the website.

Last week’s Statement on the progress of negotiations said that the negotiating rounds were about reaching detailed understanding of each side’s position and beginning to drill down into technical detail. However, the Brexit Secretary just days before referred to the partnership paper on future customs arrangements as blue-sky thinking, so detailed it was not. That paper will not help retain the jobs of the Airbus workers in Wales to which my noble friend Lady Humphreys referred.

The Brexit Secretary also said last week that the rationale for the partnership papers is that they are,

“designed to make points to our European partners so that they could see what the future might look like under our vision”.—[Official Report, Commons, 5/9/17; col. 48.]

As the right reverend Prelate the Bishop of Birmingham said, we need a strategy—and, I would add, practicalities. Vision butters no parsnips. The Minister said in her introduction that the Government do not aim to dictate the future arrangements. Leaving aside the obvious fact that they cannot dictate as it is a negotiation, this fig leaf does not cover the lack of hard proposals with realistic content.

It is hard to blame Michel Barnier for his exasperated reaction to the UK’s demand to start negotiations on future relations. He said:

“We must start negotiating seriously. We need UK papers that are clear in order to have constructive negotiations. The sooner we remove the ambiguity, the sooner we will be in a position to discuss the future relationship and the transitional period”.

As my noble friend Lord Newby said, the Government’s ambiguity is not constructive.

It is largely the behaviour of the UK Government that is preventing an important linkage between the withdrawal negotiations and the future relationship negotiations, and a speedy move to the latter—not least their refusal to deal honourably, as well as toughly, on the divorce bill, which echoes what the noble Lord, Lord Kerr, said, and their ungenerous positions on the rights of EU citizens. I contend that this Government are not generating the necessary trust to move the negotiations on. This is not a case of bad, rigid, punishment-mode Brussels; it is a case of a Government who, 15 months after the referendum, are unable to act in a grown-up, competent, organised manner and who indulge in occasional, extremely unproductive hissy fits. The Government need to be honest and willing to compromise, as the noble Lord, Lord Bridges, urged. My noble friend Lady Kramer, with good reason, thanked the noble Lord, Lord Blencathra, for revealing the Brexiteer war mentality, which helps explain the lack of progress. The Government would do well not to listen too much to that mentality.

The noble Baroness, Lady Kramer, also raised the prospect of how the Government seem to be pursuing international regulatory co-operation, rather than focusing on a relationship with the EU regulatory regime. I suspect that the UK is trying to subvert the importance of EU regulation by diluting it, and I really do not think that is going to be helpful.

Other noble lords have produced their own lists of rules and themes. I have detected eight common features of the position and partnership papers. First, there is always an assertion of common goals, that continued co-operation is in both sides’ interests, and a declaration of undying devotion to all things European, including as my noble friend Lord Wallace of Saltaire noticed in the paper today, a paean of praise for the European co-operation, foreign and defence policy that we have never heard from any government before probably. There is even sometimes an assertion that we will co-operate even more once we are out of the EU. Often this is accompanied by a strong hint of “they need us more than we need them”.

Secondly, there is an assumption that the degree of benefit and convenience for us Brits will stay pretty much the same as we enjoy now through membership of the European Union, even when we leave its arrangements. So nobody needs to worry.

Thirdly, there is a declaration that the deep and special partnership we seek goes way beyond any existing run-of-the-mill third country, because we are special. Our relationship would be unprecedented, which I have come to realise is an excuse for not pointing to any concrete examples of existing co-operation for a non-EU member state, or practical guidance on how ours would work. The term unprecedented is a convenient peg not to explain.

Fourthly, there is a tone ranging from optimism to fantasy that runs through all of the papers. Indeed, the fifth feature is insufficient detail of how the Government see the actual arrangements working in the context of a future relationship. Several noble lords have mentioned that in the context of the science field. There is also a lack of realism on the costs involved. The Institute for Government yesterday published a report which says that the costs of the customs arrangements could be up to £9 billion. We need to confront those kinds of figures.

The sixth feature is to cite other third countries—variously Norway and Switzerland, sometimes Canada. But we then reject EEA membership, so quite how these are good examples I am not sure. Then it is said that the UK’s relationship will be unique, or uniquely ambitious, because of our starting point of close integration.

The seventh feature is that we want to maximise certainty about what the arrangements will be while supplying no basis for what that certainty looks like. The last feature is that we are to have autonomy of UK laws, with the prospect of therefore diverging from European laws and a regulatory gap—but that we want the maximum depth and specialness in the relationship, including lots of mutual recognition and reciprocity. The noble Lord, Lord Liddle, dealt with this very well.

Where is he?

Photo of Baroness Ludford Baroness Ludford Liberal Democrat Lords Spokesperson (Exiting the European Union)

That is not for me to answer. As Michel Barnier has described it this last position—the freedom for the UK to adopt its own standards and regulations but to have them automatically recognised by the EU—is “simply impossible”. He said,

“You cannot be outside the single market and shape its legal order”.

His position is surely correct.

I am afraid that the topic of citizens’ rights illustrates how the Government have squandered time, trust and goodwill. I do not have time to go into the detail, but the way in which the Government have let EU citizens down is a great shame, given that the original problem was a simple guarantee of rights.

We have rightly taken the Government to task in this debate for their lack of clarity and precision. However, may I also press the Opposition? I understood that the Labour Party was now committed to single market and customs union membership during the transitional period. However, the Motion cites “participation”, which is not so precise, while their leader, Jeremy Corbyn, has reverted to the manifesto language of mere “access”. I thought that was history.

Photo of Baroness Ludford Baroness Ludford Liberal Democrat Lords Spokesperson (Exiting the European Union)

Perhaps the noble Baroness might be able to explain rather than heckle me. That would be helpful. I look forward to the responses from the noble Baroness and the Minister.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Exiting the European Union), Shadow Deputy Leader of the House of Lords 9:07 pm, 12th September 2017

My Lords, this debate should have nudged the Government to make more rapid progress on Article 50 and the final agreement; to involve Parliament, the devolved Assemblies, consumers, unions and business; and to propose a transition period along the lines outlined by the Minister’s predecessor, the noble Lord, Lord Bridges. We particularly welcome him to the debate today.

We have heard many criticisms: of the Government’s response to a nine month-old report at 3 pm before a 4 pm debate; of the unwillingness of the Secretary of State to appear before our EU Committee, as we heard from the noble Lord, Lord Jay; and of the threadbare and, incidentally, undated position papers, which left the right reverend Prelate the Bishop of Birmingham at a loss to know what the endgame is.

I have received some pretty flimsy Answers to many Written Questions that I have put, such as:

“The extent to which European Medicines Agency procedures will apply … after we have exited … will be subject to negotiation”.

I could have worked that out for myself. Other Answers said that the Government,

“are working to understand the impacts that withdrawal will have”,

including on the European Food Safety Authority, and:

“The Government is currently considering how to ensure functions … carried out by the European Commission … continue”.

These were 15 months after the referendum.

There is even an apparent backtracking on Parliament’s involvement, with the Minister seeming to recoil from the earlier undertaking of the noble Lord, Lord Bridges, that “a meaningful vote” on the exit deal would take place before that in the European Parliament. She said only that “We expect and intend” that to happen before the European Parliament’s vote. Of course, we are still awaiting clarification of the status of any such meaningful vote. And now we have Clause 9 of the withdrawal Bill, which allows Ministers to implement as UK law—by statutory instrument—anything in the withdrawal agreement, without primary legislation.

My right honourable friend, Hilary Benn, asked the Secretary of State for assurance that such Henry VIII powers to implement the withdrawal Bill would not be exercised until Parliament had had its vote on that agreement. He is still awaiting a reply. It is not just Parliament that the Government ignore. The Prime Minister has declined an invitation to address the European Parliament—the one Parliament which, under Article 50, must give its consent to the exit deal. Today, the Welsh and Scottish Governments, which have been completely sidelined in preparing the UK’s negotiating positions, have signalled their intention to withhold consent if there is no radical change to the Bill. Their legislative consent papers set out how they want the Bill to change. Without any concessions to these elected bodies, this House might have something to say.

Business wants to know more. The CBI has asked for the talks to speed up and to enable trade to continue without disruption. A survey of over 1,000 businesses showed that two-thirds need to know the details of transition arrangements by June next year, with one-third needing details by the end of this year. As the chief executive of London First said,

“we can’t afford to wait … the government must act now on a transitional agreement while setting out what the UK’s long-term future will look like”.

Meanwhile, unlike the noble Baroness, Lady Neville-Rolfe, businesses do not like what they are seeing in the leaked immigration paper and nor do scientists, who fear it would lead to a brain drain. Please do not say that it is only a draft; it is all beautifully laid out, photographs and all—it looks a bit official to me. Consumer representatives feel totally excluded from the process, while the TUC says that the Government are heading for “kamikaze” Brexit, thanks to a near “criminal lack of preparation” for the talks. No wonder six in 10 voters have lost faith in the Government’s ability to deliver Brexit successfully.

Our Constitution Committee’s chair, my noble friend Lady Taylor, said that the withdrawal Bill,

“represents an extraordinary transfer of legal powers from Parliament to the Government … this is unacceptable”.

She goes on,

“we warned … that such powers must come with tougher parliamentary scrutiny … and we are disappointed that we have not only been misquoted by the government, but that our key recommendations have been ignored”.

If that committee thinks that the Bill has shortcomings, it should look at the position papers, which have been described today as—admittedly—“fine” and “useful” by some on the Government Benches, but more generally as “depressing”, “optimistic”, “magical thinking”, full of “meaningless phrases”, “vague”, “thin”, “so many words; so little substance” and, perhaps more seriously, “shadow boxing”, “playing hide and seek”, being “poles apart”, “counterproductive” and operating in a “parallel universe” from our EU partners.

The papers begin to acknowledge the challenge of exit but reveal a refusal to face up to hard choices—just 12 months from when a deal is needed. The European Parliament’s co-ordinator and President judged that it was unlikely that there would be sufficient progress in the Brexit negotiations by October to move on to the second phase of talks, which would mean that they could be delayed to December. We have just heard today that the next round of talks has been postponed by a week. Perhaps the Minister can tell us the reason for and implication of this delay.

Our future trading relationships with the EU will be crucial, so these second-phase talks are key, as the noble Lord, Lord Hamilton, noted. The British Retail Consortium fears that unless the right customs system is in place, it will affect availability on the shelves and push prices up. Given that we produce only 60% of our food, and with three-quarters of food imports coming from the EU, we need to replicate the current EU food standards to allow smooth transit through customs and,

“avoid unnecessary interruption to trade”.

The BRC’s chief executive said:

“Getting this right is essential to ensuring UK consumers are able to buy the products they want after Brexit”.

With annual customs declarations to rise from 55 million to 255 million from 2019, the BRC said no deal could mean delays at ports of up to three days. For the food sector, exit day seems very close. According to the BRC,

“to ensure supply chains are not disrupted and goods continue to reach the shelves, agreements on security, transit, haulage, drivers, VAT and other checks will be required to get systems ready for March 2019”.

We have seen the boss of Sainsbury’s fearing that food could be left rotting at borders. The NFU has warned that the wrong exit could leave Britain with a bare larder, leading the NFU to want the UK to remain in the customs union, at least for a transitional period.

Meanwhile, Ryanair’s Mike O’Leary describes,

“a serious threat of no flights”,

from the UK to the EU unless the two sides strike a deal similar to the current open skies framework, although he sees little prospect of such a deal. The longer Brexit remains up in the air, the higher the risk that flights will be grounded—his words, not mine. Perhaps the Government’s next position paper might be on transport.

I say to the noble Viscount, Lord Ridley, and the noble Lord, Lord Cavendish, that I am very happy to produce our policy if they do not have time to look at the Labour Party website and read Keir Starmer’s position, or indeed for us to go to the other side and take over the negotiations. I say to the noble Lord, Lord Fairfax, that neither I nor my noble friend Lord Hutton—or any of the Opposition—are sniping from the sidelines. We are trying to prevent the Government making a hash of the exit process.

It is clear to business, Parliament and the devolved Administrations that our exit from the EU is far more complicated and challenging than the Government will admit. This points to the need for a transition period, as the Minister I think acknowledged today with her description of an interim implementation period. For the sake of business, this must be within the current customs union and single market, as businesses cannot readjust their processes twice. Whatever is finally agreed, new rules, regulations and paperwork—and all the associated training and preparation—will take time to design and to bed in. Could the Government therefore commit to work for this as a priority, to provide the clarity and certainty so urgently needed?

We have already heard about summer reading. Last week, I read Alice in Brexitland by David Davis—no, sorry, by Leavis Carroll—whose only happy words were the title of the final chapter: “It Was All a Dream”. Except it is not. The referendum asked that the UK leave the EU. It did not authorise this shambles of a negotiating Government, listening neither to business nor unions, neither to the devolved Administrations nor to consumers. It did not authorise a Government without a majority to bamboozle their plan through Parliament without proper dialogue and debate. We were always likely to need a transition period. Now it is urgent to settle that, on the current terms, so that we can have what the Government want—a “smooth and orderly” departure.

Photo of Baroness Anelay of St Johns Baroness Anelay of St Johns Minister of State (Department for Exiting the European Union), Deputy Speaker (Lords) 9:19 pm, 12th September 2017

My Lords, I am grateful to all noble Lords who have taken part in the debate. We have certainly heard, I will not say a full range of views, but pretty much everything that has been said in the past year has been said in a different way today—and with verve, because this House deeply cares about these matters. So do I, and so do the Government. That is why I said at the beginning that I wanted this to be part of the parliamentary engagement that builds up so that we have feedback.

I was discussing that this morning with the noble Baroness the Leader of the Opposition, as she was kind enough to mention in her opening speech. I felt that it was not just a case of having debate after debate—although we will have them. Other Members throughout the House can promise that we will, because they will put down those matters for debate. I said that I really did want to hear from Peers. That can be done in several different ways, not just in the more structured ways such as debates, Questions for Short Debate or Statements, but I want to find a way that will enable all noble Lords to feel that they have had the opportunity to participate—and I hope that the sturdy nearly 50 who have done so today will continue to stay with it throughout. In fact, I think that they will promise that they will. Thank goodness, because that is what we intend to do with the negotiations.

That is the whole point about this process: it is a negotiation. The frustration that I can feel in the House about the fact that we cannot be more open about the detail is a frustration that we too feel. We would like to be more open too, but the very nature of negotiations, and the confidentiality, works for the participants on both sides—both for the European Commission and for us.

Whatever has been painted in the press about hostility, and whatever comments have been made about people’s character, there has been a really good relationship between the negotiators on both sides. I was grateful for the earlier reference to the fact that Michel Barnier has paid tribute to the professionalism of the UK negotiators, and I pay tribute to the professionalism of the EU negotiators. We are very fortunate in how they do their work, often against a background of sniping from the press. I shall not comment on other criticism, but there certainly has been sniping from the press, and it continues.

I must say how pleased I was to hear from my noble friend Lord Bridges today. I was much happier to hear from him when he was sitting beside me, but if I cannot have that, having him sitting behind me will just have to do for the moment. I wish him continued success in his new life—I shall not say “next life”, because that sounds as if I am expecting him to pop off.

Critically, this is a serious matter of parliamentary involvement. May I pick one specific item up immediately? The noble Baroness, Lady Hayter, said that she thought there had been a change in our view of our commitment to a meaningful vote. That has not changed. “Expect and intend” has always been the position that we have taken, and the reason for that is a practical one. I asked, when I went to the department, why those words were used. I am afraid the reason is straightforward, if one thinks about it. We do not dictate the date on which the European Parliament holds its vote. If it suddenly decided to do that while this House was in recess, we would have to seek the advice of the House. We do not recall Parliament in such circumstances. So clearly, we expect and intend. We are talking about next autumn, and we do not know when the European Parliament will have its vote. We want to have our vote before it does. That is exactly what we set out, and I do not think I can be clearer than that. “Expect and intend” means that we are maintaining our commitment to Parliament.

Our commitment to Parliament is certainly to assist with scrutiny wherever we possibly can. I was worried that the noble Lord, Lord Newby—I nearly said “my noble friend” again; I am getting back into bad habits, or good ones, perhaps—somehow thought that my right honourable friend the Secretary of State had given a commitment to the Select Committee to appear after every round. He did not. He gave a commitment to work out the balance of the way in which that reporting could take place. We have a very strong sense of our responsibility, which he has stated repeatedly in his letters to chairs of committees, and we want to carry it out. However, there are committees in both Houses, and he has just accepted the invitation to appear before the newly formed Brexit committee in the Commons. We will continue to service committees as best we can. The way in which my department is set up to deliver the negotiations means that the officials who support Ministers who appear in front of committees are also the negotiators. Therefore, when they are doing their absolutely valuable work here to support parliamentary scrutiny, it necessarily has an impact on negotiations. So it is balancing that while making sure that we do not let Parliament down, because that is not the way forward.

Nor shall we let down the devolved Administrations, and we do not intend to do so. There has been engagement throughout. There can always be more—of course, there can. It is not a case, of course, that the devolved Administrations are part of the negotiations because they do not have that competence in the constitutional sense, but we have engagement and that will continue. As I mentioned last week in this House, very shortly there will be another meeting of the specialised JMC that it just invites the devolved Administrations to talk about the European negotiations. There is the other committee, which I have the honour to chair, that looks at European issues more broadly.

Throughout all of this, I understand some of the frustrations of noble Lords. I will continue to look for ways of finding where we can give more information in a more timely way. By the way, the publication date is the date on the papers. They are published to assist with the negotiations. It is not done just to make life difficult for this House when it is about to have a debate. It is because it has been timed to coincide with some of the negotiations that are going ahead.

Throughout there has been a determination from both the UK and the Commission that we should come to an agreement that is good for both of us. There is not hostility on that, and there is certainly not foot-dragging.

I was asked specifically whether the negotiating dates had been changed. Indeed, they have, but it is a joint agreement between the UK and the European Commission to start the fourth round on 25 September. The reason why is to give time for the negotiators to have more flexibility to make progress in the September round, which was highlighted in the August round. On some of the issues discussed there, we are close to reaching legal text status. I hope at some stage to be able to set that out, but clearly that would be an advance. It may not be on some of the high profile issues, but it is certainly on issues that are core to all the discussions we have had. It is right that my right honourable friend the Prime Minister has called for some flexibility in making sure that, if we need to have more dates to continue negotiating, we should find a way of doing that. We stand ready to work with the Commission to find more dates to do so.

Looking at some of the issues that were raised, clearly Northern Ireland was very much first on the list for so many people. The noble Lord, Lord Jay, rightly asked, “What next?”. If I can assist him in some small part—I wish I could tell him that everything has been resolved, but it is a case of getting it right throughout—what I can say is that there is a high degree of convergence on the key issues of the common travel area and safeguarding the Good Friday agreement, and we are working on how the text should look.

What has been agreed on the Good Friday/Belfast agreement is that we will carry out further joint technical work. The noble Lord will realise the implications of that, and it means that we will take steps forward. There was agreement on both sides on the benefit of further technical discussion on the GFA—protecting citizenship rights enshrined in the GFA and the permanent birth right of the people of Northern Ireland to identify themselves and be accepted as British, Irish, or both. We both agree that that should continue. So, again, these are technical steps. When I asked where we were not converging, the answer was none. We are converging on all the major issues, so that is the, “What next?”.

There were three particularly important speeches today—those of the noble Lords, Lord Hutton and Lord Teverson, and my noble friend Lady Bloomfield—in that they addressed the issues of Euratom in a very practical way. The question was put again: why are we leaving Euratom when clearly we all agree that its work is essential and we need to be part of it? Again, I repeat what my noble friend Lord Bridges and I have said. We are leaving because Euratom and the EU share a common institutional framework, including the European Court of Justice, a role for the Commission and decision-making in the Council, which makes them uniquely legally joined. Because of that, when we leave the EU, we have to leave Euratom at the same time. We have said that we want to look very carefully at how we form an agreement to still be able to carry out the responsibilities we have heretofore.

The noble Lord, Lord Teverson, raised the issue of associate membership. We are looking at what we want to achieve rather than the mechanism; that will be important. What it will be called I cannot say, but certainly there are alternatives available, including bilateral agreements. The noble Lord raised some extremely interesting and very helpful points.

My noble friend Lord Ridley exposed some of the misinformation in the press about what leaving Euratom really means. It will not mean that the UK loses access to radioactive isotopes for medical use. I refer to that because I thought his speech was exemplary in giving detail on those matters.

Euratom is one of the separation issues being discussed. They are confidentiality, access to information, privileges, immunities, pending cases before the ECJ and, indeed, Euratom. In some of those areas we are now ready to move towards legal text.

Photo of Lord Hutton of Furness Lord Hutton of Furness Labour

I am exceptionally grateful to the Minister for giving way. Before she moves on, will she confirm that the UK will not leave the Euratom treaty until and unless those replacement bilateral nuclear co-operation agreements have been negotiated and are in place?

Photo of Baroness Anelay of St Johns Baroness Anelay of St Johns Minister of State (Department for Exiting the European Union), Deputy Speaker (Lords)

My Lords, the fact is that as we leave the European Union, we will leave Euratom. What I can say to the noble Lord and to the House is that a lot of work has been done, not only with respect to Euratom but with other international obligations, to scope out exactly what all our international agreements mean, whether any need to be replaced and, if they do, how they would be replaced and how that would be affected by our leaving the European Union. So although I cannot say specifically that the two would be contiguous, because we will leave Euratom on the date we leave the European Union, we are in the position whereby we cannot negotiate new agreements until we have left the European Union. However, we can carry out technical exploration of such agreements. Therefore it is important to know what kind of agreements we need to reach. Above all, we are making sure that we do not in any way compromise our current position as members of the European Union. We gave that undertaking and we will keep to it.

I was asked about the transitional implementation period. My noble friend Lady Neville-Rolfe looked very closely at that with great interest, because it is all about making sure that we enable those who are in business, as well as everybody else, to know that they do not have to go through the same process more than once. If we are leaving the European Union, they will not have to keep changing their processes in business. We have certainly heard from business about what an implementation period needs to look like. Different businesses think of different periods. We have said very firmly and clearly that an implementation period is something that we will need to negotiate with the European Union but that we do not see it going beyond the date of the next election. Of course, we are not in a position to be able to discuss the terms of an implementation period until we have reached the next stage, which is to look at what our future relationship with the European Union will be. Clearly, if anyone wishes to stay in both the single market and the customs union, it means that they have to accept the four freedoms. The Commission and the EU 27 made it very clear early on that those freedoms were not divisible.

There was a lot of strong feeling about the customs paper not being clear enough. By the way, I reminded myself the other day that blue-skies thinking was the way in which Apple started its rather special business; it is a way of testing out new ideas that can really take off and work. The real reason we put in alternatives is because that is what you do in a negotiation—test out alternatives.

I turn to money. I was challenged on many occasions to say that we should simply tell the European Union how we were going to work out what we owed. It is a two-way street: the European Union also has obligations to the UK. We recognise that we have obligations with both an international legal basis and a moral one. I am sure that noble Lords will have read the paper put out by the European Union. It is three and a half sheets of paper, two of which simply describe the fact that the UK owes something. It says that the debts ought to be shared out among all the people who need to take a share, without actually quantifying or saying how they were going to calculate that, or giving an idea of how they value certain premises—the wherewithal of the European Union. What is the value of the obligation that is owed? What it did do, which is helpful, is to carefully list, on one and a half pages, a whole load of reference to treaties and regulations saying, “This is the legal basis for us demanding money”. Not how much money or how it should be divided up, but why it wants some money.

I recognise how vital this is to the other EU 27. They face losing the third largest net contributor to the European Union. They have been given a bald choice: either they get less in the way of infrastructure funds, or they pay more. Neither is a particularly attractive option for them—and they have been told that, if they can find a third way to solve the problem, they should let the Commission know. This is a problem—these are our friends, and we want Europe to continue to succeed, so I understand the difficulty. However, our duty to the British people is to challenge the European Commission and say: “You say that that particular section of a treaty confers on the UK an obligation to pay. Let us first of all test that legal basis”. That was what was happening about two weeks ago. We were challenging the legal basis, not in a hostile way, but as lawyers do, by simply saying: “How does this work”? That is at the core of why there has been so much anxiety in Brussels. It is because we have different ways of doing things, not because we do not want to reach agreement. The UK way of doing things is to analyse, challenge, then agree. I promise this House that that is what we will do.

We have had two speeches from noble Lords who nearly always make me want to think and think again, as they did tonight. The first was my noble friend Lord Bridges, who said that we have to think what kind of society we want to build in this country as we leave the European Union. My noble friend Lord Howell of Guildford carefully set out how it is important to have an eye to the future and said that we need to challenge what that future is like. How do we look at the reform of institutions across Europe, which we have helped to build but which need to be resilient for the future? Whether it is Europe, the UK or this House, all of us want to be resilient for the future.

Photo of Lord Hamilton of Epsom Lord Hamilton of Epsom Conservative

Before my noble friend sits down, could she answer the question put to her by my noble friend Lord Caithness and myself? Is it right that we offered the Commission the option of a rolling programme of negotiations and that this was turned down by the EU?

Photo of Baroness Anelay of St Johns Baroness Anelay of St Johns Minister of State (Department for Exiting the European Union), Deputy Speaker (Lords)

My Lords, I put the position very early on, in my winding-up speech, I hope, when I explained that the Prime Minister had made it clear that we were prepared now to ramp up the speed and increase the number of days for negotiation. That has not yet happened, but clearly what has happened is constructive and we now have time before 25 September for some of the technical agreements—which are right on the cusp of being made—to be sealed. That is to be welcomed. There is good will on both sides in this negotiation.

Photo of Lord Kerr of Kinlochard Lord Kerr of Kinlochard Crossbench

My Lords—

Motion agreed.