European Union (Withdrawal) Bill - Second Reading

Part of the debate – in the House of Lords at 12:34 pm on 30th January 2018.

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Photo of Lord Mandelson Lord Mandelson Labour 12:34 pm, 30th January 2018

My Lords, the noble Lord squeezed in very enjoyably. Following the referendum in 2016, as much as I regretted the result, I took the view that it must be upheld. I believed that the Government should deliver Britain’s exit from the European Union and that the duty of Parliament, including of this House, was to facilitate that. I no longer believe that to be axiomatic. The Government cannot behave as if they have a blank cheque to take Britain out of the European Union in any vandalistic way they choose.

Every day brings fresh evidence of the Government’s inability to agree what our future relationship should be. Last week, I listened to the Chancellor’s speech to the British business lunch in Davos. He clearly wants all the trade benefits of the single market without actually being in it. I admire his ambition but, like the Prime Minister, he is trying to dance on the head of a pin that does not exist. As President Macron said when he visited Britain:

“You can’t buy, by definition, full access to the single market if you don’t tick the box”.

The Government’s red lines mean that the box cannot be ticked.

Within an hour of speaking, the Chancellor was being attacked inside the Conservative Party. Some 90 minutes later, the Prime Minister, who first backed him after he had spoken, disowned him. By early evening, the Chancellor, rather than standing his ground, was tweeting a reinterpretation of his own words. This is what passes for a normal day at the office in this Government. It left British business leaders bemused and demoralised. To cap it all, at the end of the week, the Brexit Secretary was saying on the radio that, just because there are differences, that does not mean that the Government cannot negotiate coherently. Heavens! Is it surprising that the public are losing faith?

The only way to have coherence in a negotiation is if you adopt a unified view. I learned that much as a Trade Commissioner. Yet one side of the Cabinet says that it wants modest divergence from Europe and the other side wants to go it alone. As the noble Lord, Lord Hill, said, to govern is to choose. However hard it was inside her party, the Prime Minister should have adopted a clear position of principle from the outset and said that, because business needs stability in its dealings with Europe and has to protect its access to European markets, we will leave the European Union but continue in the single market and customs union. That would have given us a very advantageous negotiating position in Europe, where we would have met considerable flexibility and would have brought the whole country together—the 52% and the 48%.

I fully accept that that approach was not provided for in the referendum, but nor was it excluded. This is something that we should be clear about: the future relationship was not on the ballot paper. It cannot now be determined on the outer reaches of the Conservative Party as if the rest of the country does not matter. We are trying to come to terms with 40 years of intricate trading arrangements, intensified in recent times as a result of the single market, which Britain championed. That is why we should keep the economic disruption and damage to an absolute minimum and that, according to every opinion poll since the referendum, is the clear wish of the majority of the people.

We will not achieve this by Britain becoming a third-country exporter, like Canada, completely outside the regulatory perimeter of the EU, attempting to negotiate our goods and services back into Europe past a thicket of tariffs, customs and regulatory barriers, a world away from the frictionless trade that we now enjoy. The only option available to maintain frictionless trade in both goods and, crucially, services is to enter the European Economic Area, as Norway did when its people decided against EU membership in the 1990s. It is not perfect, because of the dilemma that we face: either we lose access to the European market that we need or we are bound by European regulation but lose our say, at least initially. That is the unpalatable choice presented by the referendum. It is joined to the further, difficult question of labour movement, but our starting point and guiding principle should be to put jobs and investment first.

The referendum result in 2016 cannot simply be ignored and no one is proposing to do so. The Government should be laying out all the options with enough clarity and detail that, before the final decision is taken on the implementation of the referendum, there is full debate and a truly democratic way of determining it. Ideally, in my view, this should be resolved by Parliament. Let us face it, though, as things stand both government and opposition parties are finding it hard to agree a way forward. So a referendum on a new question about the future relationship may become unavoidable, although that is not something on which we should be voting at this stage.

Brexit is the biggest decision that this nation has taken since the Second World War. We have to make a better job of it than the Government are doing now and Parliament must take seriously its responsibilities to ensure that the country does so. We should not duck that responsibility.