Brexit: Negotiations - Statement

– in the House of Lords at 6:35 pm on 9th October 2018.

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Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union) 6:35 pm, 9th October 2018

My Lords, with the leave of the House, I will now repeat a Statement made in the other place earlier today by my right honourable friend the Secretary of State for Exiting the EU. The Statement is as follows:

“With permission, Mr Speaker, I would like to update the House on the progress in negotiations to leave the EU and the Government’s planning for no deal. Since I last updated the House, our negotiations with the EU have continued and intensified. Over the recess break we have been engaging constructively with our EU counterparts. Let me take the main areas of the negotiations in turn.

On the withdrawal agreement, while there remain some differences, we are closing in on workable solutions to all the key outstanding issues, building on the progress we made during the summer on issues such as data and information, the treatment of ongoing police and judicial co-operation in criminal matters, and ongoing Union judicial and administrative procedures after exit. We have also been discussing proposals on the linkage needed between the withdrawal agreement and the future relationship, and the EU is engaging constructively.

On the Northern Ireland protocol, we remain committed to the undertakings we made in the joint report in December to agree a backstop in case there is a delay between the end of the implementation period and the entry into force of the treaty on our future relationship. That was agreed to avoid any risk of a return to a hard border in the intervening period. But we will not accept anything that threatens the constitutional or economic integrity of the United Kingdom. Creating any form of customs border between Northern Ireland and the rest of the UK, which is what the EU had proposed, would put that at risk, and that is unacceptable. As my right honourable friend the Prime Minister has said, it is not something that she, or any British Prime Minister, could conceivably agree to. We are engaging with the EU on our alternative proposals that preserve the integrity of the United Kingdom. They will be in line with the commitments we made back in December, including the commitment that no new regulatory barriers should be created between Northern Ireland and the rest of the UK unless the Northern Ireland Executive and Assembly agree.

On the future relationship, we continue to make progress: for example, on both the internal and external security arrangements for future co-operation, although there is still some way to go. As the House will know, the Prime Minister presented our proposals on the economic partnership to EU leaders at the Salzburg summit. We understand that the EU has raised some concerns, particularly around the distinction between goods and services under the common rulebook, and with respect to the facilitated customs arrangement. We continue to engage constructively with the EU, and we continue to press our case. The UK’s White Paper proposals are the best way of ensuring there is continued frictionless trade in goods after Britain leaves the EU, while fulfilling the joint commitment to avoid a hard border between Northern Ireland and Ireland, and of course respecting the referendum.

These negotiations were always bound to be tough in the final stretch. That is all the more reason why we should hold our nerve and stay resolute and focused. I remain confident that we will reach a deal this autumn, because it is still in the best interests of the UK and the European Union. It is the best way of protecting trade between Britain and the EU—which underpins millions of jobs across Europe. It is the best way of making sure we continue to co-operate seamlessly on security matters, to tackle crime and terrorism to keep UK and EU citizens safe. It is also the best way to avoid a hard border between Northern Ireland and Ireland that would adversely affect communities living there, or separating Northern Ireland from Great Britain, which we will not countenance.

To achieve these aims, the UK has brought forward serious and credible proposals. We continue to engage with the EU to press our case and to better understand the nature of some of its concerns. Equally, it is time for the EU to match the ambition and pragmatism that we have shown.

While we intensify negotiations to secure the deal we want, and the deal we expect, we are also expediting preparations for no deal, in case the EU does not match the ambition and pragmatism we have demonstrated. As the Prime Minister stated on 21 September after Salzburg, the Government have made clear that we will unilaterally protect the rights of EU citizens in the UK in the event of no deal. To the 3 million here, we say: you are our friends, our neighbours, our colleagues; we want you to stay and we will be setting out the details as soon as possible. We also now urge the EU and all its member states to step up and give UK citizens on the continent the same reassurances. It is time, on both sides, to provide all our citizens with that comfort and confidence.

Since I last updated the House in September, we have published 52 more technical notices, in two further batches. They inform people, businesses and other key stakeholders of the steps they need to take if we do not reach a deal with the EU. They cover a wide range of sectors, building on other work that has taken place across Government over the past two years. They enable us to prepare the UK for Brexit irrespective of the outcome of negotiations. They acknowledge that there are risks to a no-deal scenario. But they also demonstrate the steps we will take to avoid, mitigate and manage any potential short-term risks and disruption.

Overall, we have now published 77 technical notices which form part of the sensible, proportionate steps we are taking to prepare the country for every eventuality. Our most recent batch were published on 24 September and are set out in a Written Ministerial Statement today. There are 24 and they range from aviation and the advice for airlines on the impact of no deal and actions for them to consider to maintain services on the day we leave the EU, through to car insurance and the arrangements to ensure green cards will be available free of charge from insurance companies to enable UK drivers to continue to drive on the continent.

The publication of the technical notices enables further engagement as part of our no-deal planning. For example, our earlier technical notice on VAT set out the VAT changes that companies will need to prepare for when importing or exporting goods from the EU, when supplying services to the EU, or interacting with EU VAT IT systems. It was welcomed by the British Chambers of Commerce, and we are grateful to it and all our stakeholders for their constructive, ongoing engagement on that necessary planning.

More broadly, I met the British Chambers of Commerce, the CBI, the IoD, the EEF and the Federation of Small Businesses as part of the Government’s business advisory group on 17 September to make sure we are explaining our negotiating proposals and no-deal planning, and listening to UK businesses of all sizes, and across all sectors. We will keep providing people and businesses with the advice they need as we negotiate our exit from the European Union. We also keep working with the devolved Administrations on all aspects of our planning for exit.

I attended the Joint Ministerial Committee on 13 September. It has now met 12 times and our last meeting was a valuable opportunity to give the devolved Administrations a full update on the negotiations, as well as to discuss the necessary no-deal planning. We continue to listen very carefully to all their views. That is the way, with concerted effort on all fronts, that we have put ourselves in the best possible position to make the best of Brexit. I commend the Statement to the House”.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Cabinet Office), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Exiting the European Union), Shadow Deputy Leader of the House of Lords 6:43 pm, 9th October 2018

I thank the Minister for repeating the Statement but I wonder whether the Government actually own a calendar. After 18 months, and just 171 days before we are due to leave, we have more pages on no deal than on the deal, or indeed on the framework for our future relationship. Do the Government really want us to crash out despite the warm words we just heard in the Statement, or dare they not set out their plans given their fear of the Eurosceptics on their own party Benches?

The Government promised that the deal to be put to Parliament will include a “clear blueprint” for our future relationship with the EU. When will we see this blueprint? I had thought we would see a draft tomorrow but I gather it has now been delayed—perhaps because it is so vague that it is more a leap into the unknown than a blueprint for future policy. Or does the Minister think there is a third way—neither Chequers nor no deal—as David Davis set out today in his letter to MPs, albeit one he was not able to negotiate himself during two years as Secretary of State? Or perhaps the Minister thinks, along with Jacob Rees-Mogg, that we should have a “supercalifragilisticexpialidocious Canada”—hardly a game for serious negotiators.

Given that the Government have effectively and finally retreated from their claim that a deal would be done by October, could the Minister be a little more specific than “autumn” as to when he anticipates it will be done and when the deal will be brought to this House, as required in legislation? What assurances can he give the House that the Government’s solemn commitment to a legally binding backstop in Northern Ireland “in all circumstances” will be honoured? Have the Government accepted the view of this House that the UK should be in a customs union with the EU to ensure frictionless trade? This is not only important in itself, but the only viable solution to the Irish border.

The Statement includes,

“the commitment that no new regulatory barriers should be created between Northern Ireland and the rest of the UK unless the Northern Ireland Executive and Assembly agree”, which leaves the door open. This possibility is, of course, what would lead to a border in the sea despite the assurances just given in the Commons and repeated. Different rules in two areas mean checks between the two. That possibility—mentioning only the Northern Ireland Executive and the Assembly—also raises questions about the role this Parliament would have in any such change, and it challenges earlier government undertakings of no diminution of standards or rights, since any regulatory boundaries between Belfast and London sounds like different standards between the two.

The Statement says:

The UK’s White Paper proposals are the best way of ensuring there is continued frictionless trade in goods after Britain leaves the EU”.

It still sounds like “Chequers or no deal” despite, as we know, Chequers being acceptable to neither this Parliament nor our EU allies. The no-deal option is not acceptable to business, the public, our allies or, indeed, to Parliament, let alone to the people of Ireland and Northern Ireland, where there would have to be an immediate border.

The last time I asked the Minister whether he had been to the port of Dover, he said he had not. Has he now been, and has he discussed a no-deal option at the port? I was in Rotterdam yesterday, where thought, planning and preparation is in hand at its massive port to deal with a no-deal outcome—preparation to safeguard its economy and trade. Has the Minister any shame about how less prepared the UK—the country that filed for divorce—is for such an eventuality? Has he digested, as I have had to, these 77 technical notices, which alert us to green cards being reissued? Many in this House are old enough to remember those—down the other end, less so.

There is also the possibility of new driving licences being needed; the end of free movement of trade, with customs and tariff checks; the adoption of new classifications of goods, with a wonderful example given of how a grand piano would be classified if exported to the EU; the end of “goods on the market” rules; data exchange challenges; drastic changes to civil law enforcement; the end of mutual recognition of testing for safety of consumer goods; and uncertainty over travel to the EU. Are these all issues that the Minister feels it is reasonable to threaten at the end of March? As the CBI states, serious disruption will be caused to business and families. Is the Minister really serious that that is a realistic option for our country, and is it useful for the Government to threaten to refuse to pay the £39 billion divorce settlement if the EU fails to give Britain a precise future trade deal within weeks, when it is the UK that cannot get unity on its own Benches within its own Parliament on a future trade deal?

This House needs to know where the Government stand on the deal they want, and particularly on our future relationship. It needs to know whether they are with Steve Baker, who seems to prioritise a trade deal that leaves us independent over and above a trade deal that is good for the economy, or with Boris Johnson, who says that we should “chuck Chequers” and have a super-Canada FTA, spending money on,

“all the customs procedures … needed to ensure … frictionless trade, and to prepare … for a WTO deal”.

It seems he does not understand that frictionless trade comes from having the same regulations and rules rather than having a barrier of border agents checking for all the disparities in rules and regulations.

Regrettably, we are no clearer from this Statement than from what we have been reading in the press over the summer. Because I am a great optimist, I just hope that beneath everything that is going on there is serious negotiation taking place below the water level so that we can find a deal that is neither Chequers, as that is not acceptable, nor no deal, but a deal that is good for the whole economy across the whole country.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Liberal Democrat

My Lords, I start by remarking that I went to the Printed Paper Office to ask for a copy of the Written Ministerial Statement and technical notices that have been published today, but they were not available. I find that very regrettable, as we need to be informed about these things, and I hope that the Minister will ensure that on the next occasion the Written Statement is available.

I find this a profoundly worrying and in some ways surreal Statement. It talks about preparing the UK for Brexit, irrespective of the outcome of the negotiations—in other words, if necessary at the end of March to break all our relations with the European Union. Can the Minister assure us that the British Government are really prepared for that? As the noble Baroness has just said, Rotterdam is well in advance of the port of Dover in its preparations. We are beginning to train the extra customs officials that we would like and to reverse the cut in the number of Border Force officers that the Government have pushed through in the last three years, but there is no way that we can do that between now and March.

I find the confusion within the Government deeply worrying. For example, the Home Secretary has said that we will have the same visa regime for European exchanges as we have now for the rest of the world. In the last two weeks, I have been collecting a certain amount of evidence on how far universities are suffering from the refusal of the visa authorities to allow academic and scientific researchers from outside the EEA to attend conferences in Britain. If we start doing that to the EEA next April, we shall blow up half the networks for scientific research that we have in this country. I speak with particular passion because my son is involved in many of them.

There are elements here which one can really only be humorous about. I congratulate the Government on the element of irony in the Statement with the reference to their pragmatism and the suggestion that it is the European Union that is being rigid while the Conservative Party, which is so well represented on those Benches, is being entirely pragmatic.

On the Northern Ireland issue, I recognise that this is the Conservative and Unionist Party, which by its rigidity in dealing with the Irish problem over 100 years ago contributed to the division of Ireland. It seems to me that now its rigidity may well risk losing not only Northern Ireland but also potentially Scotland. I wonder whether the Government have considered taking more seriously Boris Johnson’s proposal to build a bridge across the Irish Sea. It would have a number of advantages. We could maintain the temporary customs arrangement until the bridge was completed and opened, which would certainly take us 20 or 30 years, and if one were to construct the bridge in such a way that there was room for customs arrangements to be conducted on the bridge, it could become a garden bridge in the event that those arrangements were not needed.

To move on, my wife has just been to a conference in Geneva to discuss as a model EU-Swiss relations, on which she has been an expert for some years, and the question of whether the Liechtenstein model should be taken more seriously. As some people will know, it has a customs union with both Switzerland and the European Union. That seems almost as attractive as the Jersey model, which has been talked about by various sources. The Government refer to their “ambition”, but ambition that would perhaps take us as far as being like Liechtenstein or Jersey is really beyond a joke.

On the question of how we get from here to April, I ask the Minister how far the Government will take the other parties into their confidence over the management of the business that is required. We do not know what has happened to the Trade Bill. When are we going to continue with its Committee stage? What other major pieces of legislation do we need to take through between now and March? The Institute for Government has just produced a report on the very large number of statutory instruments that we will need to consider between now and March. Can the Minister assure us that both Houses will be given time to consider these legislative instruments properly and that they will not be bulldozed through in a panic at the last minute?

I should like to move on to the subject of the future relationship. There was no reference to it in this Statement or to any sort of declaration about our future foreign policy and defence relationships. Again, the Government seem to be in great confusion on this. We have a new Foreign Secretary, who compares the European Union to the Soviet Union. Clearly, we would not wish to maintain foreign policy and defence relationships with an area that was naturally so hostile, yet for the last 40 years much of Britain’s foreign policy and security relationships externally have been conducted multilaterally in partnership with the European Union. When will the Government tell us a little more about what they consider to be important and what sort of pattern they intend the future relationship to have?

Perhaps most worrying is the reference in the Statement to a potential gap, in the case of a delay, between the end of the implementation period and the entry into force of the treaty on our future relationship. Do the Government consider that there may well be a hole whereby we have come to the end of the implementation period but have not yet negotiated a treaty on the future relationship and there is somehow a void, with no firm treaty foundation for the relationship between, say, 2021 and 2024 or 2025? If so, that is deeply worrying. I presume that that is the point at which we would go back to WTO terms, or perhaps that is another piece of loose wording in the Statement.

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I thank the noble Baroness and the noble Lord for their comments. I shall deal first with the questions from the noble Baroness, Lady Hayter. I reiterate that our blueprint is the White Paper and we continue to negotiate on that basis. We are convinced that it offers frictionless trade, which is what we want to achieve. We are taking forward discussions on that basis and are waiting for a formal response to those proposals from the EU.

On the timescale, as soon as we have an agreement we will bring forward a debate in this House and a vote in the other place on the so-called meaningful vote, and we will then introduce legislation as quickly as possible to implement the withdrawal agreement. We are mindful of the short timescale between then and our leaving date of 29 March to get that legislation through, but considerable planning is being carried out on that basis. Of course, we produced the White Paper before the summer to illustrate that.

With regard to the backstop, the Commission proposal was unacceptable. We will shortly produce our counterproposal, which will meet the requirements as set out in the joint statement in December.

I have not visited the port of Dover. I and ministerial colleagues have visited European capitals and considerable discussions are going on between officials to make sure that there is minimal disruption at Dover.

With regard to no-deal notices, to reiterate the point, we do not want or expect a no deal, but we think a responsible Government should plan for the possibility, and we will continue to publish the no-deal notices to take account of that unlikely possibility.

Lastly, I agree with the noble Baroness’s final point: that we are seriously negotiating at pace. Negotiations in Brussels are ongoing as we speak, and detailed discussions on all the outstanding issues are proceeding.

I can only apologise to the noble Lord, Lord Wallace, if he was not given an advance copy of the Statement—he should have been. I have already raised it with officials and I will ensure it does not happen again, but please accept my apologies for that. He referred to the no-deal notices. I do not know if there is some confusion; we are not publishing any additional no-deal notices today, but there was a Written Ministerial Statement accounting for the no-deal notices that were published a couple of weeks ago.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Liberal Democrat

They could not find the Written Ministerial Statement.

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I apologise; you should have been given a copy of that.

Regarding the immigration system, the Home Secretary will be setting out our proposals for a future immigration system shortly.

There are no plans of which I am aware to build a bridge between Scotland and Northern Ireland; maybe other parts of the Government are working on it, but if they are, nobody has told me.

I am not quite sure of the noble Lord’s point on Liechtenstein. I have never heard anybody else talking about a Liechtenstein model, apart from himself. He will of course be aware that Liechtenstein is a member of the EEA, which was rejected a number of times as an option in House of Commons votes. The population of Liechtenstein is about 39,000—about 1/10th of the population of Bradford. I hope he is not seriously suggesting this could be a model we would wish to follow.

Regarding the Trade Bill, our position is that Parliament is likely to be asked to take decisions on amendments relating to the UK’s future relationship. We think it is in Parliament’s best interest to know the terms of the UK’s future relationship with the EU when being asked to take decisions on the Trade Bill, so there will be a pause before we resume progress on this Bill, to ensure we can operate our independent trade policy in all scenarios.

Photo of Lord Cormack Lord Cormack Conservative 7:02 pm, 9th October 2018

My Lords, naturally I wish my noble friend and his colleagues in government well; we all do. But could he give the House some indication of what he expects the timetable to be between now and the rising of the House for the Christmas Recess? Could he also have a gentle word with the Foreign Secretary and point out that, while it is humorous if he confuses Japan and China, it is serious if he confuses the European Union with the Soviet Union?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

On my noble friend’s last point, I am not sure I am in a position to give the Foreign Secretary advice. But, to be fair, I looked at his comments, and he did not compare the EU to the Soviet Union; he was making a point about how difficult it is to leave various organisations. I think afterwards he withdrew the exact words he used.

Regarding timescales, it is difficult to be precise. We are still trying to target an agreement by the October summit. As I mentioned in my answer to the noble Baroness, Lady Hayter, we are conscious of the need for proper parliamentary scrutiny of the withdrawal Act, and we are preparing for that, but we need appropriate time to get the legislation through both Houses before 29 March. We have made the EU aware of that timescale, but of course we want to ensure we get the right deal for the United Kingdom. As soon as I have more information on the timescale, the noble Lord will be the first to hear about it.

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

My Lords, a question has been raised regarding various studies going on in Whitehall about what happens from next year onwards. Can the Minister clarify the reason for some questions being part of the scope of Whitehall studies and apparently some not? For example, a point was made about a month ago concerning the European Economic Area and scenarios of us being part of it. I thank the Minister for his letter to me about it, in which he confirmed we would in any event continue to be part of the EEA for some time after next year. Is it not sensible to have full studies done by Whitehall on the perfectly possible scenarios of what might be dubbed EEA-plus, given some of the discussions swirling around in Europe about reform of the whole EEA? And would it not be sensible for the Minister to acknowledge the case for some flexibility in the way Whitehall operates in this very novel situation?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

As I said in previous answers, the House of Commons has rejected the option of remaining in the EEA, and our legal position is that we will leave the EEA when we leave the EU. Seeking to remain in the EEA does not pass the test that the Prime Minister has set for our future partnership. It would not deliver control of our borders or our laws, and it would mean continuing to accept all EU single market rules, so I do not think that is the right future for Britain.

Photo of Lord Wigley Lord Wigley Plaid Cymru

My Lords, the Minister has stressed once again that the Government are considering and planning for every possibility. In that case, will he confirm that the Government are planning for the possibility of a no-deal Brexit and in those circumstances for a vote in Parliament requesting a confirmatory vote by the people? Can he confirm how long it would take for a confirmatory vote of that sort to be properly organised and take place?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I said we are planning for a no-deal Brexit. I do not know what he means by a “confirmatory vote”. If he means a second referendum, then, no, we are not planning for a second referendum, because we have already had a referendum and the vote was clear.

Photo of Lord Kerr of Kinlochard Lord Kerr of Kinlochard Crossbench

My Lords, the noble Lord, Lord Wallace, drew attention to the possibility of a black hole between the end of the implementation period and the entry into force of the future relationship treaty. As I understand it, the present draft of the withdrawal treaty contains no extension provision. Would it not be as well to include in the treaty the possibility of its extension? I can see that might be controversial with some in this country and with some lawyers across the Channel, but building in the flexibility to be able to bridge that gap could be very valuable. The noble Lord, Lord Wallace, is certainly right that it will take several years to negotiate the agreement, but probably another year to ratify it, since it will be a mixed agreement. So the possibility of extending it being built into the draft—both parties would clearly have to agree—is surely desirable.

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

The terms of the implementation period are already agreed and both sides agreed with the proposal to end the implementation period co-terminous with the end of the current multiannual financial framework. There is no possibility of extending that built into the agreement.

Photo of Lord Pannick Lord Pannick Crossbench

My Lords, can I ask the Minister whether the Government will be participating in the forthcoming Court of Justice of the European Union proceedings on whether there is power unilaterally to revoke the Article 50 notification? If the Government are participating, will they be submitting that there is such power or there is not?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

This is the subject of legal proceedings, as the noble Lord is well aware. I am not going to answer his question because I am not sure we have made a decision about how we are going to proceed on that yet, but as soon as I know more I will come back to him on it.

Photo of Baroness Young of Old Scone Baroness Young of Old Scone Labour

Will the Minister give me a little practical advice? I have been approached by a number of small and medium-sized enterprises that are rather confused by the technical notes. At what stage would the Minister say that these small and medium-sized enterprises should start in earnest to implement the suggestions made in those notes—now, in a couple of months or never? I would like some advice, please.

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

As with all these things, it is difficult to be precise. However, the noble Baroness will be as aware as I am of the necessary parliamentary timetables that will be involved in passing the appropriate legislation. If we do not have a withdrawal agreement in place in enough time to get it passed by Parliament then we will clearly be looking at a no-deal scenario, given the timescale. I do not want to be any more precise than that. The noble Baroness will probably want to push me on it, but I think she will now have some idea of where we are going.