Leaving the European Union - Statement

– in the House of Lords at 5:00 pm on 26th November 2018.

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Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal 5:00 pm, 26th November 2018

My Lords, with the leave of the House I will now repeat a Statement made by my right honourable friend the Prime Minister in another place. The Statement is as follows:

“With permission, Mr Speaker, I would like to make a Statement on the conclusion of our negotiations to leave the European Union. At yesterday’s special European Council in Brussels, I reached a deal with the leaders of the other 27 EU member states on a withdrawal agreement that will ensure our smooth and orderly departure on 29 March next year; and, tied to this agreement, a political declaration on an ambitious future partnership that is in our national interest.

This is the right deal for Britain because it delivers on the democratic decision of the people. It takes back control of our borders. It ends the free movement of people in full once and for all, allowing the Government to introduce a new skills-based immigration system. It takes back control of our laws. It ends the jurisdiction of the European Court of Justice in the UK and means instead our laws being made in our Parliaments, enforced by our courts. It takes back control of our money; it ends the vast annual payments we send to Brussels. So instead we can spend taxpayers’ money on our own priorities, including the £394 million a week of extra investment in our long-term plan for the National Health Service.

By creating a new free trade area with no tariffs, fees, charges, quantitative restrictions or rules of origin checks, this deal protects jobs, including those that rely on integrated supply chains. It protects our security with a close relationship on defence and on tackling crime and terrorism, which will help to keep all our people safe. It protects the integrity of our United Kingdom, meeting our commitments in Northern Ireland and delivering for the whole UK family, including our overseas territories and the Crown dependencies.

On Gibraltar, we have worked constructively with the Governments of Spain and Gibraltar, and I want pay tribute in particular to Gibraltar’s Chief Minister Fabian Picardo for his statesmanship in these negotiations. We have ensured that Gibraltar is covered by the whole withdrawal agreement and by the implementation period. For the future partnership, the UK Government will be negotiating for the whole UK family, including Gibraltar. As Fabian Picardo said this weekend:

‘Every aspect of the response of the United Kingdom was agreed with the Government of Gibraltar. We have worked seamlessly together in this as we have in all other aspects of this two year period of negotiation. Most importantly, the legal text of the draft Withdrawal Agreement has not been changed. That is what the Spanish Government repeatedly sought. But they have not achieved that. The United Kingdom has not let us down’.

Our message to the people of Gibraltar is clear: we will always stand by you. We are proud that Gibraltar is British and our position on sovereignty has not and will not change.

The withdrawal agreement will ensure that we leave the European Union on 29 March next year in a smooth and orderly way. It protects the rights of EU citizens living in the UK and UK citizens living in the EU, so they can carry on living their lives as before. It delivers a time-limited implementation period to give business time to prepare for the new arrangements. During the implementation period trade will continue on current terms so businesses have to face only one set of changes. It ensures a fair settlement of our financial obligations—less than half of what some originally expected and demanded. It also meets our commitment to ensure there is no hard border between Northern Ireland and Ireland—and no customs border in the Irish Sea—in the event that the future relationship is not ready by the end of the implementation period.

I know that some Members remain concerned that we could find ourselves stuck in this backstop. So let me address this directly. First, this is an insurance policy that no one wants to use. Both the UK and the EU are fully committed to having our future relationship in place by 1 January 2021. The withdrawal agreement has a legal duty on both sides to use best endeavours to avoid the backstop ever coming into force. If, despite this, the future relationship is not ready by the end of 2020, we would not be forced to use the backstop. We would have a clear choice between the backstop or a short extension to the implementation period.

If we did choose the backstop, the legal text is clear that it should be temporary and that the Article 50 legal base cannot provide for a permanent relationship. There is now more flexibility so that it can be superseded, either by the future relationship or by alternative arrangements, which include the potential for facilitative arrangements and technologies to avoid a hard border on the island of Ireland.

There is also a termination clause, which allows the backstop to be turned off when we have fulfilled our commitments on the Northern Ireland border. There is a unilateral right to trigger a review through the joint committee and the ability to seek independent arbitration if the EU does not use good faith in this process. Furthermore, as a result of the changes we have negotiated, the legal text is now also clear that once the backstop has been superseded it shall ‘cease to apply’. So if a future Parliament decided to then move from an initially deep trade relationship to a looser one the backstop could not return.

I do not pretend that either we or the EU are entirely happy with these arrangements, and that is how it must be. Were either party entirely happy, that party would have no incentive to move on to the future relationship. But there is no alternative deal that honours our commitments to Northern Ireland which does not involve this insurance policy, and the EU would not have agreed any future partnership without it. Put simply, there is no deal that comes without a backstop, and without a backstop there is no deal.

The withdrawal agreement is accompanied by a political declaration, which sets out the scope and terms of an ambitious future relationship between the UK and the EU. It is a detailed set of instructions to negotiators that will be used to deliver a legal agreement on our future relationship after we have left. The linkage clause between the withdrawal agreement and this declaration requires both sides to use best endeavours to get this legal text agreed and implemented by the end of 2020. Both sides are committed to making preparations for an immediate start to the formal negotiations after our withdrawal.

The declaration contains specific detail on our future economic relationship. This includes a new free trade area with no tariffs, fees, quantitative restrictions or rules of origin checks—an unprecedented economic relationship that no other major economy has. It includes liberalisation in trade in services well beyond WTO commitments and building on recent EU free trade agreements. It includes new arrangements for our financial services sector, ensuring market access cannot be withdrawn on a whim and providing stability and certainty for our world-leading industry. It ensures that we will leave EU programmes that do not work in our interests, so we will be out of the common agricultural policy that has failed our farmers and out of the common fisheries policy that has failed our coastal communities. Instead, as the political declaration sets out, we will be ‘an independent coastal state’ once again. We will take back full sovereign control over our waters, so we will be able to decide for ourselves who we allow to fish in our waters. The EU has maintained throughout this process that it wanted to link overall access to markets to access to fisheries. It failed in the withdrawal agreement, and it failed again in the political declaration. It is no surprise that some are already trying to lay down markers again for the future relationship, but they should be getting used to the answer by now: it is not going to happen.

Finally, the declaration is clear that whatever is agreed in the future partnership must recognise the development of an independent UK trade policy beyond this economic partnership. So, for the first time in 40 years, the UK will be able to strike new trade deals and open up new markets for our goods and services in the fastest growing economies around the world.

As I set out for the House last week, the future relationship also includes a comprehensive new security partnership with close reciprocal law enforcement and judicial co-operation to keep all our people safe. At the outset we were told that, being outside free movement and outside the Schengen area, we would be treated like any other non-EU state on security. But this deal delivers the broadest security partnership in the EU’s history, including arrangements for effective data exchange on passenger name records, DNA, fingerprints and vehicle registration data, as well as extradition arrangements like those in the European arrest warrant. It also opens the way to sharing the types of information included in the ECRIS and SIS II databases on wanted or missing persons and criminal records.

This has been a long and complex negotiation. It has required give and take on both sides. That is the nature of a negotiation. But this deal honours the result of the referendum, while providing a close economic and security relationship with our nearest neighbours, and in so doing offers a brighter future for the British people, outside the EU. I can say to the House with absolute certainty that there is not a better deal available. My fellow leaders were themselves very clear on that yesterday.

Our duty as a Parliament over these coming weeks is to examine this deal in detail, to debate it respectfully, to listen to our constituents and decide what is in our national interest. There is a choice which this House will have to make. We can back this deal, deliver on the vote of the referendum and move on to building a brighter future of opportunity and prosperity for all our people. Or this House can choose to reject this deal and go back to square one. Because no one knows what will happen if this deal does not pass. It would open the door to more division and more uncertainty, with all the risks that would entail.

I believe our national interest is clear. The British people want us to get on with a deal that honours the referendum and allows us to come together again as a country, whichever way we voted. This is that deal—a deal that delivers for the British people—and I commend this Statement to the House”.

My Lords, that concludes the Statement.

Photo of Baroness Smith of Basildon Baroness Smith of Basildon Shadow Leader of the House of Lords, Shadow Spokesperson (Northern Ireland), Shadow Spokesperson (Cabinet Office) 5:11 pm, 26th November 2018

Well, my Lords, another day, another Statement. I am grateful to the noble Baroness the Leader of the House for repeating today’s Statement.

Exactly 886 days have passed since the EU referendum, and it is more than 600 days since the Prime Minister wrote to the President of the European Council to invoke Article 50. At that point, the clock started ticking. Many of us struggled to understand why, in her Lancaster House speech, the Prime Minister tied her own hands with a series of hard red lines. Having set out what appeared to be a hard Brexit before talks had even begun, the most enthusiastic Brexiteers felt emboldened.

The problem for the Prime Minister is that all too often, rather than taking a clear position she has sought to please one or other of the many camps in her own party, and her message for home has at times been different in both tone and content to her message to the EU. So, as time went on and with negotiations stalling, Mrs May had to fly to Florence to extend an olive branch to the EU 27. But for many of our EU neighbours their good will had already been tested. After she failed once again to make a breakthrough in Brussels, the Cabinet met at Chequers in July, agreeing a proposal that could not even survive a weekend before the first Brexit Secretary resigned, goading Boris Johnson, the then Foreign Secretary, to follow suit. Despite such high-profile resignations, the Prime Minister insisted that her way was the only way. She was clear: there is no alternative. That has a familiar ring. As ever, she forged on.

I have reflected before that the Prime Minister’s strategy is to live in the moment—to simply get through each week at a time. This has never been as true as it is now. Last week, with a defiant flourish, the Prime Minister presented the political declaration to Parliament, which was a clear admission that the Chequers deal was dead in the water—the deal that she had defended so strongly. Yet again we are told that this is the only proposal on the table—the only show in town. I think I am not alone in failing to understand why the Prime Minister is continuing on this course. She must know that her deal, which is little more than a blind Brexit, cannot possibly win a majority in the other place. As we discussed on Thursday’s Statement, it is pretty much an aspiration without promises or guarantees.

The Prime Minister also knows that no deal would be as disastrous for UK families, communities and businesses, yet she continues to present this flawed, inadequate deal as though it is “my deal or no deal” and seeks to pray in aid EU Presidents Juncker and Tusk. I can understand senior EU figures lending their support to the Prime Minister at this exceptionally precarious time in her premiership. But, despite the Prime Minister’s “carry on regardless” approach, there are other options on the table, including that, as Michel Barnier has always been clear, the EU’s offer can, and will, evolve if the UK changes its red lines. This is in relation not just to the withdrawal agreement, but to the terms of the future relationship as well.

We have been very clear that we could accept a deal only if it delivered a permanent UK-EU customs union, a strong, ongoing relationship with the single market and high-level protection for workers, consumers and the environment. Also, it remains obvious that too little consideration was initially given by the Government to the complex issues affecting Northern Ireland and the Good Friday agreement. That is equally true of Gibraltar, which I first raised in your Lordships’ House just four months after the referendum in 2016; for both, the details have yet to be resolved. So, this deal does not deliver on the key priorities. Indeed, leaked emails describing it as “not a good deal” explain last week’s lacklustre response from the CBI. In fact, the only support the Prime Minister has been able to garner is pretty lukewarm and seems to be more about the fear of a no-deal exit if she cannot get her deal.

There are many, many questions that I could ask the noble Baroness the Leader of the House. I know that she has been inundated with questions in response to recent Statements; it is always hard to answer everything. I therefore want to be very clear and straight to the point with just two questions: Does she consider that the deal before us is the very best that is available? And does she consider that the deal before us is better than what we currently have?

If Ministers are unable to honestly answer yes to both these questions, then they have failed all those who voted in the referendum, whichever way they voted.

Photo of Lord Newby Lord Newby Liberal Democrat Leader in the House of Lords

My Lords, I too thank the Leader for repeating the Statement. We now have the agreement signed and sealed; the time for wishful thinking is over. Given the constraints that she imposed upon herself, I agree with the Prime Minister when she says that she has probably reached the best deal available. Even if she had had a dream team of negotiators, drawn from the Brexiteers normally to be found on the Conservative Privy Council Bench in your Lordships’ House, she could not have achieved the “cake and eat it” deal which so many of them have advocated.

In normal circumstances, we would now concentrate on questioning the Government on what they meant in various particularly vague clauses of the political declaration. We might, for example, probe paragraph 107, which is about space and simply reads:

The Parties should consider appropriate arrangements for cooperation on space”.

This is not a policy on space; it is a waste of space. We might equally probe paragraphs 73 to 76 on fishing. But the truth is that there is absolutely no point in worrying about the details of the declaration because it is now abundantly clear that it will not be approved by the Commons, and this is despite the time-honoured Whips’ tactic of offering baubles to wavering Conservative MPs. Clearly the offer of a knighthood does not do the trick. I would be extremely worried if I were the noble Lord, Lord Burns; I suspect that his hopes for reducing the size of your Lordships’ House are now in vain.

The Government are promising us an economic assessment of the consequences of the deal later this week. We already have one today from the National Institute of Economic and Social Research, which estimates that the cost of the deal could be up to £1,100 per person by 2030. I know that some people will pooh-pooh this, as they do all forecasts, but no reputable forecast argues that we will be better off, and I suspect that later in the week the Treasury will confirm that. Therefore, I ask the Leader of the House why the Prime Minister repeatedly claims that her deal is good for the economy. It clearly is not.

If the deal is dead, what are the options? There is much discussion among fevered Conservative MPs about plan Bs, but the problem for them is that all these plans have been examined and rejected by the Government because they are either practically or politically unworkable, and they have not become more workable now.

The Prime Minister is right to say in the Statement that voting against the deal would take us “back to square one”, if by that she means that the only realistic alternative to the deal is remaining in the EU. Can the Leader confirm that this is indeed what these words mean?

In her letter to colleagues yesterday, the Prime Minister said that no one should be in any doubt that that there are some who want a second referendum, which she then bizarrely describes as a politician’s vote—Alice in Wonderland in action. Well, too right—they do want a referendum on whether this deal is better than continued EU membership. I suspect that the 59% of people in her own constituency who would now vote remain would like a vote, as would the 56% of the population as a whole who would now vote to remain.

I understand that the Prime Minister is about to embark on a nationwide tour to promote the Brexit deal. Given that she knows that the deal is dead in the Commons, I can only assume that these are in fact her opening shots in a campaign to win popular support in advance of a people’s vote on the deal. We look forward to joining her on the campaign trail.

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I thank the noble Baroness and the noble Lord for their comments. In relation to the noble Baroness’s comments on Gibraltar, we have ensured that Gibraltar is covered by the whole of the withdrawal agreement and implementation period. Our position on Gibraltar’s sovereignty has not changed and will not change. The words of the Chief Minister quoted in the Statement were strong. They showed our commitment to Gibraltar during the negotiations, and that will continue.

This deal will deliver an economic partnership with the EU closer than that enjoyed by any other country, and it will ensure an unprecedented security partnership. It is a good deal and, as Donald Tusk, Jean-Claude Juncker and Michel Barnier have all said, it is the best one available.

The noble Lord, Lord Newby, asked about Galileo. Of course we have been in discussions with the EU about this, but we could not depend on Galileo for defence and security on the basis of the existing and proposed security restrictions for third countries. We are therefore rapidly advancing the development of a domestic system that will fulfil our defence and security needs and support the world-leading British space sector.

The noble Lord also talked about the vote, and of course it will be one of the most significant votes that Parliament has held for many years. However, as the Statement made clear, we do not know what will happen if the deal does not pass. All we do know is that further uncertainty and division would inevitably follow, and I do not believe that any of us wants that for this country.

Photo of Baroness Smith of Basildon Baroness Smith of Basildon Shadow Leader of the House of Lords, Shadow Spokesperson (Northern Ireland), Shadow Spokesperson (Cabinet Office)

As we still have time for the noble Baroness to reply, will she answer the second question that I asked? Does she consider that the deal before us is better than what we currently have?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

As I said, this deal will deliver a strong economic partnership with the EU and will allow us to develop an independent trade policy—so we will have a bright future going forward under this deal.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative 5:23 pm, 26th November 2018

My Lords, on the second question, it seems to me that the Prime Minister is seeking to operate on the decision of the referendum. In other words, she is operating on the view that the people want to leave the European Union. Therefore, the second question is not appropriate. The question is: is it the best deal that can be obtained if we leave the European Union? I have a feeling that, if this deal is not accepted, the proper question will then be what to do next—and it is for Parliament to answer that question rather than for there to be a further period of delay and indecision, which will damage the livelihoods of so many of our fellow citizens who work in businesses that depend on trade with the European Union.

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

My noble and learned friend is right, and the political declaration sets out a clear vision for our future relationship, covering an economic partnership, a security partnership and specific agreements on cross-cutting co-operation. It will deliver economic benefits and shows that, in our relationship with the EU, we are not just another third country. This will be the most ambitious free trade agreement that the EU has with any other country, and it will allow us to develop our own independent free trade policy to ensure that we remain a global Britain.

Photo of Lord Howarth of Newport Lord Howarth of Newport Labour

My Lords, do the Government accept that there has already been a people’s vote, in 2016, and that the major parties undertook to honour its result? Do they accept that to break faith with those undertakings and agree to hold a second referendum would be to intensify and perpetuate social division, political disaffection and economic uncertainty? Will the Minister confirm that, in the event of the House of Commons rejecting the withdrawal deal, the Government will not renege on their stated refusal to accept the calls for a second referendum?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I thank the noble Lord for his comments. The Prime Minister has been repeatedly clear, as we in this House have been, that we have had a people’s vote—he is absolutely right—and the people voted to leave. We have now brought forward a deal to the House of Commons—we were told we would not be able to come to a deal, but we have—and it will make its decision. But we do not believe that there should or will be a second referendum.

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

Does the noble Baroness agree that, on this occasion, and very unusually, the noble and learned Lord, Lord Mackay of Clashfern, misspoke? The question I think he posed was: given that we will leave the European Union, this is the best deal and there is no alternative. But that is patently not the case. Whatever the merits of EFTA or the European Union moving from Pillar 1 to Pillar 2, the option is available and has been well covered in many recent pamphlets.

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

An EEA-type agreement is not comprehensive and would not cover issues such as customs, external and internal security, the CAP, the CFP or Euratom. It would leave significant gaps in our wider relationship with the EU. This is a deal that covers all those areas.

Photo of Lord Wigley Lord Wigley Plaid Cymru

My Lords, if the EU Court of Justice concludes tomorrow that Article 50 is unilaterally revocable, will the Government give an assurance that they will not rule out the possibility of a temporary pause to avoid unnecessarily crashing out with a shambolic no-deal Brexit?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I am sure the noble Lord will realise that I cannot comment on ongoing legal matters.

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

The Minister has just sketched out the enormous agenda that we had to negotiate with the European Union in 21 months, with a Government that seem to still be unprepared and divided as to what they want. The Statement says:

“Both sides are committed to making preparations for an immediate start to the formal negotiations after our withdrawal”.

There are European elections next May and then a change of Commission, which means that there will be four or five months in which the European Union will not be in a fit state to negotiate. We lost three months last year by having an election. Do we anticipate that we really can begin to negotiate with a clear mandate from our side as well before the end of next year?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

The noble Lord is right. Before our withdrawal in March, both sides have agreed to undertake preparatory work to enable negotiations to begin as soon as possible. There is also a clear programme to deliver an ambitious timetable, which will include the structure of negotiations and the schedule of rounds. He will also be aware that the withdrawal agreement includes a legally binding commitment to ensure that both sides use best endeavours to negotiate the detailed agreements that will give effect to the future relationship, in good faith, so that they come into force by the end of 2020.

Photo of Lord Luce Lord Luce Crossbench

My Lords, I first thank the Government for their support of the people of Gibraltar. But will the Minister confirm that no concessions whatever have been made to the EU in the past few days over Gibraltar? Will she confirm also that it is not acceptable, either to us or to the European Union as a whole, that Spain should have the right of veto at the last stage of the overall agreement with the EU—if there is such an agreement—because it wants a separate agreement between Britain and Spain on Gibraltar?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

We are absolutely committed to ensuring a deal that works for the entire UK family, including Gibraltar. Our position on Gibraltar sovereignty has not changed and will not change.

Photo of Baroness Meyer Baroness Meyer Conservative

My Lords, given that the head of HMRC, Jon Thompson, has again confirmed that, in the event of no deal, no hard border will be built in Northern Ireland; given that the Prime Minister of Ireland offered the same assurance last month; and given that the backstop remains the main source of dispute in this country over the Prime Minister’s deal, can the Leader of the House help us to understand why there is any need for a backstop at all?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

As we have repeatedly made clear, this is an insurance policy no one wants to use. It is needed in case the future relationship is not ready at the end of the implementation period to ensure that there is no hard border. However, as we have also made clear, it is not the only option. There is a possibility of a short extension to the implementation period. It has also been made clear in both the withdrawal agreement and political declaration that both sides will consider how facilitative arrangements and technologies can be used to avoid a hard border on the island of Ireland. There are other options that we will all be exploring rather than the backstop.

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

My Lords, there is an extraordinary sentence in the Statement that,

“if a future Parliament decided to then move from an initially deep trade relationship to a looser one, the backstop could not return”.

The Prime Minister rightly said that the EU would not have agreed any future partnership deal without the backstop but then this red meat is thrown to Brexiteers. If the backstop is superseded in the future by moving to a looser trade relationship, the Government will show themselves as being completely untrustworthy and saying, “Yah boo, the backstop cannot come back”. How is that generating trust in the long-term commitment of the Government to avoid a hard border in Ireland?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

It states in the documents that any backstop—which we have repeatedly made clear we do not want to be implemented—will be superseded by a future relationship. Both sides are signed up to that.

Photo of Lord Hain Lord Hain Labour

This political declaration is full of ambiguities and contradictions. Citizens, businesses and consumers have no certainty, stability or sense of security in going forward. Do not this Government continue to set sail on a journey but have no idea where it will end—where the boat will berth, which port it will berth at or what the final destination will be? That is surely why this deal should be rejected and we should move to a position where the country has an opportunity to decide whether it wishes to remain or whether it is willing to put up with this total shambles.

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

The political declaration sets out a clear vision and framework for a future relationship. Once we leave the EU, we will begin negotiating the detail of that. It is set out. We all want an ambitious economic and security partnership and that is what we will be working towards. Of course any final agreements with the EU will be put forward to Parliament in the usual way.

Photo of Lord Shinkwin Lord Shinkwin Conservative

My Lords, my noble friend referred to “best endeavours”, which appears to be a crucial phrase in the agreement. Given that we have already seen what “best endeavours” actually means—the EU 27 doing their best to do us over, to be competitively advantageous compared to the UK—why should we suddenly trust that it means completely the opposite: that the EU starts to play fair and that, crucially, it avoids using the backstop or allowing it to come into force?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

As I said, the withdrawal agreement contains a legally binding commitment to use best endeavours and to ensure that we negotiate in good faith. There will be a mechanism for resolving disputes, first through consultation at the joint committee, with the aim of reaching a mutually acceptable resolution. If that does not work, after three months either party can refer a dispute to independent arbitration. It is there in legally binding text, and that is how we believe both sides will go into the negotiation.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Liberal Democrat

My Lords, will the noble Baroness the Leader of the House confirm that, if a matter is referred to independent arbitration and if any issue of European Union law should arise, it should be referred to the Court of Justice of the European Union for a binding ruling, with the arbitration panel obliged to settle a dispute in accordance with the ruling given by the CJEU? That makes a nonsense of saying that the CJEU will not have any relevance after Brexit.

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

The arbitration panel would be the body to consider, decide and resolve disputes. The panel will consider a dispute, make a ruling based on findings of fact and reach conclusions on questions of law or of interpretation of the agreement, other than on points of EU law. If the panel decides that there is a question of EU law which requires interpretation, it will submit a question to the CJEU, but it is for the panel alone to decide whether to refer that question or not, and the resolution of the dispute remains solely with the arbitration panel.

Photo of Lord Shutt of Greetland Lord Shutt of Greetland Liberal Democrat

The noble Lord was not here to hear the Statement. He should not be heard.

Photo of Lord Howell of Guildford Lord Howell of Guildford Chair, International Relations Committee

Very well. I was about to apologise and put a point. I think noble Lords will allow me—

No.

Photo of Lord Liddle Lord Liddle Labour

My Lords, I shall return to the point made by the noble Baroness, Lady Ludford, and draw attention again to an entirely new sentence in the Statement that we have not heard before from the Government—that:

“if a future Parliament decided to then move from an initially deep trade relationship to a looser one, the backstop could not return”.

Does the Minister agree that this is the Michael Gove sentence, put in to satisfy him; that it suggests that Conservative MPs will be persuaded to vote for this agreement on the basis that it can later be abandoned without any care for what happens to the situation in Northern Ireland; that looser standards can be introduced—we can have a regulatory competition with the rest of the European Union and do free trade deals with the United States that no one wants—and that the Conservative Party is contemplating reneging on what it is putting before Parliament?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I do not accept that. For instance, we have been clear that we propose to maintain current social and employment standards, that we want an independent trade policy, and that we want a strong economic partnership with the EU—one of the most ambitious that it has had. That is what we will work towards.

Photo of Lord Jopling Lord Jopling Conservative

My Lords, I first refer to my interests in the register. The Prime Minister has said that we will be able to strike free trade deals around the world. Will that not mean that large swathes of British industry will have added competition from the free trade of imports from all around the world but, where British industry exports similar products to Europe, those exports will have to jump the common external tariff of the 27? Am I right in thinking that this would be one of the most monumental double whammies for British industry for a long time?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

No. First, we will be able to develop an independent UK trade policy. The political declaration sets out a plan for a free trade area for goods with the EU, including zero tariffs, with ambitious customs arrangements to enable that. It will be the first such agreement between an advanced economy and the EU.

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch UKIP

Last Thursday, the Minister told your Lordships that the financial settlement on the deal would cost between £34 billion and £38 billion, but she did not answer my question on when that money will be handed over. In particular, I want to press her on whether it will be handed over only when all the pious hopes in these agreements have been fulfilled. If they are not, surely we will not hand over a penny.

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

It has already been set out that the money will be paid over a period of time. Some of it will be paid up front to cover legal obligations but some of it will be paid according to a schedule, which is available. Not all the money will be paid up front.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

My Lords, can the Minister clarify her answer to the noble and learned Lord, Lord Mackay of Clashfern? From what he said today and last week, I understand that if the deal does not go through, he is not in favour of a people’s vote but wants Parliament to accept responsibility for deciding future action, which would include staying as a member of the European Union. That is a very tempting way forward. Does the noble Baroness agree with the noble and learned Lord on that?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I agree that the House of Commons faces one of its most significant votes for many years. I will not prejudge the outcome of that vote. The deal is a good one, and I hope that the Commons will vote for it.

Photo of Baroness Bottomley of Nettlestone Baroness Bottomley of Nettlestone Conservative

My Lords, is it not the case that the country is heartily sick of the political shenanigans around this subject? The people voted to leave. There is enormous admiration for the Prime Minister’s tenacity, courage, level head and patriotic heart. It is time to settle for the best deal on offer and put the interests of the country and our people first.

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

I thank my noble friend. That chimes very strongly with the message from the public on this issue.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Crossbench

Can the noble Baroness think again about her answer to the noble and learned Lord, Lord Wallace of Tankerness? This is the third time that we have been round this course. Surely it is clear in the documents negotiated by the Prime Minister that, if there is a matter of interpretation of European law, the arbitration panel cannot decide it; it has to go to the European Court of Justice, and the European Court of Justice’s ruling on the interpretation of European law is valid. And is it not the case—I have never had an answer from the Government on this—that this withdrawal agreement or withdrawal treaty will be, necessarily, if the European side can conclude it finally before 29 March, European law?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

As I said, the CJEU would give a view only on the interpretation of the specific point of EU law. The arbitration panel would then take a decision on how to resolve the dispute.

Photo of Lord Campbell of Pittenweem Lord Campbell of Pittenweem Liberal Democrat Lords Spokesperson (Defence)

My Lords, if the subject of the referendum had been this deal, how many people does the Minister think would have voted for it?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

The British people voted to leave. They now have a deal that achieves that for them—a deal that many in your Lordships’ House said could not happen. A deal is on the table and it is a good one. Let us hope that the House of Commons sees that and votes for it.

Photo of Lord Grade of Yarmouth Lord Grade of Yarmouth Conservative

My Lords, is there a difference between the £39 billion that was promised and our legal obligations on exit? Is there a difference between what we owe and what we have promised?

Photo of Baroness Evans of Bowes Park Baroness Evans of Bowes Park Leader of the House of Lords and Lord Privy Seal

The financial settlement represents a fair settlement of our obligations as a departing member. As I said, it will between about £35 billion and £39 billion, which is significantly less than many people anticipated. It has been agreed in the spirit of our future relationship.