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Trade Bill - Committee (4th Day)

Part of the debate – in the House of Lords at 5:00 pm on 4th February 2019.

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Photo of Lord Lea of Crondall Lord Lea of Crondall Labour 5:00 pm, 4th February 2019

My Lords, I will begin by reading the amendment to set out what I am trying to do here:

“It shall be the objective of an appropriate authority to achieve before exit day the implementation of an international agreement to enable the United Kingdom to become a member of the European Free Trade Association and continue as a signatory to the EEA Agreement”.

It will be recalled from last summer that this policy had—has, I guess—the support of this House. I now wish to scrutinise some of the practical issues of attaining it. Given that all the other ideas seem to have fallen by the wayside, one after the other, like dominoes, I think this is the only one standing. It now has even more steam behind it.

Before I come to the main issue, I should like to make a point about Nissan and Sunderland. This is central to why we need to stay in the single market and customs union. Reading between the lines, Nissan is saying almost as much in those terms. There is a slow-burn catastrophe of collapsing foreign direct investment in Britain. I made a speech a year ago saying that the plans—not forecasts but plans—were down 80%. I was talking to the FDI people around a table. This is now exemplified by the huge Nissan setback. By the way, many Members here, in their previous incarnations, have worked very hard to secure that work. On this occasion, no one is blaming the workers or their trade unions. That is a change, is it not? They blame those who play to the gallery. Boris Johnson and his press acolytes spring to mind, with their self-serving and grossly misleading propaganda two years ago and since. They ought to be ashamed of themselves.

Even now, on the options before us, Her Majesty’s Government are still in denial about the vital requirement to enhance and protect our world market share of investment and trade by staying part of the customs union and the single market/common market. That, in turn, is the secret of Europe’s world market share vis-à-vis the USA and China, as well as Japan and other parts of Asia, as a preferred production location. The same applies to many services.

One precondition of staying in the EEA is that we address and find answers to some of the technical issues surrounding the route out of the current impasse by moving—albeit as a second best, although in this Bill we are talking against the background of leaving the EU, not about whether that is a good idea—from the current Pillar 1 of the twin-pillar European Economic Area—that is, the European Union—to Pillar 2, which is EFTA. In that way—I think it is the only way—we can still be part of a family of agreed rules and justiciable arrangements, with the emphasis shifting on the latter point from the European Court of Justice to the EFTA Court.

First, I wish to get out of the way a rather unnecessary obstacle. I refer to the publication by this Government on 20 December—when we were all going off on our Christmas holidays—of the EEA EFTA separation agreement with the UK. This is a treaty provision whereby we will leave the EEA on 29 March, which is next month. I have two questions on this, and I have given the Minister some notice of them. First, would the departure requirement in Article 71 of the draft agreement be automatically frozen in the hypothetical situation of reaching agreement with the EU to extend the Article 50 period so that it did not happen on 29 March? Secondly, if we crash out, we must surely wish to preserve the right to apply to rejoin EFTA. Can the Minister please indicate how that could be done? In addition, would not Parliament have the right to vote on such a treaty question if it were no longer logically derivative of the wider constitutional Act, under which we do not have a separate vote?

I now turn to some of the issues of substance, as distinct from process, associated with these two major areas of policy. A year ago, the conclusion of the House of Lords European Union Sub-Committee chaired by my noble friend Lord Whitty—as I understand it, this conclusion has not changed—was that for trade issues membership of the EEA would cause much less damage to Britain than any other option. As far as the single market is concerned, this embraces the four freedoms of goods, services, capital and labour, including all the regulations derived through the Maastricht treaty, including the baker’s dozen of workers’ rights, and their upgrading, which we negotiated under the Social Chapter. I would like the Minister to confirm that I have this right. There are some reports that the upgrading has been now affirmed by the Prime Minister as being part of a sort of voluntary commitment. The process by which this miracle would happen under her approach—that is, without the EEA—is much less clear, whereas the social part of the negotiations would be automatically covered by staying in the EEA, as in Norway and Iceland, et cetera.

Does the Minister not agree, therefore, that the only way we can leave the EU and remain in the single market—which is just as essential for BMW, Airbus and Unilever as the customs union—is by rejoining EFTA? We left EFTA at midnight on the last day of December 1973 and one second later we were part of the EEC. We could do the same thing in reverse, with—this is my point, of course—no time gap in our ongoing membership of the European Economic Area. I invite the Minister and any other noble Lord who wishes to contradict what I have just said to stand up and give a reason.

Jeremy Corbyn paid tribute in the Commons last Tuesday to the cross-party Norway Plus Group, echoing its view that we need not only full access to the single market but a customs union. This policy is supported by the TUC, under the distinguished leadership of Frances O’Grady. I prefer to say “the” customs union because I am agnostic about whether there is a cigarette paper of difference in this context between the definite and the indefinite article. The EU customs union and the single market cover a wide range of electronic data, driving licences and product standards as well as labour standards, et cetera; together, they could determine that we have no problem on the Irish border and no problem on Dover-Calais, and we have eight weeks to fix the situation. Does the Minister agree? If not, will he say why not and give an alternative view?

On the wider issue of negotiations in this complex area, from red lines to financial contributions, we must take head-on the Boris Johnson fallacy that you can have your cake and eat it. I thank Mr Johnson for drawing that nonsense to our attention; it is about time that we—and he—started to realise the converse truth that nothing comes for free when creating the conditions, nationally or internationally, for wider economic and social progress.

I recognise that the scenario I am spelling out is not problem-free. EFTA has free trade agreements with third countries which are not the same as the EU’s; the UK, as a member of EFTA and in a customs union with the EU, could not join those. Indeed, the UK must fully respect the fact that EFTA states need to protect the integrity of their agreements. But on the basic premise of staying in both the customs union and the single market, this is a policy on which, as I understand it—and there have been many quotes saying at least as much—the leaders of Norway and Iceland have in different ways stated that they would be open to negotiation. I will return in a few moments to that somewhat complex choreography.

I now turn to the objection raised by some political pundits to the EEA option, which has been rhetorically posed in the phrase that we would be a “rule-taker rather than a rule-maker”. Membership of the EEA is not unique in being open to that characterisation, is it? It depends on which category of membership you want to pay for: you cannot have it both ways, even if the penny has not yet dropped for Mr Boris Johnson and such circles. We cannot leave the EU table and then complain that we do not have a vote there. How is that idea still running? Moreover, as Jacques Delors foresaw in 1990, EFTA with the UK again a member would probably evolve into a more influential and substantial body than is currently the case; there would be scope for further strengthening the pre-legislative consultation protocols within the EEA and with the EU. It shows, apart from anything else, a woeful lack of imagination to call such a development “leaving Britain as a vassal state”.

One broader point on which to conclude concerns attitudes in this country, among people at work, in the different regions and so forth. It is not much of an exaggeration to say that almost no one is aware of the provenance of all the workers’ rights that we have strengthened through European negotiations, including for migrant workers. Most people probably think that we negotiated them at national level. I am happy to take some of the credit for that—as, I am sure, are my noble friend Lord Monks and all the rest of us—but the point is that we did it at European level because otherwise we would have been told by the employers here, or in any other individual country, that we would be undercut. The noble Lord, Lord Stoddart, is looking puzzled by that; perhaps he would like to tell me why he does not accept that.

Incidentally, there are one or two of us, including my noble friend Lord Monks and I from the TUC and other colleagues on these Benches—my noble friends Lord Morris, Lord Jordan, Lady Donaghy and Lady Drake, among others—who have direct experience of the Social Chapter negotiations, either through central bodies or through industry federations irrespective of which European trading bloc the national affiliate belonged to. There is a long list of a dozen or so new rights, ranging from part-time workers to workers posted across frontiers, with the principle that none of those can now be undercut, and that is a process that needs to develop and continue. It has a high degree of resonance with trade union representatives around the country.

Active negotiators know that what we have been doing through the TUC for years now, at EU and national level in social partnership, brings in innovative new ideas such as European works councils, just as over those same years in the OECD we have won the right to challenge in a national court a lack of consultation in a multinational corporation. I have been part of that in an exercise in the United States of America. These ideas in a world of globalisation—a word that has lost its gloss in Davos, we are told—needs strengthening, not weakening, with a lot more involvement of a well-informed public square and of active participatory organisations, notably the trade unions.

The cross-border arrangements within the European Economic Area are one of a whole range of issues that on the ground and in the air are evolving at speed. As I pointed out in the pamphlet that I wrote with Michael-James Clifton, which was circulated widely in Parliament, it is indeed common sense to consider from time to time reviewing the modalities of the different options for employment, residence and citizenship, while having full regard to cross-border employment arrangements in fields ranging from science and engineering to culture and the arts, encompassing the theatre and classical music with opera and ballet, to which the noble Baroness, Lady Bull, among others drew attention in an earlier debate.

Lastly, I will say a word about the financial position. As I understand it, Norway pays per head half of what is paid as a full member of the EU, although it is difficult to make comparisons because Norway is a richer country in GDP per head through its energy resources. However, in all of that, surely the bottom line is the pub test: “You gets what you pays for”. That may better meet the curmudgeonly mood of Britain today.

My proposal to help us out of this impasse is a dose of lateral thinking. I submit that it can be best taken forward following the terms of this amendment, which are worth being a bit pedantic about. It is a different way from that envisaged so far in the whole gamut covered by the Common Market, the Maastricht treaty and the EEA treaty. How do you look at all that lot together? All 30 countries—that is 27 plus three—have skin in the game, to use the modern vernacular, and now is therefore the time to innovate and to include them all together.

My proposal is that the UK triggers a meeting of the EEA Council, the umbrella body which comprises the members of both the EU and EFTA. Its agenda would at first be procedural: to reconcile the process of parallel sets of negotiations versus sequential ones, between the UK and the EU on the one hand and EFTA on the other, with a view to us staying part of an evolving EEA family of nations. This seems to be the only way to avoid everybody tripping over everybody else in attempting separately sequenced negotiations. It is an outcome that nearly everyone can just about live with, if not happily ever after. I beg to move.