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Trade Bill - Report (1st Day)

Part of the debate – in the House of Lords at 6:30 pm on 6th March 2019.

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Photo of Lord Lea of Crondall Lord Lea of Crondall Labour 6:30 pm, 6th March 2019

My Lords, last summer the House supported a proposition along the lines of retaining our membership of the EEA. Given that all other ideas seem to be falling by the wayside one after the other like dominoes, it now has even more steam behind it. I expect this will be demonstrated in the other place quite soon, with the proposition supported by cross-party groups in the Commons and in this House.

Before I come to the main issue, I want to make a point about all the bad news from the car industry, with BMW and Toyota adding to it. This is another demonstration of the need to stay in the customs union, which will be debated later.

We are talking in this Bill against a background of leaving the EU—not about whether it is a good idea, which it certainly is not—and moving from Pillar 1 of the twin-pillar European Economic Area, which is the European Union, to Pillar 2, which is EFTA. Given where we are now, I think that 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.

I wish to get out of the way a rather unnecessary obstacle. I refer to the publication by this Government on 20 December of the EEA EFTA separation agreement with the UK. Although this is a treaty provision whereby we will leave the EEA on 29 March, will the departure requirement in Article 71 of the draft agreement be automatically frozen in the hypothetical situation of our reaching agreement with the EU to extend the Article 50 period, which is becoming more likely, so that it does not happen on 29 March? If we crash out, would we not have the right to apply to rejoin EFTA? Would not Parliament have the right to vote on such a treaty change if it were no longer logically derivative of the wider constitutional Act? Many lawyers think that there should be such a vote.

Jeremy Corbyn paid tribute in the Commons recently to the cross-party Norway-plus group, echoing its view that we need full access not only to the single market but to a customs union. This policy is supported by the TUC under the distinguished leadership of Frances O’Grady. As I have said previously, 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 between them—they are intertwined—cover a wide range of electronic data, driving licences and product standards, as well as labour standards. Given what has been said in the newspapers today, membership of them would be the only way to guarantee that workers’ rights in this country kept pace with further improvements in the EU. As we have seen from today’s reports, the Prime Minister restricts her commitment to consultation, which past experience suggests gives a veto to the CBI, even though I suspect that it, like the TUC, will remain part of the employers’ negotiating team in Brussels. In other words, it could have its cake and two bites at the cherry, given its reluctance to be part of this arrangement.

Membership of the customs union and the single market would determine that we had no problem on the Irish border—to which my noble friend will return later—and no problem on Dover-Calais. However, 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—there have been many quotes saying this much—the leaders of Norway and Iceland have in different ways stated that they would be open to negotiation.

I turn to the principal objection raised by some to the EEA option, which has been rather 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. 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, the EEA has scope for devolution. EFTA with the UK again a member would probably evolve into a more influential and substantial body than is currently the case. There would no doubt be further strengthening of the pre-legislative consultation protocols within the EEA and the EU.

In referring in the second half of his speech on 4 February to,

“control of our borders or our laws”,—[Official Report, 4/2/19; col. 1368.] the Minister sounded, perhaps unintentionally, as if he was quoting straight from the Rees-Mogg/Boris Johnson playbook. We could have every expectation that there would then be reciprocal controls over freedom of movement, which would be cutting off our nose to spite our face. It is said that we would be free to act unilaterally, but this does not apply to GATT or lots of everyday things, from railway signalling to air traffic control. If we want to live in splendid isolation, I guess we ought to have our own rules on penalty shoot-outs, having left FIFA, and restrict ourselves to playing against a team from the planet Mars. So I ask the Minister to modify that sort of rhetoric.

My key proposal is to urge discussion among the 27 and the 3+1, which is Switzerland—that means representatives of the whole EEA—to enable a wider group of member states to be involved in finding pragmatic solutions to the single market and the customs union, involving cross-over between the two pillars if we are outside the EU. That is why I am advocating that the EEA Council be in a position to take initiatives to call meetings between the pillars in such circumstances. That prospectively involves the UK’s affiliations. I beg to move.