Further Developments in Discussions with the European Union under Article 50 of the Treaty on European Union - Motion to Take Note (Continued)

Part of the debate – in the House of Lords at 5:39 pm on 11th March 2019.

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Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Conservative 5:39 pm, 11th March 2019

My Lords, like the noble Lord, Lord Rooker, I am a member of his noble friend Lord Cunningham’s Secondary Legislation Scrutiny Committee Sub-Committee B. My noble friend Lord Callanan was kind enough to say some nice words about the committee members in his opening remarks. I hope that that includes the staff, because our ability to perform well and effectively is very much dependent on the backup we get from the staff, who have done a terrific job. When my noble and learned friend comes to reply, I hope he will make it clear that the nice remarks, which I am sure the noble Lord, Lord Rooker, and I are happy to accept, include the staff, who have worked so hard to sort out and make sense of these extremely difficult and complex issues.

So many noble Lords speak this afternoon with great authority and certainty. I fear that I do not have certainty. I am a mild Brexiteer. I do not believe that the day after we leave the European Union the sun will come up shinier and brighter than ever before, nor do I believe that it will not come up at all, or hardly at all. Indeed, in many ways, following the remarks of my noble friend Lord Howard, I think that in almost any combination of outcomes we will find that commercial and other imperatives will drive this country and the European Union to find a way to work together and that for many people, therefore, despite some major changes, life will go on much as before. If that sounds eccentric, even complacent, perhaps I may underline my reputation for eccentricity by going a stage further. Despite all the sound and fury that is being devoted to this topic now, when we come to 2030 or 2035 and look back 10 or 15 years, I think that this will be seen to be a second-order event, because we stand the edge of two huge shifts of the tectonic plates which are going to transform the way this country lives and the way it relates to the rest of the world.

The first of these is the irreversible shift of wealth from the West to the East. In the 1990s the G7, of which this country was a member—the seven most prosperous countries in the world—accounted for about 56% of world output. By 2040, it is estimated that it will account for 22%. We are going to be, whether we are inside or outside the EU, in a very slow part of the stream. That will pose great strains on this country at every level, including our social cohesion. Social scientists will tell you that it is not absolute wealth that is the determinant of happiness; in many cases, it is relative wealth: how I am doing vis-à-vis my neighbour. As people in this country see other countries in the Far East begin to move up alongside us, they will begin to question what this country stands for, the way the system works, our approach and indeed our structures.

The second factor is the impact of the fourth industrial revolution. It is hard for us to estimate just what that is going to do for this country, the way we live and the way we work, over the next 10 or 15 years. The central estimate at the moment is that about 7.5 million jobs in this country will either disappear or be radically changed. My noble friend Lord Ridley, who is not in his place, will say not to worry about that too much, because we will be able to create more jobs: they will be destroyed, as has always been the case in the past. He may be right—indeed I hope he is—but it is a pretty heroic scale of job creation over a very much shorter period than in other industrial revolutions, which have lasted 50, 75 or 100 years. Whether he is right or not, it is going to be a time of great change which will also impose huge strains on our society. So the background to my Brexit position is the key question: does membership of the European Union help or hinder our ability to face up to and resolve these challenges? In short, will economic power, large power blocs, be the key determinant, or will it be the ability to be flexible and speedy in our response? I have concluded that, in fact, flexibility will be by far the most important factor. I fear that the structures and member states of the EU will not be able to react fast enough—a fast reaction will be critical—nor will they be able to forge a common purpose among them.

Against that background, I turn to the proposed transaction—the Prime Minister’s deal. During a lifetime in the City in which I watched and participated in negotiations on the outcome of which hung fame, fortune and reputation, two features predominated. The first was that, as these fierce negotiations drew to a close, both parties would feel dissatisfied and disappointed and that if somehow they had played the cards better, a better outcome could have been achieved. For me, the question is not whether this is a good deal; it was never going to be a good deal. The question is whether it is a good enough deal for us to want to back it. The second feature was that the toughest issues always had to be sorted out at the eleventh hour. The idea that hard issues could be sorted out early in a negotiation is fanciful.

The noble Lord, Lord Thomas of Gresford, referred to the old phrase, “the man on the Clapham omnibus”. Perhaps I may introduce a much more vulgar and politically incorrect phrase—“It ain’t over till the fat lady sings”. As we enter March, the fat lady is starting to warm up. That means that, as the noble and learned Lord, Lord Hope of Craighead, said—and as the noble Lord, Lord Hannay, did not say—any extension of the Article 50 period would be a great mistake. It is only the pressure of an end date that will force the concessions and agreements that have to be reached to make this deal happen. Otherwise, everybody relaxes and the fat lady goes back to her dressing room and waits for a chance to warm up in a month or two.

In my view the Prime Minister’s proposed deal is good enough, although we must remember, as the noble Lord, Lord Rooker, has just reminded us, that it is only half a deal. There is another whole chunk still to go in negotiating our future relationship. Of course it would be helpful to get some movement on the backstop, but I feel that the EU is unlikely to want to hold us within its structure if we are paying no subscription. Many of us have felt, and evidence is now emerging, that, given the relatively low volume of trade across the land border, technology will provide an answer.

It may be unfashionable to say this, but I believe that the Prime Minister has played an impossible hand pretty well. Assailed by equal and opposite forces within both the Conservative and Labour parties, she has plodded into the storm enduring unceasing ridicule and criticism. I hope she will get the necessary backing for her transaction so that this country can reorientate itself to the new situation and begin to address not only the big strategic issues I mentioned earlier in my remarks but the many short-term problems that we face.