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European Union (Withdrawal Agreement) Bill - Second Reading

Part of the debate – in the House of Lords at 4:18 pm on 13th January 2020.

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Photo of Lord Barwell Lord Barwell Conservative 4:18 pm, 13th January 2020

My Lords, it is an honour to follow the right reverend Prelate and to make my maiden speech in this place.

I thank the staff of the House for their warm welcome and my supporters, my noble friends Lord Young of Cookham and Lord Gilbert of Panteg, who between them have been an almost constant companion during my career. I also thank my former boss, Theresa May. I had the honour of serving first as her Housing Minister, then after I lost my seat in the other place as her chief of staff. I saw at first hand her incredible resilience, commitment to public service and—perhaps less commented on—her dry sense of humour. The deal which the Bill before the House today implements is in large part Theresa’s deal. Having spent two years by her side as she negotiated it, I felt that I should speak in this debate, even if there is a convention for maiden speeches to be uncontroversial. I fear that that is impossible on this issue, but, if it is any consolation to your Lordships, I tend to upset both sides equally.

There are three changes to the previous deal, one at least partly for the better, and two for the worse, in my opinion. Two of them are to the Northern Ireland protocol. First, the Government have gone back to what the EU originally wanted: a Northern Ireland-only arrangement. The result is that goods will have to undergo customs checks when they are moved from Great Britain to Northern Ireland, creating a border within our single market. The scale of those checks will depend on negotiations in the Joint Committee about the operation of the protocol that will get under way shortly, and I look forward to the Minister confirming how the House will be updated on those negotiations.

Secondly, the arrangements in the protocol are now a default rather than a backstop but, crucially, there is a way out of the arrangements if the people of Northern Ireland want it. That latter point is a welcome improvement. The third change is to the political declaration on our future relationship with the EU, which now provides for a more distant relationship, akin to Canada’s. Again, the Government have gone back to what the EU wanted at the outset of the negotiations.

I regret two of these changes; I think that they are bad for our union and our economy. However, I believe that the referendum result must be implemented—people have waited too long already—and, having spent two years telling people that they needed to compromise to achieve that, I need to take my own advice. I will therefore support the Bill.

However, in my remaining time, I want to make six points about the negotiations on our future relationship that are soon to begin. First, we need to be honest with ourselves about how difficult they will be. Some seem to believe that the fact that we start aligned will make things easy. They will not be easy even if we wanted to stay aligned, but the Government do not; they want the freedom to diverge. We are about to negotiate something completely unprecedented—an FTA that is not about removing barriers to trade but agreeing when and to what extent they will have to be put up.

Secondly, if we want to succeed in those negotiations, we need to understand the other side’s position. I lost count of the times I was told, “The EU has a trade surplus with us, so it’s in its interest to do a deal”. Well, yes, but only up to a point. Its primary concern is preserving the integrity of its institutions, particularly the single market and the customs union. What it means by that, although it is normally too polite to say it explicitly, is that there has to be a cost to us leaving. That is not because it wishes to punish the UK, but because, if you can leave a club and enjoy all the benefits without any of the obligations, why would anyone stay a member of such a club?

That brings me to my third point. Now that we are definitely leaving, and we can stop refighting the referendum campaign, both sides need to be honest about the benefits and costs of different options. The more distant our relationship with the EU, the bigger the cost, but the more freedom we will have in the deals we do with other countries. I will give the House one example. The Government want to end free movement. I agree. It was one of the main concerns about membership that drove the leave vote. We will take back control of how many people come into our country, but there will be a cost in terms of the free movement of goods, capital and services. However, if we go further than that and decide that we are not prepared to give any preference to certain EU nationals in our immigration system as part of a deal on services—I draw the House’s attention to my declaration of interest, because I work for a number of companies that provide professional services—the cost will be bigger but we will have more freedom to give preference to other countries. There needs to be co-ordination between the negotiation with the EU and the negotiation with other countries, because choices we make in one will impact on the other negotiations.

Fourthly, I fear that we are in danger of repeating the mistake we made in the divorce negotiations. I understand why the Government do not want to extend the transition period. However, there simply is not time to negotiate the entire future relationship, have it ratified by national Parliaments, and for business to prepare to implement it, in 11 months. The substantive provisions of CETA are 550 pages long; the whole thing is nearly 2,000 pages long. Therefore, as President von der Leyen has said, we will have to prioritise. The main risk is not no deal but a very basic initial deal. It is in our interest for everything to be decided in one go, because the moment that is no longer the case, we risk getting into a repeat of the divorce negotiations, where the EU ensured that its three priorities were dealt with first.

For reasons of time, I will miss out one point and will end by saying this. The EU also needs to learn the lessons of the last few years. It may feel that its approach worked and be tempted to repeat the playbook. There is a real danger that, if it publishes a mandate in late February that closes down all the options before negotiations have even begun and seeks to sequence them in its favour, the UK will not ultimately give in but will walk away. Both sides will lose out if that happens. Our countries have much in common and we face mounting threats. We need a relationship that works for both sides and which allows us to work together to deal with those threats. We should not expect the EU to do us any special favours, but I hope it will see the bigger picture. History will judge us both badly if we get this wrong.