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Amendment 35

Part of European Union (Withdrawal Agreement) Bill - Committee (2nd Day) (Continued) – in the House of Lords at 9:30 pm on 15th January 2020.

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Photo of Lord Fox Lord Fox Liberal Democrat Lords Spokesperson (Business, Energy and Industrial Strategy) 9:30 pm, 15th January 2020

Oh dear, it’s that man again. Amendment 35 concerns the level playing field. We have heard a lot about standards and regulation over the last day and a half. This is not about going through all those standards and regulations and whether they are being regressed or otherwise. It is about the overall effect that the playing field, as we have called it—we will talk about that—will have on the negotiation stance. This is very much a probing amendment to try to find out how the Government will deal with what seem to me a number of conflicting circumstances in their positions.

We have heard a lot about regression but we are not going to talk about the individual issues here. Amendment 35 seeks to require the Government—those words again—to seek alignment of their regulations, institutions and objectives for the future FTA with the EU. My noble friend Lord Newby talked about whether we are talking about unfettered or frictionless access. A key element to access to the single market will be the level playing field, which is why this is a really important element. I am keen to hear the Government’s intellectual thoughts here. For the avoidance of doubt, we are talking about workers’ rights, environmental regulations, state aid, food and product safety, data rules and the whole framework by which people do business and live their lives. It is not a small issue. Picking out just one of those—employment regulation—I note with surprise that the Prime Minister is quoted in the Financial Times as describing employment regulation as “back-breaking”. I come from an agricultural background and it was the absence of employment regulation that caused backs to break. The point I am trying to make is that regulation is often seen as harmful and terrible, but it has had a beneficial effect on many people’s lives. You have only to ask agricultural workers alive today to see how employment regulation has improved their lives. That is just one small example.

These rules matter to people, the environment, business and many other things. But they will also matter to the EU trade negotiation; in fact, they will make or break it. The non-binding political declaration on the future EU-UK relationship makes it clear that there is a direct link between Britain’s regulatory regime and market access; we know that to be true. That is picked up in the wonderful report from the European Union Select Committee, which I have already referred to. It talks about where there has been a substantial rewrite, which we have heard about in other cases. The report says that the declaration, in adding the issue of the

“geographic proximity and economic independence of the parties,” adds more doubt about how this will go forward.

In the event that the EU eventually agrees to a UK-wide customs union, which it may, member states will require the UK to sign up to level playing field provisions. What is a level playing field? Most people who talk about them are usually trying to tip one in their direction at the same time; that is of course the subject of the negotiation, and I would not dream of seeking to tie the hands of the Government on that. By the definition of the negotiation, a level playing field is the price of any zero-tariff, quota-free and rules-of-origin-free access to that very important market for the United Kingdom. Anything less will create friction, or perhaps fetter access to that market. That is what our major industries fear. If noble Lords talk to major industries, as I am sure they are doing, they will hear that the issue of data, which we heard about two amendments ago, is frightening the fintech industry to death. Questions about rules of origin are frightening the food industry. Chemical and pharmaceutical companies fear, among other things, how the chemical regulations will pan out. Aerospace and automotive are famously concerned about how their industries will survive in this remit.

There are many other examples of when the Government and Ministers have said the right things—I praise them for that. The Government have worked with the words and talked about balance and regulatory alignment. However, the noble Baroness, Lady Jones of Whitchurch, talked about the pressures on the Government that will come. There are also examples of the Government painting a picture of a much more freewheeling approach. We have heard people worrying in other debates about regression of rules and regulations and there are those quotes from different Ministers in different places, particularly the Prime Minister, who sometimes chooses to set out a Britain on the edge of Europe, with lighter regulations. Before the election, DExEU signalled an openness to “significant divergence”. This all adds to people’s distrust of the Government’s intentions.

In Johnson’s case, his ambivalence seems determined by his proximity to the United States: the nearer he is to President Trump, the more free market he is in what he says. We should note that talk of the US trade deal really makes the level playing field issue with respect to the European Union very difficult. We talked on a previous amendment about some of the food security issues which the United States could create, so there is a big challenge here. These mixed messages from Government could be constructive ambivalence before we go into a negotiating period, or there could be splits or confusion. Perhaps the Minister can define quite why all these different messages are coming forward.

From the EU’s perspective, there is no such thing as a little bit of a level playing field. From its perspective, it is level or not level. I think a lot of the talk has been about having some levelness, but not all of it. I think that is to misunderstand the approach that the European Union will take when it comes to negotiations. Theresa May’s deal agreed a relatively generous level of provisions around taxation, labour and social standards and environmental protection. We are now in a different place, so I think we need some delineation from the Minister of which areas will be the focus for negotiations because I am sure that those Theresa May provisions will be, at the very least, a starting point from the European Union’s perspective.

We do not have time, but there is the whole issue of dynamic alignment. As Ministers have set out, we start off in the same place—it is pretty easy. But the day after tomorrow, something changes. How do we change and maintain dynamic alignment with those standards? This is a particular issue when we come to the island of Ireland and Northern Ireland. Under the deal, as I understand it, legally binding level playing field provisions apply in the exit treaty focused on Northern Ireland. How the UK maintains alignment in the British part and the Northern Irish part of those regulations to maintain its access to the all-Irish market, and therefore the European Union, is beyond my ability to understand. I am happy and humble if the Minister can explain how it will happen. It will be crucial to the negotiation. Things coming out of Brussels indicate that the role of British businesses with Northern Irish subsidiaries will also be dragged into negotiations, something I had not heard anything about until yesterday. That adds further complications to it.

This amendment also seeks to maintain UK access to participation in major funding programmes and the like, which I will not go into. The amendment sets out what we think is important around the level playing field issue. It maintains a beneficial framework—a framework jointly developed by the United Kingdom with the European Union; it was not foisted on us—and it helps to send the right messages to important businesses and sectors about how they can face the future. This discussion is a chance for Her Majesty’s Government to set out their approach because, at the moment, the messages have been confused, confusing or both, so we look forward to comments from the Minister.