UK-EU Relationship (European Affairs Committee Report) - Motion to Take Note

– in the House of Lords at 6:02 pm on 20 September 2023.

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The Earl of Kinnoull:

Moved by The Earl of Kinnoull

That this House takes note of the Report from the European Affairs Committee The future UK-EU relationship (4th Report, HL Paper 184).

Photo of The Earl of Kinnoull The Earl of Kinnoull Chair, European Union Committee, Chair, European Union Committee, Deputy Chairman of Committees, Convenor of the Crossbench Peers

My Lords, the European Affairs Committee published our report, The future UK-EU relationship, on 29 April this year. We took oral evidence between October last year and March this year, hearing from 43 witnesses, finishing with the Minister for Europe, Leo Docherty MP. We also received 58 written submissions. The Government responded to the report on 28 June and to certain follow-up questions on 31 August. I am very grateful to the usual channels for expediting this debate today.

Put simply, the report looks at the overarching state of the relationship between the UK and the EU and how this might be developed into the future. This inquiry looks forward and not into the rear-view mirror. We did not address issues specific to Northern Ireland, including the Windsor Framework agreement. These are handled by our sister committee on the protocol.

The inquiry focused on four themes: the overall political, diplomatic and institutional relationship; the foreign policy, defence and security relationship; energy security and climate change; and the mobility of people. These do not comprise an exhaustive list of areas in which the UK-EU relationship could be developed. However, we as a committee believe that they are especially salient at the current juncture.

Here, and on behalf of the committee, I thank our staff: Jarek Wisniewski, Jack Sheldon, Nick Boorer, Tabitha Brown, Tim Mitchell and Louise Shewey. Their commitment and professionalism underpin everything in our report.

I start with the overall political, diplomatic and institutional relationship. It was unhappily the case that, during our inquiry, this was impacted by the impasse over the Northern Ireland protocol. Now, however, there are signs of improvement, not least with the recent welcome news on Horizon Europe.

The current institutional framework under the trade and co-operation agreement and the withdrawal agreement includes a total of 32 committees and working groups that bring together the Government and the Commission. Two of these committees are political, with the others essentially powered by officials. It is a double-headed structure, with two sets of committees reporting to one or other of the political committees, each of which is set up under its respective big agreement.

The committee felt that this huge apparatus was operational but not really operating. We recommended that there should be a “considerable increase” in the intensity of activity within these structures. We must optimise matters, and it is vital that the committees hum with activity to the mutual benefit of all concerned. Can the Minister give us an update on the 32 committees’ level of engagement and work, and assure the House that, from the UK side, at least, activity and warm relations are seen as a priority?

Our second theme was the foreign policy, defence and security relationship. We welcomed the “close and productive” co-operation between the UK and the EU following the Russian invasion of Ukraine, as well as the effective co-operation in the imposition of sanctions against Russia, but called for closer co-operation on their implementation and enforcement. We specifically proposed that the UK and the EU agree a memorandum of understanding on the imposition, implementation and enforcement of sanctions, complementary to the G7 enforcement co-ordination mechanism.

In its response, the Government said that they are not currently considering an MoU with the EU but that they

“will continue to review options to maximise the efficiency of our cooperation with the EU going forward”.

I ask the Minister: what factors are influencing the Government’s hesitation about this MoU on sanctions, which I assume would track the enhanced sanctions partnership agreement reached already between the Government and the US Treasury?

We heard a lot on having a structured framework for foreign and security policy. The report recommends that the UK and the EU should “deepen and improve” working relations on foreign and security policy, with some limited structured arrangements for ongoing co-operation. We thought that a purely ad hoc approach was not wise. We felt that any such structured arrangements should include provision for the UK Foreign Secretary to engage with the EU Foreign Affairs Council at least twice a year.

To date, the Government’s responses are none too clear on this. On 31 August, the Foreign Secretary said that

“both sides are focused on making sure our cooperation delivers, rather than on institutional changes”.

Can the Minister give some further clarity here? It seems to me that engagement at the General Affairs Council would improve the chances of delivery.

I turn to our third theme, which is energy security. This is obviously a wide area, and we focused on several specific topics in our report. The committee welcomed the close co-operation with the EU since the Russian invasion of Ukraine and noted that, in part thanks to this, there had been no disruption to energy trading. The report made various recommendations —for example, on the need for more interconnectors. I am glad that the government response materials have been positive on the recommendations. I look forward to others developing this vital area.

Turning to emissions trading schemes, the UK left the EU ETS at the end of the transition period. A separate UK ETS was established, which is very similar in design. This began trading in May 2021, and the carbon price has since broadly tracked the EU scheme. The UK scheme is around 10% of the size of the EU one. We saw

“significant mutual benefits to be gained” from linking the schemes, citing the Swiss precedent. We recommended entering negotiations in what we called a “can-do spirit” and noted that a link would be

“easier to achieve sooner rather than later, given the possibility of greater divergence over time”.

The Government’s response says that they

“partially agree with the Committee’s recommendation”,

but it does not make clear which parts they agree with. A follow up in correspondence has not shed much new light on matters.

Commentators are now referring to a growing divergence between the UK and the EU’s Emissions Trading Scheme. As the Government have previously assured us that they are considering linking our respective systems, I ask the Minister: does this remain the case, and what steps are being taken to take this forward?

In December 2022, the EU Council agreed its general approach to a carbon border adjustment mechanism. A draft regulation is now progressing. The EU sees CBAM as a necessary part of its wider efforts to combat climate change. Without a CBAM in place, the EU foresees a risk of carbon leakage, whereby energy-intensive industries might relocate outside the EU and sell their goods back into the EU, effectively undercutting EU-based industry subject to carbon-reduction policies such as the EU ETS.

Under the EU’s current CBAM proposal, countries with an ETS linked to the EU’s would be excluded from such charges. As the UK and EU schemes are not currently linked, it is possible that CBAM could apply to UK-EU trade. I see no reason why the EU’s logic does not apply in reverse to the UK. All this of course strengthens the argument for linking ETSs. The Government have been consulting on measures to combat carbon leakage and their report on this area has not yet been published. Will the Minister say when we might expect the Government to provide an update on their position and where in the existing TCA committee structure CBAMs are being discussed?

The last section of our report examined the broad area of mobility of people, including the implications of the TCA’s provisions for both inward and outward business and professional mobility between the UK and the EU, but I will concentrate only on our work in the education and young persons sectors. The Government have made much of the Turing scheme, and we applauded it in its limited scope. However, we studied the Welsh Government’s Taith scheme. Indeed, we travelled to Cardiff. Introduced in 2022, Taith provides financial support for inbound educational group mobility. A Welsh organisation can apply for funding to send people out of Wales to another country and get funding to bring people to Wales. The Turing scheme provides funding for outbound mobility only. The Scottish Government have recently announced plans for a similar scheme to Taith, although details have not been provided. Of course, students in Northern Ireland can access Erasmus+.

We asked the Minister for Europe whether there are plans to introduce a scheme similar to Taith in England. He said the Government were

“open-minded and we look with great interest at the extent to which we might operate a similar scheme”.

In the most recent correspondence with the committee, the Foreign Secretary said,

“the Turing Scheme’s focus on outward mobility funding has not been a hindrance to forming partnerships between institutions, which may go some way to providing the kind of links the Committee is seeking”.

Three-quarters of the United Kingdom’s nations are already or will be establishing some form of reciprocal student exchange programme. Given the Minister for Europe’s admission that Erasmus+ has been “very beneficial” to the UK and the evidence that Taith has been successful in Wales, will the Minister comment on whether the Turing scheme will be enhanced?

The committee heard evidence that suggested that post-Brexit barriers to mobility between the UK and the EU, in both directions, have had an especially significant impact on young people, including workers and professionals in the early stages of their careers, as well as students across different educational levels. We recommended that the Government discuss with the Commission the possibility of an ambitious reciprocal youth mobility partnership, similar to the youth mobility schemes that the UK and EU member states enjoy with other jurisdictions, allowing young people to apply for fixed-term visas to travel and work. The Government’s response here was lacklustre, saying that the Government are

“exploring bilateral opportunities for reciprocal youth mobility schemes with international partners, including our European neighbours”.

Finally, will the Minister give us an update on discussions with the EU and individual EU member states about youth mobility partnerships?

There are many speakers and I look forward to the debate very much. I beg to move.

Photo of Lord Lamont of Lerwick Lord Lamont of Lerwick Conservative 6:13, 20 September 2023

My Lords, I thank the noble Earl, Lord Kinnoull, and congratulate him on his chairmanship of the Select Committee. His calm, efficient manner and attention to detail made it a very great pleasure and also made it easier for us to reach a unanimous conclusion to our deliberations. I join him in thanking our staff. I know it is customary and a habit always to say that, but it is well meant. We got some very good advice and service.

I was one of two leavers on a committee of 11, but I strongly support its recommendations. I want to explain today why. I also want to concentrate my remarks, almost entirely on the context, the political background, of the report. The report starts by saying that the relationship since Brexit was initially

“characterised by tension and mistrust”.

I think this is true and awkward. Perhaps it was inevitable. Brexit as an act caused hurt and possibly the desire to punish in some parts of the EU, but as my noble friend Lord Frost said when he gave evidence, the fault was on both sides. We had evidence from a wide range of witnesses. It was interesting that when we had my noble friend Lord Frost and the noble Lord, Lord Mandelson, together, their evidence did not diverge very much.

Brexit has happened. It was a seismic event but, having happened, it is in everybody’s interest that we should have as close and co-operative a relationship as possible. It is not a betrayal of Brexit. It was Boris Johnson who said after Brexit that we must concentrate on developing a close and co-operative relationship with Europe. On what basis should that co-operation and collaboration happen? Again, I think my noble friend Lord Frost put it well to the committee when he said that Europe was a port of call, not always the first port of call, but an important port of call. We do not want close alignment, rule taking or the imposition of EU law. We are a third party. We accept that we are a third party, but we can still have a close relationship as third party.

It is important while talking about the need for collaboration to be realistic about its limits and about the relationship. We should not delude ourselves that we can sweet-talk our way into a different sort of trade and co-operation agreement while remaining outside the customs union and the single market. It seems to me—I make this point not as a political point but to illustrate my point—that the leader of the Opposition is in some danger of falling into this error, peddling the idea that he can change the relationship profoundly while remaining, as he claims we will be, outside the single market and the customs union.

During the committee, we had a vigorous argument between—if I may still use the terms—remainers and leavers about alignment and divergence. To my way of thinking, both sides make a fetish of this and it is a mistake. We must have the sovereign right to diverge, but we should not diverge in regulations for the point of diverging. We should diverge when it is necessary to diverge and when there is an interest for this country in doing so.

Similarly, what should be our principles in co-operation with the EU programmes? I think an interesting case was that of Horizon. The decision that the Government made to join the Horizon programme got a lot of applause, but at the same time people criticised the delay in reaching that decision. I think that is wrong. I think it was right for the Government to take their time to consider whether this was the only option and whether it really represented value for money. The EU has much to gain from UK participation in Horizon, and it would have been an act of self-harm by the EU to have excluded Britain from it.

Part of our report, perhaps too much of our report, is about how many meetings this committee or that committee has had and which ones were missed. I note the Government’s reply which I thought was a master- piece. They said that the intensity of contact is not a measurement of effectiveness. Hear, hear to that and brilliantly put by the Government.

The most important recommendation of the committee refers to security and foreign affairs, with a call for a more structured dialogue. That does not mean having the bureaucracy or the law of the CFSP. The Government’s reply was non-committal. I read in newspapers in July that the Government had rejected a call from the European Council for more structured dialogue, and I would be grateful if the Minister could tell us whether that is true. It seems to me that this recommendation is sensible. Ukraine has reminded us, tragically, that the defence of Britain and Europe goes together. Britain is important to the defence of Europe, Europe is our first line of defence and where there is increasing co-operation, after what has happened in this tragic war, that can only be in both our interests. I support that, I support the other recommendations of the committee and I commend the report to the House.

Photo of Lord Liddle Lord Liddle Labour 6:19, 20 September 2023

My Lords, this is an admirable report and I agree with virtually all its recommendations. It is a fine swansong for the period of the noble Earl, Lord Kinnoull, as chair of the committee. It is wonderful, in a way, that we were able to reach agreement on the report’s important recommendations. It was a great pleasure to work with the noble Lord, Lord Lamont, on the committee; although I do not agree with everything he said in his speech, I agree with quite a lot.

Now that we are outside the European Union, we should be striving for consensus on how we can improve the relationship. Consensus does not mean that everyone should agree—for example, I do not think we should allow the populist right a veto over how we try to improve our relationship—but it means that when we talk to Brussels, whether through the present Government or an incoming Labour Government, it should feel that there is some kind of political willingness on Britain’s part to have a constructive relationship.

The big gap in our report, and this was done deliberately, is economics. It is a gap, as the noble Lord, Lord Lamont, referred to, that Keir Starmer was trying to fill when he announced that he was determined to improve the TCA. Obviously there is some scepticism about that, even among the European academic bubble—yesterday I read a report by the UK in a Changing Europe group that was rather sceptical about what it might achieve—but I think change is achievable in the trading relationship.

A big problem that we have had since Brexit is the lack of trust between the EU and the UK. A lot of that is due to the way in which the present Government threatened to breach their treaty obligations on the Northern Ireland protocol. The present Prime Minister, Rishi Sunak, deserves praise for negotiating and agreeing the Windsor Framework, but there is still hesitancy about taking the relationship forward. For example, I do not know how the present Home Secretary thinks that threatening a potential British withdrawal from the EHRC is going to help our efforts to control illegal migration. That would mean a crisis in our relations with the EU and a great interruption in police and justice co-operation. The fact is that we would be less able than we are now to work with our partners in tackling the criminal gangs of people smugglers.

We should stop trying to threaten these things, however sotto voce, and try to build a relationship of trust. Labour can do that. Labour can work strongly with our European partners in the defence of democracy, which is fundamentally what is at stake in Ukraine. If we have a change in the presidency of the United States next year, that will be an existential crisis for whether Europe can work together to defeat the Russian invasion of Ukraine.

Secondly, there is common agreement on large parts of the climate change agenda, although I am sorry to see the Government backing off it today.

Thirdly, there is a lot of scope for industrial co-operation on the new technologies. In the 1970s we had the great Airbus project. Let us think about how to work together on new technologies so that European efforts can match the challenge of China and the dominance of the US tech giants.

We can build an atmosphere in which change in the trading relationship is possible. We cannot be stuck with David Frost—the noble Lord, Lord Frost—for ever. That, it seems to me, would be fatal to Britain’s economic growth prospects. It is therefore worth working hard at trying to build a more constructive relationship with our partners and friends.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Liberal Democrat Lords Spokesperson (Cabinet Office) 6:25, 20 September 2023

My Lords, I wish I could be as optimistic as the noble Lord, Lord Liddle, that Keir Starmer will be able to make Brexit work.

I congratulate the committee on this excellent report. It is useful to focus on the non-commercial aspects of this broad relationship: foreign policy, defence, energy co-operation and the mobility of people.

I found the government response disappointingly thin on content. Its preference for the Turing scheme over Erasmus+ is specifically stated to be because Turing does not offer reciprocal benefits. Searching issue by issue for arrangements in which the UK gains and others give is no way to rebuild a close relationship with the EU and our neighbouring states. Good relations depend on mutual trust and broad reciprocity.

I read the article in yesterday’s Telegraph by the noble Lord, Lord Frost, on relations with the EU. As he was the Minister who negotiated the trade and co-operation agreement, it would have been valuable for the House to have heard his comments on this report, and he was in the Chamber earlier today. I was puzzled that he claimed in the article that his negotiations on fisheries and on security had been successful, and I was astonished that he made no reference to the impact of the Ukraine conflict on UK relations with the rest of Europe and on European security as a whole.

I agree with the report that UK participation in the loose framework of the European Political Community—alongside 20 other third countries, including Andorra, San Marino, Monaco and Liechtenstein, as well as the European Union—is a useful but small step forward. No doubt its coming meeting in Spain will focus on support for Ukraine and the spillover of conflicts and migrants from north Africa into Europe. I hope that preparations are now well under way for the UK to host the fourth meeting in spring next year, but I note that the Government have already recognised that this is not enough by joining the PESCO Military Mobility project. We need to move much closer towards regular and frequent consultations on foreign and security policy, multilaterally in Brussels as well as bilaterally in national capitals.

I remind the noble Lord, Lord Lamont, that successive British Foreign Secretaries, from Lord Carrington and Sir Geoffrey Howe onwards, were architects of the development of the common foreign and security policy mechanisms, and I can think of no Foreign Secretary, Labour or Conservative, since the beginning of that process under Jim Callaghan who has not regarded that as an invaluable contribution to British foreign policy.

The article in yesterday’s Times by the noble Lord, Lord Hague, provided another powerful argument for foreign and security co-operation with EU members. We cannot rule out the possibility that Donald Trump might win the next US presidential election. If that happens, the British Government will need to respond with the closest possible co-operation with our European partners, as well as Canada and Australia, and we need to build that relationship now.

The chapter on energy policy restates what everyone following energy policy already knew, but which the proponents of leave denied: our energy supplies are already dependent on interconnectors with other neighbouring states and will become more so as we and others move further towards renewable energy. One might add that these Governments are all now painfully aware that the interconnectors are vulnerable to hostile sabotage and that defence co-operation in protecting the network from attack is a security interest that we share with states across the channel and the North Sea.

The noble Lord, Lord Frost, mentioned extra-European migrants in his Telegraph article but had nothing to say about the current confusion over mobility between the UK and the EU, which the report sets out. Policy here is incoherent, with the Home Office wanting to keep as many people out as possible, and DSIT and DfE proclaiming that we are open to foreign workers, foreign researchers and talented students. Some EU states are now imposing restrictions on the number of weeks that British businesspeople, academics and lawyers can work in their countries in return. I fear we will have to wait for a different Government before any reciprocal arrangements can be agreed that will allow a freer flow in both directions across the channel.

The report also recognises the flimsiness of any European strategy or framework for co-ordination across Whitehall. It has not helped that we have had six Ministers for Europe since the 2019 election, one of whom served for two months and another for five months, with the post now downgraded to a Parliamentary Under-Secretary. It is a great contrast with the coalition period from 2010, when David Lidington was in office for five years as a senior Minister of State, with real influence across Whitehall.

The Government are making almost no effort to get their act together in managing the complex relations with our nearest and most important partners, which cover most of the important interests across Whitehall. Furthermore, the cadre of expertise on the EU—its regulations and institutions—that had been built up in Whitehall is shrinking, at a time when even right-wing Conservatives admit that we need to rebuild political and policy links. We need to rebuild the networks of co-operation among officials, Ministers, political parties, schools, universities and civil society that have been so badly damaged in the past five years. I welcome this report’s contribution to making such arguments.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Crossbench 6:31, 20 September 2023

My Lords, the report we are debating, so admirably introduced by the noble Earl, Lord Kinnoull, who contributed to great effect to its production, is quite simply the first overall analysis of the future development of the UK’s post-Brexit relationship with the EU by either House of Parliament since we left the EU in early 2020, more than three years ago, so it deserves to be taken seriously. It will not be the last word on a subject which, whatever side you voted on in the 2016 referendum, will be prominent in our politics for the foreseeable future, but its long list of suggestions for developing that relationship deserves careful scrutiny and response.

First, it is a great pity that the Government have yet again rejected the idea of negotiating an SPS agreement with the EU, when it has the wholehearted support of the agri-food industries in all four nations and of most parties in Parliament. That industry, which has benefited to an increasing degree from its access to continental markets, is being sacrificed on the altar of sovereignty—that imprecise and poorly understood concept which is trotted out whenever needed to reject a well-argued proposition.

Secondly, the report’s proposal that the UK should establish a structured framework for co-operating with the EU on foreign and security policy issues has been supported strongly by all previous speakers in this debate. It was a concept endorsed by both parties in their joint political declaration, negotiated and ratified in 2019 and 2020, and then dropped by Prime Minister Johnson. Whatever the rights and wrongs of that decision at that time, the case for such a framework has been greatly strengthened since then by the need to respond effectively to two major challenges: Russia’s aggression against Ukraine and the rising assertiveness of China worldwide. The Government say that we are getting along just fine by co-operating with the EU on an ad hoc basis on those and other issues, but that demonstrates a not-unprecedented misunderstanding of the way the EU best responds, which is through frameworks for co-operation laid down in advance, while leaving each party autonomy in its own decision-making. Surely this is a moment for a rethink on that issue.

Thirdly, there was the Government’s response to the report’s proposal that the UK and EU should develop the closest possible co-operation on their climate change policies, in particular linking their emissions trading schemes and ensuring that any cross-border adjustment mechanism did not get at cross purposes and give rise to further friction in their mutual trade. To say, as the Government do, that they agree with the report’s views in part, without saying which parts, is just a curate’s egg reply. Every single professional witness who gave us evidence urged the need for the closest possible co-operation on those issues, but in the real world the UK’s emissions trading scheme is now drifting away from the EU’s and the Government have not yet decided even whether to have a CBAM scheme, let alone what relationship it should have with the EU scheme that is already taking shape. What will the Government do if the EU imposes a CBAM on Chinese steel and cement? Will they just sit back and allow the trade to be diverted here?

The section in the Government’s response on the report’s conclusions on school visits and many other forms of cultural and educational co-operation is, frankly, shameful. The Prime Minister and the French President agreed last March to remedy the free fall in UK-France school visits since Brexit. What has happened since then? Precisely nothing is the answer; something might happen by the end of the year, we are told. Meanwhile, successive generations of schoolchildren are missing out on those formative experiences, and what could be more self-defeating than refusing to make the Turing student exchange system one which operates mutually and opens up possible co-operation with the EU’s Erasmus scheme? There is narrow-mindedness here which is quite shocking.

There is much wrong with the Government’s response so far to our report. How best could that be remedied? First, we should open discussions with the EU on how to strengthen the framework for our co-operation on foreign policy and security issues, as we foresaw doing in the 2019 political declaration. At the same time, we should begin exploratory talks with the EU about how to put to most effective use the 2025-26 review of the trade and co-operation agreement, which is provided for in its terms. None of this will be easy or straight- forward, so the sooner we begin the better. It will be important for both parties to work for ways to strengthen our co-operation to their mutual benefit, as we emphasised and underlined in our report. That should help to answer silly criticisms of cherry-picking, which are bound to surface from some quarters in Brussels.

The first few years following Brexit have hardly been a happy experience. Now we have a real opportunity to get on to the front foot and treat the existing skimpy system as a floor and not a ceiling. The Windsor Framework and the deal on Horizon are a promising beginning, but we need to be more systematic and determined about the next stages. That is the challenge this report makes to Parliament and to all parties represented here. Let us hope they will rise to it.

Photo of Lord Tugendhat Lord Tugendhat Conservative 6:37, 20 September 2023

My Lords, it is a great pleasure for me to follow the noble Lord, Lord Hannay, with whom I first became involved in the European adventure, if one might call it that, as far back as 1977. I have listened to his wisdom a very great deal since then. It is also a pleasure for me to congratulate the noble Earl, Lord Kinnoull, and those who served on the European Affairs Committee that produced this report. I was very sorry when I had to leave the committee earlier this year. I can see that the quality of the work that the committee has done has continued to improve since my departure.

This report is exactly the kind of thing which was needed at present. It is a detailed and workmanlike assessment of how to make the UK-EU relationship work better for this country as a whole, as well as for the EU. When I say as a whole, I mean for individuals, businesses and interest groups. As my noble friend Lord Lamont said, the important thing now is to make Brexit work, and this report is an important contribution towards exactly that aim—towards getting things done which were left undone at the time of our departure, and the sooner that we can act on these matters, the better.

Reading the recommendations relating to creative artists, school visits, higher education and support for small businesses, as well as the sanitary and phytosanitary rules, brings home the extent of the lost opportunities. These are all matters on which my noble friend Lord Frost might have had something to say if he was here today. He could explain how it was that these matters were overlooked at the time of our departure. It is tragic, by which I mean that businesses, interest groups and individuals themselves have all suffered loss and lost opportunities. I am glad that this report has shown the way forward.

There is also much good sense in the report on the big political issues, such as the overall political relationship, defence and foreign policy co-operation, the institutional framework and green-related issues. But these matters will, of course, take time to resolve and will depend very much on circumstances within both this country and the EU. So far as the EU is concerned, they are by no means top of the agenda. The EU has its own problems in relation to immigration, the eurozone, energy security and of course Ukraine.

That brings me to my key point. Looking ahead, it seems that Ukraine will become an increasingly important factor in framing the EU’s approach to its relationship with the United Kingdom. Here, I am thinking of two quite separate but interrelated matters. On the one hand are the consequences that flow from Ukraine’s application to join the EU and how that is dealt with. However it is dealt with—whether Ukraine joins as a full member at some distant date or whether some special arrangement is made—the consequences of that decision are bound to be extremely far reaching on the structures of the European Union and will also create precedents in terms of relationships between the European Union and other countries. Ukraine is a transformational matter.

Another factor will be the huge costs involved in reconstructing the country and preparing it for eventual EU membership—or whatever other relationship is agreed. In the nature of things, the primary responsibility for financing and carrying through the preparations to bring Ukraine into the EU, or into whatever relationship is decided on, will be for the member states. But surely those countries which have played an important part in supporting Ukraine during the war—the United Kingdom has been particularly prominent in that respect—will also play a part in reconstructing Ukraine after the war, whenever that may be.

That reconstruction will involve the creation of a very close and novel relationship with the EU. The terms and conditions on which we co-operate with the EU in Ukraine will, I think, have a very great influence on the nature of our overall relationship and how it might play out, and it is not too soon for us to start thinking about that now.

Photo of Baroness Blackstone Baroness Blackstone Independent Labour 6:43, 20 September 2023

My Lords, much of the thrust of the committee’s report is on the need for increasing the level and intensity of UK-EU contacts in a context in which Brexit is now behind us. The importance of our relationship with the EU as a bloc and with individual members bilaterally is recognised widely and only disputed by ultra anti-European ideologues who, regrettably, still have some hold in the far-right fringes of the Conservative Party.

The need for close and meaningful contact with the EU has been recognised very recently, I am glad to say, by the leader of the Labour Party. He pointed in particular to the need for a more friction-free trading relationship with Brussels, saying that, if elected, he intends to try to negotiate better post-Brexit arrangements when the TCA comes up for renegotiation in 2025. I would be a little bit more confident that that could produce some improvements than the noble Lord, Lord Lamont, was suggesting—and I think the noble Lord on the Liberal Benches was also a bit pessimistic.

As background, it is also worth noting the results of an opinion poll commissioned by the Tony Blair Institute in which respondents were asked their views about the EU and UK in the post-Brexit environment. Some 53% now think that we were wrong to leave the EU and only 34% still believe the decision was right. They also overwhelmingly support the UK moving closer to the EU in the coming decade, with 73% wanting a closer relationship. Only 7% think it is satisfactory when considering the medium-term future. Their views are surely a consequence of the UK’s poor economic performance since leaving the EU, with a serious fall in economic output, trade openness and investment.

This, then, is the context in which the report’s recommendations need to be considered. There is a willingness to strengthen our ties with the EU at a political level and in the population more widely. The Government in their reply to the report have responded positively to a number of its recommendations but have pushed back on some of them as either undesirable or unnecessary. I will pick up on four specific examples and I hope that, as the Minister replies, she will be able to say whether the Government will be able to think again on them.

First, while informal approaches are of course of value, attention must be given to the formal institutional structures for meeting to debate key issues, particularly in foreign policy and security, but elsewhere too. The Government claim that “outcomes” are what matters, not the number of meetings, but it is hard to see how key outcomes—or any outcomes—can be achieved without more properly structured meetings in the first place.

Secondly, because the committee is now doing an inquiry on the implications of Russia’s invasion of Ukraine for the UK and EU, I will not in this debate go into other foreign policy and security questions, except in one respect. Could the Minister tell the House how the Government intend to respond to the charge made by commentators that their approach to sanctions has been ad-hoc rather than rigorous and well structured? This view was expressed in the committee’s report too.

Thirdly, turning to the report’s recommendations on energy and carbon emissions, what arrangements are the Government making to reach agreement with the EU on ensuring energy flows in the event of a critical supply shortage? The EU and UK must also work together to mitigate the effects of climate change, as has been mentioned by other speakers. As the noble Earl, Lord Kinnoull, said, and I think the noble Lord, Lord Hannay, did too, there are technical issues to be resolved in the UK and Europe concerning linking their respective emissions trading schemes, where there is a growing gap. Can more be done to link them and to narrow this gap?

My last example concerns the section of the report on the mobility of people. Brexit had a disastrous effect on this in many areas—for example, on the work of musicians and performers undertaking European tours, because of the need to obtain multiple visas. The Government have been engaging bilaterally with EU member states to try to reduce visa requirements for short-term touring, which is welcome, but progress is still needed on solutions in the four member states which have not agreed to this.

School visits are a very important way in which children and young people can learn about the culture of our nearest neighbours. There has been a huge, really regrettable decline in these since Brexit. This has been exacerbated by a refusal to accept collective travel documents and an insistence on individual passports instead. Like the noble Lord, Lord Hannay, I would like to know more about the Government’s intentions on finding ways to reverse this decline.

To end on positive note, it is excellent news that, at last, we are going to rejoin the Horizon programme, even if it is only as an associate member. Rejoining means that the UK can combine knowledge and research skills with European partners, which will help innovation in the economy and elsewhere. Going it alone was never going to be a good substitute for collaboration. Let us hope that going back into Horizon is a start to greater co-operation with the EU in many areas, which the opinion poll to which I referred earlier suggests the British electorate want.

Photo of Lord Kerr of Kinlochard Lord Kerr of Kinlochard Crossbench 6:50, 20 September 2023

Like previous speakers, I congratulate the committee on its excellent report, and the ex-chairman of the committee on the brilliant timing of this debate. Like previous speakers, I believe that we need to work together with the EU

“to safeguard the rules-based international order” and

“co-operate against internal and external threats” to the values and interests that we share. That means rebuilding a relationship extending beyond trade and economic partnership to

“law enforcement, criminal justice, foreign policy, defence and wider areas of co-operation”,

and doing so in an institutional framework, with both sides committed to a regular dialogue and efficient and effective arrangements

“for its development over time”.

The House will recognise that I am quoting from the political declaration referred to the noble Lord, Lord Hannay, which the May Government agreed with the EU—or rather, I am quoting from the revised version agreed by officials but rejected by Mr Johnson four years ago, when he chose instead to go for deliberate distancing. I have to say to the noble Lord, Lord Lamont, who found a splendid quotation about the Johnson desire for close co-operation, that he deliberately went for deliberate distancing, with the noble Lord, Lord Frost, as his disciple. I had hope that the noble Lord, Lord Frost, would explain why, but we are not having that pleasure today.

I do not know why we wanted to burn the bridges. I suppose that we should have seen it coming when Mr Johnson as Foreign Secretary refused to attend the Foreign Affairs Council when it planned to discuss the significance of Trump’s election in America. He dismissed the concerns of the 27 as “Euro-whinge”, and he stayed away. It is usually better to talk and, as Foreign Secretary, the responsible course, if you do not think you like what might be the emerging European consensus, might be to turn up and try to change it.

The problems we share now—aggressive Russian revanchism, the challenge of China, US protectionism, managing migration and the costs of net zero—are problems common to us and the European Union. We live in a world that is more insecure, or feels more insecure—and I think it is more insecure—than it used to be. We could do with precisely the kind of partnership that the EU and we at official level envisaged four years ago. They tell us that they particularly miss our contribution on defence, intelligence and foreign policy analysis of the big geopolitical issues. That is the first bridge that I would try to rebuild.

The Leader of the Opposition was quite right to talk security, not single market, in The Hague and Paris. I look forward to the Minister’s answer to the question from the noble Earl, Lord Kinnoull, about the Government’s response to the recommendation from the committee on foreign policy co-operation and the Foreign Secretary’s dismissive reaction to it. This debate shows that the committee’s recommendation is widely supported.

I do not dismiss the possibility of also using the 2026 implementation review of the TCA to correct some of its obvious errors and omissions. There are some additions that would be win-wins for both sides. The report makes very sensible suggestions, but I cannot see any great appetite across the channel for a major renegotiation. The EU has moved on. Rather than try to reopen an agreed text, we might do better to pick up and draw on the one that was agreed. Michel Barnier sweated blood to get this agreed by the Council. Precedent is quite a useful thing to have. It could be best to look at it again.

I have one more point—rather downbeat, I fear. We will be living for some time with the legacy of the posturing and lies, the arrogant amateurism and the dossiers not understood and perhaps not even read, as well as the insult of the deliberate distancing that followed. It will take time to live it all down and rebuild trust. The present Prime Minister has made a good start with the Windsor Framework and, at last, the Horizon decision, but there is a long way to go, and it would help if we could do three or four things.

We could stop making regulatory autarchy paramount and listen to the voice of business. We could stop tabling Bills which, if passed, would break international commitments, and stop threatening to leave the ECHR. We could tone down the bombast a bit—the exceptionalism and chest-beating, as with the Truss trade agreements. It jars a bit here, but it jars a lot more across the channel. Above all, we could try to get the tone right and get away from zero-sum thinking. When things go well for the EU, do we really have to sneer or, when they go badly, cheer? It is our biggest market, and it is in our interests that things go well over there. This is the Ryder Cup that we are playing—we are all on the same side. We are in this together and it is a very cold world outside, so let us build bridges and thaw the frost.

Photo of Lord Howard of Rising Lord Howard of Rising Conservative 6:56, 20 September 2023

My Lords, I congratulate the committee on its report and on recommending closer co-operation with the EU. This is to be applauded, although sometimes I wonder how much lack of co-operation is as much the fault of the EU. I have no doubt that the report will contribute to overcoming impediments to closer ties. At the same time as applauding the committee’s desire for closer co-operation with the EU, it is worth pausing for a moment to reflect on how leaving the EU has allowed the UK to pursue an independent trade policy, striking several new agreements with real benefits for the UK economy and leading to closer international co-operation, to the benefit of Great Britain and the EU.

Our free trade agreement with Australia removes tariffs on £4.3 billion of UK exports, making it cheaper to sell iconic products such as ceramics and Scotch whisky. British companies have also been granted the most substantial access to Australian procurement contracts worth billions of pounds. Meanwhile, cheaper imports will save British households up to £34 million each year, and the deal creates new opportunities for young people and professionals to work and travel in Australia.

Last year’s deal with New Zealand is expected to increase bilateral trade by almost 60% in the long run, boosting the UK economy by £800 million. The agreement cuts red tape for the 5,900 UK small and medium-sized businesses that export to New Zealand, as well as ensuring that services exporters from accountancy to engineering can compete on an equal footing. Notably, it includes a world-leading environment chapter to encourage trade and investment in low-carbon goods, services and technology.

The UK has just opened a new gateway to the Indo-Pacific by joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, building our relationship with economies that will account for most of global growth in the decades to come. No one should underestimate the importance of this agreement. These countries account for almost 10% of investment into the UK, creating over 5,000 jobs in 2021 and 2022, and the CPTPP offers protections, which will encourage further growth. The agreements on rules of origin also create opportunities to diversify our supply chains, and membership allows the UK to shape the CPTPP’s fight against unfair and coercive trading practices. Joining the CPTPP also means that the UK will have a trade agreement with Malaysia, to which UK businesses exported £1.7 billion of services in 2022.

Less than two weeks ago, the UK signed a strategic partnership with Singapore to enhance co-operation on the economy, security and innovation. This includes a first-of-its-kind partnership with Singapore’s Digital and Intelligence Service, drawing on common strengths such as AI to tackle emerging cyber threats. This builds on our 2022 digital economy agreement with Singapore, which helps businesses seize new trade opportunities by opening digital markets, protecting intellectual property and digitising trading systems. I look forward to seeing progress in our ongoing negotiations, including work towards new agreements with India and the Gulf Cooperation Council.

None of these agreements impedes closer co-operation with the EU. Indeed, they enable the EU, through having trade accommodations with us, to join in these wonderful things that have been arranged.

Photo of Baroness Ritchie of Downpatrick Baroness Ritchie of Downpatrick Non-affiliated 7:00, 20 September 2023

My Lords, it is a pleasure to participate in the debate this evening. I commend the noble Earl, Lord Kinnoull, and the European Affairs Committee for this very fine report— I agree with its recommendations. I declare an interest as a member of the sister committee on the protocol and Windsor Framework.

I agree with the committee that our relationship with the European Union was characterised by tension and distrust, which is slowly evaporating as a result of the good work on the Windsor Framework and now that we are back in Horizon Europe. I know that, in a Northern Ireland context—the noble Earl, Lord Kinnoull, already referred to this—students can avail themselves of the Erasmus+ programme, and that should be available to all students within the UK.

It is important, like the committee has said, that there are much greater levels of collaboration between the UK and EU in the fields of foreign policy; defence and security, particularly in the whole area of Ukraine; protecting democratic institutions and democracy; energy security; climate change—we can only think of today’s announcement, which tries to dilute commitments relating to fighting against and mitigating climate change—and, very importantly, the mobility of people. I think of those in the dramatic arts and music industry who benefit from greater levels of mobility. So those issues are important.

I also concentrate on the area of commercial economics and the need for greater levels of trade between the UK and the EU; I refer in particular to the Border Target Operating Model. I know that many logistics groups have already met with the Minister, but there are certain areas where they feel they still need certain answers. The Government need to urgently share the technical details and guidance that businesses need to prepare. The new barriers could impact the cost and choice of products for UK consumers and risk distorting trade. This means rising prices as well as shortages of fresh food, as the UK is reliant on the EU for these goods, particularly via the short straits between northern France and Kent and during the winter. Small and medium-sized enterprises specialising in grouping multiple shipments in a single load—known as groupage—will be hit particularly hard. It is therefore important that work takes place between the UK and EU to break down trade barriers and to build relationships and collaboration, so as to ensure that trade is made much easier and that there are reduced costs for hauliers and consumers.

I therefore have three questions for the Minister. I know that this has already been referred to—by the noble Lord, Lord Tugendhat, I think—but when will an SPS agreement between the UK and EU come to fruition? What assessment has been made of the readiness of EU exporters and rest-of-world exporters for importing goods into the UK under the implementation of the Border Target Operating Model? And what assessment has been made of the readiness of EU vets for undertaking processes related to importing goods into the UK under the Border Target Operating Model? In asking the Minister for answers, I am emphasising the importance of greater levels of collaboration in commercial trade policy and in the areas already defined by this very fine report from the European Affairs Committee.

Photo of Baroness Bull Baroness Bull Deputy Chairman of Committees 7:05, 20 September 2023

My Lords, I am grateful to my noble friend Lord Kinnoull and his committee for this report and for continuing to highlight the challenges that the TCA presents for the creative sector. In choosing not to focus on this in his comprehensive introduction, he has left a welcome space for my noble friend Lord Clancarty and me to fill, perhaps giving a new meaning to the concept of speaking in the gap.

The latest report from the Independent Society of Musicians provides new evidence of impact 30 months after the TCA came into effect: half the UK musicians surveyed reported less work in the EU, with over a quarter saying that they now had none—lost work, lost income and lost opportunities, but increased costs, increased time and more red tape. Hardest hit are young and emerging artists, who make up the greater part of the sector and who lack the resources to meet the financial and administrative burden of the post-Brexit regime.

The impact of this hostile environment is diminishing the cultural sector, not just in the UK but across the entire continent, with cancellations and economic loss affecting both UK and EU artists. European festivals and venues, which have hitherto relied on the bigger box office appeal of UK artists to drive revenues and local tourism, are forced to look elsewhere. No longer do UK artists “dominate the European panorama”, as the European Commission stated in 2019. EU opera and dance companies cannot call, as they used to, on the UK’s dancers and singers for last-minute jump-ins. Of the musicians surveyed, 39% had turned down jump-in requests because of the 90 in 180-day rule.

Even now, both sides continue to claim that they offered, and the other side rejected, a better deal. The noble Lord, Lord Frost, has admitted that his approach was too purist, yet the Government’s response to this report repeats the line:

The UK took an ambitious approach … that would have addressed many of the issues artists now face. Regrettably, our proposals were rejected by the EU”.

There is little to be gained by rehashing these arguments, but this mutual finger-pointing does offer cause for optimism. If where we are is where neither side wanted to be, surely we can work together towards the better place we both say we wanted.

I am privileged to be a member of the Parliamentary Partnership Assembly. Within this group, there is clear appetite—from EU and UK members—to right these wrongs. The PPA has twice reiterated its recommendation to the Partnership Council that both sides be encouraged to negotiate a comprehensive and reciprocal touring agreement. Our own European Affairs Committee recommends the same and the European Parliament’s Committee on Culture and Education has called on the main committees responsible for TCA implementation to address the absence of the cultural and creative sectors in the TCA. With both sides clearly wanting the same thing, can the Minister explain why it is taking so long to make progress on this issue?

A good first step would be to improve the situation for younger artists by establishing the reciprocal youth mobility partnership recommended in this report—a proposal supported by both the PPA and the European Parliament’s Economic and Social Committee. The chief executive of the Independent Society of Musicians —the ISM—told the committee that such a scheme would be

“important in creating opportunities for emerging artists”,

stressing the value to artists of collaboration between the EU and the UK. She makes an important point that, while the economic loss to the next generation of talent is significant, the greater impact is arguably the loss of cultural exchange.

In some industries, growth depends on putting down roots, but artists develop and flourish by moving between different environments and experiences. Touring opens up new opportunities, markets and audiences. It enables collaboration and intercultural dialogue and builds networks and partnerships. The loss of these opportunities is not just personal and professional—it is potentially a loss to the industry, with all the knock-on effects to the UK’s economy, reputation and soft power around the world.

The committee’s report points out that barriers to mobility post Brexit have especially impacted young people—the same young people who were disproportionately affected by Covid and who will suffer most from this economic downturn. The benefits of international exchange for young people are spelled out by the committee: cultural, social, personal, professional and economic. Prioritising youth mobility would demonstrate that the Government are considering the opportunities and life chances of the generation that will, in the end, shape the future UK-EU relationship—the generation that had the least voice in the 2016 decision but that will live with its consequences longest.

Photo of Lord Balfe Lord Balfe Conservative 7:10, 20 September 2023

My Lords, I congratulate the noble Earl and his committee on not only producing this report but, for once, getting it into the Chamber for debate before it has gathered too much dust. He has done remarkably well there.

The House knows my attitude to things European. I welcome what have been called “changing attitudes”, but I am a member of the Lord Speaker’s panel for schools and there has been no change of attitude there. School pupils were appalled by the referendum result. Every time I speak to a school, I say quite clearly, “I think it was a dreadful thing and we should reverse it as soon as possible. Does anyone disagree?” Occasionally you get the odd hand, but very seldom. Most of our younger generation, including the students at Cambridge University whom I meet from time to time, believe that we should repeal the whole process. That is why I welcome recent statements about looking again at how we can get a closer relationship.

It is fine to say that you can go around Australia for tuppence, or whatever, but most people want to go to Europe. Most people want the Erasmus programme back and students from the European Union to be able to come here. Most students want to come here. I want to see a Government looking to get as near as they can to the single market and back to the customs union and free movement. It seems incredible that we have such labour shortages but do not allow people to come into the country who would be prepared to work and benefit the economy.

I welcome the European Political Community and Britain’s participation in it. I see that we are hosting a summit next year; I hope we will put a lot of effort into it. I have also been interested to see recently that the French in particular are looking at a possible different structure. It has been common gossip in Brussels for years that the EU needs a different structure to enlarge. As someone said to me of the Balkan states, “You let one in and they’ll veto all the rest”. We have to work out a different structure; this two-tier structure is certainly worth looking at and working on, because I think it would work. It would probably also work for some of the current members of the EU that appear congenitally unable to keep its rules when it does not suit them. They do not seem to realise that the EU is an organisation where you have to compromise and, in the end, agree in order to go forward. That has been the EU’s secret—people can talk together. In this landmass, with fewer languages than India and a far smaller population than India or China, we have no option but to work together.

One hundred years ago this year, my grandmother moved into her first married house. She had gas mantles—not electricity—and no radio, and penicillin was a thing of the future. By the time she died, towards the end of the last century, all those things had changed. I say this because my granddaughter, now aged two, will probably be alive for the better part of another 100 years. This world will then be very different. Britain will be a small part of a small continent. It may well be China’s century—however much fantasy we have, I can tell noble Lords it will not be Russia’s—and we need to come to terms with that. The only way of doing so is to work with our European colleagues and to accept that you have to make compromises in working together —compromises that lead to the better good, a stronger Europe and a better place for us to leave our children to inherit.

Photo of Viscount Stansgate Viscount Stansgate Labour 7:16, 20 September 2023

My Lords, this has been a very interesting debate and I am pleased to take part in it. It is a pleasure to follow the noble Lord, Lord Balfe, who speaks with a lot of European experience, as do so many other noble Lords taking part. I congratulate the noble Earl, Lord Kinnoull, on a really interesting report; the committee took a lot of interesting evidence and, like others, I am very pleased that we are having this debate sooner rather than later.

It is not often that I have to declare an interest when speaking in this Chamber, but on this occasion I refer to the register of interests. In the last 20 years or so, I have spent a lot of time in Europe, especially France, where the personal experience I have gained is relevant to this debate. I will return to this later. Speaking of France, the King is making his state visit there today— I hope the weather in Paris is better than here.

I begin by saying one fairly simple thing: the next Government will need to take UK-EU relations seriously, no matter what Government they are. They will also need to improve them. If the present Government are re-elected, they will need to improve them; if, as I hope, a Labour Government are elected, the important difference is that they will want to improve them. I was heartened to read in a recent interview in the Financial Times that the leader of my party said he would attempt to secure a “much better” relationship with the EU than the existing TCA. He said:

“I do think we can have a closer trading relationship as well. That’s subject to further discussion”,

and

“As we go into 2025 we will attempt to get a much better deal for the UK”.

I have no time to go into the trade issues, but Europe remains our biggest and nearest export market.

However, trying to negotiate a better deal is a lot easier said than done. I have heard it said that the European Commission will take a limited approach to any renegotiation, as reflected in the remarks of the noble Lord, Lord Kerr, and there may be a limit to what can be achieved. However, if there is a change of government, a new Prime Minister can do some things that would signal from the top that there is a new, more constructive and more stable Government with which the EU can do business. There would be a diplomatic dividend, which would take them so far but would need a lot of work.

In the short time available, I will highlight two areas in which I hope improvements can be made. First, there is the political, diplomatic and institutional relationship. We can make more progress by talking more. I am in favour of more UK-EU summits at prime ministerial and ministerial level. I am in favour of giving more UK momentum to the joint UK-EU partnership councils and the various specialised committees set up under the TCA. I am in favour of the UK-EU parliamentary partnerships set up to exchange views on the implementation and operation of the TCA— I very much endorse what the noble Baroness, Lady Bull, now on the Woolsack, said a moment ago on this. I am also in favour of the UK playing an active part in the European Political Community.

I welcome the Government’s decision to re-join Horizon Europe. I have campaigned for it since I joined the House and I am sorry about the damage that has been done by the delay, but it is essential. We cannot hope to be a science superpower unless we take part, and I am glad that we will do so. Now that we have re-joined it and Copernicus, why cannot we re-join the Erasmus scheme also? Perhaps the Minister can say something about that.

This brings me to the second major area I want to mention: the cultural relationship. It is no good talking about the UK’s “soft power” if we do not deploy it, or if we cannot deploy it. It is not just in the professional world of the creative industries where damage has been done; it is the amateur world as well. The committee rightly talks about school visits and there has been a staggering drop in the numbers of those taking place, in both directions. This is utterly self-defeating for the UK. Apart from the professional world of music and creative arts, there is also the amateur world. I want to emphasise the points made by the noble Baroness, Lady Bull, and, in advance, those that may be made by the noble Earl, Lord Clancarty. One of the tragedies of leaving Europe has been that visits to Europe by youth orchestras have been rendered well-nigh impossible, and here I speak from personal experience. For years, I have travelled round Europe in support of my own children, a violinist and a cellist, who were members of the Stoneleigh Youth Orchestra. They were invited to play all over Europe in the summer: in Austria, Spain, Italy, France, Germany, Slovenia, Poland and other countries. It was a deeply enriching musical experience for the orchestra and audiences alike, and in many cases, it was the first time those young people had been abroad at all. One litmus test of better UK relations in the future will be the restoration of this kind of important cultural link, and I hope the Minister will be able to say something positive about a youth visa that may make this possible.

In conclusion, I welcome the fact that we are now talking about a new and different relationship with the EU; accepting the committee’s report and everything in it would be a very good basis for approaching the task ahead.

Photo of Baroness Bennett of Manor Castle Baroness Bennett of Manor Castle Green 7:21, 20 September 2023

My Lords, it is a pleasure to follow the noble Viscount and to join everyone in thanking the noble Earl, Lord Kinnoull, for securing this debate in such a timely manner. I thank him and his committee for the excellent report. I note the noble Earl’s comments, and those of the noble Lord, Lord Hannay, about emissions trading schemes and carbon border adjustments. I will not repeat them, but I associate myself with the concerns expressed.

We have here a committee report which has produced a huge amount of sense in the midst of so much nonsense from the Government. To take just one recent example, there was the long, unnecessarily drawn out, politically biased delay, which was so deeply damaging and draining to the scientific community, to the process by which we finally re-joined the Horizon programme.

I feel I should begin by setting out the Green Party’s position to demonstrate to your Lordships’ House, and to the country, that there is a political force ready to stand up for the country’s clear, best economic, social and environmental interests and for the wishes of the people. The Green Party is working to make us “rejoin ready”, so the UK can rejoin the EU when the political conditions are right. In the meantime, many of the worst problems created by Brexit would be eased by rejoining the customs union, negotiating the return of freedom of movement of people between the UK and the EU, and signing up to a comprehensive agreement covering the protection of human, animal and plant life.

Brexit has been all pain and no gain. I start where I always start, and that is with the losses of all Britons, but particularly the young, who have suffered from the loss of freedom of movement. The noble Lord, Lord Balfe, referred to their awareness of this. These are the young people who in 2016 overwhelmingly voted to maintain their European future, and who no doubt today would do so even more overwhelmingly, although, as we have seen from the Prime Minister’s speech this afternoon, the Tory Party is clearly no longer interested in attracting the votes of young people.

Young people today have considerably fewer freedoms and opportunities; the loss of Erasmus+ is only one part of that, and I am delighted the committee recommends resuming participation. But far larger is the fact that they can no longer start a journey to Poland or Finland, Spain or Croatia from Victoria Coach Station, just down the road from where we sit. I looked it up: tomorrow at 7 am, they could have got on a coach to Warsaw for £91 and they could stay there or anywhere else across the EU. They could explore, find work or study, make friends or find a partner, or settle down across a continent with the wonderful freedom that their parents enjoyed but young people no longer have. Youth mobility schemes are clearly essential, as the committee recommends in paragraph 333.

Then there are the economic effects, and I hope the noble Baroness, Lady Bull, and the noble Earl, Lord Clancarty, will forgive me for joining their chorus that focuses on the creative sector: the musicians, the theatre groups and many others who have been forced to lay down their careers on the altar of so-called sovereignty. Also hit hard are the small and medium enterprises which have lost half or more of their markets, blocked by the impossibility of import controls and custom duties, from customers who have now been forced to go elsewhere. Their businesses were sacrificed on the false promise of replacement trade with distant Japan or Australia, with trade deals that not only hold no hope for those businesses but threaten the futures of our farmers and our already dangerously inadequate food security.

I turn to a couple of specific environmental elements of the committee’s findings, which I am afraid may well have been overtaken by the events of this afternoon. Paragraph 192 recommends regular meetings between the UK Secretary of State for Energy Security and Net Zero and the European Commissioner for Energy. Well, yes—although I doubt whether they will regard us as in any way a serious partner after this afternoon’s climate horror movie starring Rishi Sunak. In paragraphs 206 and 207, the committee suggests full membership of the North Seas Energy Cooperation, with which the UK signed an MoU to support offshore grid development and renewable energy potential in the North Sea. Again, yes—although our offshore wind programmes, both those already supposedly in train and those not bidding in the latest contracts for difference auction, are in grave question. Why would the NSEC want to bother?

Photo of Lord Howell of Guildford Lord Howell of Guildford Conservative 7:27, 20 September 2023

My Lords, this report is an impressive survey of our current relations with our European neighbours and the noble Lord, Lord Kinnoull, and his committee deserve congratulations. For those of us who have spent half a lifetime working on, first, how best to get the UK to fit in to the European Union and, once we were in, how the UK could best help shape its further evolution from within, and help it escape from its original cocoon of 20th-century protectionism, this debate gives a strong sense of déjà vu and having been here before many times. The dulcet tones of the noble Lord, Lord Kerr, are very evocative of night after night of debate in the past, going round and round old treaty issues, long forgotten, and coming to the same conclusions as before, which were usually very negative.

The missing element, if I may begin on a negative note, is that the discussion continues scarcely to touch on the changing nature of European governance and the enormous momentum for European reform, as the world alters rapidly around it and entirely new challenges emerge. We talk about more co-operation and trust; that sounds splendid, but exactly with whom or what? Are we talking about the 32 committees—this army of committees that we have to work through and do not meet often enough? The EU institution is in flux, and understandably so. Talking about it is like being confronted by a chair with one leg missing, and the missing leg is the fast-changing nature and direction of the EU itself as an institution. We may say that perhaps that is inevitable because we are outside the EU, but I am not so sure. We are, after all, just as much a European power as before, and just as much affected by the major common issues of today as we were before. Indeed, I find the chorus of “losing influence” in the whole European scene utterly self-defeating, as well as self-fulfilling.

Indeed, you could argue that today there are more common issues for us and the rest of Europe—and, as my noble friend Lord Hague remarks in his evidence, more need for a new framework for the future—than when we first joined the European Union 50 years ago. For one thing, the whole nature of modern defence has changed but the EU has not. The Ukraine outcome will change everything further, as my noble friend Lord Tugendhat reminded us. For another, free trade is under threat as never before in the last 50 years. There is the biggest migrant surge of all just beginning, as we saw over the weekend. There are deep divisions on Europe’s relations with and dilemmas about trade with China and whether it will start a new trade war by trying to ban Chinese vehicles and getting a sharp rebuff, as it will, from China. Our transatlantic relations need revising and, as your Lordships remarked earlier, even more so if Mr Trump is elected.

As for energy and climate issues, which are addressed extensively in this report, a European system of energy co-operation is really urgent. What has been delivered from the EU side is a fragmentation that will tear apart the whole energy market, and the European Green Deal is in a terrible muddle. For example, Germany’s latest energy package is a real go-it-alone strategy, and there is no unified view of nuclear power in Europe at all. I hope that in this country we will not give up or turn shy on all our work addressing these enormous crises, and all the work we have put into handling them, intellectually and creatively, with very wise minds over the last 50 to 60 years.

The Europe-wide reform cause is growing stronger all the time. The slightly supplicant note of some of HMG’s utterances and some reports should be replaced by a much more positive tone. By that, I do not mean concentric circles and all that rubbish, which we have discussed endlessly before and should put aside. For these reasons I strongly welcome the support given though membership of PESCO—advanced defence co-operation—where we can update Europe’s woeful defence inadequacies for modern war conditions. I also welcome our participation in the European Political Community, as this report does, and the North Sea energy co-operation—although goodness knows how we get electricity to market from the coming offshore forest of wind pylons being planned, since no one has begun to work that out or how to pay for it.

At the end, this report rightly asks how the laser beam coherence we need here at home to focus creatively on all these issues can be concentrated and directed by the united efforts of the FCDO, the Cabinet Office and other departments—indeed, the whole Whitehall machine. I confess that I see little or no sign of that in the Government’s response to these urgent matters of supreme national interest and importance.

Photo of The Earl of Clancarty The Earl of Clancarty Crossbench 7:33, 20 September 2023

My Lords, there were various reasons on both sides why people voted the way they did in 2016. My main personal reason at the time was to protect freedom of movement, in particular the right of young British citizens to be able to move freely across their own continent and live, study and work there without hindrance, as the noble Baroness, Lady Bennett, talked about. We have lost that freedom—although that loss was not a given and could have been avoided, even while leaving the EU. Of course, it is a loss that affects not just young people but people of all ages: students, workers and retirees who have wanted to spend their latter years in Spain or France, for example, many of whom voted for Brexit.

While important for UK citizens, that movement has been vastly overshadowed in the media by movement in the other direction. This report, so ably introduced by my noble friend Lord Kinnoull, is a very helpful corrective to that media bias by looking at both inward and outward movement. The chapter on mobility notes that in 2019, the last pre-Covid year when the UK was a member of the EU, 4.8 million UK nationals visited the EU for work purposes. We have made constructive use of this benefit, which many on the continent understand today less as a benefit and more as a democratic right.

The importance of freedom of movement within Europe to our service and creative industries cannot be overestimated. The TCA was, in effect, a no deal for these industries. The report says that Deborah Annetts, chief executive of the Independent Society of Musicians, referred to by my noble friend Lady Bull, described post-Brexit arrangements as an “unmitigated disaster” for the music industry. It also quotes her as saying that

“musicians are telling us that it is simply economically not viable to tour into the EU anymore”.

The current feeling of the music industry—indeed, the arts as a whole—is one of frustration, of the sense of a Government dragging their feet on facing up to a litany of Brexit-related concerns: on visas and the need for a visa waiver or cultural touring agreement with the EU; on work permits; on the cost of carnets; on musical instruments and cabotage, where exemptions need to be urgently negotiated; on costs and red tape around merchandise, which is so important for up-and-coming bands; on making Eurostar St Pancras a CITES-designated port, which so far the Government have refused to do; on the 90 in 180 day limit. Vision engineer Tim Brennan of Carry on Touring tweeted this month to the Prime Minister, as one can:

“I’m out on tour at the moment in the EU, building the LED screens for a gig. After my next tour I will have run out of Schengen allowance. Who do I send the invoice to for the following 90 days that I’m unable to work”.

Other areas of the creative industries are also affected, including the visual arts, as this excellent and detailed report points out. Recently, an artist said to me that Brexit has turned her and other artists unrepresented by galleries into smugglers: unwilling smugglers of their own work when they transport it for exhibition in Europe, since the costs and red tape of declaring themselves as exhibiting artists would be prohibitive. As I am sure the Minister agrees, this is a truly absurd situation. Even the noble Lord, Lord Frost, who is not in his place but whose ears must be burning this evening, said in his Zürich Churchill lecture in 2020:

“We should take another look at mobility issues”.

A few weeks ago I had the experience of helping my daughter obtain a visa to study in France, starting this year. I know at first hand how difficult, time consuming, expensive and frankly off-putting that process is, and will be even more so for less privileged members of society.

On the subject of visas, while rejoining Horizon was very good news for scientific co-operation, the fact remains that, as long as we are outside the single market, UK scientists will always be at a disadvantage to our European counterparts, who enjoy free movement with each other. In music and the other arts too, there are finite barriers for young UK musicians or performers unable to obtain a permanent post in Europe as part of an accepted career path because those positions are advertised only for EEA passport holders. It is very difficult indeed to see how we can get over that, other than by rejoining the single market. Even with the best will in the world, which we seem still not to have, despite the thawing in UK-EU relations that the noble Lord, Lord Hannay, indicated, there will nevertheless be a limit to what can be achieved in the longer term. My own hope is that, say, two years into a Labour Government, Keir Starmer will turn to the people of this country and say, “Well, I tried to make Brexit work”.

Photo of Lord Jackson of Peterborough Lord Jackson of Peterborough Conservative 7:38, 20 September 2023

My Lords, I welcome this report, which I think is reasonable, balanced and realistic. I also welcome the Government’s response. I speak as a veteran of the Brexit wars, having been chief of staff and special adviser to the Secretary of State in DExEU in 2017-18. One of our jobs was to meet heads of different Governments on a bilateral basis and explain Brexit from the UK perspective. It was also important for me to understand the European perspective, which for many was that the EU was a redemptive project to avoid the horrors of war.

On the issue of Horizon, which the noble Viscount, Lord Stansgate, has so ably enunciated over many months, I welcome the decision. But I have to say that I was disappointed by the somewhat churlish tone of some nobe Lords when the decision was made, given that the issue was weaponised by the European Union for many months, notwithstanding the fact that it was laid down in the TCA. The tone was: how dare perfidious Albion have the temerity to seek a better deal and better value on behalf of British taxpayers?

The future relationship with the European Union should of course be seen through the prism of British national interests. Our relationship with the EU matters: in 2022, 42% of total UK exports went to the EU and 48% of imports came from the EU. We also have to give consideration to the wider health of the European economy and the UK’s role as a global soft power nation, militarily, diplomatically and economically. Brexit catastrophism has been somewhat overplayed. Even the Economist has conceded that, notwithstanding that goods trade has remained becalmed, service exports since 2021 have risen 3.6%—significantly higher than most G7 countries.

On the subject of being churlish, it would be churlish not to admit that the Windsor Framework has changed the playing field in respect of our relationship. I neither supported nor voted against it. I believed that it was an unacceptable interference in the territorial integrity of a sovereign nation and that the continued jurisdiction of a foreign legal entity was wrong in principle—but we have to see our future relationship in an unsentimental, realistic and pragmatic way. I believe there will be great opportunities in the reboot of the TCA in 2025-26; we will have a new Commission and new bilateral relationships. But we also must remember the thoughts of Martin Selmayr, the former chief of staff to Jean-Claude Juncker, who said at the time of Brexit that the EU’s strategic objectives were twofold: to make Brexit as difficult and fractious as possible to encourage others not to leave, and to prevent the UK, as a third country, obtaining a competitive economic advantage. This is in the context of a situation where the EU’s share of world trade by dollar denomination—which, 30 years ago, was 30%—will probably be around 15% by the end of this decade.

I welcome the positive aspects of the report and the encouragement to work closely with the European Union on defence, security, intelligence, technology and energy. I agree that we should utilise the existing institutional framework structures for more regular meetings—I think there is a consensus across the House on that. We should have more comprehensive engagement at a bilateral level, such as, for instance, the successful engagement we have had with Portugal, our oldest ally.

In the context of Ukraine, I support involvement with the Permanent Structured Cooperation—PESCO —project, which my noble friend Lord Howell of Guildford referred to, provided that there is adequate oversight and transparency and proper accountability to this Parliament, as my right honourable friend in the other place David Jones raised in the European Scrutiny Committee. Of course, there will still be problems, including with rules of origin, electric vehicles, the coupling of fishing and energy policies, carbon pricing and people mobility. The UK adequacy decision for the exchange of data is bound to be a temporary issue, and we will have to come back to the issue of GDPR.

The EU lacks the bandwidth to consider the relitigation and renegotiation of the TCA. Germany has its own problems, and the wider EU has problems with demographics, climate change, mass migration and geopolitical issues involving Russia, China and the tilt to the Pacific. In addition, associate membership is pie in the sky. As my noble friend said, variable geometry models are 20 years old—they will not work. We do not want less accountability and democracy at the centre of the EU, and to pay in but not have our voice heard.

Finally, the report outlines the path to a mutually beneficial, respectful and pragmatic relationship between the EU and the UK, and, in that spirit, it is timely and very welcome.

Photo of Viscount Waverley Viscount Waverley Crossbench 7:44, 20 September 2023

My Lords, trade is the engine room of the UK’s national interest. So, while economic issues might not have been put centre stage by the committee, I hope that this debate will be interpreted as a bridge-building exercise to build on trust, if you will.

Pragmatism might dictate at least listening to any outreach that the EU offers on single market access, rather than dismissing it out of hand. This might become increasingly relevant for the UK, given also the implementation plans of the EU’s strategic autonomy agenda, published in July. To put things into perspective generally, and to have an understanding of the challenges being faced by UK exporters to the EU, it would be helpful to have a relevant comparison provided by the Government to confirm, first, the trading figures for the latest calendar year of 2022 and to compare them with 2019; and, secondly, the calculated projected figures for exports to the EU for 2022 if the UK had remained in the EU. That might focus minds.

For UK business to fully succeed with the large near neighbour already requires navigating the labyrinth of regulations and EU support programmes, so the EU’s economic security strategy is not good news for UK businesses wishing to deepen their relationship with the EU. This is compounded by the EU focus on single market integration and shift towards economic security and industrial policy, advancing with an industrial policy emerging with investment and deal-making decisions taking place in an increasingly politicised environment. What is the Government’s reaction to all this?

The strategy provides a comprehensive picture of the economic risks that the EU deems it faces from an increasingly challenging geopolitical environment, from supply chain resilience to economic coercion, and building on how to de-risk international supply chains in the context of rising tensions with China. On the flip side are UK border issues, but here challenges remain with UK customs border policies between the UK and EU not being aligned. Ensuring a future-ready customs infrastructure that streamlines and modernises trade and customs procedures that foster economic growth, enhances our global trade position and ensures swift and compliant cross-border trade, is paramount. Effective customs systems alignment would lead to more accurate and timely revenue collections, with streamlined and transparent processes building on stakeholder trust among traders and foreign investors.

This requires fully digitising and modernising our customs and trade procedures. Are the Government satisfied with the necessary improvement strategies in infrastructure that will enhance and facilitate transit procedures and reduce internal bottlenecks? The Government’s Ecosystem of Trust evaluation contained in the 2025 border strategy is planned to combine data and technology to move processes, where possible, away from the border. What progress is being made with the digital transformation and implementation of electronic data interchange systems to replace the outdated manual processes and development of single trade window systems, thus enabling traders to submit all documents at a single point? This would significantly improve the import process for traders and improve their border experience.

HMRC is currently engaged in two consultations with trade, one on the future of customs declarations and the other on a voluntary code of conduct for customs intermediaries, which many in the trade would like to see become mandatory. Many are questioning why HMRC is not using the existing authorised economic operator framework, which already requires applicants to demonstrate standards of competency and security. Delay to implementation of sanitary and phytosanitary checks outlined in the border target operating model is a cause of frustration and prolongs the imbalance between the regulations faced by UK food exporters. EU exporters have no such controls on sending their goods to the UK.

So questions remain among many. What of the establishment of risk assessment frameworks to prioritise inspections and the development of compliance benchmarks and monitoring tools? Where are the Government on their review and recommendation for policy reforms aligned with international best practices and harmonisation with standards to boost international trade relations? Do border capacity building and training remain a challenge? Are the Government engaging with trade associations and businesses to understand and cater to their needs and, if so, what are the take- aways from such discussion?

Photo of Baroness Lawlor Baroness Lawlor Conservative 7:49, 20 September 2023

My Lords, I am grateful to the noble Earl, Lord Kinnoull, and the committee for this very stimulating report, which aims for a constructive approach to the EU and its institutions over four well- chosen areas. I agree on the importance of a constructive dialogue. I see Brexit as an opportunity to renew the ties which have historically bound the UK to so many of her continental neighbours—but on a different basis.

Co-operation must be two-sided. One approach is to inspire trust and hope it is repaid, while another is to withhold co-operation until it is forthcoming from the other side. Which is best is a matter of tactics. Consider the memo of understanding on which the committee urged progress—I am delighted that its voice was heard and the report has now appeared. A guarded welcome is justified if the EU shows itself to be open to moving to financial services trade based on mutual recognition of laws and outcomes. Now that the UK intends to revert to the common-law approach for the sector as it sheds layers of EU law, will the EU do business on that basis, or will it press the UK to agree to shadow EU law or absorb the corpus bequeathed in the 2018 Act into UK law, and give precedence not to the common law tradition, which is open, flexible, transparent and predictable, but to the EU approach, which is based on code and the precautionary principle? That would not be in our interests. It would obstruct the people of this country—and indeed the EU—from benefiting from Brexit freedoms for one of the world’s great financial centres, second only to New York.

The committee welcomes the UK’s involvement in the European political community. However, I share the caution expressed by the French historian John Keiger, who traces this initiative of President Macron throughout the period from the early 1950s. The EPC was initially proposed in 1952 when the European Coal and Steel Community sought to set up a European political community to co-ordinate the foreign policies of the six member states. It resurfaced in 1961 with the Fouchet Plan for intergovernmental political co-ordination of Common Market states, and then again at the beginning of the 1970s. François Mitterrand came up with a similar idea for a “European confederation” in 1991 to draw in East and West. Although it has never firmly taken root it has paved the way, and was seen to pave the way, for further integration.

Integration is not a UK aim, and we should beware that a desire to “co-operate” and strike deals should not be pursued at the expense of the very different interests globally which the UK can have, even with a country as old an ally as France, and as good a neighbour. It is for the EU to recognise that this country is a sovereign power—I am sorry that there is some concern about what was described as rather a nebulous phase—with a different legal and constitutional as well as economic tradition from that of the EU. We have seen the difficulties created when the EU refuses to embrace that reality to drive through its own interests, as happened in Northern Ireland—which the Windsor Framework may ameliorate but cannot resolve. It is on the basis of mutual recognition and respect of important differences, and only that basis, that both parties can work fruitfully together.

Photo of Baroness Ludford Baroness Ludford Liberal Democrat Lords Spokesperson (Exiting the European Union) 7:54, 20 September 2023

My Lords, I thank the noble Earl, Lord Kinnoull, for his excellent stewardship of this report.

As most speakers in this debate have commented, we seem to be in somewhat calmer waters of UK-EU relations after the welcome agreement on the Windsor Framework regarding the Northern Ireland protocol. Indeed, as in the delightful pun of the noble Lord, Lord Kerr, we are “thawing the Frost”. However, a big question is whether this benign scenario will be maintained. I think some of us live in nervous anticipation—due to squabbles inside the Tory party—of some other ruction in the relationship, created for internal party or electoral reasons.

When we debated last week the report from the sub-committee of the noble Lord, Lord Jay, the noble Lord, Lord Frost, objected to what he described as a change in the Government’s stance on the protocol, saying:

“The Johnson Government, of which I was part, always took the view … that the protocol was unsatisfactory and temporary. We always hoped that, ultimately, divergence by GB would produce the collapse of the protocol arrangements”—[Official Report, 11/9/23; col. GC 110.]

Therefore, there is a faction of the Tory party—quite a large one—which does not want or offer stability in our relationship with the EU. Rather, it favours disruption, which seems very unconservative.

The Prime Minister’s disruption today of green targets will surely undermine and embarrass the King, who, on his current state visit to France is set to host a climate mobilisation forum. It certainly angers business. I fear that the perception will be once again that Tories never stick to their promises, which is damaging for them but also, sadly, for our whole country. The chair of Ford UK reacted furiously this morning to being blindsided. She said:

“Our business needs three things from the UK government: ambition, commitment and consistency”.

That is surely what many want from government for our EU relationship.

What we and the EU need now in this relationship is stability, consistency, reliability and a basis for trust; then, we can start to aim for some improvements, modest at first but not insignificant, and, I hope, then growing. Are we going to get this stability? The screeching U-turn on net zero is not reassuring, but I hope the Minister will be able to reassure me.

The Government continue to kick the can down the road on border checks on imports, leading to uncertainty and extra cost to industry, as well as concern about food safety if disease or unsafe food slips into the UK due to laxness.

Of the several specific co-operative initiatives proposed in our April report and previously, two have in fact been achieved; such is the influence of our former chair, the noble Earl, Lord Kinnoull. Those are the association with Horizon Europe and a memorandum of understanding on financial services. The achievement of an SPS agreement would be of great value but unfortunately, the Government say that they will agree one only if there is recognition of regulatory equivalence. That is of course utterly unrealistic, so our farmers and agri-food industry will continue to suffer from red tape and cost burdens.

In some quarters, as I already mentioned, regulatory divergence is seen as a good and an aim in itself, apparently to display our “sovereignty”. I regard that as an empty project, and I am glad to say that I seem to be on the same page as the noble Lord, Lord Lamont, on that point; there is no point in it for its own sake. Of course, keeping in step with EU rules without having a say is second best—to which the solution is of course to rejoin the single market—but our economy and business demand it.

If the UK were to depart from the European Convention on Human Rights, that would throw a huge spanner in the works. We might kiss goodbye to the data adequacy agreement that is so valuable to business and torpedo any chance of, for instance, access to EU crime-fighting instruments such as the Schengen Information System or deeper co-operation on justice and extradition.

Much dismay has been expressed at the stalemate on touring for creative professionals and on student exchanges, school visits and a youth mobility programme. The noble Lord, Lord Hannay, referred to government narrowmindedness on this. Can the Minister dispel the perception that on these projects the Government know the price of everything but the value of nothing?

The body that represents English language schools, a sector worth £1.5 billion a year, laments its difficulties in securing visas, and my noble friend Lord Wallace of Saltaire referred to current policy as incoherent.

Of course, the Russian invasion of Ukraine has brought the UK and EU together in supplying Ukraine, operating sanctions and planning reconstruction. The Government have taken part in the intergovernmental European Political Community and will host it next year. All this is good, but it is a bit of a jumble without any firm security partnership, either on internal or external security, within which to operate.

The Government have rejected an EU offer of strategic dialogue and do not want co-operation on sanctions encompassed in an MoU. Our committee’s current inquiry on the security and defence relationship heard very interesting evidence yesterday from senior MEPs on the scope they identified for intensifying that relationship, on which they are keen. Nathalie Loiseau, the EU co-chair of the Parliamentary Partnership Assembly, regretted the departure of the UK from two military operations in particular: Althea in Bosnia-Herzegovina and Atalanta on piracy at sea, which was in fact UK-led.

Can the Minister tell us what scope there is for re-establishing or furthering such co-operation under PESCO or projects with the European Defence Fund and European Defence Agency? Given that the NATO summit expressed a desire for the fullest involvement of non-EU allies in EU defence efforts, the Government surely cannot claim any tension on that score.

The Minister for Europe told us in evidence that he was open to the idea of regular UK-EU summits, but, disappointingly, the responses to our report have not confirmed that. Can the Minister say whether the Government see value in structures and predictable fora over ad hoc informality and claimed flexibility? Does she agree that a rationalisation and merger of the various committees under the withdrawal agreement and the TCA could be a focus for the 2025 review?

In conclusion, I feel reasonably confident that if Labour forms the next Government, we will not experience the ghastly turbulence in the UK’s relationship with the EU that we have experienced for the last seven years. I am glad that the Opposition leader was meeting President Macron yesterday and visited Europol and Eurojust in The Hague last week, sending, I think, signals on security. But the current red lines Labour has adopted—no to the single market, customs union or rejoining—though apparently designed to reassure some parts of the electorate, are, I think, likely to take some battering from voters who are already rather ahead of the Labour leadership in their ambition, and will increasingly become so as young people come of electoral age. The noble Lord, Lord Balfe, mentioned that.

There is some excitement about a new report commissioned by the French and German Foreign Ministers which suggests our old friend, concentric circles, with the outer one being associate membership, but even that would mean participating in the single market. I hope and believe that such participation may well happen under a Labour Government, though I am sure the noble Lord, Lord Collins, will decline to assure me of that.

Photo of Lord Collins of Highbury Lord Collins of Highbury Opposition Whip (Lords), Shadow Spokesperson (Equalities and Women's Issues), Shadow Spokesperson (Foreign and Commonwealth Affairs and International Development), Shadow Deputy Leader of the House of Lords, Shadow Spokesperson (Cabinet Office) 8:03, 20 September 2023

I start by congratulating the noble Earl, Lord Kinnoull, and his whole committee, remainers and leavers alike, who clearly adopted the same attitude in terms of its recommendations. I welcome the report, the concerns expressed in it and its recommendations, many of which reflect those under consideration by my party. One thing that struck me during the debate was that, after many years in the trade union movement, I have learned that trust and confidence are essential ingredients for successful negotiations and the sustainability of any final agreement. My hero, Ernest Bevin, certainly knew that from his dealings in the Foreign Office.

As we have heard, the committee acknowledged that the political relationship between the UK and the EU was in the first two years of the TCA

“characterised by tension and mistrust”.

As the committee states, there has been a welcome “change in mood” around UK-EU relations since the autumn of 2022, particularly since agreement was reached on the Northern Ireland protocol, after months of uncertainty, hostility and, may I say, the madness of Liz Truss suggesting that President Macron may be a foe. Do not underestimate the sort of damage that such language can do. But there is still a broader repair job to do to put the UK and EU relationship on new and strong foundations in political and economic terms. These are our neighbours, partners and allies, and this is our most important economic relationship. We are democracies occupying the same corner of the globe at a time when there is a brutal war of aggression taking place on our continent.

A Labour Government would prioritise building a new, ambitious partnership with the EU and with European member states. As we have heard in the debate, business thrives on certainty. Therefore, we have made clear that under Labour, Britain will not rejoin the EU, the single market or the customs union. I know that that disappoints some people—certainly my Liberal Democrat friends—but we are now in a totally different political context. Revisiting old rows would be a recipe for even more division. Frankly, I think the EU is in a different place too. It wants a stable and constructive relationship, and that is what a Labour Government would build: an ambitious new partnership, based on turning the page on an era of acrimony that this Government have overseen, which has seen trust undermined, co-operation stall and our economy damaged. As my noble friend Lord Liddle said, we know that the Government’s Brexit deal has caused real economic damage. We are well aware of that. Trade has been undermined, exporters have struggled and red tape has grown.

Conservative Governments have done serious damage to our country’s relationships and reputation, and now is the time to restore them. Labour has already laid out some of the ways we will seek to improve the agreement with the EU. As the noble Lord, Lord Hannay, urged and my noble friend Lord Stansgate said, we will use the scheduled renegotiation of the TCA to seek practical and achievable ways to remove barriers and improve opportunities for people and businesses. We have already laid out a number of ways that we could do this. As the noble Lord, Lord Hannay, and my noble friend Lady Ritchie mentioned, negotiating a veterinary and SPS agreement to ease food and agricultural trade would be good for goods going from GB to Northern Ireland but would benefit the whole of the country. We would strengthen mutual recognition of qualifications and, as the noble Baroness, Lady Bull, and the noble Earl, Lord Clancarty, said, new flexible labour mobility arrangements for those making short-term work trips and for musicians and artists seeking short-term visas to tour within the EU. We would seek to agree mutual recognition of conformity assessments across sectors, so that our producers no longer need to complete two sets of tests, or two processes of certification. Restoring co-operation, as the new Horizon agreement has done, is vital to ensure co-operation among scientists and ensure our researchers are not missing out on access to funding and vital cross-border research programmes. We also want to maintain Britain’s data adequacy status, meaning our data protection rules are deemed equivalent to those in the EU, helping UK digital services companies compete. We would seek a new foreign policy and security partnership with the EU.

There is a lot we can do to strengthen and deepen the relationship from our position outside the EU. We have said that we want to be pragmatic, not ideological, in our approach. This is not just about the economic relationship with the EU. After the invasion of Ukraine, the whole European political and security order is being looked at again. We have seen the emergence of new forums, such as the European Political Community. We have seen deepening co-operation between European countries on energy, defence and sanctions. If Labour were in government, we would be right at the heart of those discussions, helping to lead them, not on the sidelines. That is why we have proposed a new UK-EU security pact that would cover deeper co-operation on internal security and law enforcement as well as foreign policy and defence.

We want to deepen the security and foreign policy relationships between Britain and the EU, and Europe more broadly. There is no reason why leaving the EU should weaken our security capabilities.

While the EU relationship is crucial, we need to strengthen bilateral relations. Our bilateral ties have been damaged by this Government. Let me mention three crucial ones. We have a long, close and complicated history with Ireland. We are fundamentally connected. We share a border and responsibilities under the Good Friday agreement. Trust has become seriously undermined. This is a crucial relationship for both parties. We are determined to rebuild it.

France is a crucial partner and ally, but our relationship has been in a bad shape. Johnson and Truss did dreadful damage to it. Sunak is trying to repair it but is working from a low base. We will work side by side at the UN. We have close defence co-operation and the E3 format with Germany, working on the Iran deal. We have specific shared interests, such as managing migration across the channel.

Both the UK and Germany have big ambitions around the climate and energy transition, which I believe have been seriously damaged by today’s announcement. Germany intends to invest significantly more in defence, so there is space for greater security, defence and industrial co-operation. Labour will seek a new bilateral treaty with Germany, covering security and defence.

This report will be a valuable contribution to the ongoing debate about how we rebuild and strengthen our relationship, and ensure that we can make the most of leaving the European Union but staying firmly within Europe.

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe Minister of State (Cabinet Office) 8:12, 20 September 2023

My Lords, I particularly thank the noble Earl, Lord Kinnoull, and all noble Lords on the European Affairs Committee for their wide-ranging report. I take this opportunity on behalf of the Government—and, I believe, the whole House—to thank the noble Earl for his skilled chairing of the committee since 2019 and the collaborative approach he has taken to engaging with the Government. He has deservedly gone on to become Convenor of the Cross Benches, and we will all benefit from his calm, wise and intelligent leadership. I am sorry that the new chair, the noble Lord, Lord Ricketts, is absent today, but delighted that he is in Paris to celebrate His Majesty the King’s first official visit to France.

I am also extremely grateful to all noble Lords who have taken part in today’s debate for their insightful contributions, which are a tribute to the report and its authors. My noble friend Lord Howell of Guildford was right to emphasise how much the EU has changed and the changing context in which it operates. My noble friend Lord Jackson of Peterborough pointed out that there will be a new College of Commissioners next year and elections in various places.

We are committed to a mature, constructive relationship with all our international partners. That, of course, includes the European Union. As we stated in our response to the report in June, we intend to realise fully the potential of the trade and co-operation agreement, including in a range of crucial areas such as energy, trade, security and AI.

I cannot agree with view of Brexit expressed by the noble Lord, Lord Collins of Highbury. Brexit has brought us an independent trade policy, the growth of our green and digital industries, the introduction of sanctions legislation, early approval of the Covid vaccine, and a points-based immigration system.

To return to the report, relations have improved, and continue to do so, under this Government. In particular, I am pleased to say that the UK and EU already enjoy close collaboration and co-operation in their support for Ukraine and over the imposition of sanctions against Russia. I was particularly pleased that, on 7 September, the UK and the EU announced agreement for UK association to Horizon Europe and Copernicus. UK scientists will now have access to the world’s largest research collaboration programme. This will help to ensure that we are on track to deliver on our ambition to grow the economy and make the UK a science and technology superpower. It has indeed taken time because, as some have said, the Prime Minister was rightly determined to ensure that the deal was in the UK’s national interest, strengthening UK science and delivering value for money for UK taxpayers. We are looking forward to working closely with European and international partners to maximise collaboration under these excellent programmes. We have the same approach as on the Windsor Framework—I agree with the noble Lord, Lord Liddle, that this was a major step forward—of getting into the detail and doing what is right for Britain, resisting pressure to accept a boilerplate deal no matter what the terms, and delivering terms that work for us.

As we highlighted in our correspondence with the committee, tackling illegal immigration is a top priority for the Government. We continue to seek EU co-operation in tackling illegal migration—a common challenge, of course, as we can see the boats crossing both the Mediterranean and the channel. The UK-FRONTEX working arrangement, which is currently under negotiation, is an example of joint working on what is clearly a pan-European issue that requires a joined-up effort.

I have dealt with the EU all my working life. I started in the rather powerful cereals management committee as a civil servant in 1974, and eventually was the UK Minister in the Competitiveness Council for three years, where my French opposite number was a certain Emmanuel Macron. I then served with great pleasure with some noble Lords who are here this evening on the EU Committee. I therefore understand the value of engaging the EU while being clear about our interests. Accordingly, I agree with the committee and the noble Earl, Lord Kinnoull, on the importance of maintaining a regular dialogue. We will continue to do so under the formal treaty framework—for example, the Partnership Council, which the Foreign Secretary attended in March —or in the technical committees, which oversee implementation, and through other avenues, such as the dialogue established by the memorandum of understanding on financial services. I should say in passing that I noted my noble friend Lady Lawlor’s concerns that we should retain our own legal traditions in financial services.

On the importance of dialogue, the Prime Minister also engages at leader level with our EU and European partners on a regular basis at multilateral fora, the G7, the G20 and more recently with the European Political Community, which brings together the whole European continent. Indeed, the UK will host the fourth EPC summit in 2024, as my noble friend Lord Balfe pointed out.

However, I am not convinced that we should seek extra meetings, as proposed by the committee. As the Foreign Secretary said in his letter to the committee, the frequency of meetings should not be seen as a measure of success. What matters is outcomes. Noble Lords must remember that like other third countries, albeit we are special because of our mutual history, we must focus our demands on what really matters to our people and our businesses.

The TCA has now underpinned our trade and wider relationship with the EU for more than two years. Its committees meet regularly—more than 40 times since the beginning of 2021, with 15 more planned over the next few months. There is also extensive engagement with the EU and with individual member states outside the TCA structures. For example, the Deputy Prime Minister, Oliver Dowden, was in Italy last week and spoke on security and AI at the Pontignano conference. To pick up a point made by the noble Earl, Lord Kinnoull, we work hard to make engagement warm and trusting where appropriate. As my noble friend Lord Lamont said, improving our relationship with the EU is not betraying Brexit. I think there was agreement on that point.

The committee’s report rightly focused on our foreign, security and defence relationship with the EU. As our integrated review refresh makes clear, although we have left the European Union, the UK retains a significant role and stake in the future of our home region. It is essential that we work together to respond to common geopolitical threats and in support of our shared values of freedom and democracy.

In response to points made by a number of noble Lords—including my noble friend Lord Lamont, the noble Lords, Lord Wallace of Saltaire and Lord Hannay, and the noble Baroness, Lady Ludford—let me say that we do not currently consider that bringing co-operation on these matters into a formalised structure would lead to more effective co-ordination. We are focused on the substance of our co-operation and what we want to achieve together where our interests align, rather than the form. Close co-operation is vital in, for example, developing military mobility, crisis response, resilience and countering disinformation and hybrid threats where NATO and the EU have complementary strengths and tools.

The UK’s focus is strongly on strengthening our foreign and security policy relationship with the EU on Ukraine. As my noble friend Lord Tugendhat said, that is very important and likely to be important well into the future. The UK-hosted Ukraine Recovery Conference was a shining example of what can be achieved. We must remain steadfast in our support.

I say this in response to the noble Lord, Lord Wallace of Saltaire: our approach is essentially practical. Our co-ordination with the EU demonstrates our shared commitment to European security. We are working closely not only on PESCO, where the UK is negotiating terms to better enable us to shape the rules on cross-border military transport, but on providing Ukraine with military training, equipment, cyber resilience, humanitarian and economic support, sanctions, energy resilience and countering Russian disinformation.

On the question from the noble Earl, Lord Kinnoull, about the formalisation of sanctions co-operation, it is our view that our existing arrangements for co-ordinating sanctions with the EU are working well. However, I wish to pick up a point made by the noble Baroness, Lady Blackstone. The UK, along with our international partners, has the largest, most rigorous package of sanctions ever imposed on a major economy. I think it is fair to say that we surprised Russia with the scale and level of international unity on sanctions. We will continue our efforts to combat circumvention.

Our officials are in regular contact with EU institutions and member states. We co-operate on all elements of sanctions policy, from design to implementation. Although we constantly keep our processes under review, we do not assess that a more formal arrangement would improve co-ordination. Furthermore, the enhanced partnership between the US Office of Foreign Assets Control and the UK Office of Financial Sanctions Implementation reflects the closely corresponding function of those organisations within our respective systems. That is the answer: this structural similarity is not present in the case of the EU, which has no equivalent.

More broadly, we look forward to establishing dialogues on the important areas of cybersecurity and counter- terrorism.

Close co-operation on energy security between the UK and the EU is crucial as Europe decouples from Russian hydrocarbons. We expect to continue proactively engaging on planning for next winter and beyond, ensuring stable energy supplies while reaching our respective decarbonisation goals. We are also pleased to have resumed participation in the North Seas Energy Cooperation with both the EU and other friends. Exploiting the huge renewable potential of the region will boost European energy production, enhance our energy security and support the transition to net zero.

I am afraid that I cannot agree with the noble Baroness, Lady Ludford. Today, the Prime Minister reiterated our commitment to net zero by 2050 and set out a path for achieving it in a fair, proportionate way. Our new approach is pragmatic, proportionate and realistic because the key is maintaining the British people’s consent on reaching net zero by 2050. I think people will come to understand that.

The Government are committed to working with partners such as the EU to find international solutions to carbon leakage, an issue that was raised by the committee. We are following developments on the CBAM closely ahead of the transitional reporting phase, which will launch on 1 October, and engaging with the Commission to discuss technical considerations relevant to UK manufacturers. The UK raised the CBAM at the Trade Specialised Committee on Goods in 2021 and 2022 and is currently in discussion with the EU on the agenda for this autumn’s committees. The noble Lord, Lord Hannay, will be glad to know that the Government have consulted on measures to combat carbon leakage, will consider the responses carefully and will issue a response in due course.

The UK has ambitious carbon pricing through our emissions trading scheme and carbon price support mechanism. The TCA commits the UK to co-operating on carbon pricing; discussions on this issue would be covered by the Trade Specialised Committee on Level Playing Field for Open and Fair Competition and Sustainable Development. We remain open to the possibility of linking the UK ETS internationally and continue to work collaboratively with a range of like-minded nations to tackle our shared climate challenges. We will update noble Lords in due course. I will write to the noble Baroness, Lady Blackstone, on the subject of energy flows but I think she is probably aware of the interconnector arrangements that we have.

The issue of mobility is an important part of our relationship with the EU. The withdrawal agreement provided for the protection of the rights of more than 5 million EU citizens to remain indefinitely in the UK, as well as to work and access public services as they did before the UK left the EU. Since leaving, the Government have focused the immigration system towards securing the skilled labour that businesses need to stay competitive and innovative.

The Government agree on the value of cultural and educational exchanges between the UK and other nations and will continue to support opportunities for young people, which have featured in the comments of several noble Lords this evening. We are exploring new bilateral youth mobility schemes with international partners, including our European neighbours. In response to the request from the noble Earl, Lord Kinnoull, for an update on discussions with the EU and member states, he will understand that I cannot go into detail but there are live discussions and I can confirm that Parliament will be updated as appropriate; I hope that will also be welcome to the noble Baroness, Lady Bull. We already have 10 youth mobility scheme agreements with other international partners, including Canada, New Zealand and Japan. We recently agreed arrangements with Andorra and Uruguay. The majority of EU member states have working holiday agreements with third countries so we continue to explore the possibilities.

We also recognise the enormous contribution of the UK’s creative and cultural industries. Since we left the EU, we have engaged with EU member states on entry requirements and the difficult issue of touring artists, which we used to discuss when I was on the committee. Now, only three member states—Portugal, Malta, and Cyprus—do not offer any visa or work permit-free routes.

Noble Lords have talked about Erasmus+. The Government chose not to participate in Erasmus+ for the 2021-27 programme, deciding instead to introduce a global scheme and provide more opportunities for students from disadvantaged backgrounds. The Turing scheme now funds 40,000 placements in 160 destinations across the world. The Government believe that it is right to prioritise funding outbound mobilities under the scheme at the present time. As the report made clear, there have been considerable benefits for that, including for disadvantaged students.

As my noble friend Lord Howard of Rising said, Brexit has allowed the UK to carve out its own trade policy. As an independent trading nation, we now have 70 trade agreements in place, including new deals with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, with Australia, with New Zealand and through the new Singapore partnership, which was mentioned during the debate. The freedom to strike such deals opens up many new opportunities in goods as well as services, our exports of which reached record highs in 2022 under current prices. We should of course celebrate the facts that the TCA is the world’s biggest zero-tariff, zero-quota FTA and that the EU collectively remains our largest trading partner.

A number of noble Lords mentioned our border target operating model, which was published in August. It set out our new approach to how security and SPS controls would be risk based and benefit from our new ambitious single trade window, which is designed to simplify and digitalise border trade in goods, and help smaller businesses. The noble Viscount, Lord Waverley, referred to it. We continue to work with stakeholders to prepare and we updated the House in a definitive Written Statement at the beginning of September.

The noble Baroness, Lady Ritchie of Downpatrick, raised some questions and concerns about small businesses. There has been a small delay to help businesses to adapt, which will also minimise the inflationary impact. I confirm that we did discuss these matters with the EU and member state veterinarians and there were extensive discussions with trade bodies.

The committee recommended that the Government should seek an agreement with the EU on SPS controls. The Government are open to this and, with the advent of the BTOM, there is more incentive for a deal. However, it must be based on equivalence and not on alignment to EU rules.

As several noble Lords said, the leader of the Opposition recently called for a much closer trading relationship with the EU. This is puzzling and, my experience would suggest, naive. It also risks returning us to the divisions of the past seven years after the referendum instead of focusing, as we should, on our national priorities. The Government’s approach, building incrementally on what we have already achieved, is much more likely to bear fruit.

We have heard a range of opinions in this place. Many—I think most—think that leaving the European Union was a mistake and that we should be binding ourselves closer to the EU. Others favour divergence. The Government are taking a pragmatic approach. We believe in a mature relationship with the EU— maximising the TCA, tackling shared geostrategic challenges such as Russian aggression against Ukraine, which has brought the defenders of democracy together, and respectfully disagreeing on areas where we have different views. That is the best approach for the UK.

I am grateful to noble Lords for this debate. The House will be glad to know that the Foreign Secretary will be addressing members of the European Affairs Committee in an evidence session in October.

Photo of Viscount Waverley Viscount Waverley Crossbench

My Lords, I clearly cannot speak for Portugal, but I understand that it is looking for reciprocal arrangements in the matters to which the noble Baroness referred.

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe Minister of State (Cabinet Office)

I thank the noble Viscount for that information. Perhaps we could have a word on the detail.

Photo of The Earl of Kinnoull The Earl of Kinnoull Chair, European Union Committee, Chair, European Union Committee, Deputy Chairman of Committees, Convenor of the Crossbench Peers 8:33, 20 September 2023

I thank the Minister who, as ever, gave a very polished performance. Her speech was rich in detail and I look forward to reading it tomorrow morning. I must say that I am always amazed by her capacity for hard work. I have been interacting with her this week and we all owe her a lot of thanks for that hard work and for that effective response.

I also thank everyone else who has spoken; it has been a most interesting and wide-ranging debate, which went all over the place. As this is my last report—my swansong, as someone said—I thank all the people who have been on the committee with me. I have actually been on it since before the Brexit vote, for more than seven years, and it has been enormous fun. Strong comments have been made across the table, at times, but the committee has always ended up in a good place, with good humour. I hope we have produced things that will have a long shelf life and will be helpful to those who seek to improve matters through the years.

I finally thank my noble friend Lord Ricketts, who has taken on a jolly difficult task. He asked me to say how sorry he is not to be here—as noble Lords will know, he is on duty at the state visit—but I suspect he only half-meant that because I am sure he is being very well fed. I will quiz him on that when he gets back.

I want to underline three points. The first was on the comments about these 32 committees. Yes, just the number of meetings is not going to do anything, but the committees do publish their agendas and minutes. So when we on the committee say that we do not feel that these committees, which are forums for mutual opportunity, are firing on all cylinders, we mean that we have been looking at the agendas and minutes, not just at how many times they have met. And, as I said, these are mutual things, so if we can follow them up, everyone will benefit.

Secondly, the most popular theme among the speakers was some form of co-operation on foreign policy, defence and security. I heard what the Minister said on this, but I and quite a lot of people around the House regret that. These people have a lot of experience of knowing that ad hocism brings risk, and it is risk that we do not need. We have spoken a lot about having, as an absolute minimum structure, the Foreign Secretary visiting the European Foreign Affairs Council twice a year. I did not think that was too much structure. Certainly, if I were the Foreign Secretary, I would want to meet my opposite numbers from other countries—at least the major countries—regularly. I want to stress that.

Finally, in the category “boring but important” is the whole saga that occupied about half my speech on ETS and CBAM. I am sorry to go into jargon. The thing is, the more you look at that and understand it, the more you realise that this is potentially quite a big problem and it is solvable—and solvable now, if there is a will. I do hope the Government will look at all that again. From the Minister’s speech, it did sound as though this is happening. Now that there are those, as I said, rather boring but really accurate and informative chapters of our report, that will tell you about the issue and I think it is something that we can solve.

We are fated to have a close relationship with Europe. The ties of blood, culture and history are so strong. I am not talking about a political relationship; but, as liberal democracies, that is something we share greatly with them. As the noble Lord, Lord Kerr, was saying, it is a pretty wintry world outside liberal democracies, which are rather rare. So we should stick together and use the very good apparatus we have built—the powerful trade and co-operation agreement, and others—to optimise things and build something friendly and proximate, and that will have to be dynamic. I beg to move.

Motion agreed.