Brexit: Preparations and Negotiations

My Lords, it is very cold in this spot at the moment. That is a comment not on the Cross Benches but on the fierceness of the air conditioning—but I shall struggle through.

I have heard with increasing incredulity the efforts of noble Lords in this House, some of them my good friends, to reverse the results of the referendum of 2016. It may have been a mistake to hold a referendum on such a complex issue, but, having asked the question and promised to treat the answer as binding, it seems to me inconceivable that responsible politicians can disregard it. This is the answer to the noble Lord, Lord McNally. David Cameron gave repeated assurances that he would respect the result of the referendum, and I do not think we can ignore that.

So although I voted remain, I agree with the Prime Minister that our exit from the EU must be taken as given. As she writes in the foreword to the White Paper,

“the British people voted to leave the European Union. And that is what we will do”.

What I have to say is shaped by my view that any attempt not to leave would be to take serious risks with our democracy at a time when a revolt against the elites is sweeping across Europe and the United States.

The White Paper presents the Government’s proposals for the permanent future relationship between the United Kingdom and the European Union. It envisages a bespoke association to be agreed by Parliament and the European Union negotiators before we leave, and then a 20-month implementation period. The implementation period is simply designed to put in place the association agreement.

The Prime Minister’s belief that she can get the White Paper proposals through Parliament and Europe by the exit date seems completely unrealistic for three reasons. First, it expects too many complicated and contentious matters to be agreed in too short a time. Customs arrangements, arrangements for financial services, a new mobility contract and Ireland are very difficult issues all to be settled within the next two or three months. Secondly, Michel Barnier has already rejected the Government’s association plan as unworkable. Only on Friday he simply dismissed the proposals dealing with access for our financial services. Finally, there is no majority for the White Paper proposals in the other place. The White Paper makes too many concessions for the Brexiteers and not enough for the remainers, and I do not see the politics of coming to a conclusion on how they will work themselves out.​
Precisely because it is highly possible that we will leave the EU in March 2019 without a final agreement, it is essential for the Government to develop a reserve position which will protect our domestic polity and external relations from disastrous damage.

The noble Lord, Lord Newby, made an eloquent argument that there is no good leaving option, and therefore we should not leave. He expects or hopes that that decision will be ratified by another referendum. Other noble Lords argued for a middle way, a reserve position—I am thinking of the noble Lords, Lord Mandelson, Lord Tugendhat and Lord Haskel.

I think that there is a good reserve position, which is simply for Britain to remain a member of the European Economic Area. It was conceived by Jacques Delors in 1989 as a way for EFTA and ex-Communist states to transit into the European Union, and Britain could use it to transit out of the European Union. Continuing membership of the EEA would put into touch for two or more years after we leave the most explosive obstacles to an agreement today—the border between Northern Ireland and the Irish Republic, access for financial services and the permanent immigration regime—while leaving us free to negotiate our own trade agreements with third countries.

As a member of the EEA, Britain would continue temporarily with the same tariff arrangements as at present. Under Article 112, it could impose temporary restrictions on immigration, immediately regain control of agriculture and fisheries and join the EFTA side of shared rule-making.

The question is: could Britain stay in the European Economic Area after it left the customs union? That is legally obscure. The Government’s original position was that it would automatically cease to be a member. Then it was urged that the UK was a contracting party to the EEA in its own right, so its membership would not automatically lapse. The latest twist is that on 26 February, the Prime Minister informed the noble Lord, Lord Owen, that Britain would be,

“seeking continued application of the EEA Agreement for the duration of the implementation period”.

So where are we in all this? The bottom line seems to be that no one can force us to leave the single market when we leave the EU, and membership of it will give us important safeguards in the transition out of the customs union. However, it is most important to insist that the EEA is not a permanent resting place. Britain would leave the customs union on 31 March and give a year’s notice of its intention to leave the EEA. In my view, this is the only way to respect the decision of the referendum while avoiding a politically calamitous exit—and I have stuck to my time.