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Brexit: UK Plans

Volume 785: debated on Monday 9 October 2017


My Lords, I should like to repeat a Statement made in the other place by my right honourable friend the Prime Minister. The Statement is as follows:

“With permission, Mr Speaker, I would like to update the House on our plans for leaving the European Union. Today, the fifth round of negotiations begins in Brussels and this Government are getting on with the job of delivering the democratic will of the British people. As I set out in my speech in Florence, we want to take a creative and pragmatic approach to securing a new, deep and special partnership with the European Union which spans both a new economic relationship and a new security relationship. Let me set out what each of these relationships could look like before turning to how we get there.

I have been clear that when we leave the European Union we will no longer be members of its single market or its customs union. The British people voted for control of their borders, their laws and their money, and that is what this Government are going to deliver. At the same time, we want to find a creative solution to a new economic relationship that can support prosperity for all our peoples. We do not want to settle for adopting a model enjoyed by other countries, so we have rejected the idea of something based on European Economic Area membership. This would mean having to adopt, automatically and in their entirety, new EU rules over which in future we would have little influence and no vote. Neither are we seeking a Canadian-style free trade agreement, for compared with what exists today, this would represent such a restriction on our mutual market access that it would benefit none of our economies.

Instead, I am proposing a unique and ambitious economic partnership. It will reflect our unprecedented position of starting with the same rules and regulations. We will maintain our unequivocal commitment to free trade and high standards, and we will need a framework to manage where we continue to align and where we choose to differ. There will be areas of policy and regulation which are outside the scope of our trade and economic relations where this should be straightforward. There will be areas which do affect our economic relations where we and our European friends may have different goals, or where we share the same goals but want to achieve them through different means. There will also be areas where we want to achieve the same goals in the same ways because it makes sense for our economies. Because rights and obligations must be held in balance, the decisions we both take will have consequences for the UK’s access to the EU market and EU access to our market, but this dynamic, creative and unique economic partnership will enable the UK and the EU to work side by side in bringing shared prosperity to our peoples.

Let me turn to the new security relationship. As I said when I visited our troops serving on the NATO mission in Estonia last month, the United Kingdom is unconditionally committed to maintaining Europe’s security. We will continue to offer aid and assistance to EU member states that are the victims of armed aggression, terrorism and natural or manmade disasters. We are proposing a bold new strategic agreement that provides a comprehensive framework for future security, law enforcement and criminal justice co-operation: a treaty between the UK and the EU. We are also proposing a far-reaching partnership on how together we protect Europe from the threats we face in the world today. This partnership will be unprecedented in its breadth and depth, taking in co-operation on diplomacy, defence and security, and development.

Let me turn to how we build a bridge from where we are now to the new relationship that we want to see. When we leave the European Union on 29 March 2019, neither the UK nor the EU and its member states will be in a position to implement smoothly many of the detailed arrangements which will underpin the new relationship we seek. Businesses will need time to adjust and Governments will need to put new systems in place, and businesses want certainty about the position in the interim. That is why I suggested in my speech at Lancaster House that there should be a period of implementation and why I proposed such a period in my speech in Florence last month. During this strictly time-limited period, we will have left the EU and its institutions, but we are proposing that for this period, access to one another’s markets should continue on current terms and Britain should also continue to take part in existing security measures.

The framework for this period, which can be agreed under Article 50, would be the existing structure of EU rules and regulations. I know some people may have concerns about that, but there are two reasons why it makes sense. First, we want our departure from the EU to be as smooth as possible. It would not make sense to make businesses and people plan for two sets of changes in the relationship between the UK and the EU. Secondly, we should concentrate our negotiating time and capital on what really matters—the future long-term relationship we will have with the EU after this temporary period ends. During the implementation period, people will continue to be able to come and live and work in the UK, but there will be a registration system: an essential preparation for the new immigration system required to retake control of our borders. Our intention is that new arrivals would be subject to new rules for EU citizens on long-term settlement.

We will also push forward on our future independent trade policy, talking to trading partners across the globe and preparing to introduce those deals once this period is over. The length of the period should be determined simply by how long it will take to prepare and implement the new systems we need. As of today, these considerations point to an implementation period of around two years. As I said in Florence, because I do not believe that either the EU or the British people will want us to stay in the existing structures longer than is necessary, we could also agree to bring forward aspects of that future framework, such as new dispute resolution mechanisms, more quickly if that can be done smoothly. At the heart of these arrangements, there should be a clear double lock: giving businesses and people certainty that they will be able to prepare for the change and guaranteeing that the implementation period will be time limited, giving everyone the certainty this will not go on for ever.

The purpose of the Florence speech was to move negotiations forwards. That is exactly what has happened. As Michel Barnier said after the last round, there is a ‘new dynamic’ in negotiations. I pay tribute to my right honourable friend the Secretary of State for Exiting the European Union for all he has done to drive through real and tangible progress in a number of vital areas. On citizens’ rights, as I have said many times, the Government greatly value the contributions of all EU citizens who have made their lives in our country. We want them to stay. In Florence, I gave further commitments that the rights of EU citizens in the UK and UK citizens in the EU will not diverge over time, committing to incorporate our agreement on citizens’ rights fully into UK law and making sure that UK courts can refer directly to it. Since Florence, there has been more progress, including reaching agreement on reciprocal healthcare and pensions and encouraging further alignment on a range of important social security rights. I hope our negotiating teams can now reach full agreement quickly.

On Northern Ireland, we have now begun drafting joint principles on preserving the common travel area and associated rights; we have both stated explicitly that we will not accept any physical infrastructure at the border. We owe it to the people of Northern Ireland, and indeed to everyone on the island of Ireland, to get this right.

Then, there is the question of the EU budget. As I have said, that can only be resolved as part of the settlement of all the issues we are working through. Still, I do not want our partners to fear that they will need to pay more or receive less over the remainder of the current budget plan as a result of our decision to leave. The UK will honour commitments we have made during the period of our membership, and as we move forward, we will also want to continue to work together in ways that promote the long-term economic development of our continent. That includes continuing to take part in those specific policies and programmes that are greatly to our joint advantage, such as those that promote science, education and culture, and those that promote our mutual security. As I set out in my speech at Lancaster House, in doing so we would want to make a contribution to cover our fair share of the costs involved.

I continued discussions on many of these issues when I met with European leaders in Tallinn at the end of last month. In the bilateral discussions I had with Chancellor Merkel, Prime Minister Szydło, President Tusk and the Taoiseach, Leo Varadkar, they welcomed the tone set in Florence and the impact that was having on moving negotiations forward.

Preparing for life outside the EU is also about the legislative steps we take. Our EU withdrawal Bill will shortly enter Committee stage, carrying over EU rules and regulations into our domestic law from the moment we leave the EU. Today, we are publishing two White Papers on trade and customs, which pave the way for legislation to allow the UK to operate as an independent trading nation and to create an innovative customs system that will help us to achieve the greatest possible tariff and barrier-free trade as we leave the EU. While I believe it is profoundly in all our interests for the negotiations to succeed, it is also our responsibility as a Government to prepare for every eventuality—so that is exactly what we are doing. The White Papers also support that work, including setting out steps to minimise disruption for business and travellers.

A new, deep and special partnership between a sovereign United Kingdom and a strong and successful European Union is our ambition, and our offer to our European friends. Achieving that partnership will require leadership and flexibility, not just from us but from our friends, the 27 nations of the EU. As we look forward to the next stage, the ball is in their court—but I am optimistic that it will receive a positive response, because we are seeking the best possible deal, not just for us but for our European friends too. While of course progress will not always be smooth, by approaching the negotiations in a constructive way, in a spirit of friendship and co-operation and with our sights set firmly on the future, I believe we can prove the doomsayers wrong and seize the opportunities of this defining moment in the history of our nation.

A lot of the day-to-day coverage is about process, but this, on the other hand, is vitally important. I am determined to deliver what the British people voted for—and to get it right. That is my duty as Prime Minister, it is our duty as a Government and it is what we will do. I commend this Statement to the House”.

My Lords, that concludes the Statement.

My Lords, it is the first day back and we are discussing Brexit already. I am grateful to the noble Baroness for repeating the Statement, although I admit I felt an increasing sense of déjà vu as she went through it—probably I was not the only one. So much of it is vague and repeats previous speeches, Statements and comments that we have heard before.

At the outset, I want to pick up on one specific aspect. The noble Baroness will know of my interest in it from when the noble Lord, Lord Taylor of Holbeach, and I faced each other across the Dispatch Box on Home Office legislation. I listened carefully to the section on security—it is so vague and unspecific that it tells us absolutely nothing about priorities for negotiations or expected outcomes. Given the importance of the issue, we need more than that; phrases such as “bold, new strategic agreements” and “comprehensive frameworks” have been said time and again, but at this stage I do not know what they mean. I want to flag that up early on.

The noble Baroness mentioned the two White Papers that were published today—one is on the customs Bill. Is she aware that there are only 10 copies—nine now, because I have one—available to Members of the House of Lords? That seems entirely inappropriate and I hope she can look into it. Can she also say something about the consultation period? Cabinet Office guidelines indicate about 12 weeks as the norm for consultation, yet this paper—and similarly in the one on trade—has no deadline for consultation except to say that responses are encouraged on this by 3 November. That is less than four weeks away, and the other deadline is 6 November. That does not seem appropriate. I assume that if responses are encouraged by those dates, they are also the deadline for responses to be considered, and negotiations. I would be grateful if she could comment on those two points.

This is a hugely significant point in negotiations, the importance of which cannot be overestimated. On the day Article 50 was invoked, the countdown started for the UK to leave the EU. Only one thing was clear: two years is a very short time to ensure that we resolve all the issues relating to Brexit and our future relationship with the EU, including on trade, security, finance and our domestic regulations and legislation for public protection. We are around a third of the way through and it seems that too little significant progress has been made. Within days, we should have clarity on whether sufficient progress has been made in phase 1, to allow us to proceed to phase 2 in a couple of weeks’ time, or if negotiations will have to be delayed.

It is clear that the Prime Minister’s visit to Florence was designed to break the deadlock, and her speech was important for a number of reasons. First, it was the first time that she had accepted the need for a transitional phase—she prefers “implementation” phase; I do not care what it is called, but her recognition that such a period was required was important. Recognising the problems ahead, she tried to use the speech to jump-start the negotiations by supporting talks on a transitional, or implementation, deal.

We have always been clear, especially given the number of issues on which there is no certainty, that to prevent a Brexit cliff edge for our economy we must negotiate a time-limited transitional deal that maintains the same basic terms as we currently have with the EU. That means remaining in a customs union with the EU and within the single market while we build the bridge about which the Prime Minister spoke to a strong final deal. I welcome her commitment on that, but any negotiations should start from where we are now. Ruling out options at the start is like trying to operate with one arm tied behind our back.

This pragmatic approach has been welcomed by many of those organisations, including the CBI and trade unions, which fear the impact on businesses and jobs of a cliff-edge exit. It was a significant policy shift for the Prime Minister. She rightly recognised the warnings from businesses that opposition to transitional arrangements was already hitting the economy. Both the head of UBS Investment Bank and the chairman of RBS, and many others, have reinforced the message that unless transitional arrangements are agreed soon, there will be a significant shift of both staff and businesses out of the UK. Yet within days of the Prime Minister’s welcome comment, five of her Cabinet Ministers revealed conflicting and contradictory views. It is no surprise that the list of names is probably very similar to that for the next Conservative leadership contest. I am sure that many share the view that, following a disastrous election campaign which has weakened the Prime Minister at a time when, in the national interest, she has to be at her strongest, she is being further undermined by members of her Cabinet.

The Prime Minister’s speech was also part of her pitch that on the three key phase 1 issues, progress had been made and that progress was adequate for phase 2 to proceed. It will be a huge failure of government strategy if those talks are delayed. The Prime Minister is right that some progress has been made on the three issues, but the question is whether it is enough. It is clear from last week’s events in Strasbourg that the EU does not think that it is.

Let us look at those three issues. For those of us who voted in your Lordships’ House before the negotiations started on arrangements for EU nationals and the consequences for UK nationals in the EU, it is disappointing that this issue has not been resolved. I can see the noble Lord, Lord Tebbit, pointing around the Chamber and muttering. Unless he wishes to comment, I will continue. Businesses and academia are already experiencing some of the difficulties that we feared. The lack of agreement means that both here and across the EU, British and European Union citizens feel their lives blighted by uncertainty. Many in your Lordships’ House and the other place were persuaded by the Government not to vote for our Article 50 amendment, as the Government had promised that this was an early priority and would be resolved at the start of negotiations. The Government might find it harder to earn such trust in the future.

On the matter of the Irish border, there is an agreement on the required outcome, but the Government have been unable to say how it can be achieved. Initial proposals for a “technical solution” have been ridiculed by experts. A leaked report by the Irish Revenue Commissioners sets out in stark detail the vast increase in the amount of resources and bureaucracy that may result from Brexit, which will be significant at all levels and for all communities. Not only do the Revenue Commissioners warn that an open border will be impossible from a customs perspective but they even expect the important annual ploughing championships to be hit. That will affect the quarter of a million people who attend that event, and it makes a serious point about the possibility of additional paperwork being needed for machinery imported from the UK.

On the third issue—agreeing a formula for the “divorce bill”—not only is there no agreement with the EU but there is no agreement within the Cabinet either. Depending on your point of view, Boris Johnson is either an unprincipled, gaffe-prone Minister who shoots from the hip or a first-rate diplomatic Foreign Secretary. But even he has had to retreat from telling the EU to “go whistle” to accepting the need for an agreed formula and for quick progress to be made.

There is a debate to be had on whether progress is adequate to proceed to the next stage. The Prime Minister’s confidence about this is not widely shared. A war of words seeking to apportion blame will not make it any easier, but discussion and negotiation will, as will honesty and openness about the sticking points and difficulties. It is therefore all the more worrying that two Conservative Party Members of the European Parliament, a former chief whip and a deputy leader, who were honest enough to express their view and vote accordingly that progress was not yet sufficient, have been suspended from their party. That does not inspire confidence that these issues are being examined with an open mind.

I have three specific questions for the noble Baroness. Your Lordships’ House will have seen the joint statement from the TUC and CBI on citizens’ rights. The Prime Minister said in her Statement that she expected a quick agreement, but we have heard that before. Can she be more specific? Can the noble Baroness confirm that the UK negotiating team expects an agreement on citizens’ rights this week, thus concluding phase 1 of the negotiations? If not, will the Government keep an open mind, as urged by your Lordships’ House and now by many others, including the CBI and the TUC?

Secondly, returning to last week’s events in the European Parliament, it was significant that both President Juncker and Monsieur Barnier have addressed MEPs, as they do regularly. The Prime Minister has had an opportunity to do so and has not accepted the invitation. Given the possibility of a delay to phase 2, will the Prime Minister now reconsider the invitation for her to do the same?

Finally, if the Prime Minister’s Florence speech is really to break the impasse, it is clear that we must overcome the sticking point that is the financial settlement. I am not asking for details of figures, but have the UK’s negotiators been permitted to discuss potential figures at this week’s talks? I hope that the noble Baroness will be able to address those questions as well as the points made about the two White Papers published today.

My Lords, since our debate in September on the Government’s so-called position papers, there have been three developments. First, we had the Florence speech, of which this Statement is a précis. Secondly, we had the Prime Minister’s conference speech, which was noticeable for the fact that less than 5% of it was devoted to the most important issue facing the country; namely, Brexit. Thirdly, we have had an extraordinary degree of infighting among members of the Cabinet. Many of us have lived through periods when there has been infighting within our own parties, and we know what it means: it becomes all-consuming; it becomes completely debilitating. That is the state of the Government today.

As I said, the Statement is a précis of the speech made by the Prime Minister in Florence, which, in her own terms, was intended to move the negotiations forward. How does it fare in doing that? It starts by talking about the economic partnership, which is to be “unique and ambitious”. The rest of the section simply sets out what the Government will not do. It says nothing about what the Government intend this to be. This is the first of what one might call “the ball in whose court?” issues. The Government say, “We’re not having this; we’re not having that; we’re not having the other”. The assumption is that somebody will come up with a solution, but not them. Certainly, there is no suggestion in the Statement of what the solution might be.

Ditto the security relationship. The phrase there is that there is to be a partnership that will be,

“unprecedented in its breadth and depth, taking in cooperation on diplomacy, defence and security, and development”.

We wait to see what that might mean, but that is it. We then move on to the next phase, implementation. The Government have accepted that there has to be an implementation phase, and there is to be a two-year standstill. The Government should not take any great credit for this. It is impossible to move from our current position in the EU to a new position without an implementation or transition phase. All they have done is accept the inevitable with extraordinary bad grace.

Half way through the Statement, the Prime Minister marks her success in the Florence speech. She says that it was extremely successful and that Michel Barnier said,

“there is a ‘new dynamic’ in the negotiations”.

Well, there is a new dynamic for the Secretary of State—he is staying put. The Secretary of State for Exiting the European Union is not going to Brussels today, and has not been, so all his input, at most, this week as in the past, is going to be some kind of Panglossian statement on Thursday afternoon, when he has just whizzed in, which will be immediately contradicted, no doubt, by Michel Barnier.

The Statement then gets back to the substance, the three big issues, of which Northern Ireland is the first. The Government say that we and the EU,

“have both stated explicitly we will not accept any physical infrastructure at the border”.

The problem here is that nobody—not this Government, not the Irish Government, not the EU, not a think tank, not a lawyer, not a company—knows how you can be without the customs union without some kind of border control. There is not a soul on the planet who has come up with a viable proposal for dealing with that, so how can the Government believe that they are making progress there, or that they could get a quick outcome?

We then come to the EU budget, where we want to make a contribution,

“to cover our fair share of the costs involved”.

What does “fair” mean? It is a very interesting word, but the Government give zero indication of what it means. Does the EU have any idea what our view of fair is? If it does, it is certainly something that has not slipped out from anybody in Brussels or in this Government.

We now come to legislation and the two White Papers that have been published today. I have not had a chance to look at them, but I have just one question for the noble Baroness. On customs, we are about to create “an innovative customs system”. It sounds great, but is she aware that, as we speak, HMRC is in the process of reducing regional and local offices so that the ports of East Anglia, Harwich and Felixstowe, are about to be managed from Stratford, in east London? I accept that this is, indeed, innovative, but it does not fill me with any confidence that the Government have even the vaguest idea how they are going to implement a new customs regime.

Finally, we come to the conclusion, which is that, as we look to the next stage,

“the ball is in their court. But I am optimistic it”—

I do not know whether that is the ball—

“will receive a positive response”.

What is “it”? On too many issues there simply is not an “it”: there are simply vacuous statements and pious exhortations. With parliamentary Liberal Democrat colleagues I spent a couple of days in Brussels during the recent Recess attempting to find out what was really happening in the negotiations. We met representatives from the Council and UKREP, other permanent representatives, MEPs and many others. Everybody, with the inevitable exception of UKREP, was at a loss as to what the UK was really after. It was not that they were objecting to what we were after; they simply had no clue. There was no beef, as they saw it, in the negotiations. Today’s Statement, I am afraid, suggests that on current trends they are likely to be kept waiting for this beef for quite a long time.

My Lords, I am grateful to the noble Lord and the noble Baroness for their comments, as ever. I shall address some of the issues they raised. I know very well the interest of the noble Baroness in the area of security—she has held me to the fire over it a number of times—and the noble Lord, Lord Newby, raised the same issue. I stress again that the UK is unconditionally committed to maintaining Europe’s security and we will continue to offer aid and assistance to EU member states that are the victims of armed aggression, terrorism or natural or manmade disasters. Indeed, the European Council’s negotiating guidelines identify the importance of partnerships against crime and terrorism and it is clearly to the benefit of both sides to make sure that this new partnership is comprehensive and effective. I know that this will not satisfy the noble Baroness, but I stress that there is currently no pre-existing model of co-operation between the EU and third countries that replicates the full scale or depth of collaboration that currently exists between the EU and the UK in this area, which is why we want to design new arrangements that go well beyond any existing arrangements the EU has in this area and to draw on legal models the EU has previously used to structure co-operation with external partners in other fields, such as trade.

I apologise for the small number of copies of the customs White Paper. I agree that 10 is not enough and I have been assured that more are being produced and will be available shortly. I will look into the issue raised by the noble Baroness, of which I was not aware before she mentioned it.

On the implementation period, the Cabinet is united behind the vision the PM set out in Florence about a strictly time-limited implementation period based on the existing structure of EU rules and regulations during which the UK and EU would continue to have access to one another’s markets on current terms. I welcome the comments of the noble Baroness that this is, indeed, a step forward.

On citizens’ rights, we have been very clear that we want this issue resolved. The Statement made it very clear that we recognise the contribution EU citizens make and we want them to stay. As I said, and as the Statement made clear, in Florence the PM gave further commitments that the rights of EU citizens in the UK and UK citizens in the EU will not diverge over time, committing to incorporate our agreement on citizens’ rights fully into UK law and making sure that UK courts can refer directly to it. As for EU citizens living in the UK, where there is uncertainty around underlying EU law we have said we want the UK courts to be able to take into account the judgments of the European Court of Justice. We will be working hard to get an agreement. I am sure that the noble Baroness will accept that I cannot prejudge or guess the outcome of the current round of negotiations, but I reiterate the importance we place on achieving an agreement in this area as we know how important it is.

On the financial settlement, the basis of our negotiations in this round is clear. We have said that we do not want our partners to fear that they will need to pay more or receive less over the remainder of the current budget plan as a result of our decision to leave, that we will honour commitments we have made during the period of our membership and that we will make an ongoing contribution to cover our fair share of the costs involved. Again, I cannot prejudge or guess the outcome of the current round of negotiations, but we are obviously aware that this is an important issue. I fear that I am also unable to provide the noble Baroness with any further information about the Prime Minister’s interaction with the European Parliament, but if I am able to do so at a future point, I will, of course, do so.

The noble Lord and the noble Baroness raised the issue of Northern Ireland. It is important that both the UK and the EU have explicitly stated that we will not accept any physical infrastructure at the border; that means we are working from a common ground to achieve an outcome that we understand is extremely important to all of us. The noble Lord, Lord Newby, asked about customs. The White Paper sets out that we will be guided by what delivers the greatest economic advantage to the UK and three strategic outcomes in terms of our future customs: ensuring that UK/EU trade is as frictionless as possible; avoiding a hard border between Ireland and Northern Ireland; and establishing an independent international trade policy. I say to the noble Lord that HMRC operates one of the most efficient customs regimes in the world and we already have highly efficient processes for freight arriving from the rest of the world.

Perhaps I might raise a couple of points with my noble friend. First, can she tell me whether we have yet valued our share of the buildings occupied by the European Union and its agencies? Have the EU authorities yet proposed how that value in those buildings will be paid back to us following Brexit?

Secondly, on the legal rights of European Union citizens here and UK citizens in the EU, can my noble friend say how many UK citizens are currently imprisoned or detained in the European Union without trial or charge, and how many EU citizens are similarly detained here in prison without trial or charge? I fancy the numbers will tell us something about the legal rights of citizens, both here and on the continent. Lastly, does my noble friend not agree that the simple and short way to solve the dilemmas around the Irish frontier with Northern Ireland would be for the Irish Republic to look after the best interests of its citizens by leaving the EU?

I would not dream of telling the people of Ireland what to do. On my noble friend’s question about prison numbers, I am afraid I do not have those figures to hand but I am happy to see whether they are available and I will write to him. In relation to the financial settlement, as he will be well aware, a lot of work has been done across the piece looking at the contributions that we have made and the settlement that we may come to. As I said, we have set out that we do not want our partners to fear that they will need to pay more or receive less over the remainder of the current budget plan. Of course, all these issues will be discussed in detail during the negotiations.

The Government remain in complete denial about the very considerable costs of leaving the single market and, equally, about the quite significant costs of leaving the customs union. There is nothing at all about costs in either of the White Papers. If the Leader looks at pages 24 and 25 of the Customs Bill White Paper, she will see a number of things referred to which represent considerable costs to traders. There is a suggestion that traders will need new intermediaries and forwarding agents, which they did not previously utilise. It is suggested that they will need to introduce new IT systems and spend money on consultants. Have the Government made any estimate of what the cost will be to traders in this country from the restrictions that they are intending to impose when we leave the customs union? It is usually considered a good sign of honest and competent governance or administration, in the private sector or the public sector, not to commit to go into any venture without having some idea of what the cost is. The Government have not told us the cost of this gratuitous attempt to pull us out of the single market and the customs union.

As the noble Lord himself said, we have published two White Papers today, setting out our objectives for both the new customs arrangements and our future trade policy. Of course, we have a continuing dialogue with businesses involved in this and we will make sure that their voices are heard and any issues that they have are reflected in the work we do. But that is the reason we have published a White Paper, to make sure that that discussion is had.

My Lords, perhaps the Leader of the House could help me understand. There appears to be a contradiction between pages 1 and 3 of the Statement. On page 1 there is an insistence that,

“when we leave the European Union we will no longer be members of its single market or its customs union”;

then on page 3 it is asserted that the framework for the transition or implementation period would be,

“the existing structure of EU rules and regulations”.

That surely must mean the single market and the customs union. So how are we going to leave the single market and the customs union and stay in them in the transition period? I would welcome enlightenment.

We will be leaving the EU and its institutions in March 2019 but the fact is, at that point neither the UK nor the EU will be in a position to implement smoothly many of the detailed arrangements that will underpin this relationship. We want a strictly time-limited implementation period based on the existing structure of EU rules and regulations, during which the UK and EU would continue to have access to one another’s markets on current terms and the UK would take part in existing security measures. Because we want our departure to be as smooth as possible, it does not make sense to make people and businesses plan for two sets of changes in the relationship between the UK and the EU, and we should concentrate all our negotiating time on what matters: the long-term future relationship.

My Lords, does my noble friend accept the view that the Prime Minister has taken an entirely consistent and reasonable line on these matters? The Leader of the Opposition talked about a feeling of déjà vu—not something we would get from the Opposition’s position, which varies from week to week. That consistency is clearly important but I ask my noble friend: how much patience does the Prime Minister have? At what point do we say, “Enough is enough” to this intransigence that we are seeing? What has happened to the duty of sincere co-operation which is part of the acquis and the requirement in the treaties? At what point are we actually going to say that these people are deliberately obfuscating and creating difficulties by refusing to enter into the wider negotiations and actually get on with preparing what is in the best interests of our country in the longer term?

I entirely agree with my noble friend about the consistency of the Prime Minister’s position. In fact, we have been putting a lot of information out to the public. We have published seven Brexit position papers, seven future partnership papers and four White Papers, including the two today, and we have set out a clear vision. We want to see progress and we are hoping, as Michel Barnier said, that we will see a “new dynamic” in the negotiations. Inevitably, leaving is a difficult process but we believe, on both sides, that it is in all our interests for the negotiations to succeed and we will continue to work on them in a spirit of good will. Having said that, we also have a duty to plan for the alternative, which we are doing, because that is what any responsible Government would do, but I reiterate that we truly believe that we will come to a deal which will be best for both of us.

My Lords, if I understood the noble Baroness correctly, in quoting the Prime Minister she said that the Government are planning for “every eventuality”. That being so, can she confirm that the Government are indeed planning for an exit from the European Union without any agreement? If that appears to be the position in January 2019, is that not the time when the people should be asked again whether they want to leave on those terms?

I am afraid that I hold a different view from many noble Lords in this House but, as I have said, we are confident of getting a good deal. But, yes, as I just said, we are planning for an eventuality where that does not happen, because that is what any responsible Government should and would do.

My Lords, I agree with my noble friend Lord Forsyth that the Prime Minister has been consistent in her approach and I commend it. But is she aware that there are a large number of people in this country, and I count myself among them, who worry that perhaps the biggest obstacle to achieving a satisfactory outcome to these negotiations are the divisions that are being displayed on our own side? The more divided we appear, the greater the disadvantage we find ourselves at in Brussels. We are up against very experienced and tough negotiators and when they see that we are divided, they will take advantage of that. If the Prime Minister’s very sensible initiatives are to bear fruit, it is essential that she is able to enjoy the unity of purpose of her own Cabinet colleagues.

I agree with my noble friend. Indeed, the Cabinet is united behind the vision in the Florence speech. There is unity in the Cabinet. We are behind the Prime Minister because we all want to see these negotiations succeed.

My Lords, I ought to be reassured by those last words but I reiterate what my noble friend Lord Tugendhat said: there is a perception that the Cabinet is divided. There has been no doubt that individual members of the Cabinet—and one in particular, who bears responsibility for this country’s foreign policy—have not been as they should have been. Either we expect him to fall into line properly—explicitly, continuously—or the Prime Minister to exercise her undoubted authority.

I have no doubt that the Prime Minister does and will continue to exercise her authority. I want to reassure noble Lords again: the Cabinet is united. We want to get the best possible deal for the UK and the EU, and to ensure a smooth and orderly withdrawal, and that is what we are all working towards.

My Lords, I welcome the Government’s acceptance now that there are broad security dimensions of leaving the European Union and that the European Union has always had large security elements involved with it. I recall the noble Lord, Lord Forsyth, denying that that was the case, and the leave campaign certainly did not accept it. Can the Government begin to tell us something about how they will maintain the relationship both on cross-border security and in terms of defence, foreign policy and intelligence, after we leave? Looking round the Chamber, I think there are one or two Members old enough to remember, for example, a body called the Western European Union. It existed solely to allow the United Kingdom to have conversations with the then six members of the European Community on foreign and security policy when we were otherwise outside the room. Do we imagine that we are going to try to persuade others to set up some sort of special arrangement of this sort or will we hope to maintain, for example, the current multilateral intelligence arrangements through associate membership of Europol? As the position paper on this said, these are clearly in our national interests.

I entirely agree with the noble Lord that this is an extremely important area. As I said, it is very encouraging that the European Council’s negotiating guidelines also identify the importance of partnerships against crime and terrorism. The specific details will obviously be for the negotiations but I say again that no pre-existing model of co-operation between the EU and third countries replicates the scale and depth of the collaboration that exists between the EU and the UK in this area. We want to maintain that, which is why we want to work towards new arrangements that go beyond any arrangements the EU has in this area at the moment.

My Lords, the noble Lord, Lord Forsyth, commented on the Prime Minister’s consistency in her view of what Brexit ought to look like, but at times it has looked as if the EU 27 have one position on Brexit and the UK Government have 27 positions on it. One of the issues for Monsieur Barnier is that he has been given a negotiating mandate by the EU 27 and cannot exercise flexibility, because that is not within his gift. As we look towards the next European Council meeting and beyond, what bilateral work are Her Majesty’s Government doing behind the scenes, with the ministries and Heads of Government of the other 27 member states, to look at how they could try to persuade the 27 that a different, more flexible mandate might be helpful for Monsieur Barnier going forward?

I am sure that the noble Baroness will be aware that the Prime Minister has had regular conversations with other leaders at the events she has been to and at other stages, and that departments are of course working closely with their counterparts. We all understand that getting a good deal for both the UK and the EU is in our best interest, and that is what we are all working towards. There is a lot of engagement going on, through companies and business, on the ground to try to make sure that we can move together towards a position that we both want.

My Lords, do the Government share my view that if the European negotiators persist in their refusal to discuss our future relationship, they are themselves in breach of Article 50? Would we be prepared to seek a statement to that effect, if necessary from the European Court of Justice?

We are all hopeful that we will be able to move forward together in a constructive manner. That is certainly what we intend.

My Lords, how do the Government anticipate that the common fisheries policy will work out in relation to the United Kingdom during the transitional period?

We are committed to leaving the common fisheries policy and developing arrangements for fishing that can create a more profitable and self-sufficient seafood sector. Taking back control of our waters means that we can decide how we allocate access to our waters and our fisheries. Any decisions about giving access to vessels from the EU and other coastal states will be a matter for negotiation.

My Lords, can the Minister explain how this taking back of our fishing policy will work? My understanding is that most of the fishing quotas that we received when the agreement was first made have been sold by the UK fishing fleet to foreign fishing companies. Perhaps she can explain how we are going to get the quotas back from those companies which, presumably, have been enjoying them for the past 20 years.