Motion to Take Note
That this House takes note of the outcome of the European Union referendum.
My Lords, our debate today has the potential to be one of the most significant in the recent history of your Lordships’ House. Indeed, I see today as a real opportunity for us as a House to reflect on the decision that has been made and to offer some clear thinking about the issues we now face as a country. It is an opportunity for the House of Lords to show why it exists.
In repeating several Statements over the last week, I have set out the views of Her Majesty’s Government, and I want today to be much more than an occasion for me to set them out again. Over the next two days my noble friend Lady Anelay and I are here primarily to listen, so, in opening, I will try to start the process of reflection by offering my perspective both on the vote itself and on the responsibilities incumbent on this House, as I see them, in the weeks and months ahead.
To state the obvious first, the referendum was a momentous democratic exercise. Over the weeks of the campaign we saw passionate cases put forward by both sides and, more importantly, we saw voters engage with an enthusiasm that we had not seen for many years. Indeed, more than 33 million people from across the UK and Gibraltar exercised their democratic right.
I appreciate that when the votes were counted it was not the result that many of us may have wanted— indeed, 48% of us voted to remain—but the result was clear. By a margin of more than 1 million, 52% of the people who voted elected for the United Kingdom to leave the European Union—an instruction that this Government, and all of us, must respect and seek to act on.
Will the noble Baroness give way?
It would be possible for us to go over the campaigns again in detail, to look for ways to re-examine the result or to pose again the question of our EU membership, but in my view that would be the wrong thing for us to do. Not only would it distance us further from many of the people we are here to serve; worse, it would be a missed opportunity to serve them better. Instead, we should take this opportunity to play our part in shaping the way ahead and, as I see it, perform our duty of reassuring people about our country’s future by offering some clear thinking about that way forward.
Clearly, there is further work for us to do in determining our future relationship with the European Union. As the Prime Minister said, we are leaving the EU but we are not turning our backs on Europe. The next steps will not be easy. There will be complex negotiations ahead but we should approach them with the clear guiding principle of ensuring the best possible outcome for the British people. As the Prime Minister has made clear, the nature of negotiations, and the shape of any deal we strike, will be for his successor and their Government. That is why it will be for them to decide when to trigger Article 50.
In the meantime, there is a lot of ground to cover in examining the options available so that, when decisions are taken, we put our best foot forward and maintain Britain’s reputation as an open, outward-looking nation, maintaining our strong partnerships in Europe, continuing to play our role on the world stage, holding fast to our values of tolerance and respect, and showing that Britain remains open for business. That is something that we in Government will do with the input of all the devolved Administrations. It is something that I hope this House will play an important part in as well, for among the membership of this House of Lords we have an unrivalled expertise in EU and foreign affairs. We also have a range of EU committees, whose dispassionate scrutiny is admired here, in Brussels and around the European Union. That means that we are well placed to come forward with ideas to make a future deal a success for all parts of the United Kingdom.
I know that noble Lords will express views and have questions about the nature of further parliamentary involvement beyond that and the precise form that it will or should take. Those are valid questions, and the debate among legal minds has already begun. I know that our Select Committees may also choose to examine them, but those are questions which will, rightly, be for the next Prime Minister to address. I am clear, as Leader of this House, that Parliament should have an appropriate role. However, in debating what that role should be, we should be careful to show that our focus remains on delivering the referendum result and on applying all our knowledge and experience to make our future a successful one for the United Kingdom.
That is an important point and brings me on to the broader responsibility we have to bear in mind as we proceed, particularly as an unelected House. In the period since the vote there has been a lot of analysis and reflection about the reasons people voted how they did. The headline from those who voted to leave was clear: they wanted to leave the European Union. Their reasons will have varied and, for some people, may have developed over many years. However, whatever those reasons, we must take that message away and deliver on the instruction we have been given.
In doing so, we must also consider that the vote reflected something else as well: a frustration with the status quo: a sense that voters felt distant from those who exercise power and misunderstood by the people who make the decisions that affect them. So although we rightly must focus on the question of our place in Europe, as we do so, we must not lose sight of that desire for people to be better understood. If we are able to address the challenges we face with that in mind, we will build public confidence in Parliament and this House within it.
That means demonstrating that our focus is on delivering success for all the people of the UK, whichever way they voted, and on finding solutions that fit with people’s understanding of the choice the country made. If we do not, we will miss the opportunity before us and the gaps this vote highlighted will only become more entrenched between old and young, graduates and non-graduates and those living in our major cities and elsewhere—or, to put it another way, the gap between those who have privilege, power and influence and those who feel they do not.
Noble Lords may ask how we can possibly do all this. That is where we can demonstrate the value of our experience and expertise. I was never of the view that the people are fed up with experts, but I do believe that some of those who feel that gap I have just described may be fed up with experts not understanding them. In times of uncertainty such as these, people rightly look to those of us in positions of leadership to use our knowledge and our understanding of the challenges people face to develop an answer that works for them.
That may be the point on which to conclude because it reflects the essential challenge we now face. The result on 23 June was for the United Kingdom to leave the European Union. I campaigned vigorously for remain, as did many in your Lordships’ House, but I stand by the result of that referendum and want to work hard now to implement what has been decided.
As we proceed we must not forget the interests and views of the 16 million other people who voted to stay. In the disappointment many feel about the outcome of the referendum, there may be a temptation to simply leave to others the consequences of the Brexit vote. After all, although the result told us clearly what people were voting against, it did not give us a specific view as to what people were voting for. Yet the public as a whole, however they voted, deserve more. With the referendum result they have asked us to come together and to come up with a solution that works for everyone and achieves the best outcome for Britain on every possible front. It is our duty, as public servants to do just that.
There will be challenges ahead, of that I am sure, but it is for us all to find the way forward to meet them so that the United Kingdom can continue to prosper, as one nation, in the years to come. I beg to move.
My Lords, recently we have seen how strong leadership, good teamwork, thoughtful strategy and real skill can be effective and successful. Unfortunately, it has come not from politics or government but from the Welsh football team, which brought much-needed cheer to us all.
The debate over the next two days is not about the referendum campaign. We are all still seeking to understand what happens next and where we go from here. What alarms me, fuelled by the uncertainty that now affects so many areas of our life, is not only how few answers the Government have but how few questions appear to have been asked beforehand. Your Lordships’ House, with all its knowledge and expertise, which the noble Baroness acknowledged, recognised this and, during the passage of the legislation, asked the Government to prepare not only reports on the impact of Brexit but also contingency plans. The Government declined to do so.
It is therefore impossible to address the uncertainty without recognition of the false promises that were made on such a gigantic scale. The most obvious is the insistence before the vote that £350 million a week would be available to the National Health Service, before that being denied within hours of the polls closing. It is one thing to make promises in good faith, even if they cannot later be fully kept, but it is quite another to tell tall tales knowing that they are complete fiction. Both of those fuelled the current uncertainty.
In Questions last week, the noble and learned Lord, Lord Keen of Elie, was asked about the 3 million EU citizens living in the UK and the UK citizens living in the EU. Unable to offer any reassurances, he merely implied that EU citizens in this country would be used as some kind of bargaining chip when negotiating the rights of British citizens in other EU countries. In this House we all know that is wrong. It is unacceptable and must be resolved urgently. The longer this issue drags on, the more damaging it is.
We have had two prime ministerial Statements on this issue since the result. The fall-out has dominated articles, the airwaves, social media and conversations in our pubs, our shops and around dinner tables up and down the country. Since the result we have less certainty, not more. That is in part because of the way this has been handled by the Government, who apparently have no plan for dealing with the situation.
Having said he would see the negotiations through, the Prime Minister has announced his resignation and said they are a matter for his successor. I feel strongly that those who made their case by relying on information that was known to be false, or made promises they knew they would never be able to keep, have acted without integrity. When the new Prime Minister comes to appoint a Cabinet, it should be uppermost in her mind that commitment to the truth is an essential quality. We all know that we have a difficult road ahead of us and we must all play our part. We have to move forward in a way that is constructive and in the best interests of our country, of British citizens here and abroad, and of those who live and work here. In order to do so we must recognise that there are issues that cannot wait for Mr Cameron’s replacement.
For constitutional issues, absolute legal precision is required. How is the trigger for Article 50 authorised? Is this a matter for Parliament or the Executive? The Prime Minister has said that when to trigger Article 50 is a decision for the new Prime Minister. Is it the view of the Government that the decision lies entirely in her hands? Why would such a fundamental decision not be a matter for Parliament?
There remains a lack of clarity about the process of leaving the EU and when the decision takes effect. During the debate on the Statement, the noble Lord, Lord Butler of Brockwell, to whom I apologise for not telling sooner that I would raise this, asked an extremely important question of the noble Baroness the Leader of the House. He asked for confirmation of whether the UK’s departure from the EU would not be final until the end of the two-year negotiation process, and whether, when the terms of departure were known, it was the duty of the Government to ensure that the public had the opportunity to consider those terms. The noble Baroness did not answer the question, other than to confirm what we already know: that Article 50 will trigger a two-year process and that the current Prime Minister is handing responsibility for implementing it to his successor. But this is an important and serious issue on which a lot of lawyers are already in debate. Having given people a say in initiating the process of withdrawal, should the public wish to debate, discuss and vote on the terms of that withdrawal, will they be able to do so?
On the advice of senior and expert legal opinion, the report of our own EU Select Committee—very well chaired by the noble Lord, Lord Boswell—made the point, in the noble Lord’s words:
“Withdrawal is final only once a withdrawal agreement enters into force, so a member state that had given a notification under Article 50 would be legally empowered to reverse that decision before this stage”.—[Official Report, 15/6/16; col. 1223.]
But in the legal opinion published in an article on the UK Constitutional Law Association website, entitled “Pulling the Article 50 ‘Trigger’: Parliament’s Indispensable Role”, Nick Barber, Tom Hickman and Jeff King—all highly respected and regarded in the legal world—make it clear that once Article 50 is invoked and the clock starts ticking on the two years of negotiation, if no acceptable withdrawal agreement is reached, membership will cease without agreement. So, we have two heavyweight, serious legal opinions that are completely different. I am not a lawyer and it is not for me to judge which is correct, but surely the Government must clarify exactly how this works before embarking on the journey. That cannot be left to the next Prime Minister. Do the Government have a position that they have agreed with the EU and can they confirm what that is?
The noble Baroness said—I think she did so last week, as well—that the role of Parliament in the negotiations is not yet clear. That has been confirmed across the board by senior Conservatives standing for their party leadership. This is a critical issue. It is not just about allowing time for debates and it is not even about the scrutiny of decisions taken by the Government. These are the most profound, complex negotiations imaginable. We have 40 years of co-operation, 40 years of joint working, and 40 years of legislation to unravel and disentangle.
My colleagues in the other place, Seema Malhotra and Stephen Kinnock, have written to the Prime Minister with six key principles for how that engagement could be taken forward. Have the Government considered new parliamentary structures, such as specialist committees—possibly Joint Committees—for working on the detail of the negotiations and seeking advice from experts? And what consideration has been given to the role to be played by the EU Committees in your Lordships’ House and, as acknowledged by the noble Baroness, their vast expertise? Because as well as the legal process of disengaging and removing ourselves from EU institutions, we will have to examine areas as diverse as environmental protection, rights at work, consumer protection, crime and security, and transport, alongside, of course, the all-important trade discussions, which will include the issue of the single market and freedom of movement.
Then there is the legislation provided for through treaties and directives that will need to be confirmed in British law if we wish to keep it. Do we know how many such laws there are and in which areas? I sincerely hope that someone somewhere in Whitehall is trying to compile what I imagine will be the largest ring binder in history.
That is why the role of Parliament has to be clear. Once Article 50 has been triggered, we cannot afford to wait for six months while the Government start to consider what the processes in Parliament will be. In the Prime Minister’s statement there was more about the role of the devolved institutions and the Civil Service than about Parliament. And what about the role of those institutions and organisations affected—local government, our National Health Service, the police, the TUC, businesses, and the education, science, and arts and sports sectors? So many vital decisions that affect our economic, social and cultural life are now on hold.
When Mr Cameron committed to staying on for the negotiations it was accepted as providing continuity, but now the Conservative Party is having a contest for a new leader, who will be the new Prime Minister. The noble Lord, Lord Dobbs, has said that even he could not have scripted this story, and he invented Francis Urquhart and “House of Cards”. The role of Parliament in the negotiations should be set out by those who wish to be the next Prime Minister. The two main contenders for leadership have starkly opposing views, even on when negotiations should start. On Sunday, Theresa May, appearing on the Peston programme, said they should certainly not begin,
“before the end of the year. We need to establish our own negotiating position”.
She is not just a member of the Cabinet that gave us the referendum; she is the Home Secretary. Was the Cabinet really so unclear when it made that decision about what our position would be? Yesterday, Andrea Leadsom said we should trigger Article 50 and start negotiations straightaway. That is a continuation of the “act now, think later” politics that has created the current instability.
Last week, I asked the noble Baroness the Leader of the House about the Government’s programme for the coming year. She said that nothing has changed, but everything has: this is not business as usual. The legislative programme outlined a little over a month ago in the Queen’s Speech seems to limp on without recognition of the huge amount of new work that needs to be undertaken. Journalists have reported that senior civil servants already feel that Brexit will consume their energies for years to come. It will be the central focus of our policies, our politics and our Government: a massive collective effort from everyone and anyone involved in government that no part of the Civil Service will be able to avoid.
From Whitehall to local government, gaps in funding from the EU will have to be plugged, regulation undone and redone, and networks reworked. It is absolutely right that, as the Prime Minister said, the brightest and the best will be needed for this process, but we needed those people to work on our housing policy, to develop the UK as a centre of new digital and technological advances, and to deal with issues like those in our health service and businesses, and the demographic changes challenging our society. Just think what they could be doing now.
There is not a single sector currently being offered guidance or support from the Government on what the EU result means for them. There are no answers yet for our businesses or public services, who employ thousands of EU citizens. There are no plans and there is no advice for our more deprived areas about how to manage the withdrawal of EU funding. And our educational institutions, environmental bodies and the scientific community require advice, support and, above all, information.
Large employers are already drawing up plans to leave the UK, and the Government’s lack of certainty about EU citizens working for global companies based here is hugely damaging. This is the result of economic uncertainty.
The result of cultural and social uncertainty is uglier still and sharply felt. Since the EU result there has been a 57% rise in hate crimes and four times the national average of hate crime incidents have been reported. For those who invested so much in the ideals of Europe and those on either side of the campaign, the current political enthusiasm and interest should be harnessed for good. We want to see it focused in positive ways, not left blowing in the wind or, worse still, fuelling a greater distrust of politics and politicians. I doubt that the noble Baroness will be able to convince your Lordships’ House that the Government understood all the implications of a leave vote when they offered a referendum, but we now need urgent reassurances on the constitutional position and the role of Parliament. I accept that there are some issues that it is entirely reasonable to leave to the new Prime Minister, but not these.
More than ever, we need to unite around a common purpose of decency and tolerance. This is true for tackling the social uncertainty we are facing, as well as our current economic and political uncertainty. When the country is crying out for direction and leadership, we have a duty to answer. I believe that your Lordships’ House can be part of that solution, and as the Opposition we stand ready to play our part.
My Lords, I thank the noble Baroness the Leader of the House for the time set aside today and tomorrow to allow noble Lords to discuss the very profound outcome of the European Union referendum. As I expressed during our exchanges last week, I was devastated by the result of the referendum. Along with many of my noble friends and many Liberal Democrats, I have a profound and deep-rooted commitment to partnership with our European neighbours. Internationalism is in our very DNA. Our commitment is not to an institution in any particular form; rather, it is a commitment to the beliefs and ideals of the wider European undertaking of a peaceful, prosperous and united Europe, kindling a spirit of reconciliation and mutual co-operation among its members and promoting human rights and the rule of law. That is what I and many of my noble friends have striven for over our entire political lives, so the result of the referendum last week is felt very personally on these Benches.
We cannot be expected to give up these core beliefs, nor will we. We believe that Britain should be an outward-looking country that can thrive, innovate and lead in an open global economy, a country that works in partnership with those who share our values to overcome our common adversaries and sees the future benefits of close relations with neighbours and natural partners, investing in each other’s economies and sharing prosperity so that Britain can be even greater than it is now. The cry to “take back our country” is not one to which I can subscribe, because I do not believe that I ever lost my country. Reflecting on the words of my much-missed friend Charles Kennedy, I, too, have multiple identities—Scottish, British and European.
I am also a democrat, so I accept and respect the result of the referendum on 23 June, even if I am saddened by it. I also approach the result with some humility, for I know that I have to accept my share of responsibility not just for the result of the referendum but for the collective failure of politicians, institutions and the media to make the positive case over many years for the European Union and the benefits that it brings to this country. The referendum should give everyone in public life pause for thought. Too often the European Union has been used as a scapegoat or a distraction from failures in government. As my honourable friend the Member for Westmorland and Lonsdale, Tim Farron, has said:
“This vote has been a collective howl of frustration—at the political class, at big business, at a global elite”.
My deep concern is that, as we go forward, there is likely to be more dissatisfaction and frustration as people realise that much of what they were promised during the referendum campaign just will not be possible. The sad reality is that the alternatives offered by the Leave campaign will do nothing to help those in England’s poorer regions, not least because the Leave campaign offered very contradictory positions of what life outside the EU would look like.
That poses a fundamental question for liberal democracy and parliamentary democracy, which is based on attention to evidence, reasoned debate, a willingness to compromise and tolerance. Politics involves an endless conversation in which we learn about other people and see things from their point of view, trying to balance their needs against our own. You recognise the existence of different groups with different interests and opinions and try to balance and reconcile them. As Bernard Crick wrote in his book, In Defence of Politics:
“Politics is a way of ruling divided societies without undue violence”.
Yet we have seen some very troubling and violent scenes since 23 June. We have seen anger and frustration being translated into some nasty incidents of racism and xenophobia. Scores of racist encounters have been documented online, while over the weekend following the vote the National Police Chiefs’ Council revealed that hate crimes reported to our police had risen by 57% compared with the corresponding days four weeks previously. The careless and rash language of some Brexit campaigners seems to have legitimised the prejudice of some people to the point where they are targeting those who are visibly different. Of course it is only a small minority who perpetrate such outrages, but to the victims the impact is 100% and, in the communities from which the victims come, the fear is all too real. This is completely unacceptable and it must stop. This is not my Britain.
I believe that there are many layers and facets to why so many people voted to leave the European Union, some of which have already been mentioned. The vote was symbolic of a rejection of British multiculturalism; concerns about pressures on our schools, hospitals and GP surgeries; the housing crisis; the banking crisis; insecurities about employment; and the decline of our traditional industries. For me, the answers to these wider questions are both domestic and international. There is much that can be done in Westminster as well as much that could and should have been done standing shoulder to shoulder with our European neighbours.
If those who led the campaign to leave the EU have answers, we need to hear them now. Do they want to be in the single market or do they not? What level, if any, of freedom of movement do they wish to see? How will they retain the City’s passported access to European financial markets? Which taxes will go up and what spending will go down? How will they secure a bright future for our children and young people? One of the defining features of the reaction to the referendum outcome has been the utter dismay and even anger of young people, who believe that they have been deprived of the opportunities and freedoms that our post-war generation came to take for granted. Whichever side of the referendum divide we were on, we owe it to our young people to keep alive hope and establish co-operative links that will provide opportunity, of which the Erasmus programme is just one example.
There is a host of unanswered questions and during this debate a number of my noble friends will want to pose some of them from their particular areas of expertise. I hope that, when she comes to reply, the Minister will take them in the spirit in which they are intended, as some constructive suggestions to feed into the work of the unit being led by the right honourable Member for West Dorset, Mr Letwin.
Perhaps I may pose some further constitutional questions today, some of which have already been aired, in particular on the role of Parliament and of your Lordships’ House. First, last week during our exchanges I asked the Leader of the House about the process for triggering Article 50. I still await an answer. Let us remind ourselves that Article 50 states:
“Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements”.
However, there is currently little clarity as to what the UK’s “constitutional requirements” are in this regard. Will this be done by the Prime Minister acting alone, using the royal prerogative? Will there be consultation with Parliament in the form of a debate and vote in both Houses or just in the House of Commons? Does the Prime Minister need the consent of Parliament to act? Should there be legislation? There has been much legal and academic debate and discussion as to how Article 50 might be triggered, but to date there is no legal certainty. While I can see that there is a case for leaving to the new Prime Minister the issue of when to trigger Article 50, this Administration surely must have a view as to how it should be triggered. After all, in February we were blessed with a paper from this Administration on the process for withdrawing from the European Union. One would imagine that they will have given it some attention and thought. It would be to the benefit of Parliament and the country for the position to be clarified as soon as possible.
Secondly, what will be the role of Parliament and this House in particular in carrying out its scrutiny functions and its important constitutional duty of holding the Government to account during the process of negotiation with the other EU member states? What part can be played by the European Union Select Committee of this House and by the European Scrutiny Committee in the other place? It would be extremely helpful to have some indication from the Government of the principles that will underpin parliamentary scrutiny of this process. How do the Government intend to involve Parliament in deciding which laws and regulations that have derived from Europe we will keep and which we will replace? Once these decisions have been made, it is clear that much legislation will be needed to give effect to the process. Can the Minister confirm that Parliament will retain its important scrutiny function in this regard?
There are of course wider constitutional implications following the result of the referendum, bearing in mind that Scotland and Northern Ireland both voted strongly to remain in the EU. How will the Government consult the devolved institutions, by which I mean the Parliaments and the Assembly as well as the Administrations, to ensure that the needs of Scotland, Wales and Northern Ireland are properly reflected in the negotiations? Will Scottish, Welsh and Northern Ireland government officials be seconded to work in the special Cabinet Office unit? What role will there be for the London administration and for local and regional authorities in England to ensure that their diverse interests are taken on board? It would be helpful if the noble Baroness answered these questions when she comes to respond tomorrow evening, but I would welcome a commitment from her that, at least, the unit under Mr Letwin will give most thorough consideration to the issues raised in this debate, that she will return to this House periodically to ensure that noble Lords are kept well informed on the progress of negotiations and that the Government will make good use of the expertise in this House.
In the meantime, I am concerned by what already seems to be the abdication of responsibility by the Government in relation to several matters. This is only the sixth sitting day since the referendum, but I suspect that many noble Lords are already tiring of the expression, “The Prime Minister has been clear that decisions on issues relating to the UK’s exit will be for the new Prime Minister. I am therefore not in a position to make new policy statements in this area”. If there is one glimmer of reassurance, it is that at this time of great economic uncertainty and constitutional crisis, at least the noble Lord, Lord Ahmad of Wimbledon, has been prepared to step up to the plate to address the future of our bus services. How very British.
On one issue in particular, however, this Administration can and should take the lead and state openly and clearly that, come what may, European Union nationals settled in this country will continue to stay. The case for such an unequivocal commitment was eloquently made by the noble Lord, Lord Dobbs, yesterday during Questions. What kind of morality would make bargaining chips of the lives and livelihoods of people legally and responsibly settled here—their families, their livelihoods, their hopes and aspirations? It is not even a practical bargaining position. A Government who cannot even manage to deport foreign criminals with no right to remain are not credibly going to be able to deport up to 3 million EU citizens. In the dying days of this Government, surely the Prime Minister and his Ministers can show some moral fibre and pull something honourable, decent and fair out of the wreckage of their Government.
My Lords, the events of the past two weeks have led to some of the most traumatic and dynamic changes that we have known. The course of the campaign was robust—as it properly should be on such great issues—but at times veered over the line on both sides: it was not merely robust but unacceptable. Through such comments were created cracks in the thin crust of the politeness and tolerance of our society, through which, since the referendum, we have seen an outwelling of poison and hatred that I cannot remember in this country for very many years. It is essential, not only for this House but for the leaders of both sides and throughout our society, to challenge the attacks, xenophobia and racism that seem to have been felt acceptable, at least for a while.
Just over a week ago, at Lambeth Palace, at the breaking of the fast of Ramadan, I shared an iftar with the new Mayor of London, Sadiq Khan, and the Chief Rabbi. There were more than 100 young people of every faith and of no faith there. That sense of hope and energy for the future carried us through the rest of the week. It is there and we can reach for it. If, however, we are to thicken the crust through which the cracks have come, if we are to move to a place where we are not yet speaking of reconciliation but beginning to get on a path where in future healing and reconciliation will begin to happen, we need to beware. St Paul, in his letter to the Galatians, says to them at one point:
“Love one another, cease to tear at one another, lest at the end you consume one another”.
We are in danger of doing that in the way that our politics is developing at the moment. If we are to tackle that, we have to put in place some fundamental issues to be capable of creating the agile, flexible, creative, entrepreneurial and exciting society—full of the common good and of solidarity and love for one another—which is the only way that this country will flourish and prosper for all its citizens in the world outside the European Union of the future.
The biggest challenge we face if we are to be effective in creating a new vision for Britain, a vision that enables hope and reconciliation to begin to flower, is to tackle inequality. It is inequality that thins out the crust of our society and raises the levels of anger, resentment and bitterness. We have done it before; this is not new. In the 19th century we tackled inequality. In the great Governments following 1945 we tackled the inequality that had been so ruinous to our society in the 1930s and led to the failures of that time.
The tools for tackling inequality are as readily available as ever. They are the obvious ones of education, public health—we would add today mental health—and housing. We must, however, take up those tools and invest in them. I am glad that the education side of the Church of England, which I believe my right reverend friend the Bishop of Ely will speak about later, has just launched a fresh vision for education that draws together not only the need for skills but the need for a whole person, deeply imbued with the virtues, hopes and aspirations that we will need in our society.
However, we also need investment in public health and to narrow the inequality gaps that have emerged in recent years. Last week we saw horrifying figures on the levels of child poverty in this country. We have seen a widening of the unfairness in our society, and with that it is no surprise that some shocking things have emerged in the last few days. Those tools, however, cannot be used effectively if they are held in some kind of vacuum of values. We need a deep renewal of our values in this country. We need a renewal of a commitment to the common good and of solidarity. We need a sense of generosity, hospitality and gratuity, of the overflowing of the riches and flourishing that we possess, not only into our society but across the world.
The issues of immigration and the hatred expressed to those who may have been here for two or three generations are not to be solved by simply pulling up the drawbridge. Neither will the plight of the many British citizens in Europe. This morning I was talking to the Bishop in Europe, whose churches many of them have attended, and hearing of their massive concern and deep insecurity. I am so glad that the noble Baroness, Lady Smith, the noble and learned Lord, Lord Wallace, and the Lord Privy Seal have all been clear about the unacceptability of treating people as bargaining chips. I add my voice to that.
We are to have a new sense of values. On a Friday in December, if the usual channels are as helpful as they have promised to be, I hope to hold a day’s debate on the nature of British values. That has become much more important and I hope that some of your Lordships will be able to participate. We cannot despair. Many of us will have been part of the 48 and some of us among the 52. To bring them together for a country that flourishes for all its citizens is now our great challenge. I started with the scripture of St Paul and I will finish with Deuteronomy. As the Israelites were about to enter the promised land, God said to Moses:
“The eternal God is your refuge, and underneath are the everlasting arms”.
We live in a society deeply embedded in that sense of destiny and of hope. We can catch hold of that hope and be that agile, flourishing and entrepreneurial society that will benefit the poorest and richest—one that will reach out with a forward foreign policy to the poorest around the world and can renew the standards that we believe are the best of this country. I hope that in this debate we will have that sense of optimism and hope.
My Lords, one of the most momentous decisions of our time has now been taken. Parliament agreed by an overwhelming majority that the people should decide in a referendum whether our country should stay in the European Union or leave. The people decided, on a massive poll, that we should leave.
It is regrettable that some, unhappy with the result, seek to prevent its implementation, whether by way of a second referendum or some other device. It is difficult to imagine anything more irresponsible, either democratically or politically. I can only assume that living in an elitist London bubble they are blithely unaware of the alienation of a large and growing section of the British people from the London-based political and banking establishment. Any attempt to overturn the referendum result would invite mayhem of the most grievous kind. It would not only be dishonourable, it would be playing with fire. I invite those who entertain this desire to consider the consequences. Incidentally, they might also reflect on what their response would be had the referendum produced a majority to remain in the European Union and the disaffected losers then demanded that it be re-run.
The only question before us is how best to implement our departure from the European Union. Our starting point should be that we wish the best possible relationship with the peoples and Governments of Europe, against whom we have no grievance whatever and a multiplicity of mutual interests. One important point that follows from this is that we must respect the EU doctrine that to remain a member of the so-called single market we would have to accept the freedom of European citizens to live and work here. That is something the British people have made clear is not on, so we must accept that we will be outside the single market. That is scarcely a disaster. The rest of the world is outside the so-called single market and trades happily and profitably with the European Union. You do not need a trade agreement to trade. Moreover, if we were to seek some special trading relationship with the EU, not only would we be adopting the position of a supplicant—which I do not like—but it would be a futile quest.
Following the invocation of Article 50 of the Lisbon treaty, it is important that our negotiations with the EU are completed as speedily as possible. A prolonged period of uncertainty can only be damaging for British business and the British economy. By ruling out the chimera of trade negotiations, a speedy process becomes practicable. Among the issues that will need to be agreed is the position of existing EU nationals resident in the United Kingdom and existing UK nationals resident in the European Union. In common with other noble Lords, I am appalled by the unwillingness of the Government to give a clear undertaking that EU nationals resident here before 23 June will be able to remain, come what may. Not only would it be unconscionable to require them to leave but doing so would be deliberate discrimination against Europeans since there is clearly—and rightly—no intention of requiring Americans or any other non-Europeans resident in the UK to leave. That is no way to build the close friendship we seek with our fellow Europeans across the channel.
Instead of wasting time and energy on a futile and wholly misguided attempt to secure a trade agreement with the EU, the British Government need to focus on how we plan to conduct ourselves as a self-governing nation outside the European Union. A whole range of issues need to be addressed, from the precise nature of our immigration controls—which need to be a single system applying to Europeans and non-Europeans alike—to how we will support our farmers following our exit from the CAP. The Government also need to repeal the European Communities Act 1972, which makes UK law subordinate to EU law, with a delayed commencement date to be determined by Parliament in due course. Meanwhile, a study needs to be undertaken of the vast corpus of EU regulations presently on the statute book to decide which we wish to retain, which to amend and which to scrap altogether. All this is a substantial and vital undertaking, which needs to be started now. It is all entirely in our own hands and not a matter of negotiation with others.
The result of the referendum was a tribute to the courage of the British people. Project Fear may have been successful in reducing the size of the Brexit majority but most of our fellow citizens declined to be cowed. The next Government and the next Prime Minister, whoever he or she may be, will have a historic opportunity to make the United Kingdom the most dynamic and freest country in the whole of Europe—in a word, to finish the job that Margaret Thatcher started—and to become a beacon to our European friends, currently embroiled in a failed and doomed experiment.
I will not follow the noble Lord, Lord Lawson, in what I thought was a less than generous and in some areas ill-judged speech. Of course, it is true that the referendum and the consequences following it have been a shock to many Members of Parliament, not only to those who supported remain but also to those on the leave side as well. You had only to see the faces of Boris Johnson and Michael Gove on the day of their victory to understand that. I confess that the last fortnight has delivered hammer blows to the two great passions of my political life: the relationship between the UK and its continental partners, and the idea of a Labour Party capable of winning general elections. However, all of us—do not laugh on the other side—have a duty to work our way through the linked crises that face us and try to produce long-term policies in the national interest.
I do not want to dwell on the referendum and the campaign itself. We will leave that to the historians—there are some around here. I will just make one or two remarks about it. It is astonishing that David Cameron, who started by advising his party not to bang on about Europe, should have got himself embroiled in an in/out referendum that not only split his party but brought about his own political downfall. During the campaign, the remain side rightly explained the consequences of leaving the EU but it did so in an exaggerated way—I do not believe it was Project Fear but certainly there were some exaggerations—and without making a positive case for staying in. It is a long-standing criticism of British politicians of all persuasions that they failed to make the case for British membership while they had the chance. Even Tony Blair, who was very strongly pro-European, made his best speeches on Europe in Warsaw and Strasbourg rather than in the UK. We are reaping what we have sown.
As for the victorious leave campaign, to its shame it went well beyond exaggeration, especially over the cost of British membership, immigration and the prospects for Turkish membership. We have just heard a wonderful speech from the most reverent Primate the Archbishop of Canterbury. We need to draw important lessons from what happened in that campaign. We all need to act with a certain amount of humility. This is an emotion not always associated with the noble Lord, Lord Lawson, but I think he might have shown it on this occasion.
Where are we today? I suppose that we are where we are. Despite the deep divisions in the UK—with London, Scotland, Northern Ireland and the young, above all, voting the other way—there was a narrow majority for Brexit.
What should we do now? First, whatever the long-term consequences, we must avoid short-term economic damage if at all possible. I welcome the Chancellor’s decision to abandon his fiscal squeeze. I also welcome the Governor of the Bank of England’s announcement that the Bank will take whatever action is needed to support growth. One of the most disgraceful features of the leave campaign was its attack on the Governor of the Bank of England. My goodness, they need him now.
I believe it is right to delay invoking Article 50 for leaving the EU because we need time to work out a post-Brexit plan. Indeed, it was quite astonishing that the leavers had no plan themselves. Only Boris Johnson would have had the chutzpah, in yesterday’s Telegraph, to call on the Government to come forward with a post-Brexit plan. He was meant to be the leader of the leave campaign and, until a few days ago, a candidate for the Tory leadership and a putative Prime Minister. The truth is—as we know and knew all along—that there was not and is not a plan. We need one badly.
The noble Lord, Lord Lawson, referred to the basic conflict of objectives. First, we need access to the EU which is by far our biggest market. Secondly, this almost certainly requires acceptance of free movement of labour. Unless there is some change in the EU position—for example, an emergency break—we are at an impasse which we will need to work through. I do not think we can do it by abandoning our role in the single market. That is a typical Lawson throwaway. I do not believe it will work and it will be extremely damaging to British industry.
If we are honest, we ought to mention the very unpromising political background that has occurred as a result of the referendum vote. I noticed the headline in last week’s Economist—“Anarchy in the UK”. I think that was going a bit far but the reality is that, since the resignation of the Prime Minister, there is no real Government with authority. We have an unseemly scramble for office—more like “Game of Thrones” than “House of Cards”.
The Labour Opposition, with the exception of course of the Labour group in the House of Lords, is also in a mess. Its Members of Parliament have lost confidence in their leader. This leaves us in quite a difficult situation. I will leave the Tory party to its own devices, but there is no doubt that the Labour Party has to sort out its own problems as quickly as possible at this time of national crisis.
My last point is that, in this linked series of crises, we need the help of Parliament. We need Joint Committees of both Houses to oversee any post-Brexit plan that emerges, the invoking of Article 50 and any subsequent negotiations. We have a role to play. In times of national crisis, when governments and parties have been found wanting, we need to turn to our national Parliament for advice and help.
My Lords, it is always a pleasure to follow the noble Lord, Lord Radice, whose commitment to the European cause is long-standing and equivalent to that of any other. The temptation simply to say that I adopt the speeches of my noble and learned friend Lord Wallace and that of the most reverend Primate is almost overwhelming.
I am deeply disappointed by the outcome of the referendum and I wish to draw some conclusions from that. I hope that the noble Baroness the Leader of the House, will not feel it too presumptuous of me if I say that, from time to time in her speech introducing the debate, I felt more than an echo of Candide: “Everything is for the best in the best of all possible worlds”. Unhappily, it is not.
My disappointment, like that of others, has only been exacerbated by the rise in racial incidents which make me reluctant to believe that this is still my country. Those who have led us out of Europe bear a heavy responsibility which I have yet to see them accept or embrace. Mr Johnson, whose fondness for cricket is well established, has retired to the pavilion, having been run out by his partner. Mr Farage has resigned—not for the first, but for the third time—and I think we can believe, with some confidence, that this may not be the end of the chapter.
The truth is that never in peacetime has the United Kingdom faced such uncertainty with such little prospect of early resolution. We are divided socially, politically and economically, and—this is a matter close to the heart of all of us from Scotland—the very future of the United Kingdom is now at stake. Issues of this kind are often explained by the theory of unintended consequences. I have a different theory—the theory of inevitable consequences. It is a theory that we may have cause to revisit tomorrow after the publication of the Chilcot report. We have alienated a generation of young people. If noble Lords doubt that, they should look at the demonstrations and see the average age of those demonstrating with such commitment and enthusiasm.
We have embarked upon a period of economic uncertainty which is gradually, although not necessarily perceptibly, beginning to affect decision-making. This is not about the stock market or even about the pound. It is about the decisions being made in boardrooms not to invest, not to expand and to consider whether the best interests of their businesses would be served if they were located in the European Union.
There is a paradox. The regions which have had most economic assistance from the European Development Fund have rejected the European Union. How shall we provide the substitute finance in order to compensate them for that unwise decision? The regions most likely to be adversely affected are among those who decided to vote to leave. Again, how shall we deal with the issues of housing, education and transport which may have prompted these individuals to leave the European Union? What about talented individuals and professionals with portable employment skills, such as surgeons and those in information technology, who are increasingly being said to be ready to leave the United Kingdom?
We have just had from the noble Lord, Lord Lawson, assurances that we are entering a new golden age of economic success. Sunlit uplands was the only expression he did not use. We are going to have increased influence in the world but my question is when? No one has yet been able to give an assessment, or indeed made an effort, to lay down a date by which we will enter this combination of Arcadia and Utopia. Any party which went to the country in a general election, effecting to offer promising economic progress, but which could not state the date of it, would be laughed out of court—and rightly. Yet, this is the proposition which the people of the United Kingdom are being invited to accept.
There are two inevitable consequences and it is worth looking outside the United Kingdom. First, the efforts of the European Union to deal with Mr Putin will inevitably be diminished by the departure of the United Kingdom from the Union. Mr Putin has two objectives; they are there for all to see—the destabilising of the European Union and the undermining of NATO. We have helped to destabilise the European Union by the decision we now propose to take. Also the relationship which we enjoy with our closest ally, the United States, will inevitably be different, not least because, of course, President Obama went out of his way to say how important it was for the United States that Great Britain was an active member of the European Union, echoing the policy followed by the White House since the days of President Kennedy. Inevitably, the United States will look for a closer relationship with another country in Europe. That is an inevitable consequence of what we are about to do. I think it is equally inevitable that that relationship will be with Germany, echoing the relationship between George Bush senior and Chancellor Schmidt, albeit that that was some years ago. None the less, it was a productive one.
It is said that we are all Brexiters now. Well, I am not a Brexiter and I hold fast to my belief in the European Union for all its faults. I draw attention to this fact: those of us who argued to stay in were willing to acknowledge the faults in the European Union. However, I never heard those who argued to leave acknowledge any of the merits or advantages of doing so. How long will these negotiations that we are talking about take and how easy will they be? The 27 members with whom we shall negotiate will inevitably be bound to follow their own national interests—how could they do otherwise?—particularly Angela Merkel and Mr Hollande, both of whom have general elections next year which already promise to be fraught with difficulty for them. What will be the role of the legislators? Have we to accept anything and everything which is put before us? An unelected House is in a different position from the other place. What is my responsibility, and that of all other noble Lords, if legislation is put before us which we regard as defective or not part of a sufficiently generous settlement between ourselves and the rest of the European Union? Are we simply to accept these things without quibble? Are we simply to say, “Yes, the people have spoken, therefore we must follow that, even if it is our considered and conscientious judgment that to do so in a particular area of legislation is not the correct thing to do”.?
I discount the possibility of a second referendum. I also discount the possibility of a successful challenge in the courts. However, I say this: those who have brought us out dream of an England that never was and a United Kingdom that never can be. We have set ourselves on that path. It is inevitable that I should follow it, but I tell the House this: I do so with a heavy heart.
My Lords, it may help the House if I confine my remarks as chair of the European Union Select Committee to the immediate task in hand: that is, making the most effective and constructive input we can, as a committee, to the Brexit process. It is not for me, as chair, to express today a view on the timing of withdrawal or of notification under Article 50, or in any way to prejudge decisions that will be for the incoming Prime Minister.
In times of turmoil, it is wise to “keep calm and carry on”, but not to the extent of ploughing on regardless. For our 43 years of European Union membership, our committee and its sub-committees have grounded our work in the scrutiny of documents, and we have together made good use of Members, many but by no means all of whom have specialist experience, alongside an expert staff. We have built a reputation for independent, evidence-based inquiry, demonstrated most recently by the huge amount of interest generated by our report published in May on the process of withdrawing from the European Union.
I should stress that we simply cannot give up on scrutiny. The EU continues to develop legislation and policies with an impact on the United Kingdom, its businesses and its citizens for as long as we remain members. Even thereafter, in areas where continuing involvement with the European Union is possible, such as single-market and security issues, decisions reached now at EU level could have a continuing impact on our future interests. I am therefore glad that the United Kingdom Government have made it clear that they will continue to be represented at Council meetings, and that the Government will continue to provide explanatory memoranda to us for European Union documents.
As a committee we will continue to fulfil our scrutiny duty but will strive to keep it proportionate and will put a particular focus on issues relevant to the withdrawal negotiations and our long-term interests. But our remit is not limited to scrutiny, and it is clear that a new focus on Brexit will be required. We are pleased that Oliver Letwin, who heads the new Brexit unit, has agreed to see us, alongside the Europe Minister, David Lidington, later today. I hope that our committee will be in a position to publish some initial thoughts on how this House can best scrutinise the withdrawal negotiations before the Summer Recess. That is, I suggest, a matter of both operational arrangements and the major subject areas of concern.
We are conscious of the risk of duplication and overload, so we will look at how best to collaborate or co-operate with other committees in both Houses. We will also build on our existing good links with the devolved legislatures and Administrations. It is clear that in a fast-moving situation we will need to enhance communication with all the main players and find innovative ways of picking up the phone and talking to people, and we must be ready to show flexibility and make changes as appropriate. I remind noble Lords that we as a committee are not conducting these negotiations; we are scrutinising them, and our use of resources should reflect that practical reality.
Nevertheless, I note, looking around the House, that there is a rich resource of experience here on the Whitehall side, and I hope that ways can be found for the civil and diplomatic services to tap into this to supplement their existing resources. I myself was once drafted in to help out with a comparatively minor crisis a generation ago, and suggest that Whitehall often does its most productive work when the scale of events demands innovation and flexibility. I should stress, though, that this is not an area of work I would seek to put through my committee.
Instead, we can perhaps as a committee help more effectively in two other areas. First, we are charged with representing the House in interparliamentary relations within the European Union. I hope that we will keep up our bilateral ties and friendships with colleagues in other European member states to maintain mutual understanding in testing times—although, of course, I invite colleagues outside our committee also to maintain that process and to feed it into us. Secondly, I believe very strongly that we have a real duty and democratic obligation to the country, as well as to this House, to do our best to analyse and explain unfolding events. We have all already heard horrible stories of intimidation but are also very well aware of the wider subcurrents of concern and uncertainty felt across our society.
As a committee, we have a continuing duty to provide evidence-based, non-partisan, timely analysis of events as they unfold. Much of that work will continue to bear fruit in reports from my committee, although I am also giving some thought to how I might respond more informally to issues raised by colleagues.
We now have to make the best job we can, for the sake of both our own country and of our neighbours and allies. The process must start with a readiness to contemplate necessary change and to work with others to ensure that, as I hope and believe, the outcome will be one that all of us can live with.
My Lords, some voting for Brexit were sincere British nationalists, opting for the romance of freedom and independence. For most, however, it was a vote of pure protest against an elite that has let them down. Our failure in the UK, as elsewhere, effectively to regulate the financial sector and to be prudent with government finances has brought nearly 10 years of austerity.
Immigration is vital to our economy, it enriches our culture and society and I support it wholeheartedly. But the biggest surge in immigration in our history has, in recent years, brought incredibly rapid change to agricultural centres such as Boston in Lincolnshire, and to our older, poorer industrial areas, and it has placed a heavy strain on our social fabric. In the past three years, for instance, Peterborough’s maternity unit has been closed on 41 occasions to women about to give birth—a traumatic experience—for want of capacity in one of the UK’s fastest-growing cities. That is an unpardonable failure of government to forecast need and to provide.
While it is easy to understand the frustration and anguish that has prompted the Brexit protest, the vote is a catastrophe for the UK and for its people. One of the EU’s most important achievements, alongside other international institutions, has been to foster a stable, collaborative environment in Europe after centuries of destructive conflict. This is especially poignant for me at this moment because, 100 years ago last Friday, my grandfather Joe went over the top on the first day of the Battle of the Somme. As a child, I knew him well and was transfixed by his many tales of that horror-laden and wasteful war. Weakening the ties that bind Europe together cannot be in our long-term interest.
For our economy, the consequences are immediately adverse. I have witnessed that for myself in the first full working week since the Brexit vote, and old and trusted colleagues in the finance sector have shared their own direct experiences with me. I will give some examples; I could give more. I have had a briefing on a major Asian financial institution pulling out of a done deal to acquire a major and valuable British company. I know of another sales process involving a major British-owned company which trades heavily all over Europe that was stalled because of buyer unease over Brexit, and because debt financing was now uncertain. If negotiations within the EU are prolonged, our economy will be racked by uncertainty for years to come. The Chancellor has already been forced to withdraw the targets for reducing our still massive indebtedness. We risk a recession and a further shock to our system when we are not yet over the last one, and we risk 20 years or more of continuing austerity, not just 10.
Our only hope is to negotiate terms to remain full members of the European single market. The notion of some in the Brexit camp that we should not want to be an equal participant in the biggest market in the world beggars belief. They appear not to have the slightest notion of how global markets work or of how complex are the activities of leading British businesses. We are paying a high price indeed for their naivety, for the professionalisation of our political parties and for the diminishing life experiences of some of our leaders. Nor do the most buccaneering of the Brexiteers appear to have the slightest notion of how global investors operate: how professional and how aware of risk they are. It will be entirely rational for global investors to be extremely cautious about investing in the UK until there is crystal clarity about all our circumstances.
But negotiating to remain part of the single market will not, of course, be easy, for our negotiating position is now weak. We need access to Europe’s markets far more than Europe needs access to ours. Some EU members will want the UK to pay a painful price in negotiation in order to discourage exit or secessionist movements in their own countries. Some sectoral interests in Europe will press to advantage themselves over their British counterparts. Some electorates, wounded by a sense of British rejection, will want their leaders in turn to reject us. I work a great deal in Europe these days and I had many pained emails last week from European business friends and colleagues. One senior German industrialist recounted an exchange he had witnessed in his local bakery, with an overexcited shopkeeper shouting that Germans had to accept as a reality that the British hate Europeans. Local Mercedes workers in the same queue joined in angrily to assert that Mercedes should find other markets to sell their vehicles. Being nice to the Brits may become bad politics.
Yet we must hope and we must strive. Britain is already a member of the EU on special terms—absent from the euro, absent from Schengen—and there is a mutual interest in the UK remaining in the single market. While other countries will not easily give up the notion of the free movement of labour, perhaps all will recognise the advantages for all members of qualifying that freedom to gain the economic benefits while reducing social friction. Let us hope that we can find an accommodation. If at all possible, we need an exit negotiation which is not prolonged but rather is simple and quick and reduces uncertainty for all. Without that, the white-water ride ahead could be very rough indeed.
My Lords, I took no part in the referendum campaign. I felt no temptation to campaign on either side and so feel none to revisit the campaign today in the way that some have already done and others will, no doubt, do. Suffice it to say that I found the claims made on both sides of the argument to be exaggerated and overblown. The more I listened to the discussions and debates and the more I read, the more convinced I became that the arguments were far more finely balanced than either side would accept.
I have some history in this. In the late 1980s and early 1990s I had a season ticket to Brussels. I had a seat, successively, on the Internal Market Council, the Foreign Affairs Council, ECOFIN and the Budget Council. At the invitation of my noble friend Lord Lamont, who was then Chancellor, my signature adorns the Maastricht treaty. He found himself unavoidably detained on that day and said, “Francis, this is your chance to put your footprints on the sands of history”. I have frequently been invited to recant that youthful act but have never been tempted to do so, because I think the Maastricht treaty could have been an inflection point in the development of the European Union. It could have been an end to the theology of one size fits all; it is binary, you are either completely in or completely out. At that point we became a partial participant in the European Union. Sadly, after 1997, the differentiation disappeared and the one-size-fits-all ideology regained its momentum.
I shall set out a few reflections on what should happen now. We do not need to rush this. We need to allow time for emotions to settle and for things to become a little clearer. The less seen of Mr Farage in the European Parliament the better. That kind of behaviour is not likely to create good conditions for us to conduct the necessary and difficult discussions that lie ahead. It cannot make sense to trigger Article 50 early when precisely the people within the European Union who are urging it are exactly the people who are urging retribution and who think that Britain must be punished for this intolerable act of insubordination. We need to pick our time and in the meantime engage in sensible, grown-up conversations with other nation states. It does not all have to be done at once. The priority is to maximise our participation in the single market. That is not as simple as it seems because the single market is nowhere near as complete as it is sometimes made out to be. I completely understand the argument, made passionately by the noble Lord, Lord Birt, for certainty. But a bad certainty now does not trump a better certainty later, so taking time makes sense.
Reform of freedom of movement has its own momentum. I suspect that some changes will come on that, irrespective of what Britain asks for. It will be increasing clear that our economic interests and those of the rest of the EU remain closely intertwined. This is not a zero-sum game. Economic activity lost to the UK will by no means automatically migrate elsewhere in the EU. We are and will remain the second biggest economy. If we start sneezing as a result of actions deliberately designed to harm us, economies on the continent with immune systems that are, frankly, rather weaker than ours will soon catch a cold.
There is a danger here of those who have made predictions taking decisions that make those predictions come true. On trade agreements, it was said by the United States that Britain would be at the back of the queue and that no one would want to make a trade agreement with Britain. I tested this in my last week as Trade Minister in Washington, at a dinner attended by many trade experts including several former trade representatives from both sides of the aisle. I asked whether this was correct and with one voice they said, “Nonsense. We would do a trade agreement with Britain in a heartbeat”—and, to be frank, it would be a lot easier than completing the TTIP negotiations with which I was engaged. They are moving extremely slowly at the moment.
Likewise, on EU nationals, to echo points that I have made at other times in the Chamber, the Government should immediately make clear that position of the 3 million or so EU nationals already settled here will be protected. It cannot make any sense to hold out on that. It will be much better to establish the uncontested truth that these 3 million nationals want to remain here. This makes the point of how interlinked our economies are and will remain.
There is a movement towards reform within the European Union. Maybe this is wishful thinking—we have often tried to persuade ourselves that there is a movement for reform. We used to say that Maastricht was the high-water mark of federalism. But clearly there is growing frustration with the outdated certainties of Juncker. There is widespread anxiety about the undiluted doctrine of free movement. We used to talk about the free movement of labour, but that was in a different world without the huge disparities in wealth between member states that enlargement has brought.
Is it wishful thinking to believe that there may be constraints emerging on the freedom of movement that will be sharpened and made more immediate and pressing by Brexit, but also by the French and German elections that are coming up and the need for the mainstream parties not to be outflanked by the parties of the far right? There is a clear need for greater integration within the eurozone if it is to survive. There has to be a question mark over that, given the Commission’s reluctance to use even the powers that it has at the moment to enforce fiscal clarity.
The European Union needs to move away from its binary view of life—that you are either in the club or out of it and that there is only one way to be a European. At the moment we are a 65% participant in the European Union: not in the eurozone and not in Schengen. I hope that the outcome of this vote at some stage will be that we remain a participant—not a member, that decision has made—but I hope that it will not be in a European Union that is in that sense binary, and that what we used to call variable geometry will come to live again, with different countries participating to different degrees for different purposes. That is what could have been and can be again. I put the chances of its happening as no better than 50:50—so we should stabilise as best we can and show commitment to preserving as much of the trading relationship as possible to discourage disinvestment and to encourage investment.
The Government can now make the investment decisions that lie within their power. I am sorry to see the Government deciding to postpone the decision on airport expansion. That can and should be taken quickly. There are also decisions on licences for the exploitation of shale gas—a commodity that will be produced domestically for domestic consumption, with no EU implications whatever—which can and should be made as quickly as possible. So we should take our time before triggering Article 50 and do it in a considered and measured way.
My Lords, the Lord Privy Seal introduced this debate. I suppose that we should look on her as the Leader in your Lordships’ House of a caretaker Government who are commitment-light apart from on one thing—her statement that the Government have an instruction to implement the referendum. As I think my noble friend Lord Foulkes tried to intervene to say, the referendum is advisory. We now have a situation in which the campaigners are all gone. We are to have new leader of the Tory party who appears to believe that she has a mandate to leave the EU, but has a blank cheque and few views as to how this should be done and what should be done.
My noble friends Lady Smith and Lord Radice both said—and I agree—that parliamentary approval is needed before Article 50 is implemented. Probably this should be later, when we know the details. It is extraordinary that the Government have not given any information about this. Few people seem to have known what the consequences of Brexit would be and people still do not know, although some are learning fast. Some of those voting to leave in the biggest proportions were the silver-haired generation, like me. I do not support leaving. Sometimes I felt that they were almost fighting the last war. We have to get over this. The fear of migrants is very unpleasant.
The noble and learned Lord, Lord Wallace of Tankerness, and others commented that the younger generation is being committed to an unknown and fearful future. Of course, the Government managed to avoid 16 and 17 year-olds voting on this, which is their future. They are rightly angry—indeed furious—that a small part of the Conservative Party has inflicted this on them without spelling out the consequences.
Europe has brought peace, as many noble Lords have said. In the 1970s, for several years I lived in Romania and saw the effect of the failure and the lack of free movement of people. I do not accept that Romanians, Bulgarians and Polish people should not be allowed to move freely. They are in the European Union, as I hope we are. It is extraordinary that people can want to go back to a time when there were frontiers and you had to get permission to leave and sometimes, in the communist era, it was a great deal worse. Peace is very important and, as many noble Lords have said, it is essential to retain freedom of movement.
The campaigners for Brexit intentionally mixed up the freedom of movement of people within the EU with the problem of migrants. I am chairman of the Rail Freight Group and do a lot of work looking at how we get freight between Calais and Dover with all the migrant problems there.
What people do not seem to realise is that if we leave the European Union, the French Government have already said that they will remove all their controls, camps and everything else to prevent migrants coming here. They will probably start running ferries of migrants across, because as soon as they land in this country they can claim asylum. Heaven help the Home Office if it has to deal with 10 times the number of migrants coming in because we have left Europe. We must keep separate the issue of migrants—how many should come and how that is done, which I know that the Government are taking forward—which does not apply to people within the European Union, where there is free movement, and make sure that everybody understands the difference.
The single market covers much more than the odd truck going across and the odd manufacturer. It covers most of the things that our businesses do in this country. It covers science research—I declare an interest as a trustee of Plymouth Marine Laboratory—manufacturing, finance, which many noble Lords have talked about, agriculture and rail freight, in which I declare an interest as chairman of Rail Freight Group.
The noble Lord, Lord Birt, talked about uncertainties which are bringing massive changes and job losses. Why does the Tory party seem to think that this is a good thing? In the campaign, some of them said that we will keep the single market and stop migration. It is a naive way of approaching negotiations with the European Union to think that we can impose on it what we want and expect it to accept it. I still spend a lot of time in Brussels on rail freight business. We are negotiating between two equal parties, but some of them are heartily sick of the way we have been changing our mind, having a go at them and trying to get little changes here and there over the past two years, so it will not be easy. As my noble friend Lord Radice said, Angela Merkel has said there will be no single market without free movement of people, so we have to sort this out.
It is not right that Parliament needs to implement this on the basis of a very narrow majority in an advisory referendum for the leave campaign, now demonstrated as being based on flawed information, untruths or worse. I fear that the same reason is there now as a year or two ago: the fear in the Tory party of UKIP, which will force even the most pro-Remain Tory Members to vote for Brexit regardless of the damage to their constituents and the UK. I see this as real arrogance and putting party infighting before the needs of the country. It is breathtaking. What is the solution? Perhaps we should be looking for a coalition of right-minded Labour, Lib Dem, SNP and others—even Tories—to stop this disaster in its tracks before it goes even further.
My Lords, while politicians—I include myself in that group—talk, two parties try to sort out their leadership issues and the leadership candidates for the Tory party, of whom the winner will become Prime Minister, try to sort out what on earth their platform will be for negotiating with the EU, businesses are making decisions. They are not making short-term decisions on market movements today, tomorrow or next week; they are making decisions about their long-term future. So many businesses that I and others in this House have talked to recognise that everything they have heard from the Government suggests that they are not really interested in protecting them. The businesses I have talked to—I should be interested to find others that take a different view—are making their decisions based on access to the single market. Large companies and small—I talked again today with members of the Federation of Small Businesses—require that access to be able to export, which underpins their potential as companies. They are either direct exporters or in the supply chain and need access to the European market.
It is not just an issue of tariffs. They are concerned that as regulations diverge once we leave the single market, they will be required to run two sets of operations: one to meet UK regulations, one to meet EU regulations. It will require certification and documentation, and the estimate is that divergence in regulation is equivalent to a 10% tariff. That already threatens their viability as future exporters into the EU or their role in a supply chain.
They are making decisions now. We know from talking to the Institute of Directors and the FSB’s recent surveys that most companies have imposed a hiring freeze; it turns out that small businesses are actually cutting head count. Most of them have cancelled major contracts. They are deferring investment decisions. I have not heard of any foreign investor who is bringing significant money into the UK. We were the recipients of some of the largest amounts from foreign investment funds. They were behind our business, they countered our current account deficits but they are evaporating. Unless we get action very soon to counter this assumption that we must leave the single market, that process will continue. Companies will operate in their own best interests; that is their responsibility to their shareholders; that is what will happen.
I am fundamentally concerned because, like others, I see no way to square the circle of the leave promise to cut immigration significantly—which means ending freedom of movement—and retaining single market access. We certainly need to hear from those who led leave on how they intend to square that and, if they will not, for them to accept the consequences of the decisions that businesses are making. Businesses are not political creatures; they make their decisions based on what they see as the future of their company in the long term. Many of them are being driven to be more aggressive than ever as they cannot even get guarantees that the foreign staff they have today will be able to work in the UK. That is souring internal decision-making. Many of the senior management of our key businesses come from within the EU, and as they look at that instability, it becomes far more attractive to consider returning to continental Europe.
While I have a couple of minutes, I want to look at two areas. The first is the City. I sat on so many platforms in so many debates during the referendum campaign. To say that leave was insulting about the City would almost be an understatement, but the City is absolutely the heart of our economic viability as a nation. It funds the public services that we need in our country but which, as many have pointed out, have been incredibly inadequate. It is a major source of funding for the infrastructure, the new social housing, and the improvements in our schools and the NHS that we need.
A core of financial services in the City has been its role as the leading location for clearing financial trades. In 2014, London cleared nearly 50% of global interest rates and over-the-counter derivative transactions and nearly 40% of global foreign currency transactions. We are talking of amounts in the trillions in trading volumes. About a third of those were euro-denominated. The European Central Bank has already said that it wishes to ensure that clearing of euro-denominated instruments remains within the European Union, preferably within the eurozone. It was unable to enforce that because of the non-discrimination rules that are structured into the life of the European Union; those disappear the moment we leave. Because of the way that countries are now clearing all their trades on the same platforms in order to be able to net dollar trades, euro trades, yen trades, et cetera, if we lose euro clearing, we might as well lose dollar clearing and most of the rest of the clearing business.
Passporting is utterly dependent on being part of the single market in order to sell our services, but nobody, including the noble Lord, Lord Lawson, ever addresses the issue. I talk to the wholesale insurance industry. Its business is totally dependent on continental European institutional customers. I talk to the long-term asset managers. Their business is overwhelmingly with continental European entities. They will have no choice but to leave if passporting goes. People talk about other ways of doing business, such as equivalence and country-by-country licensing, but both of those require the movement of substantive operations into the EU area. The rules do not allow you to put up a brass plate and operate out of London, but require a substantial transfer of operations.
The last area I want to talk about in the minute I have left is the new world. I work a lot with financial technology companies. We are an absolute leader in this area. Young entrepreneurs come from all over Europe to set up in FinTech here in the UK, and they are terrified of the consequences. As the digital single market forms, they cannot afford to be outside it. Berlin is a serious rival to London. They desperately want to stay here, but they are looking at the realities, and funding has dried up for many of them. We have reports of venture capitalists that have Brexit clauses in their contracts pulling out of deals with companies over the last week. These companies recognise that if they do not move to be within the European family very rapidly, they may be unable to raise the finance which is totally necessary for their future. The very least the British Government could do is step in with the British Business Bank and replace that. There are so many specific issues, and if we ignore them and talk only in broad generalities, we will have no idea of what is coming and no way to cope with it.
My Lords, more than 30 million of us voted. Turnout was high, and we cannot—nor should we—ignore the outcome. The Government have a mandate and duty to negotiate the best terms of exit, but in negotiating those terms, if we fail to listen to the voters, we risk unleashing a very intolerant pain. By “listen”, I do not mean to the binary of Brexit or no Brexit, but listening to both the large minority who voted to remain and the underlying causes of the vote to leave.
That vote largely came from communities that have already paid the price of a global marketplace, as seen in the almost terminal decline of mining, shipbuilding, steelmaking and other huge swathes of manufacturing. For those communities, that decline, and the decline of trade unionism, have also meant a decline in decent pensions, workers’ education, job security and a place at our table—Government and Parliament are worryingly free of working-class representation. These communities have been the collateral damage of an austerity programme under which cuts to the public sector and local councils have denuded whole regions of an ecosystem that allowed for a level of self-determination and the funds to keep them afloat. The referendum did not create a divided country—it was an expression of an already divided country.
The referendum was framed to ask whether the electorate felt the terms negotiated by the Prime Minister were good enough to stay, and they said no. Although many voters were expressing long-held beliefs, a significant minority were persuaded that they were protecting their communities from the onslaught of 50 million Turks, that they were supporting their beloved NHS to the tune of £350 million a week and that all the benefits of EU membership were available even if we voted out. They were persuaded because that is what they were repeatedly told.
Taking the temperature of a nation to inform government policy is not legally binding, nor is it some absolute principle to which we all hold. Indeed, sadly, the decision to hold a referendum at all was a bungled attempt to keep Government Back-Benchers quiet. It would be a travesty if the future of the country was determined by pitting the interests of the political class against the real needs of those communities which so desperately need a new settlement.
The EU is not blameless. In offering the Prime Minister a lousy deal, and now worrying more about contagion than the Union, it is showing the same lack of political imagination and commitment to common good that we have shown here. Not just in the UK but Europe-wide, there is an explicit and expressed anxiety about free movement. It is an admirable principle, but what about community and protecting communities—both the communities of host nations that feel overrun and the communities whose workers, mothers, teachers and doctors abandon them for the relatively better wages, but not necessarily better lives, elsewhere?
I have been so angered by the deliberate conflation of the refugee crisis and free movement, to the detriment of both and the shame of us all. I welcome migration, with all its economic and cultural benefits, but then I am first-generation British. I live in London with my family and am economically secure. It is a more complicated picture both for the young Bulgarian woman who leaves her children in Sofia to come here to clean on a zero-hours contract for marginally better wages—but not necessarily a better life—and for her UK counterpart struggling to find secure work. As one young Geordie man said to me, “Don’t talk to me about losing jobs—I’ve never had one”.
Union remains an ideal worth fighting for. It provides us with ballast against conflict, trading partners, cultural exchange, an enlightened social project and, in a global world, the collective voice of half a billion people on any subject from climate change to data protection. But if Europe refuses to engage with communities that globalisation and nation states have left behind, that ideal is tainted, not only here but right across Europe.
We are going to hear a lot about democracy today and what is or is not democratic. The Prime Minister stated in the other place that how we now leave is our collective responsibility. But the realpolitik is that Conservative Party members have the privilege of choosing our next Prime Minister, and whoever she is will have the privilege of then deciding how we proceed. Worryingly, we already see an arms race to establish who has the best Brexit credentials, pitching the future security and aspirations of those EU citizens who have already made their home here into doubt—more careless talk from politicians, with real-life consequences, as we have seen so recently in the rise of racist and xenophobic attacks and the violent murder of Jo Cox. What short memories we have.
How can we pretend that democracy is represented by unelected people in Europe working alongside an unelected Government, cobbled together during one of the most unedifying periods of British politics, to bang out a deal that does not even begin to express the need for the housing, jobs and services that the electorate so desperately call for? What of the young, who voted overwhelmingly to remain? The Prime Minister has said that they should “make their voice heard”. They will live with this much longer than any of us, but I am struggling to understand by what mechanism they will make their voices heard. Indeed, how do any of us make our voice heard? I would like to hear from the Government how they intend to represent the 48% of the electorate who voted to remain—workers, the nations, regions, businesses, farmers, the creative industries, environmentalists and so on—within the negotiations. The voices of such a group would undoubtedly be better received in Europe, and it might go some way to persuading all the UK that it has been represented.
Just as we have tested the terms of staying and found them wanting, why not test the terms of leaving to see if they are palatable? A second referendum is not an excuse to ask the same question and get a different result, but an opportunity to ask a more exacting question.
My Lords, vocabulary is inadequate to describe events post the EU referendum. There have been the appalling and repugnant incidents of racism, which we condemn as of one. On an almost daily basis, the political world has presented us with drama, crisis and shock as the body politic has ripped itself to shreds. Much of that has been accompanied by meaningless platitude, vapid generalisation, acerbic rhetoric and behaviour which transcends anything that even the most inventive scriptwriter for a TV soap opera could concoct. Among all this verbal detritus, a bewildered and divided public are looking for a vision, plan, map, compass or anything which might seem to have about it a whiff of direction or a road to travel. In the midst of this chaos, there are some certainties and we need to sift them out.
First, the result: the UK decided to leave the EU. I wanted to remain. I do not like the result, which I profoundly regret, but I absolutely must respect it. Indeed, the most certain way of keeping raw and bleeding the wounds of division across the UK is by not respecting that result. The recrimination, regret and blame are for the past. The future is about the new journey which we have been mandated to embark upon, trying to heal and unite as we travel, moving forward with purpose, focus, energy and hope, about which the most reverend Primate the Archbishop of Canterbury spoke so eloquently and percipiently. The second certainty is that within two years of invoking Article 50 of the Lisbon treaty, the UK will leave the EU and the third is that the UK negotiations for that exit can only be led by the UK Government as a member state. Finally, by early September, we shall have a new Prime Minister and a Cabinet ready to lead these negotiations. It seems to me that these are the certainties, but that swirling around them are the tides, eddies, currents and undertows with hidden reefs, which will require consummate skill, astuteness and wisdom to navigate.
On a purely personal level, I observe that I am very sad it will not be David Cameron who leads us through these uncharted depths. I understand why he felt he had to resign and his decision was the correct one, but it makes me no less sad at losing him as Prime Minister. When he became leader in 2005, I had just become leader of the Scottish Conservatives. He was a huge support to me, always available to speak to, always ready with sound advice. He has provided firm and courageous leadership during very difficult and challenging times and I thank him for that tremendous contribution. I will not dwell inordinately on his successor, other than to define what I want, which is someone steadfast in their political views, steadfast with their political colleagues, steeled by experience at the highest levels of government with proven wisdom and good judgment —someone in whom the British public can have confidence. I want someone who is known to and respected by international leaders, including those in the remaining EU countries. I find one person satisfying those criteria and I make no secret of my support—it is Theresa May.
Different contributors to this debate will want to focus on particular aspects and it will surprise no one that I want to talk about Scotland, which voted decisively to remain in the EU, or that Nicola Sturgeon and I interpret that outcome very differently. I voted to remain in the EU, but on the basis that the UK would be the member state. That was the question before me. I read the ballot paper carefully and I do not recall any explanatory note saying, “By the way, if you live in Scotland, your vote to remain will be a Nicola mandate to keep Scotland minus the UK in the EU”. What a completely ludicrous, illogical and flawed proposition. An EU without the UK as a member state is a materially altered and changed EU. Who knows what shape it will take or what shape it will be in? So when Nicola Sturgeon says she has a mandate to try to keep Scotland within the EU, I say, “Just simmer down, you have nothing of the sort”. What she does have is the responsibility, as Scotland’s First Minister, to do all she can to ensure that Scotland’s best interests are at the very heart of the leave negotiations and that involvement can only be as part of the UK negotiations. Now, her Écosse charm offensive—clicking her stilettos around the corridors of Brussels—may assist these negotiations. She is a formidable communicator, but her role and her responsibility is to keep the Scottish dimension at the forefront of the UK negotiations, not to go off on some diplomatic exit frolic of her own.
Many may have doubted how divisive a referendum campaign can be. I have now lived through two doses of corrosive referendum acrimony and what is Nicola Sturgeon’s healing and measured contribution to this crisis? She wants to prepare for another independence referendum. It is a seriously misjudged response. It may reflect the Scottish National Party’s interests; it profoundly disserves Scotland’s national interest. First, 1.6 million votes in Scotland to remain in the EU do not cancel out 2 million votes to stay in the union of the United Kingdom. Secondly, the union she wants to leave accounts for two-thirds of Scotland’s exports; the Union she wants to join accounts for just 15% of them. Thirdly, the fundamental flaws of the separation case remain unaltered and every bit as stark: no central bank, no currency, a worsening budget deficit of £15 billion and business jitters.
My message to Nicola Sturgeon is this: your country’s interests are at stark variance with your party’s interests. Your duty in these turbulent times is to your country. Protect and promote Scotland by being at the heart of the UK leave negotiations. Use your considerable skills and undoubted ability to form and influence these discussions. Use your position to reassure the business community and to engender stability. Above all else, do not wreck that positive platform for progress by reigniting the destructive and divisive process of an independence referendum. We may have made a decision to leave one Union. That decision is precisely why we must strain every sinew to protect and preserve our remaining United Kingdom union.
My Lords, I was very pleased to be following shortly the remarks of the noble Baroness, Lady Kidron, because like her, I wanted largely to focus on the state of the nation following this vote. We rightly will have all sorts of views about the constitution, international relations, Europe and the economics of the situation, but we also need to take account of what the vote reveals. Like many of my friends and colleagues on all sides of this House, I was devastated by the result. I speak as someone who, against the views of most of my party and movement, campaigned in 1975 to stay in. Even when I had some responsibility for general elections, I do not recall ever crying at the result, but I did after this one. It has been devastating for many of us.
I was devastated but not shocked; I was hardly even surprised. I do not think that any of them are in the Chamber now but there were Members of this House who, two or three weeks before the referendum, told me they had not met a single person advocating Brexit. That applied to others in the London-based elite outside this Parliament and it indicates, perhaps at the extreme end, the difficulties of us in Westminster relating to what was going on in the country. It was not an edifying campaign and the result was not because of the flamboyant leadership of the leavers nor of the ineffective leadership of the remainers. It was a campaign which seemed to be one of fear against prejudice, rather than offering two versions of hope for affirmation. The noble Baroness the Leader of the House said that it was a momentous demonstration of democratic process, and it was. She also said that it was due to enthusiasm, but I do not think so; in some places at least, it was closer to desperation and despair. The elite are not listening to what is going on in large parts of our country. The most reverend Primate the Archbishop of Canterbury had it right today. The issues that people were really moved by were their employment prospects, their lack of access to public services and inequality in our nation.
It was immigration that got blamed, primarily, and the EU got blamed for the immigration. Some of that is logical, but some of the reasons are also that successive leaders of Governments of all parties have not made clear to the British people the benefits of EU membership and have blamed it for decisions, and their effects, which were actually the responsibility of the Westminster Government. A positive side of that campaign never really came across; instead, we opted on the remain side for Project Fear. A lot of why people voted the other way was because of the lack of enforcement of labour standards, the lack of access to public services and so forth. Because of that vote, we have now had a seismic decision in the history of our nation and in our internal constitution and geopolitical position. Those changes have also, as others have said, let other demons out, as we have seen in terms of the racist attacks and other effects on the streets of our cities. It is time that we focused on the basic causes of this vote.
My noble friend Lord Radice said that in effect we have no Government in this country at the moment, and no Opposition, and he is right. To be slightly more facetious, on the Saturday after the referendum result, there was a point when the Prime Minister had resigned, the Chancellor of the Exchequer had gone AWOL, the leader of the Opposition was pronounced officially to be in bed and the then-assumed next Prime Minister was playing cricket, while sterling was already falling and the prospects for the markets were already appallingly facing us. The Government need to get their act together and so does this House. This House can help. As the noble Lord, Lord Boswell, said, we have a key role in our scrutiny committees and the expertise and approach adopted there.
We have to decide which of the seven or eight options—or the three options—of how we in future relate to the EU are to be pursued. However, I fear that some of those options are not on the table. I need to apologise to some of my noble friends for appearing to echo the noble Lord, Lord Lawson of Blaby, but a single market requires single rules, and the single rules of this market include free movement. I hope that there can be some modification but I fear that there will not be much—because, as noble Lords have said, other EU Governments are under equally acute political pressures in respect of negotiating with the UK over the next few months. I chair the EU Sub-Committee on the Internal Market, so I will be at the brunt of this in some ways.
Another thing that appals me about the Government’s position is the lack of contingency planning. Thank God that the Bank of England at least had a contingency plan but, as I understand things around Whitehall, there is no contingency plan either of the immediate position in relation to policies within Europe during this negotiating limbo nor for the long-term position as to how EU-derived legislation on the UK statute book will ultimately be dealt with in future. The House of Lords scrutiny committees can help in that process, but we can only help.
Our political leaders in another place need to accept that they have been turned over in one way or another. I share some of the view of Nicola Sturgeon that the noble Baroness, Lady Goldie, mentioned—but the fact remains that she was the only leader of a political party in these nations of the United Kingdom whose population and electorate actually followed its advice. The rest of us have been seriously disavowed. The House of Commons and the political parties need in very rapid order to get their act together to address our future relationship with the EU, but also to address the problems of a deeply divided and resentful country.
My Lords, George Washington said in his farewell speech to Congress:
“’Tis folly in one Nation to look for disinterested favors from another”—
or, as I might put it from my experience, EU negotiations can be like the knife fight in “Butch Cassidy and the Sundance Kid”: there are no rules, no promises, and there is always a final twist.
There is no reason why our hand should be forced on Article 50 before the UK is completely ready, with a consensual approach; it is not in the national interest otherwise. Regrettably, intimidation, improper exclusion of UK representatives and all kinds of other illegal pressures and innuendos from institutions and the wider commentariat are not new tactics and one can expect them to be deployed on a much greater scale—but we must not give in. Additionally, it has always been impossible to conduct timely negotiations when major countries have been having elections. It is a recipe for prevarication and backtracking, often with long turnaround periods with no true mandate. If it holds up work on a directive, you can imagine what it would do to Brexit negotiations. We cannot have our two years wasted.
Right now, there are also battles for supremacy in Brussels over who fills the UK vacuum—Germany needing Poland, France cosying with Italy and Spain—who gets our agencies, whether protectionism will win, whether member states will assert themselves more strongly over the Commission, whether the Commission will stop being a proxy for the core member states, who in the Commission goes where, or moves, whether the Italian banking situation will smash apart legislative and state aid discipline, whether the French will see off the posted workers directive, and more.
Back here, response to the outcome of the referendum is more challenging and requires more oversight, because leave offered a false prospectus that no plan can fulfil. Some suggest that an EEA-type basis as a quick, temporary harbour, giving market access, is a solution. That brings into play the exact three conditions that were the headline reasons for the leave vote: budget contribution, free movement and control over laws. Many capitals see it as the ultimate humiliation for the UK and say that adjustments are not possible, but, being Europe, they also suggest a few, which are currently unacceptable but may be an opening to the variable geometry espoused by the noble Lord, Lord Maude.
In the UK, it has been argued that we can get a better deal than Norway or Switzerland because we are larger. That misunderstands the current state of mind of the EU 27; they are more wary of giving a good deal because we are larger. Frankfurt, Paris, Luxembourg, Amsterdam and Dublin aim to poach work from the City, but they fear an aggressive offshore UK. So threats of protectionist measures are fuelled by the balance of power in the Council minus us, by the need to satisfy the Parliament, which requires the socialist group on board, and by the perceived need to inflict pain to discourage other breakaways. Such actions may bring international opprobrium and indeed the reverse of the intended effect, but it is a known tendency.
Free movement is well flagged by the Government as an issue for negotiation, but we should look at budgets and laws as well. Repatriation of budget payments featured prominently in the referendum—I think that it was on a bus—and, even diminished to its proper size, it still features in debate. Nevertheless, there is a robust case that saving jobs through market access, especially highly paid ones in the City, can cover the cost of significant payments from tax take alone. Against that, there is a 15% hole in the EU budget when we leave, so there is some leverage there. The EU has already besmirched itself with external cash-not-migrant deals—not that I recommend them.
For both free movement and budget, the basis of any agreement can be free of subsequent unilateral change by the EU. That is not the same when you come to laws. Without the UK round the table, laws can change considerably and unilaterally. This is a problem more in some areas than others. We will not be there when the Commission discusses its pre-drafts with member state experts, nor to amend as texts go through the Council and Parliament, nor in the regulatory agencies that draft standards where currently we chair important working groups. There are many agencies beyond those in financial services, but the powers of the European supervisory authorities and UK influence within them has been an obsessive concern, even while we are so powerful within them. Are we now to become mere note takers?
I know what EU financial services law would have looked like without input from the UK. It is not a static situation and plots are already afoot to make changes. If we buy wholesale into a law-taking regime, at least in financial services, we may be buying a pig in a poke, passports or not. That is a problem that we must solve. It cannot be counteracted simply by channelling more resources through international bodies such as Basel, the FSB, IOSCO and the IAIS, which I observe are also unaccountable international bodies to which we send unelected people. For financial services, mutual recognition or equivalence provisions are another route but, as has been pointed out, the process is tricky and inherently political, and introducing more subjective conditions is already a talking point in Brussels. The question would be how far such changes would upset international relations with the US and whether that, and perhaps resolving the fears of an offshore UK, could give openings or a route to the variable geometry that has been described.
This is a small part of what we face and the plan seems to start from scratch. In some areas, our counterparts are not even just the EU, so never has “Act in haste, repent at leisure” been more relevant.
My Lords, after 65 years of public service, I do not remember such an unholy mess as we are in now, except perhaps after the Suez affair. It is an existential as well as a political crisis. As a result of recent events, my enthusiasm for referenda, never very strong, has evaporated almost to nothing. I pass over the lies and half-truths, the threats and the promises, the commitments proposed and then abandoned as soon as the votes had been counted and the rancour of the recent campaign. The problem with a referendum is that the issue is presented as a simple binary choice: yes or no, leave or remain. The issue of membership of the European Union is not simple or binary; it is a choice of complex and often conflicting considerations and of deciding where the best interests of the nation lie. Such issues are better decided in our traditional system of representative democracy by Parliament.
In that system, a referendum is advisory, not mandatory. The result of a referendum deserves to be treated with the greatest respect, but it is for Parliament to decide, and in this time of tension a great responsibility falls on this Parliament. We in both Houses of Parliament have to rise to that responsibility at a time when the uncertainties that confront us are unprecedentedly extreme and very long-lasting. We are, as the noble Lord, Lord West, would say, in uncharted and turbulent waters.
We are told that the process of extracting ourselves from the European Union will take five years or more—five years of continuing economic, financial and political uncertainty with the risk of lower investment, less employment and higher inflation as businesses and people speculate over and try to anticipate the outcome.
I cannot rid myself of the fear that we are on the verge of a terrible mistake, for which our children and our children’s children will pay the price. We should be thinking about the effects of the uncertainty on the young going to Europe to work or to study, on the young people from European countries on whom the National Health Service and other public services in this country depend and on the hopes and prospects of those British citizens who have chosen to make their lives in Europe. We should be thinking about the benefits we derive from the EU’s contribution to scientific and technological research and development and, what is more and most of all, we should be thinking about our place in Europe and in the world.
The European Union—the European Community as it was—was created to be one of the institutional guarantors of peace and stability in Europe, and particularly of peace between France and Germany. In this respect, it has been astonishingly successful over the past 60 years, so successful that many of us seem to think—in my view wrongly—that any future European war is simply unimaginable. This is something to remember as we commemorate the Battle of the Somme. It was created also to give the countries of Europe together a degree of influence in a world of global superpowers that none could have on its own. Neither of those purposes has diminished in importance. This country is geographically, genetically, historically, culturally and inescapably part of Europe and we cannot in practice, and should not try to, become semi-detached from Europe. Our place and influence in the world will be weakened by leaving the Union.
For these reasons I hope that, even while the new Prime Minister and his or her colleagues—I must say it is strange to be using that expression “his or her”; it is quite like old times for some of us—develop a strategy for negotiating our departure from the EU a sense of their responsibilities at a time of great uncertainties should lead them to explore even now, at this late hour, whether there is any possibility of reaching an agreement with the EU and its other member countries, building on the changes agreed with the present Prime Minister in February, which would allow them to recommend to Parliament, and Parliament to recommend to the British people, that we have a new deal and do not trigger Article 50 but remain as members of the European Union.
That may not now be possible. If it is not, we shall continue on course to leave the EU, but as the Foreign Secretary said yesterday, and as the Leader of the House said this morning, we must seek the best deal we can for Britain. We should not exclude the possibility that the best deal for Britain might be achieved by staying in the EU. The situation has now profoundly changed since February, and even since a month ago. The new Government will have a responsibility to explore the possibility, even now, of such an outcome and they might find the European Union willing to discuss that.
Such an outcome would resolve, at a stroke, the uncertainties that will beset us as we continue on the course of leaving the EU. It would enable the new Government to concentrate on strengthening the economy and pursuing social reform. It would restore the strength of our nation. It would allow us to continue to contribute to the strength and effectiveness of the European Union and to take part in its reform, which is now necessary and inevitable, and it would enhance the confidence and respect in which we are held by our allies and friends in international affairs.
My Lords, I agree with the noble Lord, Lord Armstrong, on one point: we should not turn our back on Europe. I hope we will have co-operation with Europe, but that is not the same thing as leaving the European Union. While I do not share the gloom of the noble Lord, Lord Armstrong, I confess to a degree of shock on the day after the referendum: shock that the side I had supported had won when I was not entirely confident that it would, and a much greater shock that so many people refused to accept the verdict of the people. There was far too much talk about reversing the result. I was stunned by the intervention of the former Prime Minister Tony Blair, complaining that the result of the referendum had been voted for by only 51.7% of the electorate. This compares with the 43.9% who voted for him, about which he never complained at any time. If we do not accept the result of this referendum, there will be a real awakening of bitterness next time.
I campaigned and voted for the leave side, partly because I have long been sceptical about the allegedly unique benefits we are supposed to get from Europe. More importantly, I am totally opposed to political union, progress towards which seems to me to be going down a blind alley with a dead end. If Europe wants political co-operation, that is one thing, and it should be on an evolutionary basis. It should not be engineered and manipulated by an elite with its own agenda. Europe is an entity without a demos and, thus, it is without the potential for real democracy. Various speakers have referred to their own sense of European identity. Europe has a weak common identity compared with the nation state, which has a strong sense of identity, plenty of life in it and plenty of legitimacy left in it as well.
I agree with the most reverend Primate the Archbishop of Canterbury and the noble Baroness, Lady Smith; I do not believe the status of EU nationals residing in this country and working in this country ought to be a bargaining chip in the negotiations at all. That ought to have been cleared up already. I also agree with the most reverend Primate, the noble Baroness and others, who have very forthrightly condemned the attacks on Polish and other immigrant communities. This is totally unacceptable and must be roundly condemned. At the same time, it is totally wrong to label people who have legitimate concerns about immigration as racist. That seems to me an extremely dangerous thing to do. If we do not listen to concerns about the pressures of population, the pressures on the housing market and the effects on the lower-paid, we are making a great and serious mistake. It is clear from the referendum results in individual areas that there was a very firm rejection of complete free movement of labour. This issue will not go away and will have to be addressed.
We are where we are. The question is, where do we go from here and what do we do about it? I welcome the unit that has been set up under the Chancellor of the Duchy of Lancaster. I hope he and his work will cut through some of the myths that have been accepted uncritically for far too long as conventional wisdom. Myth number one is that the single market has been of unique benefit to the UK. The noble Lord, Lord Birt, repeated that in his speech. But one ought to look at the trade performance of countries that are not members of the EU, such as the United States and Australia, which have managed to increase their exports into the single market faster than we have. You do not have to be a member of the single market to benefit from it.
Another myth is that the UK has free access to the single market. As we pay a budget contribution equivalent to a 7% tariff on all the goods we sell, it is free only in the sense that someone who belongs to a golf club and does not have to pay for every round of golf has free golf: it just is not true. Then we are told that it is impossible to have access to the single market without accepting complete free movement of labour. I was concerned that the Foreign Secretary seemed to accept this. Look at the arrangement that Turkey has. Since 1996, Turkey has enjoyed tariff-free goods access to EU markets with no free movement of people. Turkey accepts the present EU external tariff—about 3%—and there is no restriction on Turkey-EU trade. The important point about the Turkish arrangement is that it avoids the rules of origin. If we set our own tariffs with the rest of the world outside the EU, we would have to accept clearance under the rules-of-origin arrangements, of which there are 9,000 different classifications. This is what Switzerland has to do and there are limits of 30% to 35% placed on the non-Swiss, non-EU content of Swiss goods going into the European Union. The beauty of what Turkey does is that it bypasses all the difficulties of rules of origin. I am not suggesting this should be the final solution or the final arrangement, but it could be an interim one.
Undoubtedly, we face economic challenges. There will be short-term difficulties but, in the medium term, I believe there will be new opportunities. I also believe that what will happen will not be nearly as dire as predicted. Brexit is part of a wider reaction against centralisation in Europe. The Global Attitudes survey released the other day showed that ever-closer union is now rejected by 73% of voters in Holland, 85% in Sweden, 86% in Greece, and 68%, 65% and 60% in Germany, Italy and France respectively. We are not alone. Things that have happened in this country are also beginning to stir in other European countries. Indeed, the impact of Brexit may well be greater on Europe than it is on Britain. We are not alone. The other day, the editor of the Italian newspaper Libero wrote: “The only true functioning democracy is the English one. The United Kingdom proved for the umpteenth time that it believes in the will of the people and that it knows how to respect it with elegance”. We should respect with elegance each other’s views and we should also respect, with elegance, the views of the people.