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EU Exit: Future Relationship White Paper

Volume 792: debated on Thursday 12 July 2018


My Lords, with the leave of the House, I shall now repeat a Statement about the UK’s future relationship with the European Union. The Statement is as follows:

“Let me start by paying tribute to my right honourable friend the Member for Haltemprice and Howden, and his Herculean efforts along with those of my honourable friend the Member for Wycombe and the wider DExEU team to get us to this point in both the negotiations and the successful passage of the EU withdrawal Bill through Parliament. It is a striking achievement. My right honourable friend is a loss to the Government, but I suspect, with the mildest apprehension, a considerable gain to this House.

Shortly, we will publish the Government’s White Paper on the UK’s future relationship with the European Union. It is a new and detailed proposal for a principled, pragmatic and ambitious future partnership between the UK and the EU in line with the policy agreed at Chequers last week. I am placing a copy of the White Paper in the Libraries of both Houses, but let me briefly set out the key proposals.

Mr Speaker, the Government are determined to build a new relationship that works for both the UK and the EU, one grounded in our shared history but which looks to a bright and ambitious future: a relationship that delivers real and lasting benefit to both sides.

First, the White Paper confirms that the UK will leave the European Union on 29 March 2019, forging a new way in the world outside the single market and outside the customs union. It safeguards the constitutional and economic integrity of the UK. It reclaims the UK’s sovereignty and it protects our economic interests by minimising the risk of disruption to trade. It delivers on the instruction we received loud and clear from the British people: to take back control of our laws, our borders and our money.

In delivering on this vision, the Government propose an innovative and unprecedented economic partnership based on open and free trade. We will maintain frictionless trade through a new UK-EU free trade area for goods underpinned by a common rulebook covering only those rules necessary to provide for frictionless trade at the border. This will support business and meet our shared commitments to Northern Ireland and Ireland, thus avoiding any reliance on the so-called backstop solution. A key component of this will be our proposal for a facilitated customs arrangement, a business-friendly model that removes the need for new routine customs checks and controls between the UK and the EU, while enabling the UK to control its own tariffs to boost trade with the rest of the world.

We want a deep and comprehensive deal on services based on the principles of international trade. Our approach minimises new barriers to service provision, allowing UK firms to establish in the EU and vice-versa, and provides for mutual recognition of professional qualifications.

On financial services, we propose a new economic and regulatory approach with the EU that will preserve the mutual benefits of our uniquely integrated markets while protecting financial stability and our autonomy of rule-making. Crucially, our proposals on services provide the UK with regulatory flexibility in the sector, including our dynamic, innovative digital sectors, which will, in turn, open up new possibilities relating to trade with the wider world.

As we leave the EU, free movement of people will come to an end. We will control the number of people who come to live in our country. We will assert stronger security checks at the border. The Government will also seek reciprocal mobility arrangements with the EU, in line with the approach we intend to take with other key trading partners. In practice, having ended free movement, this is about enabling firms to move their top talent across borders to deliver services; facilitating travel without a visa for tourism and business trips; and making sure that our students and youngsters, in the UK and the EU, continue to benefit from the educational opportunities in universities, colleges and the rich tapestry of cultural life across the continent.

Next, the White Paper addresses Europe’s security, which has been and will remain the UK’s security. This is why the Government have made an unconditional commitment to maintain it. The Government’s proposal is for a new security partnership with the EU to tackle shared, complex and evolving threats, enabling the UK and the EU to act together on some of the most pressing global challenges. It is important that the UK and the EU can continue operational co-operation on law enforcement and criminal justice to keep people safe across Europe. Our proposals extend to other areas of co-operation of vital importance to the UK and the EU, including the continued protection and exchange of personal data, new arrangements on fishing and co-operative accords on science and innovation, culture and defence research.

When we leave the EU, the European Court will no longer have jurisdiction over this country. At the same time, we need to be able to interpret what we have agreed accurately and consistently and manage any future bones of contention sensibly and responsibly. Our proposals provide for proper accountability and the consistent interpretation of UK-EU agreements by both parties. We envisage resolving disputes that may arise through arbitration, which is fair, balanced and reflects global practice. To provide the foundation for an enduring new relationship, the agreement must be flexible enough to enable us to review and, if necessary, revise its operation over time, as is common in free trade agreements across the world.

Finally, I will make one thing clear: we will not sign away our negotiating leverage, or spend taxpayers’ money in return for nothing. The financial settlement agreed in December, which was substantially lower than EU demands, was agreed on the basis that it would sit alongside a deep and mutually beneficial future partnership. We agreed that we would meet our commitments as they fall due, with ever declining payments over a finite period, which add up to a tiny fraction of what would have been our net contribution.

Both sides have been clear that nothing is agreed until everything is agreed. Indeed, that is in keeping with the spirit of Article 50. There should be a firm commitment in the withdrawal agreement requiring the framework for the future relationship to be translated into legal text as soon as possible. If one party fails to honour its side of the overall bargain, there will be consequences for the whole deal. For our part, the UK Government are today demonstrating our ambition and resolve to ensure that we build that deep and special partnership with the publication of this White Paper.

The Prime Minister first outlined a blueprint for a deep and special relationship with the EU at Lancaster House and expanded it further in her speeches in Florence, Munich and at Mansion House. Those speeches have shaped, and they continue to shape, our negotiations with the EU.

I am confident that a deal is within reach, given the success that the Prime Minister and her negotiating team have already had so far. Most issues under the withdrawal agreement have been resolved, with a deal in place to secure the rights of more than 3 million EU citizens living in the UK and around a million UK citizens living in the EU, and we have agreed a time-limited implementation period that gives businesses, Governments and citizens the certainty to plan their lives and invest for the future. Next week, we will publish a White Paper on the withdrawal agreement and implementation Bill, setting out how we will give effect to the withdrawal agreement in domestic law and demonstrating to the EU that the UK is a dependable negotiating partner—one that will deliver on its commitments.

Our discussions with the EU will squarely focus on our shared future. This White Paper sets out how we can achieve that new partnership. Now, it is time for the EU to respond in kind. We approach these negotiations with a spirit of pragmatism, compromise and friendship. I hope that the EU will engage with our proposals in the same spirit, and I plan to meet Michel Barnier next week to discuss the detail in person.

At the same time, the Government are preparing in the event that this spirit of pragmatism and good will is not reciprocated. On Monday, I spoke with my right honourable friend the Prime Minister. We agreed to step up our planning for a no-deal scenario, so that the UK is ready for Brexit no matter what the outcome of these negotiations. It is the responsible thing for a Government to do.

This White Paper sets out the right Brexit deal, delivering on the result of the referendum by taking back control over our money, laws and borders; supporting the economy by maintaining a strong trading relationship after we have left; ending free movement, while avoiding a hard border between Northern Ireland and Ireland, or between Northern Ireland and Great Britain; restoring the sovereignty of Parliament and the authority of the UK Supreme Court; seizing the opportunity to forge new trade deals around the world; and maintaining co-operation with the EU in many other areas that we prize, including vital security co-operation to keep our people safe.

This is our vision for a bold, ambitious and innovative new partnership with the EU. It is principled and practical, faithful to the referendum. It delivers a deal that is good for the UK and for our EU friends, and I commend this Statement and the White Paper to the House”.

My Lords, I thank the Minister for repeating the Statement. I obviously have not had time to read the document. It was given to journalists at 9 o’clock this morning. The MPs did not even get it when they should have started, but I did, so I thank the Minister. I have had an hour with the document; we know how to do things in this House. Because I have not had time to read the whole thing I will leave detailed comments to our debate on 23 July—assuming it is still in play by then. The three-page Chequers document having failed to survive three days of Cabinet unity, I hope that this 98-page document perhaps survives 98 days.

It is of course welcome that we now have a negotiating proposal—perhaps some 12 months overdue—and I am pleased that it is more comprehensive than the Chequers statement, acknowledging the importance of services, data issues, broadcasting, justice, security and other issues highlighted in the reports of the Lords EU Committee. We look forward to a second White Paper foreshadowing the withdrawal and implementation Bill next week.

In today’s foreword, the Brexit Secretary talks of achieving agreements that are “unprecedented”, “unrivalled” and “unparalleled”. Given that we will be asking our European partners to break with their conventions and legal norms, it might have been advisable for the Government to set out such detail rather earlier. Furthermore, it would have been better if, as in the Monks amendment passed by your Lordships’ House, the Government had sought Parliament’s endorsement of their negotiating mandate before discussions with Brussels. That would have given real authority to Mrs May ahead of her talks.

The Chequers paper was a rather miserable little “concord”. It had nothing on services, despite the UK being the world’s second-largest exporter of services, with £63 billion of non-financial and £27 billion in financial services being sold in the EU and comprising 80% of our economy. Luckily, though, services have found their way into the White Paper with plans for an “ambitious economic partnership”, with,

“continued and relatively liberalised trade in services”,

and mutual recognition of professional qualifications, the Government acknowledging the importance of access to talent, the ability to move people across borders—including fly-in, fly-out—and cross-border data flows, as well as the needs of the creative industries.

The White Paper wants the new economic and regulatory arrangements to be based on autonomy of each party over decisions regarding access to its markets, with a bilateral framework of treaty-based commitments to underpin the operation of the relationship, respecting the regulatory autonomy of both partners. Whether this amounts to something acceptable to the 27 members of the single market, especially as the White Paper also rules out passporting, which will exclude EU nationals and firms from access over here, is, I contend, a big question. It will be vital for our future relationship to encompass and safeguard our wealth-creating, tax-paying service sector, so what assurance can the Minister give that this White Paper approach will achieve this, and will be acceptable to our European partners?

With regard to EU migration, the Leader of the House said on Monday that,

“no preferential access will be offered to EU workers that is not on offer also to other trading partners”.—[Official Report, 9/7/18; col. 813.]

Today’s Statement confirms this, saying that the approach to EU mobility will be in line with that for other trading partners. Obviously, at present the arrangements for EU workers are very different from those with any of the 57 countries with whom we have trade agreements via the EU and which the Government want to continue. Are the Government therefore saying that in future workers from South Korea, for example, or any other of our trading partners will have equal access to jobs as do EU nationals? Or is Dominic Raab right when he said on the “Today” programme this morning that whether EU citizens would get special treatment was “subject to negotiation”—in which case, why is it not part of the negotiating proposals? Will the Minister clarify which of these two is the Government’s intention?

The Recruitment & Employment Confederation, for example, has stressed that:

“Mobility needs to form part of the exit agreement”,

including temporary and seasonal roles. For example, it wants the right to work to be attached to the individual, so that they can move from job to job as their career moves, and not be attached via sponsorship to a single employer or the promise of a permanent contract. Meanwhile, any move to put EU workers on a par with those from far-flung countries would not be well received by the food and drink industry, highly dependent on EU nationals. Business needs to know about this and soon. What is the position of the Government?

A central tenet of the White Paper is to keep the UK in a free trade area for goods, to help create a frictionless border and reduce supply-chain worries, but there are two big problems with this. First, part and parcel of many goods is the design, the IP and the servicing of those products. An example is Rolls-Royce engines, where the maintenance, the servicing, the training, the data exchange and IP are bound up with the straight export of physical hardware. It is not that easy to distinguish between the two. Secondly, the proposed mechanism, what is called a facilitated customs arrangement, rather makes Heath Robinson look simple. It expects VAT, standards, numbers, rules of origin details, safety and hygiene all to be checked by remote, high-tech and yet to be developed software. I have my doubts.

The negotiation on future relationships with the EU are of immense consequence to Gibraltar as well as to the devolved authorities. Will the Minister therefore reassure the House on their involvement in drafting the White Paper and confirm that Gibraltar and the Scottish and Welsh Governments are content with its content and will be fully consulted as negotiations continue? We all want a successful outcome to negotiations on our long-term relationship with Europe. It is our closest neighbour, our ally and our largest trading partner. It is key that the so-called European Research Group—it may be a group but it is not European in outlook, nor is research its methodology—does not derail a deal that could be in the national interest. The White Paper may not be the right answer—we have yet to digest it—but the Minister would be wise to heed the words of his noble friend Lord Hague, who wrote that hard-line Brexiteers need to realise that the type of Brexit available is constrained by three factors: the current parliamentary arithmetic, the needs of big manufacturers for frictionless trade, and the complex realities of the Irish border. He warned that fighting against that reality, a la David Davis, Boris Johnson and the ERG, with no alternative is an “indulgence not a policy”.

Labour has an alternative, within a customs union and with a proper agreement on services, but for now our attention will be on what has been published today. We will see whether it meets our tests—to preserve and grow jobs, to maintain standards in the environment, to share prosperity throughout the country, and to safeguard peace in Northern Ireland. I look forward to our longer debate on 23 July on all that.

My Lords, naturally it is a landmark moment that we finally have a government position on Brexit after more than two years, but that exhausted sense of relief is tempered by a huge number of caveats. The first of these is that it has in fact not calmed tempers within the Conservative Party but ignited an all-out war within the governing party: strong and stable this plan is not.

I will have to mix my foodie metaphors. On Monday, I said that the Chequers plan looked like a series of fig-leaves—over the sovereignty of Westminster to reject EU regulations, over the autonomy of the UK legal order, over the pretence of business-friendliness—and I maintain those critiques now that we have the White Paper. However, in addition I suggest that the White Paper describes not a soft nor a hard Brexit but a scrambled Brexit. This is exemplified by the farce of the Secretary of State for Exiting the EU starting his Statement in the other place before MPs had a copy of the White Paper. He actually tried, after the uproar, to suggest that the clerks might be to blame, but actually the Statement is predicated on being delivered before the White Paper is published. It says:

“Shortly, we will publish the Government’s White Paper”,

on Brexit. So it was always intended that the Statement would be made before the White Paper. I think this is executive arrogance rather than taking back control for Parliament.

The scrambled incoherence of the White Paper is exemplified by the suggestions on the agri-food sector. Page 16 of the White Paper talks about,

“a common rulebook for agriculture, food and fisheries products, encompassing rules that must be checked at the border, alongside equivalence for certain other rules, such as wider food policy”.

There are quite a few contradictions there. How is it frictionless trade if there have to be checks at the border? How does that common rulebook for agri-food work if the UK is outside the common agricultural policy and the common fisheries policy? How can you have a common rulebook for some aspects of food but equivalence for other aspects of food policy? Perhaps the Minister will explain and unravel some of that. The fact is that the facilitated customs arrangement is baroque, complicated and bureaucratic; it is likely to collapse under the weight of its own contradictions.

As the noble Baroness, Lady Hayter, said, how on earth can you separate goods from the services that are essential to their production, whether that is legal services, software, intellectual property or others? There is also the serious worry about the potential for fraud and smuggling with these differential tariffs that are meant to be applied at the border; that is leaving aside the question of whether the EU will agree to operate its intended side of the arrangement.

Michel Barnier is surely right. He said that only staying fully in the single market and the customs union can guarantee frictionless trade, yet the Government maintain this claim of “frictionless trade”. That is an absolute term; it does not mean a little bit of friction—it means no friction. How do the Government intend trade to be frictionless? How can there be an independent trade policy, which is alleged in the White Paper, if the UK has committed itself to a common rulebook, including on agri-food products? How will that work when the US invites us to accept the famous bleached chickens and GM food?

The cakeism which runs throughout this White Paper is exemplified by the comments on services—a massive hole in the plan—which are 80% of our economy, and which we do not intend to be part of the single market. When one thinks of the efforts previous Conservative and other Governments have made to try and deepen the single market in services, this is a betrayal of everything that Mrs Thatcher tried to do.

Can the Minister tell me how,

“new arrangements on financial services”,


“preserve the mutual benefits of integrated markets”,

while maintaining the autonomy of rule-making? Those two are surely in contradiction. We will not have integrated markets with autonomous rule-making.

I fear that what the Government are setting up is a further loss of trust in the public. There were so many deceitful statements that came out of the three pages after the Chequers meeting last Friday, which appear to be repeated in the bits of this White Paper which I have been able to read. For instance, the White Paper says:

“We share an ambition for our country to be … more prosperous than ever before”.

But the Government’s own impact statements, which we finally wrestled out of them, all show that we will be poorer. Our economy will shrink; we will have less money for public services. So how will we be more prosperous if the Government have committed to the statements made by the OBR? There are so many statements in here that are just not true, such as that this will,

“return accountability over the laws we live by”,

to the UK Parliament. We will comply with the common rulebook, and yet we will have autonomy over our laws. It does not add up; we are setting up for the people to be let down and it is the people, therefore, who should have the final say on what the Government come back with. Otherwise, the forces that led to the decision in the referendum two years ago will just be magnified.

I thank both noble Baronesses for their comments. Let me address some of the issues that they raised.

First, I am grateful to the noble Baroness, Lady Hayter, for her comments about the prompt delivery of the White Paper in this House. I am glad to see that our processes are more efficient. When I was preparing for appearing here, I was listening to the exchanges in the House of Commons, so I dashed to the Printed Paper Office here to check that they had sufficient copies to deliver to everybody. Noble Lords were busy collecting them at the time and said they had them available in good time; I am pleased she got hers and I hope the noble Baroness, Lady Ludford, received hers in time as well. There was some information that was released to the press under embargo, as is normal practice, but it was released only once the Secretary of State stood up—

My information is that the embargo was not allowed to be lifted before the Secretary of State rose to his feet.

In answer to her other questions outside the process of delivering the White Papers, I can confirm that it is our ambition to reach a comprehensive deal on services. Will it be acceptable to the European Union? I hope so. We approach the negotiations in good faith and we will engage positively. We hope there will be a positive reaction because we want to reach a deal and get an agreement.

The noble Baroness asked about freedom of movement. I confirm that freedom of movement will end and she should be delighted to hear that, seeing as both my party and hers stood on promises at the last election to say that we would end freedom of movement. We have said that, in line with the commitments given in many free trade agreements, we will seek to negotiate a mobility partnership with the EU, but that will not be the same as freedom of movement. This will cover things such as intra-company transfers, students, tourists and service providers, but it will not be the same as freedom of movement.

The noble Baroness made some quite good points about how to distinguish between goods and services; that is something we need to explore further with the EU, but a “good” is traditionally defined as something that physically crosses a border.

The noble Baroness asked about Gibraltar and the devolved Administrations. I can confirm that we did consult extensively with devolved Administrations, including sharing some drafts of certain parts of the White Paper where they were relevant to them. We did take on board and accept some of their comments.

I am not sure where the noble Baroness, Lady Ludford, was going with her fig-leaves analogy. Perhaps this was reference to the agri-foods being able to cross borders, so she will be delighted to know that, with the common rulebook on agri-foods, her fig-leaves will be able to seamlessly cross over the borders.

Again, in terms of delivery of the White Paper, I think I have answered that question from the noble Baroness, Lady Hayter.

I can confirm that we will be outside the common agricultural policy and the common fisheries policy, although we have said that we want to try and agree a common rulebook on agri-foods. We do not believe that will be a barrier. As the noble Baroness knows, the EU itself argues that CAP subsidies are not market distorting within the WTO, so there should be no problem in agreeing our own policies on environmental and CAP protections.

In terms of the common rulebook, we have been clear that we only want to agree a common rulebook in terms of those regulations that are necessary to enable frictionless border controls—or rather, no border controls because of a friction-free border.

In terms of free trade agreements, one of the benefits of the FCA partnership, if we can agree to it, is that it will allow us to set our own tariffs. I confirm that it is a priority of this Government to negotiate a free trade agreement with the US, and the noble Baroness will see references in the White Paper, as well as to our ambition to negotiate similar agreements under the Trans-Pacific Partnership.

In terms of financial services, we have been clear that we want to agree a close future relationship with the EU that preserves the mutual benefits of our uniquely integrated markets and protects financial stability. At the heart of this new partnership will be a set of binding, bilateral commitments that provides certainty and stability of access to each other’s markets and firms, while allowing the UK and the EU to exercise autonomy of regulatory decisions through their own domestic processes.

On the final point about accountability of laws, this will be a different arrangement. As the noble Baroness well knows, under the European Communities Act European law has direct effect in the UK; Parliament has effectively no choice about it. If we agree the common rulebook, then Parliament will have to adopt any future EU goods regulations, but it will have a sovereign choice about whether to do so. If it chooses not to, then we will have to accept the market consequences of that, but it will be a choice that this and future Parliaments will be able to make, so that is a different situation to that which pertains under the existing European Communities Act.

My Lords, does my noble friend recognise that this Statement and the White Paper do rather better than one or two of the statements that came out of Chequers in continuing to emphasise the point that frictionless trade is as important for jobs among our friends in the European Union as it is for jobs in this country? If that does not exist in any way, that would be hugely damaging to jobs in Europe as well as in this country.

I totally agree with my noble friend, who speaks great sense as always on these matters. Of course, free trade is in the mutual best interest of both parties; we cannot say that too often.

My Lords, I am grateful to the Minister for making sure that we, unlike our friends in another place, were able to read the White Paper. I have got as far as page 16 and it is there that I would like to ask for some elucidation. It is very good that we have at last put some cards on the table. That is a couple of years too late but better late than never. The White Paper is clearly a very substantial body of work, which will take a lot of reading by us and, I would have thought, a great deal of negotiating in Brussels.

I want to start on an element which the Minister highlighted. The FCA or facilitated customs arrangement, referred to on page 12 of the Statement and pages 16 to 18 of the White Paper, says:

“As if in a combined … territory with the EU, the UK would apply the EU’s tariffs and trade policy for goods intended for the EU. The UK would also apply its own tariffs and trade policy … However, the UK is not proposing that the EU applies the UK’s tariffs and trade policy at its border for goods intended for the UK”.

I have two questions. First, what happens at Dover to goods from, say, Asia which entered the EU via, say, Rotterdam? Where do the customs dues, tariffs and quota checks take place?

Secondly, as the Minister will be well aware from his long experience in the European Parliament, customs dues are an own resource which go straight into the common EU budget and it is 11 years since OLAF, the antifraud agency, started warning us that our border controls on Chinese textiles and footwear were inadequate. We are now in court for unpaid duty, calculated at more than €3 billion over a 10-year period. As he will be well aware, too, we are also in court over VAT fraud at Felixstowe, where the charge against us is $3.2 billion. Does he really think that once we have shaken off the ECJ, the Commission and OLAF, we will be accepted as trustworthy collectors of the EU’s external tariffs and customs duties at our ports, against the background that it believes that we have consistently under-counted for the last decade, having admitted false invoices and incorrect value declarations? How are we going to persuade the European Union that, as non-members of a customs union, we should collect the duties which go straight into its common budget? Would it not be simpler simply to have a customs union, as this House voted for by a majority of 123?

To answer the noble Lord’s last point first, for the sake of repetition, we have been clear that we are leaving the customs union. The reason why we are leaving is that we do not want to contract out our trade policy to the European Commission. He might think that is a good thing but I do not and I disagree with him. We want to come to an independent trade policy and this model would allow us to do that. I accept that there will be some challenges in negotiating this matter. However, we have put forward a proposal in good faith and intend to persuade the EU of its virtues and benefits.

On the noble Lord’s question about collecting duties, we intend to agree with the EU a mechanism for the remittance of relative tariff revenue. The UK is proposing a tariff revenue formula, taking account of goods destined for the UK entering via the EU and goods destined for the EU entering via the UK. I am afraid I cannot comment on the court proceedings that are taking place but I understand that we are vigorously resisting the sums that have been claimed.

My Lords, does not the chaos and division preceding the publication of this White Paper point once again to the approach that I have argued for in this House over the last two years? The people, by majority, voted leave because a majority of them wanted reform of free movement and control of our borders, which is what all the pre-referendum polling data showed in many national polls that were carried out. I hold copies of that polling data myself. In the changed conditions that now exist in Europe, can I once again suggest that, despite the difficulties, we pursue that limited objective and, at the same time, seek a new formula that would redefine our net contributions as gross, then let the people decide once again in a second referendum?

I commend the noble Lord for his perseverance in pursuing this avenue but I respectfully say to him that I do not think a second referendum is the way forward. He refers to chaos. I do not agree with him on that but were we to go down the road of a second referendum we would have months and months, if not years, of arguing about what the question should be, what its effects would be and how we would resolve them. We would need legislation to go through both Houses and to try to accomplish that would be extremely controversial. What would happen if the country voted differently? Would there be a best of three, and would we seek to reopen the whole question? If anything, that would be a recipe for massive chaos.

I said quite a bit about freedom of movement earlier. Freedom of movement is ending and I agree that that was one important factor in the referendum result. However, it was not the only factor. People voted leave for many different reasons, of which I think freedom of movement was one. That is why it is ending.

My Lords, I thank my noble friend for remaining in the Government to fight for meaningful negotiations. Will he do all in his power to convince the triumphalist brigade of Brexiteers, of whom there are far too many, that they represent only a small fraction of the population and have to accept that the solution at the end of the day cannot be winner takes all? We have to have realistic negotiations in a spirit of constructive compromise. Will he assure the House that that is how he will play his part in going forward from this document, which is much more realistic than many of us feared it might be?

I thank my noble friend for his comments. I never had any intention of resigning, despite the optimistic tone in the Twitter feed of the noble Baroness, Lady Ludford, which somebody pointed out to me. It was a great amusement to wake up on Monday morning and find the number of people—including the noble Lord, Lord Adonis, the noble Baroness and others—who had been speculating on my demise. Of course, these are difficult times. There were always going to be difficult and tricky negotiations and I have always said that we need to try to come up with a solution which everybody in the country can support. That will be a challenge but we will do our best, because we have to move forward in a spirit of unity and not division.

My Lords, will the Minister perhaps enlighten the House on whether the customs arrangement proposed will be in full conformity with World Trade Organization rules, which normally lay down that when a third country sends goods to somewhere such as the UK, it knows what tariff rate it will be faced with? That would be the UK tariff rate but apparently, under certain circumstances, it would be a different tariff rate. Does that conform to the WTO?

My second question is about the migration partnership. The Statement makes it clear that this will fall within the ambit of the negotiations with the EU 27, but what on earth are the negotiations going to be about since the White Paper says nothing about the migration partnership? When the Minister’s right honourable friend arrives in Brussels next week, what is he to say when asked what we are putting in place on freedom of movement? Finally, I notice that the Statement states categorically that the Government are not going to spend taxpayers’ money on nothing but, if they get their way and there is a deal, they will have spent millions in taxpayers’ money on preparing for nothing.

I do not know if the noble Lord has a copy of the White Paper but, if he looks on pages 32, 33 and 34, he will see a substantial amount on what we see as the mobility partnership, the ending of freedom of movement, et cetera. Maybe he would like to look at those pages. Of course anything we seek to negotiate will conform with WTO rules. We will be an independent member of the WTO. We look forward to resuming our seat and we will be a global advocate for free trade, in conformity with WTO rules.

My Lords, I am sure that no one wants to undercut the position of government negotiators in the continuing talks with the European Union, but how realistic is it for the Government to pick out those bits of EU structures they like and want to retain and jettison the other bits that they do not like? Is it not cherry picking on an epic scale, almost like the England football team looking for some special dispensation from the rules in the World Cup to gain an advantage? Is the White Paper an opening basis for talks or will it be plastered with red lines laid down by elements of the Cabinet and the Conservative Party? Is this a basis for negotiation or an inflexible position?

No, this is not cherry picking. All trade agreements are bespoke. This proposal puts our rights and responsibilities in a new balance that fulfils our joint ambition to establish a deep and special partnership. The reason that we believe in free trade is that it is unambiguously positive for both sides. The EU has a surplus of goods trading with the United Kingdom, so it has an extra incentive to agree a partnership on that basis. We want to discuss these proposals with it and hope it will be able to accept them but, as with all these things, we have already made considerable compromises in the negotiations, as has the EU. Those of us who have been MEPs in the past know that all EU negotiations result in considerable compromise from both sides. It is difficult to see how we can compromise much further in the proposals but, nevertheless, we will engage in the discussions in good faith.

Some of our greatest earnings are from carriage by sea, and a great many of our goods go through Europe but are destined for countries outside it. Will those goods be exempt from the new regulations or will they be required to accept them, if it is no longer in their interest to pass through European ports?

All exports need to be WTO-compliant. A lot of the rules for maritime and sea transport are set at an international level, and exports will need to continue to comply with those regulations.

My Lords, on the theme of cherry picking, I take an example from paragraph 10 of the Oral Statement:

“In delivering on this vision, the Government propose an innovative and unprecedented economic partnership”—

you can say that again—

“maintaining frictionless trade through a new UK-EU free trade area for goods underpinned by a common rule book”,


“covering only those rules necessary to provide for frictionless trade at the border”.

Given the multiplicity of borders—there must be hundreds across Europe—is this meant to apply to all of them and, if so, what can we expect of other countries? It would surely strike them as a bit strange, if not unreasonable, if it applied only to borders in which we had some interest but not to everybody’s border.

This is concerned with the border between the United Kingdom and the rest of the EU, whether at Dover/Calais or the Northern Ireland/Ireland border. That is principally what we seek to address with these proposals.

My Lords, I congratulate my noble friend and his colleagues on the White Paper. I entirely agree with the thrust of it, the balance of it and, at long last, that we have grasped the need for compromise and being honest about the challenges that we face. In that spirit, therefore, I urge him and his colleagues to be honest and transparent about the consequences of the compromises contained in the White Paper, specifically about the role of the ECJ. Yesterday afternoon, I received an email from one of our colleagues in the Conservative Party, Mr Brandon Lewis, who said that the plan and proposals at Chequers meant that we would control our laws. It is apparent, when you read paragraph 42 on page 93, that the CJEU—the European Court of Justice—will continue to have a role in the interpretation of the laws and regulations of this country. I urge my noble friend to be honest about that, so that we can go forward together as a country, united and clear about our direction.

I thank my noble friend for his comments. These judicial areas are complicated, so perhaps I should briefly set out our position for the House. Where we have a common rule book and there is a dispute between the UK and the EU, the Joint Committee, by mutual consent, or an independent arbitration panel will be able to ask the CJEU to give a binding interpretation of a common rule. If we are allowed to participate in EU agencies, the Prime Minister has already said that we will accept the remit of the ECJ in the application of the rules of those agencies, but that is far from the overreaching impact that the ECJ has at the moment.

My Lords, I welcome the White Paper and look forward to reading it. I am afraid I have got to only page 14 so far, but my noble friend Lord Kerr was always ahead of the game. When the former Secretary of State for Exiting the European Union appeared before the EU Committee of your Lordships’ House, he talked about the negotiations on economic, security and foreign policy issues taking place at a different rhythm and pace over the next few months. Could the Minister say more about how he sees the negotiations taking place now, based on the White Paper that we have just received?

The Prime Minister has been clear that we want the negotiations to proceed at pace. They are all important issues—on security and external affairs as well as the economic partnership—so they are all going on in parallel. The new Secretary of State will be meeting Michel Barnier shortly and the negotiating teams are ready and willing to work over the summer, which is unusual in Brussels. Nevertheless, there is willingness on both sides to address these issues and to push forward at pace, in the hope of reaching an agreement by October, as we have targeted.

My Lords, the Statement refers to the “flexibility” that we will retain on financial services and the services sector generally, but the White Paper acknowledges that in doing so we will reduce our access to EU markets. Could the Minister put a figure on the cost of this change?

We want a deep and ambitious partnership on financial services. I set out earlier exactly how we see it working. We think that is in the interests of both parties, but it is impossible to put a cost on or indeed outline the benefits of anything until we have agreed it.

Would my noble friend be good enough to accept that trade is like Gaul—divided into three parts? You have direct trade between, say, India and the United Kingdom, trade between the EU and the United Kingdom, and re-export. All those will need different solutions, unlike the ideas put forward by the two parties opposite.

My noble friend makes a good point, which is why we need to try to reach agreement with the EU using our new customs model, which we believe will be a good solution.