EU-UK Trade and Cooperation Agreement

Motion to Take Note

Moved by

That this House takes note of the Trade and Cooperation Agreement reached between the United Kingdom and the European Union.

My Lords, in opening in this difficult week, I affirm our unqualified and unending respect for this Parliament and its institutions, and for democracy and democratic decisions.

I am grateful to be opening this debate. No fewer than 125 noble Lords took part in last Thursday’s debate for the Second Reading of what was then the European Union (Future Relationship) Bill, but the time for contributions and reflections was necessarily compressed—as it is again today, I understand. With much still to pore over and deliberate, I welcome the opportunity—as, I know, will my ministerial colleagues—that today’s occasion affords to take your Lordships’ wisdom further. I particularly look forward to hearing the maiden speech of my noble friend Lord Wharton of Yarm.

Since last we were here together, we have welcomed in a new year and a new chapter for the United Kingdom. We have kept faith with the British people who voted in 2016 to leave the European Union in the largest democratic exercise in this nation’s history: a vote for freedom, for parliamentary sovereignty and for change.

I am grateful to your Lordships for enabling the Bill’s passage in such unusual circumstances. Its enactment into law enabled the trade and co-operation agreement to be provisionally implemented and our future relationship with the European Union to begin. As I said in this House at Second Reading:

“The nature of any compromise is that not everyone gets what they wish for.”—[Official Report, 30/12/20; col. 1921.]

Overall, however, this deal is good for both the United Kingdom and Europe. A no-quota, no-tariff deal is good news for families and businesses in every part of the United Kingdom.

This Canada-style agreement, worth more than £650 billion, is the first free trade agreement based on zero tariffs and zero quotas that the EU has ever reached with an independent country. As of 1 January, the United Kingdom now enjoys full political and economic independence. The pledges made to the British public during the 2016 referendum and in the general election last year have been delivered. From now on, our laws will be determined by our elected politicians, and MPs will be accountable to the voters who send them to Parliament to legislate on their behalf.

The Canada-style agreement takes back control of our laws, borders, trade, money and waters. It ends any role for the European Court and protects the Belfast/Good Friday agreement. It provides certainty for business, from service providers to our world-leading manufacturers—including our car industry—thus safe-guarding highly skilled jobs and investment across our country.

We have protected the integrity of our internal market and Northern Ireland’s place within it thanks to the agreement on implementing the protocol that exists as part of the withdrawal agreement. That was struck with the European Union earlier in December by my right honourable friend the Chancellor of the Duchy of Lancaster. To support traders in preparing for the end of the grace period, the UK Government will work with supermarkets, retailers and their suppliers to move to new end-to-end digital systems that will enable goods to be moved in accordance with the protocol in the most streamlined way possible. This will be backed by a major injection of new UK Government funding as part of the broader support package we have announced.

[Inaudible]—has always said that to crash out of the transition with no deal would have been unthinkable, creating uncertainty, endless negotiation and damage to businesses in exposed sectors, particularly manufacturing and farming. To flirt with that option was highly irresponsible, so, faced with this deal or no deal, we voted in the national interest for the least-worst option for business, supply chains, the economy and jobs.

Make no mistake: this is Prime Minister Johnson’s deal. We believe that it falls short of what the Government promised. Ultimately, the Prime Minister owns the agreement and must take full responsibility for its shortcomings, including any lack of preparedness.

This is a thin deal and its flaws will be exposed over time. It will need fixing for the future. Labour will guard against any attempts to water down working and environmental protections. We accept that we will inherit this deal after the next election, but we intend to build from it as a means of promoting British interests.

With the deal now in force, Ministers must act to properly support British industry as it adjusts to new trading rules, builds supply chains and expands into new markets. We are focused on making this country the best place to be. The biggest challenges facing our country and planet require co-operation and international solutions. Labour in government will work with others to tackle those.

In his statement announcing the deal, the Prime Minister incorrectly claimed that there will be no new non-tariff barriers on British business. Since then, we have heard suggestions from other Cabinet Ministers that non-tariff barriers might be a good thing because they get businesses match-fit for international trade. After a year of economic uncertainty and Covid upheaval, how can any new costs to business be positive?

My Lords, the Minister’s suggestion in his opening remarks that the people of this country were not free when we were members of the European Union is deeply offensive, and I ask that he withdraws it.

Last week, we had three minutes to speak on an 85-page Bill to give domestic effect to this agreement. Today, we are given two minutes to debate the detail of the most important trade agreement we are ever likely to sign. To call this a farce is an understatement. It is a mockery of parliamentary accountability and scrutiny. The Government have repeatedly heard representations from across this House expressing deep opposition to the continuation of farcical procedures such as this. When will they listen?

In the time available, I will focus on two issues: the collaboration between the UK and the EU on energy issues and scrutiny of EU energy measures; and the decision to withdraw from the Erasmus scheme. As the Minister will be aware, the energy sector is concerned about the impact that our withdrawal from the single energy market will have on formal collaboration with the EU on research projects. This is particularly important as the UK and the EU seek to decarbonise their energy supplies. What reassurance can the Minister give the House on this point?

Secondly, Northern Ireland will continue to be governed by the rules of the single energy market. What provisions do the Government intend to put in place for the Northern Ireland Assembly and this Parliament to scrutinise EU legislative measures governing that market, and how will the people of Northern Ireland and their representatives be able to influence the rules that now apply to them?

Lastly, will the Government reconsider their position on Erasmus? The Minister just told the House that we are not walking away from Europe, so why leave the Erasmus scheme, which includes many non-EU countries? The Turing scheme proposed as a replacement is not only vaguely defined; more importantly, it is a unilateral scheme, meaning that we will not gain from an exchange of students, which is what makes Erasmus such a rich experience for students and countries taking part. I appeal to the Government to rethink this.

My Lords, I declare my interests in Wales and in Cardiff University.

In the Trade Bill debate, many warned of the long-term consequences of the UK Government’s approach to the devolved Administrations in recent times. Responding, the noble Viscount, Lord Leckie, stated that the Government are now listening. Communications improved in the autumn but must now be maintained and accelerated, with reinstated regular scheduled meetings between First Ministers in the devolved Administrations and the Prime Minister, to share issues of concern early to return stability to the union.

The Bill to implement the agreement was pushed through with remarkably little scrutiny. Power has been amassed in Whitehall with little regard for the checks and balances needed for the functioning of the internal market, yet this morning’s news already is of problems at ports—the very routes for our trade for livestock and fish. I remind the House that Wales is the route to Ireland.

Research and innovation is crucial to UK science. We must not slip. Our collaborations must be re-established and strengthened through Horizon Europe, European Research Council initiatives, Erasmus and scientific training opportunities.

For individuals, medical difficulties are already emerging. Take medical cannabis, the supply of which must be unlocked urgently for children with refractory epilepsy, for whom repeated episodes of uncontrolled fits risk further brain damage.

The treaty commits the UK to the use of the precautionary principle, but it will come under pressure from other trade negotiations, notably the US, to abandon this principle, and from developments such as the decision to start investigating gene editing. Can the Minister explain how this obligation set out in the agreement will be fulfilled and how the agreement will be honoured?

My Lords, I pay tribute to all those who have shepherded Brexit legislation through this House since I stood at that Dispatch Box and triggered Article 50. I also congratulate the Government, especially the Prime Minister, my noble friend Lord Frost and the entire negotiating team, on the deal.

I do not want to dive into details on the Bill, but to take a step back and ask some basic, simple questions—the same questions that I asked shortly after I resigned as a Minister. Having taken back control, what do we want to do with our new powers? Do we want to chart our own course and paddle our own canoe and, if so, what is the destination, or is the plan to follow in the EU’s wake?

From those questions, many others follow. Consider financial services, and here I draw your Lordships’ attention to my entry in the register. I am delighted that the Chancellor wants to make the UK a global leader in fintech and green finance, but as we do that, should we not think more broadly about how we might update but not weaken our regulations—which after all were created for an analogue age—for the digital green future, even if that might mean divergence from the EU at some point? Are we too fixated on equivalence?

We should ask similar, challenging questions about other parts of the economy. For example, how can we make the UK the best place to innovate in green, sustainable technology? How can we ensure that our employment laws continue to make us globally competitive and are fair for workers in the gig economy? The list of questions is long, and the answers may or may not require us to diverge from the EU in the future, but we must answer them now, starting with those basic ones if we are to prosper in the years ahead, and, more immediately, if we are to make the most of holding the presidency of the G7 and hosting COP 26.

At the moment we have a laundry list of policies—reviewing chemical regulations, banning live animal exports, blue passports, taking back control of our waters and so on—so I look forward to hearing the Minister, with his usual eloquence, putting my mind at ease and giving me the confidence that there is indeed an oven-ready plan and strategy in the post-Brexit world, and that we are not making things up as we go along.

My Lords, in two minutes it is not possible to deal with the inadequacies of this legislation and the treaty—from security to services, and from bureaucracy to our diminishing global influence—but I will just say this on security. The withdrawal from Europol and Eurojust, the failure to have real-time entry into the Schengen database, and the way in which we have withdrawn from the European arrest warrant will be regretted for a very long time to come.

I want to look to the future. The Minister mentioned Gibraltar and the issues concerning Northern Ireland. The two taken together—the proposed treaty for Gibraltar and its remaining in Schengen, and the single market, which effectively continues in Northern Ireland, with the border running down the Irish Sea—paint a very different picture for the future which will be exploited by those in the Scottish National Party who seek to use every opportunity to reopen and re-engage with the destruction of the United Kingdom. I believe that this deal accelerates the possibility of a united island of Ireland within the next 25 years. It is a century since the 1921 legislation was introduced as part of the agreement on partition. A century later, we are faced with the contradictions that exist in terms of Northern Ireland and its relationship with the European Union and the contradictions that are therefore accorded to its relationship with the rest of Great Britain.

All those things bode extremely ill for the future and, to top it all, we have replaced the Brussels bureaucracy—used so much in the Brexit arguments—with the bureaucracy that we see today on our borders in terms of distribution, hold-up and diminution in trade. It is a disaster.

My Lords, first, I thank the team of the noble Lord, Lord Callanan, for engaging with me on the patent attorney queries in the TCA.

That enables me to move on to financial services and the Governor of the Bank of England’s warning that we should not pursue equivalence if it means following the EU’s rule of software counting as bank capital—an idea that I quashed in my EU days. Equivalence is defined as having legislation at least as stringent, which should mean that it is free from maximum harmonisation and allows higher standards of capital. Has that been acknowledged as a starting point? If not, then I agree that it is a problem.

Turning to competition, I welcome potential co-operation between competition authorities, and I hope that it happens. Findings show that consumer harm resulting from cartels and dominance often leads to follow-on actions for damages, so is there an appetite to re-enable UK and EU follow-on actions relying on one another’s findings?

On state aid, I welcome the exemption for compensating damage caused by natural disasters or exceptional non-economic occurrences, and I note that it would restrict some of what the EU did in the financial crisis. However, subsidies financed at supra-national level are excluded from the independent subsidy control bodies and co-operation between such bodies, which seems to cover all EU aid. Does that mean that EU aid is excluded from remedial measures under this agreement, leaving it to WTO measures, or can action be taken under this agreement’s remedial measures?

Finally, does the UK have freedom to create state-owned investment and development banks, such as in Germany? These were grandfathered under EU law but not allowed to be newly created on similar terms.

My Lords, I draw attention to my entry in the register. I share the general relief that a deal was achieved, but the agreement does not cover services.

I am proud of the UK insurance and long-term savings industry—the fourth largest in the world—and there are three connected matters that I would like to raise. The first is the so-called green card. We assume that the UK will remain in the scheme, but early confirmation is vital. Secondly, it is high time that the Government reintroduced an international competitiveness duty into the UK’s regulatory framework.

Thirdly, on equivalence, the UK has granted Solvency II equivalence to EU insurers and reinsurers under all three tests, and we must now seek reciprocal recognition from the EU of the UK’s prudential regime. Equivalence would offer much-needed stability, but I believe that we must fashion far bolder plans for the future. Our skill at brokering insurance is nonpareil, but it is striking how few major international firms have even considered locating their headquarters in the UK. To establish the UK as the leader in financial services, we need a comprehensive strategy with support from the very top to make this an attractive place to be. This requires a proportionate and effective regulatory regime, but it is also about schools, neighbourhoods and the sectors that are being cruelly punished by the pandemic—notably, our hospitality and creative sectors. We must press for what my noble friend the Minister mentioned earlier—reciprocal, visa-free travel arrangements for touring performers and crews.

So, the withdrawal agreement is wholly welcome but we must now move swiftly from the era of mitigation to an era of opportunity.