UK-EU Summit

Statement

My Lords, I will repeat a Statement made by the Prime Minister yesterday. The Statement is as follows:

“I will update the House on the three recent trade deals that we have struck in the national interest.

First, however, I would like to say something about the horrific situation in Gaza, where the level of suffering, with innocent children being bombed again, is utterly intolerable. Over the weekend we co-ordinated a response with our allies, as set out in my statement with President Macron and Prime Minister Carney last night. I want to put on record today that we are horrified by the escalation from Israel. We repeat our demand for a ceasefire, as the only way to free the hostages; we repeat our opposition to settlements in the West Bank; and we repeat our demand to massively scale up humanitarian assistance to Gaza. The recent announcement that Israel will allow a ‘basic quantity of food’ into Gaza is totally and utterly inadequate, so we must co-ordinate our response, because this war has gone on for far too long. We cannot allow the people of Gaza to starve, and the Foreign Secretary will come to the House shortly to set out our response in detail.

Let me turn now to the three deals that this Government have struck. The principles we took into the negotiations are clear and simple. Does it drive down bills? Does it drive up jobs? Does it strengthen our borders? In each case, the answer is a resounding yes. These deals release us from the tired arguments of the past and, as an independent sovereign nation, allow us to seize the opportunities of the future—a clear message, sent across the globe, that Britain is back on the world stage.

We have a trade deal with the world’s fastest-growing economy, India, cutting tariffs for British industries, which is a huge boost for our whisky and gin distilleries—their only concern now is whether they can produce enough to sell—and for our car manufacturers, with tariffs slashed from over 100% to just 10%, and no concessions on visas. We have a trade deal with the world’s richest economy, the United States, slashing tariffs, saving thousands upon thousands of jobs in car manufacturing in places such as Jaguar Land Rover, protecting our steel and aluminium exports, and safeguarding the interests of our hugely important pharmaceutical sector.

But I can already see that, when it comes to this hat trick of deals, it is our new partnership with the EU that the Opposition most want to talk about—and given their abject failure to strike a deal with India or the US, I cannot say I blame them—so let me spell out the benefits of this deal, which gives our country an unprecedented level of access to the EU market: the best access of any nation outside the EU or European Free Trade Association.

I will start with our security. When Russian tanks rolled into Ukraine over three years ago, a gauntlet was thrown down, and it is our responsibility to step up. That is what this world demands, and it is what this partnership delivers, strengthening our national security through a new security and defence partnership that paves the way for British defence firms to access the EU’s €150 billion defence fund. That will support British jobs, British wages and British livelihoods.

The partnership also increases co-operation on emissions trading, saving UK businesses from having to pay up to £800 million in EU carbon taxes—once again, backing British businesses. The deal will drive down bills with increased co-operation on energy, because the agreement negotiated by the Conservative Party left us with a more expensive way of working with our neighbours—a needless rupture, despite our grids being connected by undersea cables. This partnership brings those systems together again, benefiting British bill payers and boosting clean British power in the North Sea.

This partnership also strengthens our borders, because, again, the previous deal left a huge gap and weakened our ability to work together to tackle illegal migration—the ultimate cross-border challenge. It closes that gap, including joint work on returns, preventing channel crossings, and working upstream in key source and transit countries, co-operating along the whole migration route to strengthen our hand in the fight against the vile smuggling gangs. It boosts our co-operation on law enforcement, combating terrorism and serious organised crime with closer operational work with agencies such as Europol and better sharing of intelligence and data, including, for the first time, facial imaging.

This partnership helps British holidaymakers, who will be able to use eGates when they travel to Europe, ending those huge queues at passport control. It delivers for our young people, because we are now on a path towards a controlled youth experience scheme, with firm caps on numbers and visa controls—a relationship we have with so many countries around the world, some of which were even set up by the party opposite. We should be proud to give our young people that opportunity. And, not for the first time, this Government have delivered for Britain’s steel industry, protecting our steel exports from new EU tariffs and backing our steel sector to the hilt.

Last but certainly not least, we have a new sanitary and phytosanitary deal, as promised in our manifesto, which will cut the price of a weekly shop, meaning that there will be more money in the pockets of working people, less red tape for our exporters, no more lorry drivers sitting for 16 hours at the border with rotting food in the back, and no more needless checks—the inevitable consequence of the Conservatives’ policies, which made it so much harder to trade even within our own market, between Great Britain and Northern Ireland.

The deal means that British goods that have long been off the menu in Europe can regain their true place, including shellfish, which are hugely important for Cornwall, Devon and Scotland. Not only does our deal on fish provide stability, with no increase in the amount that EU vessels can catch in British waters, but the new SPS agreement slashes costs and red tape for our exports to the European market. We sell 70% of our seafood to that market, so there is a huge opportunity that Britain’s fisheries, in which we have made a £360 million investment, will now look to exploit.

The reaction to this deal from business has been absolutely clear. I do not have time to run through the list of supportive quotes from businesses, but the new partnership has been backed by the Federation of Small Businesses, the CBI, the British Retail Consortium, Asda, Morrisons, Salmon Scotland, the Food and Drink Federation, the British Chambers of Commerce, Ryanair, Vodafone, and producers of meat, milk and poultry—the list goes on and on.

I wonder whether that long list of businesses coming out in support of the deal will temper the reaction of the leader of the Opposition. For weeks now, she has been dismissive of the benefits of any trade deal, in defiance of her party’s history. It is not just the Conservatives that I am talking about here; the honourable Member for Clacton, who is not here, and the right honourable Member for Kingston and Surbiton have both shown, in their own way, that their parties do not get it. If your whole approach to our allies is about striking a pose, you do not get to strike a deal. What that means in a world like ours, where deals are ever more the currency of security and justice, is that you do not get to make a difference, and you do not get to deliver for Britain. That is what this partnership means.

For years, we were told that this could not be done. What the Conservatives meant was that they could not do it. We were told that a deal with the US or India was impossible; what they meant was that it was impossible for them. We were told that a choice must be made between the US and EU; what they meant was that they could not do a deal with both. This Government can and will, because we stay in the room, we fight for the national interest, and we put the British people first. These deals represent a signal that we are back on the world stage—a global champion of free trade, playing our historic role on European security—but above all, they are deals that put money in the pockets of working people, because that is what independent, sovereign nations do. I commend this Statement to the House”.

My Lords, I thank the noble Baroness for repeating the Statement. I say at the outset that we share her concern about the humanitarian situation in Gaza, and I think everyone in this House would wish for a peaceful and swift resolution.

I have been around long enough to know that when a Prime Minister, of any party, tells you a deal is a triumph, you need to look pretty fast at the small print. In this latest case we do not yet have most of that, which is actually quite a problem, but the basics are clear: EU control of our food standards restored; Britain as a rule-taker, not a rule-maker; the ECJ back; dynamic alignment back; and, frankly, our fishermen sold all the way to the Dogger Bank in a December gale. All this for a packet of sausages that the French do not actually want. The promise is that we might—potentially, where appropriate, is what the communiqué actually says—be able to go on a summer holiday through passport e-gates. That is something the UK has continued to give EU citizens ever since Brexit. Why did they have to give up so much to get something that we in this country, who have real good will to our European friends, have given to EU citizens for decades?

I have defended some dud deals at that Dispatch Box in my time, and some good ones. You get to sniff them out—and this one is a dud. It reminds me of some other negotiations with the EU in the past: surrender all the key principles first, then try to negotiate the details later when your leverage is gone. So, having been told in the Labour manifesto that there will be no freedom of movement, the Government have a proposed scheme that could see tens of thousands of working-age migrants come to Britain, potentially with the ability to settle and bring dependants. Can the noble Baroness confirm whether reports that the scheme may be capped at 100,000 people are correct, and will she say what upper age limit the UK is seeking for the scheme?

The deal has again made Britain a rule-taker, leaving our farmers subject to rules made in Paris and enforced in Brussels, while they have no voice at the table. What assessment have Ministers made of the impact of EU regulations and dynamic alignment on the viability of family farms in this country?

My Lords, I thank the noble Baroness for repeating yesterday’s Statement. I begin by associating these Benches with the sentiments expressed in the Statement on Gaza. Recent Israeli action is indeed horrific and requires a response. Yesterday’s actions by the Foreign Secretary are welcome, but the most obvious way in which we can demonstrate our further support for the Palestinian people is to support their demand for statehood. Can the noble Baroness confirm whether this option is under active consideration by the Government?

On Europe, the joint statement issued by the UK and EU begins by pointing out that this was the first UK-EU summit since Brexit, and this is the context against which the outcome should be judged. It was, of course, a real dereliction of duty for the previous Government to turn their back so comprehensively on our largest and closest partner. A reset in our relations is long overdue in the national interest.

Perhaps the biggest achievement of the summit was that it represented a milestone in rebuilding trust between the UK and the EU. For too long, too many in British politics have poured scorn on the EU while placing their hopes on replacing ties with Europe with countries which are now run by unreliable allies. The EU has noticed this and has been understandably wary about treating with the UK as a result. Against this background, the specific outcomes of the summit are to be welcomed, whether on freer trade in food products, energy, security, defence, or youth mobility, and I am sure pet owners will also be cheering to the rafters the return of the pet passport.

It will surprise no one, however, that we on these Benches see these agreements as but small, tentative first steps towards restoring a much deeper, more productive relationship with the EU. The progress on veterinary and plant health requirements is particularly welcome as it will lead to immediate benefits to the food and agriculture sectors; and, as the Statement made clear, it has even been welcomed by the Scottish salmon industry. The return of frictionless trade in these areas is one of the main reasons why yesterday’s deal will add 0.2% to GDP.

My Lords, I am grateful to both noble Lords for their contributions on the situation in Gaza. It is dire; it gets worse by the day. Some will have heard Tom Fletcher from the United Nations on the radio yesterday speaking about his fear of the number of babies who could die in the next 48 hours if aid does not get in quick enough. I understand that a very limited amount of aid went in yesterday. There are lorries at the border now waiting to take more aid in. There are containers available, and discussions are ongoing to get that aid in. My noble friend Lord Collins will be repeating the Statement in the House tomorrow so there will be the opportunity to ask further questions on that.

I felt that this debate ran true to form. On the Conservative Benches the feeling was, “You’ve gone too far, it’s terrible”. On the Liberal Democrat Benches it was, “You haven’t gone far enough”. I feel that we have pitched ourselves in the right place. It was an uncharitable and, unfortunately, predictable response from the noble Lord, Lord True. He had questions and criticisms on e-passport use and asked why the deal was so bad last time. He should ask his own party that because the deal was done by his Government.

I will go through some of the issues raised. The noble Lord, Lord True, asked about the emissions trading system. It is a ridiculous situation that British businesses—a trade worth, I think, £7 billion—are at risk of paying what is, in effect, a levy to the EU. That has gone. That has to be in the interests of energy prices and British industry. That money was going straight from UK exporters into the EU budget. There is a better way of doing this. This streamlines the regulatory barriers. CO₂ storage is a growth industry in the UK, with enormous potential for investment and jobs. Linking the ETS removes the disincentives for EU emitters to store CO₂ in the UK. That makes our industry far more competitive. That is an important point.

My Lords, I congratulate the Government on their progress in strengthening the European arm of NATO in the light of the changed circumstances we have, and on the start they have made on putting us back into a healthier relationship—a soft Brexit—with the European Union, to replace the hard Brexit that has done so much harm to our economy in recent years and continues to do so. But will she acknowledge that this is by no means a final deal, and there are many questions to be asked and many other areas to be opened up, such as benefits that might be brought to other sectors of the economy, to get us back to something like the healthy trading relationship we had with the EU before Brexit intervened? Will she confirm that we can make great progress without in any way compromising the public vote in the referendum? The hard Brexit we had was quite unnecessarily, fiercely anti-European. Can she reassure us that this is only the start of a continuing process of negotiation, so that we see firm detail and more positive results for interest groups in addition to the farmers?

My Lord, the noble Lord makes an experienced and wise point. There is more flesh to be put on the bones of these particular agreements as well. For me, one of the most important things that came out of this is that now we have a willingness to talk, engage and reach agreement. That has been sadly missing, and this has been damaging to the British economy and the British people. There will be an annual summit as well, and there are a number of issues that are referenced in the documentation. I am thinking, for example, of those in the creative industries, touring musicians, et cetera—that is mentioned as well. There is more detail to be put on paper on the youth experience scheme and all those issues. But, yes, the annual summit is a way to have these discussions, and we are also looking to trade with other countries around the world. We all, I hope, want to see a better relationship with the EU—one that is mature—where we can have those discussions. Where we agree and can move forward, we want to do so. So there are outstanding issues and details here, and we intend to make that progress in the interests of the economy and the people of this country.

My Lords, I congratulate my noble friend the Minister on the Front Bench and I very much welcome this Statement on SPS, electricity trading and emissions trading. We must not forget that UK energy was looking for a deal on electricity trading and the alignment of schemes in respect of emissions trading. In congratulating my noble friend and our Government on bringing us further towards the European Union, I point out and will ask the Minister about paragraphs 30 and 44 of Common Understanding, which was launched on Monday. It said:

“The European Commission should consult the Government of the United Kingdom at an early stage of policy-making”

in respect of SPS, emissions trading and electricity trading. Can she, at this stage, give us a timeline in relation to this? I declare an interest as a member of the Government’s Veterinary Medicine Working Group. In the fullness of time, I would welcome a resolution in that regard.

I am grateful for the noble Baroness’s comments, and she is right about the importance of these particular issues. I cannot give her an exact timeline, because the summit was only last week. But we want to work at pace on all these issues because, between summits, we want to see progress. We need to put the detail on the bones. But she is right about the issue of consultation, which is what has been missing throughout the time since Brexit. We need this consultation. We have been in government for only eight months, and the progress that has been made in eight months is good and something we should be proud of. But I take the noble Baroness’s point: you need the detail and, as soon as the timeline is available, we will share that information.

My Lords, I congratulate the Government on pressing ahead with the youth experience scheme, and indeed with negotiating Erasmus+ —schemes which, in answer to the naysayers, will increase opportunities for less privileged young British people. However, it is disappointing that there are no concrete proposals on creative professionals touring. This is urgent. Many musicians cannot tour Europe, and of course this affects all the other arts too: visual arts, fashion, film and theatre. Finally, will there be discussions about rejoining Creative Europe, which would benefit us hugely, including in film?

I am grateful to the noble Earl, who has been a good advocate for exchanges and touring artists. I can tell him that paragraph 15 of the common understanding says:

“The European Commission and the United Kingdom recognise the value of travel and cultural and artistic exchanges, including the activities of touring artists. They will continue their efforts to support travel and cultural exchange”.

That indicates the direction of travel, and that we do want to ensure that there are such arrangements. I cannot answer the noble Earl him on Creative Europe, as those discussions have not taken place. Not everything was dealt with at this summit, and that is one of the issues that we wish to see progress on.

My Lords, the outcome of the summit is welcome, and the restored trust has been vital, although it does leave a lot of detail to be filled in. I fear that the Conservative reaction is insulting to business. There are also limits to what we can get, imposed by the Government themselves. For instance, even though, very welcomely, some red tape will be cut by the SPS agreement—of which we are yet to see the detail—there will still be customs hoops to jump through. Why are the Government maintaining their red lines against the single market and customs union? We know the ideology around that, but what is the practical value? I heard the Minister talk about the India and US agreements, but the volume of the EU market is far more important and the Government are limiting our ability to improve life for businesses and citizens.

I do not accept entirely the noble Baroness’s parameters. We are where we are, and in our manifesto we set out what the clear red lines were, recognising the public vote on Brexit. As well as having an agreement with the EU, we are looking further abroad as well. We have two agreements in place with the US and India, which, as she will know—as she was in those many debates until very late into the night—so many said would never be done if we had any arrangement with the EU, and we have proved them wrong. It is important that we look across the world for agreements as well, and we will continue to ensure that our relationship with the EU is one that is mutually productive.

My Lords, I must declare an interest as a French farmer, in a small way, in my smallholding in France. In any case, I would welcome any agreement that I believed would remove or reduce unnecessary burdens to trade resulting from SPS regulations across the Channel. Indeed, I was party to the negotiations which ultimately culminated in an agreement to which the UK and all 27 members of the EU are party, called the WTO Agreement on the Application of Sanitary and Phytosanitary Measures. It says that SPS measures shall not be applied as

“a disguised restriction on international trade”.

Yet that is what EU countries do, and the EU has been found in repeated violation of this agreement. The agreement goes on say:

“Members shall accept the sanitary or phytosanitary measures of other Members as equivalent, even if these measures differ from their own”.

Ours are currently identical. Why, therefore, does the EU not accept them as such? The agreement goes on to say that control, inspection and approval procedures are to be

“completed without undue delay and in no less favourable manner for imported products than for like domestic products”.

We know that does not happen for our exports to the EU.

I ask the Minister why she believes that the EU will adhere to a rather vague and ill-defined agreement that she proposes to reach, when it in flagrant and repeated violation of an agreement that has been in force under international law for some years?

My Lords, we are confident about this agreement and confident in our relationship with the EU. All those who export to the EU and have produce going to the EU, as well as all those who bring produce into this country, know how urgent and important it is that we reached the agreement. We have confidence in it, we believe that we will adhere to it, and we will ensure that the EU does too.

My Lords, will the noble Baroness accept the congratulations that she should convey to our Prime Minister on this very important step in rebuilding our relations with the European Union? They are pragmatic steps, but they open up the way to great future co-operation. For example, the framework of alignment that has been agreed on energy and phyto- sanitary standards is capable of being extended to other sectors of the economy, such as chemicals, pharmaceuticals and engineering, which would be important. Finally, does she note that, at a time when the security situation in Europe is deteriorating fast, and there is talk of President Trump withdrawing from supporting Ukraine, it is crucial that Europe gets its act together on defence and rearmament, and that what is in this agreement will enable that to be done with much greater effectiveness?

I will pass the noble Lord’s comments to the Prime Minister, the Minister for the Cabinet Office and others involved in the negotiations. We will proceed only when it is in the interests of British businesses and the people of the UK. Each case is being taken step by step and on its own merits, and there is certainly scope for mutual benefit. The noble Lord is right to mention security and defence. He will be pleased to know that, in the second paragraph of the second chapter of the Common Understanding document, it was highlighted that, at the heart of all this, is common security and defence. As we have seen with the invasion of Ukraine, it is more important than ever that we have a strong and secure Europe, and that we are all working together to the same ends.