My Lords, I agree that a line must be drawn internationally against the use of chemical weapons, but does not this terrible war also represent a catastrophic failure of UK foreign policy, beginning with bombast from David Cameron in 2011-12, which I am afraid the noble Baroness has repeated today, that Assad must go, refusing to allow both him and Iran into the negotiations—in other words, excluding the main players? This has never been about a barbaric Assad, as he is, against his people, but a complex civil war of Sunni versus Shia, of Iran versus Saudi Arabia, of the US versus Russia, an inter-state and proxy conflict involving also Israel, Turkey and the Kurds. Britain will remain culpable as long as we adopt a partisan role, rather than an honest broker role to promote a negotiated settlement to what otherwise looks like a war without end.
HL Hansard, 27 March 2018, cols 736-737
My Lords, I, along with other noble Lords, was proud to be a member of a Government who devoted so much time and effort over a decade to help Northern Ireland move from the horror of its violent past towards a better future. The devolved institutions set up in 2007, after a settlement that I helped negotiate, have not functioned for the past 15 months, and there appears to be little prospect of a change in that position. I have heard nothing from the Government to suggest that they have a clue what to do. Former serving Ministers in Northern Ireland such as myself and my noble friends Lord Murphy of Torfaen, Lord Reid, Lord Mandelson, Lady Smith of Basildon, Lord Browne, Lord Rooker and Lord Dubs, feel passionately about the way that the enormous peace progress made has gone so badly into reverse.
It gives me absolutely no satisfaction to say that I really do not think this Government get Northern Ireland. I make no criticism of the Minister or the arguments he has made, or of the Secretary of State—they are both new Ministers and I wish them all the best. But I observe—as I have said before, as has my noble friend Lord Murphy—that the Prime Minister’s approach, which is a kind of fly-in, fly-out diplomacy of insufficient in-depth detailed negotiation and relationship-building with all the parties and their leaders in Northern Ireland, was never going to work. You cannot achieve success in an impasse such as the one we face with this kind of approach. I urge the Government—No. 10 in particular—to reconsider this.
The measures in these Bills should never have had to come to us in the first place. They represent direct rule in all but name. But I do not think we can simply nod them through as a matter of process without addressing some of the implications of the current political impasse. The people of Northern Ireland are left in limbo, facing, as the noble Lord, Lord Empey, has pointed out so graphically, a serious crisis in the National Health Service, probably worse than in any other part of the UK. Last week I had the privilege to meet a group of remarkable people for whom that limbo is particularly cruel. They were members of the WAVE Trauma Centre’s injured group, and I will briefly recount two of their stories.
Jennifer was 21 in 1972 when she and her sister, who was shopping for a wedding dress, went into a Belfast city centre cafe for a coffee. A no-warning IRA bomb tore both Jennifer’s legs off. Her sister lost both legs and an arm. Noble Lords from Northern Ireland will recall the horror of the Abercorn bomb. Peter was 26 when he was shot by a loyalist gang in 1979 in a case of mistaken identity. Because of the configuration of the flat where Peter lived, the ambulance crew could not manoeuvre a stretcher around the stairs. They brought Peter down in a body bag. His father Herbert arrived at the scene and thought that his son was dead. “Oh my poor Peter” were his last words. He had a heart attack and died as Peter was carried to the ambulance. Peter is paralysed and confined to a wheelchair.
There are many more similarly harrowing stories. It is estimated that around 500 people in Northern Ireland are classified as severely physically injured as a direct result of the Troubles, with injuries that are at the very top of the scale: bilateral amputees, paraplegic, those blinded. All the injuries are life-changing and permanent. Because of their injuries most have been unable to work to build up occupational pensions and today have to survive on benefits. The levels of compensation paid through the adversarial criminal injuries compensation scheme were wholly inadequate and there was no disability discrimination legislation in the early days to protect them. Frankly, these people were not expected to live beyond a few years. But they have and the passage of time has compounded their problems as many suffer increasing physical distress as a result of deteriorating health and chronic pain.
They are campaigning for a special pension of the type that is in place in most other countries that have suffered from conflicts similar to that in Northern Ireland. All they want is some semblance of financial security and independence as they grow into old age in the most difficult circumstances. I find their argument compelling. The pension has been costed by independent consultants at around only £3 million to £5 million per annum—a figure which will reduce year on year as the majority of the severely injured are moving into old age. I appeal to the Government to provide this money now. It is a small amount to rectify a big injustice.
All the Northern Ireland parties are on record as saying that they support the idea of a pension for severely injured people such as those who come to see them and argue their case. But saying they support it is about as far as it has gone because their support for the severely injured is not unconditional. Of the 500 severely injured, there are 10 or so who were injured by their own hand; for example, planting a bomb that exploded prematurely. Of the 10, six are loyalist and four republican. It is no surprise that the DUP and Sinn Féin are split. The DUP says there can be no pension for those injured by their own hand. Sinn Féin insists that they cannot support a pension that excludes them as this would be tantamount to accepting a hierarchy of victims.
The injured group, who are unfairly drawn into this toxic debate, argue that it is not for them to say who should or should not qualify. What they do insist is that it is unjust, unfair and immoral for politicians to say that because they cannot agree about 10 people the other 490 must get nothing. I totally agree with them, and I hope the Minister will respond positively. The injured group, all of whom have been injured through no fault of their own, regard their plight as being as much a part of the legacy of Northern Ireland’s violent past as anything else, and the legacy issues are not devolved entirely. But the Government refuse to accept that they are part of the legacy for which they have responsibility. If the devolved institutions are, for whatever reason, unable to deliver on this—and of course, suspended, they are unable to deliver on this; and tragically, we are unlikely to see those institutions in place for some considerable time—the Government at Westminster surely must step in now, because it would be shameful if the people who have suffered so much through no fault of their own were told that nothing can be done because of political buck-passing.
On 20 February, in the other place, the Secretary of State said that she recognised the Government’s responsibilities to,
“provide better outcomes for victims and survivors—the people who suffered most during the troubles”.—[Official Report, Commons, 20/2/18; col. 33.]
I agree, and I appeal to her and to the Minister to act now. They have the power to do so. It is a very small amount; it would not be noticed on the overall allocation for Northern Ireland or, indeed, the Whitehall budget. It would not be noticed at all. I have met men and women in the WAVE trauma group who by any definition have “suffered most”, in the Secretary of State’s phrase. Unless both this Parliament and the Government accept that responsibility and act immediately to provide pensions for these 490 people, it will be to our eternal shame.
My Lords, I am very grateful to my noble friend Lady Kennedy of The Shaws for enabling me to speak to this amendment on the common travel area and to Amendment 198 in my name and those of the noble Baronesses, Lady Altmann and Lady Suttie, and the noble Lord, Lord Kerslake. It seeks to deliver into statute what the Government agreed with the EU on 8 December:
“The Good Friday or Belfast Agreement reached on 10th April, 1998 by the United Kingdom Government, the Irish Government and the other participants in the multi-party negotiations (the ‘1998 Agreement’) must be protected in all its parts, and that this extends to the practical application of the 1998 Agreement on the island of Ireland and to the totality of the relationships set out in the Agreement.”
My noble friend Lord Browne of Ladyton will also address this specifically on Amendment 215, an important amendment that he has tabled with the support of other noble Lords—and noble Baronesses.
We scarcely need to remind ourselves that the Good Friday agreement, which my noble friend Lord Murphy of Torfaen negotiated, was a triumph of politics over violence in post-conflict Northern Ireland. When I spoke in this place over a year ago, I said that a hard Brexit and the hard border that would inevitably follow it would test the delicate balance of the three strands of the Good Friday agreement—relationships within Northern Ireland, between Belfast and Dublin and between London and Dublin—on which the peace settlement is based. That, sadly, is coming to pass.
The Good Friday agreement was a good-faith effort to take the toxin out of identity politics in Northern Ireland, where those who identified themselves as Irish could live with those who identified themselves as British and with those who see themselves as Northern Irish. There is no doubt that since Brexit, which the majority of people in Northern Ireland voted against, the divisive politics of identity is coming increasingly to the fore again. That is profoundly disturbing. Meanwhile, there has not been a local Administration for over a year—an equally profound government failure. Relations north and south are also deteriorating, to the extent that a senior member of the party propping up the Government can publicly call the Taoiseach a “nutcase”, and “not Indian” but a cowboy. To get the full flavour of that particular witticism, noble Lords need to know that Leo Varadkar’s father was born in Mumbai.
The tensions between the UK leaving the EU and Ireland remaining in it are clear. Following the phase 1 joint report on Article 50 on 8 December, the EU produced a 120-page document setting out the legal framework for fallback positions in the absence of agreement between the UK and the EU on the way forward. There were howls of protest and the Prime Minister rejected it out of hand, but where is the Government’s legal framework setting out what they think they signed up to on 8 December? Presumably, it sits alongside the Brexit Secretary’s impact assessments.
We are still desperately unprepared for Brexit and this is no more evident than on Northern Ireland. The UK Government, having agreed with the EU three months ago in the phase 1 agreement to maintain a frictionless border to preserve the Good Friday agreement, continue to fail completely to demonstrate how they can combine an open Irish border with the UK remaining outside both the single market and the customs union with the European Union. There is a simple reason for that—they cannot. Yet in her desperate attempt to keep her Cabinet—never mind her party—together, the Prime Minister continues to spin platitudes and delusion. Just last week, she was still maintaining that the United States/Canada border could be a model for an open border in Ireland. This is just nonsense. There are armed guards patrolling that border; there are flags on it; there is infrastructure on it—all the things that were specifically promised would not be on the border between Northern Ireland and the Irish Republic. If they were, they would be recruiting sergeants for mayhem, civil disobedience and attack.
Ministers still maintain the fiction that technology is the answer. All technological solutions require resources, infrastructure and preparation to implement. They do not substitute for the need for checks and inspections but merely aid the efficiency in crossing the border legitimately and identifying potential breaches of compliance or false declarations. As the former Permanent Secretary at the Department for International Trade, Martin Donnelly, has made clear, on the Northern Ireland border there is absolutely no evidence, and no serious expert in the customs field, who thinks that there can be an invisible technological border. He said that it does not exist anywhere in the world.
I am most interested but I wonder whether the noble Lord has looked at the evidence given to the Select Committee on Exiting the European Union in the House of Commons by the head of Customs and Excise, who said that whatever the outcome of the talks, there would be no need for infrastructure on the Irish border.
I know that evidence has been given but I simply stick to what I have argued, supported by the former Permanent Secretary at the Department for International Trade, who is an authority on these matters.
I remind your Lordships of the report of the Public Accounts Committee in the other place, published last December. It said:
“Government departments’ poor track record of delivering critical border programmes, such as e-borders, leaves us sceptical that they are up to the challenges of planning for the border post-Brexit”.
The Foreign Secretary compares it all to the congestion charge between council areas in London. Sadly, he knows little about the issues and cares even less.
The single market and customs union are not political deals but rules-based legal entities. As an EU member state, the UK has rightly insisted on the strict and consistent enforcement of these rules. Brexiteers, no doubt including the noble Lord, Lord Lamont, pretend that the EU can pick and choose to satisfy the UK that we can have all the benefits of being in the customs union and single market with none of the obligations, and that we can have an open Irish border while rejecting all the rules for keeping it open. That is like saying, “I want my country to play in the World Cup but I won’t recognise the offside rule”.
The success of the Good Friday agreement was that it made the border between the two parts of Ireland virtually uncontentious, both to nationalists, because it had to be completely open, and to unionists, because any constitutional change in Northern Ireland’s status could occur only with a referendum. The threat to it which Brexit poses was eminently foreseeable. It is important also to note that the 1998 agreement is not a domestic contract or statement of intent; it is an international treaty between two states. The British and Irish Governments are bound in international law to implement the terms of this agreement. Its legal precedent is the 1985 Anglo-Irish Agreement, signed by Margaret Thatcher, which gave the Irish Government a right of consultation in the affairs of Northern Ireland. The 1998 agreement makes formal recognition of the Irish Government’s,
“special interest in Northern Ireland and … the extent to which issues of mutual concern arise in relation to Northern Ireland”.
The agreement expressed the British Government’s wish to “develop still further” close co-operation with Ireland.
Strands 2 and 3 of the 1998 agreement, the cross-border and British-Irish strands, are international by nature and their future cannot be determined solely by the will of this Parliament. The British Government are legally bound, in partnership with the Irish Government, to ensure that the functions and objectives of this co-operation are unimpeded by withdrawal from the European Union.
My Lords, on the question of the Good Friday agreement, did my noble friend notice the significant exchange that took place in the House on Monday between my noble friend Lord Judd and the Minister, the noble Lord, Lord Bourne of Aberystwyth? When my noble friend Lord Judd said,
“could the noble Lord confirm that the amendments to be brought forward by the Government will make absolutely sacrosanct the principle of the preservation of the Good Friday agreement?”,
the noble Lord, Lord Bourne, replied,
“My Lords, I certainly can confirm that”.—[Official Report, 12/3/18; col. 1397.]
So the Government appear to have committed themselves to bringing forward amendments, I assume on Report, to enshrine their obligation to observe the Good Friday agreement.
If that is the case, as my noble friend has reminded us, then the Government should be supporting this amendment and putting it into statute.
During the referendum campaign in 2016 two former Prime Ministers, Sir John Major and Tony Blair, both of whom made significant contributions to the peace process, gave speeches in Derry/Londonderry, in which they stressed that imposing a hard border between the north and the south of the island of Ireland would threaten the very basis of the peace process and the stability that the island of Ireland has enjoyed. Both have cogently reinforced their case in recent weeks and are as alarmed as any of us privileged to have served as Ministers in Northern Ireland.
There are more crossing points along this 310-mile border than there are along the whole of the EU’s eastern frontier: 257 compared with 137. The border crosses family farms and separates towns and villages from their natural hinterlands. It is both invisible and ever present, both unremarkable and deeply contested. Even the younger generation on both sides of the border associates the very idea of border controls with conflict and collective trauma. As well as the formal movement of goods, there are many services from cross-border medical and pharmaceutical transactions to people and data movements between supply chains north and south and the infrastructure issues: energy, telecoms, air and rail travel, environmental standards and so on. If, as the Prime Minister insists, Brexit means the UK leaving the customs union and the single market—a rules-based legal entity, not just a political agreement—then Brexit would unavoidably mean the introduction of a hard Irish border.
Is my noble friend aware that the European Parliament has today voted by 554 votes to 110 for a framework agreement that supports seeking UK associate status but that the necessary frictionless trade can be guaranteed only by membership of both the customs union and the single market? That underlines the point he is making.
I understood that this was a proposal being put by, I think, the leader of the European Parliament, Guy Verhofstadt. I am grateful that my noble friend has brought it to the attention of the Committee.
A hard border is one that consists of layers of barriers to movement—that is, tariffs, quotas, bans and regulations—and requires strict conditions and evidence of compliance to cross: declarations, inspections, authorisations, visas and permits. However, while harder borders require greater means of control and management by states, it is not the visibility of a border that determines how hard it is. The experience of a harder border is felt away from the border line in the obstacles faced by an individual or business when seeking to cross it legally to work, trade or operate on the other side. Hard border arrangements therefore threaten the evolution of a successful all-island economy, which is essential to the economic development and long-term prosperity of Northern Ireland.
A combination of the conditions of EU membership and the operation of the 1998 agreement has enabled cross-border economies of scale, supply chains, public service delivery and practical co-operation to flourish. These are particularly essential in areas, such as those in the central border region, which have suffered the consequences of multiple deprivation and conflict.
It is estimated that 30,000 people commute across the border every day. Around 1 million HGVs, more than 1 million vans and 12 million cars move between Northern Ireland and the Republic every year. Northern Ireland is also a vital route to market for goods from the Republic, with the UK acting as a land bridge to markets in the EU 27—some of the goods going through Wales, I might add. Approximately 40% of container movements to or from the island of Ireland go through Northern Ireland.
Also threatened are 142 areas of north-south co-operation that have developed as a result of the implementation of the 1998 agreement. These range from an all-island regime for animal health and welfare to shared infrastructure and emergency healthcare planning and provision. They bring direct benefits to people on both sides of the border, and much of this co-operation relies on regulatory alignment across it. For example, Dublin Airport is the main entry and exit point for air travel for Northern Ireland, around half of whose residents use it for holiday travel. Brexit will also require a new aviation agreement between the UK and EU member states if there is not to be disruption to flights to and from Ireland to the UK.
One of the most tangible successes in economic co-operation post the Good Friday agreement is the single wholesale electricity market, known as the SEM. A report by the House of Lords European Union Sub-Committee on Energy and Environment, published on 29 January 2018, stated:
“The Single Electricity Market (SEM) on the island of Ireland has been a key dividend of the peace process, reducing energy prices in both Northern Ireland and the Republic of Ireland, and helping to achieve decarbonisation targets. It is therefore vital that the SEM is able to continue post-Brexit. Given that its functioning requires the implementation of EU energy laws in Northern Ireland, the mechanics of maintaining the SEM will require careful consideration and new arrangements, particularly if the UK were to leave the Internal Energy Market”.
Food and agribusiness, worth more than £4.5 billion, form the largest cross-border trading sector, relying hugely on EU membership for everything from farmer payments to tariff-free exports. The sector operates on a de facto all-island basis. Examples include the 594 million litres of milk that are imported from Northern Ireland for processing in Ireland. If import tariffs or even non-tariff barriers were put in place, that could decimate the Irish milk-processing sector. Nearly all the wheat grown in Ireland is sent north for milling and then re-imported back to Ireland. Nearly 40% of Northern Irish lamb is processed in the Republic, while a significant volume of pigs and cattle from the south are processed in Northern Ireland. The Bushmills distillery, the oldest working brewery in Northern Ireland, which claims to have invented single malt before the Scots and is located on the beautiful coast of County Antrim, has trucks making 13,000 border crossings each year.
The 1998 agreement was drawn up in the context of shared UK and Irish membership of the EU, and its practical implementation centres on continued regulatory alignment. UK withdrawal from the EU means that the trajectories of the UK and Ireland will now diverge. The divergence will be wide-ranging and will happen in law, trade, security, rights, policies and politics. Brexit therefore risks deep fissures between the UK and Ireland and thus puts the Good Friday agreement at risk. Brexit, with its re-emergence of exclusivist definitions of sovereignty, nationalism and state borders, threatens to destabilise the fragile equilibrium in Northern Ireland. There are those in the Cabinet and in the ranks of the ideological hard right who see the Good Friday agreement as a tedious encumbrance to their form of Brexit, rather than as the cornerstone of a hard-won peace process that is not yet complete. They cannot be allowed to put that at risk. That is why this amendment is necessary and why I hope it will be voted on on Report
I welcome the noble Lord, Lord Duncan, to his post as a Minister and commend the empathy he has shown in responding to the debate, which I think the whole House welcomes.
I will not respond to the whole debate—the hour is too late—except to commend the marvellous, passionate eloquence of the noble and right reverend Lord, Lord Eames. He would be able to get me to follow him on any theological journey, which is asking a lot of me. However, I regret that the Minister has not really responded to the questions put to him. For example, the Brexit Secretary said recently that there would be no problem monitoring imports and exports between Northern Ireland and Ireland after Brexit and there would be no need for a hard border because we already do this for VAT purposes. But we can do it for VAT purposes now only because we are in the European Union’s VAT Information Exchange System—VIES. Outside the EU, we are out of that tracking system. Then, on Sunday, the Chancellor admitted that there was not an example in the world of the kind of technological open border alluded to by the Minister. Who believes for a minute that it can be done, apart from the Foreign Secretary—who thinks that South Armagh and Louth are the same as Camden and Westminster, except with more Guinness?
The Prime Minister insists that Brexit means the UK leaving the single market and the customs union, which I do not accept for a moment. We can Brexit and stay in the single market and the customs union; other countries are outside the European Union but are in either the customs union or the single market. But if she were right, the UK Government in turn would be obliged by WTO rules to enforce hard border arrangements on the island of Ireland because of the change in their relationship with the EU. Therefore, to keep the border open as it is today, there is no alternative to Northern Ireland—and, by implication, the UK—remaining in both the single market and the customs union. I regret that the Minister, despite his empathy, has not really answered that point. I will not press my amendment.
My Lords, having added my name to the amendments in the name of my noble friend Lord Adonis, I want to explain that they are designed to give back to Parliament control of when the European Communities Act 1972 is repealed and to strengthen the effect of the amended Clause 9(1), which was designed to give Parliament a meaningful vote on the final terms of withdrawal and which required that a new statute be put in place before any regulations are made to implement the withdrawal agreement.
I do not need to remind your Lordships’ House that what is at stake is more than a matter of process or procedure. It is ultimately about whether either Parliament or a group of hard Brexiteers who are trying to manipulate the Government will decide the future of the people of this country. What is at stake is people’s jobs and standards of living, which depend on our trading relationships; the protection of labour rights and environmental standards; the alliances on which Britain’s future security depends; and the future of the Good Friday agreement, which has brought peace and stability to the island of Ireland for generations to come but is itself now under attack from assorted Brextremists—including, astonishingly and recklessly, a former Secretary of State, Owen Paterson, who should know a great deal better. It is reckless and downright dangerous to put Brexit dogma before peace and stability on the island of Ireland.
As noble Lords will be aware, the notification of the UK’s intention to withdraw from the European Union under Article 50(2) of the Treaty on European Union was served by the Prime Minister on 29 March 2017. Article 50(3) provides:
“The Treaties shall cease to apply to the State in question”—
in this case, us—
“from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period”.
Therefore, Article 50 in its entirety means something quite contrary to the widespread impression, often reinforced by Ministers, that there can be no flexibility about exit day. As the noble Lord, Lord Kerr, the author of Article 50, has made it clear, the article contains provision for a possible extension of the period if that is needed to come to an agreement.
The main purpose of our amendments is therefore to give Parliament rather than Ministers the power to control the UK’s position on the date of exit day. By specifying that the European Communities Act 1972 can be repealed only on a date to be determined either by a further Act of Parliament or in the Act of Parliament enacted for the purposes of Clause 9(1), Amendments 2 and 3 support the amended Clause 9(1) by ensuring that Parliament stays in control of the timing of exit day under Article 50, and is thereby in a position to influence the withdrawal agreement and its provisions for the framework of the future relationship between the UK and the EU.
Our amendments are of particular importance in view of the earlier government amendments to Clause 14, moved on the final day in Committee in the other place, which gave Ministers power to fix the date of exit day. In their initial draft of the Bill, the Government were apparently satisfied that, for the purposes of the Bill, the date of exit day could be left to Parliament. Then, for what appear to be purely internal party factional reasons, the Government introduced an amendment to fix exit day in the Bill for 29 March 2019 at 11 pm for all purposes. The Government also supported amendments by Oliver Letwin which allowed the date to be changed by Ministers if the withdrawal agreement provides that the UK will leave on a date different from that set out in Clause 14.
I trust that your Lordships’ House will agree that Parliament rather than Ministers should be in control of the process. However, the government-supported amendments in the other place allow the date to be changed only by Ministers, not by Parliament, even if Parliament has a different view to that of the Executive. In addition, this could happen only if an alternative date on which the treaties ceased to apply to the UK was included in the withdrawal agreement—that is, only if Ministers agreed an alternative date with the EU.
Under the Bill, Ministers would in these circumstances therefore be able to use secondary legislation to change the date in UK legislation as well, thereby bypassing Parliament. Surely, that is completely unacceptable on a matter of such crucial historical importance. Therefore, there are a number of important and worrying implications of the government and government-supported amendments approved in the other place, which can be overcome by the amendments that my noble friend Lord Adonis has tabled, giving Parliament control over the date when the European Communities Act 1972 can be repealed, thus forcing the Government, if necessary, to go back into the negotiations with the EU under Article 50(2).
One example, as the former Attorney-General, Dominic Grieve, made clear in the other place, is that it was always the intention behind his amendment to Clause 9, which the other place voted for, that the powers in the Bill for implementing the withdrawal agreement, including fixing the withdrawal date, should not be used until after the final statute had been approved by Parliament. However, because of the government-sponsored amendments referred to earlier, those powers for Parliament in relation to the date of exit day are effectively removed from the scope of Clause 9, the other place having voted for that amended Clause 9. This could conceivably mean, for instance, that, given the first-phase agreement of December 2017 stating that,
“nothing is agreed until everything is agreed”,
if negotiations were deemed to have failed, the date of exit could be made earlier than 29 March 2019, thereby pre-empting Parliament’s consideration and implementation of a statute approving exit. As things stand, if there is no withdrawal deal, Parliament will be bypassed without any right to a vote. The Government’s amendments relating to the date of exit day have therefore been seen by some as potentially paving the way for a pre-emptive no deal—a so-called “hard Brexit”—by hard-line Brexiteers.
Another potential outcome of leaving the power to change the date of exit day in the hands of Ministers only is that this could be used by them to fail to pursue issues where Parliament wishes to see progress in the negotiations, on the grounds that they do not need Parliament’s support for Brexit in order for them to proceed on the pre-determined date. By the time any such vote comes on the withdrawal agreement, perhaps as soon as the end of this year, it could be difficult, if not impossible, to make substantive changes to the outcome. Neither the EU Commission, nor the member states, will be keen to renegotiate it. The European Parliament has its own agenda, and it seems highly likely that the choice facing the UK Parliament, as a result of Theresa May’s premature triggering of Article 50, would in these circumstances be to either accept the terms or reject them, with no leverage to force the Government back into renegotiations, so risking precipitating the UK crashing out of the EU with no deal. Surely, it is incumbent upon both Houses of Parliament to prevent this scenario by ensuring that Ministers are obliged to refer back to Parliament during the negotiations to ensure they win the ensuing vote.
Another danger is that the transition period, which the Prime Minister has inappropriately referred to as the implementation period, and which Labour, with the support of the CBI and the TUC, has advocated, could be at risk in the negotiations if Ministers alone control of the date of exit day. This transition period is necessary to prevent a so-called “cliff edge”, involving a legal and regulatory void, with chaos resulting for our businesses and services and gridlock at our borders after exit day. A transition period covering as many years as necessary would also ensure that exporters would not have to adapt to two new customs and regulatory arrangements in succession by first dropping out of the EU framework and falling back on the totally inadequate WTO rules and then later, possibly much later, becoming part of arrangements negotiated as part of a comprehensive trade deal with the 27 countries of the EU, which currently take almost half of our exports.
In addition, even if a transition period is agreed, the UK will drop out of the over 60 trade deals with “third countries” which we have access to through our membership of the EU. However, it appears that the Government’s concept of “on current terms” in the transition period excludes the European Court of Justice from its role in arbitrating commercial and other disputes. This is one effect of those government amendments relating to exit day, which would potentially end the jurisdiction of the ECJ on 29 March 2019, thereby preventing agreement on a transitional period “on current terms”. The UK also apparently wants to object to the application of new EU laws and to treat European citizens who come to this country differently during the transition period. All this makes it less likely that a transition period will be agreed in detail at the next EU summit, just weeks away on 22 March, in which case discussions will not move on to a framework for the future relationship. There are, therefore, now fears that the talks on the next phase, the post-transition end state, including the outline of a future trade deal, will have to be delayed, casting the whole timetable into doubt. The more things are delayed, the greater the danger that the EU will simply impose a very narrowly drawn trade deal on the UK or, worse still, the UK might crash out without a deal, to the evident glee of Brextremists such as Jacob Rees-Mogg.
Many people have imagined that the text of Article 50(2) of the Treaty on European Union—and I speak with some trepidation, given that its author, the noble Lord, Lord Kerr, sits opposite me—implies that any withdrawal agreement will constitute a new trade deal with the EU. It does not. However, anyone familiar with major trade deals knows that they reflect the judgment by states of what will be in their own interests and the relative economic power and weight of the parties involved, and that they take years to negotiate. That is presumably why the noble Lord, Lord Bridges of Headley, a former and very recent Minister for Exiting the European Union, said that he did not believe that it would be possible to sort out the divorce bill, the implementation period and the final deal on our withdrawal within the timeframe envisaged. It is therefore completely unrealistic to imagine that the detail of a new trade agreement with the EU will be finalised before the specified exit day or even before the end of the transition period, assuming one is agreed, which, for reasons relating to its budget period, is currently being set by the EU for the end of 2020.
The Dominic Grieve amendment to this Bill, carried in the other place, makes implementation of the withdrawal agreement subject to parliamentary approval. But all that is likely to be agreed by October this year, the deadline for giving time for consideration and ratification by the European Parliament and the other 27 member states of the EU, is just what the treaty states; that is, a,
“framework for its future relationship”,
with little flesh on the bones, which may therefore fall very short of the guarantees which I believe that a majority both Houses of Parliament wish to see: namely, access in the future to EU markets equivalent to what the UK has now to prevent a “cliff edge” for businesses and services and to protect the hard-won benefits of the Good Friday agreement and a completely open border on the island of Ireland.
The Irish question is a crucial reason for Parliament being in charge of the exit date. The serious near-breakdown in the December negotiations between the UK and the EU was eventually resolved only through both sides pledging no regulatory divergence between the Irish Republic and the UK. However, although this cleared the way for the next phase of the Brexit talks, the task of giving it legal effect in the withdrawal agreement remains. Brussels has asked for “precise, clear and unambiguous” proposals to avoid reimposing a hard border between the Republic and Northern Ireland, linking this to progress on transition. Brussels and most dogma-free analysts interpret this December agreement to require the whole of the UK to remain in the single market and customs union, or its exact arrangements, if there is not to be “regulatory divergence” between the Irish Republic and the rest of the UK. Yet the Prime Minister has dogmatically excluded that. It is in everyone’s interest, surely, including the DUP’s, that the exit date is not set in concrete, as it is in this Bill, giving sufficient time both to find a solution on the Irish border and, as the CBI and the TUC have argued, the economy.
Parliament should not be asked passively to sanction a transition to an unknown destination by Ministers—what could be a suicidal leap into a chasm of chaos and uncertainty. We surely have a duty to ensure that, if no deal is struck, or the terms of such a deal are deemed inadequate by Parliament, the provisions of the European Communities Act 1972 continue in force and the timing of exit day will be delayed in order that these critical issues for the nation’s future are properly addressed. The purpose of Amendments 2 and 3 is that, on the precise date of Brexit, Parliament—not Ministers—should have the final say on our country’s destiny and on whether any deal either preserves or threatens peace and stability on the island of Ireland.
My Lords, I shall speak to these amendments, on which the noble and learned Lord, Lord Judge, and the noble Baroness, Lady Northover, made some persuasive and consensual points about how we uphold our international obligations. I will focus on sanctions in the related context affecting UK-based companies. I would be very grateful for some leeway from your Lordships in this so that we can make progress on the whole Bill, especially on Wednesday, when time will be short.
It should be a matter of shame that companies headquartered here in the UK have so far evaded sanctions for aiding and abetting money laundering, corruption and state capture in South Africa, including Bell Pottinger, KPMG, McKinsey, SAP and banks such as HSBC, Standard Chartered and Baroda, in total betrayal of Nelson Mandela’s legacy. I have just referred Hogan Lovells, the international law firm headquartered here in London, to the Solicitors Regulation Authority—the SRA—for enabling a corrupt money launderer to be returned to his post as second-in-command of the critically important South African Revenue Service, SARS. I have asked the SRA to withdraw Hogan Lovells’ authorisation as a recognised body and to examine what other disciplinary action can be taken against its leading partners, including withdrawing their permission to practise as solicitors.
Hogan Lovells spared two of the most notorious perpetrators of state capture in South Africa, Tom Moyane, head of SARS, and his deputy, Jonas Makwakwa, from accountability for their complicity in and cover up of serious financial crimes. In so doing, Hogan Lovells are complicit in undermining South Africa’s once revered tax-collection agency and thereby effectively underpinning President Jacob Zuma and his business associates, the Gupta brothers and others, in perverting South Africa’s democracy, damaging its economy and robbing its taxpayers. When Hogan Lovells was engaged by the corrupt Moyane in September 2016, it was well known that he and Makwakwa were synonymous with President Jacob Zuma’s capture of the state. Hogan Lovells could therefore not plead ignorance as they walked right into that web of corruption and cronyism for a fat fee.
To help protect himself from 783 counts of corruption, fraud, racketeering and money-laundering levelled against him when he came to power in 2009, President Zuma systematically dismembered and manipulated the once highly functional South African Revenue Service and the National Prosecuting Authority. Zuma’s key man in this process was his long-time comrade, Tom Moyane, whom he appointed as head of SARS, as commissioner, in 2014 and who, from day one, loyally set about obliterating all its investigative capacity, with the assistance of his deputy, Jonas Makwakwa. These two turned the institution, which under the leadership of the highly respected Pravin Gordhan had consistently overdelivered on revenue collection, into one now facing a 51 billion rand, or £3 billion, revenue shortfall.
Makwakwa’s unethical behaviour was quickly exposed in May 2016 when South Africa’s financial crime regulator, the Financial Intelligence Centre, ordered SARS to establish whether several “suspicious and unusual cash deposits and payments” into the accounts of Makwakwa and his lover, a low-level SARS employee, Kelly-Ann Elskie, were “the proceeds of crime and/or money laundering”. About 1.7 million rand—about £100,000, a lot in South African purchasing power—had been paid into their bank accounts over a six-year period. The FIC noted that the amounts flowing out of Makwakwa’s account,
“are of concern as they originate from unknown sources and undetermined legal purpose”.
However, when the FIC reported these suspicious transactions to Moyane, he tried to ignore the request by keeping it a secret. At the same time, the FIC reported the suspicious transactions to the police, known as the Hawks, to investigate the alleged criminality associated with the transactional flows and they opened a case.
Four months later, in September 2016, news of the FIC’s report to Moyane was exposed by investigative journalists and he begrudgingly suspended Makwakwa and later Elskie. This is when Hogan Lovells entered the picture. Moyane appointed the law firm to conduct “an independent investigation” into the Financial Intelligence Centre’s allegations to ensure “transparency, independence and integrity”, and then to recommend and independently facilitate necessary action, including disciplinary action. Hogan Lovells was therefore appointed to investigate the allegations contained in the FIC report and to conduct disciplinary proceedings against Makwakwa on behalf of SARS. To that effect, Hogan Lovells drafted the terms of reference for the engagement, a seven-page roadmap signed and adopted by SARS. However, Hogan Lovells failed to investigate the very reason the firm was appointed; the allegations contained in the FIC report. Hogan Lovells deviated so materially from its own terms of reference, allowing itself to be blindly led by Moyane, who redefined the terms of reference as and when it suited him, that a respected investigative journalist described the outcome as being,
“so tailored that it borders on the realm of being cooked”.
What an indictment of a leading international firm, Hogan Lovells, and its role.
The allegations against Makwakwa involved layers of possible transgressions; these being, first, tax law breaches, linked to whether he declared the transactions; secondly, criminal breaches, linked to whether the suspicious transactions were predicated on corruption or money laundering; and thirdly, whether internal SARS policy breaches had occurred. Moyane also mandated PricewaterhouseCoopers to analyse Makwakwa’s tax compliance, with regards to the “suspicious and unusual” money flows through his accounts. The Hawks were simultaneously investigating the criminality. Hogan Lovells’s mandate was, according to its terms of reference, to institute an independent investigation, partly using the findings of these other processes, to assess the veracity of the FIC allegations against labour and administrative law, and institute a disciplinary process.
But then two things happened. First, SARS declined to provide Hogan Lovells with the PricewaterhouseCoopers investigative report into Makwakwa, citing taxpayer confidentiality—an inaccurate interpretation of the law, which Hogan Lovells accepted without question. Secondly, Hogan Lovells never made contact with the Hawks to assess the status of their investigation—information which would logically be crucial to its assessment of Makwakwa’s fitness as a senior SARS employee. Equally puzzling is that around that time, South Africa’s Parliament got interested in Moyane’s puppet mastery of Hogan Lovells, prompting a parliamentary question about the nature of the engagement between the two organisations.
In Moyane’s reply, which is a matter of public record, he said that Hogan Lovells had been mandated to investigate contraventions of tax laws and money laundering allegations, and that it would assist the criminal authorities, where necessary, in investigating these transgressions. It would also deal with the SARS disciplinary process. In a press statement released weeks later, Hogan Lovells toned down this interpretation, saying that the scope of the investigation conducted by the firm was,
“limited to identifying whether any misconduct had been committed by Makwakwa and Elskie as employees of SARS. It did not seek to directly investigate the financial transactions identified by the FIC”.
If noble Lords are confused, it is because they should be. This obfuscation is precisely what Moyane set out to achieve, and to which purpose Hogan Lovells was either a willingly gullible or malevolent accomplice.
The end result is that the firm issued an incomplete, fatally flawed whitewash of a report, which ultimately cleared Makwakwa, despite reams of evidence to the contrary. Most damning of all, Hogan Lovells failed to include crucial evidence from the PwC report and the status of the Hawks investigation in its own report. That meant that Makwakwa has answered to only a fraction of the allegations levelled against him—a serious deviation from Hogan Lovells’ mandate. It is beneath contempt that Hogan Lovells subsequently tried to justify its work by hiding behind various complex legal provisions, sections and subsections—explanations which have been described by legal experts as “utter nonsense”. Hogan Lovells’ cover-up led directly to the corrupt Moyane exonerating his corrupt deputy Makwakwa and welcoming him back on 30 October 2017—to continue their looting and dirty work of robbing South African taxpayers.
Hogan Lovells must stand indicted by the Solicitors Regulation Authority, which should seek and publish answers to the following questions. Why did Hogan Lovells accept this mandate while knowing about Tom Moyane’s corrupt Zuma/Gupta agenda? Why did Hogan Lovells allow itself to be controlled by Moyane, including allowing him glibly to alter the terms of reference to suit his agenda at various points in this sorry saga? Why has Hogan Lovells failed to release its documents—including the original terms of reference, its final report and any other relevant documentation which would help clear its name—to the South African Parliament? What has it got to hide? How much money did Hogan Lovells get from SARS for this investigation? Will Hogan Lovells pay back that fee, if not to SARs then at least to South African charities combating the poverty it has helped deepen? What is the relationship between the South African chair of Hogan Lovells, Lavery Modise, and the commissioner of SARS, Tom Moyane? Why has Hogan Lovells allowed itself to be used to undermine South Africa’s revenue collection agency? Some of the suspicious transactions received by Makwakwa were in US dollars. What onus does this place on regulatory authorities in the US—and, indeed, Hogan Lovells, as a firm that is also based in the US—to report and investigate?
Hogan Lovells has ducked and dived over its responsibility for and complicity in propping up state capture, corruption, cronyism and money laundering in South Africa. I trust that the SRA will sanction it, and that the British Government will issue an edict that no British-based firms should do any business whatever with any member of President Zuma’s family, or with any member of the Gupta family, and that any work for any state agency or state-owned enterprise in South Africa must be undertaken only with total integrity, not connivance in criminality such as Hogan Lovells has been guilty of. I thank noble Lords for their indulgence.