Contribution to debate on Trade Bill, House of Lords, 11 September 2018

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My Lords, I, too, welcome the noble Baroness, Lady Meyer, who, I am sure, will recharge the flailing Brexiteer case in this House with her great eloquence.

This Bill could have huge significance for people’s jobs, people’s rights and the economy, because it illustrates how Brexit puts at risk not only our trade agreements with the other 27 member states of the EU, but agreements with around 70 so-called third countries around the world that collectively account for around two-thirds of the UK’s trade. In a no-deal scenario on exit day—which is enthusiastically advocated by many Brexiteers—we risk losing not only tariff-free access to the biggest single market in the world but the benefits of our participation in the EU agreements with these third countries.

It is also important that we debunk the Brexiteer myth that Britain will be freed to conquer new global trade markets if, and only if, we leave the single market and the customs union. Germany is in both, and its biggest trading partner is China. There are absolutely no barriers within the EU preventing us getting a greater share of global trade.

A further problem, once the UK ceases to be regarded as EU territory, is that for the purposes of complex rules of origin which define when a product benefits from tariff-free quotas, UK component parts and products will no longer qualify. This could have a huge impact on UK trade, especially in sectors such as the automotive industry and aerospace, where complex supply chains currently operate freely within the EU.

All these difficulties are exemplified—noble Lords will not be surprised to hear me mention it again and again—in the case of the Irish border. InterTradeIreland’s report last March, Cross Border Trade and Linkages, found that the vast bulk of cross-border trade is accounted for by firms that trade simultaneously in both directions. Although these two-way traders amount to just 18% of firms, they account for over 60% of imports and 70% of exports. The data also shows that most cross-border trade occurs in intermediate inputs—components of final products—and highlights the considerable interconnectedness of cross-border supply chains on the island of Ireland.

In addition to being exposed to costs from customs duties and increased administration, two-way trade also risks disruption from delays, particularly where supply-chain links are concentrated in perishable food products such as milk. Milk tankers cross the Irish border about 33,000 times a year. Northern Ireland produces around 2.2 billion litres of milk a year, of which some 30% is processed in the Republic. Milk and dairy products move in both directions, sometimes several times. For example, cream from Northern Ireland milk is removed in Virginia, County Cavan, in Ireland and sent back to the Baileys Irish Cream plant in Mallusk, County Antrim, in Northern Ireland. We should not think of trade across the Irish border as being confined to the island; much of it is connected to global trade as well. For example, this complex cross-border supply chain underpins global exports in powdered milk products from the island of Ireland, north and south. It is exposed on two fronts by Brexit. First, in the event of a hard Brexit, the north-south milk trade would become unprofitable due to tariffs ranging from 40% to as much as 64% depending on fat content. The second concern is that when the UK exits the EU, it will no longer be included in EU export agreements. It could take a period of years to put new export agreements into place for key milk powder markets. What is supposed to happen in the meantime to those dairy farmers and the thousands of other jobs dependent on these supply chains? The Brexiteers have absolutely no idea.

And for those no-deal zealots, in July, Pascal Lamy, the former director-general of the World Trade Organization, described as “pie in the sky” the idea that there would be no border on the island of Ireland if there was no deal. Therefore, as Labour has rightly argued, a new comprehensive customs union with the European Union after Brexit is the best way to protect jobs and the economy, as well as avoiding a potentially disastrous hard border on the island of Ireland. That is what the TUC, the CBI and major businesses such as Jaguar Land Rover and National Grid want.

For the last 40 years, when trade deals have been negotiated by the EU on behalf of its members, scrutiny has been delivered through the European Parliament’s Committee on International Trade and in the UK by the European Scrutiny Committee of the House of Commons. These mechanisms will no longer apply after Brexit. But surely trade negotiations must be transparent and open to scrutiny by stakeholders and the public. As things stand, these new arrangements with third countries which the Government call “continuity agreements” would be excluded from the Government’s new arrangements, admittedly still lacking in detail, for structured engagement with stakeholders in relation to the new trade agreements announced by the Secretary of State for International Trade on 16 July.

My Labour colleagues in the Commons successfully argued that the Government’s Bill as introduced was woefully deficient in that it accorded yet again a number of Henry VIII powers to Ministers but made no provision for parliamentary scrutiny, as takes place in other countries including Germany, New Zealand and Australia. Following an unprecedented campaign by trade unions, the trade justice movement and industry and consumer representatives, the Government, in fear of their own Back-Benchers, tabled amendments very late in the day addressing at least some of the issues. However, the Government simultaneously tabled an amendment that would allow Ministers to ignore these scrutiny provisions should they so choose. So much for taking back control. Furthermore, those provisions for enhanced parliamentary scrutiny did not extend to the clauses relating to the UK’s future membership of the WTO’s Government Procurement Agreement covered by the Bill. This is very worrying, as protections relating to public procurement need to be in place for public services such as the NHS and the public sector more generally in the UK. The Bill remains seriously deficient and still needs significant amendment to be made fit for purpose on these scrutiny issues.

I find it mind-boggling that, with the clock fast running right down, we still have absolutely no idea how, after Brexit, we will be trading with our biggest partner, Europe, or any other country outside. No wonder that investors and traders are giving up on the British economy and that Jacob Rees-Mogg has had to volunteer that we will be poorer for decades. He asserts that it is worth it because we will be free of Brussels: free, free, free at last, but poorer, poorer, poorer as well.

As they confirmed recently, Boris Johnson, David Davis, Liam Fox, Jacob Rees-Mogg, Iain Duncan Smith and the rest—and quite possibly the noble Lord, Lord Lilley—have no plan for their cherished Brexit. Meanwhile, government Ministers admit that we have no idea where we are going but we are going there anyway. What a way to run a country—no wonder the rest of the world thinks that reliable old Britain has gone barmy, with this Parliament a willing accomplice to what is rapidly becoming a national tragedy. The trade unions and others are providing a lead to rescue the country from this madness by demanding a people’s vote on the final deal. I hope that we will all support that.

Contribution to debate on Taxation (Cross-Border Trade) Bill, House of Lords, 4 September 2018

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My Lords, it will come as no surprise to the noble Viscount, Lord Trenchard, that I disagree with virtually everything he said. As the Bill confirms, the Brexit charabanc is lurching giddily along, dragging our country towards a completely unknown destination. Even at this not-quite 11th hour, no Brexiteer, and certainly not the Prime Minister, has the faintest clue how we will be trading with our biggest partner—Europe—or any other country for that matter. No wonder the pound has plummeted and businesses engaged in any way with the outside world are at their wits’ end. It is therefore hardly a surprise that, although the Bill allows for the creation of a stand-alone customs regime for the UK, there is as yet no idea what shape it will take.

Everybody knows the mantra is “Brexit, dammit”, but nobody knows yet what it means, and maybe we never will until after we crash out into the nirvana of Trumpian free trade. That does not matter a jot because we will be free of Brussels—free, free at last—but God knows what new chains will now restrict our jobs, our prosperity, our businesses and our workers. I am no historian but I cannot think of any equivalent situation our country has ever faced as a result of a conscious act of government policy which says, “We’ve no idea where we’re going but we’re going there anyway”. Has the British political class ever done anything more utterly, profoundly irresponsible? Yet this Parliament, to our utter shame, has so far simply indulged in rubber-stamping it.

It should therefore be no surprise to anyone that the Bill illustrates how neither No. 10 Downing Street nor the arch-Brexiteers in the Conservative Party are now in control of their Brexit fantasies. Neither has a plan as the clock ticks down. What unites them is that it must click down regardless of the consequences. The people have spoken—full stop. We are going we know not where, but we are going anyway. This is rapidly becoming an act of collective national madness.

With the Chequers deal based on her flawed White Paper the Prime Minister was supposed to be keeping the UK close to the single market after Brexit, with some magical thinking about customs arrangements. Never mind that the services sector, forming a mere 80% of our economy, was abandoned. The importance of the Bill and the parallel Trade Bill should not be underestimated. Borders matter. Those who fantasise that the UK can enjoy frictionless trade under WTO rules need to understand that those rules mean hard borders, including within the island of Ireland. Even under the WTO’s most-favoured-nation rules, if we did not enforce the border in Ireland, we would be in breach of our agreements with other parts of the world, as would be, in parallel, the Republic and the EU. That would be a disaster for the economies of Northern Ireland and the Republic and would gravely threaten the peace and prosperity which have flourished since the Good Friday agreement of 1998, which is a binding treaty recognised under international law to which this Government pay lip service, but which is being steadily undermined by their whole approach to Brexit. No developed country trades purely on WTO rules, and it is fantasy to suggest that Britain should be the first to give it a go. Moreover, less than two weeks ago the director-general of the WTO pooh-poohed the idea that the UK could fall out of the EU straight into compliance with WTO arrangements, pointing out that it would take quite a time to negotiate the transition.

The debates on the Bill in the Commons demonstrated that the Government are a hostage to a minority of their own Back-Benchers, who chose to table four changes as wrecking amendments. The Chequers compromise can be seen as the Prime Minister’s attempt to steer her dysfunctional Cabinet towards a softer Brexit strategy that would mitigate, to some extent, the most damaging economic consequences of a hard or, worse still, a no-deal Brexit, but it started to fall apart at the first hurdle. Rather than risk defeat and a possible government collapse, these European Research Group amendments to the Bill were accepted by No. 10 and now potentially constitute new red lines, which may hinder the conclusion of a successful Article 50 withdrawal agreement.

The amendments in question were, first, to introduce the need for primary legislation if the Government want to keep Britain in a customs union. As my noble friend Lord Tunnicliffe and the noble Lord, Lord Kerr, have convincingly argued, and as Labour has compellingly argued, the case for a customs union with the EU is overwhelming—in order, among many other things, to avoid rules of origin requirements and check whether goods qualify for preferential tariff arrangements. According to the Government’s own analysis, these rules can burden businesses with additional administrative costs amounting to between 4% and 15%.

Furthermore, once the UK ceases to be regarded as EU territory, UK component parts and products will no longer benefit from zero tariffs as EU products under EU free trade agreements. That means that if the Government’s facilitated customs arrangement does not work, the fallback position will be no customs deal at all, which would be deeply damaging for our manufacturers. This could have a huge impact on UK trade and is the reason why a customs union is absolutely necessary for the sake of British manufacturing, international trade and Northern Ireland’s peace.

A second ERG amendment accepted by the Government ruled out a customs border in the Irish Sea between Northern Ireland and the rest of the UK. This was accepted as in line with the Prime Minister’s previous position, despite her commitment in the UK-EU joint report of 8 December 2017:

“In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all-island economy and the protection of the”,

Belfast/Good Friday agreement.

The purpose of the second ERG amendment seems to be to destroy the negotiating room within which discussions on such backstop arrangements could take place. However, the most substantial and visible impact of the Bill will be at the UK’s borders—seaports and airports—and on our land border with the Republic of Ireland. It allows for the Irish border to return to being a customs border between the UK and Ireland. That means that goods leaving Northern Ireland will have to be cleared for exit from the UK and for entry to the EU.

First, goods crossing the border must be covered by a pre-departure declaration, partly to offer evidence of their status for VAT-free export. Secondly, goods will be able to enter the customs territory only through a designated place of clearance—which, for a land border crossing such as on the island, usually contains facilities for customs examination and clearance, including access to the relevant customs software systems to ensure that detailed information on the goods is submitted for recording and risk analysis purposes, and that correct duties are paid.

Thirdly, goods will be subject to customs duties from both sides. Fourthly, traders are more likely to be subject to requirements for import and export licensing. As the UK leaves the EU, all businesses in Ireland and Northern Ireland that trade across the Irish border will have to be properly registered to do so. Proper rollout of any trusted trader scheme requires time and agreement with trading partners.

Fifthly, the Bill will change common experience for VAT and Excise. Import VAT will be charged on all imports from outside the UK. Sixthly, if goods have to be inspected, there has to be the facility and capacity to do so. For the movement of agri-food produce, for example, including livestock, a rigorous veterinary and plant health inspections clearance regime must be in place. All of this illustrates the importance of getting a deal with the EU that avoids the need for customs controls between the EU and the UK.

How ironic it is, then, that this Bill also now contains a provision that risks making such a deal far less likely. The addition of this proposed new clause as a result of ERG dogma has ramifications not just for the Irish border; it also has implications for the current Brexit negotiations at a macro level. This was the Government’s intention in accepting it.

The so-called backstop in the draft withdrawal agreement is intended to prevent the scenario I have outlined previously coming into effect around the Irish border. However, what the ERG amendments, and therefore the subsequent new clause, do—in a fairly crude way—is to prevent that backstop being workable. It forces a scenario in which the Irish border is a customs border in the Bill. More to the point, by making it more difficult for the UK and EU to finalise the withdrawal agreement, it makes such a scenario all the more likely. This is no imaginary problem; there are no harmless consequences.

In July, the Prime Minister made her first substantial visit to Northern Ireland. When there, she visited the village of Belleek, on the Fermanagh-Donegal border. Belleek is in many ways a typical Irish border village. It has a population of Catholics and Protestants, British and Irish citizens, cross-border families and cross-border workers. A good number of such workers are employed by one business that straddles the border, with its front door in the Republic and its back door in the UK. As Theresa May’s entourage descended on the village, that business owner described the impact of the uncertainty around Brexit in a powerful way. “Out here”, he said, “We’re cannon fodder”.

The third ERG amendment Theresa May accepted makes it illegal for Britain to collect EU tariffs at its ports unless Brussels agrees to act on a reciprocal basis. The Government insisted that the amendment was consistent with the customs policy as outlined in the White Paper, because they envisaged using a formula to govern the flows of money based on trade patterns between the EU 27 and the UK. However, the White Paper does not explain exactly how this would work, and it seems highly unlikely that the EU will accept such a plan. There are further technical problems with the proposed facilitated customs arrangement, as it would appear to breach elements of the General Agreement on Tariffs and Trade—GATT—which is part of the World Trade Organization rules.

It is, in any case, a complete and utter delusion that the UK, with a market of 60 million, can improve on the negotiating strength we already have as a member of the EU with a market of 500 million, as far as free trade agreements with third countries are concerned. The point is that trade will become more costly and burdensome outside the EU single market and the customs union, and our businesses and manufacturers will be at a disadvantage compared with their European neighbours and competitors.

The ERG’s fourth amendment concerned VAT. Because the authorities need to know whether goods have crossed the border to properly apply the tax, the EU VAT area is absolutely crucial to avoiding a hard border. We currently have around 25 million customs declarations requiring payment of VAT at the border. That will potentially rise to 255 million after Brexit. Either goods are checked as they cross, requiring hard infrastructure and border friction, as happens in Switzerland and Norway, or we seek to stay in the EU’s system, which operates on the basis of a paper trail to track the movement of goods and requires European Court of Justice rules to apply. If the Government adopt neither option, it opens the UK up to massive fraud where goods enter the country VAT-free and people evade tax, depriving the Treasury—and therefore our already cut, battered and overstretched public services—of crucial revenue.

In conclusion, the debates on the Bill have illustrated that, as the reality of Brexit becomes clearer, the case for it disintegrates. Instead, the case for delaying Brexit and for giving not only Parliament but the people a meaningful vote, or a people’s vote, on any draft withdrawal agreement, becomes ever more compelling. I am delighted that my own trade union, the GMB, has today supported the principle of a people’s vote.

Nelson Mandela Centenary Exhibition

It was a privilege to Chair the Organising Committee for The Nelson Mandela Centenary Exhibition in South Bank Centre over July-August 2018 which attracted record numbers of visitors

With the Duke and Duchess of Sussex who kindly launched the Exhibition and Madiba’s granddaughter Zamaswazi Dlamini-Mandela
With only surviving Robben Island and Rivonia trialist the marvellous Andrew Mlangeni

Contribution to debate on Syria, House of Lords, Monday 16th April

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.

Contribution to Northern Ireland (Regional Rates and Energy) Bill, House of Lords, 27 March 2108

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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.