EU re set and Windsor Framework

This is based on  the Hansard version of my speech in Grand Committee on the issues of Northern Ireland and the EU re set. As always I spoke without notes or text. I have changed the punctuation and shortened some of the sentences from the Hansard version to turn it into written prose.

My Lords, I intervene in this debate not as a Northern Ireland specialist or representative, which I am clearly not, but as someone who has taken a strong special interest over many years in the economy and economic growth, and in the trading patterns of our great United Kingdom. I am not surprised that much of the debate so far has been about these economic issues. We have heard eloquent testimony to the barriers and difficulties that small businesses in particular but also some big businesses are experiencing as a result of the dreadful settlement of the so-called Northern Ireland problem, embedded first in the protocol and subsequently in the Windsor Framework.

I fully support what my noble friend Lord Lilley said and will explain to the Committee that my noble friend and I, and other Conservative MPs and Peers, held regular meetings over the Brexit years to discuss how our country can get the most out of the freedoms we can enjoy . We set out how we  could develop now that we have left the European Union, and how the £17 billion we are now saving in annual contributions can be best spent to our wider benefit and related issues. We have often, as a result, had joint meetings or exchanges of MPs and Peers with our Unionist colleagues here today.

In our meetings, we took on board that Northern Ireland had a particularly bad deal out of the form of Brexit entry that the EU cajoled or persuaded successive British Governments into accepting. There is no doubt that absorbing so much European Union law into Northern Ireland is a constraint on growth, on small businesses and on trade. I urge the Government to think carefully about this, because they wish to align the whole United Kingdom with more of these laws, charges and impositions. Yet it is the case that where it is being tried in Northern Ireland, far from being a golden scenario, as some suggested, it is clearly a negative that is causing trouble.

In a previous speech in the Chamber of the House of Lords, I set out my own research findings for the period 1952 to 2020—from 20 years before we entered the EEC, from the 20 years in the EEC customs union from 1972 to 1992, and from the 28 years in the single market from 1992. The data is overwhelmingly convincing that the closer the alignment—the more European law, costs and taxes we absorbed—the slower we grew.

I fully accept that there were other factors affecting our growth rates over those long periods, but you cannot reach a conclusion from the data that there was ever a time when aligning more closely helped and gave us a boost. There was no boost when we joined the customs union. On the contrary, because a lot of our industry was not fully competitive and was being protected by tariffs, when the tariffs came off, the Labour Government had to face big problems. We  saw mass closures and destruction of large parts of our industry because Italian, German and French textile companies, steel mills, engineering works and vehicle makers were so much more efficient than our own. The shock was too much.

There was also no visible extra growth—indeed, quite a lot to the contrary—after 1992, when the EU had completed its so-called single market. This  was actually a major power grab and a whole series of laws that were often negative to the conduct of business. Again, there was no sudden improvement or growth in our economy. In many ways, the problems got worse after the single market had been completed. Of course, it was completely misleading to say that the single market was completed in 1992 because, for the following 28 years of our membership, there were ever more laws, ever more rules, ever more charges and ever more taxes, which had a direct impact on British businesses and clearly did no good.

Northern Ireland is right to say that there are two problems with the settlement we have been persuaded or forced into by the European Union. There is the problem of economic growth, prosperity, and business and trade success, but there is also the fundamental democratic accountability problem, which is a direct result of the EU’s chosen solution of putting Northern Ireland under European Union rules.

The report is wonderfully written. When I first came to it, I found it quite heavy going, complicated and difficult. Then I  realised that, in a way, that was a wonderful parody of the issues that the report had to deal with. The authors of the report clearly understood it perfectly well and were showing, by the way they described it, what a dreadful mess there was: just how many contradictions and complexities were built into it, all to the advantage of the EU and not to the United Kingdom or Northern Ireland. I pay great tribute to the committee and to the work done.

The noble Lord, Lord Carlile, pointed out the wonderful organogram, which was meant to be a simplification so that those of us who found it hard going could see a picture. It tells you all you need to know. The thing is quite unworkable, completely incomprehensible and, by any external judgment, completely mad. No sensible country would ever behave like that or have accepted it, yet this is where we have got to by having all these agents and institutions involved in negotiating.

The solution offered by my noble friend Lord Lilley was  hammered out as it was with a lot of colleagues. We had the benefit of two expert lawyers in this field, who very kindly worked pro bono for us because they felt, as we did, that things needed to change in a radical direction for the benefit of Northern Ireland. This proposal would,of course, resolve the issue of  democratic accountability. If, either by agreement or unilaterally, we no longer have to impose European Union laws on Northern Ireland, then the democratic accountability problem vanishes.

However, we are rightly told in the report that an attempt to resolve the problem was the partial solution of saying that, if a law is really so bad that Northern Ireland cannot put up with it, then Northern Ireland should have the right, through the Stormont procedure, to say that it will not apply in Northern Ireland—an override. That does not get you around the table to influence and vote on all the other laws that you can put up with—so it is not a full answer to democratic accountability. It  is a very good partial answer, because not only would you be able to strike out anything that was really bad but the fact that you had that power would start to influence European Union opinion and attitudes, so that when representations were made on other matters, the European Union would have to bear in mind that you could just decide that it was all too much.

This takes me back down memory lane, which I am normally reluctant about, but on this occasion it is relevant. I remember, as a very young man, that when the 1975 referendum occurred and the British people voted to stay in the European Economic Community, we were assured by the then Labour Government and by the Conservative and Lib Dem opposition parties that our sovereignty would not be taken away or damaged in any way. We were joining a trading arrangement; it was a free trade area, and they called it the common market—they would not even call it the EEC. I made the mistake of reading the treaties and felt that this was an unlikely explanation of what was going on. (meaning  I voted against staying in)

When I found myself, some years later, as Single Market Minister, I remembered that we had been told that no sovereignty had been lost. My  job was a visible demonstration that a huge amount of sovereignty had been lost, because I had to spend all my time trying to construct alliances with member states to stop a law being imposed on our country that did not make any sense or could even be positively damaging. I remembered that, over the years, in an attempt to persuade us that we had not been cheated over sovereignty, something had been developed called an emergency brake—language rather similar to the Stormont brake.

Faced with this avalanche of draft laws that I did not want or wanted to change dramatically, and recognising how much work it was to construct an alliance of member states sufficient to dilute or delay in each case, I decided on one—I cannot remember which I chose now—and let it be known that I was going to use the emergency brake. This was just to show Brussels that this was all getting out of hand and that I was prepared to take action to stop its extreme legislative ideas. As soon as I mentioned this within the privacy of government, I could feel the quiver of fear and annoyance that this idea created. The great British governing establishment—the civil servants and quite a few of the Ministers—were so pro the EU having its way on everything that they thought a Minister going maverick, as they saw it, and trying to negotiate from a position of strength was a very bad idea. It was, of course, vetoed before anyone outside government ever knew about it. I conspired with the rest to make sure nobody knew about it, because I did not think it would reflect well on me that I had lost the argument to use the emergency brake, or reflect well on the Government, because they were clearly throwing away a very powerful negotiating tool that could have got us an answer that was a lot better. (The emergency brake was never used and melted away ed)

I give this as a salutary tale. I know that Northern Ireland bravely got a bit further than I did and once suggested that it was going to use the emergency Stormont brake. Once again, the great governing establishment knew better and decided that it was not going to be allowed to. I do not think that the Stormont brake will be used. The European Union does not think it is going to be used, which does not give you any negotiating heft as it tries to put more laws upon you.

My conclusions are this. This is advice to the Government that is heartfelt and well meant, and that would actually help the Government. I fully support the Government’s aims to have a growth strategy for the whole United Kingdom that levels up those parts that need levelling up, and is driven by more trade, industrial activity and small business developments. The Government will not get that in Northern Ireland unless they address this issue. The way to address it is to take up my noble friend’s suggestion: this is a bogus problem; there does not need to be a hard border. In the past, the big trade flows have always been east-west, or GB to Northern Ireland, not north-south, or Republic of Ireland to Northern Ireland. The big trade flows are being damaged. This has to be lifted and we have to put it to the EU. If the EU is a friendly and sensible neighbour, it will see that it makes sense. If it is not, we should do it unilaterally.

(The Lilley/Redwood/ERG idea was set out on this website at the time of the negotiations. It is mutual enforcement of each other’s trade rules, so anything going from GB to NI can go without new controls and do not need to follow EU rules. Anything exported from NI to Ireland will have to comply with EU rules and the UK will enforce that to avoid the need for border checks into Ireland)