Brexit and the EU Budget (EUC Report) — House of Lords, 2017-04-06
Topic: International Affairs
Kishwer Falkner (Liberal Democrats, Centre to centre-left): My Lords, I start by thanking all noble Lords who have spoken in this debate. It has been extremely valuable and we will of course reflect on all the comments that have been made. I particularly thank the members of the committee who have spoken. As my noble friend Lord Shutt pointed out, a debate on the last day of term seems to be the fate of European Union Sub-Committee A, but as a committee we felt that we should take this date as offered, because this is one of the topics that will be addressed at an early stage and it is important to hear all sides of opinion in this House. What a debate it has been and what opinions we have heard. I will go through some of the substantive points and believe that I should address them as this is a debate I start with the noble Lord, Lord Davies of Stamford, whose presence on our committee we still miss, and I was delighted that he was able to find the time to speak. I need to address early on an issue which he raised and which it is of fundamental importance to get on the record. I refer to the rights of EU citizens who are working for EU institutions today. The noble Lord inferred that they would be fired at the end of the United Kingdom’s departure from the EU, and I thought it would be useful for the House to reassure them—in case they pick up Hansard—by reading Mr Juncker’s email to staff of 24 June, which particularly addresses this issue. He said: "I know many of you are concerned about your future after this vote … you are Union officials. You left your national hats at the door when you joined this institution and that door is not closing on you now … our staff regulations will be read and applied in a European spirit" So not only do the United Kingdom Government stand by EU citizens, as I understand it, but the European Commission does, too, and that is an important clarification The noble Lord, Lord Davies, also led us through an exposé of the origins of jurisprudence which was worthy, if I may say so, of a university seminar. I tend to prefer the science of economics to the discipline of law, and I suggest that the established finding of behavioural economics, which borrows heavily from psychology, might apply here in terms of "confirmation bias". Confirmation bias, as is defined, "occurs when people filter out potentially useful facts and opinions that don’t coincide with their preconceived notions" The noble Lord, Lord Davies, also said that no one is suggesting that we will have liabilities after departure. We caveat our report by referring, as the noble Lord, Lord Tunnicliffe, said, not just to what will happen when we leave. After we leave there will be ongoing commitments, which is why the legal advice is significant. We know—and the report spells out—that there is a rule called n+3, whereby the expenditure continues for three further years after the end of the MFF period. I think it was the noble Lord, Lord Butler, who reminded the House of the comments of the German Finance Minister, Wolfgang Schäuble, who thinks that the liabilities could continue till 2030.Therefore, in that sense, this legal advice is absolutely pivotal My noble friend Lord Thomas of Gresford joined the noble Lord, Lord Davies of Stamford, on the overarching obligations of the Vienna Convention on the Law of Treaties. I refer noble Lords to page 60 of our report, which takes us back to the intentions of the drafters of the Vienna convention in 1966—the UN’s International Law Commission—which explained the thinking behind what it said in Article 70(1) of the convention. That article contains the words "unless the treaty" in question "otherwise provides". The commission says: "Clearly, any such conditions provided for in the treaty or agreed upon by the parties must prevail, and the opening words of paragraph 1 of the article"— which are, "unless the treaty" in question "otherwise provides"— "(which are also made applicable to paragraph 2) so provide" Therefore, the Vienna convention rules itself out where there are other provisions in treaties The committee cannot be faulted for the fact that the treaty in question might not have provisions in it about how to go about an orderly withdrawal, the obligations and liabilities and so on. I suggest that the House, which has debated Article 50, might perhaps think about how it was so carelessly drafted as to leave out these important caveats. I understand from my conversations in Brussels that there is much gnashing of teeth among Commission lawyers about the manner in which Article 50 was drafted Let me turn to another point made by my noble friend Lord Thomas of Gresford. He gave the example of an EU project in Wales where the money might, on the whim of someone, be used for a purpose other than that for which it was provided. I agree that that would palpably be illegal. However, I also agree that the receipt of this funding would take place while the EU treaties are extant. Once we have left the European Union, the treaties do not apply. Therefore, neither does the justiciability of the CJEU, unless a withdrawal agreement decided to accept that as a condition I turn now to the noble Lord, Lord Hannay of Chiswick. I agree completely with his advice on the manner of negotiations and how one’s perceptions can be confounded as one goes deeper into the negotiation. However, he disagreed specifically with paragraph 135, and said that the committee should not have accepted the legal opinion. Perhaps he thought that we had taken only a single legal opinion into account. We did not. All the lawyers we spoke to knew the EU institutions well. We tested each opinion given by a lawyer and, as time went on and we had a subsequent opinion, we wrote back to the original lawyers asking them to give their opinion again in the light of what we had heard I am being encouraged to move on, and I will—I am coming to my final comment We exercised our collective judgment and came to our views based on how we saw the evidence. However, the noble Lord, Lord Hannay, suggested that I was somehow tiptoeing around some of these issues. Let me give him some advice: when confronted with counterintuitive situations, I find it better to tiptoe around new evidence rather than dismiss it through confirmation bias In conclusion, there is only one way to test whether our judgments in this report have been right or wrong, and that is through a court of law. We have heard from the Minister and from all sides of the House that we will not be going there; that we want an orderly exit and a deep and lasting relationship with our nearest partners, and that is what we should all be seeking to achieve, not least the Government, who speak in our name. I hope the report will be seen as perhaps an important milestone in making us all much more competent in dealing with the pitfalls that lie before us. I hope it will be taken in the best spirit of EU Select Committee reports, which perform such a valuable service to the House and beyond.