The House of Lords has so far responded in a robust, rational and highly effective manner to the government’s EU withdrawal bill. But the most important test of the peers’ resolve is yet to come. On Tuesday an amendment to the withdrawal bill will be tabled in the Lords that, if passed by the Commons, would commit the government to keeping the United Kingdom in the European Economic Area (EEA).
The EEA is an internal market between the EU28 and Norway, Iceland and Liechtenstein. It was established with the purpose of allowing the further participation of non-EU states in a single market (including services), but this excludes agricultural and fisheries sectors and the EU customs union. As article 1 of its founding treaty, the EEA agreement, states: “The aim of this agreement of association is to promote a continuous and balanced strengthening of trade and economic relations between the contracting parties with equal conditions of competition, and the respect of the same rules.”
Article 1 is pivotal, because it unambiguously confirms that the EEA is a commercial association, not a political project. There is no mention of “ever closer union”, and no reference to the post-Maastricht pillars of the European project such as the common foreign and security policy or common security and defence policy. If the UK were to commit to an EEA-based Brexit we would essentially be returning to the original terms and premise of our pre-Maastricht membership of the European Community.
The Brexiteers have of course been up in arms about the unelected peers attempting to thwart “the will of the people”. But their complaints are utterly lacking in credibility, given that David Davis, Liam Fox and Jacob Rees-Mogg have consistently voted against attempts to democratise our second chamber. And the fact is that the 52-48 result of the referendum was clearly not a mandate for a reckless Brexit at any cost, a point that was then further rammed home by the result of the general election. One message should be clear: yes, we must leave the European Union so that we can secure a greater degree of control over our borders, laws and money, but we must do so without wrecking the economy, and without burning bridges with our European partners and allies.
Of course, the economy is not the Lords’ only consideration. It must consider how best we can protect the terms of the Good Friday agreement by ensuring that there is no hard border on the island of Ireland. The customs union amendment goes some way towards that aim, but it is not sufficient – it would not provide a framework for the harmonisation of regulations and product standards that is fundamental to frictionless trade across the Irish land border. Only membership of the EEA in conjunction with a customs union can secure that objective.
And then there is the issue of time. We’re almost two years on from the referendum, and around six months from the meaningful vote on the withdrawal agreement. And yet there is still a deeply entrenched impasse between the government and the EU around the fundamentals of our future trading relationship. The EEA is an off-the-shelf, ready-made package and well understood arrangement that has existed since 1993. By committing to an EEA-based Brexit the government would be providing business, consumers and our entire country with the certainty and stability that is so desperately needed.
One of the arguments most frequently deployed against the EEA is that it would relegate the UK to the status of a “vassal state”. This is patently wrong. EEA countries are not subject to the supremacy of EU law. Any rules relating to the aspects of the single market that apply within the EEA internal market must be passed by the national parliaments of the EEA countries. And EEA countries are not subject to the direct jurisdiction of the European court of justice (ECJ). The EEA is overseen by the Efta court, and disputes are managed by the Efta Surveillance Authority. The Efta court routinely makes decisions and rulings that diverge from the ECJ, and it would of course have at least one British judge, if we were to join – most observers agree that there would likely be two British judges.
For those concerned about EU immigration, articles 112 and 113 of the EEA agreement offer the possibility of unilaterally suspending the operation of any one of the four freedoms – including the free movement of labour – subject to the presentation of a political case to the EU27 outlining the presence of “serious economic, societal or environmental difficulties”. There is legal precedent for this through protocol 15 of the EEA agreement, which applies to Liechtenstein and would have been offered to the Swiss, if they had chosen to join the EEA.
And Britain would only pay for what is accessed from the single market. This means it would not transgress the prime minister’s red lines on the single market or on ECJ jurisdiction, while offering veto power through the EEA joint committee, which determines whether EU laws and directives are relevant to the EEA and/or whether adaptations are necessary. It would also give us access to expert working groups and agencies, alongside EU member states. This gives EEA governments multiple opportunities to shape and influence EU regulations and directives before they are approved. EEA governments do not have voting rights in any of these settings, but the vast majority of decisions in Brussels are taken by consensus in any case, and the views of EEA countries play an important part in the decision-making process.
On 13 December 2017 Labour MPs were whipped to support my colleague Heidi Alexander’s amendment to the Withdrawal Bill, which would have secured an EEA-based Brexit. It is somewhat baffling then that Labour peers are apparently being whipped to abstain on this amendment. I hope that this is simply a misunderstanding, and that consistency and coherence will have returned by the time the division bell rings.
Because the fact is that the division bell is also ringing for the Prime Minister. She cannot keep kicking the can down the road indefinitely. She must now decide which path to choose: will she follow the Brexit-at-any-cost diktats of the likes of Rees-Mogg, or will she opt for a Brexit that actually reflects the real concerns of the British people? On Tuesday, the Lords can play a vitally important role in ensuring that Theresa May chooses the right path. It is imperative that it does so.