European Affairs Committee

Corrected oral evidence: The future UK-EU relationship

Tuesday 11 October 2022

4 pm

Members present: The Earl of Kinnoull (The Chair); Lord Faulkner of Worcester; Lord Foulkes of Cumnock; Lord Hannay of Chiswick; Lord Lamont of Lerwick; Lord Liddle; The Viscount Trenchard; Lord Tugendhat; Lord Wood of Anfield.

Evidence Session No. 1 Heard in Public Questions 1 - 13

Witnesses

I: Lord Mandelson; Lord Frost.

Examination of witnesses

Lord Mandelson and Lord Frost.

Q1 The Chair: Welcome to the hybrid House of Lords European Affairs Committee. This is the first public evidence session of our inquiry into the future UK-EU relationship—I emphasise “the future”. I welcome Lord Mandelson and Lord Frost, who have come to give evidence to us today. This is a public evidence session, so a transcript will be taken, and we will send that to you in due course. We would be grateful to be notified of any corrections that need to be made, because we will be using this as part of the eventual report that we expect to write shortly after Christmas.

We will be together for a maximum of 90 minutes this afternoon. I would be grateful if questions and answers could be kept relatively crisp as there is quite a lot of ground to cover. I suggest we devote the first two or three questions to looking at the position today, but the vast majority of our time will be spent looking forward—assuming that we manage to tackle the current issues, which are grounded in the Northern Ireland protocol.

I tossed a coin beforehand—a very rare thing these days—to see who I was going to come to first. Either the winner or the loser—I am not quite sure— was Lord Mandelson, so I will start with him and move to Lord Frost. How would you characterise overall the current state of the relationship between the UK and the EU? What are the primary factors affecting that relationship today?

Lord Mandelson: Thank you very much for the opportunity to give evidence. I would characterise the state of the relationship between the UK and the EU as poor or very poor. However, the chasm that has been created between us has, I am glad to say, been narrowed somewhat in recent weeks. I have no doubt in my mind that the key to unlocking the relationship we need with the European Union lies in resolving the Northern Ireland protocol. It is the biggest barrier standing in the way. We have to overcome it and remove it in order to proceed in any positive direction. Without it being resolved, I do not believe that anything gets better.

Why is the relationship so bad? Because we have gone through a miserable divorce. On the UK side, there has been a lack of honesty about what Brexit means and the trade-offs it involves for people, businesses and Northern Ireland in particular. On Northern Ireland, I do not believe there was any magical thinking that could have got us out of the conundrum we found ourselves in. We had to face a fundamental choice between a customs border that ran across territory or down the Irish Sea, and there was no way of avoiding that, in my view. I believe that there was and is room for the creation of a light border, as opposed to a heavy border, if both sides approach the issue in a pragmatic and creative spirit based on a relationship of trust, which has to be built up now.

Unfortunately, the UK’s reputation as a responsible international actor was damaged from the outset—the moment we left the European Union. This was done in a needless, almost wilful way; we can come back to “why?” if we want. Building trust between the UK and the EU after Brexit was not a priority for the then Prime Minister.

On the EU side, there has been too little thinking about what kind of relationship the EU wants with the UK in the future. We are not a normal third country. I know what a normal third country is with the European Union; I used to negotiate trade agreements with them. We are a very large former member of the EU with a very big economy sitting right on the border of the EU. That creates all sorts of unique tensions and frictions, which have to be overcome by constant dialogue and collaboration.

I think the European Union is now beginning to think more about the relationship it wants with the UK, including how the Northern Ireland protocol problems can be resolved intelligently. However, I have to say that, based on my contact with my former colleagues in Brussels, there are a lot of doubts about whether the UK Government is a stable or reliable interlocutor for the EU. The government seems to change, roll around and go off in different directions. People do not know who and what they are dealing with.

In conclusion, we badly need a normalised relationship between the UK and the EU, and we have to stop giving the European Union excuses not to think constructively about the relationship it wants with the UK. We need to put aside the confrontational tactics employed in the negotiation for the TCA and the sovereigntist game playing that has, in my view, characterised Britain’s approach until now since the TCA was agreed.

We need to reaffirm that the European Union and its member states are very important partners for us. It is only through working with them, among others in the world, that we will deal with the most pressing political and economic challenges that we face as a nation.

The Chair: Thank you very much. You touched on a large number of points there, and I am glad that we will be coming back to a few of them as we progress through the questions. The other side of the coin, Lord Frost, is you.

Lord Frost: Thank you for the opportunity to come and give evidence. I agree with about 50% of what Lord Mandelson has said; it will become apparent which 50% that is. The way I would characterise the relationship, as far as I can tell, is that it is cool and quite fragile, but noticeably improving over the last few months. It is obviously nowhere near where we would want it to be yet.

There are two reasons why this is happening. The first, obviously, is the Ukraine war, which has produced a sense of solidarity. Britain’s importance to the security and defence of the continent has been reinforced. Our ability to get ahead of some others in responding to the challenges that were presented has been noticed and welcomed in at least part of the continent, perhaps all of it by now.

The second reason is because we have a general settling down of things, which I thought would happen, and I have said that a few times. People are getting used to the new relationship. Some of the new institutions are in place and meetings are happening. We are getting used to it, and as a result it is beginning to feel more normal.

There are plenty of things that could still upset this. I agree that Northern Ireland is the major problem, and it is quite hard to see the relationship getting anywhere near where we want it to be until that problem is fixed. There are other issues that could become problems this autumn. A lot is said about trust on our side, but we will also need to look at how the EU handles certain issues itself. One obvious example is the energy interconnectors and decisions that may or may not be taken about them if we get to a crisis point with energy supply later this autumn. There are plenty of things where it could get worse, but I hope that both sides will manage to find a way through this and rise above it.

I have just a couple of final remarks. I am sure we will go into it in more detail, but Northern Ireland needs to be fixed and on a more durable basis. That more durable basis must involve a shift in the current arrangements so that Northern Ireland is more fully part of the UK single market for goods and regulation. It is obviously better if that is negotiated, but there needs to be a serious shift. An important part of that is that the Court of Justice cannot have a jurisdictional or arbitrational role in future arrangements. I cannot see how it would be stable while that remains the case. It would be better if that was acknowledged sooner rather than later.

To finish, I think Lord Mandelson is right that things could have been done differently all along by both sides. It is hardly surprising that mistakes were made in an unprecedented process. If there is a failure of trust—and there probably is a bit—both sides are to some extent responsible for that. There are things that the European Union and its member states have done in the last two or three years that have very seriously shaken trust on the UK side as well. We need to put that behind us and find solutions that can last. I hope we can get through this winter, find a Northern Ireland solution and move on to something better.

The Chair: Thank you. That also unpacks quite a few things that we will come back to in the evidence session. It is a very good segue into Lord Hannay’s questions.

Q2 Lord Hannay of Chiswick: Both witnesses have covered rather fully the preliminary remarks I was going to put to them about how the dispute over the Northern Ireland protocol is the main cause of a lack of progress in the UK-EU relationship and has contaminated many other fields as well. I do not particularly want to go over that again, as I think you have both answered rather fully.

I think you have given some answers to the second part of my question, which was: what form might such a resolution of the negotiations take? Can you both comment on one part of the dispute, which is the involvement of the European Court of Justice in Northern Ireland. Is it not the case that the EFTA countries, for example, which are in the single market, have a system of dealing with disputes called the EFTA Court, which is subordinate to the European Court of Justice? There is nothing particularly unusual about this. Could you not find it a bit difficult for the EU to ever accept that disputes relating to the application of single market law in Northern Ireland should be the only part of the single market not covered by the jurisdiction of the Court of Justice?

Lord Frost: Where to start on that? There is a crucial distinction between the EFTA countries and others. I do not think the situation on the court is quite as clear cut as you present it, Lord Hannay, particularly regarding Switzerland and the role of the court.

Lord Hannay of Chiswick: I did not refer to Switzerland.

Lord Frost: That is the one that is referred to very often in this context.

The crucial difference is that politics in Northern Ireland, as we know, is fragile. The Belfast/Good Friday agreement is a crucial element of making those arrangements work. The normal tools which the EU uses to enforce its laws beyond its borders are not suitable for the politics of Northern Ireland. We worried about this when we accepted the protocol in 2019, and we were right to worry because we discovered that the EU’s first reaction to a problem was to immediately open infraction processes. They have been paused and now reopened again. It is never going to be suitable for the Northern Irish environment to have that sort of knee-jerk approach to dispute resolution.

The protocol does, of course, include another arrangement, which is the more normal arbitration, as well as the court. If the EU had used that first in these disputes, we might be in a different position. It is now too fragile for us to accept the use of the court and its mechanisms in this very complex environment. We have learned by experience that it will not work. Of course, I appreciate that the EU’s doctrine on the court is what it is. Nevertheless, it has taken on with us a shared role in trying to make the Good Friday agreement and Northern Ireland politics work, and I think it should be willing to look at its doctrine in that light.

Lord Mandelson: My view is that, if we have reached the position of fragility that Lord Frost describes, it is because the Prime Minister at the time signed up to the arrangements in Northern Ireland in bad faith. It is certain that he consistently failed to tell the truth about them to the people of Northern Ireland. I know the people of Northern Ireland; I was their Secretary of State at the time when my responsibility was to implement the Belfast/Good Friday agreement. Signing it was one thing; it was then still-born for well over a year before it was implemented, and that I was able to achieve along with other political leaders in Northern Ireland, with the assistance of Senator George Mitchell.

Everything is always fragile. Yes, nothing is ideally suited for the politics of Northern Ireland. That I can tell you for sure, in just about every single dimension. That is why you have to use creativity and flexibility in how you manage these sensitivities in the politics of Northern Ireland. In my view, it is as a direct consequence or extension of the Northern Ireland protocol that we have to find an appropriate way in which European law is maintained and there is an appropriate role for the ECJ or some European judicial process that operates there, as a direct result of the protocol which this Government negotiated and agreed.

The European Union will find a flexible way of adapting how it operates the rule of law, in the most sensitive way that, as Lord Frost says, takes into full account the politics of Northern Ireland. But I am absolutely sure of one thing: that if the British Government press down hard on these issues of sovereignty, as opposed to the most expeditious, smooth and uninterrupted flow of goods between Great Britain and Northern Ireland, which is where I think we should focus, and if the British Government choose to make these other “sovereignty” issues their sticking point, we will be back to square one, and we will not get anywhere.

Q3 Lord Hannay of Chiswick: I have a further question, although it is not to do with Northern Ireland, which I gave notice to Lord Frost about and would like to put to him. After he left the Government, he made a speech which I certainly read with interest, in which he referred to the British Government’s position on performing artists, and the difficulties that Brexit has brought to that important and lively sector of our economy. He said that the approach by the Government had been “too purist”. Could he expand a little bit on what he thinks is the way out of the impasse that we have got into?

Perhaps he could also take in the issue of the complete collapse of intraschool visits as a result of the application of our visa regime. These are appallingly damaging. They are a subject that we will be considering in our analysis of the future of UK-EU relations, and it would be very valuable to have a few words from him on that now. I am sorry not to address this to Lord Mandelson, although he may like to come in on it, but it is an issue on which Lord Frost has personally expressed a view.

Lord Frost: Yes, I am very happy to. In my Zurich speech, the Churchill lecture, I said two things. One is that I thought then, and think, now that there is room for a significant bargain between us and the EU, although it must of course take in the settlement on Northern Ireland, and it could take in closer arrangements on foreign policy co-operation and migration movement issues. Of course, it could take in other things as well, in the interests of finding the right balance. That is still possible, so at that level a settlement is possible. On one level down, if you like, in the migration set of issues, it is a pity that it was not possible to solve these issues during talks in 2020. The atmosphere was not such as to make it possible on either side. There was a bit of scoping out of some of these issues but, in the end, it did not work, for a mix of reasons.

As you say, there is the issue of musicians’ visas and of school visas on our side. There are a number of other irritants, if you like; the difference between the Schengen visa of 90 and 180 days and ours of 180 and 360 days. There is the use of e-gates at airports, and so on—practical issues.

It ought to be possible to fix those. I do not see why we could not agree a narrow visa waiver arrangement covering defined categories such as musicians and actors and so on, provided that it was not permanent for ever, had an exit clause, could be renegotiated and was flexible according to events. But that ought to be possible. If the relationship warms up generally, these things are possible. In our minds, they could have been possible even in 2020, but events just did not make it possible.

Lord Mandelson: If it is so simple, why on earth could it not have been agreed at the time in 2020? Why were the relationships allowed to become so cool, in Lord Frost’s terms, that we could not even grasp that lowhanging fruit? Mutual recognition of professional qualifications is another issue. The sooner we get the mechanisms and working groups and parties of the TCA, of which there are at least 30 operating, there are all manner of things that can be opened up and which we should grasp. But we need the relationship to work, and it will not work until we have resolved the Northern Ireland protocol.

Lord Frost: Could I just come back on one point on that? It is important to remember in those last few months of the negotiation that, first, the atmosphere was not ideally as we would have wished, for a mix of reasons. Secondly, there was Covid. A lot of the talks, even in those last few months, were conducted remotely; they were constantly breaking down because one or another of us would get a positive test. We were not able to get within two metres of our interlocuters, so the normal defusing and exploring conversations simply could not take place. That is one reason that, now we have all moved on, we have forgotten was quite a major constraint on getting things done.

The Chair: Thank you.

Q4 Lord Lamont of Lerwick: I just want to ask Lord Mandelson a question. You warned of the danger of placing too much emphasis on sovereignty issues, as opposed to the flow of goods, and obviously I understand that in a practical sense. But in emphasising this, are the Government not just reflecting the views of the unionist community, and is their paramount concern not issues like the ECJ? Given that one has to give equal weight to the two communities in Northern Ireland, will this not inevitably be a consideration?

Lord Mandelson: I agree that we need to give consideration to the feelings and sensitivities of the unionist community. I happen to believe that, had both the European Union and the UK thought about it, they would have realised that once the protocol hit the political realities of Northern Ireland, it was not going to work exactly as they were envisaging—or pretending that they were signing up to, in the case of the UK.

I am very conscious of those, but, equally, unionists in Northern Ireland want their economy to work in the best possible way. There are therefore trade-offs between economic efficiency, trade and the flow of goods. A result of the Northern Ireland protocol and the arrangements that have been made is that it places Northern Ireland in a very advantageous position vis-à-vis both the European market and the domestic UK market.

Unionists are very conscious of that; they listen to those who are directly engaged in this trade. There are very strong business and employment interests that know that they will have to sign up to, or trade off, between sovereigntist issues and the advantages of trade and the movement of goods.

Where it is possible to find some flexibility in relation to sovereignty issues, such as taxation, state aid and the ECJ, the European Union should go the extra mile to do so. What I said was that if the British Government chose to press down hard on those issues and make them the stumbling blocks, we will be back to square one.

The Chair: Thank you very much.

Q5 Lord Tugendhat: I have a question for Lord Frost, but to some extent both his and Lord Mandelson’s answers have cast light on it. Does he think that the institutional structures set up under the withdrawal agreement and the TCA have operated in the manner envisaged by the UK Government when the respective agreements were signed? I imagine the answer is probably no.

Lord Frost: Actually, it is mainly yes, to be honest. They have worked reasonably well but have obviously been subject to a degree of external strain that probably was not expected at first. The TCA arrangements, as far as I can tell, are working reasonably well. Indeed, the TCA itself is working effectively. There are certainly some bits that we have discussed that could be sanded off, and perhaps those groups are discussing it. I think they are working effectively.

The withdrawal agreement is a different matter. Even within the withdrawal agreement, the Joint Committee and many of the specialised committees have worked effectively. They have been fora for different perspectives being shared, most obviously on citizenship and even more obviously on Northern Ireland. They are doing the job and getting people talking. They are not bodies that are designed in themselves to evolve the arrangements; that has to come from outside. They are working within a context in which that is quite difficult, but I am quite positive about it.

I do not have direct experience, but the parliamentary and civil society forums are all up and running and probably within the relatively formulaic expectations that we have of bodies like that. They are working reasonably well. It is too soon to tell, but I think they are working better than many people give them credit for.

Lord Tugendhat: That said, if the current negotiations resolve the outstanding difficulties and we get back to a more normal situation, could you and Lord Mandelson tell us whether you think the present system of 32 committees and working groups established under the withdrawal agreement and the TCA is appropriate or overly complex? Perhaps I could ask Lord Mandelson first.

Lord Mandelson: I think that the 30-odd specialist committees and technical working groups take us only so far. They are a vehicle for people to use but do not in themselves generate the sort of spirit, determination or desire for partnership that we would like to see and the development of habits of working together to solve common problems.

Where we have employed real co-operation, for example in respect of energy, we can see so far the gains that are available. However, there are many other areas in which we have to employ similar co-operation and develop the habit of working together. I would rather us prioritise what I call a habit of co-operation and working together, rather than, at this stage, look at the structural aspects of the TCA. It is too early for that. We have not given anything that we have put in place time enough to operate and work as we think it should. I think the TCA will be reviewed in 2025 in any case. I hope that, in the years between now and then, the habit of working together will have grown so that we will want to take the TCA forward.

As it stands, the TCA is a bare-bones trade agreement on goods. It is not a lot more than that. I would describe it as a ground floor and not a ceiling. The TCA is a dynamic construct that can, with the agreement of both sides, be taken in a variety of different directions. We know that foreign policy, security and defence issues, for example, were not included in the original agreement.

One thing we have learned from the experience of the continuing war in Ukraine is that in this sphere of security and defence there is a colossal amount more that unites us than divides us. We now, after all, have a common enemy that unites us. We have also learned that you do not win wars by WhatsApp. You need really strong mechanisms and working structures, which I think are likely to become permanent. We might get on to the area of defence and security in the course of the discussion, but that is an example of a key area where a dynamic trade and co-operation agreement can fulfil better its original aims when we come to review it.

I would not spend time now on structural, institutional questions. I would put more time and energy into leaders meeting, ministers meeting and people meeting concerning different challenges in different contexts. The recent meeting in Prague is a very good example of an occasion that shows the advantages of bilateral meetings, for example between our own Prime Minister and President Macron. What has flowed from that has unlocked co-operation on Sizewell, for example. There are many areas where we can unlock co-operation, as long as we have people meeting in good faith on a trustworthy basis in the first place.

Lord Tugendhat: Thank you very much. I agree very much with the point you make about the habit of co-operation. It is on that basis that so much else can be built.

Lord Frost: I basically agree with what a lot of what Lord Mandelson said. The habits of co-operation are important, and the more of it that happens the better. Talking does not dissolve fundamental national interests, but it certainly makes them a bit easier to manage. I certainly have no problem personally with UK Ministers showing up at councils, if they are invited, and joining those discussions. It all makes sense.

You are right that a lot of committees are in the TCA, but that is because it is quite a big agreement. It has got a bit established somehow that it is a bare-bones agreement, but it is not. It includes services—for example, legal services—and we worked very hard to get good provisions there. It includes provisions on airlines and lorries. It has a huge law enforcement chapter and a fisheries agreement, as well as a very deep social security commitment, including on health co-operation, and the continuation of the arrangements for mutual treatment of health, which we worked very hard to get. So there is a lot in this agreement; it is a lot broader than most trade agreements, in fact. It is right and inevitable that there will be lots of complexity in running it.

Lord Mandelson: I know a little bit about trade agreements.

Lord Frost: Indeed, I think we both do.

Lord Mandelson: This is a goods agreement, not a services agreement. Yes, we have a memorandum of understanding on financial services and handling VAT, but it has not been ratified, as far as I know. There are one or two small bites of the cherry, but this is not a substantive agreement in services trade.

Lord Frost: There is a 500-page schedule attached to the agreement on services. We certainly wanted to do more and do better, but I think it is better than zero, by quite a lot.

The Chair: In the same vein, can we move to Lord Lamont?

Q6 Lord Lamont of Lerwick: My question has been partially covered, at least by Lord Mandelson. The question was whether there would be any benefit to holding regular summit-level meetings between the UK and EU of the type that the EU holds with some other countries, which the UK has already agreed to hold with some partners such as Germany. Perhaps we could get Lord Frost’s view, as well as that of Lord Mandelson if he has anything to add, although I think he made his point in reply to Lord Tugendhat.

Lord Frost: Yes, it could be helpful to have regular summits. They tend to be at the more dignified, rather than efficient, end of the spectrum, as far as the collective constitution is concerned, but they can be a useful focal point. I would probably not say that they are the most important thing at the moment. The most important thing is getting habits of co-operation going in other ways and having enough co-operation, not just in the committees, but day to day, through the missions and so on. That would be the priority, but I certainly would not say no. I could easily see it getting established, but it is probably not the immediate priority.

Lord Lamont of Lerwick: I think Lord Mandelson was not saying no but that he thought that informal contacts were more valuable.

Lord Mandelson: I think also that bilateral contacts are important between our Prime Minister and leading Ministers and those in France, Germany, Norway and eastern Europe. I am trying to think of an example: we have a defence partnership co-operation with Poland, for example—we have developed that. Those are the sorts of things that I would like to see. A UK-EU summit might have a symbolic value. It would have to be very carefully prepared, and the good will, if it engendered that, might cascade downwards to other relationships.

I would like to see relations developing between London and Paris, London and Berlin, London and Prague, London and Rome, and I would like to see those bilateral relations developing in a whole plethora of different areas. Then I would like to see much more London and Brussels. I am not saying that we should develop bilateral relations with national capitals of member states at the expense of Brussels, or to divide or rule member states—on the contrary. But bilateral relationships will in time feed into a better allround relationship between London and Brussels, the UK and the EU.

Lord Frost: Can I make one follow-up point? I agree with all of that, but it is important, if those things are going to happen, that we have enough people to manage those relationships. That means, certainly in the Foreign Office and probably beyond, that you need sufficient Ministers, senior officials and envoys, who are empowered by Ministers or the Prime Minister, to build those relationships, to be in place over time and not rotate rapidly, to allow them to happen. That is a change in our practice that we should try to get established, now that we have left the EU. We essentially have the same number and cast of Ministers, and the same ways of doing things in our diplomacy as we did before, and that has to change.

The Chair: Lord Hannay is going to come in in a second, but I would like to ask you about that. Surely, during the time when we were members of the EU, Ministers were engaging naturally in that type of intercourse. That time has been given back to them, because they are not doing it, so we are talking about re-engaging in the process. Would we really need to increase things dramatically, or are we just going back to the position quo ante?

Lord Frost: Within the EU, Ministers, senior officials and others met a whole bunch of people all at the same time, through the EU structures. That was not the only thing, but it was how a lot of the contact happened. Now we have to do a lot bilaterally, which involves travel and preparation— and, when you have put all that work in, you have done it with only one country. It requires more resource and effort than before, if we are to make it work.

Lord Hannay of Chiswick: I want to pick up on that. You have had recent experience of this, and Lord Mandelson has had less recent experience but plenty of experience. A huge amount depends on the co-ordination of the British Government’s policies under the authority of whoever is the Prime Minister in machinery usually to be found in the Cabinet Office. As far as I can tell, most of the existing machinery that we had was simply abolished and has never been properly replaced. What is to be done about that? We have to recognise the reality that, in this day and age, the Prime Minister calls the shots on all these matters, but it does not work if the other departmental Ministers are not working in a coherent way together.

Lord Frost: I do not think that our internal co-ordination arrangements on European or semi-European business have worked well, certainly not since the referendum and probably a bit before that. The internal habits of transparency of information and clarity when decisions were taken, as well as what those decisions were, so that people could act on them, have all been lost. You cannot point at one Government in particular for being responsible for that; it has been a gradual deterioration over the past decade or more, to be honest, in how the machinery has worked.

Q7 Lord Faulkner of Worcester: I would like to ask both our witnesses for their view on UK participation in other multinational organisations, such as the Council of Europe, the United Nations, and maybe the World Trade Organization and the G7. How should our institutional co-operation with the EU relate to that?

Lord Mandelson: In my view, we should know what the EU is doing multilaterally and, where it is possible to do so, try to shape the positions the EU arrives at informally through discourse and transparency between us. We should seek, outside the European Union, to leverage the strength of the EU within multilateral institutions where we have an identity of interest and opinion.

What has happened is that, almost as a matter of principle or dogma, many who supported Brexit feel that any contact with the European Union is a form of entrapment, that somehow the tentacles of the beast will reach out and inveigle us back into the European Union. Well, that ain’t going to happen, and nobody is suggesting that it will. I am talking about pure practicality: how to advance the interests and the position of the United Kingdom. Just as we seek to influence the United States, and try, where we can, to leverage the strength of the United States to advance UK interests, I believe we should do the same in relation to the European Union.

Lord Frost: I basically agree with that. We should obviously be making sure that we know what the major players are doing in multilateral organisations. We are likely to find ourselves working with the EU and other western countries more than others, for obvious reasons, which is entirely natural.

There are two things I would add. We should not get into a position where we are always dealing with the EU first and our first assumption and solution to every problem is to ask what the EU is doing. We should be a bit more sophisticated than that. Knowing and talking to the EU is extremely important, but it should not automatically be the first thing we think about everything. At times, it has been.

I agree with Lord Mandelson that, at times, there has been an overzealous wish almost to avoid contact with the EU and its institutions. That is not my view, and I hope that what I have said already shows that, but I think there has been overcorrection by some in places as a result of Brexit.

The last thing on all this is that we are an independent player now. I think there is still a bit of a tendency to undervalue what we can do internationally and in these institutions. Obviously we are not a player like the Americans, the Chinese or the EU on trade issues in the WTO, for example, but we are still a very big player. The countries that do have influence in the WTO, such as Canada and Australia, have influence. They are not at the very top, but they are very significant players, and we should not underrate ourselves and our ability to make things happen in these organisations.

Lord Faulkner of Worcester: Thank you. That was a very interesting answer, Lord Frost.

Q8 Lord Foulkes of Cumnock: I am having some problems with communication, because I am in Strasbourg at the Parliamentary Assembly of the Council of Europe.

Some concern has been expressed here by Members of Parliament from all the countries about the meeting in Prague, which Lord Mandelson described earlier. Our Prime Minister said that this is just going to be an informal relationship with no secretariat. They have already fixed meetings in Moldova and Spain, and later in the United Kingdom, and it is beginning to look as if it is a growing and permanent organisation. How do you see it developing, both of you, and do you see the fear here, that it will eclipse the Council of Europe and take over, as genuine?

Lord Mandelson: I do not see why the Council should feel threatened at all. I personally welcome the establishment of the European Political Community. I think it is a good forum and potentially a mechanism to advance co-operation on energy, security, migration and other issues. I also think it is a chance for us to rebuild trust with our neighbours and to foster a more strategic and common interest amongst all Europe’s nations. So I look at it positively.

Also, we need not to anticipate, but at least to consider, the risk that we get another “America first” President moving into the White House. Should America ever move in a direction that adversely affects us in Europe and puts a question mark over our alliance with the United States or America’s security guarantee, we will all of us have to think in a rather deeper and more profound European way than we have previously. Britain will have to find its place in that consideration, that forum.

We are not a member of the European Union, and we need some sort of locus in some sort of European body. I am not absolutely sure that the EU Political Community will be it. I know some say that eventually it will need a secretariat. I do not think that that secretariat can or should be the European Commission, by the way, because this community is an amalgam of countries inside the EU, outside the EU, once in the EU, no longer in the EU, so it would not be appropriate for the Commission to play that role, but it may be that a secretariat of some sort will be needed in due course.

Let us see how it evolves. Let us see how it develops. One thing is for sure: our Prime Minister, when eventually she was persuaded that it was a good idea to participate in this meeting, seemed very relaxed and very at home in it, and I think her presence was very well received by others. That is significant, and something on which we should build.

Lord Foulkes of Cumnock: There was a feeling that the European Commission had taken over that meeting. In fact, the Secretary-General of the Council of Europe was not invited to the meeting—nor was the Secretary-General of NATO, although it was dealing with security—and it looked as if the Commission was trying to take ownership of it. Is that a concern?

Lord Mandelson: I think that would be a mistake. I just do not think that the Commission can play that role. If you are going to develop the community and it is going to have a founding document and agree that, and establish other bona fides, you have to recognise that this community is not simply an extension or an expression of the European Union. Therefore, I do not believe that its Commission can provide its administration.

Lord Foulkes of Cumnock: Good. What does Lord Frost think about it?

Lord Frost: I agree with a lot of that. It is a potentially useful body. It seems right that Europeans should have a way of getting together in a reasonably systematic way nowadays. I think it was right for the PM to go to it. I do not see much risk of it overshadowing the Council of Europe, to be honest. That is such a well-embedded institution with its own treaty and obviously the court and everything that goes with that. I just think it is a different kind of thing, and I just do not see that risk at the moment.

Some small level of institutionalisation may be necessary. It is possible for international bodies to work with minimal secretariats; the G7 has done that for many years, as has the G20, obviously. But some sort of secretariat probably makes sense. I agree that it cannot be the Commission; it has to be done in some other way. Any sense of deep institutionalisation or the kind of teleology that has surrounded the EU, would scare off participants and should be avoided. It is an interesting start. Let us see where it goes, and keep it complementary to everything else that is going on in Europe.

Lord Foulkes of Cumnock: If it gets established, do you think it will play a key part in UK-EU relations?

Lord Mandelson: I have a slightly different view, George. I think it will not play a key part in UK-EU relations, but I think that the establishment of the community, if it happens, is a very big opportunity for Britain, and we have an incentive to make it work.

Lord Frost: I keep saying that the point of Brexit was not to have bad relations with all our neighbours; it was to have a different kind of relationship with all our neighbours. This seems to be a way of allowing that to develop.

Lord Foulkes of Cumnock: Thank you very much, both of you. Those are very helpful answers.

Q9 Lord Wood of Anfield: Thank you very much for coming. I want to ask about the impact of Brexit on foreign policy and security co-operation. I think Viscount Trenchard is going to ask about Ukraine, and that is one set of issues. In the medium term, what impact of Brexit do you see on the possibility of foreign security and defence co-operation? One issue in particular about which there is a lot of concern is that of PESCO and European procurement co-operation, with the UK being excluded in the medium term, or maybe even shorter than the medium term. How worried are you about those sorts of things in the continuing involvement of the UK in defence work inside the EU?

Lord Frost: We should be pragmatic about this. We kept it out of the negotiations in 2020 and took the view that we did not want to see an institutionalised UK-EU foreign policy relationship at that point. That may not be the case for ever, but a lot can be done just by normal UK-EU diplomacy, the normal contacts that happen at all kinds of levels in assuring foreign policy co-ordination and alignment of the direction of travel, where that is necessary.

On things like PESCO, where there is a process under way, and on similar kinds of EU arrangements, we should be pragmatic. If it ends up that we are a bit player in essentially EU arrangements, with very little ability to affect it or have our own interests at play, that is one thing. If it is about taking part in arrangements that other third countries are part of, which are a sensible way in which to allow a particular area of co-operation to develop, that is something different. PESCO probably leans a bit more to the second than the first at the moment. We should have no prejudices about that, as long as we are maintaining freedom of action and are able to protect our own interests. That is how I would look at it.

Lord Wood of Anfield: So you do not see the need for any institutional arrangements to develop to give birth to a new relationship on foreign policy or security co-operation.

Lord Frost: I do not, really. I would not say that it will never be necessary, but there are two things going on. One is that diplomacy and foreign policy co-operation are not always well suited to the kind of formal institutional arrangements that the EU typically does. They rapidly become dignified rather than efficient, and all the real contacts happen in other ways. From the perspective of the Government that I was in, we did not want immediately after Brexit a whole set of arrangements to be established that would keep us in the orbit and mean that the first thing that we thought of, when presented with a foreign policy problem, was what the EU was going to do and how we were going to influence it.

That is an important part of any policy, but it should not be the first thing. Over time, we will get used to being a genuinely independent actor on the world stage; we will develop our own interests more effectively, and we will co-operate in different ways, and the institutional relationship may become easier, in that context.

Lord Mandelson: My view is that our ability, and the scope for us to act as a truly independent actor on the world stage, is very constrained. That is why we channel so much into the collective security arrangements of NATO; it is why, at times in the future and on a practical and pragmatic basis, we will have to find ways to co-operate with the European Union. There are areas of activity. In the Horn of Africa, for example, there are issues to do with terrorist threats and illegal migration, where Britain has played quite an important role. We have even led on those efforts on missions in the Horn of Africa and elsewhere. We have done that through collaboration, as members of the European Union, and we need to find a way back to do that.

Our leadership in the NATO HQ is definitely one part of Brussels where the UK is very well thought of. The role that we have played in respect of Ukraine generated a lot of respect and good will for Britain among the member states of the European Union. But we lack a vehicle, some structured way in which we can operate in future with the European Union. We have to be careful about this, because the EU and the United States are definitely on a mission to create very structured ways of working and assembling strategic views of our western interests in the world. I can think of two. There is the US-EU security forum, for example; we have no structural mechanism or way in which to take part in that, or influencing it. Then there is the Trade and Technology Council, which was originally the idea of the Commission, and which the United States Administration took some time to embrace but they have now done so with real gusto and enthusiasm.

Why is that? It is because suddenly you have a mechanism for US-EU cooperation and convergence of policy, thrashing out what we are going to do, for example on sanctions against Russia because of Ukraine, as well as what we are going to do to operate export controls of critical technology to China and how we are going to pursue technological international standards that reflect the interests of the United States and Europe, rather than have them imposed through hyperactivity by China. Where is Britain in all this? Frankly, we are observers and spectators, because we have no institutional mechanism that connects us or binds us into these new arrangements.

Do not underestimate them. Yes, they may fall by the wayside if there is another President who takes a different view of Europe—in which case, we have much bigger problems on our plate than what Britain’s future role will be. Those would be existential questions for us all, but in the meantime, this EU-US collaboration is thickening in a whole number of different areas, and we are not part of it.

Lord Wood of Anfield: Maybe Lord Frost wants to come back on some of that.

Lord Frost: I take a slightly different view on how influence happens in the world. It is about more than just being part of institutions and trying to project your will within them. A lot of foreign policy is about what you say, how quickly you act and how much of a lead you give. Speed, clarity and decisiveness count for quite a lot.

There is an implicit view of the EU that it always knows what it wants to do internationally and is clear about how it wants to act. I do not think that is always the case. There are clearly very significant divisions within the EU that, in different circumstances, we have seen play out a lot and which make the EU a much less effective international player. It has gradually got its act together over Ukraine, but it was not obvious that it was going to be like that.

Speed, clarity and what you do with your own country count. If we are successful economically, as I believe we will be, and if we become serious defence spenders and spend a lot on defence research, we will be a significant player and part of discussions that matter. Institutions are part of it, but they are only part.

Q10 Lord Liddle: I would like to follow on directly from what we have just been discussing, particularly in the context of major international crises. David, we were talking about Ukraine. We have clearly managed to play a big role through military support, but in areas such as sanctions and, even more, in energy policy, are we not on the sidelines a bit of what Europe is deciding?

Thinking forward, in the next 10 years we may face a major crisis with China. Where would Britain be and how would it fit into, for instance, whatever trade policy the EU decided on China? Would we just go along with it? How would we influence it? Can we establish relationships that enable us, from outside the EU, to influence critical decisions that really matter to us?

Lord Frost: I have not been in government since the Ukraine problem happened, so I am a commentator like everybody else. Obviously, we are on the sidelines of EU decision-making to some extent because we are not a member of the EU. It was inevitable that it would be a bit like that. I do not think the EU’s record has been particularly stellar over this period. A lot of the problems we have come from some of the appalling misjudgments by some member states about energy supply in recent years, about which we have been critical. It will take quite a lot of time for them to correct those. It is right that our focus—if it is indeed our focus— should be very much on our own resilience and making sure that we get through these periods, as well as trying to influence what the EU does.

Similarly on sanctions, you could make the case that the need for consensus within the EU has weakened it over the last year. You could argue that 25 or 26 member states proceeding on their own would have been able to put in place quicker, more effective and more far-reaching sanctions than this process, which has been blocked at every stage—with the country concerned being slowly won round. It is not straightforward; the picture is more complicated. We have given leadership and have stood up for our own interests. It is right that we focus on our own resilience.

Can we influence the EU from outside as part of a crisis? I hope so, and I like to think we influence the Americans and others. The way we do it is by having very deep day-to-day relationships, frequent contact and an understanding and sense of each other’s interests. That is how we should be trying to do co-operation with the EU. That will require effort on our part. As I said earlier, I am not sure we are resourcing it as well as we should be. We should be doing it and trying to, as it will be very important.

Lord Mandelson: Let me come on to China in a moment. Obviously, I agree with the impulse that we should stand up for our own resilience in respect of energy, for example. However, when push comes to shove, we may need a little bit more than that. We may need a little more cooperation, more energy or interconnectedness. We may have to rely on our neighbours, in other words, in extremis.

I do not think that anyone in Europe—us or member states of the European Union—can afford to throw stones in glass houses. While certain member states of the European Union were deepening their dependence on Russian gas—very foolishly—we were closing down our gas storage facilities in Britain. It was in about 2012 or 2013. It is crazy. We have a lot of trouble with onshore wind, as we know. We seem to be incapable of building civil nuclear power stations once a year for 10 years as was promised. None of us has got energy right, and I would be cautious about imagining that in all circumstances we can stand up for our own resilience. We need more safety nets than that.

On China, my view is pretty simple. When it comes to China, I would rather we co-ordinated and collectivised our approach than stand separately alone and allow ourselves to be targeted and picked off by China. We are not the most important country in the Chinese universe, but we are a fairly large economy, and there are strong trade and investment links between the UK and China. We are not unimportant, but we should not exaggerate our importance.

When it comes to shaping our future approach to China, we have to secure ourselves in a variety of ways, but we also need to engage with China. That is what the new dynamic in the relationship between China and the West requires. I would rather we did that as part of a collective western approach and strategy than think that we can form our own stance and exercise any real influence over China and China’s position in the world by separating ourselves from others.

Lord Hannay of Chiswick: I want to ask you both to comment on this question—particularly Lord Frost, because Lord Mandelson has already to some extent answered the question. Do you not think that if we insist all the time on the necessity to look after our own interests in a separate way, we make ourselves quite a lot more vulnerable? Over the years, as one of the members of the European Union, we acquired a good deal of invulnerability as a result of the fact that the European Union was rather a large beast and nobody wanted to kick it on the shins too much. If we insist that we are going to be separate and different, will we not be creating—in the sort of conditions of a tension with China to which Lord Mandelson referred—great vulnerability? I am not arguing that we should therefore always do exactly the same, but surely we are creating a vulnerability there without perhaps realising that that is what we are doing.

Lord Frost: There are different ways of looking at this. Obviously, there is a risk of divide and rule or us ending up on our own, taking a particular policy view. However, when we were in the EU, sometimes my experience was that our policy was to avoid taking a robust view on questions and to hide in the pack. Over time, that stopped us thinking hard about problems that we should have been thinking hard about as a country. These things play both ways.

To expand on the discussion slightly, on the question of resilience I am not saying that we should have regard to our interests independently and indifferently to anybody else’s. You obviously increase resilience by having connections with others, but you also have to take a realistic view about whether or not you can rely on those connections. I was deeply burned by the very fraught atmosphere over the vaccine issue 18 months ago. We discovered, in that case, that it was every man and every country for itself, whatever the legal niceties. We have to be realistic that, in moments of extreme crisis and stress, you cannot necessarily rely on interconnectors or on every legal framework that you are part of; you have to make sure that you are doing your best to cover yourself.

Q11 Viscount Trenchard: How effective has the co-operation between the UK and EU been in response to the Russian invasion of Ukraine? Has it worked well, and would it have worked better had we been part of the US-EU institutional defence and security arrangements, which have been discussed, or if we had been committed to PESCO, which we are not—or has it worked effectively because the UK was free, at the point of invasion, to react immediately and adopt a leadership role, which otherwise would have been compromised?

Lord Frost: Your latter choice is my view. I have not been directly involved in this, but that is my impression. If we had been part of the EU, a lot of diplomatic effort over the last six to nine months would have been devoted to showing up in Brussels and trying to influence what was going on there, and spending a lot of time on that, probably to rather limited effect. That would have come at the expense of talking to others, thinking hard about the situation and trying to influence it in other ways. That is just my view. I think that it is the case, but of course you never know with counterfactuals.

Lord Mandelson: I think Lord Frost is exaggerating, for whatever purpose, the slowness of the European Union to react to the invasion. It is certainly true, when it came to sanctions, that United States senior officials flew into Brussels with a plethora of very well worked out and detailed arrangements, and met the relevant Commissioner, who thought that they were just going to have a preliminary and general chat—whereupon the Americans got their spreadsheets out across the table, and we were off with rather more momentum than the Commission had initially anticipated.

The bigger issue that Europe and we have to consider when we co-ordinate action, such as our aid for Ukraine in its resistance to the Russians—that will be done primarily through NATO—is a defence industrial dimension. That is about how we develop weapons systems that are interoperable and easily moved. I was very struck, when I met and discussed this with Chancellor Scholz in Berlin in July—it was an informal, private conversation, but I am sure he will not mind if I say—that among the early German problems was not only a paucity of supply. German military capability has been run down over two-plus decades, which is now going into reverse, of course.

By the way, I think that Britain needs to co-operate with Germany in the build-up of its military capability and help to shape it and possibly supply it.

The issues that Germany was wrestling with were not only that it did not have enough to supply to help Ukrainian resistance—there were great issues of adaptation of its systems and interoperability, which you would have thought would have been thought through in their inception and not when they were most needed, at a time of war, through proper NATO collaboration.

In my view, the EU is going to learn lessons from Ukraine. It will want to step up and do better in future, in such circumstances. Chiefly, the European Union will form new linkages to NATO and the United States, but it is also going to develop a defence industrial strategy and rolling out of resource and co-ordination, which I think it would suit us militarily and economically to be part of where we can, rather than stepping aside and not being part of what is going to be a significant ratcheting-up of European defence industrial strategy and military capability.

Q12 Viscount Trenchard: That is very interesting. You have gone on to the extension of my question, which was going to be about how successful you both think co-operation with the EU has been in various areas. The provision of munitions was one that I was going to refer to, which you have already mentioned. What about the provision of hospitals and medical equipment and the implementation and maintenance of sanctions? Lord Mandelson, you already referred to the lessons which you expect that the EU has learned as far as munitions and military equipment are concerned.

Just to finish up—I am trying to put three or four questions in one—what other lessons have we learned from the co-operation over Ukraine, and are we confident that the EU will hold together through this winter? Germany’s dependence on Russian gas has been so much greater than, for example, that of France, which relies largely on nuclear. Is the EU going to hold together and maintain sanctions through the winter?

Lord Frost: “I think so”, is the answer. Of course, it depends how extreme the crisis in its various ways becomes, which is only partly in our hands. I expect the EU to show solidarity on this, having gone as far as it has, precisely because the crisis is an extreme one. I am probably less convinced of its ability to learn from experience in these areas and to reform its internal arrangements to avoid these problems again, but that is its problem, not ours. There are very considerable strains within the EU which are often not commented on as much as they should be. All the same, the force of solidarity and co-operation is always strong. So far, it has proved to be the stronger of those two forces.

Lord Mandelson: I agree with Lord Frost. We should not underestimate EU solidarity and, equally if not more so, the absolute determination to see Putin defeated. This is such a massive strategic interest to Europe. Yes, very serious shortages and serious economic pain will be incurred. The European Union will do everything it can to discourage or depress energy use across Europe. It may introduce price caps; there may be rationing of energy in certain member states. It will be prepared to take on this pain in pursuit of a bigger goal: resistance to and defeat of Putin’s invasion. It is absolutely right to do so.

The Chair: Thank you very much. I am sure we all agree with those sentiments. We come to our final question and Lord Lamont.

Q13 Lord Lamont of Lerwick: The final question is about the so-called deepening relationship between NATO and the EU, which Lord Mandelson referred to. I must confess I was not really aware of this. I am not sure whether he was referring just to the US-EU security forum or something much wider, perhaps he could expand on that.

How do you think this affects Britain’s relationship with NATO, particularly in the context of Ukraine? Is there a risk of the UK being excluded from important discussions? In the past, in my recollection, EU defence cooperation was always regarded as a something of a threat to NATO, so I am rather surprised by the development Lord Mandelson was talking about.

Lord Mandelson: The British attitude has always been that if Europe does more in any form, it will simply duplicate or dilute NATO. NATO’s role and the anchoring of European security in the NATO alliance is in the Lisbon treaty. It is an article of European law as well as faith that NATO is the primary source and form of defence collaboration for EU member states.

The question, however, is whether EU member states could do more to step up the strength of their contribution to NATO’s efforts without diluting or duplicating. That is going to be an important lesson from Ukraine, and I do not think that Britain, for example, should react in a negative or neuralgic way. We have our place on the top table. We are an undisputed key member and provide important leadership to the NATO alliance. Nothing will affect that. As long as the EU’s focus and the channelling of its efforts are to strengthen NATO’s collective strength, I believe Britain’s interests will be protected.

Lord Lamont of Lerwick: What form is this EU-NATO co-operation, which the question implies, taking?

Lord Mandelson: It is two things. First, it is operational. It is making the EU think more and think more nimbly and quickly about what EU member states have to do in the context of threats or emergencies, whether it be in Ukraine or northern Africa. Secondly, it has to develop, and it is. This is partly what so-called strategic autonomy is about. It has to do more to develop its own defence industrial strategy. It has to rely less on European member states acting separately and apart in developing weapons systems, which are not always interoperable, or depending on the United States, as many do. It is about creating European-constructed and produced defence industrial policies and investments on which they collaborate together. The aircraft combat system is an example of that. We have our own approach, which involves Japan, Sweden and Italy.

Lord Lamont of Lerwick: There is nothing very new about that.

Lord Mandelson: There is not, no.

Lord Lamont of Lerwick: That goes right back to the 1980s.

Lord Mandelson: And look where it has got us.

Lord Lamont of Lerwick: Many of the multilateral projects turned out to be much more expensive than buying American or developing on one’s own.

Lord Mandelson: However, there are economies of scale that can be exploited. There are advantages and benefits from countries collaborating. They are doing so at the moment; France and Germany are, in the case of their own aircraft combat system.

I am saying that, where there are economies of scale to be exploited and we can improve the military interoperability and performance of what we are producing, the European Union is much more focused than it was before the Ukraine war. It behoves us to consider our own defence industrial strategies, certainly on where we want to and can do things ourselves, and where we can usefully collaborate with others. The key thing is that we are all part of one collective security alliance; it is called NATO. What we are doing should be joined up.

Lord Frost: Obviously NATO has a new lease of life. It has been developing it for a few years, but this year has made a huge difference to the perceptions of political importance, what NATO is there for and the importance of getting it right. The Swedish and Finnish applications to join are a symbol of that. I draw from that what I had always thought—that NATO does not have to worry about being undermined by a more sharply defined European security and defence identity. It should worry us if we were in it, but we are not in it any longer. If Europeans feel that a clearer perception of and arrangements for how they manage crises and a clearer sense of their own strategic interests develop, it is not particularly likely to undermine NATO. It should not particularly worry us. I certainly do not think we should invest any effort in trying to stop it as a country.

Defence industrial policy is all done through collaboration now. I am not a big fan of industrial policy generally. It should not be a presumption that it would be a good thing to be involved in EU procurement arrangements for military kit. I do not think the track record stands it up. We can work out what our own interests are and where we want to co-operate on that. It might be in other partnerships, buying American or whatever. Again, I do not think we should be worried. If that is what the Europeans want to do, it may very well not be in our interests.

The Chair: Thank you both very much indeed. We have used up 100 minutes of your time and we are very grateful for what has been a thoroughly interesting session with much food for thought.