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European Affairs Committee

Corrected oral evidence: The future UK-EU relationship

Tuesday 18 October 2022

5.30 pm

Watch the meeting

Members present: The Earl of Kinnoull (The Chair); Lord Faulkner of Worcester;

Lord Foulkes of Cumnock; Lord Hannay of Chiswick; Lord Jay of Ewelme; Lord Lamont of Lerwick; Lord Liddle; Lord Purvis of Tweed; Baroness Scott of Needham Market; Viscount Trenchard; Lord Tugendhat; Lord Wood of Anfield.

Evidence Session No. 4               Heard in Public               Questions 35 - 45

Witnesses

I: Dr Rosa Balfour, Director, Carnegie Europe; Dr Nathalie Tocci, Director, Istituto Affari Internazionali; Georgina Wright, Senior Fellow and Director, Europe Programme, Institut Montaigne.

Examination of witnesses

Dr Rosa Balfour, Dr Nathalie Tocci and Georgina Wright.

One big overarching question about the EU-UK relationship on foreign and security policy is whether there needs to be some kind of institutionalised framework for the relationship. It is fair to say that the Government do not particularly see a need to deliver something more structured, at the moment at least. What is your view about that, and what kind of form might that more institutionalised framework take, if indeed you think it is a good idea or if there is a big demand for it?

The Chair: I am afraid we are going to have to interrupt proceedings. There is a vote in the House of Lords. That will mean that those that are here will need to disappear for about 10 minutes, so there will be a 10minute interruption and then I will invite Lord Wood to ask his question again.

The committee suspended for a Division in the House.

The Chair: We are back again, having voted, and perhaps I could ask Lord Wood to pose his question again.

Lord Wood of Anfield: Thank you. My question was about whether there was a need for a more institutionalised framework to structure UK-EU cooperation on foreign and security policy. The UK Government do not seem to think that is a priority. I would like to hear your views about what would be in the best interests of that relationship, but also whether there is an appetite for something in the manner of what the political declaration envisaged, inside the EU or not. 

Georgina Wright: Thank you for this very interesting question and thank you for the invitation. I am director of the Europe Programme at the Parisbased think tank Institut Montaigne.

I do not think we should privilege institutionalisation for institutionalisation’s sake. Instead, we should privilege flexible formats. We should be thinking about how to meet more regularly, and about ways in which we can work together in areas where our interests align. That does not mean that you necessarily need an institutionalised framework.

The Ukraine war has shown that the UK and the EU can come together when needed. Liz Truss, who was Foreign Secretary at the time, attended a Foreign Affairs Council in March 2022, together with Tony Blinken from the United States. She also held a call with Josep Borrell, the EU High Representative.

One big lack that I have seen from talking to people in Brussels or across the EU capitals, is the fact that the UK and the EU, whether at ministerial level or below, just have far fewer opportunities to meet and talk. That is where the real problem lies. The United States and the EU have the TTC, which has helped. They meet in a very institutionalised way, but they also meet outside that council. You also saw it on sanctions co-ordination, where the White House and the Commission spoke a lot more frequently perhaps than even the UK Government did with the European Commission at the time.

That is one of the key losses of Brexit. There are fewer opportunities to interact, whether that is with Brussels or Luxembourg. That is also the key difference between the political declaration put forward by the Boris Johnson Government and the political declaration put forward by the Theresa May Government; Theresa May’s declaration wanted meetings at all levels, including ministerial and below.

Therefore, finding more opportunities to meet is a good thing. I have a couple of very quick examples. The Foreign Secretary could attend EU Gymnich meetings, informal meetings organised by the member state holding the rotating presidency of the Council. Norway, Switzerland and Turkey have done so in the past, so why not the UK? In a world where you wanted even closer co-operation, you could have secondments in each other’s Administrations. That is another opportunity. Then, of course, there is greater co-ordination and opportunities to look at ad hoc co-operation in areas of mutual interest, but perhaps we can come back to that later.

Lord Wood of Anfield: Thank you. Do Nathalie or Rosa want to come in?

Dr Rosa Balfour: Thank you. I am the director of Carnegie Europe, the Europe centre of the Carnegie Endowment for International Peace, based here in Brussels. I agree 100% with what Georgina was saying. There is no need to institutionalise the relationship, although I do think that the Trade and Technology Council, which the EU has set up with the United States, is quite an interesting example, because it is very practical and problem-solving oriented, without necessarily having a heavy institutional structure. Just to add to what Georgina was saying, I am hearing from diplomats in Brussels a growing flexibility with respect to what the relationship might look like, obviously once the Northern Ireland protocol problem is solved. 

There is certainly one lesson in the co-operation over the Russian invasion of Ukraine. By the way, it is not EU-UK led. It is actually led by the US, by the G7, and it always involves additional partners, beyond the EU, the US and the UK. 

None the less, the experience of this on a daily basis and the conversation between officials has reminded the European Union that there is a lot that could be discussed with UK counterparts. There is a growing flexibility in what shape the future relationship could take once the Northern Ireland protocol is solved, but I do think the TTC is a very good example.

The second point I would like to raise—again, looking at the transatlantic relationship—is that EU-US relations have never been quite so good. Whenever the US Administration come to Europe, they pay visits to all the EU institutions, so a lot of respect is shown towards the European Union and not just its member states. That would be perhaps another step or another gesture that the UK Government could make in order to start a different conversation on how to co-operate with the EU on foreign and security policy.

Dr Nathalie Tocci: I am Nathalie Tocci, from the Institute for International Affairs in Rome. 

I broadly agree with what has been said, but I do think that it is worth looking at this institutionalisation question by trying to be as unideological as possible. What I mean by that is that it is true—as was put in the question itself—that there is an instinct within the EU to try to institutionalise, and there is definitely an instinct on the British side to go in a non-institutional way.

I think it is worth looking at this question: what is it that institutions add and what is it that they take away from a meaningful relationship on security and defence? The impression I have is that—indeed, as Georgina put it—when it is institutions for institutions’ sake or, perhaps put slightly differently, institutions end up being a sort of surrogate for action and a way of hiding the fact that there is little action, that is kind of bad institutions.

TTC has been raised and I think there is merit in institutions as places, as venues in a sense, where the action actually happens—the implementation actually happens after the moment of a political decision passes. For instance, if we take an initiative that has decided to build in a noninstitutional way—for example, the European municipal community—the big risk underlying an initiative such as this is that beyond the meeting there is then little action. It was great to meet but it would be even better if there was some follow-up to it.

The point is trying to see what is it that institutions can contribute, which means that rather than starting with the question of institutions, it is probably worth starting from the question: what is it content-wise that we actually want to do together?

Q37 Lord Tugendhat: My question follows on from that and I must address it first to Dr Tocci. Some years ago, when we were members of the EU, I attended a conference of MEPs and national parliamentarians and you were on a panel representing Mrs Mogherini. One of the MEPs said, “Wouldn’t it be much easier to reach agreement on foreign policy and security without the UK?” You replied, “Yes, it would, but it would be worth much less”, which I thought was a very good answer. How open do you feel the EU would be to deepening foreign policy and security co-operation with us, and on what terms?

Dr Nathalie Tocci: Thank you so much for that question. I would probably still stick to that same answer, several years down the line. In terms of how open the EU would be, I think the EU was always very open to this. This was always viewed as a bit of a no-brainer. There was always the area of all things Brexit, where a post-Brexit relationship actually offered most scope for co-operation precisely because the value that the United Kingdom brings on issues of security and defence was very obvious and appreciated across the EU. Therefore, if you have a security and defence relationship with the UK out of the EU, it does not perhaps have the downside of a solo power complicating decision-making within the EU, and it has the value of basically co-operating with the UK outside of the EU, so I think the openness is definitely there.

The difficulty sets in—but this is up to the EU to resolve—as you know very well, in that the EU is more comfortable in dealing with a relationship in which countries simply fit in to the template it has to offer. That kind of ends up working when the bargaining power between the two sides is very unbalanced, erring on the side of the EU, which on most issues related to Brexit actually turned out to be the case, but not on security and defence. When it comes to security and defence, while I would not say that 27 weigh as much as one, it is definitely far more balanced than in other areas, such as trade.

Whereas that willingness on the EU side to co-operate is definitely there and is getting as strong as it was back in early Brexit days, once that negotiation—if it ever does happen—actually starts there would need to be some readjustment on the EU side in recognising that this is not simply something it can do on its own terms.

Lord Tugendhat: Thank you very much. That is very interesting. Ms Balfour.

Dr Rosa Balfour: I would like to add: what is it that the EU can offer to the UK and what does the EU have that the UK does not? Since 2016 the EU has moved on and there are a number of developments that affect foreign and security policy which I think are worth thinking about from a UK perspective.

For instance, failing Ukraine’s membership to NATO, Ukraine, Moldova and Georgia have applied to join the European Union and Ukraine and Moldova have been accepted as candidate countries. The path is long and we are not entirely sure how that will develop, but it is likely to produce an accelerated and stronger focus on the part of the EU in looking at eastern Europe and the western Balkans in terms of reconstruction, transforming these countries and readying them to join the European Union.

Obviously, the UK does not have this button it can activate—to be attractive for other countries to join—because it is a state. In this sense, there will be a growing divergence between the UK and the European Union in terms of what its foreign policy priorities are. Secondly, and separately, another area where the EU is investing a lot is in beefing up its geoeconomic strength, its economic statecraft. Again, here the comparison—just in terms of GDP and numbers of citizens—is huge.

These are two areas where the UK cannot participate, so while on the one hand, for the EU to co-operate with the UK as a foreign and security policy actor would be in the EU’s interests, the EU has always been favourably shaped by the UK as a member of the European Union in terms of its global projection. At the same time, the EU is moving on and some of the areas in which it will be making big investments in terms of beefing up its global capacity are those in which co-operation with the UK will be less interesting for the EU.

Georgina Wright: Very quickly, because I think everything has been said: does the EU want a closer security and defence relationship with the UK? Yes. Is it thinking enough about it and what it should look like? I suspect not. The reasons for that are multiple. The first is that there have been multiple crises—Covid-19, now the Ukraine war. But the High

Representative for foreign policy in the EU, Josep Borrell, said in front of ambassadors just a couple of days ago, “We should already be thinking about what a different US Administration would mean for US-EU cooperation”. Therefore, the EU is thinking about it for certain countries but perhaps less for others. I suspect that it is also because the EU, whether as a collective or its individual member states, has a feeling that the UK Government are simply not that interested in having a close UK-EU cooperation. So, yes is the short answer to your question, but something I often say to my EU colleagues as well is, “The EU should also be thinking about what cooperation with the UK looks like”.

As Rosa said before, there is an appetite to think out of the box now. The Ukraine war has forced that, but we are really at the beginning of that thinking. We need to accelerate, which is why I congratulate you for holding this evidence session, because hopefully that will be food for thought.

The Chair: Thank you. Lord Hannay wanted to come in with a supplementary.

Q38 Lord Hannay of Chiswick: Yes, I wanted to ask whether you thought that the implementation of sanctions was an area where there could be value

in some institutionalised co-operation. It struck me as interesting that this morning’s newspapers reported that the UK Treasury and the US Treasury had just signed an agreement to work together on implementing sanctions. Could that be built into an EU-UK relationship?

Dr Rosa Balfour: Most definitely. I think we would all probably agree regarding sanctions, and this is where that co-operation has proven of added value. We talked earlier about institutionalisation. One consequence of regular meetings and regular conversations about practical issues is that partners know what is happening. That is one of the added values that come out of this regular co-operation that we have seen on sanctions with respect to Ukraine but prior to that, China and Belarus. It is not just EUUK; it also involves the US, Canada and other like-minded countries. The experience of that has helped the relationship at a personal level, and officials hope to be able to maintain it.

Dr Nathalie Tocci: I agree and I think it has happened; these are unprecedented sanctions, and we have co-ordinated rather remarkably on them. If crisis is to be turned into opportunity, it is worth thinking about institutionalising this. Given that these are unprecedented sanctions and we will implement them for probably quite a long time, we do not know what other hurdles and loopholes we will meet along the way in terms of the behaviour of third countries. This gets us into a transatlantic conversation about extra-territorial sanctions. What lessons can be drawn, as Rosa was hinting at—

The Chair: I am very sorry to cut in. It was a very short question but we need to make some progress because we have a lot of questions to go and time presses on. I assume that was a yes. We will move to Lord Jay.

Q39 Lord Jay of Ewelme: Since the UK left the EU, we have agreed bilateral foreign affairs and security declarations with a number of EU member states, including Germany, Finland and Sweden. What do you think the advantage of that might be for the UK and for the other states too? I agree with what Rosa Balfour said about the fact that these relationships will be dynamic. 

Dr Rosa Balfour: These bilateral relationships, by all means, probably provide added value to the UK, but very little by comparison to what the EU has to offer. One thing that has become apparent, maybe to the surprise of some, including myself, is the degree to which EU member states have been very united and co-ordinated when dealing with the UK. After the referendum the diplomatic tactics of London were to focus on bilateral relationships with member states, but member states came to the conclusion that it was vital to stay together. 

Since Covid and the Russian invasion of Ukraine, it is more obvious to the member states the added value the EU can offer. Therefore, the bilateral relations and the MOUs that have been signed by the UK with individual member states, which are quite targeted to certain sectors, be it energy or defence, are not seen as an impediment to a more important relationship with the European Union and are not seen in an antagonistic way at all. We have seen great unity on the part of the EU vis-à-vis the UK, and these bilateral agreements are a natural type of diplomatic relationship.

The Chair: I regret that, unexpectedly—we will come back to the other two to answer that question—we have another vote here in the Lords, so we will have another 10 minutes before we resume.

The committee suspended for a Division in the House.

Dr Nathalie Tocci: Thank you for that. There is one bit of the answer we have already discussed, and that is the sanctions story. That is definitely something big and new that has happened that we need to figure out how to capitalise on. Secondly, this is a defence moment. This is a moment of increased defence spending that raises incredible opportunities and finally, the Europeans are getting their act together and waking up to the importance of defence, and that of itself creates potential. Also, there is a risk that perhaps we had not thought about as much, and which is important to address in a European, including UK, context. 

We used to think that simply spending more on defence also meant spending better, and in the midst of this war, as our capacities are being depleted, many of which are being sent to Ukraine, you end up spending on what is available. Often what is available is from America, which is inevitable to an extent. This raises a risk of even greater defence fragmentation in Europe. What can we do to address that? If you have in mind what is our objective, it is increased effectiveness through increased spending.

Thirdly, connecting to the strategic autonomy question, this is not a strategic autonomy moment. This is a NATO moment. It is also a moment connected to what I was saying earlier—that Europeans realise they need to do more on security and defence. For the first time this has revived in a meaningful way a conversation about the European pillar in NATO. It was always pitched but never really elaborated on because there was never a need to elaborate on it. This is a NATO moment but at the same time, it is also a European defence moment, so this is the moment to try to figure out as Europeans, including the UK, what this could entail.

The Chair: Thank you very much. We come to Lord Lamont and then we will go back to Lord Liddle.

Q42 Lord Lamont of Lerwick: What do you think are the implications of the launch of the European Defence Fund? Although we have heard some evidence that this is very significant, surely, the amount of money involved—£13 billion over six years up to 2027, over 27 countries—is rather marginal and it is just R & D. Is it really very significant? Perhaps Dr Tocci might answer that.

Dr Nathalie Tocci: I am sure Gina will have more to say on this, but very briefly, earlier I was making the parallel between member states and the EU, and when talking about the EU I deliberately used the word “incentive”. I was talking about legal, institutional and financial incentives. This is how the EDF should be looked at. This is an incentive to spend together. One can look at it as seed money to try to build European capacities, but it can only be a trigger for something that ultimately is done by and therefore funded by member states. If looked at through that lens of incentive, then £13 billion is not nothing, but this is apples and oranges. The competence remains a member state’s competence, including where the bulk of defence spending will come from.

Dr Rosa Balfour: I 100% agree that this is how it needs to be looked at. It is an incentive to get the various national defence industries to coordinate a little more. We have some very large industries in some countries and other countries have rather small businesses, so it is an incentive to help create this through market processes and investment in research and development. This is a field that remains very much tied to the state, where most of the activity is through NATO, so strategic autonomy needs to be understood in the broadest possible sense. On the one hand it is a response to Trump’s America, and on the other it is an attempt to look at Europe’s industrial policy and not just the defence sector, and to make it more resilient in the face of external threats. It is not limited to the defence field, where Europe is inextricably tied to NATO.

Q43 Lord Liddle: On the Ukraine crisis, what do you think has worked well in terms of UK-EU co-operation? What could have worked better? How could we do better in future?

Dr Nathalie Tocci: What has worked best is clearly co-ordination on sanctions. Considering how unprecedented this has been, and also, let us face it, the poison in the UK-EU relationship, it is remarkable that we have put that to one side and worked together on sanctions. As well, this is mainly a NATO story, co-ordinating our military assistance to Ukraine. In this context it is also good news—although it is only partly related to the Ukraine context—that the UK is moving forward on participating in military mobility, so this would be the first time the UK would be participating in an EU project.

In terms of what could be done better, this goes back to the first question on institutionalisation: how to make something that lives on beyond a crisis. This crisis is likely to be with us for a very long time and yet by definition, at some point crises end. How do we make this a mechanism, rather than simply a response to a crisis, that enables us to develop and eventually implement policies in a co-ordinated way?

Lord Liddle: Do you think the co-operation on helping Ukraine with armaments could lead logically to a European sense of where there are gaps and where we need to co-operate together in future?

Dr Nathalie Tocci: Yes, all of a sudden this is no longer simply an abstract, technical, slightly conceptual conversation. What capacities do we need? Which ones are being depleted and how do we go about thinking about not only ensuring they are procured in the short term, but developing those capacities in Europe at the transatlantic level for when the next crisis comes?

Lord Liddle: Does anyone else want to add to that?

Georgina Wright: Very briefly, on what lessons can be learnt and what works really well, I think this will not be a surprise to anyone here because most people knew the UK would remain a committed guarantor of European security. At the time of Brexit and just after, and around the publication of the integrated review, there was a real sense that the pivot to the Indo-Pacific would see the UK far less involved and interested in what is happening in Europe and looking overseas. The Ukraine war has shown that the UK not only remains implicated but is a major player in Europe. That was a strong political message. We have seen flexibility and pragmatism. I am based in France, and I have seen how much the war has focused minds here and you have seen the UK and the French Governments working more together and realising that much more unites them than divides them, so there is a lot of flexibility and pragmatism there.

What lessons for the future are there? Greater co-ordination on sanctions, as I think everyone has said before. Also, it is quite interesting that the UK participated in the European political community summit in Prague, talking about critical energy infrastructure as well. These are other issues that are not purely about supporting Ukraine but are a consequence of the Ukraine war, and on which the UK and individual member states can work more closely together.

Dr Rosa Balfour: I have a couple of points to make but I will be brief. First, it is remarkable how G7 leadership has worked and trickled down to all levels, be it individual states, the European Union or NATO. Secondly, that co-operation goes beyond sanctions and security and defence. For instance, there is an atrocities advisory group, which includes the UK, the EU, the US, Canada and so on, that is laying the first foundation for justice once the conflict is over.

Thirdly, if I look back to when the UK was a member of the European Union, the UK plays quite an important role in bridging between central and eastern Europe and “old” Europe—France and Germany. Even though European states now are much closer to each other in terms of strategic vision and how they see Russia and eastern Europe, none the less, now and again cracks emerge, so the absence of the UK can be felt in the sense that there is no one playing that bridging role at the moment. The EU has moved forward considerably, but looking back at the role the UK played in the European Union and the role it is not playing, that is something I notice.

The Chair: Thank you very much. The penultimate question comes from Lord Trenchard.

Q44 Viscount Trenchard: I want to ask you about PESCO. For a long time many of us were very sceptical, even negative about the establishment of PESCO, which was set up to progress the EU’s ambition to develop strategic autonomy. Recently, the UK has applied to be part of PESCO’s military mobility project, as we have mentioned. Is that a one-off, because it is not really military but is about logistics more than military co-operation? Or do you think the UK might benefit from becoming a third-party participant in PESCO? How do you see the future of PESCO against that background, and do you agree that it conflicts with commitment to NATO?

Dr Nathalie Tocci: Military mobility can be seen as a one-off or can be seen as virtuous at some point, and in a sense, time will tell. Not only time will tell but participation will tell. Given that military mobility highlights that it is possible for a PESCO project to be for the benefit of European security and defence broadly understood—that dovetails with all kinds of good things that NATO would like to see—the point is how to make PESCO do things that are more like military mobility, rather than projects that are less likely to see the light of day in a concrete sense. In this respect, the UK’s participation as a third country adds to that. As with everything, things can go in one direction or another and if you are in that game, the likelihood is they will end up in a particular direction rather than the other.

Georgina Wright: The PESCO military mobility project is something NATO likes and I think we should remember that, and that partly explains why the UK joined it. Member states that are part of PESCO are aware of not wanting it to duplicate what NATO does already. If you think back to May 2018, Belgium, Luxembourg and the Netherlands published a paper saying that PESCO should be open to third-country co-operation, but that we should not duplicate what NATO does. That is something they know and are aware of. 

Whether the UK joins PESCO as a whole rather than that part will depend on whether the UK can have an input into the design of projects, including how the budget is used. That is a broader question for the EU PESCO members. Even if you are not a member of the EU but you contribute significantly, financially or otherwise, can you have a say in the design of projects rather than just tag along, with the EU deciding everything, taking all the money and you having a final say? It will require the EU to make a better offer to the UK, perhaps.

Q45 The Chair: The last question comes from me and it is along the same lines, so it is additional thoughts. There has been this increasing relationship between the EU and NATO that has been interesting to watch all round. The UK is a non-EU member of NATO, so do you have any thoughts about how the UK should look at this and what it should do? Secondly, are there any lessons in recent history on this? With the Ukraine war going on, are there any particular things you have noticed in this tripartite set of facts in recent times?

Dr Nathalie Tocci: I think so. The NATO-EU relationship has passed the three Ds moment in which we did not see eye to eye. We then entered a constructive period that more or less started around 2015 and is ongoing. Interestingly, within that broadly constructive political context, now is a moment that is not simply an academic question about how we cooperate—but we do have to co-operate.

This leaves the new EU defence in an uncomfortable situation, whereas NATO has its answer. The war has clarified what NATO does; the defence of Europe is NATO’s business and the strategic concept brings that home. We do not have a good answer yet as to what European defence is supposed to be doing. Here we are in the middle of a war. We know what we are not supposed to be doing, but the question as to what we are supposed to be doing with this weight of responsibility on security and defence continues to be unanswered. I suspect we will not be able to find an answer to that question in the short term, but I strongly feel that the answer to that question—and I deliberately say European defence rather than EU defence—is a conversation the UK has to be part of.

Dr Rosa Balfour: Through EU-NATO co-operation, there is a possibility of addressing certain issues that are not strictly speaking traditional defence. I am thinking, for instance, of cyber-security. This is an area where the UK, the EU and US have a strong incentive to work together. We are seeing a very conventional war taking place but also seeing attacks on critical infrastructure. In these hybrid areas, working not just through NATO but also through NATO-EU co-operation, a lot can be achieved.

Secondly, going back to the initial questions, the TCA provides for some co-operation on foreign policy matters such as countering the proliferation of weapons of mass destruction and counterterrorism, but very little has been done because of the political obstacles caused by the Northern Ireland protocol. These are areas where also NATO-EU co-operation could play a role, taking it out of the EU-UK relationship insofar as the Northern Ireland protocol remains this sword of Damocles, preventing greater co-operation.

Georgina Wright: I will be very quick as I am conscious people have to leave. NATO-EU co-operation is a perennial question. At university I was already writing about how it could be improved. Nathalie is right that a lot depends on the EU and on what the EU defence becomes. I am based in Paris, and they have a different conversation about what that looks like compared to their German friends and, I suspect, people in Brussels.

Where there might be conflict is on the innovation fund that was proposed in the NATO strategic concept. We know the EU is also thinking about bolstering the defence innovation fund, so how could those not duplicate? Could they work together? How does that work?

China is the other big issue. The United States and, I suspect, the UK are pushing for NATO to discuss China more, and there are some member states who are NATO allies that would prefer the China discussion to happen predominantly in Brussels in the Council. That could also be an issue where there might be tension in EU-NATO co-operation. Everyone would like to see better co-operation. In practice it is a lot harder, but it will continue to occupy us for years to come.

The Chair: Thank you very much. On that, out of interest, I asked similar questions of people in the Commission and European politicians regularly. I am struck by the lack of commonality of view on that. The Commission appears to be much further forward than some of the national politicians in the thinking there.

Thank you very much indeed. I am very sorry that we have gone on much longer than advertised, caused by the votes here in the House. We are very grateful for your analysis, your frankness and, above all, your time.