Lord Kerr:

I do not know why the government came forward with Part 5 of the Internal Market Bill. There is another theory that it was simply to shake up the negotiation, to move fast on things and see if the deadlock in the future relationship negotiations could be cracked that way. If so, I personally believe it was a grave error. The degree of mistrust it created makes it more difficult to secure an agreement on level playing field enforcement and governance, which appear to be two of the three outstanding areas of difficulty in the negotiation.

I agree with what has been said about the desirability of securing a free trade agreement, and ideally a free trade agreement plus. The difficulties of implementing the Irish and Northern Ireland protocol would become much greater in the event that there was a tariff war between the United Kingdom and the EU. It is clear that many of the problems, such as the goods-at-risk problem, get much easier or disappear in the event that there is a deal. If the deal includes level playing field provisions, that removes another of the likely difficulties in implementing the protocol. Speaking personally, I believe it is very important that the protocol should be implemented in full. As the Chairman said, we all must hope for sensible compromises on its implementation.

As to why we need a free trade agreement, it is not just in order to make the problem on which we are focusing this morning easier. The whole relationship between the UK and the EU is likely to go through a bad patch if there is no deal and no agreement. It is likely to become a bit rebarbative. Without a foundation to build on, and in order to build up other agreements, we will take a while to rebuild the relationship. This is particularly important with regard to matters like the Border and co-operation between law enforcement agencies. I was struck by the difficulty law enforcement will have if the UK no longer has access to the Schengen information service, the European arrest warrant and so on. It seems to me that it is not just about free trade but if there is no core of a free trade agreement, it will be very difficult to add on things like a security agreement.