My Lords, I respect those who have devoted their lives to integrating Britain into the European project. Their evident sadness today is the one downside to the joy I feel but, as good parliamentarians, I hope that they—like the noble and learned Lord, Lord Judge, and the noble Baroness, Lady Morgan, at the beginning of this debate—will see some upside in the restoration of parliamentary sovereignty.
I served on the committee scrutinising the transfer of European law into British law. There were tens of thousands of pages of regulations, accumulated over four decades, few of which have ever been debated, and none voted on. Indeed, had every parliamentarian voted against them, they would still have become the law of the land. Tomorrow, that changes. We will be free to amend, repeal or enhance any of these measures, but it is a mistake to believe that the only choice is between high standards and lower ones. There are many ways in which rules and regulations can be improved without affecting the level of environmental, social or other protection, none of which anyone wishes to reduce, despite what the noble Baroness just implied.
When negotiating in the Council of Ministers, I—and, I gather, my Labour successors—brought a different regulatory philosophy to that of our European friends. We focus on outcomes; they focus on process. We set principles; they try to legislate for every conceivable eventuality. We allow everything that is not forbidden; they tend to forbid anything that is not specifically allowed. Our priority is to protect consumers; theirs is protecting producers. The result is that our approach encourages innovation, stimulates competition, facilitates new entrants to a market and minimises the burden of compliance without reducing standards. As a result, it creates a more dynamic and enterprising marketplace while maintaining high standards.
The clearest example of this different approach is the complete trust between British common law and continental Roman law. It is no coincidence that the world’s four leading financial centres—London, New York, Hong Kong and Singapore—are all based on common law, whereas the EU’s biggest financial centre, Frankfurt, ranks only 15th in the world. However, in the EU, detailed prescriptive laws such as MiFID, with its 2 million paragraphs, have steadily overwritten common law. That is why the Bank of England said that the overriding priority for the UK was to become a rule maker, not a rule taker.
We can make a success of Brexit if we bring that same spirit of rule-making, not just in financial services or common law but to the whole acquis communautaire, to make Britain’s economy more innovative, competitive, dynamic and prosperous. Your Lordships’ House will play a key part in this.