EU Exit: End of Transition Period
(3 years, 6 months ago)
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Baroness Hayter of Kentish Town (Lab)
My Lords, I thank the Minister for the opportunity to question the Statement, despite it dealing with only one, albeit a visible, part of the preparations needed for 1 January: the physical movement of goods. On finances, accounting, the mutual recognition of qualifications, equivalence, citizens’ rights, consumer protection and pet passports, there is nothing. I was asked recently about what would happen to a UK national working and living abroad who, for example, retires back to the UK in 10 years’ time, after the cut-off for the temporary measures, with his or her EU spouse and children. Will that family be able to return with the British national? The fact that these questions are still being asked is testimony to the amount of uncertainty remaining.
The Statement is very UK-focused, with no mention of the challenges to the Crown dependencies, nor indeed to Gibraltar, which has had to issue a technical notice warning that while EU goods will hopefully still be imported with the same processes, anything from Britain will have to be checked into the EU through a border post and checked back out again. While I welcome the chance to ask about the challenges our exporters, importers, ports and customs face, we should not pretend that this covers everything, nor that everything is done and dusted.
From the Statement, we have learned of the risk of 7,000 lorries in Kent. In order to help visualise this, my honourable friend Kevin Brennan helpfully pictured it as a single line from Dover to Westminster. Clearly, the Government do not want them all in Kent, so they are introducing a “Kent access permit”, which I guess is today’s equivalent of a “Passport to Pimlico”—presumably with Michael Gove as today’s Stanley Holloway. It is unclear how these access permits will be policed, because there can hardly be a “ring of steel” around the county. Can the Minister therefore tell the House how many roads go into Kent, how many police will be needed to carry out the checks and where he envisages finding the extra police, as I presume that others will not have the authority to halt or turn back an otherwise legal lorry? Can he also outline how these measures will prioritise perishable goods and key degradable items such as radioisotopes and medical products, and just-in-time supply chains?
Given that much of the documentation required will be electronic, it could easily continue within lorries en route, so it may not be complete when they enter Kent but would be finalised by Dover. How is that going to be policed? Once in Kent, the lorries may still have to go to the yet-to-be-built lorry parks the Government are planning in 29 local authority areas, without bothering to consult residents. What are the costs of the lorry parks and their staffing? Are those included in the costs noted for “the border” because they will be inland?
Mr Gove has said that
“we have invested in the sites in Ebbsfleet and North Weald, Ashford, Warrington and the west midlands … we are working with the Welsh Assembly Government to invest in a facility near Holyhead in Anglesey.”—[Official Report, Commons, 23/9/20; col. 969.]
When will these sites be ready and what are the costs?
It is no good telling business to act now without information or systems in place. They are pleading for the details to which they need to work. The Statement says:
“Every business trading with Europe will need to … familiarise itself with the new customs procedures”.
Quite so, but they do not know what those new procedures are. The food and drink industry would love to be ready for Brexit but there is no guidance about what labels businesses will need to use to sell their goods legally into the EU and Northern Ireland next year. As I mentioned in Grand Committee yesterday, this applies particularly to the organic sector.
The Government need to explain why on earth all the essential prerequisites for a smooth transition are not already here. The Statement talks of £700 million for infrastructure and new technology, 1,000 extra staff, £80 million to help businesses, plus a new information campaign; all on top of what has already been spent—more than £4 billion, according to the NAO—including on staff, external advice and advertising. In addition, we still have the cost of Mr Grayling’s non-existent ferries and other no-deal preparations. The Minister may not have the answer today but will he write to me with the full, total costs of government expenditure needed for the change to our trading arrangements?
The Government also acknowledge that there will be some £7 billion worth of additional bureaucracy for businesses. Can the Minister also write with the full cost to the Government and to business of all the changes that will be needed? It would also be interesting to see alongside those costs an estimate of how many years before those “great prizes” and export opportunities mentioned in the Statement pay off all the investment of the change before we are able to reap the real benefit.
I have a specific question for the Minister. The Statement says that our new trade deals will
“help developing nations to grow faster”
and provide “lower prices for consumers”. Can he explain how that will happen and why only now it becomes possible? We would love to see both outcomes—developing nations growing faster and lower prices for consumers—but I fear that it might simply mean less being done, lower standards and less protection for the environment. To reassure me that that is not the case, perhaps the Minister could explain how that is achievable in a less harmful way. If he has time, he might like to put on record the Government’s response to the latest LSE/UK in a Changing Europe view, published today, that the economic cost of no-deal could be two or three times as bad as the impact of Covid.
Lord Wallace of Saltaire (LD) [V]
My Lords, I am not sure whether to sympathise with the Minister for having to defend a Statement with which he cannot entirely agree, to admire his loyalty in following each step the Government take towards a harder break with the EU than was ever hinted at by the Vote Leave campaign in the referendum, or to be appalled by his willingness to swallow the shifty rationalisations of the Johnson-Cummings-Gove cabal.
Yesterday in Grand Committee, the noble Lord, Lord True, attacked the European Union for challenging
“the United Kingdom’s well-established position on state aid”.—[Official Report, 23/9/20; col. GC 506.]
True or false? I asked two friends in the City if they knew what the Government’s established policy on state aid was and they burst out laughing at the idea that there is any clear policy. The interview that Lynton Crosby gave the Financial Times on Monday helped me to understand the Government’s current position. He said that
“in negotiations like this you need a little bit of crazy to keep your opponents guessing”.
I thought, “Ah, this is the art of the deal. The Donald Trump approach to negotiation—monster your opponents, talk tough, insist that they act reasonably, and either they will compromise further than they intended to or you can walk away and blame them for the failure. It is the Johnson-Trump playbook.” If the Statement is an attempt to bluff the EU into believing that we are well prepared for a no-deal outcome, it is clearly a failure. It shows that we are woefully unprepared and is an attempt to shift the blame onto business and potentially on to the French and Belgian Governments.
It has been clear to almost everyone concerned with the UK’s external trade since Theresa May’s Government decided to leave the single market that the channel ports would pose problems, except that Dominic Raab did not realise that and Boris Johnson did not bother to think about it. It was also clear that it would take well over a year to create the new infrastructure needed and to recruit and train the additional staff. Yet, here we are, 100 days short of 2021, and the Statement deplores a “lack of business preparedness”. The rest of us deplore the lack of government preparedness. The same mixture of incompetence, ideology and negligence that has marked the Government’s approach to Covid-19 marks their approach to the channel ports.
The same sweeping aside of inconvenient facts marks Ministers’ handling of the Irish border. The British Academy held its first seminar on the problem of the Irish border if the UK were to leave the EU in March 2016, attended by officials, among others. Yet the Prime Minister now claims that in October 2019, three years later, he still did not understand the complexity of the issue. The Statement refers to hundreds more Border Force staff “being recruited now”. Why were they not recruited months ago? How many of the additional Border Force and customs personnel required will be fully trained and in post by 1 January, and how many are still being recruited or trained?
The Statement refers to new technology being important. Is this now being fully tested and will it be in working order on 1 January? The Statement refers to “queues” and “associated disruption and delay” in Dover, at least for the first six months. What arrangements have been made to ensure that fresh food, vegetables and fish are not delayed beyond the point where they are spoiled, which would lead to shortages in British supermarkets? Can the Minister explain what is meant by the warning that
“if our neighbours decline to be pragmatic”
we will face the worst circumstances? Do we demand that the French and Belgians decline to enforce their own border checks because we are not ready to enforce our own? Is this the Trump-Johnson playbook again: “We are unreasonable but will pin the blame for chaos on you, unless you help get us out of the mess”?
The noble Lord, Lord True, will now defend Michael Gove’s extraordinary Statement with his weasel words about an “exit on Australian terms” and his fantasies about how a “truly sovereign state” may behave. I hope that there will come a point where the noble Lord will consider that his self-respect as a Conservative requires him not to follow Johnson and Cummings’s efforts further down the road to alternative reality and fake facts, be true to his best instincts instead and follow the principled example of the noble and learned Lord, Lord Keen.
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, there were a number of observations there, some of which could be characterised as a little wide of the Statement and perhaps a little behind the game—the game being that the British people have decided to leave the European Union. We are leaving the single market and the customs union and are preparing for that. Frankly, continually railing about this situation—as the noble Lord, Lord Wallace of Saltaire, did with some colourful language in parts of his intervention—does not help us address some of the specific issues in this Statement. For the avoidance of doubt, I am very content with the direction of travel of the United Kingdom and this Government. Unfortunately, I cannot ease the angst of the Liberal Democrat party in that respect, but I note it. Since the noble Lord offered sympathy to me, I reciprocate.
So far as the specific questions I was asked are concerned, I hope I have made a note of most of them. If I have not, I will follow them up. The overall stance of both interventions was, “Why haven’t we done more sooner? Why are there still some uncertainties?” Obviously, there are still some uncertainties; that is the nature of a broad negotiation. The noble Baroness, Lady Hayter, went wide of the specifics in the Statement, as she fairly acknowledged, but much of the central, core stuff that this Statement is concerned with flows from the fact—which is not affected by whether we get a free trade agreement—that we are leaving the customs union and have to address that situation. We have already adjusted our own phasing of border controls up until July 2021 specifically to help. I note what was said about our friends and counterparties in other member states. Obviously, their policy decisions are for them, but we hope to have fruitful and helpful exchanges with them up to and through this process’s conclusion.
I was asked about Gibraltar. I assure the noble Baroness that the Foreign Office is working closely with Gibraltar and that its interests will very much be taken into account in the transition process. Next Monday there is a meeting of the withdrawal agreement joint committee, which will deal with a number of aspects.
Comment was made about the reports in newspapers about what was called the Kent access pass. It was said in newspapers that this was a border in Kent. The noble Baroness asked how this would operate. It is an approach related to road use, and it is not intended that every vehicle will be stopped. As the noble Baroness says, that would be difficult to do. The reality is that disruption will occur if vehicles without the right documentation arrive at the point of departure. The Government’s whole strategy—our conversations with the road haulage industry, the publicity campaigns we have been running and the process of “Check an HGV” and smart freight—is designed to make sure that the maximum number of haulage vehicles will have the appropriate documentation. If they enter Kent and do not have that documentation, it will be possible for that to be picked up by ANPR and other resources.
The concentration will be on the M2 and M20. The Kent Resilience Forum is looking at all aspects of movement in Kent, but it is a roads-based approach intended to reinforce the advice with an element of deterrent. The cost of the port and inland infra- structure is up to £470 million; some of that is in place. Conversations are ongoing with local authorities and local Members of Parliament about the specifics. Some of this has already been put in the public domain; more will come into the public domain shortly.
On standards, there is not a direct correlation between price and standards. Some very high-quality goods can be cheaper. One of the purposes of free trade deals, which the Statement quite rightly says will help many countries around the world, is that—this is in the history of free trade deals—they tend to lower prices. That is to the benefit of the underprivileged as well as the privileged.
Border Force recruitment is going on. I do not have the exact figures, but £10 million has been put aside to recruit around 500 more Border Force personnel and training is in progress. I will pick up the other points in the two statements after I sit down, when I see Hansard. There are various estimates of elements of the cost. I will try to help as far as I can.
This is a practical programme. There are many thousands of excellent civil servants working on it, and the Government have great confidence that Britain will be ready and able to trade from the end of the year.
The Deputy Speaker (Lord Faulkner of Worcester) (Lab)
My Lords, we now come to the 20 minutes allocated for Back-Bench questions. I ask that questions and answers be brief, so that I can call the maximum number of speakers.
Lord Mackay of Clashfern (Con) [V]
My Lords, the detail of the ultimate agreement, if any, is not known. What difference will it make whether we have a free trade agreement or no deal in respect of the preparations that are the subject of this Statement?
Lord True (Con)
That is a very important question, and it is important that it is understood. Whether we have a free trade deal must not be confused with the question of tariffs, and the question of tariffs will differ. Whether or not we get a Canada arrangement or another arrangement, my noble and learned friend is quite right that we will have left the single market and the customs union. That fact means that adjustments for businesses trading with the European Union will have to be made, and they are the subject of this Statement and the ongoing discussions. It is important that all businesses and people moving to and from the European Union understand the point lying behind my noble and learned friend’s question.
Lord Kerr of Kinlochard (CB) [V]
I am not shocked by Kent access permits; the Dutch have done the same already. Serious border friction and supply chain disruption are inevitable as the barriers Lord Cockfield tore down 40 years ago are rebuilt. Yes, it is absurd to have a ring-fence around Kent, but it is just a particular facet of a general absurdity. I would like to ask the Minister about businesses’ shock at Mr Gove blaming them for being unready. Ready for what? The Government have not produced the documents or the IT, so if the 50,000 new customs brokers had been recruited—I am sorry the Minister cannot tell us how many have been; perhaps he would write to us—they would be twiddling their thumbs with nothing to practise on. Will he say when the new IT systems will be tested and available for practice?
Lord True (Con)
My Lords, I did not hear that I was asked about customs agents originally, and I apologise to the House; £80 million was set aside for that. Not all that has been drawn down, but a good deal has. As for the specific IT we are talking about—the “Check an HGV” and the smart freight—next month detailed contacts and practice in that system will begin in concert with the road haulage industry. The target is to have that fully operational by December and the Government are confident it will be.
Baroness Donaghy (Lab) [V]
My Lords, the Government are urging businesses to prepare, even though many are in survival mode because of the pandemic. It might be wishful thinking that 43% of businesses think the transition period will be extended. They want the Government to do their job and negotiate a deal. We know we are leaving the EU, but we did not know we were leaving Kent. Instead of lecturing business, when will the Government make available the granular information promised? When will real help arrive?
Lord True (Con)
My Lords, there are a number of questions wrapped up there, and I did not answer the noble Lord, Lord Kerr, on one question. The Government are not blaming anybody. We are certainly not blaming the haulage industry or any other industry. We are pleading for everybody to work together to achieve the best outcome. I have said to the House that the specific freight IT which we have been talking about will be being tested next month and be operational by April. We have already published an iteration of the border operating model. There will be a new iteration of that published very shortly.
Baroness Kramer (LD) [V]
My Lords, small manufacturing exporters have been put in an impossible position, with no clarity on an FTA, high costs to adapt to borders and blows from Covid-19, and they have no capacity to prepare for multiple outcomes. Will the Government at the very least provide a beefed-up advice service, and will they use these last days of negotiation to focus on a simplified export regime for the little guys—something that does not seem to have been on the table at all—less onerous rules of origin, no duplication of conformity assessments and a pared-back AEO scheme? Frankly, without immediate action, many small guys will lose the willingness to engage properly in the Christmas trading season. That would be very bad news and mean that many go out of business.
Lord True (Con)
My Lords, I very much hope that this is not the case. I share the concerns of the noble Baroness for traders of all sizes, obviously, and assure her that the Government are reaching out to all those who are involved in trade across the channel and with the European Union. I repeat that we are extremely hopeful that this system will operate.
Lord Davies of Gower (Con) [V]
My Lords, I am grateful for this Statement and fully support Her Majesty’s Government on their efforts to reach a deal with the European Union. However, given the somewhat fragile nature of the negotiations and the knock-on effect that this will have should we end up leaving without a negotiated deal, what steps are Her Majesty’s Government taking to ensure that the devolved Government in Wales and other UK institutions are fully cognisant of any preparedness projects?
Lord True (Con)
My Lords, I thank my noble friend for his support for what the Government are doing. I am grateful for that. So far as the interests of Wales are concerned, obviously the ports of Holyhead and Fishguard are extremely important. We are in contact with the ports concerned and I expect there will be further announcements on that, but the conversations are ongoing. The Government have been engaging colleagues in the Welsh Government closely, including on further iterations of the border operating model which, as I told the House, will come shortly, so they will have a chance to comment. Officials from the UK Government and the Welsh Government have also been working closely to ensure that the right decisions are made on new infrastructure, as I have just stated.
Viscount Waverley (CB) [V]
My Lords, would the Government consider self-help for stakeholders by publishing a more regular flow of selective summaries of decisions made by the XO Committee of the Cabinet Office, which to date has had 136 meetings? Given that travelling to Kazakhstan may soon become easier than travelling to the markets of the European Union, that reportedly 70% of UK SMEs are still unprepared and that 30% of mid-sized businesses—the UK’s engine room of trade—are foreign-owned, do plans exist for assisting those that for whatever reason are not ready for the off and for working with foreign Governments to the extent that they will be equally concerned?
Lord True (Con)
My Lords, we negotiate with foreign Governments as appropriate. So far as information is concerned, obviously the noble Viscount will know that minutes of Cabinet Committees are not published. The Government are involved in a major publicity campaign. The “new start” campaign has already spent some £20 million of the £69 million that was put aside. The GOV.UK transition landing page that was launched in July has already had 2.4 million visits and there have been some 17.5 million page views of transition content. We have also built a transition checker with tailored actions that users must take for post-transition. So far, that has been completed 422,000 times.
Lord Dubs (Lab) [V]
Will the Minister confirm that the Government’s port infrastructure plan, which has been set at £200 million, will be increased if there is major demand for more money?
Lord True (Con)
My Lords, I cannot comment on the specific financial point, but further details of the port infrastructure fund will be published very shortly.
Lord Taylor of Goss Moor (LD) [V]
My Lords, the Minister makes the border around Kent sound very simple, with automatic number plate recognition. Once a lorry is recognised as not having the right export documentation, who will stop it, having decided whether it is going abroad without the documentation or just making a local delivery?
Lord True (Con)
My Lords, as far as local deliveries are concerned, the Kent Resilience Forum is putting material in place. I sought to explain that an effort will not be made to stop every vehicle. The expectation is that before they move to ports, vehicles should have the proper documentation. That is good for hauliers, traders and the country. The system being put in place will enable the interception of certain vehicles, which will be required to comply and be subject to a fine if they arrive at port having not complied. It is an exemplary system which we hope will encourage all to comply, as most traders will want to.
Baroness Noakes (Con)
My Lords, I congratulate the Government on the progress that they have made in being ready for 1 January and on the support that is being given to businesses. The former EU Internal Market Sub-Committee of the EU Committee, of which I was a member, issued a report in 2019 on Brexit and the implications for transport. It reported that the majority of the UK’s exports and imports of goods was handled by overseas hauliers, primarily in vehicles registered in Poland, Romania and Ireland. I know that the Government have been working very closely with the UK haulage industry. What has been done with foreign hauliers to ensure that they are ready, especially in view of their limited language skills?
Lord True (Con)
My Lords, the Government are certainly reaching out to all hauliers. I will provide my noble friend with details on those specific countries as soon as I can.
Lord Singh of Wimbledon (CB) [V]
My Lords, the Statement gives a sombre picture of what could happen on our exit from the EU, with only 24% of businesses believing that they are ready. We are reminded that the consequences could be destructive not only economically, but more widely, especially if the EU unreasonably continues to put its interests before ours. Does the Minister agree that our jingoistic and somewhat superior attitude to our former partners inhibits successful negotiations?
Lord True (Con)
My Lords, I do not believe that this Government have a jingoistic attitude or one of superiority towards our French partners or any others. My belief, and that of most people who know both nations and the member states on either end of the main transport routes, is that no one would see an interest in unnecessary disruption. What is before your Lordships is a reasonable worst-case scenario. It should not be taken as a prediction. I hope that over the next few months, people reflecting on these matters ensure that we come nowhere near such a scenario.
Lord Whitty (Lab) [V]
My Lords, the Minister said that this was a reasonable worst case. But, given the statements by the Freight Transport Association and the Road Haulage Association, neither of which believe that this system will be in place by January, is it not in fact closer to the most likely outcome, and do the Government not need to find a contingency arrangement that avoids the worst of this scenario?
Lord True (Con)
No, my Lords. We believe that the systems we are putting in place provide the best guarantee that we will avoid the worst case. I cannot promise that there will be no friction, but I do not accept the characterisation of the recent meetings between the Government and the Road Haulage Association. I believe that those meetings have been constructive. As I said, we have provided more than £80 million in funding to support customs intermediaries, and the measures that I have spoken of today will assist more road hauliers to become ready. The Government are not criticising anybody; they seek partnership, and I do not believe that throwing stones on either side of this constructive discussion helps.
Lord Roberts of Llandudno (LD) [V]
My Lords, on 15 July I asked the Minister what the intentions were regarding construction in the three Welsh ports. I was told that new facilities would be built because of the necessity for more checks and so on, and the trucks slowing down. On that date in July, I phoned Holyhead to ask what was happening and was told, “Nothing’s happening”. This morning, months later, I phoned again and the answer was, “Nothing has happened”. So when will these new facilities be provided? Also, is it the Government’s intention to invest in these ports or do they possibly intend to let the ships that now come through Holyhead, Fishguard and Pembroke Dock to go directly to the European mainland, avoiding those ports? If that happens, what will be the effect on the Welsh economy and on the jobless situation? Not very long ago, Holyhead had one of the highest rates of unemployment in the whole of the UK. What is the intention for Holyhead, Pembroke Dock and Fishguard?
Lord True (Con)
My Lords, I did mention the Welsh ports in an earlier answer. I assure the noble Lord that the interests of those ports are well in mind. I am surprised by what he said he was told. Of course, I absolutely accept what he says, but an additional multifunctional inland site is being progressed to serve Holyhead. As I also told the House, there will be a statement very shortly on the Port Infrastructure Fund as a whole—I mentioned Holyhead because the noble Lord did. I will check the claim that there have been no contacts with Holyhead and report back to him.
Baroness McIntosh of Pickering (Con) [V]
My Lords, the situation on the Irish border is desperately unclear. The EU Environment Sub-Committee concluded in July that the matter of qualifying status for Northern Ireland goods and businesses that will benefit from unfettered access to the rest of the UK market, taking into account all-island supply chains, is still unclear. What message does my noble friend have today for the agri-food producers, farmers and freight operators in Northern Ireland about what the status will be on 31 December this year?
Lord True (Con)
My Lords, as my noble friend knows, there are continuing discussions in relation to Northern Ireland, but we are taking all available steps to support trade readiness in Northern Ireland, including establishing a new and unprecedented trader support service. That is backed by funding of up to £200 million and will provide end-to-end support for businesses engaged in new processes. The importance of the state of Northern Ireland within our union and customs territory is undoubted.
Baroness Wheatcroft (Non-Afl) [V]
My Lords, transport and trade depend on GPS. Yesterday, I asked the Minister what preparations were being made for our continuing involvement in Galileo, given that the country has now abandoned its hare-brained scheme to try to create its own system. His response was that
“the EU’s offer on Galileo did not meet the UK’s defence and industrial requirements.”—[Official Report, 23/9/20; GC 554.]
Therefore, can he tell us what will meet those requirements and whether it will be in place at the end of the transition period?
Lord True (Con)
My Lords, I can only repeat the answer that I gave yesterday, which the noble Baroness very kindly read out. The Government believe that the infrastructure and IT systems that are put in place will meet the needs of this nation.
Lord Bilimoria (CB) [V]
My Lords, the coronavirus pandemic has consumed businesses’ attention over the last few months, and business preparations for the end of the transition period have not only stalled but gone backwards. This has left businesses with very little capacity to prepare for a chaotic exit from the EU. Does the Minister agree that the priority for business still has to be a negotiated outcome and that zero tariffs, zero quotas and formalised customs opinions will be to our benefit, generating £5.7 billion in benefits for exports and also for professional services? This is not just about the moving of physical goods. Firms have always been clear that the UK internal market must work in lock-step with the Northern Ireland protocol. Surely a deal will make sure that this is resolved and is an absolute priority.
Lord True (Con)
My Lords, again, of course I agree. I have always made it clear from this Dispatch Box that the Government hope very much that we will have a deal—a Canada-style deal—which I think will be in everybody’s interest. However, we have to deal with the situation in terms of leaving the customs union, whatever the outcome, as I said in my first Answer. The Government are investing £235 million—for example, in staffing and IT systems—including £100 million to improve and develop HMRC systems to reduce trader burdens, and £15 million to build new data infrastructure to enhance border management. The Government are working extraordinarily hard to keep this country open, prosperous, thriving and capable of taking the great opportunities that leaving the European Union will allow us.
The Deputy Speaker (Lord Faulkner of Worcester) (Lab)
My Lords, the time for questions to the Minister is up, and I apologise to the noble and learned Lord, Lord Morris of Aberavon, for not being able to call him.