Further Discussions with the European Union under Article 50 of the Treaty on European Union

Baroness Hayter of Kentish Town Excerpts

Wednesday 27th February 2019 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, it is a good thing that the Minister has a sense of humour. I have to say that he is struggling not just with his throat but with finding anything new to say. That, I understand: some of us are in the same position. More seriously, he is struggling to recognise the seriousness of the state we are in. I think it would be good if the Minister would heed the advice given to him the last time we met that he should stop being,

“the boy who stood on the burning deck”,—[Official Report, 5/2/19; col. 1430.]

and face today’s reality. The reality is that a 29 March departure is simply not going to happen.

What we are witnessing, to the mystification of observers here and abroad, is a wholly divided Government and a Prime Minister who has let down Brexit voters by failing to provide the promised “smooth and orderly” departure to get the very best out of leaving—a Prime Minister who has unnerved the very businesses which have traditionally looked to her party to understand and promote their interests, who has divided her party and Parliament and who, unforgivably, has failed to unite the country after a divisive referendum. She has failed to reach out to remainers to reflect their interests as well as those who voted to leave. We see a Prime Minister who has failed to reach out to the Opposition, engaging not at all until the last few weeks, and even now refusing to move one iota towards our priority for a deal—a Prime Minister who promised the Commons a vote to halt no deal only when she faced defeat in the Lobbies, yet who even then offered only a temporary reprieve, leaving a no-deal threat on the table after 29 March and, as we have just heard, only the promise of a vote, with no indication of whether the Government would whip against a no-deal exclusion. That, to me, means that she is keeping it tight in her armoury. The noble Lord, Lord Callanan, endlessly reminds us that no deal is the legal default position. We say to him that it is not the moral default position.

I fully expect, when some future committee, no doubt chaired by someone in your Lordships’ House, reviews how the Government handled this sorry saga, it will ask the normal tin-opener question written by the secretary to the committee—cui bono? Had we girls been taught Latin at school, I would be able to pose in Latin, instead of having to do so in English, the more important question—not just cui bono, but who pays? I am sure it is not the ERG members.

It will be businesses, consumers and the country. Fitch is putting our AA credit rating on negative watch, due to the potential exit without a transition period. Of course, that signals a possible downgrade. Meanwhile, the UK would lose its current market access to the 60 third countries covered by special arrangements with the EU, Mr Fox having spectacularly failed to roll these over or to prepare all those exciting new ones with a swathe of other countries, as we were promised.

All of us have heard endlessly about the risk to supplies and businesses of no deal—from a shortage of pallets and life-saving medicines to delays, handling costs, legal queries and, of course, tariffs. I discussed tariffs earlier this week with the noble Lord, Lord Lilley, when we were at LBC. I am glad to see him here in his place in case I get this wrong, because I have to say that he slightly shrugged off the tariff problem, saying that a drop in the pound would compensate for it. That is not what it would feel like to consumers.

[Lord Lilley (Con)]

I am grateful to the noble Baroness for giving way. What I said was that the drop in the pound would compensate those whose tariffs were around the average of 4%, but that, in aggregate, the tariffs amount to £5.3 billion. The saving we make from leaving is more than £10 billion. We would therefore be in a position to help those who face above-average tariffs and still have money in hand.

[Baroness Hayter of Kentish Town]

So the consumers will pay. Just an extra 5% on tariffs? Are we really going to go round subsidising food?

[Lord Lilley]

With respect, the money we save will not come from consumers; it will just no longer be available to the EU to finance its projects. Every year, we pay £10 billion more to the EU than it gives us back. We will no longer do so, and will therefore be in a position to use some of that money to help those industries—particularly farmers and car producers—and ensure that the effect of tariffs, if the EU is foolish enough to continue applying them to us, is offset.

[Baroness Hayter of Kentish Town]

I am talking about the tariffs that we will have to apply to the goods that we import, such as meat and cheese. Those will be paid for by consumers. The Government’s own analysis shows the likelihood of food shortages and increased prices just from the interruption to trade, but a lower pound—whereby people will have less money in their pockets to buy any imported food—means that, in addition to prices going up because of shortages and delays in things arriving here, it will be even more expensive for consumers. The answer to “Who pays?” will be the consumers.

For those wanting to travel, mile-long queues for Eurostar trains, long waits at ferries, green cards for drivers and the loss of health cover will all impact British families. Does this no longer matter to a party traditionally careful of consumer prices and its electorate? The noble Lord, Lord Heseltine, warned last year in your Lordships’ House of the electoral damage to his own much-loved and lived-in party. This continuing drift to no deal must be fuelling his fears. It is certainly fuelling mine, as well as those of the CBI, the IoD and all those affected by the Government’s recklessness.

[Baroness Deech (CB)]

Since the noble Baroness has mentioned morality, I raise a question with her: does morality lie with no deal? Brussels asked us what we wanted and we said we wanted a change to the border situation—a way out of the backstop—and it said no. It is not this Government who have led us to no deal—it is Brussels. When it comes to moral leadership, I have no idea what the leader of her party in the House of Commons has wanted for the last two years—it is not clear to the average observer. Leaving aside, for a moment, the moral swamp going on there, we have no idea what his position is.

[Baroness Hayter of Kentish Town]

We do. I made it clear yesterday—I am not sure whether the noble Baroness was in her place when I spoke to the House—that no deal is our choice because if we amend the deal on the table, we can get one. It is our choice, not that of the other side.

The costs of no deal, as I said, have been set out. The worries of the CBI, the IoD and of all the others have been made pretty clear to the Government—I am sure they have been if they are making them clear to me—and I wonder sometimes whether Ministers read their own papers. Yesterday, the Government’s own paper predicted that the economy would be between 6% and 9% smaller in the long term in a no-deal scenario compared with today’s arrangements, with the north-east losing out more than anywhere else—I am sure the Minister noticed. I thought that that, at least, would have attracted his attention.

[Baroness Altmann (Con)]

Would the noble Baroness ask the Minister to agree that yesterday’s paper which predicted the 6% to 9% reduction in the economy in the event of no deal noted that that excluded any short-term disruption costs from no deal?

[Baroness Hayter of Kentish Town]

It is a shame that he will not be replying but I am sure that his colleague—judging from that lovely poker face of his—has made a careful note of that and will respond later today.

We know that one bit, at least, of the Government is listening because we know they are preparing to set up a hardship fund—presumably with the money that the noble Lord, Lord Lilley, thinks will be available to pay for all those who will lose out; this seems a funny way of running the economy. Despite all that and the pressures for the hardship fund, the no dealers today have been attacking the grown-ups in their own party as “saboteurs, wreckers and blackmailers”. This, coming from politicians who have blackmailed the Prime Minister by voting against her and who are willing to wreck the economy and sabotage business, all for their own ideological hang-up. This has to stop and it has to stop now.

Will the Minister who will sum up, and who is definitely not an ERG hardliner, push his political masters—or, perhaps, his political mistress—to rule out unequivocally any no-deal departure, with its lack of a transition period and the chaos that goes with that? Will he urge the Prime Minister to change her approach and to find a consensual way forward to unite the Commons and the country, and will he ensure that an extension to Article 50 is requested this week? It is clear we will need it, but requesting it this week, rather than being forced into it, will help to calm nerves and offer some certainty to business. Will he work to see that such an extension is used not for more pretence and tweaking of words, but for a serious reconsideration of how we withdraw from the EU?

--- Later in debate ---

[Lord Keen of Elie]

The noble Lord’s observation is utterly irrelevant in this context. Let us be clear as to what the legislation provided. Ultimately, it provided that we would leave the EU on 29 March 2019. This Parliament determined that date—not the Prime Minister, not the Executive. Let us bear that in mind, shall we? It is in that context that you have to look at where we are going.

I come on to some of the observations of the noble Lord, Lord Newby. I am a little concerned for him, because he appeared to proceed on the basis that purgatory has its limits. I am terribly sorry to inform him that, as and when he arrives in purgatory, he may find that it is actually indefinite. He had better proceed with a degree of care in that context. He made an allusion to Mr Corbyn as a “schoolboy”. I do not want to take the allusion too far, but I will refer to one well-known fictional schoolboy called William, who said you cannot have a referendum if you do not know the question. We all know that. The point is that Mr Corbyn may be in favour of a referendum, but we have no idea what question he might or might not have in mind. Other members of his party have advanced questions, of course, but Mr Corbyn himself has not told us what his question is or is going to be. It appears that it is hidden in his allotment at present.

[Baroness Hayter of Kentish Town]

I know Cabinet responsibility has gone a little awry on that side, but we actually still have it. We have made it clear—Keir Starmer, Emily Thornberry and I have made it clear—

[Lord Callanan]

What about Corbyn?

[Baroness Hayter of Kentish Town]

On his behalf. We do not wheel him out on every occasion to make these speeches. I can call him in, if you like. We are quite clear what the questions are. It depends what happens down there but, assuming a deal goes through, it would be the deal that goes through against remain.