EU Exit: End of Transition Period

Baroness Hayter of Kentish Town Excerpts

Wednesday 15th July 2020 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, this Statement in fact sets out an enormous number of costs—costs to Parliament, to business, to taxpayers and to consumers.

First, on the cost to Parliament, we learned of these plans on Sunday, via Written Statements and in the Telegraph, rather than in Parliament. So it is not just York that awaits your Lordships’ House; Coventry is clearly being prepared for both Houses. The devolved nations hardly fare better, despite their responsibility for ports, airports, and human, animal and plant health. The First Minister complained of a lack of engagement with the Scottish Government in developing the new border operating model, and the Welsh Government at one point had mere minutes’ notice of an announcement within their bailiwick. That is no way to treat Parliament.

Secondly, on the costs to business, despite the promise of a deal with no fees, charges or tariffs and no new infrastructure, we in fact face significant disruption to trade from new border checks. This will cost business some £13 billion, let alone any loss of orders and increased import costs, in order to handle 200 million declarations a year. There is real alarm at the state of preparedness across businesses, which are already coping with Covid but have their wall diaries all pointing to the rapidly approaching 31 December. All they are promised is a welter of new red tape.

Thirdly, there will be a cost to taxpayers of £700 million for buildings and staff at borders, including new infrastructure, some at new inland sites. If the ports are not ready in time, any failures could break WTO rules, as we have heard from a Cabinet Minister. There are to be 500 extra Border Force personnel; an IT system not yet tested, let alone introduced; a 27-acre parking lot in Kent bought through emergency purchase of land, the Government having forgotten to tell the local council and, we hear, having to hastily hand-deliver letters to residents on a Friday ahead of work beginning on Monday; and an advertising campaign. We must hope that this will be more successful than the £46 million spent on “Get ready for Brexit”, which the National Audit Office found did not result in significantly better preparedness.

The NAO says that any future campaign should focus on what impact is needed and how behaviour change will be delivered, with resources targeted at activities adding the best value, and a consistent focus on key performance metrics from the start. Can the Minister confirm that lessons have been learned from that earlier exercise—or will just friends of those in the know be used for the campaign, without proper procurement, their USP being more in shared belief than proven campaign ability?

Fourthly and lastly, there is the cost to consumers. I have to say that the Statement’s talk of “significant opportunities” is particularly inappropriate for consumers. As the guidance makes clear, there will be extra documents for travelling, including an international driving permit for some countries; a return to the old green card, or proof of insurance; arrangements for pets needed four months before travel; and continuing confusion around which travel rights will continue. The Government, probably quite rightly, are advising people to get comprehensive travel insurance—more cost to consumers. Of course, there will be much more expensive medical insurance with the loss of the EHIC, especially—I declare an interest—for us oldies, or for those with pre-existing conditions. For consumers it will be all costs and no benefits.

There is no doubt that there was support across the country to get Brexit done, but the Government’s approach has been costly, reckless and disdainful of the views of constituent parts of the UK, of business and of consumers. We see symptoms of chaos and some dysfunction even within the Cabinet. Mr Gove wrote on Sunday:

“Leaving the European Union … is a bit like moving house … Taking back control of the money we send to Brussels means we can spend it on our priorities”.


I have to say that it feels more like a messy divorce, with cash going to lawyers and removal men rather than on the kids.

I have four questions for the Minister. The first is about the advertising campaign I have already mentioned. The second is to ask for reassurance that business will be engaged every step of the way in the design and implementation of IT and documentation systems, and that the devolved authorities will be part of the planning, not mere recipients of information. The third is whether consumer representatives will be similarly consulted. The fourth and last, still in hope, is whether the Government will return to the democratic process of making announcements in Parliament, rather than in Sunday newspapers. Let us have Parliament take back control.

[Baroness Ludford (LD) [V]]

My Lords, the Government are seeking to put an upbeat gloss on the plans for 1 January, under the strapline, “The UK’s new start: let’s get going”, but getting going anywhere is set to be a very big challenge for both people and businesses. Individuals will lose their free movement, free roaming, free healthcare and freedom to take a pet on holiday abroad at short notice. The Government claim that leaving the EU single market and customs union means that we will,

“regain our political and economic independence.”

It is in fact going to feel like “out of control” rather than “taking back control”.

In the other place on Monday Mr Gove promised

“a free flow of freight”—[Official Report, Commons, 13/7/20; col. 1275.]

but nothing could be further from the truth. The UK will be moving from a highly integrated relationship with the EU to one in which trading with it becomes much more difficult. There will be customs forms, physical checks, new VAT rules, plant and animal health requirements, export declarations, a lorry park, and a vast new IT system—always a terrifying prospect. This is going to hit businesses struggling with the disruption and economic hit of Covid; perhaps they might just be getting their heads above water by December, at which point they will get hit by the Exocet of masses of expensive new red tape.

The Government have left it until 24 weeks before the end of transition to produce this plan. What have they actually done for the last four years? One sensible move would, of course, have been to extend the transition period, so as to avoid distraction from the pressing issue of dealing with the pandemic, but Brexit ideology, as always, trumped good sense. The complexity facing businesses can be judged by the fact that this government document comprises a dense 200 pages. As the Trade Secretary rightly highlighted in her striking letter of last week, the controls, IT systems and lorry parks will not be ready by the end of the year. This is the real reason they are being phased in over six months. Are we seriously to believe they will be ready by July next year?

Ms Truss urged

“it is essential that my department has a clear view of operation delivery plans, timescales and risks going forward.”

This suggests that the Trade Secretary has not been fully involved in plans for imports and exports. Can the Minister explain this extraordinary state of affairs? Ms Truss also pointed out that if, as predicted, the dual-tariff system is not in place for 1 January

“this may call into question NI’s place in the UK’s customs territory”.

What substantive reassurances can the Minister give us—and, more to the point, the people of Northern Ireland —on this point?

This Brexit burden will force companies to fill in an extra 215 million customs declarations every year, which Mr Gove’s document acknowledged were “complicated”. The cost for them is estimated at between £7 billion and £13 billion a year; this is on top of huge costs for the public sector. So this is where “our money back” will be going—not on the NHS, but on bureaucracy. Many firms will face the expense of hiring customs agents to complete new border formalities on their behalf. It is estimated that 50,000 of these will be needed, a figure that dwarfs the number of officials in the demonised European Commission.

The Trade Secretary, in her letter to Messrs Gove and Sunak, was worried about tariffs being dodged and asked for

“assurances that we are able to deliver full controls at these ports”—

that is, EU-facing ports—

“by July 2021 and that plans are in place from January to mitigate the risk of goods being circumvented from ports implementing full controls.”

What she is talking about, of course, is the risk of smuggling and fraud; this is an astonishing admission, so what is the answer to how these risks will be addressed?

It is clear for all to see that the promises of “frictionless trade” and “an oven-ready deal” were mere empty slogans. We are seeing what my honourable friend in the other place, Stephen Farry MP, called

“the brutal reality of Brexit”.—[Official Report, Commons, 13/7/20; col. 1279.]

It is no comfort at all for some of us to say, “We told you so.”