EU Withdrawal

Debate between Baroness Ludford and Earl Cathcart

Wednesday 13th February 2019 Lords Chamber

[Earl Cathcart (Con)]

My Lords, I have not spoken in a Brexit debate until now because I did not think there was any point. What I might have said would have been said dozens of times before, and I do not suppose that whatever I say here today will have the slightest effect on the outcome. However, on this occasion, I wish to ask my noble friend the Minister a question.

Before I start, I should say that I voted to leave in the referendum. Indeed, I voted to leave in 1975 as well. Before we joined the Common Market, Britain had 100% control over its destiny and its laws, rules and regulations. The reason I voted to leave in 1975 was that I thought there would be a loss of sovereignty and, like the vast majority of Brexiteers, the reason I voted to leave in 2016 was to regain that sovereignty. I know that remainers cannot understand why Brexiteers voted to leave, just as Brexiteers cannot understand why remainers voted to stay, but we are where we are. What we need to do now is find a way through this quagmire that is in the best interests of the United Kingdom.

We are told that if we do not vote for Theresa May’s deal, there is a danger of us crashing out with no deal—falling off the cliff edge, which we have heard again today. I am not sure that we need to fall off a cliff edge if there is no deal, because under Article XXIV of the World Trade Organization’s General Agreement on Tariffs and Trade, the United Kingdom and Europe would be allowed to continue with the zero-tariff, zero-quota trading arrangements after 29 March. As the EU enjoys a £95 billion surplus with the UK, I cannot see why it would not welcome such an arrangement.

However, there are conditions. First, both parties have to agree to this standstill arrangement covering all goods trade, but could then negotiate at a later date a more comprehensive free trade agreement covering services and so on. This might not solve everything, but it should ease some of the fears about a cliff edge. Secondly, both parties must be in negotiations for a free trade agreement. It is on this point that I can see the Minister saying why we cannot invoke Article XXVI. He might say, “We have tried to negotiate a deal. Negotiations have failed, they have broken down, and because they have, we will not be able to invoke Article XXIV; hence, we are leaving without a deal”. I disagree. Just because the first deal put on the table is unacceptable does not mean that the second one will be—if at first you don’t succeed, try, try again. That is exactly the point of Article XXIV: to reduce the disruption while negotiations continue.

I understand that the Department for International Trade is investigating the possibility of invoking Article XXIV. I also understand that the Malthouse compromise envisages as plan B, in the absence of a formal withdrawal agreement, a basic interim agreement with the EU using Article XXIV. However, it is disappointing that the Department for Exiting the European Union is silent on Article XXIV. I can understand the political reasons why No. 10—

[Baroness Ludford (LD)]

I am sorry to interrupt the noble Earl, but I draw his attention to a briefing by the House of Commons Library from last week, No-deal Brexit and WTO: Article 24 Explained. Briefly, it makes it clear that if you have no deal, you cannot invoke Article XXIV. It is about interim application with a view to a full trade agreement. If you crash out with no deal, you are not negotiating a full trade agreement. Anyway, apparently no interim agreements have been registered with the WTO since 1995, because they can be objected to.

[Earl Cathcart]

I think I have just explained exactly that point. Just because the first deal is unacceptable, does not mean that the next deal will be. Negotiations will continue.

I was saying that I can understand the political reasons why No. 10 would want to keep Article XXIV under wraps, because talking about its possibility in public would reduce MPs’—and, indeed, noble Lords’—fears about no deal. This would make no deal considerably less frightening and therefore lessen the chances of the Prime Minister’s deal being passed. I ask the Minister: what discussions have the Government had with Brussels, and indeed the World Trade Organization, about the possibility of invoking Article XXIV, to ensure that we meet all the necessary conditions? Where there is a will, there is a way.