Brexit: Deal or No Deal (European Union Committee Report)

Baroness Wheatcroft Excerpts

Tuesday 16th January 2018 Lords Chamber

[Baroness Wheatcroft (Con)]

My Lords, we should congratulate the noble Lord, Lord Jay of Ewelme, and the European Union Committee on securing this debate so relatively shortly after publication of this excellent report. It is, perhaps, an acknowledgement that time is running out and crucial decisions on this momentous subject have to be taken soon. The most important decision that needs to be taken, and very soon, was raised in the report and mentioned by the noble Lord, Lord Whitty. The Government should stop talking about transition and ask for an extension of the negotiating period. Transition, or implementation, comes later.

The evidence that no deal would be the worst possible deal is now overwhelming, yet the risk of the country hitting the self-imposed deadline of March 2019 without a workable deal is real. The Government have maintained so far that nothing is agreed until everything is agreed, but it is obvious that everything will not be agreed by the time that the withdrawal agreement has to be finalised this coming autumn, nor by March 2019, when our membership of the EU is scheduled to end.

The risk is that the rhetoric of “nothing is agreed until everything is agreed” will change, and it will be proposed that we leave the EU and enter into a limbo period in which negotiations will continue. This cannot be the implementation period which used to be discussed, since there will not be any clarity over what should be implemented. It would, undoubtedly, be a transition period, but Britain would be transitioning to we know not what.

There would be a bare-bones deal. Planes would still fly, but the future terms of trade would be up in the air, as would so many aspects of life. Having left the EU, our negotiating position would be weakened. Business would not have the clarity it craves, and it is highly unlikely that the UK would be free to negotiate the much-vaunted trade deals with the rest of the world while we were in transition.

The dictionary definition of limbo is,

“An uncertain situation that you cannot control and in which there is no progress or improvement”.

Some theologians suggest that it can go on indefinitely. None of us, not business, not citizens, want to enter into limbo. I accept that a time-defined period of negotiation does not provide the certainty that we all seek. However, to leave without knowing where we are going cannot make sense. Protracted negotiations do provide the chance of negotiating the best deal possible for future generations, and that, surely, should be our aim.

The overwhelming weight of economic evidence is that Britain will lose by leaving the single market. The estimates vary—they are produced by economists—but the conclusion is the same. The independent Rand Corporation modelled the outcome of various scenarios and found that Britain would be significantly worse off outside the EU in all but one set of circumstances. This nirvana where we would be better off would involve the UK negotiating a free-trade deal with the EU, and the EU and the UK concluding the TTIP agreement with the US. The likelihood of this seems slender: negotiations on the Transatlantic Trade and Investment Partnership have been going on for many years and have made no progress since 2016. Issues such as the American fondness for chlorinated chicken have proved hard to overcome and they would be, even when we tried to negotiate our own trade deal with the US.

Rand concluded that, in the absence of this dream scenario, the UK would suffer by as much as $140 billion over 10 years. It admits that its modelling took no account of the drift of EU workers out of the UK, a consequence of Brexit which is already becoming apparent. Only this week we heard of the estimated cost to the Scottish economy of leaving the EU. The Scottish Government say that even a Canada-style deal would cost their economy 6.1% of GDP by 2030.

We need a good deal. The Cabinet Secretary, Sir Jeremy Heywood, has told the Public Administration and Constitutional Affairs Committee that his troops are doing work on a no-deal eventuality, as they must. For clarity’s sake, will the Minister confirm that the Government do not, however, have a “Minister for No Deal”, as had been suggested before the reshuffle? Government has to be prepared for the worst case but must try to engineer the best, and Parliament must know the implications of what is being planned. How else can it do its job?

I would therefore also be grateful for clarity on the issue of impact assessments. We were led to believe that nearly 60 of these were being prepared in order to assess the impact of Brexit on various sectors. They were so detailed that they could not be made public for fear of jeopardising negotiations. Then they seemed to metamorphose into sectoral analyses that could be unveiled. As a snapshot of a sector as it currently operates, they may suffice, but they do not attempt to analyse the potential effects of Brexit.

I refer noble Lords to the Agriculture, Animal Health, and Food and Drink Manufacturing (including Catering, Retail and Wholesale) Sector Report. The title gives a hint of the somewhat broad-brush approach. It includes revelations such as:

“The sector is vital for consumers”.


Yes, but enlightenment over the impact of leaving the EU is there none. How can we take sensible decisions on a massive issue such as this without evidence of the potential effects? Are there actually more detailed impact assessments which Parliament is not being allowed to see? Might the coyness be because so many sectors will be seriously damaged if we leave the single market?

I have been a consistent supporter of the need for Parliament to have a meaningful vote on the outcome of our negotiations with the EU 27. I am delighted that we seem to be moving in that direction. I firmly believe that if taking back control has any meaning then it means that the sovereignty of Parliament should prevail. It would be a tragedy if Parliament were asked to approve legislation that would see the country leave the EU for limbo land. We must ask for an extended negotiating period. If it proved impossible to negotiate a good deal that the British public could find acceptable, we would still be in the EU and able to take advantage of the absolute assurance from the noble Lord, Lord Kerr, that Article 50 is unilaterally revocable.