European Union (Notification of Withdrawal) Bill

Lord Birt Excerpts

Monday 20th February 2017 Lords Chamber

[Lord Birt (CB)]

My Lords, I was a passionate remainer but I will vote to pass this Bill without a moment’s pause for we simply must respect the people’s choice. However, we are woefully underprepared for the gigantic challenges ahead. The White Paper, complete with its correction slip, was shockingly flimsy—as flimsy as the paper it is printed on. There were 300 to 400 bland words on immigration, for instance, and a host of questions about matters such as sectoral impact that should have been answered long ago.

Secondly, we are woefully overoptimistic. We are in a weak, not strong, negotiating position. It is in the EU’s overall economic interest to negotiate a bespoke deal with us that facilitates free trade, but politics will trump economics. Some of the 27 countries on the other side of the table have very different priorities. Most will not want to see us benefit from exit and incentivise future breakaways. Some will put the spoke in the wheel for their own domestic reasons. For example, Spain’s concerns on Gibraltar may affect the multiple freedoms our airlines currently enjoy in Europe, worth a whopping £60 billion a year to the UK economy. Some European countries will be opportunistic and look for advantage. I have a good friend working for the French authorities to facilitate the transfer of financial services from the City to the Île-de-France. I personally know of one major British bank that is actively exploring moving half its workforce out of Britain. The EU 27 represent 44% of UK trade, but we are just 8% of theirs. We need a deal far more than they do, so no one but no one can predict with any confidence at all the outcome of such complex, multiparty negotiations.

Thirdly, we appear woefully blind to the risks we are running. There are three roughly equal trading blocs in the world—North America, Asia and Europe—but trade halves as distance doubles. It is hard to believe that the scope for increasing our trade with the rest of the world—56% of our trade now—will be greater than the damage we risk to the 44% of trade we conduct on our own European doorstep.

We are also poorly positioned economically and politically to navigate these unsettled waters. We have just experienced nearly a decade of, I would suggest, unavoidable austerity. Ten years of flat personal incomes or worse and a creaking, overstretched public sector, accompanied by the biggest surge in immigration in our history, created the sourness and frustration that underlay the 23 June result. Yet, immigration is vital to our economy at every level, whether picking the cauliflowers in Lincolnshire, staffing our care homes or attracting some of the best brains in the world to power our financial service industries. We meddle with all that at our economic peril. Squaring the circle—meeting our economic interests while achieving the political consent of a discombobulated population—is a huge political challenge.

The backdrop to meeting that challenge is grim. The noble Lord, Lord O’Donnell, mentioned his role in the IFS. As the IFS’s work demonstrates, it seems highly likely that Brexit will prolong public and private austerity in the UK well beyond 2025—well into a second decade. The mood of the country will become more disgruntled still, with unknown consequences.

We are all in this together now. What the Government must do from here on in is show proper respect for our institutions; involve Parliament meaningfully; unite a nation divided down the middle; be hopeful yet realistic, but not giddily optimistic, about our prospects; and be honest and open with the British people about continuing austerity and the white-water ride ahead.