Brexit: Withdrawal Agreement and Political Declaration

Lord Gadhia Excerpts

Thursday 10th January 2019 Lords Chamber

[Lord Gadhia (Non-Afl)]

My Lords, many of us hoped that the holiday season would clear our minds and lift the Brexit fog, but, alas, the fuzziness remains and has come back with a vengeance. More worryingly, the ideological divides between and within families, communities and political parties show little sign of being resolved, let alone healed.

Yet the eyes of the world are on us, particularly from the business community, whose primary focus is to secure a timely decision and path to certainty, especially at a moment when the headwinds of the global business cycle are turning against us. Our international reputation for political stability and mature, predictable and rational decision-making has already been dented. The actions of Parliament in the coming days and weeks will determine how the UK continues to be perceived by global investors, with very real economic consequences.

With fewer than 80 days to go before the expiry of the Article 50 period, this is not a time for political handwringing. There is plenty of evidence from Hansard of advice ignored and warnings neglected. The time for protracted debate has ended; it is time to decide. Extending the Article 50 period is unlikely to produce a fundamentally different set of choices or trade-offs that we are not already aware of. At this stage in the life of a complex negotiation it is not about tinkering with individual clauses but evaluating the balance of advantage of the deal, taken as a whole, compared to other credible and deliverable alternatives—to govern is to choose. That is why brinkmanship has its natural limits. Indeed, it feels like brinkmanship is the order of the day, whether between the US Congress and the White House on the federal budget, Washington and Beijing on trade tariffs or the Janus-like face-off on Brexit between the Prime Minister, Parliament and Brussels simultaneously.

Taking things to the wire can play a legitimate part in a robust negotiation and help test boundaries, but in international diplomacy there are limitations on playing poker with people’s lives and livelihoods. We should also remember that an open hand holds more than a closed fist. As the noble Lord, Lord Tugendhat, reminded us in the previous debate, Brexit is,

“a process, not an event”.—[Official Report, 5/12/08; col. 1000.]

We are barely at the end of the beginning so we will need to draw upon a store of good will with our European partners over many years—it is the end destination that matters most.

That is why leaving the EU without a negotiated withdrawal agreement has no credibility. The Justice Secretary rightly describes no deal as a unicorn. But, sadly, there are still enough MPs willing to chase the unicorn who can block the Prime Minister’s deal. They will continue to do so, however many times she brings a vote back to Parliament and regardless of any further assurances received. It is therefore abundantly clear and has been since last July, when the Chequers plan was unveiled, that a deal cannot secure approval without the support of opposition MPs.

The only viable path for the Prime Minister following the outcome of next Tuesday’s vote is to conduct a discovery process aimed at establishing whether there are enough opposition MPs willing to set aside their party Whip and act in the national interest to support an alternative Brexit plan. To draw an analogy with financial markets, a clearing price is often discovered through a book-building process to gauge demand at different levels. It is this type of process of indicative votes that is required to help determine the next steps.

Opposition parties, once they have exhausted their inevitable attempt at holding a no-confidence vote in the Government, should allow Parliament to have a series of free votes and enable MPs to reveal their true preferences. It is likely that such a process will confirm that the House of Commons opposes no deal, as the amendments to the Finance Bill have already signalled, and that MPs prefer a softer form of Brexit, perhaps tilted more towards Norway than Canada.

Some will inevitably view this as a betrayal of Brexit, but it simply reflects the change in parliamentary arithmetic following the 2017 general election. It also reflects the consequences of a simple, binary referendum. There are at least 17.4 million versions of Brexit and no settled consensus on which path to pursue.

The Prime Minister, to her credit, has tried to chart a middle course that strikes a balance between safeguarding prosperity and regaining sovereignty. The more difficult part to swallow is not the backstop but the flimsy nature of the future framework and the absence of any interconditionality with payments being made to the EU. To use a financial markets analogy again, we have simply secured a £39 billion option value on negotiating a trade deal. Some would consider this an expensive option but, in the context of a £2 trillion economy, it is a bearable price to pay.

What is less bearable is replacing one form of uncertainty with another. We have limited control over the future timetable and cannot impose any sanction or penalty on the EU if a deal is not finalised by the end of 2020. In fact, my noble friend Lord Macpherson has suggested that it will take us until the middle of the next decade to finalise a future deal. So we are forced to take much on trust and must be prepared for an extended period in Brexit limbo. It is ironic that the foremost of the Prime Minister’s 12 negotiating objectives in her Lancaster House speech in January 2017 was delivering certainty and clarity. I have previously described the situation we find ourselves in as a grubby compromise, but it is a necessary compromise if we are to find a way through that reconciles so many conflicting objectives, pressures and realities.

I sincerely hope that Parliament can solve this most difficult of Rubik’s cubes, but we must be prepared for the very real possibility of a blocking minority for every option, resulting in deadlock. In those circumstances, we will rapidly become a zombie Parliament and lose all remaining authority. In such a situation, a fresh democratic process—whether a referendum or general election—will become inevitable.