Brexit: Appointment of Joint Committee

Lord Howarth of Newport Excerpts

Wednesday 3rd July 2019 Lords Chamber

[Lord Howarth of Newport (Lab)]

My Lords, the Joint Committee that my noble friend proposes should be clear-eyed in weighing up the costs and implications of no deal by comparison with other options.

One option is still for us to leave under the terms of the Prime Minister’s withdrawal deal. Donald Tusk said yesterday that we should not expect the new leaders of the EU institutions to offer any other deal. However, the withdrawal deal is deeply objectionable to both leavers and remainers. Leavers see it as Brexit in name only; remainers think it a poor substitute for full membership.

Another option is to revoke Article 50, but the House of Commons is not going to vote for that either, and rightly so. For Parliament to repudiate the decision of the British people at the 2016 referendum would be catastrophic for our democracy. The two main parties pledged themselves to respect the verdict of that referendum. The esteem in which Parliament is held has been deteriorating throughout our political lifetimes, and Brexit has precipitated a crisis of confidence in Parliament. The House of Commons has failed to resolve Brexit, and voter support for the two main parties has never been lower. Here, as in much of the EU, we can see a more sinister politics emerging out of frustration with the main parties and parliamentary government.

A third option is another referendum. That would be a cop-out by Parliament. As Mr Heath discovered at the February 1974 election, the people do not expect their MPs to pass the buck back to them. A second referendum would be even more bitterly divisive; nor would it resolve the impasse. Whether it turned out that leave or remain had more votes, the majority would be narrow, leaving us with the same problem of consent and reconciliation as we have now.

Meanwhile, during the many months it would take to legislate and then organise and hold the referendum, the economy would continue to suffer. Uncertainty is the great enemy of markets and investment. The Governor of the Bank of England spoke yesterday of the drag from Brexit uncertainties intensifying. Our political paralysis has caused business paralysis. The latest PMI and ONS figures highlight the malaise. Do we want to extend from three to four years this vacuum in which little or nothing is done to address our uncompetitive productivity, in which businesses hoard cash, stockpile goods and defer investment decisions, and in which the number of people doing precarious and poorly paid jobs has soared, as has the number of people resorting to food banks? A second referendum is not in the interests of the poor and disadvantaged.

Alternatively, we might have a general election. This seems more likely to happen by accident than design, but there is a real possibility that an early general election could follow a vote of no confidence. If there were to be a general election, it would not take the politics of Brexit into clear water. A general election would be about more than Brexit. Neither leave nor remain could claim the outcome as vindication. The fragmentation of identity and political support among the electorate means in any case that, under first past the post, an election is unlikely to deliver a Government with a working majority.

So what other options are we left with?

Perhaps the new Prime Minister will be able, at the 11th hour, to pull a rabbit out of the hat and negotiate a new deal that is acceptable to Parliament. It is hard to foresee success in such an endeavour, but it must be right to try. In the circumstances of a serious new negotiation, possibly the EU would agree to another extension, but that is far from certain, and postponement is not resolution.

If negotiation does not work, we are forced on to so-called no deal. As is now the legal default, we could simply leave on 31 October. This is what people of a nervous disposition—and they are right to be nervous—call crashing out. Legal uncertainty, a sudden alteration of terms of trade and severance of contractual and administrative processes would indeed be disruptive and possibly very damaging in ways that even the committee my noble friend proposes could not altogether foresee. No one can responsibly advocate this. If it is what, through failure of negotiation and planning, we find ourselves having to deal with, no doubt as a country we will cope, as we have coped in other crises. Mitigations by the Treasury and the Bank, common-sense waivers of the rules and bold improvisations by Whitehall and business would limit transitional damage, but people would get hurt.

There can, however, be a relatively benign version of no deal. It is not too late to achieve a managed no deal. This is an option that the Bank envisaged in its response to the Treasury Select Committee last autumn. The Bank’s projection was that a managed no deal would provide for future growth to be only 1.5% less by 2023 than under the Prime Minister’s withdrawal agreement—no catastrophe, therefore. The Joint Committee, once it has examined the evidence, might consider that comparatively minor diminution of prospective growth a price worth paying in these circumstances, in which there are compelling objections and obstacles to all other options.

It has been grossly irresponsible on the part of the Chancellor, since the referendum, to have dragged his feet on preparing for no deal. Yesterday he repeated his adamantine opposition to no deal, but whatever he or others may have wished, no deal has always been a possibility and there are no excuses for failing to make the fullest preparations for that contingency. So much more could have been done to mitigate the risks of no deal and, of course, to strengthen our negotiating position. As President Macron also said yesterday:

“If you fear no deal you are the hostage”.


I was appalled to read in the Guardian of 11 April that, following the postponement of Brexit from 29 March, Whitehall transferred 6,000 officials who were at last preparing for no deal back to other departmental duties and stood down operational planning for no deal.

Be that as it may, we still have four months before our scheduled departure date of 31 October, and a great deal of useful preparation for a managed no deal can be made in that period to build on the reassuring plans for no deal that have already been made on both sides of the Channel in relation to transport, customs and so forth.

I know the EU believes it is politically necessary to show—pour encourager les autres—that it must be painful for a member state to leave the EU. But the 27 and ourselves continue to profess friendship. Good will, common sense and pragmatism can still, in the interests of our EU trading partners and ourselves, make no deal manageable, with much potential damage avoided.

My understanding, supported by eminent legal and academic authority and pace the noble Lord, Lord Kerr of Kinlochard, is that under Article XXIV of the GATT we can avoid new tariff barriers between ourselves and the EU, precluding the need for a hard border in the island of Ireland, if the EU makes a simple commitment in principle to start negotiations with us to achieve a free trade area.

It is a moment to remember the old maxim:

“Keep calm and carry on”.


A Joint Committee may find that, sensibly conceived and with determined preparation, no deal can well be manageable and transitional turbulence can be minimised. It may conclude that it would be the least unsatisfactory route to the resolution of Brexit.

Which would be better for our country? To pursue economic growth, regardless of other values, within an ailing EU or to nerve ourselves to seize the great prize that Brexit offers of the recovery of national self-government and the opportunity to renew our democracy and self-belief?