Brexit: Preparations and Negotiations

Lord Liddle Excerpts

Monday 23rd July 2018 Lords Chamber

[Lord Callanan]

Of course we are not reneging on the Prime Minister’s words, but my right honourable friend the Secretary of State for Exiting the EU made it clear yesterday that we expect a future partnership to be agreed at the same time; it will sit alongside the withdrawal agreement and no money will be paid unless the future partnership is delivered. In these circumstances, it is the duty of any responsible Government to prepare for every eventuality, including the unlikely scenario that we reach March 2019 without agreeing a deal. It is essential that plans are in place to mitigate the risks and ensure stability, whatever the outcome of these negotiations. The Government’s legislative programme in this Session provides for a range of negotiation outcomes, including that of no deal.

In the last few months we have passed the Nuclear Safeguards Act, the Sanctions and Anti-Money Laundering Act and the Haulage Permits and Trailer Registration Act, preparing the UK for a future outside the European Union. I am grateful to the House for the constructive way it has engaged on this legislation.

We have been taking other practical action to ensure that we have the infrastructure in place—for example, recruiting 300 extra Border Force staff, with a further drive to recruit another 1,000, launched earlier this year. The Government have been working on nearly 300 no-deal plans for almost two years. Some of these are already in the public domain. As we announced last week, over August and September the Government will release a series of technical notices to set out what UK businesses and citizens will need to do in a no-deal scenario. This due diligence is designed to provide reassurance that the Government are prepared.

I note the great number of speakers listed for today’s debate and I look forward to hearing all the contributions. Before I resume my place, let me make it clear that we strive to strike the very best deal with the EU, and whatever the outcome of our negotiations, we stand ready to make a success of Brexit.

[Lord Liddle (Lab)]

Before the Minister sits down, will he answer the question raised by the noble Lord, Lord Forsyth, about the facilitated customs arrangement? Paragraph 17 of chapter 1 of the White Paper states clearly that,

“the UK is not proposing that the EU applies the UK’s tariffs and trade policy at its border for goods intended for the UK”.

I understand that in the other place last Monday, an amendment was carried saying that this arrangement would not come into effect unless the other member states agreed to apply this dual tariff. What now is the Government’s policy on this critical point?

[Lord Callanan]

That paragraph confirms the answer I gave earlier. We will agree a tariff-sharing formula with the EU. That is part of the discussions we will have, but we are not asking other EU member states to change their arrangements at their borders. We do not believe that the amendment passed last week is incompatible with our White Paper proposals.

--- Later in debate ---

[Lord Liddle]

My Lords, last week I had the great pleasure of being in Brussels with the noble Baroness, Lady Noakes, and my noble friend Lord Whitty under the very good chairmanship of the noble Lord, Lord Boswell. We had a very interesting time, but I fear that I came away from the visit with a great deal of pessimism. My view is that we will return from our Summer Recess to find us heading for the deepest political crisis our nation has faced since the Second World War. It could so easily transmute into an economic crisis, a sterling crisis and an investment crisis once business suddenly comes to terms with the awful fact that the Brexiteer bluff of no deal might soon become—admittedly, I think, by accident—a reality.

No deal will have very serious consequences for 60% of our trade—not just trade with the EU, but with all the other countries the EU has trade agreements with—which now includes Japan. I do not share the optimism of the noble Baroness, Lady Noakes, about trading on WTO terms. No deal would mean a breakdown in aviation and energy markets from day one; an immediate loss of broadcasting rights from the UK as programmes no longer comply with country of origin rules; potential chaos at all our borders as agricultural inspections, customs, rules of origin, regulatory checks and up-front VAT payments are imposed; legal uncertainty about contracts and business licences and authorisations issued by EU agencies; disruption to data flows; and some really awful things, such as confusion about the status of EU citizens living in this country and British citizens living on the continent. What on earth would happen to the Irish border in the event of no deal?

Quite a lot of people have said, “Oh, there is no majority for no deal in Parliament and it is not going to happen”—I wish I was so confident. The no-deal amendment, which twice passed in this House by huge cross-party majorities in the then European Union (Withdrawal) Bill, failed in the Commons when its otherwise wholly admirable mover—the right honourable Dominic Grieve—chose to fall on his sword in the interest of Conservative Party unity.

On the customs Bill last week, the Prime Minister chose to whip her parliamentary party to vote for several Jacob Rees-Mogg amendments which directly contradict the White Paper that she had produced only days before. The facilitated customs arrangement is a fantasy but it is possible that if it had simply been confined to the UK, the Government might have been able to persuade the European Commission to go along with the possibility that—at some stage in the long, long term—it might become technologically feasible, and that we would accept remaining in the customs union until that day happened. The fact is, however, that the Rees-Mogg amendment totally scuppers that possibility, because there is no way whatever that our European partners are going to adopt this plan themselves when, to be polite, it involves a massive increase in bureaucracy. One of the strange things about Brexit is that most of its keenest supporters also support a low-tax, small state. But what are we going to see with Brexit? There will be a massive increase in the size of the Civil Service and bureaucracy. This arrangement would certainly involve a big increase in bureaucracy, with untested technology and an invitation to commit fraud. No one else will go along with it and it is therefore not going to work as a proposition.

Last week left me feeling in a very bad way. I said to myself: is there no instance in which a clear-cut national interest can trump the unity of the Conservative Party as a higher cause? Will the Conservative Party ever not put its own unity first, before the national interest? Sadly, there is a group of misguided Labour MPs—and some of my colleagues here—who are totally oblivious to the pain that a hard Brexit will inflict on their poorest constituents. They are prepared to back Brexit in any form.

While we all hope for an agreement in October, I fear the political dynamic is moving in totally the wrong direction. I am not a fan of the White Paper. It should have been published 18 months ago, before we invoked Article 50, and it completely neglects the services sectors, where so much of Britain’s economic future lies. But if you were to ask me as a European adviser, the model of a customs union plus a single market in goods might have worked as the basis for an agreement with our European partners, as long as the UK was prepared to make concessions in other areas. Those would include: a more clearly defined role for the ECJ; binding rules to implement future single-market legislation; some continuing EU budget payments; and a preference for EU citizens in new labour mobility rules.

Instead of signalling the possibility of flexibility, however, the Cabinet postures that it has no more room for manoeuvre. Mrs Leadsom says we have gone as far as we can. Mr Raab protests that we will not pay the divorce bill—for which we have already signed up, incidentally—unless we are promised the trade agreement that we demand. Even the eminently sensible Mr Lidington uses the argument inside the Conservative Party that Parliament would, under Mrs May’s plan, retain its sovereignty to reject EU laws. Yet David Lidington knows, as well as I do, that the first principle of a common rule book for a common market is that members have to live with laws they do not like to benefit in the round from laws that are in their interests. We cannot trade frictionlessly with Europe on the basis of some pick-and-choose formula. Far too many on the Government Benches—

[Baroness Stedman-Scott (Con)]

Will the noble Lord conclude his remarks?

[Lord Liddle]

I will. I do not think other people have—anyway, there we are.

Some people think the Northern Ireland border is being got up by the Commission to force Britain into so-called vassalage. The truth is, as my noble friend Lord Adonis told us, the problems are very real. The truth is that England chose to impose this problem on Ireland by voting to leave the EU, and we are duty bound to find a solution to it. No deal could be a disaster and could happen. I believe we are heading for a grave national crisis. The Brexiteers think they can lay the blame on Brussels for the untruths they peddled in the referendum about the glorious opportunities Brexit would offer while claiming there would be no costs in trade, economic welfare or influence. It is time that politicians in all parties, including my own, stopped mouthing unworkable cake-and-eat-it solutions. It is time for those on all sides of the political aisle to put the national interest first, and that means revisiting the Norway model, extending Article 50 and contemplating another referendum.