Brexit: Withdrawal Agreement and Political Declaration

Lord Lilley Excerpts

Monday 14th January 2019 Lords Chamber

[Lord Lilley (Con)]

My Lords, it is a great pleasure to follow a thoughtful speech from the noble Earl.

The Prime Minister claims there is no alternative to her deal—but there is. It is not mine, not Jeremy Corbyn’s—whatever that is—but Donald Tusk’s Canada-style free trade deal he offered in March and repeated in October. As he said, that is the only deal compatible with leaving the customs union and single market, as promised in the referendum and in the Conservative manifesto. It must cover the whole UK, which means replacing the backstop by a commitment by Ireland, the EU and the UK that we will all retain an invisible Irish border, as we have all pledged to do if there is no withdrawal agreement. Under Article 24 of the WTO, if we agree such a deal in principle we can continue to trade with zero tariffs after 29 March while fleshing out the details.

To get such an agreement we must be ready, and be seen to be ready by the EU, to leave on WTO terms. As Trade and Industry Secretary, I helped negotiate the WTO to provide a safe haven for trade and I also implemented the single market programme. I predicted that both would boost trade—wrongly in the case of the single market, to which our exports have grown by a miserable 18% over 25 years, but rightly for the WTO as our exports to the rest of the world have grown by 72%.

If we leave on WTO terms there would be four obvious pluses. First, far from crashing out, we will be cashing in, as my noble friend Lord Hamilton, predicted I would say, and we will keep £39 billion. Your Lordships’ own committee concluded that:

“Article 50 allows the UK to leave the EU without being liable for outstanding financial obligations”.


To show good faith, we should confidently submit the issue to international arbitration. Secondly, it would end corrosive uncertainty—economic and political—which would continue for over two more years under the PM’s deal. Thirdly, both sides will have to solve the Irish border issue by administrative measures without border posts, as they have promised if there is no deal. Mr Varadkar has said:

“In … a no deal scenario … we won’t be installing a border between Northern Ireland and Ireland, and everyone knows that”.


Mr Junker reassured the Irish Parliament that:

“If negotiations fail … the European Union will not impose a border, customs posts or any other kind of infrastructure on the frontier”.


And Britain has said it will not,

“require any infrastructure at the border … under any circumstances”.

We already tackle smuggling of tobacco, alcohol, red diesel and drugs without border checks, so the UK can certainly stop illicit trade in Dyson vacuum cleaners if our regulations deviate from those of the EU. Finally, once we all resolve the Irish border issue administratively, we can take up Tusk’s offer of a free trade deal for the whole UK.

Not one of the noble Lords who has railed against no deal in these debates has addressed these benefits of a WTO Brexit, even to refute them. More remarkable, only two or three noble Lords have spelled out specific concerns about a WTO Brexit. The others simply demonised it with a lexicon of lurid adjectives which were last deployed to warn against leaving the ERM, not joining the euro or the millennium bug.

Let me address the specific concerns that a couple of noble Lords have raised. The first was given by the noble Baroness, Lady Smith of Basildon, opening the debate in December, who said, “Planes will be grounded”. She was apparently unaware that on 13 November the European Union Commission had already promised legislation allowing air carriers from the UK to fly over, to and from the EU provided the UK reciprocated. The Commission also announced that hauliers will continue to get licences, that Airbus can export its wings, that the UK will be swiftly listed as a safe country to allow entry of live animals and animal products from the UK, and more.

The other concrete concern came from the most reverend Primate the Archbishop of Canterbury. While temporal Lords have been demonising a WTO Brexit with odium theologicum, it took a Lord spiritual to bring us down to earth with the request for proof that it would not have a significant negative effect on people in his diocese, such as when Operation Stack has been in force. Of course it is impossible to prove a negative or that Operation Stack will never be necessary regardless of Brexit, as it has been invoked on 211 days over the past 18 years, although without any archiepiscopal moral censure of those responsible.

I can explain why Brexit should not add significantly to such delays. First, HMRC expects roughly the same number of physical checks of vehicles at Dover as at present because its checks are based on risk, notably of smuggling tobacco, drugs and illegal immigrants, none of which will increase because of Brexit. Moreover, HMRC promises to prioritise flow over compliance. That means waving lorries through even if their declarations are incomplete.

The concern in the past has been not about Dover but about Calais. However, the good news, brought to the most reverend Primate’s attention by my noble friend Lord Forsyth, is that the chairman of Calais ports says that they too will have no more checks than at present. They are determined and confident that traffic will flow freely—not to be nice to Britain but to avoid losing trade to Zeebrugge, Rotterdam and Antwerp. They are installing three extra lorry lanes, an inspection post for animals away from the port and a scanner for trains moving at 30 kilometres an hour. Monsieur Puissesseau was indignant that the British Government were—quite unnecessarily in his view—hiring ferries to take trade away from his port to other ports.

Problems one prepares for rarely happen, as we discovered with the millennium bug. The Government are now being rather coy about how advanced their preparations are for leaving on WTO terms because they want to frighten MPs into voting for their deal, but I am confident that if we leave on WTO terms on 29 March events will be far closer to a damp squib than the apocalypse. That may disappoint some fanatical remainers in this House, but they will get over it.