Brexit: Withdrawal Agreement and Political Declaration

Lord Shipley Excerpts

Wednesday 5th December 2018 Lords Chamber

[Lord Shipley (LD)]

My Lords, it was interesting to listen to the contribution of the noble Lord, Lord Farmer. His speech confirmed to me why I was right to vote remain.

We have been reminded many times in this debate that the country voted for Brexit in 2016. It certainly voted to leave the European Union, but it did not at the time establish a clear sense of what that actually meant. The Norway option, a Norway-plus option, a Norway-plus-plus option, a Canada-style free-trade agreement, a relationship such as that which Switzerland has with the EU: all of these were said to be options, as were claims by some supporters of Brexit that we might get special access to the single market and stay in a customs union if we left.

We were promised that our trading with the EU would be settled quickly: it has not been. We were told that trade deals with the rest of the world would be easy: they have not been. I have never understood why such trade deals are thought to be in our interest, when much of the evidence suggests that it is the other country that will gain more from them, sometimes disrupting British production. Anyway, we have large numbers of trade deals already from our membership of the EU. Would it not be better just to keep those as a member of the EU and benefit as a member when other trade deals are negotiated by the EU?

The Government’s own analysis admits that trade deals outside the EU will add little to GDP, yet a no deal could mean a 9% hit to our GDP. No deal would be a disaster. The question we need to address is: can we rely on the result of a referendum held two and a half years ago when the outcome two and a half years later is very different from what was claimed it would be by leave campaigners? I submit that another referendum would not be a betrayal, as the Prime Minister has described it, now that the destination has become clearer. People surely must have the right to assess the evidence and to make a final decision, so I will be supporting the Motion of the noble Baroness, Lady Smith of Basildon. No deal would damage our currency, cause rising unemployment and push up interest rates. This is not Project Fear: both the Government and the Bank of England have confirmed that any Brexit outcome will make us poorer. People did not vote to become poorer and were never told they would be poorer by the leave campaign.

The Prime Minister describes her deal as promising a brighter future. Her letter to the nation adds a claim that it is a deal,

“that works for our whole country and all of our people”.

It does not. It is a serious blunder that will impact on millions of low-income families. The Prime Minister’s letter to the nation also said that she has worked to,

“deliver a Brexit deal that works for every part of our country—for England, Scotland, Wales and Northern Ireland”.

Crucially, the English regions are simply forgotten in this, yet more than £400 million has been injected into the north-east of England, where I live, through the current round of European structural funds. This funding is due to end in 2020, yet we already know that transition could be extended beyond 2020. Without clear decisions well in advance, regional growth and development will be harmed. Why have the Government failed so comprehensively to ensure that the money we would expect from the EU in structural funding if we stayed in will be available for the poorer English regions after 2020?

With regard to the risks for the north-east economy in this withdrawal agreement, I remind the House that 4,540 north-east businesses traded with the EU in 2017, totalling 57% of north-east regional trade, compared with 40% nationally. The EU is a vital export market for the north-east of England, and the single market is a crucial part of that.

I am advised now that there are cases of businesses already putting their no-deal plans into place, either relocating or reducing staff. In addition, some smaller companies cannot deal with some of the pressures needed for Brexit. For example, it is often cited that business may need to stockpile 25% more to cope with transition—but, with limited warehousing and pressured profit margins, some businesses do not have the resources to raise their capacity. There are examples of some north-east companies being handed supply contracts saying that if the deal is unfavourable, they may have to move to the EU or else have their contracts terminated. Many companies are concerned about their role in a supply chain: if a large manufacturer pulls out, it could cause a domino effect right down the chain, impacting on many businesses.

Uncertainty has also deterred certain businesses in the north-east from bidding for continental contracts. Currency risk is one reason I give as an example. Some businesses have bid for European contracts but have been told that it was too much of a risk to take them on, and that has been attributed to uncertainty. I contend that the north-east of England will be poorer outside the EU. The north-east will be outside the single market, making it harder for our exporters to the EU to do business. We will see more capital investment that we might have attracted to the north-east going to other parts of the EU that are inside the single market, because we are outside it. No deal would also impact hard on university research and disrupt EU exchange programmes.

I repeat that all versions of Brexit will make us poorer. I have concluded that we need to ask the British people whether they still want to leave the EU now that they know the cost of Brexit or whether they prefer to stay in, with all the advantages of the customs union, the single market and membership of European programmes. I accept that this would require a people’s vote, and I will support that.