Brexit: Deal or No Deal (European Union Committee Report)

Lord Wigley Excerpts

Tuesday 16th January 2018 Lords Chamber

[Lord Wigley (PC)]

My Lords, I welcome this most timely of debates, and I thank the committee and the noble Lord, Lord Jay, for presenting the report and the noble Lord, Lord Whitty, for introducing it. Deal or no deal is, for me, an absolutely critical question. I respect the referendum vote to give up our membership of the EU, although I do so with the utmost of bad grace. However, we cannot ignore that vote or rerun the same question, even if Mr Farage, for his own reasons, seems to be advocating that.

During the referendum, Mr Farage and his Brexiter colleagues repeatedly emphasised that, of course, we would get a deal, a very good deal, because, we were told, it was in the interests of all the 27 other member states that such a deal was achieved. So, fine—if we do, indeed, get a good deal. For me and for the vast majority of my former colleagues in manufacturing industry, and for the livestock farmers of Wales, this means a deal that enables them to trade with the single market without any physical barriers or tariffs whatever. For the tourism industry in Wales, it means free movement of people, both visitors and employees, and for the NHS it means having no disincentives to recruiting staff at all levels of work. That is the core of a good deal.

Having no deal fails to deliver those key requirements. Indeed, today, to my mind, with this report, the Brexit chickens have finally come home to roost. A no-deal scenario represents an utter disaster for the countries of Britain. The Government are criminally irresponsible to present no deal as a viable option, and to use it as a bargaining counter, as Brexit Ministers come close to admitting, risks having the Government’s bluff called, to the ultimate detriment of both sides. Millions of people who voted for Brexit on the basis sold to them by Brexiters that of course a deal would be done would most certainly think twice before endorsing a no-deal Brexit. That is why, to my mind, if the no-deal outcome is what finally transpires, Parliament should insist that it cannot go ahead without there being a confirmatory referendum. I hope that, even at this late stage, MPs will have the foresight to build this into the Brexit Bill. If they do not, we in this Chamber should most assuredly do so.

A very real danger, as this report highlights, is that a no-deal outcome happens almost by default. Both sides may call the bluff of their antagonists, and that could go right up to the wire. That is the stark reason why building into legislation a fixed and immutable deadline late at night on 29 March 2019 is sheer madness. The hands of the negotiators in Brussels on both sides and the hands of Parliament itself must not be tied by unnecessary macho posturing. The issues at stake are far too important for them to be put at risk in a game of Euro-bluff.

Let us remind ourselves what a no-deal really means if it comes about by default, with negotiations possibly going up to the wire on 29 March and collapsing without agreement. On 30 March next year, it would mean that the border between the Irish Republic and the six counties will be closed, with a requirement to control the movement of goods, people and money. It would mean chaos in the Irish dairy industry, as the report highlights, with the possibility of a 44% tariff on Irish cheddar. It would mean that, on that Saturday morning, all the lorries going through the ports would have to be checked, with all the extra staff in place to handle such an eventuality and with potential chaos in Holyhead, not to mention Dover, where the report says there could be tailbacks of 17 miles. It would mean exporters having to adjust their prices to reflect, as the report mentioned, an additional 4% tariff on manufactured goods, up to 10% on cars—and such tariffs would apply to 90% of the UK’s manufactured exports.

Over 70% of Britain’s food exports go to the EU. On 30 March, farmers could face an instant tariff of between 40% and 80% on beef and lamb in various carcass forms. Imported food prices would instantaneously rise by over 20% if, on that black Saturday morning, we had to fall back on WTO rules. If at that point in time, when nothing is agreed because everything is not agreed, on that morning the London Chamber of Commerce warns, on page 15 of the report,

“flights from the UK … will be grounded on exit day”.

As Johnson & Johnson warned the committee, on page 14:

“A no deal scenario could potentially disrupt the supply of medicines”.


On that Saturday, UK citizens in EU countries and EU citizens in Britain will be in limbo. No deal means no deal. For the service sector, there is no succour from falling back on WTO rules, because, as the report notes, they do not apply to the vital financial sector.

It would be criminally irresponsible for the Government to allow the slightest possibility of a no-deal Brexit emerging at the last minute. They have to do at least three things, to my mind, which emerged from the report. First, they have to step back from the crazy policy of “nothing is agreed until everything is agreed”, as demanded in paragraph 106 of the report. They will need a phased approach. Secondly, a withdrawal agreement on the future UK-EU relationship needs to be agreed by October this year, separately from the deal on future relations. That is in paragraph 122. Thirdly, the Government need to spell out urgently what they expect in terms of the proposed transitional agreement, clarifying the legal basis for every element in such a transition package, as asked for in paragraph 132. I would also highlight the comments in paragraph 134 that:

“The consequences of a ‘no deal’ outcome would be so damaging that a fall-back position is now needed”.


There I rest my case. A damaging no-deal outcome, to my mind, demands that there be a confirmatory referendum. That is the only way that so damaging an outcome can be legitimised or, better still, buried once and for all. Let this unelected House resolve to allow the electors to have a final say on that most damaging prospect, which confronts us in the context of the report, of a no-deal Brexit.