Department for Exiting the European Union

Angus Brendan MacNeil Excerpts

Monday 26th February 2018 Commons Chamber

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Thank you for calling me to speak, Madam Deputy Speaker.

Brexit is an area where it is quite hard to estimate. Brexit has been mis-served by the media. It has been played out in a soap opera of personalities, parliamentary arithmetic and party political advantage, when in fact it should be played out under the lens of trade, the economy and what it will mean. When the Prime Minister says that our best days are in front of us, that is a news story, but if vets say that there will be 325% more checks at borders because of this, that is not a news story. This is a costly step that is going to be taken, over and above anything else we might need at ports in years to come. Clearly, to even a very untrained eye, Brexit is going to be costly, and anybody who does not think that is in severe denial.

Maybe the best comment that I have heard about this was not made by Peston, Marr, Andrew Neil or any of our so-called professional media. It came from “The Mash Report”, a current affairs comedy programme, and said that Brexiteers have to tell us now what Brexit is, not what it is not, because they are very strong at telling us what Brexit is not.

At least we know one thing that Brexit will be. We have to be grateful for the efforts of the Secretary of State for Exiting the European Union and his civil servants for this: we know that Brexit will not be a “Mad Max” dystopia. It may be a dystopia, but it certainly will not be a “Mad Max” dystopia.

We know, because it was leaked from the UK Government and has been verified and cross-checked by the Scottish Government and the Irish Government, that staying in the customs union and single market is a 2% hit to the UK economy. That is a strong estimate of the hit. A free trade agreement is a 5% hit, and WTO rules is an 8% hit.

[Sammy Wilson (East Antrim) (DUP)]

Maybe the hon. Gentleman has not had the opportunity to see the report, but it is quite clear that none of these figures should be treated as forecasts or quoted in isolation. The report is full of caveats showing that many things influence those figures, and therefore they are really rough guides to compare one situation with another but should never be used as forecasts.

[Angus Brendan MacNeil]

The hon. Gentleman makes a case for all reports, but the report is the best estimate we have to go with. The report was kept secret for a long time, but it seems that it chimed with more than one person when it had to be leaked in the end.

It has emerged that the UK Government have decided on the middle road. They are looking for a free trade agreement, which is the option of a 5% to 6% hit on GDP—those are the Government’s own estimates—although some of the Tory party would go for the 8% hit of WTO rules. They have made political choices with severe economic consequences that they probably will not personally have to face. In a funny, humorous and ironic twist, they expect the European Union not to respond in kind. They expect the European Union to react with complete economic rationale, even though their politics are ones of irrational economic actions.

As we know, the EU and the UK have already taken actions based on principles, for a higher purpose, and that was in Crimea because of Russia’s annexation of it. The EU’s principle of the four freedoms means that it will take a smaller hit than the UK and a smaller hit than they all took with Crimea, or about the same. The point is that, in the bigger picture, the European Union is going to lose effectively about a toenail here, while the UK debates how many bullets are to go through its feet. That is the difference in the damage that will be done.

From the principal parties, we have had slogans. The slogan from the ruling Conservative party has been the illuminating “Brexit means Brexit”, as well as “It’s going to be a Brexit for Britain” and “It’s going to be the best trade deal possible”. We can look at this as an analogy. The Government have crashed their Rolls-Royce and are going down the second-hand car shop looking for the best second-hand car possible. Will it be a second-hand car that is 2% less good, 5% less good or 8% less good than the one they currently have?

On the other hand, we have the principal Opposition party, Labour, talking about a Brexit for jobs and a Brexit for the people. Labour—or at least its leader—has thrown another variable into the works: it want a customs union. I do not see an estimate for that either. What does that mean? If hon. Members are familiar with national newspapers that run fantasy football activities for statheads and football fans, they will know that readers can pick and choose players from a variety of teams and compose their own team based on that fantasy—perhaps called Team Corbyn; I do not know—but it is notable that this need not bear any relation to the reality of football other than the statistics, and even the players do not need to know that they are in somebody’s fantasy football team. Similarly, what is now emerging is a fantasy customs union—it bears no relation to the views of the 27 other partner countries—and they can pick and choose elements from the newspapers to their heart’s content.

The estimates in the leaked statistics show that this option—it is not the customs union or the single market—will lead to a hit of between 2% and 5% to 6% to the UK economy. The current Labour leadership should be very clear about that.

[Bill Grant (Ayr, Carrick and Cumnock) (Con)]

I have listened to the very pessimistic overview taken from the part reports. I read them today in the reading room, which was awfully secure, rather bizarrely, I thought. The reports make it clear that they are not finished estimates, but crystal-ball gazing. I take it that the hon. Gentleman has no desire to respect the people by way of referendums. He has never really got to grips with the referendum in 2014 and I am hearing tonight that he has not really got to grips with the referendum of 2017. Does his party disrespect the people and referendums?

[Angus Brendan MacNeil]

The other referendum was actually in 2016, but in both referendums—of 2014 and 2016—the Scottish people voted clearly to remain in the European Union, so, yes, I do respect the two referendums. I want that opinion to be checked again in the further referendum on Scottish independence within the European Union that, as the hon. Gentleman knows, is coming down the tracks in jig time.

A customs union, as currently suggested by the principal Opposition, can have myriad or infinite permutations. Have no estimates at all been made for that? All in all, this is one of the areas where the estimates are huge, the variabilities are massive and it is very unclear where the chips will fall.

The overall message that should be going out is that when boardrooms and when the people of Scotland look at the two parties in this Chamber—the Government and the principal Opposition—they have to start thinking and, particularly in the boardrooms, they have to start speaking. They do not have to enter into political debate, but they have to start to become very strident indeed in what they are saying. I meet too many of those from companies who come to me with their fears and their estimates of what might happen. In reality, they have to start saying what they want, because otherwise it will be too late.

I am reminded of the book, “On the Psychology of Military Incompetence”. In a number of military events that occurred, whether in Crimea—the charge of the Light Brigade was in Crimea of course—with the Boers in South Africa, in Mesopotamia or in Afghanistan, the common theme running through them all was the fact that the rank and file could not believe their commanders could get it so utterly wrong, and it was only when hot lead ripped through bare flesh that people then understood. There are companies that are too afraid to move and that, for one reason or another, will not say a word, but when they are taken down by the 2%, 5% or the 8% damage of Brexit, I tell those companies now that it will be too late to do anything about it then, so speak now.

Recently, my Committee went to the USA and Canada to look at the possibility of trade deals. The farmers lobby asked us why. Ford said a UK-US deal would be incremental, but that a UK-EU one would be existential. Certainly, when I saw the border with other Committee members, it was not as fast as the border at the moment between Ireland and Northern Ireland or as the border between France and Spain. These are some of the realities that are coming our way.

[Mr Marcus Fysh (Yeovil) (Con)]

Will the hon. Gentleman give way?

[Angus Brendan MacNeil]

I am very glad to give way to one of the Select Committees colleagues who were with me. I predicted at the border that some people would see what they wanted to see, so let us see what happens.

[Mr Fysh]

The hon. Gentleman is absolutely right that we saw the border between the US and Canada. The US and Canada have different regulatory and customs systems, yet they have a just-in-time, integrated supply chain that works perfectly well, so it is possible. The forecasts that he referred to earlier take no account of the possibility of such just-in-time supply chains continuing to work in a free trade agreement scenario.

[Angus Brendan MacNeil]

We were told that the average wait time was 15 minutes and just-in-time takes cognisance of that. If two minutes at Dover becomes four minutes, that will result in a 17-mile tailback. And, of course, no embarkation of ships takes place on the US-Canadian border after they have passed, or just before, the border point.

In summary, this Government exercise is costing about £250 million a year. It will cost the Scottish economy, which concerns me most, between £3.6 billion and £12 billion a year by 2030, and the way in which the two main parties are going at it means that the figure will probably be closer to £12 billion than to £3.6 billion. It really is time that the UK took a short, sharp look at itself. I predict that Brexit will probably collapse on itself. The economic reality will hit the rhetoric head first, and when it does so the rhetoric will just vanish into a pile of dust and be trampled by the economic reality, which is that the people want their jobs and they want the economy running, not the ideological purity of some Members of this House.

--- Later in debate ---

[Hilary Benn]

Different Members will draw different conclusions from what they read. It sounds to me that the hon. Gentleman is making an argument in favour of openness, so that everybody can make a judgment. In the circumstances, that would be a very wise thing to do.

My last point is that the argument we are currently having in the political world about membership of the customs union as opposed to leaving it, which is the Government’s policy, is all about what is in the best economic interests of the United Kingdom, our businesses, and the jobs and communities that depend on them. I say to my hon. Friend the Member for Darlington (Jenny Chapman), who occupies a position as shadow Brexit Minister, that I unreservedly welcome the fact that there is now a growing consensus in the House in favour of remaining in a customs union with the European Union after the transition period. As hon. Members will know, I have been arguing for that for a very long time. It is supported by, among others, the CBI; it would remove any risks of a return to tariffs and help to ease concerns about supply chains; it would be an essential first step, but not the complete answer, to ensuring a free and open border between Northern Ireland and the Republic without infrastructure; and it would also save money—the hon. Member for North East Fife made the point that, if we are in a customs union, we will not need to recruit a load of new customs officers.

The House will face that choice in due course, however long the Government delay the Trade Bill. To the two SNP Members who have spoken, I should say that, despite their slightly ungenerous characterisation of the policy position announced by the Leader of the Opposition and the shadow Brexit Secretary over the last two days, I trust that, when the vote comes, the SNP will be in the Division Lobby with Labour Members and others.

[Angus Brendan MacNeil]

rose—

[Hilary Benn]

I am looking forward to confirmation of that now.

[Angus Brendan MacNeil]

The confirmation I would need is this: what is the difference between “a customs union” and “the customs union”? I said that there are many other possibilities—an infinite number—but I am sure the right hon. Gentleman knows exactly what it means.

[Hilary Benn]

I hope that that is not a caveated expression of support. My interpretation of “a customs union”, as opposed to “the customs union”, is that it would bring all the same benefits—

[Angus Brendan MacNeil]

They are the same thing.

[Hilary Benn]

Indeed. There is a legal argument about whether one can remain a member of the customs union if we are not a member of the European Union. But SNP Members need to be careful: if we go through the Division Lobby and discover that they are sitting on their hands when we have the chance to say to the Government with one voice—we should not weaken—that the view of those who think that staying in a customs union is right—

[Angus Brendan MacNeil]

rose—

[Stephen Gethins]

rose—

--- Later in debate ---

[Hilary Benn]

I take that as an endorsement of the development of our policy announced by my right hon. Friend the Leader of the Opposition and the shadow Brexit Secretary over the past two days. I notice the slightly different approaches of the hon. Gentleman and the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil). I want us to continue to develop our policy. I have always said openly that the single market issue is more complicated because of free movement, but where we can find common ground with some Conservative Members, we need to maximise that unity of purpose and strength. In the end, if the Government are forced to realise that they cannot get policies through the House of Commons, they will have to change their mind. As I said in my last speech in the House, if the Government will not do their job, the House will have to do it for them.

[Angus Brendan MacNeil]

Will the right hon. Gentleman give way?

[Hilary Benn]

Other Members want to speak. I have given way already, and I am about to bring my remarks to a close.

It seems to me that the estimates we should really be discussing are our best estimates of the economic impact of Brexit. We are now running out of time. It is 19 months since the referendum, and there are nine months to go in the negotiation, but, crucially, there is one month until the European Union draws up its negotiating guidelines for the new economic relationship. If we do not get a move on, we run the risk that options that the House—or, heaven knows, the Government, if they change their view—might want to pursue are closed off by the EU in the negotiating guidelines for want of clarity about what the United Kingdom is seeking.

--- Later in debate ---

[Tommy Sheppard]

Thank you, Madam Deputy Speaker. I was going to point out that the hon. Gentleman’s intervention had a tenuous link to the subject of debate and no connection whatever to what I was saying, but he has none the less made his point for the record.

What does this lack of preparation mean for financial planning? I shall give the House two quick examples. The first is the customs union—or the customs arrangements, as the Government will call them. I might be wrong, but it seems overwhelmingly logical for our global trade that if we are leaving the European Union, we should first immediately try to seek an arrangement with those countries that are nearest to us and with which we have the greatest trading links. That ought not to be a matter of controversy. The only reason that it is controversial is the existence of an unreasonable number of people on the Government Benches who are so Europhobic that they will not countenance anything that looks like a cut-down relationship with the European Union. The idea of having a customs union should not be controversial, however, and I very much welcome the fact that Her Majesty’s Opposition now seem to be on a course towards coming round to that point of view.

[Angus Brendan MacNeil]

At one stage, the Labour party was against “the customs union”. Now it is for “a customs union”. The Conservatives are clearly against the customs union, and the Opposition are rallying around it, but we now have a third option from Labour, apparently dividing the Opposition, in favour of a customs union that it cannot fully explain. Does my hon. Friend see a difficulty in what Labour is proposing?

[Tommy Sheppard]

I am going to be uncharacteristically kind to the Labour party and take the right hon. Member for Leeds Central at his word. He seemed to be suggesting that we were moving towards a situation in which the difference between “a customs union” and “the customs union” might not be that great. In fact, I think he said that he viewed “a customs union” as having to replicate the procedures of “the customs union”.