Further Discussions with the European Union under Article 50 of the Treaty on European Union

Baroness Altmann Excerpts

Wednesday 27th February 2019 Lords Chamber

[Baroness Hayter of Kentish Town]

We do. I made it clear yesterday—I am not sure whether the noble Baroness was in her place when I spoke to the House—that no deal is our choice because if we amend the deal on the table, we can get one. It is our choice, not that of the other side.

The costs of no deal, as I said, have been set out. The worries of the CBI, the IoD and of all the others have been made pretty clear to the Government—I am sure they have been if they are making them clear to me—and I wonder sometimes whether Ministers read their own papers. Yesterday, the Government’s own paper predicted that the economy would be between 6% and 9% smaller in the long term in a no-deal scenario compared with today’s arrangements, with the north-east losing out more than anywhere else—I am sure the Minister noticed. I thought that that, at least, would have attracted his attention.

[Baroness Altmann (Con)]

Would the noble Baroness ask the Minister to agree that yesterday’s paper which predicted the 6% to 9% reduction in the economy in the event of no deal noted that that excluded any short-term disruption costs from no deal?

[Baroness Hayter of Kentish Town]

It is a shame that he will not be replying but I am sure that his colleague—judging from that lovely poker face of his—has made a careful note of that and will respond later today.

We know that one bit, at least, of the Government is listening because we know they are preparing to set up a hardship fund—presumably with the money that the noble Lord, Lord Lilley, thinks will be available to pay for all those who will lose out; this seems a funny way of running the economy. Despite all that and the pressures for the hardship fund, the no dealers today have been attacking the grown-ups in their own party as “saboteurs, wreckers and blackmailers”. This, coming from politicians who have blackmailed the Prime Minister by voting against her and who are willing to wreck the economy and sabotage business, all for their own ideological hang-up. This has to stop and it has to stop now.

Will the Minister who will sum up, and who is definitely not an ERG hardliner, push his political masters—or, perhaps, his political mistress—to rule out unequivocally any no-deal departure, with its lack of a transition period and the chaos that goes with that? Will he urge the Prime Minister to change her approach and to find a consensual way forward to unite the Commons and the country, and will he ensure that an extension to Article 50 is requested this week? It is clear we will need it, but requesting it this week, rather than being forced into it, will help to calm nerves and offer some certainty to business. Will he work to see that such an extension is used not for more pretence and tweaking of words, but for a serious reconsideration of how we withdraw from the EU?

--- Later in debate ---

[Baroness Altmann]

My Lords, it is a pleasure to follow the noble Lord, Lord Hannay. It seems that we are participating in yet another act of that long-running theatrical exercise that has been going on in Parliament for quite some time. Perhaps we could call it “The Brexit Chronicles”. We are not sure yet whether it is a farce, a tragedy, a comedy or some combination of all three—indeed, one could suggest that it encompasses many more aspects of theatre. However, as has been directed by the last act of our play, we are led to believe that somehow the Prime Minister will go back to the EU and get 27 countries to reconsider the withdrawal agreement that she herself agreed, with concessions made on all sides, and tell them to tear up the backstop, which the EU considers essential to protect its external border and one of its smaller nations. The fact that our own Government are willing to play fast and loose with the Irish border is indeed shameful, but that is how it appears.

My noble friend Lord Cormack referred to the excellent article by our noble friend Lord Finkelstein. It seems that the ERG has roundly rejected the only agreement on offer for the orderly—if only for the short term—Brexit that apparently it has always wanted. It has now bullied the Prime Minister into disgracefully refusing to take no deal off the table. The Orwellian arguments being used to keep threatening no deal are almost beyond belief. Indeed, the nationalist obsessions behind these arguments reflect Orwell’s words:

“Nationalism is power-hunger tempered by self-deception”.


The self-deception is on quite an exceptional scale.

I will quote from an article today by my right honourable friend David Davis, who writes that the announcement yesterday,

“sends the wrong message to the EU”.

He says that,

“ruling out No Deal, or extending Article 50 … may harm our negotiating position … because it takes away our leverage in negotiations and is against our national interest”.

So no deal is somehow in our national interest. In any case, the EU has said that the negotiations are over. Even the Prime Minister, in her Statement yesterday, of which we are taking note now, says that these are discussions, not negotiations. As other noble Lords have said, the EU will not reopen the withdrawal agreement. Yet the ERG says that we must not abandon this no-deal charade. That is either dishonest or delusional. I fear that it is the latter, especially as, in the same article, Mr Davis says:

“Above all we all want an orderly exit from the European Union”,


and that:

“Conservatism is based on pragmatism and realism”.


He says also that:

“The public has always been ahead of and more relaxed on No Deal than politicians. They are right to be”.


Somehow, therefore, no deal represents an orderly exit from the EU and is the pragmatic and realistic choice. Words almost fail me.

In previous acts of our play we have been told that the purpose of no deal is a necessary fiction of some kind, whose purpose is to threaten or bully the EU into capitulating on the backstop. That is playing Russian roulette with several chambers of the gun loaded. This no-deal threat is not like a normal deal, where you walk away and go back to your village if the other side does not agree to your terms. If we leave with no deal, we will have set fire to many of the homes in our village. It is not like, as some suggest, having an independent nuclear deterrent. We hope never to have to use it. Others also would assume that we will not actually use it, but our enemies cannot be 100% sure. This no-deal threat is not like that. It is about as realistic as threatening to use our nuclear arsenal when the missiles are primarily trained directly on ourselves, or as—as the leader of the Opposition suggested—having our nuclear submarines sailing around without any missiles on them. No deal would be an unmitigated disaster for many parts of our country—not, perhaps, for the individuals who are promoting this idea, but certainly for many innocent people around the nation.

Many noble Lords have referred to the Government’s paper from yesterday. Indeed, my noble friend Baroness Wheatcroft has pointed to one thing that stood out particularly to me, which was the HMRC estimate that the administrative burden on our country’s businesses just from customs declarations on UK-EU goods trade could be around £13 billion a year. I looked up the receipts that the Government get from corporation tax in this country. For the year 2015-16, which is the year to which the £13 billion refers, corporation tax receipts were £43.7 billion. So the impact of a no-deal Brexit, just from customs declarations, would be the equivalent of a 30% increase in corporation tax on British business. Having trumpeted the reduction of corporation tax and tried to attract businesses to the UK, making us the best place to set up a business, the Conservative Party is suddenly suggesting that we contemplate slapping an increase of this nature on our companies, just for a business to be able to carry on doing what it has already been doing freely for years.

The Government have created risk and uncertainty for some of the UK’s largest manufacturing sectors, including automobiles, food and drink, and chemicals. Let us take a couple of examples. Chemical firms with integrated supply chains, whose products cross borders many times, would have to register with the European Chemicals Agency. Currently that is automatic via the EU, but businesses would have to register for 12,000 different registrations if there were no deal and they still wanted to sell into the EU. They would also have to transfer their existing registration to an EU-based entity. Each of those registrations costs £1,500 plus the associated administrative expenses.

For food, the impact of leaving with no deal would be particularly grave. The country is not even remotely ready for a no-deal Brexit. In fact it is probably the small and mundane procedural issues that will cause some of the worst problems. For example, Defra has suddenly realised that we do not have enough pallets to be able to cope with the consequences of no deal. Most pallets that are used by British exporters do not conform to the third-country rules that the EU requires for trade because we have a much more relaxed set of regulations as a member. The UK will apparently not have enough EU-approved pallets for the exports that we require if we leave with no deal in March. Those UK companies that miss out will have to wait for new pallets, which can take weeks to be ready.

Another example is that labels that food and drink companies put on their products will become illegal from 29 March if we leave with no deal. It can take months for new labels to be produced. Any UK company without a presence in the EU would have to take down its websites with a .eu suffix. Here is an example that I find particularly interesting: March/April is a particularly bad time to leave without a deal because it is the very time when we are most reliant on importing fresh fruit and vegetables from the EU. Some 90% of lettuces come from the EU at that time. By May or June there is less reliance on the EU so that would actually be a better time to leave without a deal. That might also help to avoid the worst initial disruption to food supplies, as well as giving more time to prepare for no deal.

This is where I see the situation very differently from my noble friend Lord Howell. I am deeply concerned about how the final act of this Westminster Brexit chronicle may unfold. I am concerned that the possibility of no deal may actually have risen. This could indeed be the final denouement of the saga that we are engaged in. Everyone knows that we are not ready to leave in March with no deal. An extension has to be requested. If it is agreed, the Prime Minister insists that it must be a one-off, it must be short and it must not last beyond June. There will be no renegotiation of the withdrawal agreement, so it is entirely possible that a short delay would be designed just to give us more time to prepare for no deal. In the meantime we will keep threatening no deal and hope that the EU will surrender to our wishes, but if, as most of us in today’s debate agree, the EU will not give us anything better than the withdrawal agreement apart from some slight changes to the political declaration and reassurances on the backstop, what next? We will face the choice between vassalage and suicide. Neither represents the freedom and control that people who voted to leave voted for. The ERG would, it appears, choose the suicidal route, perhaps believing that the gun is not really loaded, or that some deus ex machina will rescue us. Other Members of your Lordships’ House—I entirely understand this—would choose vassalage, at least in the short term, and then hope that the political declaration will deliver some decent terms for us.

However, I believe that Parliament would be betraying our democracy and our country if we refuse to go back to the people and check before taking any of these courses, to make sure that this is what they will support, given that the circumstances are so different from those that people were presented with when they voted in either 2016 or 2017. It is time to respect the British people. We have respected those votes. It is now time to respect the people by asking again for confirmation of whether they wish us to proceed in this way before the final curtain comes down.