Brexit: Preparations

Baroness Hayter of Kentish Town Excerpts

Tuesday 8th October 2019 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

I thank the Minister for repeating the Statement which, despite what we hear from sources at No. 10, claims,

“the strong desire of this Government to leave the EU with a deal”.

It is now 76 days since Mr Johnson became Prime Minister and 23 days until 31 October, but he has failed to get a deal: a failure that he said, and for which he would share responsibility, would represent “a failure of statecraft”. So, we have no deal, but is that the fault of the Prime Minister and his incompetence? Oh no, it is the fault of those pesky Europeans; it is the fault of the unbending Irish; it is the fault of Mrs Merkel; it is the fault of those pesky parliamentarians; and it is probably the fault of your Lordships’ House. But the truth, as we now know from the ever-helpful Spectator, is that there is no desire for a deal. It is all a ruse.

The Government are spending taxpayers’ money on advertisements to promote the 31 October date and the notion that we will leave on that day even though it would be unlawful without the consent of the House of Commons. The ads and the endless repetition of the date are all to absolve this incompetent Prime Minister of his failure, and it is all about preparing for an election where he can blame everyone but himself for our continued membership. But at what cost? What would be the cost of that much-trailed no deal? The IFS says £150 billion a year for business in administration alone, while the Government themselves are spending £8 billion to soften the blow. Then there are the tariffs to be paid by exporters, consumers and some importers—although not on Argentinian wine or New Zealand honey, which are not very high on the ordinary person’s shopping list. We will see higher food prices for consumers and the ending of pet passports. I am not making this up. It is all in the misnamed document I have in my hand. This is called “readiness”, despite what we hear from Ireland, from farmers, manufacturers, exporters, road hauliers, expats, medics and small businesses—that we are woefully unready. Indeed, it makes Ethelred the Unready seem extraordinarily well prepared.

Tariffs would hit us three weeks on Friday with an immediate impact on availability and prices. UK citizens abroad would lose some of their rights, while traffic congestion near Dover would make Parliament Square look like an open space. Moreover, with no adequacy agreement, any firm without an appropriate contract would lose data flow rights while the European arrest warrant would end. I say again: three weeks on Friday. Small businesses, hit by customs declarations for the first time, will be stymied in their work, and it is clear that the Government, despite this Statement, simply do not want a deal and are playing with people’s livelihoods. As Mr Tusk writes,

“what’s at stake is not winning some stupid … game. At stake is the future of Europe and the UK as well as the security and interests of our people”.

Speaking to the Prime Minister, he says:

“You don’t want a deal … you don’t want an extension”.


That says it all. The Deputy Prime Minister of Ireland agrees with the Tusk statement, which she says,

“reflects the frustration across EU and the enormity of what’s at stake … We remain open to finalize a fair #Brexit deal but need a UK Govt willing to work with EU to get it done”.

We are pleased that the Government have published this document. However, let us be clear: we on this side of the House—I probably speak for the whole House, not just this side—will do everything in our power to ensure that the no-deal nightmare does not come to pass.

I have only two questions for the Minister. First, does he really think that his Government will be thanked for taking the UK out of the European Union in this way? Secondly, does he think that the EU will help us to find a way forward when Leave.EU tweets over a picture of Mrs Merkel today the words:

“We didn’t win two world wars to be pushed around by a kraut”?


Is the Minister as embarrassed by that as I am?

[Lord Wallace of Saltaire (LD)]

My Lords, it is very difficult to know how much of this Statement to believe. It says that the Government still think that there is a chance of no deal. The text from No. 10 from last night—which the Spectator has now published—suggests that people with influence inside No. 10 have clearly entirely given up on the idea of a deal and are moving towards an election, so we have to treat this as the beginning of a series of election statements.

The statement that we will leave with no deal if necessary is a statement that the Government will defy the law. That is also an interesting statement for the Government to make to Parliament at this point. I note that, among other things, last night’s text says:

“To marginalise the Brexit Party, we will have to fight the election on the basis of ‘no more delays, get Brexit done immediately’”.


If that is what the national interest has come down to, we are all in deep trouble. Dominic Cummings appears to text as madly and prolifically as Donald Trump tweets.

There are a number of other fantasies in the text. However, I would like to start by pressing the Minister a little more on the fantasy that he gave us yesterday in suggesting that one could have production with different standards for the domestic and export markets. I am not sure whether the Government have had any discussions with any industrial sectors about having separate production lines. Perhaps they could tell us. We know very well that cross-contamination makes that sort of thing very difficult indeed in the food industry. The pharmaceutical industry depends on global markets, global standards and global research efforts. It will cease production in Britain if we start doing things like that. Non-tariff barriers produced by the British at different standards might also get us into trouble with the World Trade Organization.

If and when we leave the European Union, we will become “an independent trading country” again—as the Statement says—but we will not become an entirely independent economy. We depend very heavily on multinational companies which produce and invest in this country. If they cease doing so, we will all be poorer.

The Statement congratulates the automotive industry on how well prepared it is. What preparations is it making? It is closing plants for periods and reducing plans to build new models in this country. I remember a representative of the automotive sector saying to me in a briefing some weeks ago that it is now impossible to justify new investment in this country. That is the sort of preparation that it is making. This will make us and our children poorer over a longer period.

Another fantasy is that the World Trade Organization will be a major gain for Britain because we will have our own seat; this does not accept the deep crisis within the WTO which the United States has itself created. There is a failure to recognise that between the referendum three years ago and now there has been a downturn in the world economy, a protectionist turn in US policy and a trade conflict between the US and China, which makes the international context in which we manage the British economy much more difficult.

No form of Brexit offers comparable benefits to staying in the EU. That is what, after three years of discussions, the Government have discovered. As a result, the Government are not saying, “Now that we have been through all this, we need to modify our position”. They are saying, “Now that we have been through all this, we need to mitigate the disaster we are committing the country to”. This is a betrayal of Margaret Thatcher’s legacy. She pushed through the European single market as a major exercise in globalisation and deregulation by having common standards in one of the biggest markets in the world. The Government are now retreating to the idea that we will have our own little standards in a much smaller and weaker economy.

There have been all these comments about “vast financial contributions” to the EU budget. As I recall—since we are one of the richer countries and a major contributor—these are said to be £9 billion per year. Well, so far, we have spent £8 billion on the additional costs of leaving, and we have not yet begun to calculate the costs that we will incur from having to replace the shared agencies and facilities to which we have contributed as part of the EU with separate, national facilities. I mentioned yesterday the Joint European Torus in Culham; this is to become a national facility for which, I assume, the British Government will in future pay all the costs rather than a contribution towards shared costs. That is the sort of new cost that we will be developing.

When it comes to Britain in the world, where is British foreign policy? There is no sense of where Britain goes. This is a Vote Leave Government, not a Conservative Government. So much in this Statement seems to be without any foundation whatever. Lastly, it says there will be “damage to democracy” from “dishonouring” the referendum result. After the referendum, our current Prime Minister published an article in the Telegraph saying that there was no question that we had to leave the single market. He has changed his mind. Is it not time the Government changed their mind?

[Lord Callanan]

I thank the noble Baroness and the noble Lord for their comments and questions. I say to my opposite number, the noble Baroness, Lady Hayter, that what I found interesting about her lengthy contribution—she had a number of clever debating points to make—was that she said nothing at all about Labour’s policy on Brexit. Of course, as we all know, Labour is against everything: against a deal, against no deal, against revoking Article 50. One of these days, maybe even in our debates, we may get to discover what the Labour Party is in favour of.

I will correct some of the points that the noble Baroness made. She said that it is unlawful to leave without a deal. That is not correct. Leaving without a deal is the legal—

[Baroness Hayter of Kentish Town]

I referred to leaving without a deal without the consent of the House of Commons.

[Lord Callanan]

The record will show what the noble Baroness said. I wrote down that she said it was unlawful to leave without a deal, which, as she has now correctly said, is not the case. That is now for the European Council to determine as a matter of EU law. She said that businesses would lose their data flow rights; that is also not true. We have put in place substantial mitigations through standard contractual clauses. The Statement said that this will enable the transfer of data. We are urging the EU to put in place a proper adequacy decision, which should be straightforward on the basis that our regulation is, in fact, identical. We hope that it will do that.

Lastly, the noble Baroness asked me to condemn—which I happily do—the embarrassing, incorrect tweet from Leave.EU. Germany is a close friend, neighbour and ally. That comment was appalling and I join her in condemning it.

Moving on to the points made by the noble Lord, Lord Wallace, I picked up very few questions in his contribution. He said businesses would not have different production lines, but many already do. If you want to export to the Chinese, Indian or US market, you already have to meet the different standards they have. However, I readily accept his point about non-tariff barriers. He asked about the single market being an exercise in deregulation. I think that would come as a shock to many businesses that have to meet its standards. He talked about the £8 billion cost. Yes, the cost is considerable, but much of that expense would be incurred anyway. Even if we left with a deal, we would still incur the costs of leaving.