European Union (Withdrawal) Act

Chris Leslie Excerpts

Wednesday 9th January 2019 Commons Chamber

[Andrea Jenkyns (Morley and Outwood) (Con)]

In May last year, when I was a Parliamentary Private Secretary, I believe that I was the first person on the payroll to resign to fight for Brexit. I had deep concerns about how Brexit was being handled, and I felt compelled to resign for the Brexit that I believed in and the Brexit that my constituents and our country voted for. I was the first to step down, but I was not the last. We have seen talented, committed and hard-working colleagues on both sides of the Brexit debate resign because of numerous concerns.

Our reasons for standing down may vary, but one thing that we all have in common is our belief that this deal is a bad deal for our country. Be they remain or leave, I respect all those colleagues who bravely stood by their convictions and made the principled decision to fight for what they believe in, but the fight is not yet over. The Prime Minister speaks of a deal that will unite our country, a goal that no doubt we all desire, but the division we have seen is of the Prime Minister’s own making. Her desire to get a deal at any cost, prolonging “Project Fear”, and her decision to postpone last month’s withdrawal agreement vote were mistakes—and that decision has only led to more division at a time when our country should be uniting behind the democratic decision to leave the EU.

On 23 June 2016 the question was clear: should the UK remain a member of the EU or leave the EU? The British people spoke and decided overwhelmingly to leave.

[Mr Chris Leslie (Nottingham East) (Lab/Co-op)]

Not overwhelmingly.

[Andrea Jenkyns]

Well, I think 1 million more people is quite a big clue, actually.

It was never supposed to be this way. At the referendum there was no third option: the choice was either leave or remain. The referendum did not mention a half in, half out or worst of both worlds choice for our country’s future. The referendum question said nothing about giving the EU £39 billion of taxpayers’ money and getting nothing in return, the referendum question said nothing about a continued role for the European Court of Justice after 2019, and the referendum question said nothing about an Irish backstop and restricting our ability to sign new trade deals. This deal is a sell-out of those who voted to leave. It is therefore impossible for the House to unite around this deal, and it is impossible for our country to unite around a bad deal.

At the referendum two years ago the British people spoke and our objective was clear: as elected Members of Parliament we were tasked with delivering Brexit. Some Members thought the British people would deliver a different result and would vote remain in the referendum, but they did not, and this is the problem: some Members do not accept the result of the referendum and are using every opportunity to thwart the will of the British people.

It is a sad period in our great Parliament’s history when MPs try to overturn the democratic mandate; that is completely unacceptable, After all, it was Parliament that gave the British people the opportunity to have the referendum in the first place. Our great British parliamentary model has been a beacon that has been used as a template in parliamentary democracies across the globe for centuries. Let us not insult our greatest institution, or forget that we were elected by the British electorate. We are all democrats, so let us respect the result: our British people have spoken and it is time for us now to deliver. Our people decided to take back control and said we should leave. [Interruption.] They are still British citizens.

This was a vote dictated not by fear, but by hope: hope of a different tomorrow and a new path; hope of a new system not restricted by the EU’s institutions; and hope that once again our people will feel that they have a true stake in our country’s future. The chance of a global Britain was promised, but that promise has now been broken.

We must leave, and we need a clean Brexit and to trade under WTO rules if necessary. The US and China sell billions of pounds’ worth of exports each year to the EU using WTO rules; the UK can do the same if necessary. As the EU’s largest trading partner and with a deficit of £95 billion in trade in goods, we should have been negotiating from a position of strength, but the Prime Minister’s determination to get a deal at any cost gave the EU the upper hand. The Prime Minister showed her hand too soon, and now the EU has called her bluff.

I say that it is time we put the ball firmly in our court and take the upper hand in these negotiations. The EU fears our leaving on WTO terms as it will give Britain the competitive advantage if we do, so let us fully embrace a clean Brexit; I have no doubt that the EU will come running back to us at the eleventh hour. But besides being a good negotiating tool, leaving on WTO terms is not something we should fear.

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[Mr Chris Leslie (Nottingham East) (Lab/Co-op)]

It is nearly two months since the 585 pages of the withdrawal agreement were published, and it is already gathering a little bit of dust. As we have already heard, despite deferring the vote and pretending otherwise over Christmas, and ringing up Mr Barnier or Mr Juncker on Christmas eve or new year’s eve saying “Please can we have a negotiation?”, the Prime Minister has found that, in that famous phrase, nothing has changed. So here we are yet again facing a Government who are determined to prevaricate and kick the can further down the road.

Earlier today, having seen the Government defer this issue previously, Members realised that once the Prime Minister’s plan was defeated there would potentially be 21 days, and then perhaps another seven days, before the Commons would be allowed to determine what happens next. We had the ridiculous spectacle of the Government objecting to that and saying, “No, Members must not be allowed to vote on moving things forward.” That prevarication is extremely dangerous. It is dangerous to put political calculations above the country’s best interests when we could crash out with no deal on 29 March.

I am glad, Mr Speaker, that you withstood the attempts by a loud and vociferous minority in this place to thwart Members and prevent them from having a say. You have in the past made decisions and rulings with which I have disagreed, but on this occasion allowing parliamentarians to express their views was the right thing to do. Indeed, that proved to be the case, because a majority of MPs said, “No, we don’t wish to wait 21 or 28 days, till the middle of February; we want to get on with things.” The time has now come to decide. The House has instructed Ministers, if the Prime Minister’s deal is rejected on Tuesday, to come forward with a motion three sitting days later, which would be Monday 21 January. We could then make some decisions.

By the way, I do not address my remarks on prevarication only to Ministers. I gently say to those on the Labour Front Bench that they, too, should stop prevaricating on the question of Brexit. The time has come for the Labour party to make some decisions and stop this notion of constructive ambiguity. I know that this complex sequenceology has been constructed to try to avoid having to confront these issues, but the politics should come second to the national interest. We cannot afford to gamble at this stage, given how close we are to 29 March.

The withdrawal agreement is wrong for the country, as is the political declaration that accompanies it. The withdrawal agreement ignores 80% of our economy, the service sector. It might not necessarily provide good pictures for the television cameras, unlike queuing ferries at Dover and so forth, but the service sector is very much where the UK excels, whether in legal, professional, media, creative or financial services. Not only do many of our constituents work in those services, but they provide the engine for the revenues needed for our public services—for our NHS, schools, local authorities and social care. If we ignore the risk of diminished prospects for those sectors in our economy, we will be facilitating a further decade of austerity to come. That is why I say to all Members, across all parties, that we cannot just kick the can down the road and pretend that this will not matter.

The problem with the withdrawal agreement is that it is full of warm promises about what might be agreed, but it does not actually agree many, many things. It contains no agreement on data or energy policy. It says that we will establish a process on transport policy, and that we will talk about the Erasmus programme to allow students to study throughout Europe. It does not resolve the security situation or the question of Euratom. It fudges the question of the Northern Ireland border still further. The withdrawal agreement does not actually settle many of these things.

What is worse is that the political declaration is non-binding on the parties involved, which means that it amounts to little more than warm words. The Government got themselves into this ridiculous situation by embarking on the article 50 process without a commitment that, by the end of it, we would have not just the divorce arrangement settled, but, in particular, a settled plan for an EU-UK trade deal. That should have been part of the negotiation framework.

For us now to be asked to leave on 29 March without having settled our future relationship with Europe is highly irresponsible. Ministers may say, “Well, we intend to do it this way”. European officials may also say that they intend to do it that way, but, of course, they are here today and gone tomorrow, and commitments that are made by those particular individuals will not necessarily bind us on what happens to the UK. Therefore, we will not have the EU-UK arrangement settled down by the time that we are asked to leave, and anything could happen in that process.

There are many difficulties with that, because of course if we do not have the EU-UK trade deal buttoned down, our prospects of doing deals with the rest of the world will have to wait. Other countries, such as Japan, Singapore, Canada, America and others, will say, “We may be interested in doing a trade deal with you, but we would like to see what your relationship is with the EU first. Will you be allowed to reduce tariffs or not?” That arrangement could take two, three, four or five years—an ever unknown amount of time. The Canada trade deal with the EU took seven years.

The idea that the poor old Secretary of State for International Trade is raring to go with all these new deals across the world is, of course, fantasy. That is the delusion of Brexit that so many people are operating under, but the real world is beginning to bite. Businesses know it, and increasingly our constituents see it, and they want the right to determine their own future.

The withdrawal agreement and this settlement would end the free movement of people across Europe. I regard that as a great tragedy. It is a shame that we have not stood up and spoken out for the benefits of free movement. We should remember that free movement is reciprocal, so just as we restrict European movement into the UK, we will potentially be sacrificing UK citizens’ right of movement to the rest of Europe. Let us think of the future generations, their work opportunities, their study opportunities, the freedom we enjoy, the 2 million British people who already reside across the rest of Europe, and the uncertainties that this will create—and for what? What is this great harm? It is a ridiculous proposition, and that alone would be a reason to reject the withdrawal agreement.

There is also the notion that the agreement will allow us to control taxpayers’ money, but we know that we will lose a great deal of money because of the effect on the economy. Members do not need to take my word for that; the Treasury, the Government and the Prime Minister herself have articulated how we will be worse off by going down this pathway. We will be controlling a diminished amount of money. We will be paying out £39 billion, and possibly even more during the transition arrangement, in exchange for what? There is no commitment on a trade with the EU deal going forward, which I regard as a fundamental failure.

The Prime Minister has made a number of strategic errors all the way along this process, such as setting down red lines and interpreting the outcome of the referendum in her own way—for instance, on whether it was to do with the single market or the customs union, when, of course, none of that was on the ballot paper. She has also failed to take the temperature of Parliament. She did not exactly read the runes of the House of Commons from the beginning, and now she faces this situation. Under this arrangement the UK could be left in limbo in this situation for the next four years, and we would not even have a seat around the table to shape the rules to which we would be subject—it is a nonsense. Britain has had a fantastic ability to shape the rule-making arrangements of an entire continent—the whole European Union—for many years, and many of the rules and regulations that we have chosen to adopt have been generated by the United Kingdom. Some of the best ideas that we have had have shaped EU policies, and it is a great shame that we will be moving away from that.

Whether it is because of the failures of the withdrawal agreement or the wishlist presented in the form of the political declaration, which is an almost meaningless document, this House has to reject the Prime Minister’s proposal when it comes to the vote next Tuesday. The House must quickly realise that we have to extend article 50 at the very least, if not suspend or revoke the article 50 process, while we put this question back to the British public so that they can decide, in the full knowledge of the facts and the economic and social impact.

A people’s vote is a solution whose time has come, and increasing numbers of Members on both sides of this House are realising that it is the way ahead. I strongly hope that the Labour Front Benchers will also realise that the people’s vote has the support and is the preference of the vast majority not just of Labour party members, but of Labour supporters and voters. Now is the time to decide. We cannot afford to prevaricate any longer.

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[Sir Vince Cable (Twickenham) (LD)]

One problem of having extended debate and resumption of debate is that we are getting a lot of repetition and recycling of arguments that we have heard many times before. For that reason, I want to focus on one specific issue, which is the idea of World Trade Organisation rules and exactly what they mean. The term “WTO rules” is used casually in every pub, and in every radio interview I encounter, but I suspect that many of the people who use it are not at all clear what it means.

Before getting into the detail of that, I will make one general point about no deal, which was brought out rather brilliantly by the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), who got to the heart of this very well. He exposed the fact that no deal is actually a choice. It is not just something that happens; it is the conscious choice of a Government who could choose to revoke article 50, as the Father of the House keeps reminding us. That may be a difficult decision and a very unpopular one, but article 50 could be revoked, and by choosing not to revoke it, the Government will be choosing to have no deal, with all its catastrophic—or so they tell us—consequences.

Let me narrow down to the specific issue of what the WTO rules would be if we found ourselves in a no-deal world. The basis on which I speak is that many years ago, long before I came into the House, I was part of a small community of international trade specialists and got involved in negotiating the so-called Uruguay round and then the Doha round as part of the World Trade Organisation—or, as it was then called, the general agreement on tariffs and trade. I saw at first hand the way in which the WTO system operates. I realise that there is no longer just a small community of anoraks, which is what we were. A large number of people now consider themselves experts on trade policy, but the glibness with which the term “WTO rules” is applied leads me to believe that there are probably not too many anoraks, because there are some very real difficulties in applying WTO rules.

The World Trade Organisation is to trade what the United Nations is to peace. It has some admirable principles, but I think most Members, and certainly those on the Government Benches, would consider it seriously negligent of us to make our national defence dependent solely on the rules of the United Nations. Rules have to be enforced, and they have to be effective.

We need to look back on what the World Trade Organisation is and what it is trying to achieve. In the post-war world, it has established one central principle, and actually it is not free trade; it is something called the most favoured nation—MFN—rule. It is about non-discrimination. It has one big waiver, which is to allow common markets and customs unions such as the European Union to function on the basis of total free trade within themselves, but its whole objective is to stop the proliferation of bilateral agreements.

Such agreements were common in the inter-war period, and they are becoming fashionable again. Many people who are in favour of Brexit say that they are the whole purpose of trade policy. Those people want deals with numerous countries, but the whole purpose of the WTO was to stop this happening. It was supposed to be a multilateral organisation. In that capacity, the WTO achieved a great deal. It cut tariffs to single digits on most manufactures except agriculture, and it got rid of quantitative restrictions, except for the quotas that still exist for agriculture and textiles. It also began to establish a set of rules around intellectual property and various other intangible non-tariff barriers regarding, for example, government procurement.

The problem is that the WTO reached the zenith of its authority about 10 years ago, when the Doha negotiations collapsed and multilateral trade negotiations ceased to make any progress. This was largely due to the obstruction of India, Brazil and, to some extent, the United States. The European Union was actually the main liberalising force, but anyway, the negotiations collapsed and the WTO’s authority is now much less strong. Where does that leave us in terms of what the WTO rules now mean? If they mean anything, it is the application of the rule of law. In the WTO, the rule of law operates through dispute panels, which in theory have the same force as the European Court of Justice in settling disputes. It baffles me that Conservative Members are so affronted by the intrusiveness of the European Court of Justice, because it was designed to achieve precisely what the dispute panels of the WTO were designed to do.

However, like the United Nations, the WTO is not a desperately effective body, and many of its rulings are not carried through. Because it is a weak organisation, it is possible for big countries to bully weak ones. A celebrated case some years ago involved a trade dispute between the United States and Costa Rica—over men’s underpants, as it happens—and Costa Rica won the dispute. The United States felt deeply humiliated and refused to comply. A face-saving compromise was eventually reached, but that dispute sowed the ill feeling that in due course led to President Trump, who has made it absolutely clear that he does not believe in the World Trade Organisation. He does not want it to work, and he is doing everything he possibly can to stop it working, including not sending judges to sit on the dispute panels. It is now a very weak organisation. If we were to crash out of the EU under WTO rules and found ourselves in a dispute with the United States—or, indeed, with the European Union, which we had left—we would not be able to rely on the WTO dispute panels to settle the dispute in an orderly manner.

That is one of the WTO’s central weaknesses. Another is that, throughout its history, it has been overwhelmingly concerned with getting rid of tariffs. The main problem in international trade these days is the divergence of standards, which is of course why we originally entered the single market under Lord Cockfield and Mrs Thatcher. That was perfectly logical. If we are trying to liberalise trade, we attack the non-tariff practices that obstruct trade, hence the harmonisation of rules on mutual recognition. However, the WTO does not do that. It has very weak rules covering government procurement and all the barriers that are dealt with in the European Union through the rules on state aid, competition and the like. That, in turn, means that there is very little in the WTO that covers the services sector, which, as we have been reminded, accounts for 80% of our economy. We have a fair degree of liberalisation in the services trade in the European Union, which benefits our high-tech industries, financial services and so on. No such arrangement exists in the WTO. Those sectors are completely unprotected.

Finally, and not least, the fact is that some tariffs remain, and they are on agriculture. We have the problem that if we leave the European Union with no deal, on WTO terms, the European Union’s tariffs on dairy products, lamb and various other items, which are quite high, immediately kick in. The problem with that, as we discovered when we had the foot and mouth epidemic, is that if we cannot export, prices crash. The only logical response from the farming industry, in order to maintain the value of the stock, is to slaughter large herds. This will happen. We know there is a paper at the moment in the agriculture Department—the Department for Environment, Food and Rural Affairs—setting out a plan for slaughtering a third of all British sheep in order to maintain the integrity of the market. That is an inevitable consequence of a high tariff obstructing British exports.

That is not all; I had only 30 seconds in the House yesterday, but I mentioned the particular problem associated with exports through the port of Portsmouth. It is actually the lifeline to the Channel Islands; that is the main route. The Channel Islands are not otherwise affected by Brexit of course, but they will be in this case. If trade is obstructed at the port because of the need to comply with veterinary requirements, phytosanitary requirements and things of that kind, lorries will be obstructed and fresh produce will not be able to get through. Quite apart from the disruption to traffic, the whole system of agricultural trade and the supply of food to the Channel Islands will simply dry up. We have an enormous practical problem resulting from this.

[Mr Leslie]

The right hon. Gentleman is giving an excellent speech, which is very helpful indeed. Did he see that the Financial Times reported yesterday that the Department for Transport commissioned research that says that just a 70-second delay in authorising a vehicle at the border could mean a six-day queue to get on a ferry?

[Sir Vince Cable]

Yes. Indeed, if I have made a contribution to this argument, it is in pointing out that this is not just a problem in Dover; this problem exists in all the ports around the country. There is going to be serious disruption of supply chains—of the supply of fresh food and many other items. Those people who trivialise the issue by simply saying, “WTO rules—nothing to worry about”, are completely disregarding these consequences.

The conclusion I come to—I think many Conservative Members share it, publicly or privately—is that no deal is just not a viable, acceptable option under any circumstances. We will therefore, within the next few weeks, be brought to the point at which the Government will have to revoke article 50. That would be a major step; it would be overturning the result of the referendum. I feel uncomfortable about Parliament, through Government, doing that. That is why I and other people who are not enthusiasts for referendums believe that the only way of dealing with this properly and of reasserting democratic legitimacy is to go back to the public and seek their approval for doing just that.

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[The Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office (Mr David Lidington)]

As the hon. Member for Rochdale (Tony Lloyd) said, this has been a genuinely interesting debate. It has been good to hear voices from all four nations of the United Kingdom. I have been struck by the fact that, from the opening remarks of the shadow Secretary of State for Exiting the European Union, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), the tone has been moderate. Even when there have been some profound differences—as inevitably there would be in a debate on this issue—for pretty well the entire period of this debate, those differences have been expressed in a spirit of mutual respect and readiness to listen, if not to agree, with what an opponent has said. To take up the final comments of the hon. Member for Rochdale, I hope that that is a harbinger of how this House might proceed for the rest of this debate and in the decisions that will face us in the days, weeks and months to come.

Many contributions so far have focused less on the withdrawal agreement than on the nature of the future relationship. When kicking off the debate, the right hon. and learned Member for Holborn and St Pancras said that his preference was for a customs union with the European Union and close future regulatory alignment. Those points of view have been expressed elsewhere in the debate, and we heard hon. Members from Scotland and Wales reflecting the views expressed in the resolutions passed recently by the Scottish Parliament and the Welsh Assembly to that effect.

The key decision that faces this Parliament next week is not over what the new relationship should be in the long term. That can only be negotiated, in terms of the European treaties, once we have left membership and become a third country. What we need to do is to take a decision about the terms of the withdrawal agreement. The withdrawal agreement is the unavoidable gateway whether to a Canadian, a Norwegian or a Chequers destination, or to wherever on the spectrum of a future relationship any particular right hon. or hon. Member wishes to end up.

Nor do I believe that it is going to help to argue, as some hon. Members have advocated today, that the way forward is to conclude that these problems are too difficult and there is insufficient consensus, and therefore we simply postpone the article 50 deadline. The policy dilemmas, choices and trade-offs that face us as a Parliament and as a country are not going to go away in that time. Nor are the EU27 and the European Commission going to suddenly start to open detailed negotiations about the nature of the future partnership between us and them until we have actually taken the step of leaving, because while we are a member, we are subject to the obligations of, and have all the rights of, every other member state of the European Union. The treaties, yes, allow and encourage the EU to make trade and political co-operation agreements with third countries, but only with third countries—it cannot conclude or, indeed, negotiate such an agreement with one of its own members.

As my right hon. Friend the Secretary of State said earlier, the House has to confront the fact that the default position both in United Kingdom law and in European law is that we leave on 29 March this year whether or not a deal has been agreed and ratified, and if the House wants to reject no deal, the House has to vote by a majority for a withdrawal agreement that provides for a smooth and orderly exit.

[Mr Leslie]

Will the Minister give way?

[Mr Lidington]

I will, and then I want to make some progress, particularly to respond to some of the points made by the hon. Gentleman’s Front Benchers.

[Mr Leslie]

Will the Minister elaborate on something? It is not just about voting for the Prime Minister’s deal; it would also potentially be about requesting an extension of article 50. He will acknowledge, will he not, that that facility is permitted under article 50?

[Mr Lidington]

An extension of article 50 is permitted under that article of the treaty—the hon. Gentleman is right to that extent. But of course such an extension has to be by unanimous consent of both the departing member state and all existing member states. What I am quite clear about in my own mind is that regardless of what opinions were expressed here, or by this or any other British Government, the EU27 are not interested in some sort of extension of article 50. They want this process brought to an orderly conclusion because they have other things, like a future budgetary process, that they need to get on with and think about after the United Kingdom’s departure.