Leaving the EU

Henry Smith Excerpts

Tuesday 24th October 2017 Commons Chamber

[Charlie Elphicke (Dover) (Con)]

I rise to address the preparedness of the United Kingdom to leave the European Union with no agreement.

Brussels warns that the talks on a Brexit deal are taking longer than they should. The IMF issues cautions about risks to the global economy. Only today, it was reported in The Times that one of the European Union’s many presidents, Donald Tusk, has warned of the risk that the talks will collapse. Planning for no deal is not simply a negotiation point; increasingly, it is the responsible thing to do in the national interest.

This is not due to lack of effort on the part of the Prime Minister, who set out a positive and forward-looking proposal in her Florence speech. She even made a bold financial offer to move the talks forward. Last week she flew to Brussels ahead of the European Council to underline the positive case that we make. What was the response of the European Council? It said that we must agree the so-called Brexit divorce bill, and it will not talk trade until we sign on the dotted line. That does not look promising. How can we agree a price until we know what we are paying for? Even if we overcome the impasse on money, the trade talks may not go easily either.

Moreover, there is a serious risk of our being offered a bad deal which is worse than no deal. The risk is that we shall be asked to pay £50 billion as a settlement for a trade deal that requires us to adhere to EU rules. If that happened, we might as well never have left. We would be run by remote control, without a seat—or a say—at the table. Our ambition to seek the opportunities that are open to us around the world would be lost, as we would not have the flexibility to change our rules as we might wish to. That would be the worst of all worlds. It is a deal we should not take, and it is a deal that we will not have to take if we make sure we are ready on day one, deal or no deal.

Let us remember that we all want a deal. The EU would benefit from a deal every bit as much as we would. The EU is already the winner in free trade with the United Kingdom: we buy £100 billion more in goods from the EU than we sell to it.

[Henry Smith (Crawley) (Con)]

That is precisely the point. The intransigence of the EU27’s negotiating position will ultimately be detrimental to their own economic interests. It is therefore absolutely right for us to prepare for no deal, because this country will thrive regardless.

[Charlie Elphicke]

My hon. Friend has made a powerful point. He is absolutely right. If we lived in a world of tariffs, they would hit EU exports to the UK to the tune of £13 billion, but our exports to the European Union would be hit by only £6 billion. Tariffs would hurt the European Union twice as much as they would hurt the UK, and that is why a deal is in the interests of everyone. What is more, the lawyers are clear that the EU has no legally valid claim for its divorce bill. As a matter of international law, no deal will mean no money for the EU. Frankly, we could just say, “See you in court; we’ll test your case,” and take it to an independent court or international arbitration, because we know what the position is. That is another reason why a deal is in the interests of the EU.

The UK is also an important part of the security guarantee for the entire European continent. We are not just a defence umbrella; we also have a great treasure-trove of information and expertise, as well as being a bridge to the “Five Eyes”. That is why a deal that includes data and information sharing is needed by all, and why the Home Secretary is right to say that no deal on security would be unthinkable because it would be crazy for the EU not to want to continue to share information and data after we leave the EU. We might not want to be controlled by Brussels, but that does not mean we do not want to co-operate and have a positive relationship with all the remaining EU27 member states.

What about the view of the British people? This is yet another case where the people are way ahead of our political system. Here we hear voices, particularly from the Labour party, about how we should just write a blank cheque and fold on a deal whatever the terms, yet the British people say, “No, we didn’t vote to leave the EU only to pay out vast oceans of cash and be run by remote control.” So it is little surprise that a recent Sky News poll found that 74% of people think that no deal is better than a bad deal, and it appears that patience is starting to wear thin with the EU because a poll by Opinium last Friday found that 37% of people want the UK to leave the EU without a deal if by March 2019 no satisfactory deal has been reached.