Leaving the EU: No Deal

Jeremy Lefroy Excerpts

Wednesday 19th December 2018 Commons Chamber

[Jeremy Lefroy (Stafford) (Con)]

It is a great honour to follow the right hon. Member for Derby South (Margaret Beckett).

We are living in the most serious of times, and I think that that is very clear to all of us. What we are discussing today is of such great import that there should be a reaching out across the Front Benches, as I have said in this place more than once. It is incumbent on the Government to do that and it is also incumbent on the Opposition to do that.

I will largely restrict my remarks to why I believe that no deal should not and must not happen—indeed, I was one of those who signed the letter co-signed by my right hon. Friend the Member for Meriden (Dame Caroline Spelman) and the hon. Member for Birmingham, Erdington (Jack Dromey). A no deal would cause such grave disruption to the businesses in my constituency in the west midlands and further afield.

Let us just look at what no deal means. No deal means going on World Trade Organisation terms. These have been lauded in some quarters. I disagree. I have been involved in international trade for most of my working life. Yes, the WTO provides the lowest common denominator for world trade. It provides for nothing more than that. Those who think that a country such as the United Kingdom will thrive on World Trade Organisation terms, which no other major country thinks are anything like sufficient, are deluded. Indeed, no other country of our size has World Trade Organisation membership without several other additional agreements, whether it is with China, the United States or wherever. They all have agreements with their neighbouring countries for a start.

Let us look at what World Trade Organisation means on a day-to-day basis: it means tariffs. We do not have tariffs with the European Union at the moment, but it will mean tariffs. Much more importantly, it will mean the non-tariff barriers that have already been mentioned, whether that is phytosanitary inspections, veterinary inspections and other types of inspections of borders. I, along with colleagues from the Exiting the European Union Committee, have seen what happens at Dover. It is a smooth flow of trucks through the port—one every few seconds. A slight delay, which we have seen for other reasons, causes massive back-ups. This is simply not possible, and that will happen at other ports as well.

World Trade Organisation terms would also mean that we would have to deal with the separation of the quotas that we have as part of the European Union. This will not be easy. For instance, New Zealand has questions about how its quota of lamb to the European Union will be divided between the UK and the EU27. We will not have the benefit of the 40 free trade agreements that cover about 70 different countries, unless they are rolled over. It is going to be difficult enough to roll all those over if we sign the withdrawal agreement; if we do not, it will be next to impossible and I do not believe that we have the capacity or time to do that. And that is just for goods.

For services, World Trade Organisation terms would mean a very basic agreement. Whatever has been said about the failure of the European Union to complete the single market in services, it is nevertheless a much better market for services than WTO rules.

[Tom Brake]

Does the hon. Gentleman, like me, struggle to some extent with those who advocate falling back on World Trade Organisation rules, because they then talk about very comprehensive free trade agreements that in many ways seek to replicate the European Union?

[Jeremy Lefroy]

The right hon. Gentleman is precisely right. We would be going back several steps only to try to come forward a few steps.

Let me turn to the new trade agreements. Members have already mentioned how difficult it will be to negotiate the new agreement with the European Union. I agree, but I think it will be possible and it will be an excellent agreement. That is why I am going to support the Prime Minister when it comes to the vote in January. However, let us just think about how much more difficult it will be to negotiate that new agreement if we go without a deal. In effect, relations will have broken completely between the United Kingdom and the European Union. There will be so many other things to have to deal with that the prospect of negotiating a new trade agreement will be at the bottom of the agenda for the European Union and, to be frank, for the UK because we will be dealing with so many other things. The idea that if we come out with no deal, there will somehow be a possibility of negotiating a quick free trade agreement with the European Union to replace the great agreement that we have at the moment is ludicrous. It will not happen. It will be easier for us if we leave with the deal that is on the table.

I will very gently refer to the remarks made by my hon. Friend the Member for Broxbourne (Mr Walker), because I do actually agree with him about the approach of the Labour party. I fully respect the position that the official Opposition are taking, but hon. Members should look at the Labour party’s 2017 manifesto and at the withdrawal agreement. With the exception of the Labour party’s manifesto saying that a customs union should be left on the table—if I am quoting it correctly—there is very little difference between this agreement and the manifesto that the Labour party stood on in 2017. That is why I urge both Front Benches to talk. This matter is too important for us to have a line right down the middle. It is incumbent on both sides to talk.