Brexit: The Customs Challenge (European Union Committee Report)

Lord Dykes Excerpts

Monday 1st April 2019 Lords Chamber

[Lord Dykes (CB)]

My Lords, in this House we are fortunate to have had many reports about Brexit and all its complications from the various sub-committees and the main European Union Committee. I am sure we are very grateful to all Members who have worked hard on those reports. They are of immense detail and complexity, but also immense conviction and persuasion. That does not gainsay my feeling at the end of reading them all carefully, which I try to do if I can: one comes to the inevitable conclusion that there is no substitute for actually staying in the European Union.

I very much congratulate the noble Baroness, Lady Verma, on leading this discussion of the report and the other three members of the committee who have spoken so far. I thought the concluding remarks of the noble Baroness, Lady Suttie, on the numbers were very relevant and need looking at again. I also thank the noble Lord, Lord Horam, for his words highlighting the dangers and difficulties of producing the customs union concept in the way that my great friend Kenneth Clarke was trying to explain properly on the radio this morning. He did a very good job but there are many minuses as well as many pluses.

On the report itself, I agree very strongly with all the remarks made by the three ensuing speakers, with their worries and anxieties about what this all means. I hope the Minister will kindly look at the report’s conclusions, on page 48. I am particularly concerned about paragraph 191, which states:

“The UK Government’s estimate that 96% of UK goods trade would be able to pay the correct or no tariff up front and not go through the repayment mechanism has been challenged. We call on the Government to clarify the methodology it used to arrive at the 96% figure”.


Then, on a totally different subject, paragraph 193 states:

“We welcome the Government’s stated intention to uphold current UK food standards and not lower them in free trade agreements with third countries”.


All that is a danger if we go ahead with this matter. I beg to differ, and conclude with a few remarks about the broader scene now facing us in what is yet another—although not the final—emergency, drastic week for this House, and particularly for the House of Commons.

[Lord Wigley (PC)]

Will the Minister address the difficulties arising from the lack of infrastructure for customs dealings between Ireland and the UK using the UK as a land bridge, particularly at Holyhead? I do not think it was visited by the committee; nor did witnesses from Holyhead come before the committee.

[Lord Dykes]

This is not the first time I have agreed with the noble Lord, Lord Wigley, on these matters, and I do so strongly—partly in the nervous realisation that I know much less about Holyhead than he does. The noble Lord has referred to this in a number of speeches; I agree with the broad outline of his comments and thank him for intervening today.

The background to what is happening is a tragedy and a matter of great sadness for this country. No Prime Minister with any wisdom and good sense would have set out to totally ignore the wishes of almost 50% of those who voted in what was only an advisory referendum, even though David Cameron said he would abide by the decision. Even after the futile election of 8 June, after she had lost her mandate and was able to carry on only artificially via a dubious deal with and huge bribe to the DUP, the Prime Minister defiantly carried on. She chose not only to ignore the wafer-thin majority in the first referendum but to deal just with the ERG—not even with the whole of her own Conservative Party. The ERG came first in all her dealings and all her discussions. This again reveals the huge weaknesses in our now totally dilapidated political and parliamentary system, which can be removed only with drastic and radical reforms, which should not be done by politicians—they would never agree—but by sensible outside experts and professorial characters of distinction, men and women. We have to get rid of this bandit politics disease in Britain and come back to reassuring the public.

In that context, I conclude by saying something in contrast to the miseries we are all experiencing with this Brexit process—Brexit is on the verge of being registered with the NHS as an official disease, and anti-Brexit is part of it. However, public opinion has changed, and it was, at last, reassuring to go on the march on 23 March with over 1 million like-minded people from all over the country, including many former leave voters who now grasp the looming disaster of Brexit. The 6 million-plus signatories to the petition underline the huge change in public opinion on this matter. None of these reports is rendered less important and valuable because of this, but that is the reality.

This is especially true for our precious and increasingly internationally minded younger generation, and often, at the other end of the age scale, for the many thousands of UK citizens working and living elsewhere in the European Union—perhaps a more relevant union for us than that other union Mrs May refers to. The European Union is precious to the modern populations of its modern member states.

Finally, I want to quote Margaret Beckett, speaking in the Commons debate on 27 March. She said,

“I invite colleagues who … resist a confirmatory vote to look starkly at … what they are saying. They are willing … to terminate our membership of the European Union even if it may now be against the wishes of the majority of the British people”.—[Official Report, Commons, 27/3/19; col. 391.]

--- Later in debate ---

[Lord Taverne (LD)]

My Lords, I was not a member of the committee but, having read its report several times—it is not an easy read—I am impressed. First, as many speakers have pointed out, it provides convincing evidence once again of what would be the disastrous consequences of a no-deal Brexit, and I trust that the Commons will rule out that option conclusively.

The report should be, or should have been, compulsory reading for those who plan to vote for the Clarke amendment, for a form of customs union presumably on the lines of the facilitated customs arrangement analysed in this report. This, the Government claim, would enable the UK to control its own tariffs for trade with the rest of the world. It is the option which seems to be the present favourite to win the Commons beauty contest to be voted on today.

However, that option has many serious snags. As pointed out in chapter 5 of the report, the present EU customs union requires a common commercial policy—in effect, a single market. To allow for the freedom to make separate trade agreements with the rest of the world, the customs union proposed by the Government, and, one must assume, by the Clarke amendment, seeks to avoid this. But the committee tells us that, for this kind of customs union to work and for us to enjoy a frictionless border with the EU as a non-member, there would still have to be convergence of regulations. We would, we were told, become “a regulatory satellite” of the EU. Would this be acceptable to most Brexiteers, or to those who support a soft Brexit? Instead of winning back control, we would, we are told, be subject to control by satellite.

The facilitated customs arrangement would also be immensely complex, involving different tariffs for EU and non-EU countries, including possible payments and repayments collected or paid on behalf of other countries. Compliance would, as many other speakers have pointed out, be a very hard and costly task for small to medium enterprises. Being part of a customs union without being a member would also require very complex negotiations, which are hardly likely to be welcomed by the 27 after their recent experience of endless delays and changes of tack by a succession of incompetent Brexit negotiators.

But what all Brexit advocates—even soft Brexit advocates—ignore is the most important development of all, to which the noble Lord, Lord Dykes, referred. There is strong evidence that the people’s will has changed since the referendum and is no longer the people’s will today. The evidence is not just the march by over a million people, or the petition to revoke Article 50 signed by some 6 million. Professor Curtice, who is much invoked by the Government and Brexiteers, long maintained that opinion had not shifted. He has now changed his view. A vote today, according to his findings, would be 54% to 46% in favour of remain; according to YouGov, it would be some 56% to 44%.

This shift should not come as a surprise, and there is every reason to suppose that it will grow. Nearly all Brexit news is bad: on overseas investment; a growing number of manufacturers and service companies which are planning to leave the UK; a likely crippling shortage of nurses and other professionals in the NHS, caused by the exodus of EU citizens; and so on. It is true that there are lots of leavers crying, “We want out”, and “Why haven’t we left yet?” No evidence will change their minds. However, there must be many of the 52% who voted leave who care about the future of their jobs and the prospects for their children, and they will not be impervious to what manufacturers such as those in the motor industry and Airbus tell us.

There was an extremely extensive poll of intending leavers on the eve of the referendum about the reasons why they intended to vote “out”. Many gave different reasons, but they all agreed that leave would have no downside—no prospect but that of life in the sunlit uplands. Now it is becoming plain what Brexit means: any form of Brexit, however soft, will make us poorer, especially the most vulnerable. It would be a strange twist to the present confusion if we left the EU because MPs believed they were obeying the people’s will, when—

[Lord Dykes]

I am sorry to interrupt the noble Lord, as I agree strongly with his words, but in the context of what he was saying two sentences ago can he estimate the number of people who accompanied Nigel Farage on his long trip from Sunderland?