Brexit: Deal or No Deal (European Union Committee Report)

Lord Forsyth of Drumlean Excerpts

Tuesday 16th January 2018 Lords Chamber

[Lord Liddle (Lab)]

My Lords, as a member of the EU Select Committee, I add my thanks to the noble Lord, Lord Jay, who very ably prepared and chaired this inquiry. I also thank the secretariat, who cut through a very complex issue and produced a very able and well-argued report—I disagree with the noble Lord, Lord Hamilton.

This speech will be a bit of a first for me. It is the first time I have disagreed with the noble Lord, Lord Kerr of Kinlochard, on a European matter. I believe there is still a horrible danger of a no-deal outcome to these negotiations. I wish I shared the noble Lord’s optimism that we are on course for some kind of beneficial outcome, but I fear not.

It is worth remembering that the soundbite, “No deal is better than a bad deal”, was one of Theresa May’s more politically misjudged lines in her Lancaster House speech last January. It was the Prime Minister who gave life to this soundbite and opened up in the Conservative Party the view that no deal might be a viable stratagem for this country. For the past 12 months, she has spent an awful lot of her time trying to soften the impact and reduce the significance of what she said then.

There are many in the Conservative Party who still appear to believe that this is a viable threat to make. The poor Chancellor of the Exchequer was attacked for awarding only £250 million to be spent on preparations for no deal. He had to up that to £3 billion in the Budget. Perhaps that was the price of him keeping his job in the reshuffle.

As we heard from the noble Lord, Lord Hamilton, the hard Brexit camp is united that Britain must talk up walking away from the negotiations as a realistic possibility. But how big is this threat to walk away? Of course, there is a lot of pub talk where you hear businesspeople say, “In any negotiation I go into, I always have to have the possibility of walking away from it”. That may be true if you are buying a house or a car: if you think the other side is asking far too much for it, you walk away. That is fine, but the reality is that you do not lose very much by walking away because you can always go out and find some other car or house that you want to buy.

However, if Britain were to walk away from the Brexit talks, the result would not be the status quo that we have now of membership of the biggest free trade area in the world. Our walking out would result in a breakdown of our main trading relationship and, on some accounts, would mean that planes flying to the continent would be disrupted, nuclear materials could not be transported across borders, pharmaceutical regulations would no longer be operative, many EU citizens would become illegal foreigners in this country and there would be massive legal uncertainties about all kinds of business and insurance contracts. That seems to me a pretty appalling prospect.

The committee analysed the possibility of walking away and concluded that it is a credible threat only if it is made well in advance of the leaving date. That point had not struck me until it was pointed out. The nearer you get to the deadline, the less credible the threat of walking away becomes because the resulting chaos would be so much greater that you would not be able to cope with it.

[Lord Forsyth of Drumlean (Con)]

I am most grateful to the noble Lord. I read the report over the weekend. He lists all the Armageddon consequences, as he sees it, that would accrue to this country if we left without a deal. Could he explain why his list of disastrous consequences does not mention any of the things that would be disastrous for European countries, and why the report did not look at that?

--- Later in debate ---

[Baroness Hayter of Kentish Town]

You do not hear what you do not want to hear. We would not go into the negotiations with red lines already closing off what we wanted to discuss with the opposite side. A number of noble Lords have said today that they are experienced negotiators. I have done a bit myself, starting in the trade unions. I have never gone into negotiations saying what I would and would not accept before I even started. The Labour Party has said absolutely clearly that we would not have taken anything off the table before we had even sat on the chairs.

[Lord Forsyth of Drumlean]

How is that consistent with the leader of the Labour Party, Mr Jeremy Corbyn, saying that he is not in favour of our remaining in the single market?

[Baroness Hayter of Kentish Town]

As the noble Lord knows, those were not actually his words. The leader—I did not need to know his name; interestingly, I remember it—said that he could see some difficulties in being in when and if we were no longer a member of that treaty. He did not say, and nor has he said, what the outcome of the negotiations should be. Importantly —it was a challenge, I think, made to me earlier by my noble friend—it was asked whether the Labour Party can rise to the national interest. If anyone would like us to take over the negotiations and do a better job than is being done at the moment, we will be very willing to do that.

For the moment, I leave your Lordships with these words:

“It is difficult, if not impossible, to envisage a worse outcome for the United Kingdom”.


I hope that the Minister will now reassure us that that is neither the aim nor even a fallback and that every bit of work will be done to make sure that there is a deal in the interests of the whole country.