Brexit: Negotiations

Lord Hain Excerpts

Tuesday 20th November 2018 Lords Chamber

[Lord Hain (Lab)]

My Lords, especially as a former Secretary of State for Northern Ireland, I warmly welcome the noble Lord, Lord McCrea, to this Chamber.

The Prime Minister’s deal is a bad one for Britain, primarily because the Tory Brexiteers imprisoned her in a negotiating straitjacket which meant it could not be otherwise. They never did have a plan of their own but merely a set of slogans. On the Irish border—always the Achilles heel of their dogmatism—they promised to keep the border open with nothing other than yet-to-be-tested, fanciful, back-of-an-envelope notions, as Iain Duncan Smith and Owen Paterson breezily wrote about in the Sunday Times on 11 November. They suggested that existing national systems of reporting trade, such as for VAT or the Intrastat data collection system, could be expanded. But you cannot simply add on to those a whole new function, such as the intricate and huge task of customs declarations. Moreover, three-quarters of businesses that trade across the Irish border are small and operate below the Intrastat reporting thresholds of £250,000 for export and £1.5 million for import. So that plan simply will not work.

There is no point in having a national system that might manage exports without ensuring that the country on the other side can facilitate the entry of those same goods as imports. The systems on either side must seamlessly connect on a legally certain foundation—either as EU member states, members of the single market, members of a customs union, members of a free trade agreement, or on WTO terms. Each step down that ladder brings more friction in trade.

The rules that currently keep the Irish border open are the rules of the European Union’s customs code and the single market acquis, which Brexiteers dogmatically reject. How can they, on the one hand, point to the logic of continuing participation in existing systems, such as the EU’s VAT information exchange system, yet, on the other, insist that the UK leaves them?

Duncan Smith and Paterson claim that, even for third countries, only a small proportion of agri-food products need to be physically inspected. But this is a result of rigorous means of ensuring compliance by food producers with the very strict EU rules that Brexiteers reject. They suggested that, because all products of animal origin must enter via specified border inspection posts, these could be located some 25 miles from the border-line itself. But that would mean a serious diversion, plus an addition of time, cost, and risk—for example, to food expiry dates. How would this work on the island of Ireland, where fully two-thirds of cross-border supply chains are in agri-food products, such as in the meat and milk-processing industries? The latter alone requires 30,000 crossings annually, over 80 daily. There are currently no checks for agri-food products on the island of Ireland, because it is a single sanitary and phytosanitary zone. Imports from Britain are subject to checks at sea and air entry ports—checks that the DUP has long accepted pose no threat to the territorial integrity of the United Kingdom.

The problem for the hard-line Brexiteers is that their frictionless trade requires adherence to EU rules and systems underpinned by a legal foundation that they wish to tear up. They want to maintain all the benefits of the EU that keep the Irish border open, with none of the obligations of the EU. Perhaps that is because breaking completely free from the EU is more important to them than protecting the very hard-won peace and prosperity in Northern Ireland. This is yet another reason to support the noble Lords, Lord Reid, Lord Steel, Lord Kerr and others, in their call for a people’s vote on whether this mess or remain should be our future.