Brexit: Withdrawal Agreement and Political Declaration

Lord Howarth of Newport Excerpts

Wednesday 5th December 2018 Lords Chamber

[Lord Howarth of Newport (Lab)]

My Lords, the Prime Minister has honourably striven to do the impossible: to find a compromise between remainers, for whom Brexit is above all a threat to our economy, and leavers, for whom what matters most is the recovery of our sovereignty. Remainers think that the economic cost of withdrawal on the terms she has negotiated is too great and see the deal as far inferior to remaining in the European Union. They think we should revoke our Article 50 declaration. The reckless among them seek a second referendum. A second referendum would do deep damage to the already battered faith in our politics and put paid to reconciliation in our country for a long time. For leavers, the deal fails to release us from the tentacles of the EU and from the democratic deficit that was built into it at its origins.

It is not only leavers who cannot accept that we should continue, perhaps indefinitely, to be subject, with no power of decision on our part, to rules determined by the EU governing swathes of our national life, including policy on the environment, employment, state aid, competition and even tax; to be subject to the continued jurisdiction of the CJEU as arbiter of the agreement and interpreter of EU laws by which we remain bound; with a separate regime for Northern Ireland; without the right to liberate ourselves at our own volition from the Irish backstop; and locked inside the customs union and the EU’s external tariff wall for as long as the EU wants, with no realistic chance of achieving an independent trade policy. How can we as democrats accept that?

Amid the passions of this debate, in your Lordships’ House we should seek to state the issues accurately. Let us dispose of the canard, as our French friends say, that the demand to take back control masks ugly attitudes towards immigration and a widespread vicious nativism at odds with liberal values and internationalism. Yes, there are racists and xenophobes among those who voted leave; their attitudes are odious. Nobody, however, can sensibly suggest that more than a minuscule proportion of the 17.4 million of our fellow countrymen who voted to leave were such bigots. It does not follow that, if you want to extricate your country from the undemocratic structures of the European Union, you are illiberal or insular.

The evidence published in April by the Nuffield Centre for Social Investigation confirms that the paramount concern of leavers is sovereignty: our right to make our own laws through our own representative institutions of government, accountable to our people, together with the supremacy of our own courts. We see this clearly now in the reaction of leavers to the withdrawal agreement. It ends free movement from the EU into the UK. If immigration was their key concern, leavers would be welcoming the agreement, but they are not. They are objecting that the withdrawal agreement does not allow us to take back control and to recover the sovereignty that we lent to the EU through the European Communities Act 1972.

Let us also have a realistic debate about no deal, on which the Motion in the name of my noble friend invites us to focus. The Government are right to prepare for no deal, and in no spirit of trepidation. They would be right also to prepare to protect those in poverty who are at risk of particular suffering during the transition, a point that the most reverend Primate made very powerfully. But no deal certainly need not be a disaster or a catastrophe, as so many noble Lords insist. It need not mean crashing out or a cliff edge. There would be no need for aeroplanes to stop flying, for Kent to become a lorry park, for supply chains to seize up, for medicines to be unobtainable and for food to be rationed, as the litany goes. We would not face the Bank of England’s worst-case scenario of a disorderly exit, which is, as the former governor, the noble Lord, Lord King of Lothbury, has noted, based on entirely unrealistic assumptions.

Appendix A of the Bank’s response to the Treasury Committee, entitled “Impact on the UK economy of a transition to WTO”, offers a no-deal scenario that we can well live with. Philip Aldrick, economics editor of the Times, has helpfully translated the Bank’s technical prognostications into relatively plain English. In this scenario, he explains, we go to WTO rules after a smooth transition in January 2021, retaining for ourselves the EU’s existing 90 external trade deals; sterling falls by 8.5%; we welcome a net 85,000 immigrants—tens of thousands—into Britain annually; and our GDP is 5.25% less in 2023 than if we had remained in the EU. Under the Prime Minister’s deal GDP would be 3.75% less. The difference between the Prime Minister’s deal and an orderly no deal is just 1.5% of GDP.

Remainers assert that people did not vote to be poorer. With the orderly no deal projected by the Bank, they will not be poorer than they were; they will be somewhat less wealthier than they might have been. Leavers, who voted to leave despite the lurid warnings of the first project fear, will be happy to pay that price for the restoration of their sovereignty.

It is in the interests of the peoples and businesses of the EU to avoid chaos and agree an orderly no deal with us. The EU has already offered to reciprocate air traffic rights and aviation safety certificates, and in its own interests it will surely act sensibly in relation to road transport. Any additional checks would be very limited. There will be no legal requirement to inspect every vehicle or to carry out checks at the border itself, and anyway there will not be enough staff and equipment to check more than a minute proportion of vehicles. Indeed, new EU-imposed non-tariff barriers will be illegal under WTO rules so long as our products exported into the EU are still made to the same standards.

It is objected that under WTO rules and without the customs union, there must be a hard border within the island of Ireland. That problem has been greatly overstated and I do not believe that the Good Friday agreement would be in jeopardy. The Permanent Secretary at HMRC has made it clear that there is no need for the UK to erect a hard border in any scenario. Nor, as they have said, will the Republic or the EU impose one.

The US and China trade with the EU on WTO rules. We can do likewise. Better, of course, would be the rapid conclusion of a free trade deal with the EU. Given where we start from and based on the EU’s deal with Canada, that is entirely possible. EU countries that sell us £300 billion of exports will be impatient for the EU to reach a free trade deal with us. That is what the Government must now work for.