Further Discussions with the European Union under Article 50 of the Treaty on European Union

Lord Lilley Excerpts

Wednesday 27th February 2019 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, it is a good thing that the Minister has a sense of humour. I have to say that he is struggling not just with his throat but with finding anything new to say. That, I understand: some of us are in the same position. More seriously, he is struggling to recognise the seriousness of the state we are in. I think it would be good if the Minister would heed the advice given to him the last time we met that he should stop being,

“the boy who stood on the burning deck”,—[Official Report, 5/2/19; col. 1430.]

and face today’s reality. The reality is that a 29 March departure is simply not going to happen.

What we are witnessing, to the mystification of observers here and abroad, is a wholly divided Government and a Prime Minister who has let down Brexit voters by failing to provide the promised “smooth and orderly” departure to get the very best out of leaving—a Prime Minister who has unnerved the very businesses which have traditionally looked to her party to understand and promote their interests, who has divided her party and Parliament and who, unforgivably, has failed to unite the country after a divisive referendum. She has failed to reach out to remainers to reflect their interests as well as those who voted to leave. We see a Prime Minister who has failed to reach out to the Opposition, engaging not at all until the last few weeks, and even now refusing to move one iota towards our priority for a deal—a Prime Minister who promised the Commons a vote to halt no deal only when she faced defeat in the Lobbies, yet who even then offered only a temporary reprieve, leaving a no-deal threat on the table after 29 March and, as we have just heard, only the promise of a vote, with no indication of whether the Government would whip against a no-deal exclusion. That, to me, means that she is keeping it tight in her armoury. The noble Lord, Lord Callanan, endlessly reminds us that no deal is the legal default position. We say to him that it is not the moral default position.

I fully expect, when some future committee, no doubt chaired by someone in your Lordships’ House, reviews how the Government handled this sorry saga, it will ask the normal tin-opener question written by the secretary to the committee—cui bono? Had we girls been taught Latin at school, I would be able to pose in Latin, instead of having to do so in English, the more important question—not just cui bono, but who pays? I am sure it is not the ERG members.

It will be businesses, consumers and the country. Fitch is putting our AA credit rating on negative watch, due to the potential exit without a transition period. Of course, that signals a possible downgrade. Meanwhile, the UK would lose its current market access to the 60 third countries covered by special arrangements with the EU, Mr Fox having spectacularly failed to roll these over or to prepare all those exciting new ones with a swathe of other countries, as we were promised.

All of us have heard endlessly about the risk to supplies and businesses of no deal—from a shortage of pallets and life-saving medicines to delays, handling costs, legal queries and, of course, tariffs. I discussed tariffs earlier this week with the noble Lord, Lord Lilley, when we were at LBC. I am glad to see him here in his place in case I get this wrong, because I have to say that he slightly shrugged off the tariff problem, saying that a drop in the pound would compensate for it. That is not what it would feel like to consumers.

[Lord Lilley (Con)]

I am grateful to the noble Baroness for giving way. What I said was that the drop in the pound would compensate those whose tariffs were around the average of 4%, but that, in aggregate, the tariffs amount to £5.3 billion. The saving we make from leaving is more than £10 billion. We would therefore be in a position to help those who face above-average tariffs and still have money in hand.

[Baroness Hayter of Kentish Town]

So the consumers will pay. Just an extra 5% on tariffs? Are we really going to go round subsidising food?

[Lord Lilley]

With respect, the money we save will not come from consumers; it will just no longer be available to the EU to finance its projects. Every year, we pay £10 billion more to the EU than it gives us back. We will no longer do so, and will therefore be in a position to use some of that money to help those industries—particularly farmers and car producers—and ensure that the effect of tariffs, if the EU is foolish enough to continue applying them to us, is offset.

[Baroness Hayter of Kentish Town]

I am talking about the tariffs that we will have to apply to the goods that we import, such as meat and cheese. Those will be paid for by consumers. The Government’s own analysis shows the likelihood of food shortages and increased prices just from the interruption to trade, but a lower pound—whereby people will have less money in their pockets to buy any imported food—means that, in addition to prices going up because of shortages and delays in things arriving here, it will be even more expensive for consumers. The answer to “Who pays?” will be the consumers.

For those wanting to travel, mile-long queues for Eurostar trains, long waits at ferries, green cards for drivers and the loss of health cover will all impact British families. Does this no longer matter to a party traditionally careful of consumer prices and its electorate? The noble Lord, Lord Heseltine, warned last year in your Lordships’ House of the electoral damage to his own much-loved and lived-in party. This continuing drift to no deal must be fuelling his fears. It is certainly fuelling mine, as well as those of the CBI, the IoD and all those affected by the Government’s recklessness.

--- Later in debate ---

[Lord Kerr of Kinlochard (CB)]

Following the noble Lord, I am reminded of how much he has done down the years to encourage our engagement in Asia and Asian investment in this country. I feel very sorry for him, because this must be a sad time for him. If you take just Anglo-Japanese relations, his work down the years was remarkable. We know what the Japanese banks here are doing. We know what Hitachi and now Honda are doing. We know what Toshiba is doing. We know about Sony and Panasonic. When will we hear from the third of the great car companies, Toyota? Actually, we did hear from it. It exports 80% of its UK production to the European Union. Its executive vice-president, Didier Leroy, said that:

“The UK government should … understand that we cannot stay in this kind of fog when we don’t know what will be the output of the negotiation”,


and that any kind of EU import tax would create a huge,

“negative impact in terms of competitiveness”,

for its UK plant. That quote—

“we cannot stay in this kind of fog”—

was from October 2017. It is still in this kind of fog. We have not told it anything, so it is not surprising that it has given up and is backing off. It has given up expecting clarity from us.

[Lord Lilley]

I am sure the noble Lord will want to congratulate Toyota on opening in this country a year later—in October last year—a line producing the best-selling car in the world, opened by the Secretary of State. That shows a rather different picture to that he was portraying.

--- Later in debate ---

[Lord Lilley]

Who is the right reverend Prelate accusing of this untrammelled ambition which is apparent to all?

[The Lord Bishop of Oxford]

I prefer not to name names.

[Lord Lilley]

Even though it is apparent to all?

[The Lord Bishop of Oxford]

I do not single out a particular party or a section of a particular party. One of the dangers of our politics at present is that personal ambition is being put before the country and I think we need to draw that period to an end with great urgency, lest our politics and our confidence in democracy be damaged for a very long time. Conversely, nothing will restore trust in our politics more than putting the interests of the nation ahead of personal position.

The second temptation is to allow yourself to be swayed by narrow party interests and the pursuit of or retention of power in the short term. The issues at stake here are much greater than the rise and fall of particular parties or factions. We need our MPs and Peers to act in the greater national interest and for national unity. I would argue that Parliament needs to come together if the nation is to come together and emerge from this long period of division and introspection.

The third temptation is nostalgia—a romantic attachment to the past. It is wrong to imagine that we can reverse the effects of one referendum by another or go back to a time before the Brexit debates began, when all was well, or go back still further to a different age of independence and imagined glory. We cannot. We must deal with the world as it is, not as we would like it to be, and steer our course accordingly; the leadership that we offer will be judged by this measure.

The fourth and final temptation is idealism: in a world of difficult choices and necessary compromise, holding on to an ideal which is no longer tenable, whether it is a particular kind of leaving or remaining or something else. This, it seems to me, is currently the greatest barrier to positive cross-party consensus. A coming together across Parliament is impossible without the willingness to compromise, and one of the encouraging features of recent weeks has been cross-party engagement.

As others have said, there are huge issues facing our world and our country: climate chaos, care for the poorest, increasing equality and opportunity, our changing relationship with technology, and the challenge of social care and health funding. We cannot allow our national attention to be diverted from these issues by prolonging still further a series of adjustments to our relationship with Europe. The nation is looking to its political leaders for a strong, compelling and united vision of the future that enables us to see beyond these debates in a way that brings unity and common purpose.

The most reverend Primate the Archbishop of Canterbury has spoken in this House about the vital importance of reconciliation in these debates and the protection of the poorest in society. The most reverend Primate the Archbishop of York has written of the need to preserve trust and confidence in our democratic institutions through a time of significant national jeopardy. I hope and pray that, in the midst of these difficult debates, we will be able to turn aside from those four temptations, seek meaningful compromise and act for the common good. I underscore the request to the Minister to lay out for us the ways in which the Government will continue to foster cross-party collaboration and listening, move towards a positive consensus and work to draw Parliament and the country back together.