Brexit

Lord Lilley Excerpts

Monday 25th March 2019 Lords Chamber

[Lord Lilley (Con)]

My Lords, the most precious commodity in political life is trust, and trust depends on keeping your promises. We saw what happened to what was once a major party in our country when it broke its solemn pledge on tuition fees: it was reduced to a rump, and even now, nine years later, with both major parties in disarray, it is unable to regain its position. Both major parties were elected in 2017 on a pledge to implement the referendum decision, and the Conservative Party was specific: that meant leaving the customs union and the single market. If we do not keep those pledges, we do not just put our party fortunes at risk. We undermine trust in our whole political system.

When, on 7 March last year and again on 4 October, President Tusk offered the United Kingdom a Canada-style free trade deal, he correctly stated that it was the only type of trading arrangement between the United Kingdom and the EU compatible with our promises to leave the customs union and the single market. That is why I greatly regret that the Government did not take up that offer. If I were in the other House, I might, with extreme reluctance, vote for the withdrawal agreement, since the alternatives being offered are even worse. However, if it is defeated, I hope the Government, Parliament and our political system will look again at President Tusk’s offer. Most certainly, in the time available, we will not be able to secure it before we leave, in which case we must be prepared to leave on WTO terms.

A year ago, it was quite reasonable to be worried about what leaving on WTO terms, with no withdrawal agreement, would mean. People had specific and concrete concerns. The planes were not going to fly. There were not enough licences for drivers and hauliers to operate on the continent. Trains would not be able to find a platform in Paris, apparently. Problems with the electricity supply in Ireland were threatened. Derivatives would cease to be valid, which would lead to the collapse of the whole banking system. I could go on. There were worries, too, about shortages and congestion at Dover. Now nearly all those concrete and specific concerns have been resolved by a series of mini-deals, reciprocal arrangements and pragmatic measures taken by us, by the European Union and by individual countries such as France, Belgium and Holland.

The opposition spokesperson began her speech in December by raising that concrete threat that planes would not fly. Planes will fly, however, because—although news of it did not reach this House—on 13 November last year, the EU said that it would introduce legislation to allow our planes to fly over, land in and return from the EU, if the UK reciprocated. We have: deal done.

There were concerns that if we became a third country to the EU and it to us, there would be only 1,638 licences available for all our lorries. The EU has said that it will create licences for our lorries to operate over the next year. It has also backed British membership of the common transit convention, to which we now belong, and has promised to work with us in the European Transport Ministers’ committee, which covers 48 states and will provide licences for our lorries to operate throughout all 48 states in and around Europe. Trains will run. Electricity will operate in Ireland, because of the measures and changes the Irish Government have made. Derivatives have been sorted. Visas will be available to our citizens to travel on the continent, as long as we make reciprocal arrangements for continentals to come here, which we will: another deal done. All these mini-deals have been done, and it is to the Government’s credit that they have made them, although they are rather coy about it, because they are still trying to frighten my colleagues in my former House into voting for their deal.

Most of the concerns about shortages, of everything from food and medicines to Mars bars and water, were due to fear of congestion at Dover and Calais, because additional checks might be needed. But Her Majesty’s Revenue and Customs has said it will not need to carry out any additional checks at Dover in the event of no deal or a free trade agreement because, even if there are tariffs, they will not be collected at the border. As the chairman of HMRC said, they are paid computer to computer, not by someone handing over a cheque through the window of a lorry as they pass through Dover. That is true of duties at present. The checks made are based on intelligence, where there is reason to believe that there is tobacco or alcohol—dutiable goods—or drugs or illegal immigrants, and officers therefore have to stop vehicles to look for those things. But they are few and most are carried out away from the port. Their frequency is not expected to change, because those risks will not change after Brexit, so traffic will flow freely through Dover.

Concerns were then raised and focused on what would happen in Calais. Most of the problems that caused us to operate Operation Stack for 211 days over the last 20 years—10 days a year on average—arose from problems in Calais, when there were strikes, immigrants blocked access to ports or trains, and so on. People feared that, if the French were not ready, it would create congestion at Calais, backing up across the channel and leading to congestion in Dover. But the French have moved with commendable speed and efficiency. I recommend that colleagues and noble Lords who have not already done so look at the website of Douane Française. They will see the smart border arrangements that will be put in place in Calais, which it is believed will ensure that trade flows freely through that port. The French are worried, and make it explicit, that if they do not enable trade to continue uninterrupted through Calais, they will lose that trade to Zeebrugge, Rotterdam and Amsterdam, which are well-prepared and eager to take the trade from them. So there will be no congestion at Calais either.

All these scares about shortages of food and so on are absurd. One that really worries people is the idea that there will be a shortage of medicines. I hear it repeated all the time, even though, on 25 February, the Government put out a Statement listing everything they have done to ensure that medicines get through. Even if there are hold-ups somewhere, there are stockpiles in this country and the Government said that,

“the supply of medicines and medical products should be uninterrupted in the event of exiting the EU without a deal”.—[Official Report, Commons, 25/2/19; col. 3WS.]

They urge people not to stockpile, because the one thing that could create a shortage is panic buying, as it could of any commodity at any time.

The result of all this has shown up in the debate today, where noble Lord after noble Lord has threatened us with calamity, catastrophe and disaster if there is no deal, but none has mentioned any specific calamities, catastrophes and disasters, because they know, in their heart of hearts, that they have been resolved and prepared for. Problems you prepare for do not happen, as we discovered with the millennium bug. If you have additional capacity for ferries as back-up in the event that something goes wrong, it means you have resolved the risk and we should recognise that.

It is essential, however, for those who want us to prolong the whole process to demonise the possibility of our leaving without a withdrawal agreement, hence the resort to this lexicon of lurid adjectives about calamity, catastrophe and disaster, previously used by the same people in reference only to the calamity that faced us if we did not go into the ERM, the catastrophe that faced us if we left the ERM, the disaster that faced us if we did not join the euro and the appalling situation that would result, according to 365 economists, if Geoffrey Howe’s Budget went ahead in 1981. That was followed by eight years’ growth, just as our departure from the ERM was followed by eight years’ continuing growth. We should not believe these abstract concerns that people have now that the concrete worries have largely been resolved.

The remaining fears are much more concrete and concern the certain application of tariffs if we leave and there is no free trade deal. Then, our exporters would face EU tariffs. They average 3% or 4% on our goods. Our exporters have gained 15% in competitiveness through the movement of the pound since 2016, so most are better placed now than they would have been, even with those tariffs. Some will face higher tariffs, but we will be in a position to help them. The total bill for this tariff of 3% or 4% on our exports will be £5 billion to £6 billion, but we will be saving £10 billion to £12 billion every year in our net annual contribution to the EU. So we will be well placed to help farmers and the car industry—those facing the highest tariffs—to cope with those tariffs and adjust to them.

We should not just look at the negatives. There are positives, too, if we leave without a withdrawal agreement. First, we will not have conceded £39 billion with nothing in return, which we would under the withdrawal agreement. We should be prepared to go to international arbitration confident in the advice that this House gave, concluding:

“Article 50 allows the UK to leave the EU without being liable for outstanding financial obligations”.


The second advantage is that it will truncate uncertainty, which, under the withdrawal agreement or a prolonged extension of Article 50, will continue for between 21 and 45 months. We will put that to bed, not necessarily to everybody’s liking, but it is better to end uncertainty and enable business to plan and get on with life.

Finally, it will force a resolution of the Irish border issue. As recently as last month, Simon Coveney, the Irish Foreign Minister, said that, in the event of no deal:

“There is an obligation on the Irish and British governments, and the EU to try and work together to find a way of avoiding physical border infrastructure on this island”.


It can be done. It will be done if we leave with no withdrawal agreement, and that will open the way for us to have a free trade arrangement between Britain and Europe, covering the whole UK, which I hope will enable us to trade profitably and amicably in the future.

--- Later in debate ---

[Baroness Ludford (LD)]

My Lords, I intend to be relatively brief. I hope I will be, not just because it is getting late, or because I have nothing new to say—the noble and learned Lord, Lord Keen of Elie, teased me for saying that in our last debate—but because a lot has changed. It would take me a very long time to get out of my system what I really feel about the incompetent and partisan way that this Government have behaved in the last three years—with their red lines, their appeal only to leave voters, and their prioritising of unity within the Tory party, which does not seem to have been a great success. I agree with the noble Lord, Lord Ricketts, who said that all of this has brought us to a state of national humiliation. We are in big trouble, as the noble Lord, Lord Trevethin and Oaksey, said.

One reason that I do not want to go on at too much length is because I agree with so many who spoke earlier in this debate, particularly the noble Lords, Lord Kerr, Lord Lord Hannay, Lord Kerslake and Lord Ricketts, and the noble Viscount, Lord Hailsham, and the noble Baroness, Lady Altmann. I was struck particularly by the mention of patriotism and of the colleagues of the father of the noble Lord, Lord Kerslake. It reminded me of the 97 year-old veteran who was at the march on Saturday. If I recall correctly, one of his tasks in the war was digging people out of the bomb-hit city of Coventry, but his conclusion from his wartime experience and the medals that he was awarded was to say “never again”. We must have the European Union to build peace, security and prosperity.

I agree with the noble Lord, Lord Bridges of Headley, that fear of splitting the Conservative Party has been the guiding force over the last three years. Obviously, not being in the Tory party, I can only empathise, rather than share the pain that must be felt by relatively reasonable people within that party. The complete loss of Cabinet collective responsibility has been the most dismaying. The noble Lord, Lord Adonis, rightly highlighted the existence of a party within a party—the ERG. Obviously, if we had a decent electoral system, those people would have to stand under their own banner and not that of the Conservative Party.

As the noble Lord, Lord Bilimoria, highlighted, Saturday was a great day. It was good-humoured and well behaved; there was not a single incident that required the attention of the police, just like in October. Those commentators who said the mood was slightly different from that in October were probably right. It was very serious and determined, as well as enjoyable.

I was interested to hear Mark Field MP, who is a Minister, say that he could envisage supporting the revocation of Article 50. Perhaps that has to do with the high level of support in his constituency for the petition. Cleverer people than I have analysed those figures for all the constituencies; no doubt, there will be some very thoughtful MPs looking at those figures. In many cases, the number of those who signed the petition is greater than the majority that MPs enjoy.

The Prime Minister is showing contempt for both people and Parliament. She keeps invoking the will of the people but refuses to check whether, nearly three years on, with 1 million people marching, 5.5 million people petitioning to revoke Article 50, and polls showing a majority support for remain, their views have evolved. She allows herself so many bites at the cherry but she will not allow voters a single reassessment, which is quite arrogant. She also said she will take no notice of indicative votes, which continues her high-handed attitude towards the House of Commons. The noble Viscount, Lord Hailsham, and as my noble friend Lady Smith of Newnham both stressed that the 2016 referendum result is not a mandate for what is happening now on Brexit. No one could possibly have wanted to arrive in this situation. It should not be a problem to ask voters whether this still represents their views. Surely the people’s vote has to be between whatever deal MPs agree and remain. To those who say that no deal would need to be on the ballot paper, I ask this: what is no deal? What does it consist of? How do you describe it? I really do not think that that is a runner.

If Brexiters are so sure that leave would still win—and I agree with the noble Lord, Lord Green of Deddington, that if it did, that would be the end of it, perhaps for a generation—they should have no problem holding another referendum. What are they afraid of? We need a long enough extension of Article 50—for four or five months, say—to allow a people’s vote.

I believe that a lot of leave voters were protesting against the system in 2016, and most of that protest had nothing whatever to do with the EU. I do not deny that immigration was a factor, although three years on it has become less of a factor. But I say to the noble Lord, Lord Green, that any consideration of continuing free movement must be looked at in the round, along with the fact that British citizens are being denied free movement and the opportunities they expected to have, particularly young people and those who wanted to retire to, for example, France or Spain. It is a two-way street and we need to look at it entirely in the round, as well as reflecting the huge contribution that EU citizens make to this country, not just economically but socially and culturally.

I agree with the noble Lord, Lord Hennessy, that we need to focus on post Brexit, but we might define that term differently. I mean that, even if it is only clinging on to nurse for fear of something worse, we should remain in the EU; I think he means we should exit and then deal with all the other problems. There are so many crucial needs in this country. One of the tragedies of the past three years is how all our energy, capacity and thinking have been taken up by Brexit. I feel that myself. When I left the European Parliament, I was really hoping to do things other than EU affairs—I do have other interests, as it happens—but this has been a straitjacket from which it has been difficult to escape. But of course we will have less money to pursue those other things, whether it is social care, decent housing, better skills training or youth services. Talk to anybody in the area of knife crime and you will learn that it is not just the police but the lack of money for schools and youth services which is totally undermining the ability to deal with that terrible problem. By post Brexit, therefore, I mean once the country has liberated itself from this disastrous exercise.

I apologise that I have not been as brief as I thought I would be. I am grateful that the Prime Minister confirmed that the extension knocks out the 29 March date. She may be right that there would be legal confusion about the UK’s ability to implement EU law, but we would still be in the EU because of the European Council decision on the extension. Can the Minister confirm that in fact the repeal of the European Communities Act under Section 1 of the EU withdrawal Act has not been brought into force yet, the same as the repeal of the European Parliamentary Elections Act? An SI is needed for that, and that SI has not gone through, and so the European Communities Act is still in force.

I am also pleased that the Prime Minister’s announcement today, on 25 March, marks the anniversary of the treaty of Rome. There seems to be something significant about this coincidence. Can the Minister clarify the categorisation of the European Council decision as “international law”? Surely it is EU law, unless I have missed something.

Unfortunately, the Prime Minister has not in fact ruled out no deal. I am afraid that that is an illustration of her tendency to be not entirely straight and somewhat manipulative. On one side, she said that no deal had been ruled out but on the other that it had not. She said, “Let me be clear”, then was nothing of the sort. I agree with the noble Viscount, Lord Hailsham, that the noble Lord, Lord Callanan, needs to clarify whether she really meant that no deal could be chosen only by an affirmative process.

The noble Lords, Lord Kerslake and Lord Cormack, reminded us that no deal would have a catastrophic effect. One thinks particularly of people with serious medical conditions such as epilepsy or cancer or who are having dialysis, who are terrified. You see this all the time on social media. Some of them are unable to get their supplies now. What will happen is frightening. It is unbelievable that any Government would impose this fear and anxiety on their citizens.

[Lord Lilley]

Did the noble Baroness not hear me read out the assurance from the Department of Health that there would be no interruption of supplies? Why is she indulging in this disgraceful scaremongering of vulnerable people?

[Baroness Ludford]

I follow people who report their own experience of going to the pharmacist and finding already that they cannot get their supplies. I am sorry, but whatever assurances the Government give, I am personally at the point where I believe the individual patients rather than the Government.

We need a longer extension to be able to hold a people’s vote. If we have to participate in European elections, that is fine with these Benches. I would not be entirely surprised if some legal political fix will eventually be found because everyone is ignoring the opinion from the European Parliament legal service that says that we must hold European Parliament elections but if we do not it will not invalidate the legality of the new European Parliament. That seems a straw in the wind that might point to a different solution. I look forward to the Minister’s answers.