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

Lord True Excerpts

Tuesday 16th January 2018 Lords Chamber

[Lord True (Con)]

My Lords, noble Lords know that there has been so much concern in this House about overcrowding that some will be asked to leave your Lordships’ House, but 75% of the seats have been available at every stage of this important debate.

I declare an interest as a part-time resident of Italy for 37 years. I guess that I must have spent several years of my life in toto in that great country. But the context for this debate needs to be brought before noble Lords. It is the continuing efforts of the Government to pass legislation to implement the will of the British people in the referendum. Last week, in this House, the noble Lord, Lord Taverne, used a debate on housing to say,

“the only way … to avoid the impoverishment of the British people, is to reverse … the decision to leave the EU … in fact, to stop Brexit”.—[Official Report, 11.1.18; col. 327.]

He spoke for what I have dubbed the fat yellow line opposite—100 unelected Lib Dem Peers aching to block the democratic will of the British people and force a second referendum.

On the legislation, they are abetted by the unprincipled opportunism of Labour. Bills to withdraw from the EU, the single market and customs union would pass easily if Labour kept its election promises of last year. Tony Blair says that stopping Brexit is more important than seeing Labour in power. But it will not be just Telford and Mansfield that go Tory if Labour take his line in this House.

My position is different. I do not want to reverse the public’s decision or stop Brexit. I do not agree that leaving the EU will impoverish the British people. We should remember that that was Project Fear’s line, shamefully orchestrated by the Treasury but readily broadcast by others. An EU ambassador recently told me that not one of our UK envoys made a single hint to the chancelleries of Europe to take the leave vote seriously. Having heard some of the interventions today, I wonder what they are now saying about no deal.

Project Fear told us that a vote to leave would cause “immediate and profound shock”, and a recession costing 500,000 to 800,000 jobs. But employment is up by 400,000 and unemployment is at a 20-year low. Mr Osborne, of course, was Project Fear’s mastermind and I find it sad to see a great newspaper like the Evening Standard still being used as a vehicle for what I guess now is project whimper laced with personal bile. Mr Osborne threatened an emergency Budget if the British people voted to leave. The noble Lord, Lord Darling, standing with him, warned of emergency Budget after emergency Budget. He said that he was much more worried than he had been in the crisis of 2008, which he handled so well. We all remember the threats—2p on income tax, 3p on the higher rate, 5% on inheritance tax, alcohol and petrol duties up, and 2% cuts in health, defence and education. None of that happened.

That is a meaningful background to the way in which I assess this report. Of course it impresses in its scholastic legal analysis, and we have heard some exposition of that in the debate. But it fails because, while it may not be Project Fear or even Project Whimper, it is another Giant Despair, a litany of ifs, buts, coulds and maybes, consistently loaded with spin to bury or—what was the phrase?—give the quietus to any idea of no deal. It reads as a siren call for longer and ever more tortuous negotiations, extending the withdrawal period and even, we now learn, our membership of the European Union. This brings us to the gravamen of the matter.

The noble Lord, Lord Kerr of Kinlochard, who is not in his place at the moment, was classically clear when he said that staying in the EU was his objective. That is the broad background to the apparently narrow ground of the report and this debate. Staying in the EU will not be accomplished by the frontal attack of the Liberal Democrats, although they will provide the votes: it will be the mandarin nudging, bit by bit, back into the same old sheep pen—perhaps in Kinlochard—after which, no doubt, not only Britain but the sheepdog will be called to heel.

We start these negotiations, uniquely, with no tariffs on either side. Who wants to impose them? In assessing risk, why did this report not press, as others have said, the overwhelming public duty of EU leaders not to hobble access to UK markets for their citizens? Where is that in the report? Free trade is the greatest generator of hope, prosperity and jobs known to mankind. The report totally ignores the benefits of opening up to a wider world that a bad deal could actually delay. Canada, China, South Korea and India are not even mentioned, while Australia and New Zealand get one reference in a tendentious context. Our great trading partner, the United States, creeps in twice with no comment on the risks of free trade being kicked into the future.

Of course, I thank the committee for its hard work and I join others in sending my best wishes to the noble Lord, Lord Jay, who serves this House so well, as he did his country. The report will be a useful legal vade mecum but it does little to shake the acquis commune in the Westminster, mandarin and media beltway. I disagree with the view expressed in the report that there would be a “crucial advantage” in extending EU membership after 2019. The people voted to leave in 2016, not some time in the 2020s at your Lordships’ pleasure. The Chancellor was right the other day to challenge the EU to say more about what sort of future it wants. He is no out-and-out Brexiteer, but a man with the interests of this country and Europe at heart. We do not need or want a hard border with the Irish Republic, and perhaps when he winds up the debate my noble friend will tell us who does want one. Of course we do not want Lufthansa airplanes circling Gatwick until they fall from the sky, as Mr Barnier hints. Who is suggesting such nonsense? These matters can be readily resolved and we should stop letting the shape and image of negotiations be finagled by others.

In conclusion, I hope that my noble friend on the Front Bench will confirm that an implementation period will be just that: implementation—brief, limited in scope and limited in time, not an across-the-board transition, booting the can ever further down the road. I hope that he will reject any idea that the report suggests of extending EU membership and can confirm that if we do face stalling and failure to respond positively to the many offers of our Government, then no deal will remain an option that must lie on the table. That is certainly preferable to any deal which binds the UK to tracking the rules and regulations of the poorest performing sector of the world economy over the last generation.

--- Later in debate ---

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I too thank my noble friend Lord Whitty for introducing today’s debate. I thank the noble Lord, Lord Jay, and his committee for their choice of subject and for what I consider is the high quality of the report. I am sorry about the attacks made on it; I think that most were a cover for not liking its conclusions, although I exempt the noble Lord, Lord Bew, from that. I also thank the noble Lord, Lord Jay, for getting this debate today; it is particularly timely as it is of course on the very eve of the first anniversary of the Lancaster House speech when, regrettably, the Prime Minister gave legs to this rather vacuous “No deal is better than a bad deal” nonsense. But I also hope that this debate is in time to influence the Government’s thinking, particularly along the lines of the report’s advice, which is, basically, “Get real”. Both the report and the debate have laid bare the absence of any rationale for suggesting no deal and, of course, its failure to scare the other side to offer us lots of goodies, given that they view it as mere bluster. I will emphasise four points.

First, there is the near unanimity of advice that no deal has no merit. As paragraph 18 notes:

“Very few witnesses identified any positives arising as a result of ‘no deal’”,


while a former Chancellor of the Exchequer struggled to find any country of any significance that traded purely on WTO terms—the no-deal option—which the CBI judged would mean that 90% of our manufacturing exports by value would face tariffs. Yet as my noble friend Lord Whitty has warned, the very repetition of the no-deal rhetoric risks becoming a self-fulfilling prophecy. Indeed, rather oddly, as has been mentioned, even as Ministers insist it is an option and continue to prepare for it, as they say,

“any responsible government would do”,

they are then utterly surprised when the EU 27 do just that, with David Davis even having the effrontery in a letter to the Prime Minister to attack their “damaging” no-deal planning, even, we understand, consulting lawyers—presumably at taxpayers’ expense—over the EU’s preparations for no deal. It is unclear why David Davis should spend £3 billion preparing for no deal but get so het up when Michel Barnier does exactly the same. As the Commission spokesman responded:

“We are surprised that the UK is surprised that we are preparing for a scenario announced by the UK government itself”.


So of course the Commission should prepare. As it makes clear, if no deal is agreed by this October, the status quo would come to an abrupt halt next March. However, as the noble Lords, Lord Gadhia and Lord Taylor of Warwick, said, this is not a game show. Should we leave the stage, there would be dire consequences for our country.

Secondly, it is difficult to believe that the Government really believe that no deal could ever be satisfactory, given that it would mean: no security for United Kingdom citizens living in the EU; probably a hard border in Ireland; immediate imposition of tariffs, customs checks and possibly travel visas; no flights to continental Europe; nuclear materials stacked at the border; no judicial co-operation or European arrest warrants, as the noble Lord, Lord Blair, mentioned; no new trade agreement with any other country, because they would not be in place by then, and the loss of all 57 existing trading relations with third countries; 17-mile tailbacks at Dover, without having even an IT system in place; a devastating impact on our farming and food safety, and food prices possibly going up by 20%; a rift in the all-Ireland energy electricity market, posing threats to Northern Ireland’s lights; the financial sector in jeopardy, particularly on investment contracts, as we have heard; and, according to the impact assessment commissioned by the Mayor of London, which was rather more thorough than that done by Her Majesty’s Government, some half a million jobs under threat, and effectively a “lost decade” of lower employment and economic growth, with perhaps £50 billion of investment lost. And of course it would mean no transition agreement, despite the proposal for an implementation period by the Chancellor and the Secretary of State for Brexit in the Frankfurter Allgemeine Zeitung, although of course that is not possible without a deal.

Thirdly, the Whitehall farce returned last week as the anticipated new “no-deal Brexit Minister” failed to appear and was replaced by a new Minister who supports no deal. Indeed, she does not even want a transition, despite the fervent pleas from industry. So “No, No, Nanette” becomes “Yes, no; well, maybe. We’ll tell the EU 27 that we want a deal but we’ll appoint a Minister who doesn’t”. If it were not so serious, it would actually be quite funny.

Fourthly, and crucially for this House as we prepare for the withdrawal Bill—it will soon end its passage through the other House—any decision to slam the door behind us, after 46 years, with no agreement on our temporary or future relationship is a big national decision. It is not a decision to be taken solely by Ministers; it is one to be taken by Parliament on behalf of the nation. Therefore, we will seek to amend the withdrawal Bill to ensure that any decision to have no deal resides with Parliament and not with Downing Street.

As the report says, failure to reach agreement is not a continuation of the status quo. No deal would mean the abrupt cessation of nearly half a century of economic, political and legal partnership. The elegant wording of the noble Lord, Lord Jay, repeated today by my noble friend Lord Whitty, and by the noble Lords, Lord Gadhia and Lord Wallace, concludes:

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

[Lord True]

I mentioned the position of the Labour Party. A lot has been said in this debate about not knowing where people stand. The noble Baroness is here as a spokesman for her party. Is it the policy of the Labour Party that the UK should come out of the single market and the customs union? It would be helpful for us to know before next week—tonight, please.