Legislating for the Withdrawal Agreement
Debate between Matthew Pennycook and Vicky Ford(6 years, 2 months ago)
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Matthew Pennycook
The hon. Gentleman is right, but it is an inconsistency of the Government’s own making, because they chose symbolically to repeal the ECA in the European Union (Withdrawal) Act, and in this new Bill they are going to unpick the very legislation that we passed because, as paragraph 60 of the White Paper makes clear, the ECA will be “saved” for the duration of the implementation period and will continue to be legally effective until 31 December 2020. What is saved is not merely select parts of the ECA, but almost all its key provisions. Chapter 3B of the White Paper makes it clear that the Bill will ensure that throughout the transition, the EU doctrines of direct effect and primacy will continue to apply, including with regard to EU law that comes into force after 29 March next year; the legal basis on which most EU-derived domestic legislation stands will be preserved; and, as paragraph 80 of the White Paper sets out, the full role of the European Court and the binding nature of its rulings will be preserved.
The White Paper argues that repealing the ECA in name only, while in practical effect preserving its effect throughout the transition, is the most effective way to provide continuity and certainty to business and individuals. With the European Union (Withdrawal) Act and its fixed exit day already enacted, that may well be the case, but it is difficult to see why the flexibility provided for in the original drafting of the European Union (Withdrawal) Bill, which allowed for Ministers to determine different exit days for different purposes, would not have achieved the same end, with the added benefit of saving us all a great deal of parliamentary time. The whole farcical saga highlights how when it comes to Brexit-related legislation, the Government have an unhealthy tendency to indulge in short-term tactical gimmicky at the expense of what is sensible and what is in the best interests of the country.
Vicky Ford (Chelmsford) (Con)
The hon. Gentleman has welcomed the White Paper and encouraged the Government to come forward and finish the negotiations as quickly as possible. Will he disclose whether, if those negotiations are completed, he will vote for the outcome? If not, is he not the person who is guilty of political gimmickry, rather than Government Members?
Matthew Pennycook
I am well used to the hon. Lady asking questions that are slightly out of left field, but I fail to see how the Opposition can give an opinion on whether we will back a deal about which we do not know the full details and which is still being negotiated. We will faithfully apply our six tests when the deal comes before us, as we all hope it will.
The political gimmickry must stop, and when we approach this next Bill, we hope that the Government will focus on what is the most effective way to legislate for the issues in hand, but there is good reason to fear that that same short-termism—a myopic approach driven by whatever will buy Ministers a few days or weeks of respite from the predations of the European Research Group—could stand in the way of a sensible resolution to those parts of the withdrawal agreement on which no agreement has yet been reached. It is to that issue that I shall now turn.
As Members will know, several aspects of the agreement remain unresolved, of which the two biggest are the mechanism for settling future disputes and the Irish border. It is on the second of these that I shall focus, because the issue of how we avoid a hard border on the island of Ireland is clearly now the major sticking point to concluding a withdrawal agreement. We can talk as much as we like today, and on future days, about how Parliament will legislate for a withdrawal agreement, but if the issue of the Irish border is not resolved, there will not be a final deal to legislate for.
European Affairs
Debate between Matthew Pennycook and Vicky Ford(6 years, 8 months ago)
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Matthew Pennycook
I absolutely agree with my hon. Friend. I could not have put it better myself.
The theme of today’s debate is international trade. The sections relating to customs were arguably the least convincing parts of the Prime Minister’s speech. In contrast to other areas, there was no attempt to engage with the hard truths about what leaving the customs union will mean for the UK, and particularly with the impact of that decision on manufacturing and the Irish border. As the House knows, the Prime Minister simply went back to the two propositions that the Government set out in their future partnership paper published on 15 August last year. They were a
“customs partnership between the UK and the EU”
or
“a highly streamlined customs arrangement, where we”—
that is, the UK—
“would jointly agree to implement a range of measures to minimise frictions to trade, together with specific provisions for Northern Ireland.”
The first proposition is untried and untested. By the Government’s own admission, it would take at least five years to implement and it would be ripe for abuse. It was roundly rejected by the EU last year, not least because it would require EU member states to completely reconfigure their own national customs systems. The idea is not simply “blue sky thinking”, as the Secretary of State described it in September last year; it is pie-in-the-sky thinking.
The second option would, according to the chief executive of Her Majesty’s Revenue and Customs, take three years to put in place and would result in friction on our borders. It would therefore require a range of measures, including unproven “technology-based solutions”, to minimise frictions to trade. In her speech, the Prime Minister claimed that both those options were serious and merited consideration, but they were widely rubbished in the wake of that speech. The EU immediately ruled them out as non-starters.
The truth is that the Government have absolutely no idea about what to do about the issue of customs and the Irish border. The fall-back that surfaced in the EU Commission draft legal text published on 28 February—namely, that Northern Ireland should go into a customs union with the south and that the UK border should be shifted to somewhere in the Irish sea—is clearly unacceptable. The Prime Minister quite rightly made it clear that no UK Prime Minister could accept such an outcome. The Irish border issue remains unresolved.
One part of a wider solution to the border issue would be, as the Opposition have suggested, to negotiate a new comprehensive UK-EU customs union. Such a customs union would ensure that goods covered by the agreement could still be traded with the EU tariff free, with no new customs or rules of origin checks. The exact terms of such a customs union would, of course, have to be negotiated, but this represents a pragmatic proposal, reflecting current arrangements, and it has been welcomed by trade unions and by business, including the Manufacturers Organisation—formerly the EEF—and the CBI. It would be a win-win for both the UK and the EU27. A new UK-EU customs union would not prevent the UK from trading globally or improving our export industry, just as the EU customs union has not stopped Germany making China its largest trading partner, for example. Germany now exports four times more to China than the UK. The UK would still be free, as we are now, to negotiate in the areas of services, data, investment, procurement and intellectual property, and UK businesses would still be able to export to non-EU markets just as other EU countries do. In short, there is no question but that the UK could and would still increase trade inside a customs union with the EU, as the Secretary of State for International Trade said earlier this year in relation to the Prime Minister’s visit to China.
A new, comprehensive UK-EU customs union, were it agreed, would of course require the UK to adopt a common external tariff with the EU, and we would of course seek both to replicate existing EU trade agreements and benefit from negotiated future deals. It is true that we would not be able to negotiate independent third-party trade deals, but as many hon. Members have already mentioned, we need to face up to some hard facts in this area, because the notion that future free trade agreements will offset the inevitable economic costs of exiting a customs union with the EU is nonsense. To say, as the Minister did, that it is simply not an either/or question does not get to the heart of the issue that confronts us.
Vicky Ford
When the hon. Gentleman says that he wants to stay in a customs union with the EU, will he confirm that he will continue to comply with EU state aid and competition law as a condition of staying in that customs union? I cannot find a single example of a country that can stay in the customs union while disregarding state aid laws.
Matthew Pennycook
The hon. Lady has great expertise in this area, but I think she has slightly misjudged the fact, as I understand it, that that is not about customs, but about the elements that make up the single market. We have said that we would seek, in principle, to negotiate protections, clarifications or exemptions where necessary, but I cannot imagine a situation in which those exemptions would be necessary. As I think the Leader of the Opposition said on “Peston on Sunday” some time ago, there is nothing in the current state aid rules that would prevent us from implementing, for example, our manifesto.
Many hon. Members have already mentioned this, but Sir Martin Donnelly, the former permanent secretary at the Department for International Trade, said that the reality is that what the Government are proposing is akin to giving up
“a three-course meal... for the promise of a packet of crisps in the future”.
The EU currently constitutes 44% of our exports and 53% of our imports. It must be our priority. Increases in trade from new free trade agreements with the USA, Canada, Australia and New Zealand combined would be worth less than 3% of our current trade in goods and services.
Matthew Pennycook
I am just coming to a close.
The draft withdrawal agreement merely needs to include a political declaration on the future relationship—that is, its broad outlines—with the details to be hammered out after the UK has left the EU.
Matthew Pennycook
I will not give way.
But the Irish border issue is an integral part of the withdrawal agreement. Without a solution to it, it is very difficult to imagine how the Government secure an orderly exit deal or a transition period, let alone a post-Brexit trade deal.