Department for Exiting the European Union

Peter Grant Excerpts

Monday 26th February 2018 Commons Chamber

[Hilary Benn (Leeds Central) (Lab)]

May I begin by saying that I welcome the fact that the House now has the opportunity to debate estimates? Like many Members who previously served in local government, I was astonished when I first arrived that the House of Commons appeared to spend no time at all discussing the Government’s expenditure, when many of us would have sat through many hours of committee meetings poring line by line over the expenditure plans of the local authorities of which we were members. I doubt that this debate—this is already evident—will feature the kind of consensus we saw in the last debate on the need for more expenditure. I have to confess that this is one area of Government spending where, to be frank, I wish we were not spending anything at all, but we are where we are following the referendum result.

I will, however, just pick up on one point made by the hon. Member for North East Fife (Stephen Gethins), whom I congratulate on having secured this debate. Perhaps if the Government had not wasted so much time repeating the mantra, “No deal is better than a bad deal,” we would not be spending so much money on preparing for no deal, which would be clearly disastrous for the British economy and, frankly, I say to the Minister, would never get through this House of Commons. That is a consequence of choices that the Government have made.

It is fair to say, and not to be argued with, that relatively little preparation had been made in government for a leave result in the referendum, but clearly the establishment of DExEU was a logical and necessary consequence. I have to say, however, that the civil servants and, indeed, the Ministers who work in the Department face a really substantial and highly complex task, because for 45 years our trade, laws, relationships, rules and standards have been inextricably intertwined with those of our European friends and neighbours. The task we now face is the process of pulling out the plug of that relationship while trying to fashion a new plug in the course of negotiation, and everyone is wondering, when we stick it in the socket and press the switch, what will still work and what will not. The honest answer is that, as things stand, we just do not know.

The Department, of course, has been established from scratch and has recruited very able people from all across Whitehall. Lots of civil servants wanted to work in DExEU because of the nature of the challenge, which is a once in a generation—probably a once in a civil service career—opportunity. The Department has been set the task of both understanding the implications of Brexit and of advising Ministers on the choices that might be made in how to handle it.

On the first of those tasks, drawing on my experience as Chair of the Select Committee, I know that, in truth, the more we look, the more we encounter questions that currently have no answer. On the second, it was clearly sensible of DExEU to, in effect, subcontract to other Government Departments the task of talking at the start of the process to stakeholders about the important issues that Brexit raises, but I have to say that, when it comes to development of policy, I have a great deal of sympathy with civil servants. Unusually, they are not suffering from a lack of money; they are suffering from a lack of clarity from the people who head the Department, Ministers, the Prime Minister and the Cabinet about what the UK Government want.

In my experience, if you give direction to the civil service, it will get on and do the task using all the expertise, energy and ability for which it is highly regarded in this country and around the world. However, all those qualities cannot make up for a lack of leadership, let us be frank, caused by the divisions—open secret—in the Cabinet on what the right thing to do is. It is not surprising that the Prime Minister sought to move Olly Robins, who was the permanent secretary in the Department for Exiting the European Union, across to the Cabinet Office to work directly to her rather than remain in his role as permanent secretary.

Looking at the scrutiny that has taken place thus far of DExEU—reference has been made in part to some of it—the National Audit Office said in July last year that the Government had failed to take a unified approach to talks with the EU. The Comptroller and Auditor General commented, in a rather unusually colourful way, that the Minister had left hopes of a successful Brexit at risk of falling apart “like a chocolate orange”. I suspect that when the history of Brexit comes to be written there will be a special footnote for chocolate oranges, “Mad Max” and this week’s favourite phrase, snake oil. Frankly, they could remain in the dustbin of those footnotes as far as I am concerned.

In November, the NAO reported on DExEU and the Government’s preparations for Brexit. It said, as we heard from the hon. Member for North East Fife who opened the debate, that 310 work streams had been identified. Some mid-sized Departments, in particular the Department for Environment, Food and Rural Affairs but also the Department for Business, Energy and Industrial Strategy, have a lot of issues they need to grapple with. Not surprisingly, there is a lot of work to be done. They have to formulate policy, draft legislation, consult with the devolved Administrations and, in some cases, new systems and processes have to be invented. One task facing the Home Office is how to document 3 million European citizens when, because of the system of free movement we have operated, we do not know who some of them are. The Treasury always starts by saying to Departments that they will have to do all that within their existing budgets, but we know that last summer and autumn it had to review and agree bids for additional funding for 2017-18.

There is a very complex structure across Whitehall for dealing with Brexit, but the Public Accounts Committee suggested:

“No one in the civil service is clearly responsible for making sure that arrangements overall are fit-for-purpose for Brexit.”

In its report of 7 February, the PAC concluded that

“Government Departments have got to face up to some very hard choices”

and that

“the Department for Exiting the European Union (DExEU) and the Cabinet Office do not have a robust enough plan to identify and recruit the people and skills needed quickly.”

I note the high turnover in staff in DExEU. It said there was a need for

“much greater transparency from DExEU, HM Treasury and the Cabinet Office on formally setting out who is responsible for what and on the progress that is being made.”

It said that accountability was unclear and that that

“risked undermining speedy decision-making”.

I will come back to that point. It also said that there was a

“paucity of information in the public domain”.

On that last point, it is frankly extraordinary that so many decisions have been made about the kind of Brexit the Government wish to pursue in the absence of any estimate, any evidence or any analysis whatever. When the Secretary of State admitted to me, in testimony to the Select Committee, that when the Cabinet decided to leave the customs union it had done so without having before it any assessment whatever of the economic impact, that said it all. Having given Parliament the impression that detailed impact analysis was being done on different sectors of the economy, we were—I think the whole House was—astonished to discover that this was not the case. It was not a lack of money in the estimates that caused that; it was a lack of policy and an apparent lack of interest.

We have before us the exit analysis, which the latest Humble Address instructed the Government to pass over to the Select Committee and which has been shared in confidence with all Members of this House and the other place. We have had the chance to see it, and the public have had a chance to read part of what it says, courtesy of BuzzFeed and the Financial Times. We know that for the first time it has attempted to look at some costs of the different choices when it comes to our future economic relationship with the European Union, although Ministers have said from the Dispatch Box—indeed, they were at pains to point it out when we debated the Humble Address—that it does not include the Government’s preferred option. I presume the reason is that those who were doing the modelling did not know what the Government’s preferred option was at the time they undertook that work.

The Brexit Committee has decided that it is minded to publish the Government’s EU exit analysis, but it has asked the Secretary of State whether he would wish any specific details to be redacted on the basis that they would either be sensitive to the negotiations, market sensitive or commercially confidential. As a Committee, we have always argued in favour of as much transparency as possible in the process, without damaging our negotiating position. If we are going to be able to do that, we need as much information as possible.

If the press reports of what the exit analysis has to say are correct, it is clear that the economy will be less big and less strong than it would otherwise have been, because of Brexit. Incidentally, that assessment is shared by many other organisations that have done their own economic impact assessment.

[Peter Grant (Glenrothes) (SNP)]

Will the right hon. Gentleman give way?

[Hilary Benn]

I will, to my fellow Select Committee member.

[Peter Grant]

It is now in the public domain, I think for the first time, that the Committee intends to publish as much of these documents as possible. Does the right hon. Gentleman see the contradiction in the two claims that have been made by those who oppose publication? On the one hand, the documents contain information that would be very useful to our negotiating partners or opponents in the Brexit negotiations, but on the other, they are so unreliable that they are no good to anybody. Does he accept that there is a blatant contradiction that the Government have to address?

[Hilary Benn]

The hon. Gentleman anticipates exactly the point that I was going to make. I should point out that the information about the Committee taking that decision last week came into the public domain when our minutes went up on our website, so it is available for everybody to see.

I was just about to say that the assessments of the economic impact of some policy choices that the Government face have been hotly contested by some. Civil servants have been accused of producing figures to support views that they already hold, rather than undertaking an objective examination of the evidence. I have to say that to attack civil servants and Government economists in this way is both wrong and unfair. The right hon. Member for East Antrim (Sammy Wilson), who is also a member of the Select Committee, was absolutely right to make the point that the analysis is, rightly, heavily caveated. That is important, because trying to forecast what the future holds is a difficult business, as we all know, and there is a strong argument for saying that if the information is going to be in the public domain, the nature of the caveats should be too.

--- Later in debate ---

[Peter Grant (Glenrothes) (SNP)]

I am grateful for the chance to sum up this debate. Given that we are short on time, I will keep my remarks brief.

There has been interest in this debate from everyone but Tory Back Benchers—it is noticeable that none of them wanted to speak—so I hope we might have even more time next time around. My hon. Friend the Member for Edinburgh East (Tommy Sheppard) said that this is the first time we have had anything like a proper chance to examine Government estimates. Who knows? Maybe by the time this Parliament is 321 years old we will have financial scrutiny procedures as inclusive and as thorough as those that the Scottish Parliament put in place before it was one year old, assuming this Parliament ever gets to 321 years old—I would not bet on it.

[Douglas Ross (Moray) (Con)]

Will the hon. Gentleman give way?

[Peter Grant]

I cannot take interventions from Members who chose not to put in to speak. There is limited time for the three Front-Bench speeches, and I want to give the Minister time to answer the questions that have been asked.

When it comes to Brexit, DExEU is practically the only Department that has not seen its budget increased during the year. The Home Office needs more money to cope with an immigration system that will do who knows what because we do not know what immigration will look like. Her Majesty’s Revenue and Customs needs money for a customs system to deal with who knows what customs arrangements we have after Brexit.

It was interesting that we heard from the Labour Front Bencher that being in a customs union with the customs union is no different from being in the customs union except that it is not enshrined in the treaties. Given that that distinction first appeared in the Tory party’s White Paper shortly after the Brexit referendum, I hope the Minister will be able to confirm tonight whether that is the Government’s understanding: being in a customs union with the customs union is not any different in practice from being in the customs union. Good news it is, partly because it simplifies things and partly because it saves Her Majesty’s Revenue and Customs about £400 million of unnecessary expenditure.

Interestingly, despite all the other expenditure we have seen in relation to Brexit, a proper analysis has not yet been done as to the likely impacts of all the different scenarios we could be faced with. We keep getting told that the few pages that have been done are so full of caveats that they are not particularly worth while. What does that say about a Government who committed themselves to a hard Brexit—to leaving the customs union and the single market—without a single paragraph of analysis about what the economic impact would be? That is especially the case as we see now that the economic impact is a 5%, 10% or 15% fall in economic growth over the next few years, with billions of pounds wiped out of the economy. The Government have committed themselves to that without even stopping to think about the impact. If that is not complacency and incompetence to an almost criminal degree, I genuinely do not know what is.

The most optimistic noise that the Brexit Secretary has been able to make recently has been to tell us that leaving the European Union will not be quite as bad as “Mad Max Beyond Thunderdome”. Previously, the Foreign Secretary predicted that it would be as successful as “Titanic”. That has prompted a bit of a Twitter storm, with people trying to suggest what disaster movies would best describe the process of leaving the European Union. My hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) tried to broaden the description by talking about soap operas. I do not know whether it should be “That’s when good neighbours stop being good friends” or perhaps “Home and Away”, because the Prime Minister tells one story when she is at home here and a very different story when she is away in Brussels trying to woo the European Union.

Rather than talking about a blockbuster disaster movie, it may surprise Members if I say that the Government are actually heading for a real blockbuster of a Brexit. On 1 January 1973, the UK officially joined the Common Market, as it was then known. Wee Jimmy Osmond was at the top of the charts, but a few weeks later he was displaced by those immortal glam rockers “The Sweet”. Those of us lucky enough to be growing up in those times, which were an epitome of a combination of the best possible taste in music, fashion and television, will never forget the lyrics of that immortal song, the only No. 1 they ever had. Its chorus reads like a press statement coming out at the end of a Brexit Cabinet meeting:

“Does anyone know the way?

There’s got to be a way…

We just haven’t got a clue what to do.”

Or, as a constituent more pithily said to me a few days ago about Brexit:

“They couldnae make a bigger bahookie of it if they tried”.

I should explain that that guid Scots word does not mean “elbow”, although given the Government’s performance to date I am not sure they would know the difference.

The only question to be asked on the Brexit estimates today is: if this is how much we have to take away—hundreds of millions of pounds—from our health service, from desperately needed investment in social housing, from our welfare system and from our understaffed and under-equipped armed forces, and spend to create a machinery for a failed Brexit, can we imagine how much we would have to spend to make it work? No Government could make it work, and this Government certainly cannot. They have to change. They have got to get back around the negotiating table and get us away from a cliff edge of a hard Brexit. Otherwise, the amounts of money that have been included in the expenditure estimates for the Brexit Department will be a drop in the ocean compared with the overall cost to the people of these islands.

[Douglas Ross]

On a point of order, Mr Speaker. The hon. Member for Glenrothes (Peter Grant) mentioned at the opening of his remarks that there had been no Conservative Back-Bench speakers and he criticised Conservative Members for that. May I ask, through you, whether he would agree that that would therefore be a criticism of the Scottish National party, which in a four-hour defence debate immediately preceding this one could not muster one Back-Bench speaker?