Leaving the EU: Extension Period Negotiations

Robert Syms Excerpts

Wednesday 22nd May 2019 Westminster Hall

[Sir Robert Syms (Poole) (Con)]

I congratulate my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez), who has eloquently opened this debate and set out some pertinent questions that I hope the Minister will try to answer—probably with limited time.

The referendum was a vast vote of confidence by our people in the future of our country—a vote of confidence not entirely shared by the political class, who seem to suffer from a collective Stockholm syndrome: they cannot see a way forward without trying to hold on to nurse for fear of something worse. A lot of the problems we face in our democracy at the moment have arisen because although Parliament’s role is different from that of a referendum, we have to facilitate the decision, and I do not think Parliament has done the job that the people expected it to do when they elected it in 2017. Somehow, those of us who wish to enact the referendum have to try to find a way through.

A lot of the deal that the Prime Minister has agreed with the EU is not controversial; it is quite sensible, and is eminently voteable for. However, there is a big problem with that deal. There were no conterminous trade talks, so where we are going to land becomes a vacuum, into which the EU has very helpfully placed the backstop. That backstop should not be in the withdrawal agreement; it should be part of the trade talks. Nearly three years after the referendum, we are still arguing about whether we are going to be in the single market and what the relationships are going to be. That problem arises first from the EU’s response, but secondly from the Government’s response in accepting the EU response.

It is manifestly clear to me that 12 to 18 months ago, we should have walked out of the talks and gone for no deal, because the agreement is not fair and equitable. The fundamental problem in getting the deal through the House of Commons is the backstop and the fact that there is still great doubt about where we are going to land. Most of us want a good relationship with the Irish Republic and most of us want an open border. Had there been coterminous trade talks, we probably would not be very far away from having that as part of the agreement. Not doing coterminous trade talks was a monumental mistake, but it was made in the EU and in Downing Street. There were times in the negotiations where we needed a bit of handbagging, and we did not get it.

That leaves a problem. The one proposition that would go through the House is the deal without the backstop. If the backstop is taken out of the withdrawal Bill on Second Reading, I will vote for it, and I think the House will vote for it, but I suspect that the backstop will still be there, and that fundamentally is a problem. We have properly to prepare for no deal, because there are not many options if Parliament does not support the Prime Minister’s deal. As always, the people walking through the Lobby to vote against are those who do not like the deal, but they are also those who want to revoke or overturn the referendum. It is no doubt an unenviable and difficult task for the Prime Minister, because there are many swirling tensions and arguments over Europe that have been in the House for 20 years, and they are bedevilling the chances of our getting a deal and getting on to trade talks.

Moving on to no deal, a lot of preparation has been undertaken. Every time I used to read in the Sunday papers that some disaster would befall us, I would ask the then no-deal Minister, of which the current Minister is one of a succession, “Is this true and what we have done about it?” The no-deal Ministers have been doing a massive risk assessment of what could go wrong and what we should do about it. One Minister mentioned to me one day that a lot of British information was kept in southern Ireland, and they would have to repatriate it to British servers otherwise we could not access some of the things to do with pensions, benefits and everything else. I think we can all reassure ourselves that the civil service and the no-deal Ministers have done a pretty good job.

Pertinently, one of the no-deal Ministers said to me, “You can make lots of preparations. Clearly, if you go on to WTO terms overnight, there will be problems for exporters and businesses. That requires the Treasury effectively to underwrite some of our businesses for a period of months.” We did that with the banking collapse, and we have done that at certain times in our history. For example, in the second world war when ships were being torpedoed, the British taxpayer paid for merchant shipping. We need to underwrite any kind of change with the resources of the UK Treasury. The problem many of us face is that people in the Treasury spend most of their time worrying about no deal and saying it will be a disaster, rather than preparing for it and backing what the British people want to do.

I am confident that a lot of things have been done by the Government. I am a little less confident that preparations for no deal have been undertaken by many private businesses, but the problem many of them have is that they prepared for no deal at the end of March. They are now left with large inventories. They have expended millions of pounds, and they do not know whether we will have no deal in October or maybe later. We may have a worse scenario with no deal because we put it off in March when people were preparing for it, because businesses now have to take some hard political decisions. If we look at the banks’ reports, they have all been lending money to their customers so that they can make preparations. There is of course a limit to what the banks will put forward and what companies will do.

There have been good preparations by no-deal Ministers. A no deal needs to be planned, organised and underwritten by the billions of the UK Treasury. I do not think it is a question of costing lots of money. The wheels of business turn, and if people find that a ship going to South Korea suddenly gets landed with tariffs or turned around, that will drive British exports to bust.

We need vision in British politics. Not only is there a vacuum in our future trade arrangements, but British politicians should be looking ahead with an optimistic view of how we are going to put our place in the world. There is an awful lot for us to do, but we desperately need to fulfil the terms of the referendum. The only way we will be able to do that, if things continue as they are, will be in a prepared, organised, and packed no deal where we get where we want to get. My view is that if the Prime Minister had stuck to the end of March, we would now be getting through the problems, rather than being up to our neck in them, but the fact that we are having an unwanted, uncalled-for European election is probably an awful indictment of where we are.

I am confident in the Minister, but it boils down to a question of trust. Unfortunately, many of my colleagues do not trust the EU, looking at the track record, but there are severe concerns and question marks over the Prime Minister, and we see that, even when her own Cabinet have arguments. Sometimes people can vote for a deal they do not feel comfortable with if they feel that the person in charge is going to bat for them. Too many of my colleagues feel that that is not taking place. I am looking forward to the Minister’s response. I am grateful to my hon. Friend the Member for Hornchurch and Upminster for securing the debate. Many of us think we have to proceed, if necessary with a no-deal scenario that is well-organised, well-funded and successfully undertaken.

[Several hon. Members rose—]

--- Later in debate ---

[Mr Clarke]

Indeed it does not. It has become a holy grail—a totemic example of our determination somehow to be in and half-out at the same time. As other hon. Members have pointed out, that is a fundamentally untenable position. Making the decision to leave the European Union means embracing the choices, challenges and opportunities that come with that; the same would be true of the decision to be part of the European Union. There are trade-offs to be made in either position. In that respect, there has been a fundamental lack of honesty throughout the entire debate.

The European Commission’s own website states:

“The Customs Union is a foundation of the European Union”.

I am clear that continued membership of the customs union would be not only a serious misjudgment, but a breach of faith with the referendum result. It was therefore with absolute incredulity that I watched the Prime Minister yesterday promising to adopt both the customs union and a second referendum as official Government policy if Parliament votes for them. Frankly, that position represents a devastating failure of politics, leadership and statecraft. Indeed, the only redeeming feature of the situation is that this desperate attempt to win the Labour party’s support must be the final one.

Many of us have advocated a Canada-style trading relationship with the EU, with frictionless trade and a high level of customs facilitation. In such an arrangement, we would be fundamentally responsible for controlling our internal affairs. Regrettably, we have encountered the twin misfortune of having a leader who never asked for it and an European Union that would rather turn us into a colony. Unless and until both those facts change, it is incumbent on us all to prepare for no deal. Indeed, on the very same day in March that Ministers stood at the Dispatch Box warning of the lack of preparedness for no deal, the European Parliament in Strasbourg voted through no-deal measures on, among other things, social security, road freight connectivity, basic air connectivity, the fishing fund, fishing vessels authorisation, railway safety and connectivity, and road haulage. There is no reason why there should be any interruption to or shortage of goods coming into the UK in a no-deal scenario.

[Sir Robert Syms]

Is it not a little ironic that the European Union’s no-deal preparations are much clearer than ours?

[Mr Clarke]

There is a bitter irony in that, as my hon. Friend rightly says. It speaks to the choices that we have made, but choices they were—it needs to be recognised and understood that there is nothing inevitable about the situation in which we have placed ourselves.

It is entirely up to us what barriers to impose on imported goods in any scenario. The Government have already said, quite rightly, that in the event that we leave with no deal, we will prioritise maintaining the flow of goods—even at the risk of losing some customs revenue—until long-term arrangements are in place.

Foreign countries and ports have also demonstrated their keenness to co-operate in a no-deal scenario. For example, Xavier Bertrand, president of the Hauts-de-France region, said in January that

“the ports of Calais, Boulogne and Dunkirk, as well as the Eurotunnel and airports,”

will

“have 100 per cent fluidity on day one in the event of a no-deal Brexit.”

We need to intensify our preparations, as my hon. Friend the Member for Hornchurch and Upminster said, and look at dynamic policy responses. People on Teesside are intrigued and excited by the possibility of a free port, which would really boost our connectivity in the event of our actually getting free of the European Union. These are the things that we need to be doing. These are the choices that we need to be taking. That is the leadership that we need to be showing.