Government’s EU Exit Analysis

Robin Walker Excerpts

Wednesday 31st January 2018 Commons Chamber

[The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)]

The Government will not be opposing this motion. As the motion is therefore expected to pass, I will focus my remarks on three important points: first, how we plan to comply with the terms of the motion; secondly, an explanation of exactly what the analysis to which the motion refers is and the significant caveats to the status of the analysis, so that all Members fully understand the preliminary nature of the analysis and the challenges around this type of modelling more broadly; and, thirdly, the fact that there are parts of the analysis that remain negotiation-sensitive and should not be put into the public domain. The right hon. and learned Member for Holborn and St Pancras (Keir Starmer), who speaks for the Opposition, has recognised the latter point in his motion, which refers to confidentiality. A key part of this is about the importance for Government of being able to conduct internal thinking when it comes to preparing policy.

Let me start with the terms of the motion. We will provide the analysis to the Exiting the European Union Committee and to all Members on a strictly confidential basis. This means that we will provide a hard copy of the analysis to the Chair of the Committee. A confidential reading room will be available to all Members and peers to see a copy of the analysis, once those arrangements can be made. This will be under the same terms as previous arrangements in similar circumstances, under this and previous Governments.

[Hywel Williams]

We have heard many requests and demands for this information to be published here today and in the press. Has the Minister had any similar requests from the devolved Government in Cardiff for Welsh-specific information from these assessments?

[Mr Walker]

I personally have not yet seen such requests. We do intend to make this information available to the devolved Administrations, as we did with the previous reports that we made available to this House. It is then a matter for the devolved Administrations to ensure that such documents are handled with appropriate confidentiality; we have no objection in principle to their being shared with Members of the devolved legislatures on the same basis of confidentiality.

[Sir Desmond Swayne (New Forest West) (Con)]

As the Minister is a former economist, can he persuade me that it will be worth my while to visit this reading room, given that every economic forecast that I have ever seen has been wildly inaccurate?

[Mr Walker]

My right hon. Friend raises an interesting point. I would like to turn to the analysis itself, so he pre-empts some of the caveats that are important to mention.

[Several hon. Members rose—]

[Mr Walker]

I will give way in one moment.

The document is preliminary, unfinished and has only very recently been presented to Ministers in any form at all. It contains a large number of caveats, and sets out on every single page that this is

“draft analytical thinking with preliminary results”.

The analysis has not been led by my Department or, for that matter, by any single Department. This next stage of analysis has been a cross-Whitehall effort to support our negotiating priorities. It is not yet anywhere near being approved by Ministers, and it has only been brought together in a draft paper for them to review this month. Even the ministerial team in my Department have only just been consulted on this particular paper in recent days, and have made it clear that it requires significant further work. It does not yet reflect this Government’s policy approaches and does not represent an accurate reflection of the expected outcome of the negotiations.

It would not be right to describe the figures as Government numbers, as they have not had formal Government approval or sign-off as most analysis or policy would. The primary purpose of analysis at this stage was a preliminary attempt to improve on the much criticised analysis published around the time of the EU referendum. It is there to test ideas and to design a viable framework for the analysis of our exit from the European Union.

[Lady Hermon (North Down) (Ind)]

Since the Conservative party governs with the support of the 10 Democratic Unionist party Members—of whom I am not one—I am very curious to know whether any Member of the DUP will have advance notice of this economic analysis ahead of the Select Committee or, indeed, in addition to the Select Committee.

[Mr Walker]

The simple answer is no. We would make this information available to the whole House on the same basis, while responding to the points on confidentiality that are covered in the Opposition motion.

[Thangam Debbonaire (Bristol West) (Lab)]

Will the Minister give way?

[Mr Walker]

If the hon. Lady will give me one moment, I will give way. I just want to complete my point about the caveats to the analysis.

At this very early stage, the analysis only considers the off-the-shelf arrangements that currently exist, and we have been clear these are not what we are seeking in the negotiations. It does not consider our desired outcome, which is the most ambitious relationship possible with the European Union, as set out by the Prime Minister in her Florence speech—such an agreement is in the interests of both the UK and the EU—and, to be crystal clear, it does not consider a comprehensive free trade agreement scenario as some reports have suggested, but simply an average FTA. We believe that we can do much better, given our unique starting point and shared history. Therefore, the scenarios in this analysis continue to suffer from the flaws that we have seen in previous analyses of this type.

[Joanna Cherry (Edinburgh South West) (SNP)]

Will the Minister give way?

[Mr Walker]

I will give way to the hon. and learned Lady after I have given way to the hon. Member for Bristol West (Thangam Debbonaire).

Yesterday, a number of Members of this House spoke eloquently about the challenges of modelling uncertain outcomes over an extended period. The analysis presented by many organisations prior to the referendum is a clear example of those challenges. To date, we have seen outcomes that are quite different from some of those that were set out.

[John Redwood (Wokingham) (Con)]

I find this conspiracy theory so absurd. The Treasury published very clear and totally wrong short-term forecasts for the referendum debate, and it published very clear and, I think, equally wrong long-term forecasts before the referendum debate, so that the whole nation could engage with these wrong forecasts. The latest lot of leaks looks very much like the wrong long-term forecasts that the Treasury previously published. I look forward to the Minister getting some more common sense into the thing, because there is absolutely no reason at all to suppose that leaving the EU will cause any hit to the long-term growth rate of the UK.

--- Later in debate ---

[Thangam Debbonaire]

I am so grateful to the Minister for being very patient and giving way to me, but I must press him on this point. It is curious to think that the Government are at this moment planning their negotiating strategy without having considered adequate impact assessments. I went to the so-called reading room in December. It was laughable that I had to sign a piece of paper, a copy of which I was not allowed to remove, in order to promise that I would not reveal what was in the documents. If there is going to be another reading room, I will do exactly what I did last time and reveal what is not in them, which is quite a lot. When will the Government work out that they need these impact assessments to have a decent negotiating strategy?

[Mr Walker]

As we have said many times, the Government are informed by a wide range of analyses, but I am responding to the motion from the hon. Lady’s Front Benchers that respects the importance of confidentiality in this case.

[Several hon. Members rose—]

[Mr Walker]

I will give way to my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) in a little while. I just want to finish my point about the nature of the analysis and the caveats that are contained in the document, as Members will see when they view it. Economies of all sorts face an uncertain future in the face of new technologies and the next phase of globalisation, which presents both challenges and opportunities.

[Alison McGovern]

Will the Minister give way?

[Mr Walker]

Not right now.

Of course, there is a specific role for this sort of modelling, but it must be deployed carefully and appropriately alongside a full range of policy work in our EU exit plans. On its own, no model or analysis will be sufficient to provide us with the full picture of the various benefits and costs of different versions of Britain’s future relationship with the EU. Such models cannot predict the future. It is the Government’s job to use these sorts of models appropriately and to develop them as best they can. Despite this—and, in many cases, because of it—the analysis remains extremely sensitive.

[Joanna Cherry]

I am grateful to the Minister for giving way. Surely the million dollar question is this: if the Government have not yet assessed the model agreement that they want, when are they going to tell the British people what it is that they want, cost it and publish the results?

[Mr Walker]

The Prime Minister has set out a very clear strategy for developing an FTA between the UK and the EU that goes much further than previous models. As I am explaining, the analysis under discussion looks at the existing models and compares some of them, which is not the same as what the hon. and learned Lady sets out.

[Mr Kenneth Clarke]

I thank my hon. Friend for announcing that the common-sense decision has been made overnight to stop trying to withhold these documents. I accept what he says about the caveats attached to all forecasts, although the idea that they are all rubbish is a new and sensational claim made by some of his colleagues.

Just to be clear about the status, is it not the case that the perfectly responsible Government Departments that produced these papers have reached the stage of briefing and informing Cabinet Ministers as they go to the next stage of discussions to try to create a policy for where we are going in the negotiations with the European Union? That status is the same as that for forecasts put to a Chancellor before making a Budget. Does my hon. Friend therefore accept that, although his words about caveats in economic forecasts are wise, we should not be tempted to drift into the rubbishing of the whole thing, which his colleague, the Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Wycombe (Mr Baker), rather unwisely embarked on yesterday?

[Mr Walker]

My right hon. and learned Friend knows a lot from his own experience as Chancellor about the confidential information presented to Ministers ahead of Budgets, but that process has to go through a number of stages. As I have said, this information, which is preliminary and not yet finished, was presented to Ministers for the first time in recent days. It is, therefore, not in a form that is approved to go forward in the way he describes.

Despite, and in many cases because of, the points I have made, the analysis remains sensitive. Let me stress that the only reason we do not oppose the Opposition motion is that it makes clear that the analysis is to be shared with the Select Committee and Members on a confidential basis. We are about to embark on exploratory talks with the European Union regarding our future relationship and will be in formal negotiations over the coming months. Having an incomplete analysis such as this in the public domain would not serve the national interest in the upcoming negotiations. I cannot imagine that any reasonable Member of this House genuinely believes that it is in the national interest for the Government to have to publish at the start of the negotiation unfinished, developing analysis of scenarios that we are clear we do not want.

There is, however, another equally important reason why this analysis should not be put in the public domain, and it is simple: the functioning of Government—by which I mean any Government—about which my right hon. and learned Friend knows a great deal. I ask hon. Members who have been Ministers, who aspire to be Ministers or who have ever held a position of responsibility how they would feel about having to publish their team’s work in progress partway through a project. I am sure they would agree that publishing unfinished initial findings can be extremely misleading, and I am confident that they would join me in ensuring that that does not happen on a routine basis.

[Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)]

There is another reason why this set of analyses is peculiar and quite different. I listened carefully to my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), but he is wrong on this count. This is not like advice to a Chancellor. This analysis, as I understand it, comes out of the back of the reality that all the previous forecasts, heavily reliant as they were on a gravity model of economics, have proved so wildly wrong that a variety of ways are being looked at to try to rectify that. There is, therefore, an experimental nature even to the economics, not just to the straight analysis, and that is why it does not have a massive bearing on the Government’s negotiating strategy at this point—because they themselves are questioning whether it is feasible to make a serious analysis or forecast that may be even slightly correct.

[Mr Walker]

My right hon. Friend makes an interesting point and I will leave it to Members to consider it when they see the actual information under discussion.

Throughout this process I have been impressed—and the Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Wycombe (Mr Baker) has been clear repeatedly that he has been very impressed—by officials across Departments and the way in which they are rising to the challenge of delivery of our exit from the European Union. To do that, however, we need to have the space to undertake internal work and to challenge preconceptions.

[Vicky Ford]

I thank the Minister for giving way and for saying that the information will be made available to all Members in a confidential room. I remember making that suggestion when speaking about the sector-by-sector reports, which I have been to see and some of which are extremely useful. How many Members of this House have actually been to see them? I believe that the figure is probably fewer than one in 10, and I sometimes wonder whether Opposition Members are having a huge fight but not bothering to follow up on the real details that matter to real jobs in this country.

[Mr Walker]

My hon. Friend makes her point very well. I do not have the answer to her question, but we can certainly look into it and perhaps write to her in response.

[Keir Starmer]

rose—

[Mr Walker]

I want to complete my remarks and give other hon. Members a chance to speak, but of course I give way to the right hon. and learned Gentleman.

[Keir Starmer]

I assure the House that I and many of my colleagues have been to see the documents and discussed what I thought was not in them.

[Mr Walker]

Returning to the hard work of our officials, if every time any element of their work leaked we were forced to present unfinished work for the scrutiny of Parliament, the public and the press, there would be a very real chance that the quality of that work would suffer. It is simply not conducive to an open, honest and iterative process of policy making in government. That is as true for all the Government’s work as it is for EU exit. I do not believe that a single Member of this House believes that that would be in the national interest, so I urge the Select Committee, whose Chairman is here, to provide some assurances, in good faith, that, for those reasons and reflecting on the words of the motion, which recognise the confidential nature of the document, this preliminary analysis will not be made public.

[Anna Soubry]

I am grateful to my hon. Friend for giving way. I have to say that, of all the Ministers, I think he does an outstanding job in exceptionally difficult circumstances. I thank him for the work he does. However, with bucket loads of respect, the Government cannot have it both ways. Either these are rather meaningless analysis documents that have not been done on any proper modelling and cannot be relied on and all the rest of it—in which case, publish the wretched things, because they are not of any value to right hon. and hon. Members—or they are indeed of great value and must be kept secret and highly confidential. Which one is it, because at the moment we do not know?

[Mr Walker]

I am grateful to my right hon. Friend, as always, for her kind praise, but I think I have already answered the challenge she sets as to the reasons why some of the information in the report should be kept confidential. That is something on which the two Front-Bench teams clearly agree, because it is in the Opposition motion. I also just want to emphasise that the misrepresentation in some of the press reporting of this leak makes this an exceptional request that the Government agree to on an exceptional basis. They do not accept a precedent for future action.

Finally, it is also for those reasons that I believe that forcing the release of partial and preliminary analysis risks undermining the functioning of Government at a vital moment.

[Alison McGovern]

Will the Minister give way?

[Geraint Davies (Swansea West) (Lab/Co-op)]

Will the Minister give way?

[Mr Walker]

Not now. The public have voted through a referendum to leave the European Union. We must deliver on that result, in the national interest. I agree with the right hon. and learned Member for Holborn and St Pancras that we should work together to ensure that, and that must include scrutiny.

Only yesterday the Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Wycombe committed to ensuring that Parliament has the appropriate analysis on the terms of our exit from the European Union ahead of the vote on the final deal we agree with the European Union. That is entirely right and we will deliver on it. However, delivering on the referendum result, in the national interest, does mean being able to have a stable and secure policy-making process inside Government. It means Government taking seriously their obligation to preserve the security of our analysis and the work underpinning our negotiations, and receiving that analysis means Parliament sharing in that responsibility and obligation. As all Members of this House come together to deliver for the people the best possible outcome of the referendum result, it is with that sentiment that we will comply with the motion.