Department for Exiting the European Union

Sammy Wilson Excerpts

Monday 26th February 2018 Commons Chamber

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Thank you for calling me to speak, Madam Deputy Speaker.

Brexit is an area where it is quite hard to estimate. Brexit has been mis-served by the media. It has been played out in a soap opera of personalities, parliamentary arithmetic and party political advantage, when in fact it should be played out under the lens of trade, the economy and what it will mean. When the Prime Minister says that our best days are in front of us, that is a news story, but if vets say that there will be 325% more checks at borders because of this, that is not a news story. This is a costly step that is going to be taken, over and above anything else we might need at ports in years to come. Clearly, to even a very untrained eye, Brexit is going to be costly, and anybody who does not think that is in severe denial.

Maybe the best comment that I have heard about this was not made by Peston, Marr, Andrew Neil or any of our so-called professional media. It came from “The Mash Report”, a current affairs comedy programme, and said that Brexiteers have to tell us now what Brexit is, not what it is not, because they are very strong at telling us what Brexit is not.

At least we know one thing that Brexit will be. We have to be grateful for the efforts of the Secretary of State for Exiting the European Union and his civil servants for this: we know that Brexit will not be a “Mad Max” dystopia. It may be a dystopia, but it certainly will not be a “Mad Max” dystopia.

We know, because it was leaked from the UK Government and has been verified and cross-checked by the Scottish Government and the Irish Government, that staying in the customs union and single market is a 2% hit to the UK economy. That is a strong estimate of the hit. A free trade agreement is a 5% hit, and WTO rules is an 8% hit.

[Sammy Wilson (East Antrim) (DUP)]

Maybe the hon. Gentleman has not had the opportunity to see the report, but it is quite clear that none of these figures should be treated as forecasts or quoted in isolation. The report is full of caveats showing that many things influence those figures, and therefore they are really rough guides to compare one situation with another but should never be used as forecasts.

[Angus Brendan MacNeil]

The hon. Gentleman makes a case for all reports, but the report is the best estimate we have to go with. The report was kept secret for a long time, but it seems that it chimed with more than one person when it had to be leaked in the end.

It has emerged that the UK Government have decided on the middle road. They are looking for a free trade agreement, which is the option of a 5% to 6% hit on GDP—those are the Government’s own estimates—although some of the Tory party would go for the 8% hit of WTO rules. They have made political choices with severe economic consequences that they probably will not personally have to face. In a funny, humorous and ironic twist, they expect the European Union not to respond in kind. They expect the European Union to react with complete economic rationale, even though their politics are ones of irrational economic actions.

As we know, the EU and the UK have already taken actions based on principles, for a higher purpose, and that was in Crimea because of Russia’s annexation of it. The EU’s principle of the four freedoms means that it will take a smaller hit than the UK and a smaller hit than they all took with Crimea, or about the same. The point is that, in the bigger picture, the European Union is going to lose effectively about a toenail here, while the UK debates how many bullets are to go through its feet. That is the difference in the damage that will be done.

From the principal parties, we have had slogans. The slogan from the ruling Conservative party has been the illuminating “Brexit means Brexit”, as well as “It’s going to be a Brexit for Britain” and “It’s going to be the best trade deal possible”. We can look at this as an analogy. The Government have crashed their Rolls-Royce and are going down the second-hand car shop looking for the best second-hand car possible. Will it be a second-hand car that is 2% less good, 5% less good or 8% less good than the one they currently have?

On the other hand, we have the principal Opposition party, Labour, talking about a Brexit for jobs and a Brexit for the people. Labour—or at least its leader—has thrown another variable into the works: it want a customs union. I do not see an estimate for that either. What does that mean? If hon. Members are familiar with national newspapers that run fantasy football activities for statheads and football fans, they will know that readers can pick and choose players from a variety of teams and compose their own team based on that fantasy—perhaps called Team Corbyn; I do not know—but it is notable that this need not bear any relation to the reality of football other than the statistics, and even the players do not need to know that they are in somebody’s fantasy football team. Similarly, what is now emerging is a fantasy customs union—it bears no relation to the views of the 27 other partner countries—and they can pick and choose elements from the newspapers to their heart’s content.

The estimates in the leaked statistics show that this option—it is not the customs union or the single market—will lead to a hit of between 2% and 5% to 6% to the UK economy. The current Labour leadership should be very clear about that.

--- Later in debate ---

[Sammy Wilson (East Antrim) (DUP)]

Unlike most contributors to this debate, I do not believe that we are spending the money in these estimates to take the United Kingdom into some dismal future. Rather, it is essential that this money is spent in order to ensure that this country has a bright future. I do not want to debate the reports about our future economic prospects, other than to say that 15-year economic reports do not mean a great deal. We can dispense fairly quickly with 15-year economic reports that are full of caveats that highly uncertain figures should not be used as forecasts or given any weight as single-point estimates. None of the reports made to date have come to fruition. In fact, all the gloomy forecasts have been totally dispelled in the short run.

The money that we are spending in these estimates to exit the EU is money well spent. It will release billions of pounds in the future from our EU contributions. It will open new horizons to do trade deals with the parts of the world economy where 90% of future growth will happen. It will enable us to stop the imposition of the red tape from Europe that stifles innovation and new industries in the United Kingdom. Indeed, it is the established industries that most hanker after the directives, because they influence the regulations from Europe in order to cut out competition, so that should indicate that we are going in the right direction. The money is essential to open up a bright future.

It is important that we are prepared. People have commented on the unpreparedness and the fact that we have a lot of work to do in the negotiations. Yes, the establishment and the elite may well have found the referendum result unexpected, but that was because they were all so cosy in their little arrangement. However, the people voted in a certain way and now the Government must act, which is why we have the Department for Exiting the European Union, and it is important that we prepare for all the different scenarios, including for no deal.

When we look at how European bureaucrats and negotiators are treating the situation, they still do not believe that the views that people expressed in the referendum will actually be implemented. We therefore get the kind of nonsense that we have had from Michel Barnier over the last couple of weeks. He has threatened us with things like, “If you do not behave, you will be punished,” and now that has to be put into legal language that will almost tie us to an option that keeps us in the single market and the customs union. It is important not only that the Government send out a signal, but that they are prepared to walk away on WTO rules if there is no good deal for the United Kingdom. That should be used as the basis to negotiate a future free trade arrangement.

[Mr Fysh]

One of the concerns I have is that we might have a political agreement on a transition or implementation period in the next six or nine months, but if that falls over at the last minute, it will be essential that we have made the preparations now. I am concerned that we are not getting on with appropriate speed with some of the infrastructure that could alleviate the potential trade issues at the border.

[Sammy Wilson]

Not only are these preparations needed in case there is no deal; many of these preparations will be essential whether or not there is a deal. Of course we have to spend money on registering EU citizens who already live in the United Kingdom, as the Chairman of the Select Committee, the right hon. Member for Leeds Central (Hilary Benn), mentioned. The Home Office needs to spend money on the borders as it prepares for our exit. Whether we have a deal or no deal—or whatever scenario there is—IT infrastructure or surveillance infrastructure, or whatever, will be needed to monitor the trade that goes back and forth. It is essential that we spend that money.

Reference has been made to an underspend. The hon. Member for Edinburgh East (Tommy Sheppard) said that the underspend is a metaphor for Brexit, and maybe it is. Yes, we will save an awful lot of money when we leave the European Union. We will save our contributions to the EU budget. If the underspend is a metaphor for Brexit, it is simply due to efficiency. That is well and good.

The Department is entering uncharted waters. Given the work streams that need to be done, do the underspend last year and the reduction this year reflect the true resources that the Department needs? Given the nature of the people, as was explained to us at the start of the debate, have there been difficulties in getting the needed expertise? If so, what plans does the Department have to ensure that we have sufficient resources to do the important work we have talked about? The Minister has made an assessment of future needs; is he convinced that other Departments have sufficient money? Finally, £365,000 has been spent on legal fees in Northern Ireland. Have those costs arisen as a result of action taken by the known fraudster in Northern Ireland who is now a serial litigant?