Leaving the EU: No Deal

Tom Brake Excerpts

Wednesday 19th December 2018 Commons Chamber

[Keir Starmer]

I will give way in a moment.

Treasury estimates of a no-deal outcome would mean a 9.3% decline in GDP over 15 years. That would be an act of economic self-harm that no responsible Government should take. It would see every region of the UK worse off and would mean that there would be no common security arrangements in place and, of course, a hard border in Northern Ireland. In any event, the truth is that the Government simply have not prepared for it and it is now too late.

Let me give two very specific but obvious examples. Over the summer, the previous Brexit Secretary published 106 technical notices—the Government’s view of what needed to be done in order to prepare for no deal. What comes out of those 106 documents is that, taken together, they commit the Government to the creation or expansion of 15 quangos, further legislation in 51 areas, the negotiation of 40 new international agreements with the EU or others, and the introduction of 55 new systems and processes. That is the Government’s own analysis of what they need to do to prepare for no deal. Let us just stand back and consider that. The meaningful vote is scheduled for the week of 14 January. It is then just over nine weeks to 29 March. It is simply not credible to pretend that even the bare minimum in the Government’s own technical notices can be delivered in that nine weeks.

The second example is just so powerful. Two weeks ago today, the Chancellor answered a question from the hon. Member for Dover (Charlie Elphicke) about preparations at Dover, which is a pretty busy port—the busiest. Some of us have been down there a number of times to talk to the staff and management about what needs to be done, and they are very worried. This is what the Chancellor said:

“if we were to end up having a WTO-type trading arrangement with the European Union”,

that

“would involve some very significant infrastructure works that could not be done in a matter of months; they would take years to complete.”

However much money we throw at it now, how can we get over that problem—that the infrastructure at Dover will take years, not months? The Chancellor did not say that it would take months if there was more money; he said years, not months. The idea that we could somehow manage a no deal nine weeks after the meaningful vote only has to be put against that example to be seen to be ridiculous. This was confirmed by the National Audit Office, which said bluntly in October:

“The government does not have enough time to put in place all of the infrastructure, systems and people required for fully effective border operations on day one”.

[Tom Brake (Carshalton and Wallington) (LD)]

Is the right hon. and learned Gentleman aware that the non-disclosure agreements that were stopping officials sharing with business the Government’s plans for no deal were lifted—I think it was only last week—to enable businesses to be aware of what the Government were planning for in relation to no deal?

[Keir Starmer]

I am grateful for that point. I think that businesses have begun to make their voice heard in the last day or two, expressing their concerns about a no- deal exit.

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[Chris Heaton-Harris]

I will just carry on for a couple more minutes and then I will happily give way to all those standing.

At the heart of the Government’s approach to preparing for a no-deal scenario is a commitment to prioritise stability for citizens, consumers and business, to ensure smooth operations of business infrastructure and public services, and to minimise any disruption to the economy. As we said on 6 December, we have made a unilateral commitment to how citizens’ rights would work in a no-deal scenario. All European Union citizens who are resident in the UK by 29 March 2019 will be eligible to apply for settled status. They will be able to live, work and study as they do today. The basis for qualifying for status would be the same as proposed in a deal scenario. EU citizens would have until 31 December 2020 to obtain a status under the scheme. Once granted a status, EU citizens would be able to leave the UK for up to five consecutive years without losing their right to return.

We are pleased that the EU has today encouraged member states also to make a generous offer on citizens’ rights—this is a step in the right direction—but we hope that member states will now go forward and guarantee this and that the EU will now open up engagement with us on other important issues. Let me be clear: a no-deal outcome and move to WTO terms, which some hon. Members have suggested would be preferable to a deal, would lead to disruption and potential harm to critical industries in the short term. We cannot solve the issues that may arise in a no-deal scenario, but we can, as a Government, mitigate them by prioritising continuity where possible. Indeed, continuity is a thread that runs through our no-deal plans.

[Tom Brake]

The Minister has just outlined all the risks associated with no deal. He needs now to discount and rule out no deal. No one on the Opposition Benches believes the Government will push that forward, and the Government will not succeed in convincing any Opposition Member that, because their no-deal option is so bad, the Prime Minister’s option is attractive. It is not, and we all know that.

[Chris Heaton-Harris]

As the right hon. Gentleman might have heard me say before, the best way to mitigate no deal is to vote for the deal on the table.

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[Peter Grant]

There is no doubt at all that the EU referendum, as well as having the biggest participation of UK citizens in any democratic test, was also the most corrupt and most dishonest there has ever been and, I sincerely hope, we will ever see. Revelations are still coming out, even today, about the illegalities, some of which I suspect will never be brought to account. The penalties imposed on those who corrupt the democratic process are puny compared with what happens to a person who is found to have attempted to corrupt the full course of justice, so there is clearly a question that has to be addressed in future legislation.

We know that the calamitous effects of no deal are not what the majority of leave voters voted for.

[Tom Brake]

Will the hon. Gentleman give way?

[Peter Grant]

Not just now.

It is not what they were promised either in the Government’s information or by the leave campaign. It is not what they voted for, and I believe it is the absolute duty of this Parliament and of this Government to make sure it is not what they get. It would be an unpardonable dereliction of duty for the Government, or anyone else, deliberately to use the procedures of this House in such a way as to maximise the danger of the worst possible outcome, the least-favoured outcome, simply because it is the only conceivable way to deliver an outcome that the Prime Minister has decided she wants but which practically nobody else in this Parliament wants.

In the past few days, as was mentioned earlier, a number of Conservative MPs have said publicly that they are likely to resign the party Whip if it looks as though the Prime Minister is herding us towards a no-deal Brexit. I would not want to see anyone put in that position.

I have respect for a number of Conservative MPs—for most Conservative MPs, in fact—even though I disagree with them, and I do not think any of them will hand back their party card easily or with a light heart, but think about it. It would not need many more Tory MPs to do that before suddenly, even with the Democratic Unionist party, the Government no longer have a working majority. There is already a motion of no confidence in the Government on the Order Paper, and it would take only one signature on that motion, and a few more people in the Conservative party to decide to put the countries of this Union before narrow party advantage, and suddenly the entire Government, not just the Prime Minister, would find that their jaikets were on the shoogliest of shoogly nails. That might be what concentrates minds, which would be welcome, but what does it say about the state of British politics when hundreds of thousands of other people’s jobs can be sacrificed by the Cabinet for an ideologically driven hard Brexit but a threat to their own jobs suddenly makes them sit up and take notice?

Ultimately, whatever voting procedure the Government decide to use whenever, if ever, we get to that vote, Parliament will be faced with a choice between two final options, and no deal cannot be one of them. Think about what happens in, to take a random example, a Conservative party leadership election. I understand that quite a few Conservative Members had reason to check the rules recently. If there are more than two candidates, they go through a series of eliminations, with the least supported candidate dropping off at the end of each round and the election finishing with a run-off between the two most supported candidates.

If that process is good enough to pick a temporary, sometimes extremely temporary, leader of the Conservative party, why cannot we do it for the most important peacetime decision these islands have ever taken? If we did that, no deal would be off the table before we started, which would ease a lot of the concerns that the Government are now quite deliberately fuelling.

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[Jeremy Lefroy (Stafford) (Con)]

It is a great honour to follow the right hon. Member for Derby South (Margaret Beckett).

We are living in the most serious of times, and I think that that is very clear to all of us. What we are discussing today is of such great import that there should be a reaching out across the Front Benches, as I have said in this place more than once. It is incumbent on the Government to do that and it is also incumbent on the Opposition to do that.

I will largely restrict my remarks to why I believe that no deal should not and must not happen—indeed, I was one of those who signed the letter co-signed by my right hon. Friend the Member for Meriden (Dame Caroline Spelman) and the hon. Member for Birmingham, Erdington (Jack Dromey). A no deal would cause such grave disruption to the businesses in my constituency in the west midlands and further afield.

Let us just look at what no deal means. No deal means going on World Trade Organisation terms. These have been lauded in some quarters. I disagree. I have been involved in international trade for most of my working life. Yes, the WTO provides the lowest common denominator for world trade. It provides for nothing more than that. Those who think that a country such as the United Kingdom will thrive on World Trade Organisation terms, which no other major country thinks are anything like sufficient, are deluded. Indeed, no other country of our size has World Trade Organisation membership without several other additional agreements, whether it is with China, the United States or wherever. They all have agreements with their neighbouring countries for a start.

Let us look at what World Trade Organisation means on a day-to-day basis: it means tariffs. We do not have tariffs with the European Union at the moment, but it will mean tariffs. Much more importantly, it will mean the non-tariff barriers that have already been mentioned, whether that is phytosanitary inspections, veterinary inspections and other types of inspections of borders. I, along with colleagues from the Exiting the European Union Committee, have seen what happens at Dover. It is a smooth flow of trucks through the port—one every few seconds. A slight delay, which we have seen for other reasons, causes massive back-ups. This is simply not possible, and that will happen at other ports as well.

World Trade Organisation terms would also mean that we would have to deal with the separation of the quotas that we have as part of the European Union. This will not be easy. For instance, New Zealand has questions about how its quota of lamb to the European Union will be divided between the UK and the EU27. We will not have the benefit of the 40 free trade agreements that cover about 70 different countries, unless they are rolled over. It is going to be difficult enough to roll all those over if we sign the withdrawal agreement; if we do not, it will be next to impossible and I do not believe that we have the capacity or time to do that. And that is just for goods.

For services, World Trade Organisation terms would mean a very basic agreement. Whatever has been said about the failure of the European Union to complete the single market in services, it is nevertheless a much better market for services than WTO rules.

[Tom Brake]

Does the hon. Gentleman, like me, struggle to some extent with those who advocate falling back on World Trade Organisation rules, because they then talk about very comprehensive free trade agreements that in many ways seek to replicate the European Union?

[Jeremy Lefroy]

The right hon. Gentleman is precisely right. We would be going back several steps only to try to come forward a few steps.

Let me turn to the new trade agreements. Members have already mentioned how difficult it will be to negotiate the new agreement with the European Union. I agree, but I think it will be possible and it will be an excellent agreement. That is why I am going to support the Prime Minister when it comes to the vote in January. However, let us just think about how much more difficult it will be to negotiate that new agreement if we go without a deal. In effect, relations will have broken completely between the United Kingdom and the European Union. There will be so many other things to have to deal with that the prospect of negotiating a new trade agreement will be at the bottom of the agenda for the European Union and, to be frank, for the UK because we will be dealing with so many other things. The idea that if we come out with no deal, there will somehow be a possibility of negotiating a quick free trade agreement with the European Union to replace the great agreement that we have at the moment is ludicrous. It will not happen. It will be easier for us if we leave with the deal that is on the table.

I will very gently refer to the remarks made by my hon. Friend the Member for Broxbourne (Mr Walker), because I do actually agree with him about the approach of the Labour party. I fully respect the position that the official Opposition are taking, but hon. Members should look at the Labour party’s 2017 manifesto and at the withdrawal agreement. With the exception of the Labour party’s manifesto saying that a customs union should be left on the table—if I am quoting it correctly—there is very little difference between this agreement and the manifesto that the Labour party stood on in 2017. That is why I urge both Front Benches to talk. This matter is too important for us to have a line right down the middle. It is incumbent on both sides to talk.