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Department for Exiting the European Union

Ministry of Defence – in the House of Commons at 8:28 pm on 26th February 2018.

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Motion made, and Question proposed,

That, for the year ending with 31 March 2018, for expenditure by the Department for Exiting the European Union:

(1) the resources authorised for use for current purposes be reduced by £22,093,000 as set out in HC 808,

(2) further resources, not exceeding £650,000, be authorised for use for capital purposes as so set out, and

(3) the sum authorised for issue out of the Consolidated Fund be reduced by £24,303,000.—(Mr Baker.)

Photo of Stephen Gethins Stephen Gethins Shadow SNP Spokesperson (International Affairs and Europe) 8:31 pm, 26th February 2018

I extend my thanks to colleagues across the House who have backed this debate this evening. This is an important debate. The Department for Exiting the European Union is obviously a relatively new Department, but it is not an insignificant spending Department, as we have seen recently.

We have some sympathy for the Government of the day—and the House will not hear me say that very often—given that they are trying to find a solution for leaving the European Union on the back of a vote leave campaign that told us precious little about what leaving the European Union would actually mean. There was no White Paper and no manifesto. Two years on from the EU referendum, however, the excuses are wearing a little thin. The Government increasingly seem to have not much of a clue and any analysis they conduct—at the taxpayers’ expense—is hidden from view, in spite of what this place says and others might argue.

What is clear that the Government are taking each and every part of the United Kingdom down the road to ruin. Tomorrow we will vote on the estimates, a vote that will take place before we even know what the UK Government’s plan is for leaving the EU. The Government tell us that this is a big negotiating strategy—not to tell anybody anything. But even Baldrick could tell us that simply not having a plan, cunning or otherwise, is not much of a strategy. I fear that, just as the EU referendum was held to try and keep the Conservative party together—and then we had a general election for the same reason—so too is every announcement on the subject. It is the Government’s raison d’être—if I may be forgiven for using French in this debate. This is clearly a failing Government when the risks are so high for us all.

The situation is having an impact on public services. If GDP decreases, obviously less cash will be available for public services, unless taxes are increased or further cuts are made. We are all mindful of that. We have just had an excellent debate about the 2% GDP commitment for defence spending. But if GDP is not what we think it will be in 2030, that will mean less money for defence, in the same way as the red bus pledge seems to get further and further away from the £350 million a week that was promised for the NHS. The Government’s own leaked analysis shows that GDP will fall as will investment in public services.

The Chancellor has set aside £3 billion for Brexit preparations—greater than his additional cash allocation for the NHS in England. That is spending even before we take into account the devastating impact of the loss of EU nationals on the NHS and other public services—and, frankly, on our society in general.

The overwhelming departmental spend shows an increase. Jon Thompson, the chief executive of Her Majesty’s Revenue and Customs, said in November that he would need an extra £450 million a year for personnel and infrastructure—spending money to throw up barriers, rather than to take them down. That money could otherwise be put towards frontline public services. As well as this expenditure that we do not need at the moment, we saw in July 2017 that the Department for Exiting the European Union is spending money on legal costs, including litigation, to stop this place having a say. Again, that is money taken away from frontline public services, and another way in which Brexit is costing each and every one of us. The expenditure for DExEU and the Government’s plans will be absolutely brutal. I have a message for the Government. In spite of what they might believe, there is no magic money tree. It does not exist and it has never existed. Every penny spent on leaving the EU—including the eye-watering bill of reportedly £40 billion just to leave—is cash that we will not have to spend on other services.

If I may say so for a moment, the issue goes beyond finances. This Government are so hell-bent on keeping themselves together and somehow trying to find a way a through the morass that they have created for themselves that other policy areas are being left behind. In normal times, we should be looking at the future of our NHS, and working with our European partners to tackle issues such as climate change and the ongoing conflicts that have been debated in this House that affect many of Europe’s neighbours.

As I saw just this morning, higher education is one area that will deeply affected by the UK leaving the European Union. Yes, it will be affected in terms of funding, but it will also be affected when it comes to personnel. This morning I spoke to academics who have gone on strike over their pensions at the University of St Andrews. Believe me, it is a cold time of the year to be striking; it is pretty chilly out there. Those academics want to see a Government who are committed to seeing an end to this crisis. This is just one of many difficult issues, yet at a time when that area should be a priority we are having to debate these Government plans that suck cash out of our frontline services. Instead of tackling the issues that matter such as higher education funding and the strikes in that sector, we are trying to clear up a mess of the Government’s own making.

The UK Government should take the advice of almost all economic experts, businesses, and the Scottish and Welsh Governments who incidentally—unlike DExEU—have actually published their analysis. Staying in the single market and customs union would protect the economy and give the Government consistency in trade policy. While we are talking about how much money we are spending on these areas, it would remiss of me not to mention the official Opposition. It was welcome to see some movement from the Labour party after almost 20 years of glacial movement, but there is still a long way to go. When the Labour party talks about a “jobs first” Brexit, it is perhaps mindful of the Government’s analysis showing that staying in the single market is a better option, but still the least worst option.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

Does the hon. Gentleman not feel an annoyance that the Labour party has ignored its Labour base, especially in the north-east, and that it has tried to move forward with an acceptance of the customs union that people do not want? Does he not accept that we will get £8 billion back from the EU that we will then be able to use for everything else? Where is his argument on that?

Photo of Stephen Gethins Stephen Gethins Shadow SNP Spokesperson (International Affairs and Europe)

I thank the hon. Gentleman for his point, as usual, but every economic analysis that we have seen, including the one from the Scottish Government, shows the devastation that would be wrought on GDP. That means billions of pounds disappearing out of the public purse. That means billions less in Scotland and the rest of the UK. It means billions less in Northern Ireland, which is why I am not surprised that the people of Northern Ireland voted so overwhelmingly to remain part of the European Union.

Photo of Christopher Chope Christopher Chope Conservative, Christchurch

Speaking as a St Andrews graduate, may I point out to the hon. Gentleman that when we leave the European Union, the University of St Andrews will no longer have to give free fees to people from the European Union, which currently results in discrimination against people from England?

Photo of Stephen Gethins Stephen Gethins Shadow SNP Spokesperson (International Affairs and Europe)

If only the good people of England would vote for a Government who believed in getting rid of tuition fees. What an argument by the hon. Gentleman! The University of St Andrews is a fine educational establishment, despite his best efforts to prove otherwise. Twenty-five per cent. of its funding comes from funding for research on issues like kids who have learning difficulties or treating dementia. It does this because it pools its resources with other European universities and with some of the finest EU nationals who have made St Andrews their home—and if this Government gave them certainty could continue to call their home. The hon. Gentleman’s argument is one of the weakest I have heard in this place, given the huge amounts of benefits that the University of St Andrews, like the entire education sector in Scotland and the rest of the United Kingdom, derives from our being part of the European Union.

Photo of Christine Jardine Christine Jardine Liberal Democrat Spokesperson (Scotland)

Apart from the financial implications, and regardless of having tuition fees or not, there is a cultural element. We could be facing damage to educational quality throughout the United Kingdom if we lose the students who bring that cultural element from other parts of the EU and provide us with the ability to learn from other cultures. When I went to university, the word “university” meant “universal”. Does the hon. Gentleman agree that we are in danger of losing that?

Photo of Stephen Gethins Stephen Gethins Shadow SNP Spokesperson (International Affairs and Europe)

The hon. Lady makes an excellent point. I benefited personally from our membership of the European Union through being able to study at the University of Antwerp. The educational experience is the richer for having students who come from elsewhere, as well as the opportunity that students have to go elsewhere. I urge Ministers to look at this, because the cost of these programmes is not that much, especially given the benefits that they bring. Building on her point, I think we should all be ashamed of the fact that right now, as things stand, this Parliament will be one of the first that we do not leave with young people having more opportunities than at its start. That is something we should reflect on and that is quite shameful.

Going back to the DExEU Committee, the Public Accounts Committee’s recent report on exiting the EU said:

“DExEU has identified 313 areas of work, or work streams, that departments need to complete as a consequence of the UK leaving the EU…However, we are concerned that DExEU has been too slow to turn its attention to how departments will put those plans into practice and that the plans may not be sufficiently developed to enable implementation to start quickly.”

Despite the cash, the Department is being held back because of the Government’s lack of plans. I hope that the Minister will touch on that. In January, the National Audit Office released a verdict that the International Trade Department is struggling to meet deadlines, recruit enough specialist staff or retrain its existing workforce as we start from scratch after losing all the trade relationships that we have built up as a part of the European Union. That means jobs, investment, and cash for Departments to spend in the future.

None of this has stopped the Chancellor giving the Department an increase of almost £30 million for preparations. And there is more: the number of times that the Chancellor will have to spend out money. The UK Government will have to spend out money as we lose the European Medicines Agency from here in London. The Government have allocated £250 million of spending for Departments to prepare for a Brexit with no deal. As I said, they have spent £1 million fighting the case to stop this place from having a say, after the Brexiteers telling us how much they wanted democracy to return to the House of Commons. Is it right that this Government are blowing money on stopping Parliament from having a say? They are preventing us from analysing and publishing their own statistics, and the extra money they are having to spend will hit public services. This shows how little confidence this Government have in their own plans, and rightly so.

Photo of Angus MacNeil Angus MacNeil Shadow SNP Spokesperson (Environment and Rural Affairs), Chair, International Trade Committee 8:44 pm, 26th February 2018

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 vets saying that there will be 325% more checks at borders because of this 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.

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury), Shadow DUP Spokesperson (Work and Pensions), Shadow DUP Spokesperson (Brexit)

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.

Photo of Angus MacNeil Angus MacNeil Shadow SNP Spokesperson (Environment and Rural Affairs), Chair, International Trade Committee

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.

Photo of Bill Grant Bill Grant Conservative, Ayr, Carrick and Cumnock

I have listened to the very pessimistic overview taken from the part reports. I read them today in the reading room, which was awfully secure, rather bizarrely, I thought. The reports make it clear that they are not finished estimates, but crystal ball gazing. I take it that the hon. Gentleman has no desire to respect the people by way of referendums. He has never really got to grips with the referendum in 2014 and I am hearing tonight that he has not really got to grips with the referendum of 2017. Does his party disrespect the people and referendums?

Photo of Angus MacNeil Angus MacNeil Shadow SNP Spokesperson (Environment and Rural Affairs), Chair, International Trade Committee

The other referendum was actually in 2016, but in both referendums—of 2014 and 2016—the Scottish people voted clearly to remain in the European Union, so, yes, I do respect the two referendums. I want that opinion to be checked again in the further referendum on Scottish independence within the European Union that, as the hon. Gentleman knows, is coming down the tracks in jig time.

A customs union, as currently suggested by the principal Opposition, can have myriad or infinite permutations. Have no estimates at all been made for that? All in all, this is one of the areas where the estimates are huge, the variabilities are massive and it is very unclear where the chips will fall.

The overall message that should be going out is that when boardrooms and when the people of Scotland look at the two parties in this Chamber—the Government and the principal Opposition—they have to start thinking and, particularly in the boardrooms, they have to start speaking. They do not have to enter into political debate, but they have to start to become very strident indeed in what they are saying. I meet too many of those from companies who come to me with their fears and their estimates of what might happen. In reality, they have to start saying what they want, because otherwise it will be too late.

I am reminded of the book, “On the Psychology of Military Incompetence”. In a number of military events that occurred, whether in Crimea—the charge of the Light Brigade was in Crimea of course—with the Boers in South Africa, in Mesopotamia or in Afghanistan, the common theme running through them all was the fact that the rank and file could not believe their commanders could get it so utterly wrong, and it was only when hot lead ripped through bare flesh that people then understood. There are companies that are too afraid to move and that, for one reason or another, will not say a word, but when they are taken down by the 2%, 5% or the 8% damage of Brexit, I tell those companies now that it will be too late to do anything about it then, so speak now.

Recently, my Committee went to the USA and Canada to look at the possibility of trade deals. The farmers lobby asked us why. Ford said a UK-US deal would be incremental, but that a UK-EU one would be existential. Certainly, when I saw the border with other Committee members, it was not as fast as the border at the moment between Ireland and Northern Ireland or as the border between France and Spain. These are some of the realities that are coming our way.

Photo of Angus MacNeil Angus MacNeil Shadow SNP Spokesperson (Environment and Rural Affairs), Chair, International Trade Committee

I am very glad to give way to one of the Select Committees colleagues who were with me. I predicted at the border that some people would see what they wanted to see, so let us see what happens.

Photo of Marcus Fysh Marcus Fysh Conservative, Yeovil

The hon. Gentleman is absolutely right that we saw the border between the US and Canada. The US and Canada have different regulatory and customs systems, yet they have a just-in-time, integrated supply chain that works perfectly well, so it is possible. The forecasts that he referred to earlier take no account of the possibility of such just-in-time supply chains continuing to work in a free trade agreement scenario.

Photo of Angus MacNeil Angus MacNeil Shadow SNP Spokesperson (Environment and Rural Affairs), Chair, International Trade Committee

We were told that the average wait time was 15 minutes and just-in-time takes cognisance of that. If two minutes at Dover becomes four minutes, that will result in a 17-mile tailback. And, of course, no embarkation of ships takes place on the US-Canadian border after they have passed, or just before, the border point.

In summary, this Government exercise is costing about £250 million a year. It will cost the Scottish economy, which concerns me most, between £3.6 billion and £12 billion a year by 2030, and the way in which the two main parties are going at it means that the figure will probably be closer to £12 billion than to £3.6 billion. It really is time that the UK took a short, sharp look at itself. I predict that Brexit will probably collapse on itself. The economic reality will hit the rhetoric head first, and when it does so the rhetoric will just vanish into a pile of dust and be trampled by the economic reality, which is that the people want their jobs and they want the economy running, not the ideological purity of some Members of this House.

Photo of Hilary Benn Hilary Benn Chair, Committee on Exiting the European Union 8:56 pm, 26th February 2018

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 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.

Photo of Hilary Benn Hilary Benn Chair, Committee on Exiting the European Union

I will, to my fellow Select Committee member.

Photo of Peter Grant Peter Grant Shadow SNP Spokesperson (Europe), Shadow SNP Spokesperson (Exiting the European Union)

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?

Photo of Hilary Benn Hilary Benn Chair, Committee on Exiting the European Union

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. 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.

Photo of Marcus Fysh Marcus Fysh Conservative, Yeovil

Does the right hon. Gentleman think that there is enough information in the impact analyses to judge whether the impact assessments are objective?

Photo of Hilary Benn Hilary Benn Chair, Committee on Exiting the European Union

I made the point a moment ago that Government economists and the Treasury are not the only people who are trying to look at the economic impact of leaving the European Union and what the alternative models might produce. I presume that all the other ones have already been published; they all show the same picture. Indeed, the best indication we have had since the referendum result of what the world thought of the British economy’s future value came the day after, when the pound fell. The world looked at the United Kingdom and said, “You’re not going to be as well off as you were. The economy is still going to grow”—let us not get that wrong—“but it will grow less than it would have done had we not left.”

All I am arguing is that we should make the effort to try to understand. Having been a Cabinet Minister and having looked at many impact assessments when legislation was coming forward, I know that we do this for all sorts of things that are really quite minor by comparison with this absolutely fundamental change that the country is facing. That is why, for me, it is inexplicable that so little work has been undertaken by the Government in an attempt to assess the situation so people can then look at it. The other point I would make is that if that assessment had shown that the British economy would be better off, the report would not only have been published yonks ago, but would already be gathering dust on our bookshelves.

Photo of Marcus Fysh Marcus Fysh Conservative, Yeovil

I have looked at forecasts for many years as a professional. I share the right hon. Gentleman’s concerns about these impact forecasts, but perhaps for different reasons. They have absolutely no value as a decision-making tool. Frankly, I am shocked at how poor and poorly constructed they are. I encourage all hon. Members to read them in detail and see exactly that.

Photo of Hilary Benn Hilary Benn Chair, Committee on Exiting the European Union

Different Members will draw different conclusions from what they read. It sounds to me that the hon. Gentleman is making an argument in favour of openness, so that everybody can make a judgment. In the circumstances, that would be a very wise thing to do.

My last point is that the argument we are currently having in the political world about membership of the customs union as opposed to leaving it, which is the Government’s policy, is all about what is in the best economic interests of the United Kingdom, our businesses, and the jobs and communities that depend on them. I say to my hon. Friend Jenny Chapman, who occupies a position as shadow Brexit Minister, that I unreservedly welcome the fact that there is now a growing consensus in the House in favour of remaining in a customs union with the European Union after the transition period. As hon. Members will know, I have been arguing for that for a very long time. It is supported by, among others, the CBI; it would remove any risks of a return to tariffs and help to ease concerns about supply chains; it would be an essential first step, but not the complete answer, to ensuring a free and open border between Northern Ireland and the Republic without infrastructure; and it would also save money—the hon. Member for North East Fife made the point that, if we are in a customs union, we will not need to recruit a load of new customs officers.

The House will face that choice in due course, however long the Government delay the Trade Bill. To the two SNP Members who have spoken, I should say that, despite their slightly ungenerous characterisation of the policy position announced by the Leader of the Opposition and the shadow Brexit Secretary over the last two days, I trust that, when the vote comes, the SNP will be in the Division Lobby with Labour Members and others.

Photo of Hilary Benn Hilary Benn Chair, Committee on Exiting the European Union

I am looking forward to confirmation of that now.

Photo of Angus MacNeil Angus MacNeil Shadow SNP Spokesperson (Environment and Rural Affairs), Chair, International Trade Committee

The confirmation I would need is this: what is the difference between “a customs union” and “the customs union”? I said that there are many other possibilities—an infinite number—but I am sure the right hon. Gentleman knows exactly what it means.

Photo of Hilary Benn Hilary Benn Chair, Committee on Exiting the European Union

I hope that that is not a caveated expression of support. My interpretation of “a customs union”, as opposed to “the customs union”, is that it would bring all the same benefits—

Photo of Hilary Benn Hilary Benn Chair, Committee on Exiting the European Union

Indeed. There is a legal argument about whether one can remain a member of the customs union if we are not a member of the European Union. But SNP Members need to be careful: if we go through the Division Lobby and discover that they are sitting on their hands when we have the chance to say to the Government with one voice—we should not weaken—that the view of those who think that staying in a customs union is right—

Photo of Stephen Gethins Stephen Gethins Shadow SNP Spokesperson (International Affairs and Europe)

As usual, the right hon. Gentleman makes an excellent point and is making an excellent speech. I agree with much of what he has said and look forward to defeating the Government in due course. However, one challenge we have is this. The Government are on the ropes; will he gently nudge Labour Front Benchers to get behind the single market as well as the customs union?

Photo of Hilary Benn Hilary Benn Chair, Committee on Exiting the European Union

I take that as an endorsement of the development of our policy announced by my right hon. Friend the Leader of the Opposition and the shadow Brexit Secretary over the past two days. I notice the slightly different approaches of the hon. Gentleman and Angus Brendan MacNeil. I want us to continue to develop our policy. I have always said openly that the single market issue is more complicated because of free movement, but where we can find common ground with some Conservative Members, we need to maximise that unity of purpose and strength. In the end, if the Government are forced to realise that they cannot get policies through the House of Commons, they will have to change their mind. As I said in my last speech in the House, if the Government will not do their job, the House will have to do it for them.

Photo of Hilary Benn Hilary Benn Chair, Committee on Exiting the European Union

Other Members want to speak. I have given way already, and I am about to bring my remarks to a close.

It seems to me that the estimates we should really be discussing are our best estimates of the economic impact of Brexit. We are now running out of time. It is 19 months since the referendum, and there are nine months to go in the negotiation, but, crucially, there is one month until the European Union draws up its negotiating guidelines for the new economic relationship. If we do not get a move on, we run the risk that options that the House—or, heaven knows, the Government, if they change their view—might want to pursue are closed off by the EU in the negotiating guidelines for want of clarity about what the United Kingdom is seeking.

Photo of Bill Grant Bill Grant Conservative, Ayr, Carrick and Cumnock

I thank the right hon. Gentleman. I am standing up without holding on to the ropes at the moment.

I am thoroughly enjoying the right hon. Gentleman’s balanced and informative speech, but should he not consider the possible thoughts of, for example, the Dutch flower growers, the Italian Prosecco producers, the Italian winemakers and the German car manufacturers? I am sure he agrees that they will wish to do business with the United Kingdom, because we are a good country to do business with.

Photo of Hilary Benn Hilary Benn Chair, Committee on Exiting the European Union

The Prosecco and BMW car analysis of our future economic relationship with the European Union—we heard a lot of it during the referendum—simply fails to understand the sheer complexity of the task that we now face. The customs union, in one sense, is the easy bit. When it comes to our future relationship with the internal market and the whole question of divergence, which we may hear more about from the Prime Minister when she speaks on Friday, I can tell the House, following our discussions in Brussels a week ago with the Select Committee—colleagues who were there can confirm this—that the moment the Government start to talk about divergence, two things happen with the European Union.

First, the EU asks, “Divergence where? How? What will it mean? How will we manage the process?” It has experience of the Swiss-type deal, which is basically 60 deals, which it loathes because of the complexity of the task and the need to continue to negotiate and, in effect, renegotiate with Switzerland how the relationship will work. The second issue that the EU raises is this: it is afraid that we will use freedom to gain the competitive advantage of being able to sail through the door that the Government are asking it to leave open for us when it comes to trading goods and services.

We are now learning that after the simplistic promises—“You can have your cake and eat it”, “There will be a deep and special partnership”, and all that sort of stuff—we have come to the end of that approach to Brexit. Now is the time for choices. The Government will make their choice, and we will have to live with the consequences, but it will be very apparent to Ministers—not least, I am sure, from the exchange of views around that room in Chequers—that there are trade-offs to be made, depending on what it is that we want.

I have argued passionately for remaining in a customs union not only because I think that it is in the best interests of British business, but because of the question of Northern Ireland. Believe you me, if we are to meet the very high bar that the Government have rightly set for maintaining an open border—the Select Committee made this point in its report at the end of last year—I do not see how that can be reconciled with the Government’s current policy of leaving the customs union and the single market. What we need now are clarity and certainty, and we need them with speed. Above all, however, we need the right policies for the economic future of the United Kingdom.

Photo of Tommy Sheppard Tommy Sheppard Shadow SNP Spokesperson (Cabinet Office), Shadow SNP Spokesperson (Scotland), Shadow SNP Spokesperson (House of Lords) 9:19 pm, 26th February 2018

It is a pleasure to follow Hilary Benn. I hope to respond in a minute to some of the points that he made about the customs union. However, before I start to talk about DExEU and Brexit, I want to make some general observations about the process in which we are engaged during our two days of debate on the estimates.

When I, and most of my colleagues, came to the House in 2015, we were quite shocked by the lack of financial scrutiny of the Executive in the Chamber. Since we became the third party, we have pressed for change in the way in which the estimates are considered. I therefore welcome the baby steps taken this year, in that we are at least able to focus on a set of figures that relate to a Government Department and what it is doing, rather than discuss random topics that may or may not be related to budgetary matters. However, we still have a long way to go in holding the Executive to account financially and in terms of their policies.

I firmly believe that if we were the board of a large charitable organisation, the charity regulators would find us wanting in terms of our procedures for financial scrutiny and accountability. I also believe that if we were the board of a large corporation, our shareholders would be demanding action to improve our processes. I therefore hope that the steps we have taken this year are the beginning of a process, and we might one day get to a situation where the Government are required to produce a programme plan charting their future policies and their effects, and then each Department has to produce a programme plan, which each Select Committee can scrutinise along with the budget that goes with it. That is the process that the Scottish Government are engaged in, in terms of how they govern the responsibilities under their remit, and it is one that we could learn from and try to develop here in the years ahead.

What happens when we combine a rudimentary process of programme planning and financial planning with the complete absence of a set of policy objectives in the first place? The answer is DExEU, because here we have combined an absolute lack of planning and a financial mess. DExEU was set up in the summer of 2016 by a shell-shocked Government who frankly did not know what to do in implementing a referendum result that they did not expect. In a desperate desire to be seen to be doing something, they set up a brand, spanking new Department, with lots of new letterheads and people to write memos to each other, and lots of people employed to research and analyse something, the only problem being that there was no plan to be implemented.

In the absence of a plan to be implemented, we have gone from one chaos to another, and I share the Minister’s embarrassment. This must be the only Department in history that underspends its budget not by a couple of percentage points, but by 50% in its first year, and it has had to go to the Treasury to scale down its estimates of spending in the next financial year.

That is a phenomenal metaphor for the Government’s Brexit policy, because they do not know quite what they are doing. In the absence of their being able to play a co-ordination role in planning for Brexit, individual Departments have had to be allowed to do their own thing and try to deal with the consequences as best they can. That is why 90% of the amount of money being spent on Brexit preparations, or the lack of them, is not to be found in the Department supposedly responsible for co-ordinating preparations for Brexit. That is a ridiculous situation.

This, of course, is from a Government who have said not only that they will set up a brand new Department, but that money is no object for that Department. This is a Government who cannot find the money for our health service; a Government who are determined to squeeze down wages by pay restraint in the public sector and reduced living standards; a Government who have, for heaven’s sake, taken £30 a week of employment support allowance from the most vulnerable people in our community—yet they can find £4 billion over the next few years to spend on preparing for Brexit. The problem is that the plans are so incomplete, and they do not know what they are doing, so they are even unable to spend the money.

Photo of Bill Grant Bill Grant Conservative, Ayr, Carrick and Cumnock

I remind you, in case you have forgotten, that this Government created and increased the living wage and took millions of people out of tax, and your Government in Scotland asked that the wages cap be lifted in the public sector simply so you could tax people more.

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. It is becoming a bit of a habit that there are exchanges across the House with Members saying “You” and “you” and “you”. We must observe the courtesies of the House; one goes through the Chair.

Photo of Tommy Sheppard Tommy Sheppard Shadow SNP Spokesperson (Cabinet Office), Shadow SNP Spokesperson (Scotland), Shadow SNP Spokesperson (House of Lords)

Thank you, Madam Deputy Speaker. I was going to point out that the hon. Gentleman’s intervention had a tenuous link to the subject of debate and no connection whatever to what I was saying, but he has none the less made his point for the record.

What does this lack of preparation mean for financial planning? I shall give the House two quick examples. The first is the customs union—or the customs arrangements, as the Government will call them. I might be wrong, but it seems overwhelmingly logical for our global trade that if we are leaving the European Union, we should first immediately try to seek an arrangement with those countries that are nearest to us and with which we have the greatest trading links. That ought not to be a matter of controversy. The only reason that it is controversial is the existence of an unreasonable number of people on the Government Benches who are so Europhobic that they will not countenance anything that looks like a cut-down relationship with the European Union. The idea of having a customs union should not be controversial, however, and I very much welcome the fact that Her Majesty’s Opposition now seem to be on a course towards coming round to that point of view.

Photo of Angus MacNeil Angus MacNeil Shadow SNP Spokesperson (Environment and Rural Affairs), Chair, International Trade Committee

At one stage, the Labour party was against “the customs union”. Now it is for “a customs union”. The Conservatives are clearly against the customs union, and the Opposition are rallying around it, but we now have a third option from Labour, apparently dividing the Opposition, in favour of a customs union that it cannot fully explain. Does my hon. Friend see a difficulty in what Labour is proposing?

Photo of Tommy Sheppard Tommy Sheppard Shadow SNP Spokesperson (Cabinet Office), Shadow SNP Spokesperson (Scotland), Shadow SNP Spokesperson (House of Lords)

I am going to be uncharacteristically kind to the Labour party and take the right hon. Member for Leeds Central at his word. He seemed to be suggesting that we were moving towards a situation in which the difference between “a customs union” and “the customs union” might not be that great. In fact, I think he said that he viewed “a customs union” as having to replicate the procedures of “the customs union”.

Photo of Jenny Chapman Jenny Chapman Shadow Minister (Exiting the European Union)

This is becoming one of the most pointless, tedious and repetitive conversations. May I help the hon. Gentleman out? There is not really any difference; it is all about how it is embedded in the treaty. We cannot be part of “the customs union” because it is part of the treaty that we are leaving, so we will need a new one. Therefore it will be “a customs union”. There is, in essence, no difference.

Photo of Tommy Sheppard Tommy Sheppard Shadow SNP Spokesperson (Cabinet Office), Shadow SNP Spokesperson (Scotland), Shadow SNP Spokesperson (House of Lords)

Well, if there is no difference, welcome to the party! It is good to have the hon. Lady on board, and we look forward to her walking through the Lobby with us next time this comes to a decision.

The debate about customs arrangements is relevant to the budget because the clock is ticking and we are now only just over a year away from Brexit day. We still do not know what customs arrangements we are going to have with the EU27, yet the Department for International Trade is allowed to run round the world meeting everyone and talking about all manner of global trading arrangements, even though everyone knows that if there is a set of legacy arrangements involving the European Union, that will probably place conditions on or compromise any arrangements we can make with anyone else. What a waste of money it is to engage in the process of pretending that we are going to have unfettered global trading arrangements with the rest of the world while at the same time discussing the need for preferential trading arrangements with the European Union.

Let me just take one more minute to talk about the second aspect of Brexit and DExEU that illustrates the lack of co-ordination and the financial waste involved in this process—namely, clause 11 of the European Union (Withdrawal) Bill. Unless that clause is corrected, it will drive a coach and horses through the principle of devolution to Scotland, Wales and Northern Ireland, yet at the eleventh hour we still do not have the amendments that the Government admitted in debates in this Chamber were necessary to make the Bill work.

The question is this: who is at fault for that? Is it the Secretary of State for Scotland, the Secretary of State for Exiting the European Union, the Minister for the Cabinet Office or the Prime Minister? Someone needs to tell us why they could not achieve the simple thing of preparing legislation that would allow a coherent withdrawal Bill to be presented to the House. That is not something that we can blame on Brussels. Michel Barnier does not really care what clause 11 of our European Union (Withdrawal) Bill is or what the post-Brexit arrangements for devolution are. This problem is self-made and self-inflicted, because the Government are so incoherent and unable to plan. I hope that in the months and years to come we will have rather more coherence in Government policy and therefore rather better financial coherence as a result.

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury), Shadow DUP Spokesperson (Work and Pensions), Shadow DUP Spokesperson (Brexit) 9:30 pm, 26th February 2018

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.

Photo of Marcus Fysh Marcus Fysh Conservative, Yeovil

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.

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury), Shadow DUP Spokesperson (Work and Pensions), Shadow DUP Spokesperson (Brexit)

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, 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. 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?

Photo of Peter Grant Peter Grant Shadow SNP Spokesperson (Europe), Shadow SNP Spokesperson (Exiting the European Union) 9:37 pm, 26th February 2018

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 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.

Photo of Peter Grant Peter Grant Shadow SNP Spokesperson (Europe), Shadow SNP Spokesperson (Exiting the European Union)

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 Labour Front Benchers 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: that when they talk about being in a customs union with the customs union it 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 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.

Photo of Douglas Ross Douglas Ross Conservative, Moray

On a point of order, Mr Speaker. 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?

Photo of Jenny Chapman Jenny Chapman Shadow Minister (Exiting the European Union) 9:44 pm, 26th February 2018

Today, Parliament is asked to consider an underspend by the Department for Exiting the European Union. We might as well, as it is far from clear what we have been getting for our money anyway. The Government wasted £1.4 million on fighting Parliament’s right to vote on the decision to trigger article 50. Around 75% of the cost derived from the Supreme Court appeal that Labour opposed at the time as a waste of money.

It gets worse. The Government decided that, for show, it would look good if Sir Tim Barrow could be photographed hand-delivering the article 50 letter from the Prime Minister to the European Council. The two business-premier class return tickets cost around £1,000. Apparently, it took two people to deliver the letter, which is surprising given how understaffed the Department is.

Will the Minister comment on the Department’s unusually large staff churn? The National Audit Office recently found that churn at the Department is running at 9% per quarter. The civil service average is 9% per year. As my right hon. Friend Hilary Benn said in his, as ever, excellent speech, the Institute for Government thinks that that degree of churn in the Department at the forefront of co-ordinating the complicated task of leaving the EU should cause concern both within and outside the Department. It certainly causes me concerns.

Perhaps the Department is not so much at the centre of co-ordinating this complicated task after all. In December 2017, Oliver Robbins left his role as permanent secretary at the Department to focus on his role as the Prime Minister’s European adviser. Robbins was joined at the Cabinet Office by his own team and a unit of around 30 staff. An answer to a Labour written question revealed that Robbins’ new unit includes five deputy directors, on up to £118,000 each; six Cabinet Office band As, on up to £60,500 each; and seven Cabinet Office band Bs, on up to £38,500 each.

In December, we found out that one in four DExEU posts was unfilled, including 81 policy roles, and that 44% of DExEU staff plan to leave within the next year. Jill Rutter, programme director at the Institute for Government, put it like this:

“They’ve been losing people at a higher rate than any civil service department. It obviously makes your task harder of filling up that bucket, it’s like filling up a bucket with a bit of a leak”.

Can the Minister explain how much of the Department’s underspend is because of an inability to recruit and retain staff? Why is it that the Department struggles to find and keep hold of good staff? What is it about the Department that is so off-putting to talented civil servants? Perhaps it is because there is a Whitehall turf war over Brexit, leaving the Department effectively neutered and paralysed by the division in Government.

With such excess resources available, how is it that the Department made such a pathetic job of pretending that it had conducted sectoral analyses of Brexit’s impact on the economy? When they were finally made available, they were an embarrassing copy-and-paste waste of paper. I will not go over the whole shoddy tale again, but it proved just how disorganised and under-powered the Government’s Brexit operation is. It is chaotic.

The worst part of all of this is that amid the chaos, the Secretary of State for Exiting the European Union has turned his face away from one of the most important issues that his Government faces: the impact of Brexit on the border in Northern Ireland. I have visited Northern Ireland on three occasions in the past three months, because the impact of the reintroduction of a hard border would be a catastrophe for all communities in Northern Ireland. I agree with the Government’s assertion that Northern Ireland should be treated the same as the rest of the UK, but Labour will never support a Brexit deal that results in any customs infrastructure whatsoever on the Northern Ireland border.

The Secretary of State has not visited Northern Ireland once since September 2016, and I do not think he has ever visited the border. That is neglectful. He ought to go there so that he can correct the Tory former Secretary of State for Northern Ireland, Mr Paterson, when he says that the Good Friday agreement has outlived its use. Such outrageous, casual ignorance is frightening. Will the Minister assure the House that there is no circumstance in which the Government would countenance establishing any infrastructure on the Northern Ireland border?

Can the Minister identify for the House a single example of an open border between two countries operating different customs regimes? Anywhere—Norway and Sweden, or the USA and Canada? It cannot be done. Therefore, because there are no credible alternatives that would safeguard the Good Friday agreement, and because of the need to support manufacturers throughout the UK, the Labour party has said that it would seek to negotiate a new customs union with the EU.

The Government are failing in so many of their responsibilities, and the excuse that is so often given is that they are focused on Brexit. Maybe if Brexit was going well, if the Department was not so unstable, if there was clarity of position or a sense of energy and purpose, or if the Prime Minister could articulate with any certainty where the country is heading, Ministers might be forgiven for their lack of progress on so many issues. My hon. Friend Ian Murray and Sammy Wilson spoke of metaphors, but sadly an apt metaphor for the entire Government can be found in the Department’s rapid decline into chaos, division, irrelevance and incompetence.

Photo of Steven Baker Steven Baker The Parliamentary Under-Secretary of State for Exiting the European Union 9:51 pm, 26th February 2018

I congratulate Stephen Gethins on opening the debate and I thank the hon. Members who have contributed. I am proud to serve in and represent the Department for Exiting the European Union, which—despite having been established for only two years—has achieved a great deal.

As the House knows, the Department was set up in response to the referendum, one of the biggest democratic exercises in British history. Turnout was high at 72%, with more than 33 million people having their say. Turnout was higher than in any general election since 1992, and it was the second highest popular vote of any form in our long and distinguished democratic history. More than 1 million more people voted leave than voted remain.

The Department was established at pace from a standing start. It has grown considerably to more than 600 staff today, plus more than 150 people based in Brussels at our permanent representation to the EU. DExEU staff are drawn from more than 40 Departments and public bodies, as well as 180 staff who have joined us from outside of Government to ensure that we have the range of expertise to deliver our objectives. If time allows, I will respond specifically to the Chair of the Select Committee, but I join him in paying tribute to the quality of our staff, and I was glad to hear him do so. I am extremely proud to work with them.

As many hon. Members observed in the debate, and as many others have done here and in the Lords, the scale of the Department’s task is immense, but its objectives are clear. One of DExEU’s primary objectives is to lead and co-ordinate cross-Government work to seize the opportunities of Brexit and to ensure a smooth process as we leave, including the required domestic legislation, on the best possible terms.

Delivering EU exit is, of course, a cross-Government effort. Our work in DExEU means that we come together with the devolved Administrations, Parliament, EU member states and institutions and a wide range of other interested parties. The Department is small and agile in Whitehall terms, with just over 600 people. We are focused on co-ordinating activities towards our EU exit in Brussels, in Whitehall and beyond across the UK.

For 2017-18, our original budget for the year was £106.1 million. Following a supplementary estimate, we have reduced this budget to £80.6 million. The Department transferred £1 million to the Cabinet Office in relation to supporting the transfer of the role of the Europe adviser to the Cabinet Office, and a further £0.8 million to other Departments to support activities directly related to our exit from the European Union. A further £20 million of the original budget was returned to the Treasury to be transferred to and used by other Departments for critical work relating to Brexit. Our Department has sufficient funding in current and future years to deliver its objectives.

We have achieved a tremendous amount already. We have put in place a major legislative programme to make sure our statute book continues to function smoothly as we exit the European Union, and to cater for the full range of negotiated and non-negotiated outcomes.

DExEU has set out the Government’s future vision in 14 position papers, supporting the keynote speeches delivered by the Prime Minister at Lancaster House and in Florence. Officials from my Department have engaged in negotiations and supported the Secretary of State in the Brussels negotiations, which ran from June to December. That culminated in our publication, with the EU, of a joint report on 8 December last year, setting out the significant agreements that we had reached on the three key areas of citizens’ rights, the budget and Northern Ireland.

A fair deal on citizens’ rights is one that will allow for the UK and EU citizens to get on with their lives broadly as they do now in the country where they live. The financial settlement honours the commitments that we undertook as members of the EU, as we said it would. It is a fair delivery of our obligations in the light of the spirit of our future partnership and it is one based on reasonable assumptions. The settlement is estimated to stand at between £35 billion and £39 billion in current terms, which is the equivalent of around four years of our current budget contribution, around two of which we expect to be covered by the implementation period. It is far removed from the figure that some had suggested of £60 billion.

We have an agreement in relation to Northern Ireland that commits us to maintain the common travel area with Ireland, to uphold the Belfast agreement in full and to avoid a hard border between Northern Ireland and Ireland while upholding the constitutional and economic integrity of the whole United Kingdom. On that point, Jenny Chapman asked about visits to Northern Ireland. I checked just moments before I rose to speak. The answer is that the Under-Secretary of State for Exiting the European Union, my hon. Friend Mr Walker, who is responsible for engaging with Northern Ireland, has made three visits and has another planned.

We want to honour the agreements set out in the joint report. The important thing now is for talks to move forward so that we can agree the terms of our future relationship with the EU in order to provide vital certainty to businesses and citizens. Sammy Wilson asked what signals we wanted to send. Although I agree with him that a responsible Government should prepare for all scenarios, the signal that this Government wish to send is that which I have just set out: we wish to fulfil the withdrawal agreement; we wish to agree an implementation period; we wish to agree a co-operation on security and defence because our commitment to peace and security in Europe is unconditional; and, of course, we want to move forward to agree a future economic partnership that is in all our mutual interests.

Negotiations have been continuing at pace in the last two months to ensure that we secure a deal on the time-limited implementation period that both we and the Commission want to agree by the March European Council. The Prime Minister has advocated this implementation period from the start, and first mentioned it in her Lancaster House speech. The implementation period will provide greater certainty for individuals and businesses, meaning they will only have to plan for one set of changes in the relationship between the UK and the EU. The business community has been clear on the importance of this to its planning, and the period will ensure a smooth exit and transition to our future partnership after the UK leaves the European Union in March 2019. We have of course published a legal text on the arrangements for the implementation period and we look forward to taking further significant steps.

As I have said, a key part of DExEU’s role is to lead and co-ordinate work across Government. We have been working with Whitehall Departments to help them to plan for all scenarios, sharing assumptions and scenarios and making sure we have the right legal and administrative systems in place. The Department returned £20 million of original Budget allocation to the Treasury to help to fund other Departments, with an additional £2 million being transferred to other Government Departments as a result of a transfer of responsibilities. In terms of wider financial support for EU exit, over £250 million has been approved by the Treasury as needed in 2017-18 to prepare for EU exit work across a range Departments. The Chancellor announced at the 2017 autumn statement that a further £3 billion will be available to Departments.

Time has run short in this debate. I will just pick up one or two of the points raised by the hon. Member for Darlington regarding the Prime Minister’s Europe adviser. The departmental and ministerial responsibilities are set out clearly on gov.uk. The Europe Unit supports Olly Robbins in his role as the Prime Minister’s EU sherpa. As such, it supports him as the lead official and the Department is glad to work with him.

As time has run so short, I will finish by simply saying that I have listened extremely carefully to the debate, in particular to the points on the customs union, but the Government’s position remains as stated.

Photo of Stephen Gethins Stephen Gethins Shadow SNP Spokesperson (International Affairs and Europe) 9:59 pm, 26th February 2018

I thank all Members for their contributions. This is a big undertaking, and it is incredibly important that Members have the opportunity to analyse as much information as possible. I note the remarks by the Chairman of the Brexit Committee. I also note the remarks of the Minister acknowledging the work of civil servants. I hope that he will shine a light, as far as possible, on their economic analysis and what it means.

Question deferred (Standing Order No. 54(4)).