Review of powers in consequence of EU withdrawal

Finance (No. 3) Bill – in the House of Commons at 4:45 pm on 8th January 2019.

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Votes in this debate

  • Division number 286
    A majority of MPs voted against carrying out a review into the Treasury's use of powers given to it to maintain the effectiveness of tax law on the withdrawal of the UK from the EU.

“The Chancellor of the Exchequer must, no later than a week after the passing of this Act and before exercising the power in section 89(1), lay before the House of Commons a review of the following matters—

(a) the fiscal and economic effects of the exercise of the powers in section 89(1) and of the outcome of negotiations for the United Kingdom’s withdrawal from the European Union giving rise to their exercise;

(b) a comparison of those fiscal and economic effects with the effects if a negotiated withdrawal agreement and a framework for a future relationship with the EU had been agreed to;

(c) any differences in the exercise of those powers in respect of—

(i) Great Britain, and

(ii) Northern Ireland;

(d) any differential effects in relation to the matters specified in paragraphs (a) and (b) in relation between—

(i) Great Britain, and

(ii) Northern Ireland.”—(Jonathan Reynolds.)

This new clause would require the Chancellor of the Exchequer to review the fiscal and economic effects of the exercise of the powers in clause 89(1) before exercising those powers.

Brought up, and read the First time.

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

I beg to move, That the clause be read a Second time.

Photo of Lindsay Hoyle Lindsay Hoyle Deputy Speaker and Chairman of Ways and Means, Chair, Panel of Chairs, Chair, Standing Orders Committee

With this it will be convenient to discuss the following:

New clause 7—Review of effect of carbon emissions tax on climate targets—

“The Chancellor of the Exchequer must review the expected effect of the carbon emissions tax on the United Kingdom’s ability to meet its internationally agreed climate targets and lay a report of that review before the House within six months of the passing of this Act.”

New clause 12—Review of expenditure implications of Part 3

“(1) The Chancellor of the Exchequer must review the expenditure implications of commencing Part 3 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) No regulations may be made by the Commissioners under section 78(1) unless the review under subsection (1) has been laid before the House of Commons.”

This new clause would require a review within 6 months of the expenditure implications of introducing a carbon emissions tax. It would prevent part 3 (carbon emissions tax) coming into effect until such a review had been laid before the House of Commons.

New clause 13—Report on consultation on certain provisions of this Act (No. 2)—

“(1) No later than two months after the passing of this Act, the Chancellor of the Exchequer must lay before the House of Commons a report on the consultation undertaken on the provisions in subsection (2).

(2) Those provisions are—

(a) sections 68 to 78,

(b) section 89, and

(c) section 90.

(3) A report under this section must specify in respect of each provision listed in subsection (2)—

(a) whether a version of the provision was published in draft,

(b) if so, whether changes were made as a result of consultation on the draft,

(c) if not, the reasons why the provision was not published in draft and any consultation which took place on the proposed provision in the absence of such a draft.”

This new clause would require a report on the consultation undertaken on certain provisions of the Bill – alongside New Clause 11, New Clause 14 and New Clause 15.

New clause 19—Review of powers in consequence of EU withdrawal (No. 2)—

“(1) The Chancellor of the Exchequer must, no later than a week after the passing of this Act and before exercising the power in section 89(1), lay before the House of Commons a review of the following matters—

(a) the fiscal and economic effects of the exercise of the powers in section 89(1) and of the outcome of negotiations for the United Kingdom’s withdrawal from the European Union giving rise to their exercise;

(b) a comparison of those fiscal and economic effects with the effects if a negotiated withdrawal agreement and a framework for a future relationship with the EU had been agreed to;

(c) any differences in the exercise of those powers in respect of—

(i) England,

(ii) Scotland,

(iii) Wales, and

(iv) Northern Ireland;

(d) any differential effects in relation to the matters specified in paragraphs (a) and (b) in relation between—

(i) England,

(ii) Scotland,

(iii) Wales, and

(iv) Northern Ireland.”

This new clause would require a review of the economic and fiscal impact of the use of the powers in section 89 in the event of no deal and in event of a withdrawal agreement passing.

Amendment 16, in clause 78, page 51, line 32, after “may” insert

“(subject to section (Review of expenditure implications of Part 3))”.

See New Clause 12.

Amendment 1, in clause 89, page 66, line 38, at end insert—

“(1A) The Chancellor of the Exchequer must, no later than a week after the passing of this Act and before exercising the power in subsection (1), lay before the House of Commons a review of the following matters—

(a) the fiscal and economic effects of the exercise of those powers and of the outcome of negotiations for the United Kingdom’s withdrawal from the European Union giving rise to their exercise;

(b) a comparison of those fiscal and economic effects with the effects if a negotiated withdrawal agreement and a framework for a future relationship with the EU had been agreed to;

(c) any differences in the exercise of those powers in respect of—

(i) Great Britain, and

(ii) Northern Ireland;

(d) any differential effects in relation to the matters specified in paragraphs (a) and (b) in relation between

(i) Great Britain, and

(ii) Northern Ireland.”

This amendment would require the Chancellor of the Exchequer to review the fiscal and economic effects of the exercise of the powers in subsection (1) before exercising those powers.

Amendment 13, page 67, line 7, leave out subsection (5) and insert—

“(5) No statutory instrument containing regulations under this section may be made unless a draft has been laid before and approved by a resolution of the House of Commons.”

This amendment would make Clause 89 (Minor amendments in consequence of EU withdrawal) subject to the affirmative procedure.

Amendment 7, page 67, line 19, at end insert—

“(7) The provisions of this section only come into force if—

(a) a negotiated withdrawal agreement and a framework for the future relationship have been approved by a resolution of the House of Commons on a motion moved by a Minister of the Crown for the purposes of section 13(1)(b) of the European Union (Withdrawal) Act 2018, or

(b) the Prime Minister has notified the President of the European Council, in accordance with Article 50(3) of the Treaty on European Union, of the United Kingdom’s request to extend the period in which the Treaties shall still apply to the United Kingdom, or

(c) leaving the European Union without a withdrawal agreement and a framework for the future relationship has been approved by a resolution of the House of Commons on a motion moved by a Minister of the Crown.”

This amendment would prevent the Government implementing the “no deal” provisions of Clause 89 without the explicit consent of Parliament for such an outcome. It would provide three options for the provisions of Clause 89 to come into force: if the House of Commons has approved a negotiated withdrawal agreement and a framework for the future relationship; if the Government has sought an extension of the Article 50 period; or the House of Commons has approved leaving the European Union without a withdrawal agreement and framework for the future relationship.

Amendment 8, page 67, line 19, at end insert—

“(7) The provisions of this section shall not come into force until the House of Commons has come to a resolution on a motion made by a Minister of the Crown agreeing its commencement.”

Amendment 14, in clause 90, page 67, line 22, after “may” insert

“(subject to subsections (1A) and (1B))”.

See Amendment 15

Amendment 15, page 67, line 24, at end insert—

“(1A) Before proposing to incur expenditure under subsection (1), the Secretary of State must lay before the House of Commons—

(a) a statement of the circumstances (in relation to negotiations relating to the United Kingdom’s withdrawal from the European Union) that give rise to the need for such preparatory expenditure, and

(b) an estimate of the expenditure to be incurred.

(1B) No expenditure may be incurred under subsection (1) unless the House of Commons comes to a resolution that it has considered the statement and estimate under subsection (1A) and approves the proposed expenditure.”

This amendment would require a statement on the circumstances (in relation to negotiations) giving rise to the need for, as well as an estimate of the cost of, preparatory expenditure to introduce a charging scheme for greenhouse gas allowances. The amendment would require a Commons resolution before expenditure could be incurred.

New clause 18—Review of effects on measures in Act of certain changes in migration levels—

“(1) The Chancellor of the Exchequer must review the effects on the provisions of this Act of migration in the scenarios in subsection (2) and lay a report of that review before the House of Commons within one month of the passing of this Act.

(2) Those scenarios are that—

(a) the United Kingdom does not leave the European Union,

(b) the United Kingdom leaves the European Union without a negotiated withdrawal agreement,

(c) the United Kingdom leaves the European Union following a negotiated withdrawal agreement, and remains in the single market and customs union,

(d) the United Kingdom leaves the United Kingdom on the terms of the draft withdrawal agreement of 14 November 2018.

(3) In respect of each of those scenarios the review must consider separately the effects of—

(a) migration by EU nationals, and

(b) migration by non-EU nationals.

(4) In respect of each of those scenarios the review must consider separately the effects on the measures in each part of the United Kingdom and each region of England.

(5) In this section—

“parts of the United Kingdom” means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland;

“regions of England” has the same meaning as that used by the Office for National Statistics.”

This new clause would require a review of effects on measures in the Bill of certain changes in migration levels.

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

This group of amendments relates to the tax and fiscal implications of the UK’s withdrawal from the EU.

Throughout the last year Parliament has been asked to approve a series of Bills giving the Government the power to deliver every type of Brexit deal conceivable, and this Finance Bill is no different. I said when closing the Second Reading debate on the Bill for the Opposition that this approach was one of “give us the powers now and we will make the decisions later,” and as it currently stands Brexit represents the biggest transfer of power to the Executive in modern constitutional history. That is disappointing for anyone who thought Brexit would see greater powers for this Parliament, but it is also a recipe for very bad decisions, and there is a classic culprit in this Finance Bill in the form of clause 89. Innocently named “Minor amendments in consequence of EU withdrawal”, it gives the Government power to amend tax legislation without any of the usual due process in the event that the UK leaves the EU without a deal.

The Government always tell us—I am sure they will do so again—that this is simply a safeguarding provision that we will never have to use, but all of us here today know that as it stands the Government have absolutely no chance of getting their deal through, because that deal does not deliver the basics of what this country needs. It does not deliver smooth, low-friction borders for manufacturing and supply chains, nor does it deliver market access for financial services. It also fails to resolve the big question: after we leave the EU, will we prioritise market access or trade autonomy? Because of that, we will almost certainly end up in the backstop arrangements, a halfway house without any say for the UK—the very worst of all worlds.

The new clauses and amendments are therefore of seminal importance, and I am extremely grateful to the Chair of the Home Affairs Committee, my right hon. Friend Yvette Cooper, for laying amendment 7 before the House today. It is clearly a cross-party amendment, supported by the Chairs of the Treasury, Exiting the European Union and Business, Energy and Industrial Strategy Committees, but it has the Opposition’s support because it offers Parliament a chance to make a clear statement rejecting a no-deal outcome—a statement that cannot come soon enough.

Anyone pretending that crashing out without a deal is simply about resorting to World Trade Organisation schedules is dangerously misinformed. As The Economist magazine said last month:

“A no-deal Brexit is about a lot more than trade—it would see many legal obligations and definitions lapse immediately, potentially putting at risk air travel, electricity interconnections and a raft of financial services”.

It would mean tariffs on trade with the EU, but it would also affect trade beyond the EU as all our current trade agreements negotiated as an EU member would immediately cease to apply. Agriculture, aerospace, the automotive sector—all these major sectors of our economy—would face potentially irreparable damage, and while tariffs may be reduced over time, excise duties and health checks on food, plants and livestock cannot be reduced so easily. Researchers at Imperial College London have calculated that just two minutes more transit time per lorry at Dover and the Channel tunnel translates into a 47 km traffic jam, and for perishable items like food, delays of that magnitude simply could not be sustained. When we add to that higher prices through tariffs and further inflationary pressure from another inevitable fall in the value of the pound, it is a recipe for significant pressure on living standards. That is why the Opposition say that no deal is not a real option.

There has been some suggestion that the Government might accept amendment 7.

Photo of John Baron John Baron Conservative, Basildon and Billericay

Does the hon. Gentleman not acknowledge that by ruling out preparations for no deal one is in effect tying the hands of one’s negotiating team, which in effect makes a trade deal—which we all, I think, would prefer to leaving on WTO terms—more difficult to achieve and therefore makes leaving on WTO terms more likely?

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

The facts are as they are. It is far too late for that. Everyone knows the position that this country is in. The Government have run down the clock. They lost their majority through a general election that they did not need to call, and it is far too late to start applying the logic that might have applied several years ago. Because of that, our vulnerability is evident for everyone to see. No one should underestimate the likelihood of a no-deal outcome at this stage. No one should be pretending, through semantics or parliamentary chicanery, that we might be able to present no deal as a way of giving us greater leverage in negotiations. I am afraid that the Government have got us to the point of ruin if that is the strategy that Conservative Members wish to pursue.

There has been some suggestion that the Government might accept amendment 7 at some point today in order to avoid defeat. Usually the Opposition would welcome that, but unfortunately, if that capitulation comes, it will show that the Government have absolutely no strategy for anything other than surviving until the end of each day. I have begun to think that they will accept almost any amendment to a Finance Bill to avoid defeat, regardless of what it proposes or of how incoherent it would make the legislation, because that is the only objective they seem able to pursue. That is no strategy for delivering the most important decision this country has taken for 70 years. That is why the Opposition have tabled new clauses 3 and 7 and amendment 1 to address some other serious issues in the Bill.

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Digital, Culture, Media and Sport) (Arts and Heritage) 5:15 pm, 8th January 2019

Given that the Business Secretary said in the House earlier that no deal should not be contemplated, and that my hon. Friend is outlining the possibility of the Government accepting amendment 7, would it not be right for the Government to say clearly at the end of business today that they are ruling out no deal because it would be so damaging to this country?

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

I absolutely agree with my hon. Friend. We all know that several members of the Government take that view, even though they may not be able to say it on the record. They are quite clear as to what no deal would mean, and they would not contemplate going down that route. It would be far simpler and far better to get to a position where ruling out no deal was clearly the Government’s intent.

New clause 3 would oblige the Government to publish a review of the fiscal and economic effects of the exercise of the powers in clause 89, as well as the differences between exercising those powers in Great Britain and in Northern Ireland. As we edge closer to the reality of crashing out without a deal, clause 89 is not simply hypothetical. We are now just two and a half months away from the UK’s exit without an agreement. It is therefore of critical importance that we have a full and transparent view of the implications of a clause of this kind.

Photo of Crispin Blunt Crispin Blunt Conservative, Reigate

I am afraid that the hon. Gentleman is going to have to do a bit better than this. He talks about crashing out without a deal, but he needs to get into the detail of the implications. Perhaps he is going to start talking about planes, but amazingly, the planes are going to keep flying. Amazingly, we are still going to have drugs supplied into the United Kingdom. He needs to get down into the detail of exactly what the implications will be, because if we are faced with the reality of no overall agreement, there will be a barrow-load of minor agreements to ensure that the common interests of the United Kingdom and the European Union survive the transfer to WTO terms on 29 March with minimum impact on the citizens of the EU and the UK. It is time he got real and stopped this nonsense—

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

Thank you, Mr Deputy Speaker.

I have just talked about some of the consequences of crashing out without a deal. I have talked about relationships, about tariffs on products and about the legal definitions under the common agreements that this country has undertaken with other European countries. We all know this—the information is readily available—so I am not quite sure what point the hon. Gentleman is making. I think he is aware of the dangers of taking this course of action.

Photo of Lyn Brown Lyn Brown Shadow Minister (Treasury)

He is frustrated with his own Government.

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

And yes, people are frustrated with the Government.

Photo of Kenneth Clarke Kenneth Clarke Father of the House of Commons

With respect, it is quite right to concede that some of the fears being raised about no deal are grossly exaggerated, but the problems are quite real enough. If we leave with no deal, we will be the only developed country in the world that has no trade agreement at all with anybody and that is having to fall back on WTO rules, which are made to sound marvellous by the Brexiteers but which do not actually amount to very much. We will also be erecting new barriers to trade and investment around the borders of the United Kingdom, including along the Irish border, and that is bound to disadvantage our economy very seriously indeed.

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

The Father of the House is as accurate as ever. Some colleagues are pursuing a dangerous argument that all our trading relationships with countries that are not in the EU are somehow currently under WTO terms, which is an absurd misconception. We have entered into trade agreements as a member of the EU that account for something like 16% of our goods exports.

Regardless of the significant impacts of a no-deal outcome, we could go further and say that to leave the EU having not secured a deal—an acrimonious departure —would damage our relationship with our most important trading partner for years to come and fundamentally undermine our credibility on the world stage. I cannot see how any serious-minded Member of this House could understand that that would not be of severe consequence for the United Kingdom, which is why it is so important that this House makes a clear statement today about the dangers of no deal.

Photo of John Redwood John Redwood Conservative, Wokingham

Can the hon. Gentleman name a single country that has a free trade agreement with the EU that will not transfer it to the UK under the novation procedures?

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

We simply do not know the answer to that question. I always listen to what the right hon. Gentleman has to say in Treasury and Finance Bill debates, but he is one of the archetypal Members who come to the House and pursues what I call the BMW argument: “Everything will be fine because we buy BMWs and everyone will give us what we want.” That argument is still being pursued in these debates, but it has been proved completely untrue by the stage of the negotiations that we are at. It is simply not good enough to say, “It will all be alright on the night. Everyone will transfer over the benefits we currently have. It will be as straightforward as that.” If that were case, the Government would not be in this morass and the country would be in a far better position.

Photo of Chris Philp Chris Philp Conservative, Croydon South

First, is it not the case that the UK and, indeed, the entire EU currently trade with major economies, such as the USA and China, under WTO terms? Therefore, while not desirable, they can be made to work. Secondly, if we adopt the shadow Minister’s approach and rule out no deal, we have no choice but to remain in the EU or to accept whatever the EU sees fit to give us, which is not a great negotiating position.

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

I thoroughly agree that what the Government have got us into is not a great negotiating position, but that is because the negotiations have been driven by the best interests of the internal politics of the Conservative party. If the national interest had been considered, we would be in a completely different place.

Trade can exist on WTO terms. It is not that the UK would somehow no longer be a trading nation, but that is not the test of good Government policy. The test is to consider the ramifications of that decision and to decide whether it is in the UK’s best interests, but I cannot believe that anyone would look rationally at what a no-deal outcome means and say, “I would find that acceptable for this country.”

Photo of Kate Hoey Kate Hoey Labour, Vauxhall

Does not my hon. Friend think that it would be irresponsible for any Government not to be making contingency plans for WTO rules in these circumstances? Does he also agree that the Irish Taoiseach has in the past few days looked for the first time at making some changes to his intransigent approach to the backstop, precisely because the Republic of Ireland would suffer so much more from WTO terms than the United Kingdom?

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

The merits of the Government undertaking contingency measures are different from the political case that we must consider, which is whether we would find it desirable to undertake a course of action that would mean that we had to use those contingency measures. The focus of the debate in this Finance Bill should be a seriously hard-headed look at the consequences of no deal, and there should be a statement from Members on both sides of the House that that is not what we seek for the UK and that we do not believe that it is possible.

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

I will take an intervention from Charlie Elphicke, and I may come to Daniel Kawczynski if the intervention is good enough.

Photo of Charlie Elphicke Charlie Elphicke Conservative, Dover

The hon. Gentleman is making an interesting speech. My concern is with how he can support undermining the making of contingency preparations that are in the national interest, which is the effect of amendment 7. It is just the wrong thing to do, and the Labour party ought to be more responsible than that.

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

I completely disagree with the hon. Gentleman, and a little humility from Conservative Members on the point about responsibility for the Brexit negotiations would be appreciated. For my entire lifetime, this country’s European policy has been dictated by the internal politics of the Conservative party. Every Conservative Prime Minister in my lifetime has been brought down by the issue of Europe. To suggest that any other political party or actor in this country needs to have more regard for the national interest, when it is the Conservative party that has never been able to do so, is not something I will take.

Photo of Daniel Kawczynski Daniel Kawczynski Conservative, Shrewsbury and Atcham

Bearing in mind that 95% of the world’s growth over the coming decades will come from outside the European Union, what assessment has he made of the opportunities that will be afforded to the United Kingdom by our being able to tailor-make bilateral trading agreements?

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

I am extremely glad that that issue has come up, because the opportunities created by growth outside the EU have no relationship to our membership of the EU, and could possibly be undermined by our leaving the EU. If we want to compete in competitive emerging markets around the world, what better way is there to do so than from within the single market? I would wager with the hon. Gentleman that a country like Germany will do far better from that growth around the world through its continued membership of the European Union than we will. I am afraid that it is because of such statistics, which have no bearing on serious Government policy or reality, that this debate has got to where it is, but I will move away from a wider debate on Brexit and return to the Finance Bill before you tell me to do so, Mr Deputy Speaker.

I will now come to clause 89 and the relationship between Great Britain and Northern Ireland. Under the draft withdrawal agreement it is widely accepted that, under the backstop arrangements, Northern Ireland will remain in regulatory alignment with the European Union, which would be particularly the case for EU customs law but it would also apply to compliance with elements of EU single market regulation in the technical regulation of goods, state aid and other areas of north-south co-operation between Northern Ireland and the Republic. Of course, Northern Ireland would be included in parts of the EU VAT and excise regimes and in the single electricity market.

With that in mind, it is clear that the powers handed to the Treasury by this Bill may not be applicable in Northern Ireland in the legal and regulatory areas under which EU authority would remain. We are therefore seeking a review that clearly sets out any difference in application of these powers in respect of Great Britain and Northern Ireland, and I urge Members on both sides of the House to support new clause 3.

New clause 7 relates to clause 90 on establishing an emissions reduction trading regime. It would require the Government to review the expected effect of the carbon emissions tax on the UK’s capacity to meet internationally agreed climate targets. There has never been a more critical time to take urgent action on climate change to avoid environmental catastrophe. The report from the UN Intergovernmental Panel on Climate Change, published in October 2018, shows that we have just 12 years left to make unprecedented changes to prevent global warming increases above 1.5° C. Our exit from the European Union must not be used as an excuse to step back from action on climate change. Worryingly, clause 90 contains one of the Bill’s very few passing references to environmental issues, and our review, proposed in new clause 7, would ensure that the Government are held accountable for making progress on reducing emissions without using Brexit as an excuse for stalling.

This is evidently a Government in chaos, seemingly without any plan or strategy at all. The new clauses and amendments in this group would improve both the Finance Bill and the process by which we leave the European Union. They are sensible, proportionate and timely, and I commend them to the House.

Photo of Nicky Morgan Nicky Morgan Chair, Treasury Committee

I realise that time is short and that many hon. and right hon. Members want to speak on this group, which shows the appetite of Members on both sides of the House to have their say on this critical issue. There is a deep frustration that debate was curtailed last month before we got to the meaningful vote on the Prime Minister’s draft withdrawal agreement.

I rise to support amendment 7, which was tabled by Yvette Cooper and to which I have added my name, and amendment 8.

It is clear that Brexit can happen without this country, or this Government, having to undermine our economy, our constitution and our values as a country. Those who have signed amendment 7 represent different parties. We have different views on Brexit and the way forward. We have different views on the 2016 referendum and how we voted in it, but it is right that parliamentarians from all parts of the House should rule out the most damaging option that could happen on 29 March.

Photo of John Baron John Baron Conservative, Basildon and Billericay 5:30 pm, 8th January 2019

My right hon. Friend is very gracious in giving way. Does she accept that the UK trades profitably with the majority of the world’s GDP on World Trade Organisation terms? Therefore, this is not the cliff edge or crashing out that many people paint.

Photo of Nicky Morgan Nicky Morgan Chair, Treasury Committee

I have great respect for my hon. Friend, but I think that it would have been better to have had this debate in 2016 rather in 2019, because the honest truth is that the Brexit that some Members on these Benches and some people out in the country say that they want was not outlined in any way, shape or form in the 2016 referendum. I refer to one Member, who said at the time, “Only a madman would leave the single market.” Yet now, that is exactly what he is proposing should happen.

I do not agree with my hon. Friend Mr Baron about the advantages of WTO, and I will tell him why: if it was so good, Members who are backing the WTO option—a no-deal option—would not be so keen to get into negotiating free trade agreements so quickly with countries around the world. I do not know whether it was my hon. Friend, but one Member just now talked about trading with America and China, yet free trade agreements with America and China are touted all the time by those in favour of Brexit as agreements that need to be negotiated as quickly as possible.

The honest truth is that to make trade work around the world, all countries will seek to enter into agreements with countries they want to trade with in order to lift or to lower tariffs and non-tariff barriers. That is what we have done, very successfully, in our relationship with the European Union since we joined over 40 years ago.

Photo of John Baron John Baron Conservative, Basildon and Billericay

My right hon. Friend is being very gracious and I very much appreciate that.

Many of us in this place—I would like to think the majority of us—would prefer a good trade deal to WTO. That is not inconsistent, but I think what my right hon. Friend misses is that on a bad deal versus WTO we have got to get the balance right, because the EU has had such a bad track record on negotiating trade deals. We trade with the rest of the world on WTO terms very profitably and very successfully, even though many of us would prefer a good trade deal.

Photo of Nicky Morgan Nicky Morgan Chair, Treasury Committee

Trade deals are immensely complicated. While Members know how I voted in 2016, I accept that this country will be leaving the European Union on 29 March—with regret, I have to say, but I do accept it—but one of the debates that we have not even started to have is how the House is going to approach the approval of trade deals. I can tell my hon. Friend that this is a real worry to those who are going to be negotiating those agreements. We saw with the Transatlantic Trade and Investment Partnership just how politically contentious that agreement was, even though it did not even reach the House as an agreement. We are going to spend the next few decades in the House negotiating and approving trade deals, which everybody, for various constituency reasons, will have problems with.

Photo of Nicholas Soames Nicholas Soames Conservative, Mid Sussex

My right hon. Friend is making an extremely powerful argument. Does she recall that the trade deal between America and Canada, which was a “willing buyer, willing seller” trade deal, took many, many years? The idea that this is some wonderfully easy, smooth, simple process is, frankly, rubbish.

Photo of Nicky Morgan Nicky Morgan Chair, Treasury Committee

I have great respect for my right hon. Friend, and on this issue he speaks much good sense, as always. I hope that right hon. and hon. Members will listen to what he has to say. I am conscious of the time, so shall move on.

Over the past two years, we have heard it said in the House that no deal is better than a bad deal. I have to say that no deal is a terrible deal and it would be a gross dereliction of the responsibility of Members of this House to inflict no-deal on our constituents.

Photo of Nicky Morgan Nicky Morgan Chair, Treasury Committee

I am afraid I am going to make some progress. My hon. Friend will be able to intervene on other Members.

Those who wanted Brexit talked often about the taking back of control. I have not had time to watch the film broadcast on Channel 4 last night, but I understand that that was a key part of it. As I have said before, it is right that control should come back to this Parliament, and it is right and it is time for Members of Parliament on all sides to make it clear to the Government that a no-deal Brexit outcome is absolutely unacceptable.

It will have been noticed that many of those who have put their names to amendment 7 are Chairs of Select Committees. The Treasury Committee took evidence in December—I am grateful to all Committee members, who have varying views on Brexit—and we produced a unanimous report. One thing that was made very clear is that, compared with today’s trading arrangements, and assuming no change to migration arrangements, our GDP would take a 7.7% hit on a modelled no-deal scenario. That is greater than the impact of the 2008 financial crisis. Members who have been in the House since 2010, and perhaps just before, will know the impact of the financial crisis on our constituents.

Finally, as a wise general said to me a few weeks ago, Britain is renowned for its confidence and competence. Currently, we are demonstrating neither. A no-deal Brexit will completely destroy any reputation we have for confidence and competence. The Government decided to put off the meaningful vote, although hopefully we will get it either this week or next. It is time for Members of Parliament on all sides to start ruling out options that would be deeply damaging to our country. That is what amendment 7 and 8 are about, and I will be delighted to support them both, should they be voted on.

Photo of Yvette Cooper Yvette Cooper Chair, Home Affairs Committee

It is a pleasure to follow Nicky Morgan, because although we represent different parties and disagree on many issues, and although we will take different positions on the Prime Minister’s deal when it comes to a vote, on this issue we agree. I rise to speak to amendment 7 and to support amendment 8.

We agree on the dangers of no deal to the country. I tabled amendment 7 because I am really worried that delays, drift or brinkmanship mean that there is now a serious risk that we will end up crashing out of the EU with no deal in just 80 days’ time. I am worried that we could come to the crunch and Parliament would not have the powers to stop it happening. We have a responsibility not just to stand by. I believe that the Government should rule out no deal but, if they will not, Parliament must make sure that it has the powers to do so if it comes to the crunch.

Amendment 7 has support from across the House. It has been signed by Chairs of cross-party Committees—it has the support of the Chairs of the Treasury Committee, the Exiting the European Union Committee, the Liaison Committee and the Business, Energy and Industrial Strategy Committee and others, too—and it is supported by those with a wide range of views on the best way forward. It is supported by those who support the Prime Minister’s deal and those, like me, who do not, and it shows that those who take a wide range of views on the best way forward have come together to say that we should rule out the worst way forward.

Photo of Charlie Elphicke Charlie Elphicke Conservative, Dover

Just to clarify, does the right hon. Lady herself intend to support or oppose the Prime Minister’s deal?

Photo of Yvette Cooper Yvette Cooper Chair, Home Affairs Committee

As I just said, and as I said when I spoke in the debate before Christmas, I am opposed to the Prime Minister’s deal. It is a blindfold deal that does not address some of the policing and security challenges, as well as customs union issues for manufacturing. I accept, though, that we take different views on that throughout the House. There are very different perspectives and views, which is why the opportunity to come together and rule out no deal is such an important one.

Photo of Yvette Cooper Yvette Cooper Chair, Home Affairs Committee

I will give way in a second. I am conscious of the time, so let me set out what the amendment would do and I will then of course give way to the hon. Gentleman.

The amendment applies to clause 89 of the Bill, which the Government say they need for minor amendments to tax-raising powers in the event of no deal. In practice, clause 89 is drafted much more widely than that, but that is the point that the Government have made. The amendment says that, if the Government want to use clause 89 powers to implement no deal, they first need to give Parliament a vote on no deal and to have Parliament’s support for no deal. The amendment provides a safeguard to make it harder for the Government to go ahead with no deal without even going back to Parliament.

Photo of Marcus Fysh Marcus Fysh Conservative, Yeovil

I am still not clear. What could the Government do under clause 89 that this amendment deals with to rule out no deal? Can she say how exactly the amendment rules out no deal?

Photo of Yvette Cooper Yvette Cooper Chair, Home Affairs Committee

The amendment provides a parliamentary safeguard. It does not, in itself, solve any of the many Brexit issues that we have, but it does provide an additional parliamentary safeguard that says that the Government cannot use the powers in clause 89 to implement no deal without first coming back to Parliament to ask for permission and support for a no deal. The hon. Gentleman is right that there may be other powers that the Government may choose to use. There may be other issues that they may choose to pursue, but this is our opportunity within this Bill to address these powers. That is why it is an important one to come around.

I have heard four sets of objections to the amendment. Some say that it is irresponsible; that it is somehow holding the Government to ransom on powers that they need. Some say that it is undesirable and perhaps even unpatriotic because they think that no deal is a good outcome and should not be ruled out. Some say that it is unnecessary because the Prime Minister’s deal is the best way forward. Some suggest that it is unstrategic because we need the threat of no deal to force a decision one way or another. I want to take each of those objections in turn because each of them is wrong.

First, on the charge that this is an irresponsible amendment, the amendment does not affect the normal Treasury and Government operations; those carry on as normal. It simply requires the Government to get Parliament’s permission if they want to use these powers to pursue no deal. Even if there is deadlock, the amendment provides a way forward. Let us suppose that Parliament votes against any deal that is put and also votes against no deal, and the Government still desperately want to use the clause 89 powers. In that event, they could follow paragraph (b) of the amendment if they still want to use the powers they need to apply to extend article 50. So in fact, this is an extremely responsible amendment. The irresponsible thing to do would be just to stand back and hope for the best, or to stand back and allow the Government to drift towards no deal without any attempt to put the safeguards in place to prevent from that happening.

The second objection is from those who think that no deal is a good option, or at least a good enough option not to rule it out. That is reckless. The damage to manufacturing industry, on which many of our constituencies rely, would be too serious. One local factory has said to me that the cost of its imports will double in price if we go to WTO tariffs. Another has told me that its European parent company would be under pressure to switch production to continental factories to avoid delays. Burberry has hundreds of jobs in my constituency, making clothing that is sold all over the world. It has written to me about the risks and concerns about delays to its supply chain. Its letter says:

“My hope in writing to you is that you will work with your colleagues across Parliament to ensure that there is no scenario possible where a No-Deal Brexit is a possibility.”

That is what I am doing.

Photo of Rachel Reeves Rachel Reeves Chair, Business, Energy and Industrial Strategy Committee

I thank my right hon. Friend for for tabling this amendment, which is so important. The Business, Energy and Industrial Strategy Committee has taken evidence from a number of businesses in the past few weeks, including Nestlé, Toyota and Airbus. Each one of them, and many others too, have said that the most dangerous thing would be to leave the European Union without a deal, which would have catastrophic impacts on their businesses and on the people who work for them. For that reason alone, anything that we can do to avoid a hard Brexit and going on to WTO rules, as some Members suggest, is the most important thing. This amendment at least helps to provide some safeguards to stop that from happening.

Photo of Yvette Cooper Yvette Cooper Chair, Home Affairs Committee 5:45 pm, 8th January 2019

My hon. Friend is exactly right. This is about dealing with risk, delays and increased costs. There is the risk that border delays will hit tight cross-border supply chains, but the CBI also estimates that the impact of WTO tariffs will mean a £4 billion to £6 billion increase in costs on our exports. The Environment Secretary—the leave campaigner himself—has said that WTO tariffs on beef and sheepmeat will increase by over 40%.

Photo of John Baron John Baron Conservative, Basildon and Billericay

The right hon. Lady is being very generous in giving way, but may I encourage her to temper her dire warnings about WTO terms? There were many forecasts and predictions from business organisations, the Bank of England and the International Monetary Fund about the disastrous consequences if we voted to leave the EU in 2016, including predictions of 500,000 extra unemployed by Christmas 2016. Those predictions did not materialise because investment is about comparative advantage such as low taxes and more flexible labour market practices. That is what determines investment at the end of the day.

Photo of Yvette Cooper Yvette Cooper Chair, Home Affairs Committee

I am not drawing on macroeconomic predictions about the overall impact on the economy, although I note that there are predictions of a 9% reduction compared with the level at which we might otherwise be. I am actually focusing on the microeconomic impact on individual businesses across the country of simply seeing those costs go up. That is a real impact of the tariffs. It is not about confidence, levels of investment and so on; it is about the real impact of those costs on consumers, manufacturers, exporters and importers that is the real consequence of WTO tariffs.

Photo of Angela Eagle Angela Eagle Labour, Wallasey

I am sure my right hon. Friend has noticed that the Office for Budget Responsibility said in its report on the recent Budget that there has been a loss of 1.5% of GDP since the referendum, and that the uncertainty was likely to make that worse, at least in the medium term. This Parliament has a duty to ensure that we mitigate that as much as possible, which is why I will be supporting her amendment.

Photo of Yvette Cooper Yvette Cooper Chair, Home Affairs Committee

My hon. Friend is right that we have a responsibility not to make life harder for our manufacturers, which face huge pressure and huge international competition. We also have a responsibility not to make life harder for our consumers, who could see significant increases in prices. The British Food Importers & Distributors Association warns that WTO rules could mean that food prices go up by over 20%.

Photo of Crispin Blunt Crispin Blunt Conservative, Reigate

Rachel Reeves has just cited Nestlé, which is a Swiss company. The right hon. Lady will be aware that Britain and Switzerland, which is able to make arrangements for the future, negotiated an agreement on 14 December 2018 to be able to continue trade, even if there is no agreement between the UK and the EU. Once this House has rejected the withdrawal agreement, that is exactly where the European Union and the United Kingdom will be. We will need to make the best of the situation in which we find ourselves. That is precisely why both sides will, under article 24 of the general agreement on tariffs and trade, move towards a free trade agreement to ensure that we do not put tariffs in place at all after 29 March. That is where we should be and those are the realities that are going to descend once we are through the “Project Fear” phase.

Photo of Yvette Cooper Yvette Cooper Chair, Home Affairs Committee

The same cheery optimism that the hon. Gentleman and others have expressed that everybody will suddenly magically come to an agreement once we are through this phase and if we are on WTO terms is exactly the same cheery optimism they had that we were going to end up with a deal by now—and we have not, because it is actually a lot tougher than hon. Members suggest. The reality is that we are going to have a big hike in prices in April if we have no deal, and that has consequences for our manufacturers, businesses and consumers right across the country.

Photo of Anna Soubry Anna Soubry Conservative, Broxtowe

I shall be supporting the right hon. Lady’s amendment. She talks about the manufacturing sector and I believe that there are a number of manufacturing jobs in her constituency. Has she heard any argument that falling back on WTO rules would ensure that those critical, just-in-time supply chains are able to continue, and does she agree that this issue is very important to the many millions of people across the country who rely on those just-in-time supply chains, because if we fall back on WTO rules, it is they who will be losing their jobs, not hon. Members?

Photo of Yvette Cooper Yvette Cooper Chair, Home Affairs Committee

I completely agree with the right hon. Lady. What I am saying just comes from listening to employers in my constituency who have told me that they have bought all the storage capacity they can find in order to stockpile, but they cannot stockpile more than 10 days’ worth of some of their products, and they are really concerned about the impact of the delays on just-in-time technology.

Photo of John Redwood John Redwood Conservative, Wokingham

Does the right hon. Lady agree, in wanting to promote stronger and better industry once we have left, that the Government should set zero tariffs on all imported components, which we would be free to do, which would make them cheaper from non-EU countries and preserve zero tariffs for EU components?

Photo of Yvette Cooper Yvette Cooper Chair, Home Affairs Committee

It is not clear to me how that strengthens our negotiating position with countries all over the world that might then keep their tariffs extremely high on our goods. The whole point is that, if we crash out on WTO terms, it undermines our negotiating power. Whether one thinks that is about negotiating with the EU or negotiating with other countries, we are weakening our position abroad.

We also have the impact on the NHS, which is spending £10 million on fridges: it will have to put more money into this which could be put into patient care. The police have warned that we will be less safe. They and the Border Force would immediately lose access to crucial information that they check 500 million times a year to find wanted criminals, dangerous weapons, sex offenders and terror suspects. We will not be able to use European arrest warrants to catch wanted criminals who fled here having committed serious crimes abroad. We use those warrants 1,000 times a year to send people back to face justice in the countries where those crimes have been committed. If those 1,000 suspects commit more crimes here, MPs will need to explain to the victims why we took away the power from the police to arrest and extradite them by tumbling into no deal.

Photo of John Bercow John Bercow Speaker of the House of Commons, Chair, Speaker's Committee on the Electoral Commission, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Commons Reference Group on Representation and Inclusion Committee

Order. I am listening to the right hon. Lady, as always, with great interest and enormous respect, but may I just very gently point out that we need to hear from other Members with amendments in the group and from the Minister? I am not certain how many more Members we need to hear, but my guesstimate is at least four, and we have 31 and a half minutes.

Photo of Yvette Cooper Yvette Cooper Chair, Home Affairs Committee

Thank you, Mr Speaker. I apologise to anybody else who wants to intervene, but I will not take any further interventions and try to conclude my remarks.

Some of those who say they support no deal have said that it is unpatriotic to rule it out. I understand that there are strong emotions, but I hope we could be more respectful of each other than that, because I believe that it is patriotic to stand up for manufacturing, for families who may be on the breadline and face increases in food prices, for our NHS, and for British citizens abroad who could lose their rights.

The other objection that people have raised is that this is unnecessary because the Prime Minister’s deal is the one they want as the way forward. I simply disagree, but I think the reality is not about my view but the view in the House: there is not, at this stage, support for the Prime Minister’s deal, and I do not think there could be. We have to be able to respond to what happens next.

Finally, I have heard some say that they want the imminent threat of no deal to persuade people to back the Prime Minister’s deal, if not now, then later. But brinkmanship in Parliament is not the way to resolve this and get the best deal for the country. This is too serious for us to play a massive Brexit game of chicken. The country cannot afford to wait to see who blinks first.

I hope that Ministers, as may have been rumoured, will accept this amendment and accept the principle behind it. The Government should get agreement on a deal before 29 March, get explicit agreement on no deal before 29 March, or, if that fails, commit to seeking an extension of article 50, so that there is time to sort this out. The amendment does not solve the Brexit challenges that we have ahead and the many intense debates that we will no doubt have about the best way forward, but it gives us an opportunity to rule out the worst way forward and to do so in a way that is calm, measured and sensible. That is why I hope that amendment 7 will have support from across this House.

Several hon. Members:

rose—

Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset

Thank you, Mr Speaker. I rise to support amendment 7, to which I am a signatory.

My right hon. Friend Sir Nicholas Soames, who is sitting next to me, and I have calculated that we have been in the House, collectively, for 56 years, and we have only ever, either of us, voted once against the Conservative Whip. This will be the second time that we will both be voting against the Conservative Whip, and I want to explain why. First, I want to say one thing about what this amendment is not. Yvette Cooper and my right hon. Friend Nicky Morgan gave eloquent expositions, but what they did not mention is that, in contrast to some things that have been suggested, it has no impact whatsoever on the Government’s ability to prepare for Brexit—it is about what the Government do after Brexit.

Secondly, clause 89 is an item that those of us who have been Ministers for a number of years will recognise as an “abundance of caution” clause. Some group of lawyers somewhere stuck in the bureaucracy clearly alerted Ministers to the possibility that they did not have certain unspecified powers and said it would be a good idea to have some unspecified powers in case the lack of unspecified powers turned out to be important. I do not think therefore that this amendment, in itself, will be likely to have a huge impact, if any, on the Government of this country.

That brings me to the question of why I am supporting this amendment. The answer is that it is most extraordinarily important to make it clear to the Government that it is not just this amendment. It is the precedent that this amendment sets, which is that on any power taken in any Bill in relation to the exit of the UK from the EU, if there is a majority in the House today and there continues to be majority against no deal, it will be possible to bring forward similar amendments. It is my proposal that we should indeed do that. I want to make it abundantly clear to those of my hon. Friends who are thinking of voting against the Prime Minister’s deal, which I shall be supporting, that the majority in this House, if it is expressed tonight, will sustain itself, and we will not allow a no-deal exit to occur at the end of March.

My last point is on why I am so passionate about not allowing such an exit. Many Members, including the Father of the House, have spoken eloquently about the long-term dangers to our economy of WTO trading and so on. My right hon. Friend John Redwood, for example, very much disagrees with that. I do not take a particular view about that. My preference is for a continued free trade deal with the EU, which is by far our largest trading partner, but in contrast to some, I do not want to argue that there would be a disaster in principle if we were on WTO terms. I do not believe it would be disastrous. I think it is suboptimal but not disastrous.

For five long years, I was in charge of the resilience of this country. During that period, I saw many examples of our civil service, military and security apparatus being prepared or not being prepared for certain issues that closely affected the wellbeing of our country. That is one reason why two years ago I passionately argued—my right hon. Friend the Member for Wokingham will recall an occasion a year ago when I made that argument even more forcefully—that the Government should undertake serious preparation for a no-deal exit. That would have had the effect that some of my hon. Friends mentioned. It would have altered our negotiating position. It was not done.

I have been in awesome detail through the papers produced. I have listened to the briefing for Privy Counsellors. I have consulted senior officials across Whitehall. I know what the RAG ratings of red, yellow and green mean—nothing. I know what it is actually to have prepared for dealing with the gas interconnectors, the electricity interconnectors and the many other details concerned.

Some of my hon. Friends and others in the country believe they can assure that under circumstances where we wreck the deal, refuse to make all the payments that the EU is expecting and falsify its expectations of a reasonable departure, the EU will then reasonably set out to work with us in a calm and grown-up way to ensure a smooth departure. It may be so. I am in no position to deny that it will be. I do not make lurid projections. Anybody who believes that they know it will be so is deluded.

I do not believe that we in this House can responsibly impose on our country a risk that may be severe of serious short-term disruption, for the sole purpose of gratifying the possibility that we avoid certain eventualities that certain Members of Parliament would prefer to see avoided and on which nobody in this country ever voted because they were never asked to. Under those circumstances, I will be voting with the right hon. Member for Normanton, Pontefract and Castleford against my own Government and very much against my own will, and I will continue to do so right up to the end of March, in the hope that we can put paid to this disastrous proposal.

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy), SNP Deputy Leader

In the interests of time, I will be very brief. I want to make it clear to the House that the SNP intends to push new clause 18 to a vote. I will briefly speak to some of the other new clauses and amendments that we have put forward. A couple of them relate to the expenditure implications of the UK now having to take charge of carbon and greenhouse gas taxes. They are about making sure that the Government are clear with the House about why they are spending this money and about the money they intend to spend before they do so. This is an additional cost that would be associated with the UK leaving the EU, which is a concern of ours. Obviously, we would not have to spend this money if we remained in the EU.

New clause 13 relates to a report on consultations. The Government have not consulted on nearly as many of the measures in this Finance Bill as we would like to see them consult on. Usually, they are produced in draft format, but many of them were not produced in draft format this year. Concerns have been raised by various external agencies about this, and new clause 13 relates to that. I think the Government could do a better job next year; they have done a better job in some previous years. They could pull together the notices in draft form, and we would therefore have better legislation that had been more properly scrutinised by external organisations in advance of being part of the Finance Bill.

Finally, new clause 18 relates to migration levels. The political declaration confirms the intention to end free movement. This is a significant problem, and something the SNP has argued against at every possible opportunity. We do not think we should leave the EU, but if the UK is determined to leave the EU and have an immigration policy of its own creation, it needs one that does not have a £30,000 limit and it needs one that allows people to come to live and work in Scotland. If the UK Government are not willing to do that, they should devolve the powers to Scotland so that we can do that, or Scotland should have the chance to become an independent country again so, again, that we can have a better immigration policy.

The Scottish population is ageing faster than the population in the rest of the UK. In the UK, 15% of the agriculture and food sector is staffed by EU nationals. However, I have spoken to a local company in my area in which over 50% of the staff are EU nationals. In Scotland as a whole, 7% of our citizens are international migrants, and the percentage of people born outside the UK is far higher in Aberdeen.

It is incredibly important for Scotland to have a migration system that works. We have tabled new clause 18 so that we can push the Government on looking at the migration system. We want a migration system that is not about saying, “We’re just going to stop migration”, but one that is evidence-led. It should be done by asking: what will be the impact to the Exchequer of reducing migration, and what will be the impact on public services continuing to run if migration is reduced? The Government have failed to do so.

That is why we are incredibly keen that new clause 18 is accepted by the Government and, more widely, that the Government make changes to migration policy. If they are not willing to concede some of the points we are putting forward about migration, they should at least be honest with people about the cost to the country of reducing migration, and about the fact that those who come to live and work here are net contributors to our economy and that the Exchequer benefits as a result of those people choosing to live and work here. If the Government are planning to change that and to reduce migration, they need to be clear that they will have less money to spend as a result.

In pushing this, we want to make it clear that our position is very different from the Government’s: we would like to protect the right of people who live and work in Scotland to continue to do so.

Photo of Nicholas Boles Nicholas Boles Conservative, Grantham and Stamford 6:00 pm, 8th January 2019

I will be very brief, not least because my right hon. Friends the Members for Loughborough (Nicky Morgan) and for West Dorset (Sir Oliver Letwin) have described much better than I ever could why I am going to support amendment 7, which I signed almost while it was hot off the presses before Christmas. The one point I want to address is the question that has been raised, and indeed the accusation that has been made, that in doing so I and other Conservative Members are breaking faith with our constituents and somehow breaking a manifesto commitment. I believe this to be utterly wrong, and also a rather disgraceful suggestion to make.

In the referendum campaign on our membership of the European Union, I supported and indeed voted remain. However, the argument of my colleagues who voted and campaigned for leave that I found most powerful and most emotionally impactful was that Parliament is sovereign and should take control of all the decisions that affect the lives of my constituents. That was the argument that the leave campaign made that I found the most difficult to resist and the most difficult to say was worth compromising for the sake of our membership of the European Union. It is therefore somewhat extraordinary that the very same people who made that argument so eloquently and effectively during the referendum campaign should somehow have the temerity to criticise me or other hon. and right hon. Members for doing what we believe is right in the interests of our constituents and in the national interest.

Photo of Kenneth Clarke Kenneth Clarke Father of the House of Commons

I cannot think of a single leading Conservative Brexiteer who would have changed his opinions on membership of the EU in the slightest had the remain side won the referendum. They made it quite clear that they had no intention whatever of abandoning their long-held, quite sincere views, which they would have carried on arguing in this House and voting for. Does my hon. Friend share my view?

Photo of Nicholas Boles Nicholas Boles Conservative, Grantham and Stamford

The Father of the House is completely right. I have to say—I am sure the same is true of him—that I rather admire them for it. I admire my hon. Friend Sir William Cash for making the same arguments passionately and with principle for 40 years—longer, practically, than many Members have been alive.

I want briefly to address the question of the Conservative manifesto commitment. I should point out that quite large chunks of the Conservative manifesto were junked by the Prime Minister during her own election campaign, so I do not know quite why we have elevated it to be a sort of Moses-style tablet. Nevertheless, it contained a sentence saying that we maintain that no deal is better than a bad deal. I agree, and I agreed then, in my hospital bed, when I agreed to stand as a candidate in the election, that that was the right position for the Government to take. As my right hon. Friend Sir Oliver LetwinWest Dorset; apologies to the people of Dorset—explained, it was entirely right for the Government to want to prepare for no deal. Unfortunately, as he pointed out, they failed to do so.

However, what we did not say in that manifesto is that no deal is better than any deal; we said no deal is better than a bad deal. I remind my hon. Friends that we have a deal; it is a deal that the 27 nations of the European Union have agreed, that the Prime Minister, who recently won a confidence motion in the Conservative party, and her Cabinet have endorsed and advocate, and that, at the last count, about 200 Conservative Members, including myself, intend to support when the vote is finally put. It is simply not possible to suggest that by saying that I will not countenance no deal, I am breaking that manifesto commitment. We do not have a bad deal; we may have a deal that you, individually, do not like —not you, Mr Speaker, but individual hon. and right hon. Members—but nobody can claim that we do not have a deal that it is reasonable for Conservative Members to support. It is therefore reasonable for us to say that, at this late stage, with the Government having prepared as woefully as they have for no deal, we will on no account countenance a no-deal Brexit.

Finally, I join my right hon. Friend the Member for West Dorset in very clearly saying this: I will vote on any motion, on any amendment, on any piece of legislation, proposed by whomsoever in this House to ensure that we leave the European Union on 29 March with a deal or not at all.

Several hon. Members:

rose—

Photo of Chris Leslie Chris Leslie Labour/Co-operative, Nottingham East

I will be brief, Mr Speaker. I will want to move amendment 8, which stands in my name and in those of many hon. Members on both sides of the House. In many ways, it complements amendment 7, which was tabled by my right hon. Friend Yvette Cooper.

Amendment 8 would institute a commencement motion for the powers that the Treasury is seeking. Clause 89 might have been wrapped up as fairly minor and inconsequential, but essentially the Government are asking for pretty whopping permission to start legislating for no-deal arrangements. At this stage in the game, I really do not think that right hon. and hon. Members should be delegating our powers entirely to Ministers in this way without question. I know it is difficult for Sir Oliver Letwin to rebel for a second time, on amendment 7, but I would like to persuade him to do so for a third time on amendment 8. A commencement motion is an important adjunct so that we can give the House and hon. Members the chance to express how they wish Brexit to go forward—so that we have the opportunity to express our view. A commencement motion would allow hon. Members the chance to do just that.

As things stand—certainly if the Government’s Brexit proposal is negatived next week—there could be 21 days or perhaps another seven days before anything is voteable on in this place. My own view is that before we start delegating powers to Ministers on these issues, or indeed on others, we need to start saying that enough is enough. Hon. Members need a chance to help to guide the way forward. There are many different views on these particular issues—Nick Boles has his particular preference and I have mine—but we need to provide for ourselves the time and the space to express them. Amendment 8 would simply provide for a commencement motion.

I hope that the Minister will recognise there is a strong cross-party opinion that we need now to give voice to Parliament. We cannot just drift into a no-deal situation. Parliament does want to take back control. He should concede and accept the amendment now.

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

I am grateful to all right hon. and hon. Members for the debate.

Delivering the deal negotiated with the EU remains the Government’s central priority. It is neither our preference nor our expectation that we will leave the EU without a deal. However, as a responsible Government, we must prepare for all scenarios. In the Budget, we furthered that commitment by confirming an additional £500 million of funding in 2019-20, taking the total Government investment on preparing for EU exit to over £4 billion. At the Budget, to help to ensure that the tax system can continue to function under any EU exit outcome, we announced a series of modest, sensible provisions, which included a power to make necessary minor technical amendments to UK tax legislation. It also allowed, as we have heard, for the Government to introduce a carbon emissions tax to replace the EU emissions trading system in the event of no deal. By including those measures in the Finance Bill, our foremost motivation is to provide certainty to taxpayers—the kind of certainty that one would expect from any responsible Government.

Let me turn to amendment 7, which was tabled by Yvette Cooper. Prior to proceedings in the Committee of the whole House, which considered clause 89, I placed a list of changes envisioned under the clause in the House of Commons Library. Right hon. and hon. Members who have taken the trouble to review the list will see that they are indeed minor technical changes, and out of minor and technical changes, these are the most minor and technical. Since then, we have received no indication from any Member to the contrary. Clause 89 is simply prudent preparation to provide our taxpayers with the certainty they deserve.

As I made clear, the Government do not want or expect a no-deal scenario. That was why we negotiated the withdrawal agreement, which will see us leave the EU in a smooth and orderly way on 29 March and sets the framework of our future relationship. As we heard from my right hon. Friend Sir Oliver Letwin and my hon. Friend Nick Boles, the best way of avoiding a no-deal scenario, if that is of grave concern to Members, is to support the withdrawal agreement next week.

Unless Parliament agrees a deal, the UK will leave the European Union on 29 March with no deal, as that was the agreement we all knew when we voted to trigger article 50. That is now the law, and amendment 7 does not change that simple truth.

Photo of Sarah Wollaston Sarah Wollaston Chair, Health and Social Care Committee, Chair, Liaison Committee (Commons) 6:15 pm, 8th January 2019

Will the Minister clarify his last sentence? Is he saying that if the deal is voted down next week, it will become the Government’s stated objective to deliver no deal?

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

The point I have just made is that the law of the land is that the UK will leave the European Union on 29 March, and nothing contained in amendment 7 will change that. As I will come on to say, the only difference that the amendment will implement is to make the UK somewhat less prepared for that eventuality. The purpose of clause 89 is to provide taxpayers and—

Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset

I am grateful to my hon. Friend, who is doing a valiant job—I do not envy him. Does he accept that although, as he says, the law at present is that we will leave on 29 March, the House of Commons, with the House of Lords and Her Majesty, has the ability to change that provision?

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

The House of Commons has the right to make the law, but the law as it is today is that we will leave on 29 March. The point I am making is that, whatever the intentions of the right hon. Member for Normanton, Pontefract and Castleford and those who may wish to support amendment 7, all that will be achieved by supporting it is denying our citizens and taxpayers the degree of certainty that we wish to give them.

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

I will give way one last time, but I have only a couple of minutes.

Photo of Kenneth Clarke Kenneth Clarke Father of the House of Commons

I, too, extend my sympathies to my hon. Friend, who drew the short straw of responding to the debate. He is trying very eloquently to minimise the significance of the whole thing, but of course he realises there are big issues behind this. Can he tell us what contingency arrangements the Treasury has made for the fiscal impact of leaving with no deal, and its likely impact on our trade, our manufacturing industry and so on? He must concede that the published figures for future deficits, debts and so on will be made utterly meaningless if we leave with no deal, and a fiscal crisis will occur. Is the Chancellor planning the emergency Budget he will probably require?

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

My right hon. and learned Friend and constituency neighbour tempts me to go into areas that I should not, but the Chancellor has said that we will be prepared and that we have fiscal room available—that was what he stated in the Budget, as certified by the Office for Budget Responsibility. My right hon. and learned Friend appears to be making the case for prudent preparations in case of a no-deal scenario, which is all that clause 89 seeks to achieve.

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

I will give way one last time to my hon. Friend—I apologise to the right hon. Lady, but I only have a couple of minutes.

Photo of David Davies David Davies Chair, Welsh Affairs Committee

With all due respect to my hon. Friend’s Department, is it not the case that it published a series of figures about the economic disaster that was allegedly going to occur if we voted to leave the European Union, although none of that has happened, and that what we have here is an attempt to blackmail the Government into not going ahead with a decision that was taken after a majority of the population voted to leave the European Union?

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

We are leaving the European Union. We wish to do so with a deal. The House will vote on the deal next week, but we must and will prepare for all scenarios.

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

I give way to the right hon. Lady because, of course, amendment 7 is hers.

Photo of Yvette Cooper Yvette Cooper Chair, Home Affairs Committee

Will the Minister confirm that he will still be able to use clause 89 powers if he either gives the House a chance to vote on no deal or, alternatively, takes the opportunity to apply for an extension of article 50?

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

Clause 89 would give the Government the ability to provide certainty to taxpayers now. That is what we want to ensure. We do not want to inhibit the ability of HMRC and the Government to provide that critical certainty. Who would want to do that? Who would want to diminish certainty to taxpayers at this time? The right hon. Lady listed a number of businesses. Those businesses want certainty, and by supporting her amendment, we would diminish that certainty and our preparedness—admittedly only modestly—for a no-deal scenario.

We will not be deterred from making sensible preparations—the public expect us to do so—and using the Finance Bill to prevent or frustrate preparation for any eventuality is unwise and irresponsible. I therefore urge the House to reject all the amendments and new clauses tabled against clauses 89 and 90 so that we give our constituents and taxpayers across the country the degree of certainty they deserve.

Photo of John Bercow John Bercow Speaker of the House of Commons, Chair, Speaker's Committee on the Electoral Commission, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Commons Reference Group on Representation and Inclusion Committee

Order. If the right hon. Gentleman feels able and willing to express his views in a minute, I will be delighted to hear him—I hope he will not be offended—but otherwise I will call the Opposition Front-Bench spokesperson.

Photo of Vincent Cable Vincent Cable Leader of the Liberal Democrats

Thank you for your indulgence, Mr Speaker. I just want to say a few words in support of amendments 7 and 8. They are Brexit-neutral, in the sense that they require the House to approve any change, but of course they relate primarily to no deal. The fiscal issues, as Sir Oliver Letwin explained them, were arcane and rather gentle. I tabled a more brutal amendment that was not called.

In the 30 seconds left, I want to relate an incident from this morning, when I went to the ferry port at Portsmouth. It is very clear that the Government are totally and utterly unprepared for the chaotic impact that there will be on the road system, including access to the naval base, if a no-deal Brexit occurs. Despite repeated requests from the council and others, the Department for Transport and the Ministry of Defence are refusing to co-operate, and the police now say that the M3 motorway will have to be closed from Winchester to Basingstoke in order to provide a lorry park. Repeated efforts to get Ministers to respond have not been heeded. A meeting was held for 19 regional MPs last week, but only one attended, so I am taking on the job of representing a no-deal Brexit. It is a task I undertake with all the enthusiasm of an arsonist trying to put out a bushfire, but I will do it.

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

This has been a significant and important debate. In fact, it is clear that the House desires a longer and broader debate—that point was well made by the Chair of the Treasury Committee. No deal is some people’s preferred outcome, and they are the same people who told us that doing a deal would be the easiest thing in history. They were wrong then and they are wrong now. I feel that the case against the unilateral use of these no-deal powers has been comprehensively made, and I urge all Members to vote for our amendments, because that is best for jobs, prosperity and the national interest.

Three and a half hours having elapsed since the commencement of proceedings on the programme motion, the debate was interrupted (Programme Order, this day).

The Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the clause be read a Second time.

The House divided:

Ayes 292, Noes 314.

Division number 286 Finance Bill — New Clause 3 — Review of Treasury Use of Delegated Powers in Relation to Withdrawal from the European Union

A majority of MPs voted against carrying out a review into the Treasury's use of powers given to it to maintain the effectiveness of tax law on the withdrawal of the UK from the EU.

Aye: 292 MPs

No: 314 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Absent: 40 MPs

Absents: A-Z by last name

Question accordingly negatived.

The Speaker then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).