With your permission, Mr Speaker, I would like to make a statement on our preparations to leave the European Union and the steps that we are taking to be ready for every eventuality.
Some 17.4 million people voted in the referendum in June 2016 to leave the European Union—more than have ever voted for any proposition in the history of our democracy—and this Government are committed to honouring that verdict. The Government are determined to secure a good deal with our EU partners. Negotiations have been led by the Prime Minister, the Brexit Secretary and the Foreign Secretary, and those negotiations have seen significant movement over recent weeks. Until recently, the EU has maintained that the withdrawal agreement was sacrosanct, but now it has acknowledged that it can be changed. Up until this point, the European Union has also said that the backstop was inviolable, but again, European leaders have said that they are not emotionally attached to the backstop and hat there are other ways of ensuring that we can safeguard the gains of the Good Friday/Belfast agreement and also ensure smooth trade flows across the island of Ireland.
I want to commend the Prime Minister and his colleagues for the progress that has been made in those negotiations, and I hope that everyone in the House will agree that it is better for all of us if we can leave the EU with a withdrawal agreement in place, but Government need to be prepared for every eventuality. Since the PM took office, he has created a new Cabinet structure to ensure that, across Government, we take all the steps necessary to prepare for exit. A new Cabinet Committee—XO—has met 48 times and brought greater focus and urgency to our preparations. Our top economic priority is to ensure that we can maintain a smooth and efficient flow of goods and people from the UK into the EU and vice versa. We need to make sure that businesses are ready for changed circumstances and new customs requirements. There are, of course, some goods that require not just customs checks but other procedures—particularly food and products of animal origin—and we have been working with the Department for Environment, Food and Rural Affairs and the relevant sectors to ensure that those businesses are ready.
We take very seriously our responsibility to ensure that the rights of millions of EU citizens in this country are protected, and we are working with our European partners to ensure that UK nationals in EU nations also have their rights safeguarded. The XO Committee has also taken steps to safeguard and enhance national security and the operation of our criminal justice system, to enhance the free flow of personal data across borders, to ensure that we can support the devolved Administrations in their work and, in particular, to support the Northern Ireland civil service in its vital work.
With your permission, Mr Speaker, I would like to go into a little more detail about how we can facilitate the free flow of goods across borders, and it is in that context that I would like to explain the role of Project Yellowhammer in the Government’s planning. If the UK leaves the European Union without a withdrawal agreement, we will be a third country, subject to the EU’s common external tariff and trading on World Trade Organisation terms, and exports will be subject to new customs and sanitary and phytosanitary checks. These are unarguable facts, they pose specific challenges, and they constitute the base scenario with which we all have to work.
The Government’s Civil Contingencies Secretariat has used these facts to develop a reasonable worst-case scenario of what might happen, including in cases where appropriate mitigations are not put in place and readiness measures are not implemented. That reasonable worst-case scenario and the steps required to mitigate it are the work undertaken under the name Operation Yellowhammer. As the National Audit Office reported in March, work on Operation Yellowhammer has been going on since June 2018. The NAO made it clear then that
“Departments are working on the basis of a reasonable worst case scenario.”
Many of the challenges that Operation Yellowhammer identifies relate specifically to flow at the border. It contains careful estimates of how flow might be affected through a range of factors, including if steps are not taken to help businesses to be ready. That is why this Government have taken significant steps to ensure that businesses are ready. Specifically, we know that in adjusting to this new situation, businesses require support to deal with those new customs procedures, and Her Majesty’s Revenue and Customs has acted to support traders. Importers will have access to transitional simplified procedures, which ensure that businesses have time to adjust to new duties. Businesses exporting to the European Union will need a specific economic operator registration and identification number from HMRC, and HMRC has already allocated EORI numbers to 88,000 VAT-registered businesses that currently trade with the EU and not beyond it.
We have introduced postponed accounting for import VAT and negotiated access to the common transit convention, so that both imported and exported goods can continue to flow across international borders without the payment of any duties until they reach their final destination. We have established new transit sites in Kent and Essex, to ensure that trucks can flow freely, carrying goods into France and beyond to the wider EU. We are also providing tailored information to hauliers and businesses through a range of sites across the country, to ensure the greatest level of readiness. We have funded business representative organisations to share information with enterprises large and small, and they are preparing for exit. We have also worked with the authorities in both Dover and Calais to smooth trade, and I want to take this opportunity to thank the French authorities for the work they have done to ensure the operation of a smart border at Calais, so that compliant consignments should experience no delay.
The steps we have taken are designed to ensure that businesses are ready for exit without a deal on
As I mentioned, there are specific additional requirements for those who are exporting food and products of animal origin, with sanitary and phytosanitary checks. Traders will require export health certificates for food and catch certificates for fish. Hundreds of vets have now been trained to issue those certificates and additional personnel certified to support them. Again, the French authorities have taken steps to ensure the smooth flow of critical produce. They have specifically created a new border inspection post at Boulogne-sur-Mer to ensure that fish and shellfish products can be caught in the UK today and be on sale in the European Union tomorrow.
Of course, as well as making sure that commerce flows, we must safeguard the rights of individuals. That is why this Government have provided the most comprehensive and generous offer to EU citizens in this country, in order to guarantee their rights. It is already the case that under the EU settlement scheme, more than 1 million people have been granted status, and the Home Office is helping thousands of new applicants every day. If any Member of Parliament finds that any of their constituents are having difficulties with that process, I would welcome their getting in touch directly with me and the Home Secretary.
In the same way, we have taken steps to secure the rights of UK nationals in the EU, including access to healthcare after exit, and we will continue to work with our partners in member states to provide further protection for UK nationals. It is important that UK citizens in those countries register with the appropriate authorities. On gov.uk/brexit details are outlined, member state by member state, to enable every citizen to have the rights they deserve.
Also this month, the Government committed to increasing the UK state pension, which is paid to nearly half a million people living in the EU every year, for three years after a no-deal exit. Previously the commitment was solely for the financial year 2019-20. As well as making sure that UK nationals in the EU, and EU citizens in the UK, have their rights protected, we want to make sure that UK citizens can continue to travel in the EU without impediment. That is why UK nationals will have visa-free travel into the EU. We are also talking to member states to understand how people who provide professional services can continue to do so, member state by member state.
On security, it is vital to ensure, as we leave the EU, that we have the right approach to safeguarding citizens. That is why we have been talking to the EU about making sure we continue to have access to law enforcement and national security instruments. It is also important to recognise that, as we leave the EU, new tools will be available to ensure that we can better deal with people trafficking, smuggling and other criminal activity.
On the situation in Northern Ireland, the Government are absolutely committed to the Good Friday/Belfast agreement, absolutely determined to ensure there will be no infrastructure at the border, and absolutely determined to uphold the functioning of the all-Ireland economy. That is why we will have no checks at the border and no tariffs. We wait to see what Ireland and the EU Commission will decide, but we stand ready to work with them to help to safeguard commerce and rights across the island of Ireland.
I do not shirk from the fact that leaving the EU without a deal provides economic challenges, but it is also provides economic opportunities. There is the opportunity to secure new trade deals and become a strong voice for free trade at the WTO; the opportunity to develop new technologies that will help feed the world and enhance the environment; the opportunity to overhaul Government procurement to better support growing British businesses; the opportunity to introduce a fairer, more efficient and more humane immigration system; the opportunity to deal more effectively with cross-border crime; the opportunity to invest more flexibly and generously to support overlooked communities; and the opportunity to strengthen our democratic institutions.
The British people gave us a clear instruction to leave the EU. This House now has a clear choice. Do we honour that instruction, or do we continue to delay and seek to frustrate the British people’s vote? The Government are clear that we must honour that decision. I commend this statement to the House.