Brexit: Withdrawal Agreement and Political Declaration - Motion to Take Note

Part of the debate – in the House of Lords at 5:01 pm on 9th January 2019.

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Photo of Lord Fox Lord Fox Liberal Democrat Lords Spokesperson (Business, Energy and Industrial Strategy) 5:01 pm, 9th January 2019

My Lords, it is a great pleasure to follow the noble Lord, Lord Hain, and I look forward to working with him when we move into Committee on the Trade Bill.

When the Minister was looking in our direction, he spoke about the need for clarity. I understand that his right honourable friend the Secretary of State for Defra is organising a new unit in his department with the express remit of “seeing through the fog” of Brexit. I also understand that the department is finding difficulty in recruiting people to take on this task. Meanwhile, the Government are stress-testing their own ability to create fog. We have already heard the lighter side of Project Grayling today but actually it is not funny; it is quite sad and rather pathetic that a government department led by a Minister is going out and trying to prove how serious the Government are about a no-deal exit, and doing it completely incompetently. I do not know who does due diligence in the Department for Transport but the big question is: who did due diligence on Chris Grayling?

Elsewhere, Iain Duncan Smith has been vocal about the benefits of a no-deal exit. He does not,

“believe that a single job will be lost”,

in a hard Brexit. It is not for me to challenge his belief system—I will leave that to the Lords spiritual—but I am able to refute what is clearly a false claim. Take, for example, a small engineering firm on an industrial estate just outside Hereford employing 30 people. It is very successful. Unlike some firms, the owner has looked long and hard at his situation and has talked in detail with his largely continental European customer base. He has prepared for no deal and the imposition of borders, tariffs and non-tariff barriers. In that situation, his plan is clear: he will make 10 of his staff redundant.

That is one business on one trading estate, the like of which surround almost every town and city in the UK. They will not all have to do this, but a significant proportion are thinking about making those decisions. Put them together and the toll on jobs is significant. Across the country, high-quality local jobs will vanish. Many of them are craft jobs in SMEs, which are highly valued. They will disappear. That is not a belief; it is what I have been told by the people who run those companies.

At the other end of the scale—the big scale—are the tier 1 manufacturers. We have heard what they say: a no-deal exit would be “catastrophic” to their just-in-time supply chains; that is their word, not mine. But of course, it is not just manufacturing: the 80% of our economy that is services-based will also be put at risk and here the numbers are huge. For example, the Bank of England estimates that there are some £69 trillion-worth of cleared derivatives which should not be disrupted. In this case, the EU Commission has put in place a temporary fix but the long-term implications of what needs to be done have to be considered, and that is just one financial instrument.

To be clear, any customs process, any imposed regulations and any non-tariff barriers will seriously hamper both our manufacturing and our service industries: the whole economy. That is why those of us sitting on the Liberal Democrat Benches need no encouragement in our analysis that leaving the EU, either with no deal or with the deal on the table, will damage the United Kingdom.

Turning to Mrs May’s deal, there is no doubt in our minds that this will leave us poorer than remaining in the European Union. Despite what the Minister says, nothing has changed since before Christmas. There cannot be frictionless trade if we are not part of the European Union and that creates a land border in Ireland. The backstop, conflated with the Irish border paradox, will permanently tether the United Kingdom into what I have called an economic terrarium: it will be an economic microclimate where the EU 27 permanently make the weather on our behalf. We will not have a say on what happens regarding the rules and regulations if we are bound by the backstop. For these reasons, I will support the Motion tabled by the noble Baroness, Lady Smith. We all recognise the limited role of this House, but to support the Smith Motion is to tell the other place and the world at large that we have very serious concerns about this deal and the prospects of no deal.

When proposing the backstop, the Attorney-General described it as a “calculated risk”. We saw later that his calculation was either flawed or a rhetorical trick but the whole prospect of leaving the EU is a risk, a huge risk. I have heard the process described as “self-harm”, yet who will really be harmed by the decisions made in this building? As the most reverend Primate said just now, it is a moral issue. In the main, we are not the ones whose futures are at risk; the vulnerable and least well off are those most at risk. To put that in detail, the British Retail Consortium has just published figures that show, in each constituency, the effect on the shopping basket. It is clear that the poorest people will have their bills and pay packets per week affected the most: food will go up by 5% or even more, according to the BRC. A deal, including the deal on the table, would also add to their shopping basket; already poor people will be made poorer by the actions of politicians in this place and the other place.

We need to take this very seriously. That is why it is perfectly consistent to say to the people of the UK, “You voted to leave the EU. The detailed work now indicates these risks to you and your family. Before we take the final, irrevocable step, we ask you to confirm whether you want to take and participate in those risks”. Quite simply, now that the risks are out in the open, the British public should have the final say on whether they want this deal or to stay in the European Union.