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Brexit - Motion to Take Note

Part of the debate – in the House of Lords at 7:04 pm on 25th March 2019.

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Photo of Lord Lilley Lord Lilley Conservative 7:04 pm, 25th March 2019

My Lords, the most precious commodity in political life is trust, and trust depends on keeping your promises. We saw what happened to what was once a major party in our country when it broke its solemn pledge on tuition fees: it was reduced to a rump, and even now, nine years later, with both major parties in disarray, it is unable to regain its position. Both major parties were elected in 2017 on a pledge to implement the referendum decision, and the Conservative Party was specific: that meant leaving the customs union and the single market. If we do not keep those pledges, we do not just put our party fortunes at risk. We undermine trust in our whole political system.

When, on 7 March last year and again on 4 October, President Tusk offered the United Kingdom a Canada-style free trade deal, he correctly stated that it was the only type of trading arrangement between the United Kingdom and the EU compatible with our promises to leave the customs union and the single market. That is why I greatly regret that the Government did not take up that offer. If I were in the other House, I might, with extreme reluctance, vote for the withdrawal agreement, since the alternatives being offered are even worse. However, if it is defeated, I hope the Government, Parliament and our political system will look again at President Tusk’s offer. Most certainly, in the time available, we will not be able to secure it before we leave, in which case we must be prepared to leave on WTO terms.

A year ago, it was quite reasonable to be worried about what leaving on WTO terms, with no withdrawal agreement, would mean. People had specific and concrete concerns. The planes were not going to fly. There were not enough licences for drivers and hauliers to operate on the continent. Trains would not be able to find a platform in Paris, apparently. Problems with the electricity supply in Ireland were threatened. Derivatives would cease to be valid, which would lead to the collapse of the whole banking system. I could go on. There were worries, too, about shortages and congestion at Dover. Now nearly all those concrete and specific concerns have been resolved by a series of mini-deals, reciprocal arrangements and pragmatic measures taken by us, by the European Union and by individual countries such as France, Belgium and Holland.

The opposition spokesperson began her speech in December by raising that concrete threat that planes would not fly. Planes will fly, however, because—although news of it did not reach this House—on 13 November last year, the EU said that it would introduce legislation to allow our planes to fly over, land in and return from the EU, if the UK reciprocated. We have: deal done.

There were concerns that if we became a third country to the EU and it to us, there would be only 1,638 licences available for all our lorries. The EU has said that it will create licences for our lorries to operate over the next year. It has also backed British membership of the common transit convention, to which we now belong, and has promised to work with us in the European Transport Ministers’ committee, which covers 48 states and will provide licences for our lorries to operate throughout all 48 states in and around Europe. Trains will run. Electricity will operate in Ireland, because of the measures and changes the Irish Government have made. Derivatives have been sorted. Visas will be available to our citizens to travel on the continent, as long as we make reciprocal arrangements for continentals to come here, which we will: another deal done. All these mini-deals have been done, and it is to the Government’s credit that they have made them, although they are rather coy about it, because they are still trying to frighten my colleagues in my former House into voting for their deal.

Most of the concerns about shortages, of everything from food and medicines to Mars bars and water, were due to fear of congestion at Dover and Calais, because additional checks might be needed. But Her Majesty’s Revenue and Customs has said it will not need to carry out any additional checks at Dover in the event of no deal or a free trade agreement because, even if there are tariffs, they will not be collected at the border. As the chairman of HMRC said, they are paid computer to computer, not by someone handing over a cheque through the window of a lorry as they pass through Dover. That is true of duties at present. The checks made are based on intelligence, where there is reason to believe that there is tobacco or alcohol—dutiable goods—or drugs or illegal immigrants, and officers therefore have to stop vehicles to look for those things. But they are few and most are carried out away from the port. Their frequency is not expected to change, because those risks will not change after Brexit, so traffic will flow freely through Dover.

Concerns were then raised and focused on what would happen in Calais. Most of the problems that caused us to operate Operation Stack for 211 days over the last 20 years—10 days a year on average—arose from problems in Calais, when there were strikes, immigrants blocked access to ports or trains, and so on. People feared that, if the French were not ready, it would create congestion at Calais, backing up across the channel and leading to congestion in Dover. But the French have moved with commendable speed and efficiency. I recommend that colleagues and noble Lords who have not already done so look at the website of Douane Française. They will see the smart border arrangements that will be put in place in Calais, which it is believed will ensure that trade flows freely through that port. The French are worried, and make it explicit, that if they do not enable trade to continue uninterrupted through Calais, they will lose that trade to Zeebrugge, Rotterdam and Amsterdam, which are well-prepared and eager to take the trade from them. So there will be no congestion at Calais either.

All these scares about shortages of food and so on are absurd. One that really worries people is the idea that there will be a shortage of medicines. I hear it repeated all the time, even though, on 25 February, the Government put out a Statement listing everything they have done to ensure that medicines get through. Even if there are hold-ups somewhere, there are stockpiles in this country and the Government said that,

“the supply of medicines and medical products should be uninterrupted in the event of exiting the EU without a deal”.—[Official Report, Commons, 25/2/19; col. 3WS.]

They urge people not to stockpile, because the one thing that could create a shortage is panic buying, as it could of any commodity at any time.

The result of all this has shown up in the debate today, where noble Lord after noble Lord has threatened us with calamity, catastrophe and disaster if there is no deal, but none has mentioned any specific calamities, catastrophes and disasters, because they know, in their heart of hearts, that they have been resolved and prepared for. Problems you prepare for do not happen, as we discovered with the millennium bug. If you have additional capacity for ferries as back-up in the event that something goes wrong, it means you have resolved the risk and we should recognise that.

It is essential, however, for those who want us to prolong the whole process to demonise the possibility of our leaving without a withdrawal agreement, hence the resort to this lexicon of lurid adjectives about calamity, catastrophe and disaster, previously used by the same people in reference only to the calamity that faced us if we did not go into the ERM, the catastrophe that faced us if we left the ERM, the disaster that faced us if we did not join the euro and the appalling situation that would result, according to 365 economists, if Geoffrey Howe’s Budget went ahead in 1981. That was followed by eight years’ growth, just as our departure from the ERM was followed by eight years’ continuing growth. We should not believe these abstract concerns that people have now that the concrete worries have largely been resolved.

The remaining fears are much more concrete and concern the certain application of tariffs if we leave and there is no free trade deal. Then, our exporters would face EU tariffs. They average 3% or 4% on our goods. Our exporters have gained 15% in competitiveness through the movement of the pound since 2016, so most are better placed now than they would have been, even with those tariffs. Some will face higher tariffs, but we will be in a position to help them. The total bill for this tariff of 3% or 4% on our exports will be £5 billion to £6 billion, but we will be saving £10 billion to £12 billion every year in our net annual contribution to the EU. So we will be well placed to help farmers and the car industry—those facing the highest tariffs—to cope with those tariffs and adjust to them.

We should not just look at the negatives. There are positives, too, if we leave without a withdrawal agreement. First, we will not have conceded £39 billion with nothing in return, which we would under the withdrawal agreement. We should be prepared to go to international arbitration confident in the advice that this House gave, concluding:

Article 50 allows the UK to leave the EU without being liable for outstanding financial obligations”.

The second advantage is that it will truncate uncertainty, which, under the withdrawal agreement or a prolonged extension of Article 50, will continue for between 21 and 45 months. We will put that to bed, not necessarily to everybody’s liking, but it is better to end uncertainty and enable business to plan and get on with life.

Finally, it will force a resolution of the Irish border issue. As recently as last month, Simon Coveney, the Irish Foreign Minister, said that, in the event of no deal:

“There is an obligation on the Irish and British governments, and the EU to try and work together to find a way of avoiding physical border infrastructure on this island”.

It can be done. It will be done if we leave with no withdrawal agreement, and that will open the way for us to have a free trade arrangement between Britain and Europe, covering the whole UK, which I hope will enable us to trade profitably and amicably in the future.