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Brexit: Appointment of Joint Committee - Motion to Agree

Part of the debate – in the House of Lords at 3:49 pm on 3rd July 2019.

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Photo of Lord Newby Lord Newby Liberal Democrat Leader in the House of Lords 3:49 pm, 3rd July 2019

My Lords, I thank the noble Baroness, Lady Smith, for tabling the Motion. When the idea of a Joint Committee was first suggested, I was very sceptical about it, for two reasons. First, I thought: surely it is obvious that the costs of leaving without a deal are so horrendous that there is no need to spell them out again. But that was before it became crystal clear that both candidates for leadership of the Tory party were prepared to contemplate no deal as a serious option and seemed either ignorant of or unconcerned about its consequences. So there is definitely a need for the exercise to be done.

Secondly, I thought that, even if we were to propose such a committee, the Commons would not pick up our suggestion and therefore that it would be a waste of time. But I was mistaken. There is clearly an appetite in the Commons for this exercise to be undertaken, and we should therefore set the ball in motion today.

Before looking at the effects of no deal on any specific area of the economy or public policy, we need to be clear about what it means overall for our position at the country. This was recently spelled out by Sir Ivan Rogers, the former head of UKREP. No deal, he said,

“is not a destination. It is simply a volatile and uncertain … state of purgatory, in which you have forfeited all the leverage to the other side because you start with a blank slate of no preferential arrangements, and live, in the interim—probably for years—on a basis that they legislate in their own interests”.

Leaving without a deal means that there will be no transitional arrangements and on 1 November, 17 weeks from now, we will be on our own.

Some Brexiteers have argued that nothing will change and, in particular, that goods will continue to flow freely and that no one will notice the difference. It is therefore worth reading the Commission’s take-stock report to last week’s Council meeting on preparations made in the EU against no deal. I will quote from just one item, which states:

“In the field of sanitary and phytosanitary controls, Member States have set up new Border Inspection Posts … or extended existing ones at entry points of imports from the United Kingdom into the EU”.

I may have missed something, but I assume that the only logical point of having new inspection posts is to conduct new inspections, which means delays—and these delays would not disappear any time soon.

Noble Lords may have heard an interview with the head of Fujitsu on the “Today” programme last Thursday. He explained that his company was a member of the UK Government task force looking at technological ways to avoid controls at borders. Asked how the work was going, he said that there were “many difficulties”. Asked how long before there would be any implementation solutions, he could not even begin to hazard a guess.

So, when noble Lords opposite say, as they repeatedly do, that the new border controls that will be in place for 1 November are unnecessary, they are, to put it at its politest, peddling a myth. To suggest, as they sometimes do, that we can simply dispense with customs controls altogether and let smuggling rip is not only being criminally irresponsible but ignoring the fact that even if we were to do so, the EU will not follow suit.

Fujitsu is one of 1,000 Japanese companies that operate in the United Kingdom. Last week, Tarō Kōno, Japan’s Foreign Minister, explained that no deal would,

“have a very negative impact on their operation”— by which he means cuts in investment and employment. A Joint Select Committee would be able to confirm that that is what we would face. It would also confirm the overall impact of no deal on the economy and the public finances. According to the Government’s own estimates, published in their 26 February document Implications for Business and Trade of a No Deal Exit, a transition to WTO rules would lead to an economy that would be between 6% and 9% smaller over a 15-year period, but the decrease would be 8% in Scotland and Wales, 9% in Northern Ireland and 10% in the north-east. The Chancellor said yesterday that the cost to the Exchequer would be some £90 billion in hard cash per year.

Of course, these costs are only part of the story. Freedom of movement would end on 1 November, and British citizens planning to work in the EU would find that they had no right to do so. Equally, we would find many sources of vital workers blocked under the Government’s planned immigration policy. The Government are very fond of saying that they still want the brightest and best to be able to work here. But as far as they are concerned, this does not apply to the brightest and best care assistants, agricultural workers, baristas or lab technicians, all of whom we need from the EU on a continuing basis and all of whom would be barred under the Government’s immigration plans.

No deal would also immediately end a whole raft of mutually beneficial mechanisms for security co-operation, including data sharing, police co-operation and extradition. As a nation and as individuals, we would simply be less secure.

A no-deal Brexit would also preclude any involvement in all the mechanisms that project a shared European voice in international affairs, whether on climate change, the promotion of human rights or security and terrorism threats. These are the biggest issues facing the globe. As last week’s G20 meeting showed, Europe’s is the only powerful voice advocating policies in these areas that we and the Government strongly support, because they reflect our values as a liberal democracy. Any sort of Brexit, but particularly one without a deal, would diminish our influence in resolving them. It would also threaten the union, with inevitable renewed calls for Scottish independence and more credible calls for a border poll in Northern Ireland.

These are some of the costs of a no-deal Brexit, but what about the benefits? Everybody accepts that there would be net costs in the short term, and Jeremy Hunt for one is completely relaxed at the prospect of looking people in the eye and telling them that no deal means the loss of their job or their business. But beyond this immediate pain, for some the sunny uplands beckon. However, this nirvana is ill defined, devoid of specifics and wholly unsupported by any credible analysis. The economic costs through lost growth greatly outweigh our net contributions to the EU budget, and there is no evidence that trade deals with the rapidly growing markets outside the EU would be better than those the EU as a whole can negotiate—quite the opposite. I challenge anybody to offer even a shred of evidence that leaving without a deal would do anything but make us less safe and less secure.

What is now a Tory virility symbol was not remotely being offered in 2016 and has but minority support in the country now. In 2016 the Vote Leave campaign ruled out a no-deal Brexit and spoke repeatedly of negotiating a deal before even starting the legal process to leave. Today, in the latest YouGov poll, only 28% of the population—less than the Brexit Party vote in the European Parliament elections—supports leaving with no deal. Among 18 to 24 year-olds this figure falls to just 8%. So a policy option being clutched by Johnson and Hunt as their crucifix against the vampire of the Brexit Party is not even going to protect the Tory party from the electoral and existential threats it now faces.

Nevertheless, Boris Johnson said last week that we would be leaving the EU on 31 October, “do or die”. Jeremy Hunt on Sunday, not to be outdone, said that there was not much difference between him and Boris on the issue. There is of course, in reality, zero chance of reaching a new agreement with the EU before the end of October, and therefore leaving without one remains a growing possibility.

As this would be an act of monumental irresponsibility and stupidity, Parliament should at least prepare for such a decision with its eyes open. The Joint Committee that this Motion envisages would ensure that we did not stumble blindfold into a no-deal Brexit. It therefore has our strong support.