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No-deal Update - Statement

Part of the debate – in the House of Lords at 6:43 pm on 3rd September 2019.

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Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union) 6:43 pm, 3rd September 2019

My Lords, with the leave of the House I will now repeat a Statement made today by my honourable friend the Chancellor of the Duchy of Lancaster in another place. The Statement is as follows:

“Thank you very much, Mr Speaker. This is the first time that I have appeared at the Dispatch Box since I moved on from the Department for Environment, Food and Rural Affairs, and I take this opportunity to thank the superb team of civil servants at the department who do so much to improve the lives of so many citizens of this country. With your permission, I will make a statement about preparations for our departure from the European Union.

More than three years ago, in the biggest exercise in democracy in our country’s history, the British people voted to leave the European Union, but so far this Parliament has failed to honour that instruction. Now our Prime Minister has made it clear that we must leave by 31 October, and so we must. Trust in this House depends on it, and trust in our democracy depends on it. Now, of course, this Government are determined to secure our departure with a good deal, one that paves the way for a bright future outside the single market and the customs union. The response that the Prime Minister has received from European leaders shows that they are ready to move. They want a deal, too. They are moving because the Prime Minister has been clear that matters must be resolved by 31 October. If we drift, the incentive on them to deliver will quickly dissipate. So I hope my colleagues in the House of Commons will give the Prime Minister the time and the space he needs to pursue the opening he has secured and get a good deal that we can all support.

But, of course, we must be prepared for every eventuality. The European Union may not change its position sufficiently before 31 October, it may be that a deal is not secured, so we must be ready to leave without a deal on 31 October. Leaving without a deal does not mean that talks with our European partners end altogether. In those circumstances, after we depart without a deal in place, we will all want to discuss how we can reach new arrangements on trade and other issues. But while those conversations go on, we must ensure that we are ready for life outside the EU, as a third country trading on WTO terms.

There has been extensive speculation about what leaving without a deal might mean for businesses and individuals. Moving to a new set of customs procedures, adjusting to new border checks and dealing with new tariffs all pose significant challenges. Nobody can be blithe or blasé about the challenges that we face or the scale of work required, but, provided the right preparations are undertaken by government, businesses and individuals, risks can be mitigated, significant challenges can be met and we can be ready.

Leaving without a deal is not an event whose consequences are unalterable. It is a change for which we can all prepare, and our preparations will determine the impact of the change and will also help us to take advantage of the opportunities of life outside the EU. We have, of course, to prepare for every eventuality. That is the function of Operation Yellowhammer; it is an exercise in anticipating what a reasonable worst-case scenario might involve and how we can then mitigate any risks. Operation Yellowhammer assumptions are not a prediction of what is likely to happen, they are not a base-case scenario or a list of probable outcomes. They are projections of what may happen in a worst-case scenario and are designed to help government take the necessary steps to ensure that we can all be ready in every situation.

Since the new Government were formed at the end of July, new structures have been put in place to ensure that we can be ready in every situation and to accelerate our preparations for exit. Two new Cabinet committees have been set up, XS and XO, to discuss negotiating strategy and make operational decisions about exit respectively. XO meets every working day to expedite preparations for exit and we are in regular contact with our colleagues in the devolved Administrations, including the Northern Ireland Civil Service, and thousands of the best civil servants across the UK are working to ensure the smoothest possible exit. We have been helped by the Chancellor’s move to double Brexit funding for this year, announcing an additional £2.1 billion on top of expenditure already committed—so £6.3 billion in total has been allocated to prepare for life outside the European Union. That money is being used to provide practical help to businesses and individuals.

Guaranteeing the effective flow of goods across our border with the EU is, of course, central to our preparations. That will require action by businesses to adjust to new customs procedures and intervention by government to ensure the freest flow of traffic to our ports. That is why HMRC has announced an additional expenditure of £16 million to train thousands of customs staff, traders and hauliers, so that trade with the EU continues as smoothly as possible. It is also why today we are announcing £20 million more to ensure that traffic can flow freely in Kent and trucks arriving at Dover are ready to carry our exports into the EU. On business, we have automatically allocated an Economic Operator Registration Indicator number, or EORI number, to 88,000 companies across the UK. Businesses can also register for transitional simplified procedures to delay the submission of customs declarations and postpone the payment of customs duties.

New transit sites have been built in Kent to smooth the flow of goods into the EU, and we are also recruiting 1,000 new staff to help maintain security and support flow at the border. The Government will do all they can to support businesses to get ready, but many of the steps required to ensure the smooth flow of trade fall to businesses. We will provide advice, finance and flexibility over how revenue payments may be settled, but it is important that businesses familiarise themselves with the new requirements that exit will involve.

That is why we have launched a public information campaign, Get Ready for Brexit, to give everyone the clear actions they need to prepare. As well as TV and radio advertising, there is now a straightforward, step-by-step checker tool available on the government website, GOV.UK/Brexit, so that all of us can identify quickly what we may need to do to get ready. The Government have also acted to provide assurances so that businesses and individuals can have the maximum level of confidence about the future.

We have signed continuity agreements with countries covering more than £90 billion in trade, and we have replacement civil nuclear trading agreements with Canada, the United States of America, Australia and the IAEA. We have secured aviation agreements with 14 countries, including the US and Canada, and we also have arrangements with the EU on aviation, roads and rail to ensure smooth travel between the UK and European nations. We also have arrangements on education exchanges, social security, fisheries, climate change and a number of other areas. It is also the case that arrangements are in place covering financial services, so that a range of transactions can continue to take place and financial and market stability can be underpinned. Of course, we have a robust legal framework in place.

Six exit-related Bills which cater for different scenarios have been passed by Parliament, the Government have laid more than 580 EU exit statutory instruments and they are of course also determined to ensure that we protect the rights of both UK nationals in the EU and EU citizens in the UK. I personally want to thank the more than 3 million EU citizens living and working here for their positive contributions to our society. You are our friends, our family, our neighbours. We want you to stay and we value your presence. Under the EU settlement scheme, more than 1 million EU citizens have already been granted status.

Let me be clear. EU citizens and their family members will continue to be able to work, study and access benefits and services in the UK on the same basis after we exit the EU. Of course, the Government will do everything in our power to make sure that UK nationals can continue to live in the EU as they do now. We will continue to offer support for UK nationals to help them secure their rights in their home member state, including those associated with residency, access to healthcare, voting, driving and the validity of their passports. Indeed, the Government are providing up to £3 million to assist UK nationals with registering and applying for residency as we leave the EU. However, the UK Government cannot protect the rights of UK nationals unilaterally. We welcome the fact that all member states have drafted or enacted legislation to protect the rights of UK nationals and fully reciprocate our commitments to EU citizens, providing UK nationals with the certainty they deserve.

Of course, there are other decisions that the EU and member states have said that they will take that will have an impact on us all if we leave without a deal. The EU’s commitment that we will be subject to their common external tariff in a no-deal scenario will impose new costs, particularly on those who export food to Europe. Indeed, the EU’s current approach to the rules of the single market will, as things stand, require the Republic of Ireland to impose new checks on goods coming from Northern Ireland. For our part, we will do everything we can to support the Belfast agreement and mitigate those impacts, including providing targeted support for our agriculture sector and for Northern Ireland’s economy.

While these are real risks that we must deal with, there are also many opportunities for life outside the EU. We can reform government procurement rules to support UK businesses and get a better deal for taxpayers. We can forge new trade relationships to help UK businesses grow. We can innovate more energetically in pharmaceuticals and life sciences. We can develop crops that yield more food and contribute to better environmental outcomes. We can manage our seas and fisheries in a way which revives coastal communities and restores our oceans to health. We can introduce an immigration policy that is fairer, more efficient and more humane. We can improve our border security and deal better with human trafficking and organised crime. We can open new free ports across the country to boost undervalued communities and we can support businesses more flexibly.

There are undoubted risks and real challenges in leaving without a deal on 31 October, but there are also huge opportunities and new possibilities for our country outside the EU. It is my job to mitigate those risks, overcome those challenges and enable this country to exploit those opportunities and extend to every citizen those new possibilities. That is why I commend the Statement to the House and am confident that, as a nation, our best days lie ahead”.