Brexit: Preparations - Statement

– in the House of Lords at 3:29 pm on 8th October 2019.

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Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union) 3:29 pm, 8th October 2019

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

“Mr Speaker, with your permission I would like to make a Statement on our preparations to leave the European Union on 31 October and the steps that we are taking to get ready.

It is the strong desire of this Government to leave the EU with a deal. Our proposals to replace the backstop were published last week. I commend the Prime Minister and the Exit Secretary for their continued efforts to ensure that we can leave the EU with a withdrawal agreement in place. We have put forward a fair and reasonable compromise for all sides that respects the historic referendum result, and we hope that the EU will engage with us seriously.

In setting out these proposals, we have moved—it is now time for the EU to move, too. If it does, there is still every chance that we will leave with a new deal. However, if the EU does not move, this Government are prepared to leave without a deal on 31 October. We must get Brexit done so that the country can move on and focus on improving the NHS, cutting crime, helping families with the cost of living and further improving school standards.

In preparing for every eventuality, we are today publishing our No-Deal Readiness Report. This document is a comprehensive summary of the UK’s preparedness for leaving the EU without a deal. It sets out the preparations that the Government have made and how they have been intensified under the determined leadership of my right honourable friend the Prime Minister, and also the steps that third-party organisations and individuals need to take in order to get ready.

The actions in this report reflect our top priority: ensuring that we maintain the smooth and efficient flow of goods and people from the UK into the EU and vice versa. The actions are also aimed at ensuring that we continue to support citizens—upholding their rights and helping them prepare for the changes ahead.

In order to prepare for Brexit, my right honourable friend the Chancellor has doubled funding from £4 billion to £8 billion. We have also published a significant volume of material relating to no-deal planning, including 750 pieces of guidance setting out the steps that businesses, traders and citizens should take in order to prepare. We have also published 31 country guides for all EU/EFTA states, setting out what UK nationals living there need to do in order to get ready for Brexit. And this morning my right honourable friend the Trade Secretary published the temporary tariff regime that will apply from 1 November. In all, it liberalises tariffs on 88% of goods by value entering the UK. It maintains a mixture of tariffs and quotas on 12% of goods, such as beef, lamb, pork, poultry and some dairy products, to support farms and producers who have historically been protected through high EU tariffs. As a result of cutting these tariffs, we should see a 15% reduction in the cost of honey from New Zealand, a 9% cut in the cost of grapes from South America and, of course, a 7% reduction in the cost of wine from Argentina.

Businesses raised a number of points in response to the publication of the original tariff schedule in March. The Government listened carefully to these representations and made three specific changes as a result. We are reducing tariffs on HGVs entering the UK, adjusting tariffs on bioethanol to retain support for UK producers and applying tariffs to additional clothing products to ensure that developing countries continue to have preferential access.

But it is not enough for just the Government to get ready; we need businesses and citizens to get ready too. Even with every government project complete, and necessary IT systems in place, flow at the border would still be affected if hauliers did not have the right paperwork. If companies do not prepare, they will face challenges in trading their goods and services with the EU. While the Government can of course lobby EU member states to improve their offer to UK nationals living in their countries, we need individuals to act as well, to register for residency and to make arrangements for continued access to healthcare. For that reason, the Government are investing £100 million in one of the largest public information campaigns in peacetime. Through both mass market and targeted advertising, we are alerting businesses and citizens to the actions they need to take to get ready. We are also providing a further £108 million to support businesses in accessing the information and advice they need.

My right honourable friend the Business Secretary is overseeing a series of events with businesses around the country, designed to provide information on all the steps that they need to take to get ready, including actions that will support the flow of trade through the short straits. My right honourable friend the Health Secretary has today established a trader readiness support unit for suppliers of medical products. This week, HMRC is writing to 180,000 businesses setting out the full range of steps that they need to take in order to import and export with the EU after we leave. Of course, in advance of 31 October, we will continue to use every means at our disposal to communicate to businesses the need to get ready.

I want to pay particular tribute to the automotive, retail and transport sectors, including authorities at the Port of Dover and Calais, as well as Eurotunnel, for the extent of their Brexit preparations. On a recent visit to the West Midlands, the heartland of our automotive industry, I was impressed by the steps that manufacturers are taking to prepare. Retail businesses have also made significant strides: Morrisons, for example, now reports that it is ‘prepared for all eventualities’ in the UK, while the Co-op says that it is ‘prepared for the worst case’. Of course, risks remain and challenges for some businesses cannot be entirely mitigated, even with every possible preparation in place. But the UK economy is in a much better position to meet those risks and challenges thanks to the efforts of those sectors and companies and my right honourable friend the Chancellor.

It is also the case that the impact of no deal on both the UK and the EU will depend on decisions taken by the EU and its member states. On citizens’ rights, internal security, data protection and the vital position of Northern Ireland, we have taken decisions that will benefit UK nationals as well as EU citizens. I hope that the EU will match the generosity and flexibility that we have shown.

Through the EU settlement scheme, we have ensured that every EU citizen resident here by 31 October can acquire a formal UK immigration status, protecting their rights to live and work in the UK. To date, 1.7 million citizens have applied and 1.5 million have been granted a status. Those who have not yet applied have until the end of December 2020 to do so. So far, very few EU member states have made as generous an offer to UK nationals as the UK has made to EU citizens. We do not believe that citizens’ rights should be used as a bargaining chip in any scenario. EU citizens in the UK are our friends and family—we want them to stay. We now hope that the EU extends the same hand of friendship towards UK nationals as we have to EU nationals.

At the same time, keeping our fellow citizens safe should be a priority on all sides. My right honourable friend the Home Secretary has written to Commission Vice-President Frans Timmermans to ensure that effective arrangements are in place on the exchange of passenger name record data, disconnection from SIS II and working arrangements with Europol, as well as the transfer of law enforcement data. We hope that the EU will respond positively, in the interests of the shared security of us all. We have also unilaterally ensured that personal data can continue to flow freely and legally from the UK to the EU and the EEA. A swift adequacy decision from the EU would reciprocate this arrangement, providing legal certainty to EU entities and UK companies.

With respect to Northern Ireland, in order to avoid a hard border, we have committed not to introduce any checks at the border between Northern Ireland and Ireland. The limited number of checks that need to take place, due to international obligations, will all be carried out well away from the border and will affect only a very small number of businesses. The Irish Government and the EU have not yet set out how they will manage the Irish border if we leave without a deal. We urge them to match our commitment.

Let me finally turn to the opportunities from Brexit as laid out in the report. For the first time in 50 years, the UK will have an independent trade policy and we will be able to take our own seat at the World Trade Organization. We will be able to introduce a points-based immigration system that prioritises the skills that we need as a country. We will have autonomy over the rules governing our world-leading services sector and continue our leading role in setting global standards for financial services. We can be a beacon for the world in setting progressive policies on farming, fishing and the wider environment and, outside the jurisdiction of the European Court of Justice, we will set our own rules, putting in place smarter, more responsive regulation.

Of course, no deal will bring challenges and I have been open about that today, as I have been in the past. It is not my preferred outcome, nor that of the Government. We want a good deal, but whatever challenges no deal may create in the short term, and they are significant, these can and will be overcome. Far worse than the disruption of no deal would be the damage to democracy caused by dishonouring the referendum result. Some 17.4 million people voted to leave, many of them turning out to vote for the first time in their lives. They voted to ensure that the laws by which we are governed are set by the politicians in this place whom they elect. They voted for a fairer immigration system which attracts the brightest and the best. They voted to end vast financial contributions to the EU budget and instead invest in the people’s priorities such as the NHS and our brave police service. That is what the British people voted for and that is what this Government will deliver. I commend the Statement to the House”.

My Lords, that concludes the Statement.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Deputy Leader of the House of Lords 3:40 pm, 8th October 2019

I thank the Minister for repeating the Statement which, despite what we hear from sources at No. 10, claims,

“the strong desire of this Government to leave the EU with a deal”.

It is now 76 days since Mr Johnson became Prime Minister and 23 days until 31 October, but he has failed to get a deal: a failure that he said, and for which he would share responsibility, would represent “a failure of statecraft”. So, we have no deal, but is that the fault of the Prime Minister and his incompetence? Oh no, it is the fault of those pesky Europeans; it is the fault of the unbending Irish; it is the fault of Mrs Merkel; it is the fault of those pesky parliamentarians; and it is probably the fault of your Lordships’ House. But the truth, as we now know from the ever-helpful Spectator, is that there is no desire for a deal. It is all a ruse.

The Government are spending taxpayers’ money on advertisements to promote the 31 October date and the notion that we will leave on that day even though it would be unlawful without the consent of the House of Commons. The ads and the endless repetition of the date are all to absolve this incompetent Prime Minister of his failure, and it is all about preparing for an election where he can blame everyone but himself for our continued membership. But at what cost? What would be the cost of that much-trailed no deal? The IFS says £150 billion a year for business in administration alone, while the Government themselves are spending £8 billion to soften the blow. Then there are the tariffs to be paid by exporters, consumers and some importers—although not on Argentinian wine or New Zealand honey, which are not very high on the ordinary person’s shopping list. We will see higher food prices for consumers and the ending of pet passports. I am not making this up. It is all in the misnamed document I have in my hand. This is called “readiness”, despite what we hear from Ireland, from farmers, manufacturers, exporters, road hauliers, expats, medics and small businesses—that we are woefully unready. Indeed, it makes Ethelred the Unready seem extraordinarily well prepared.

Tariffs would hit us three weeks on Friday with an immediate impact on availability and prices. UK citizens abroad would lose some of their rights, while traffic congestion near Dover would make Parliament Square look like an open space. Moreover, with no adequacy agreement, any firm without an appropriate contract would lose data flow rights while the European arrest warrant would end. I say again: three weeks on Friday. Small businesses, hit by customs declarations for the first time, will be stymied in their work, and it is clear that the Government, despite this Statement, simply do not want a deal and are playing with people’s livelihoods. As Mr Tusk writes,

“what’s at stake is not winning some stupid … game. At stake is the future of Europe and the UK as well as the security and interests of our people”.

Speaking to the Prime Minister, he says:

“You don’t want a deal … you don’t want an extension”.

That says it all. The Deputy Prime Minister of Ireland agrees with the Tusk statement, which she says,

“reflects the frustration across EU and the enormity of what’s at stake … We remain open to finalize a fair #Brexit deal but need a UK Govt willing to work with EU to get it done”.

We are pleased that the Government have published this document. However, let us be clear: we on this side of the House—I probably speak for the whole House, not just this side—will do everything in our power to ensure that the no-deal nightmare does not come to pass.

I have only two questions for the Minister. First, does he really think that his Government will be thanked for taking the UK out of the European Union in this way? Secondly, does he think that the EU will help us to find a way forward when Leave.EU tweets over a picture of Mrs Merkel today the words:

“We didn’t win two world wars to be pushed around by a kraut”?

Is the Minister as embarrassed by that as I am?

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Liberal Democrat Lords Spokesperson (Cabinet Office)

My Lords, it is very difficult to know how much of this Statement to believe. It says that the Government still think that there is a chance of no deal. The text from No. 10 from last night—which the Spectator has now published—suggests that people with influence inside No. 10 have clearly entirely given up on the idea of a deal and are moving towards an election, so we have to treat this as the beginning of a series of election statements.

The statement that we will leave with no deal if necessary is a statement that the Government will defy the law. That is also an interesting statement for the Government to make to Parliament at this point. I note that, among other things, last night’s text says:

“To marginalise the Brexit Party, we will have to fight the election on the basis of ‘no more delays, get Brexit done immediately’”.

If that is what the national interest has come down to, we are all in deep trouble. Dominic Cummings appears to text as madly and prolifically as Donald Trump tweets.

There are a number of other fantasies in the text. However, I would like to start by pressing the Minister a little more on the fantasy that he gave us yesterday in suggesting that one could have production with different standards for the domestic and export markets. I am not sure whether the Government have had any discussions with any industrial sectors about having separate production lines. Perhaps they could tell us. We know very well that cross-contamination makes that sort of thing very difficult indeed in the food industry. The pharmaceutical industry depends on global markets, global standards and global research efforts. It will cease production in Britain if we start doing things like that. Non-tariff barriers produced by the British at different standards might also get us into trouble with the World Trade Organization.

If and when we leave the European Union, we will become “an independent trading country” again—as the Statement says—but we will not become an entirely independent economy. We depend very heavily on multinational companies which produce and invest in this country. If they cease doing so, we will all be poorer.

The Statement congratulates the automotive industry on how well prepared it is. What preparations is it making? It is closing plants for periods and reducing plans to build new models in this country. I remember a representative of the automotive sector saying to me in a briefing some weeks ago that it is now impossible to justify new investment in this country. That is the sort of preparation that it is making. This will make us and our children poorer over a longer period.

Another fantasy is that the World Trade Organization will be a major gain for Britain because we will have our own seat; this does not accept the deep crisis within the WTO which the United States has itself created. There is a failure to recognise that between the referendum three years ago and now there has been a downturn in the world economy, a protectionist turn in US policy and a trade conflict between the US and China, which makes the international context in which we manage the British economy much more difficult.

No form of Brexit offers comparable benefits to staying in the EU. That is what, after three years of discussions, the Government have discovered. As a result, the Government are not saying, “Now that we have been through all this, we need to modify our position”. They are saying, “Now that we have been through all this, we need to mitigate the disaster we are committing the country to”. This is a betrayal of Margaret Thatcher’s legacy. She pushed through the European single market as a major exercise in globalisation and deregulation by having common standards in one of the biggest markets in the world. The Government are now retreating to the idea that we will have our own little standards in a much smaller and weaker economy.

There have been all these comments about “vast financial contributions” to the EU budget. As I recall—since we are one of the richer countries and a major contributor—these are said to be £9 billion per year. Well, so far, we have spent £8 billion on the additional costs of leaving, and we have not yet begun to calculate the costs that we will incur from having to replace the shared agencies and facilities to which we have contributed as part of the EU with separate, national facilities. I mentioned yesterday the Joint European Torus in Culham; this is to become a national facility for which, I assume, the British Government will in future pay all the costs rather than a contribution towards shared costs. That is the sort of new cost that we will be developing.

When it comes to Britain in the world, where is British foreign policy? There is no sense of where Britain goes. This is a Vote Leave Government, not a Conservative Government. So much in this Statement seems to be without any foundation whatever. Lastly, it says there will be “damage to democracy” from “dishonouring” the referendum result. After the referendum, our current Prime Minister published an article in the Telegraph saying that there was no question that we had to leave the single market. He has changed his mind. Is it not time the Government changed their mind?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I thank the noble Baroness and the noble Lord for their comments and questions. I say to my opposite number, the noble Baroness, Lady Hayter, that what I found interesting about her lengthy contribution—she had a number of clever debating points to make—was that she said nothing at all about Labour’s policy on Brexit. Of course, as we all know, Labour is against everything: against a deal, against no deal, against revoking Article 50. One of these days, maybe even in our debates, we may get to discover what the Labour Party is in favour of.

I will correct some of the points that the noble Baroness made. She said that it is unlawful to leave without a deal. That is not correct. Leaving without a deal is the legal—

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Deputy Leader of the House of Lords

I referred to leaving without a deal without the consent of the House of Commons.

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

The record will show what the noble Baroness said. I wrote down that she said it was unlawful to leave without a deal, which, as she has now correctly said, is not the case. That is now for the European Council to determine as a matter of EU law. She said that businesses would lose their data flow rights; that is also not true. We have put in place substantial mitigations through standard contractual clauses. The Statement said that this will enable the transfer of data. We are urging the EU to put in place a proper adequacy decision, which should be straightforward on the basis that our regulation is, in fact, identical. We hope that it will do that.

Lastly, the noble Baroness asked me to condemn—which I happily do—the embarrassing, incorrect tweet from Leave.EU. Germany is a close friend, neighbour and ally. That comment was appalling and I join her in condemning it.

Moving on to the points made by the noble Lord, Lord Wallace, I picked up very few questions in his contribution. He said businesses would not have different production lines, but many already do. If you want to export to the Chinese, Indian or US market, you already have to meet the different standards they have. However, I readily accept his point about non-tariff barriers. He asked about the single market being an exercise in deregulation. I think that would come as a shock to many businesses that have to meet its standards. He talked about the £8 billion cost. Yes, the cost is considerable, but much of that expense would be incurred anyway. Even if we left with a deal, we would still incur the costs of leaving.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Chair, Economic Affairs Committee, Chair, Finance Bill Sub-Committee 3:55 pm, 8th October 2019

My Lords, I congratulate the civil servants and officials responsible for this document. Listening to the speeches from the Opposition Front Benches, it is perfectly obvious that they have not read it. It is very helpful indeed. The only criticism I make of the Government is that they did not give us very long to read it, but I have read it. On page 46, for example, it makes it absolutely clear that pet owners will still be able to travel to Europe with their pets after Brexit. They may need to take additional steps to prepare but it explains what these are. The opposition parties are scaremongering and making the same speeches. They have demanded to know what would happen if we left, but when a document is produced all we get are the same tired old arguments that we have heard over and again. I congratulate my noble friend and his officials on the fantastic piece of work that has been done in this document.

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I thank my noble friend for his comments and join him in congratulating all the officials across government who are working on no-deal preparations. We have some excellent civil servants who are putting in a great deal of work to make sure that the country is prepared to honour the democratic decision the British people took to leave the European Union.

Photo of Lord Wigley Lord Wigley Plaid Cymru

My Lords, at lunchtime, the BBC news reported that Mrs Merkel is looking for a customs union element in Northern Ireland in order to find some common ground. Given that Mrs May’s Government had that as a policy, and given the single market policy of the present Government, is it not possible to bring these together to find a compromise that can avoid us crashing out on 31 October?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

The noble Lord makes a good point. We are seeking a compromise and have compromised considerably by conceding that Northern Ireland will remain aligned—part of the single market, effectively—for agri-foods and goods on the island of Ireland. We look to the EU to make similar compromises. No nation on earth has an internal customs border in its territory and it is unreasonable to expect the UK to do that.

Photo of Baroness Smith of Newnham Baroness Smith of Newnham Liberal Democrat Spokesperson (Defence)

My Lords, the Statement addresses the danger of dishonouring the referendum result, suggesting that 17.4 million people voted to end vast financial contributions to the EU and instead invest in people’s priorities, such as the NHS—I seem to remember that being on the side of a bus—and our brave police service. Fine, those investments would be great, but in light of the IFS’s suggestion today that a no-deal Brexit would lead to borrowing at levels not seen for 50 years and to our debt-to-GDP ratio rising to 90%, when will Her Majesty’s Government stop dancing to the tune of the Brexit Party, the Spartans and Mr Dominic Cummings, and acknowledge that the financial costs of Brexit, especially a no-deal Brexit, will outweigh any financial contributions that we have been making to the European Union?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I accept that the Liberal Democrats are quite open about the fact that they want to dishonour the result of the referendum; if only the Labour Party would be more honest, we might have more of a debate on the subject. We have accepted that there will be costs involved in honouring the referendum result and leaving the European Union. We are doing our best to mitigate those effects.

Photo of The Earl of Listowel The Earl of Listowel Crossbench

My Lords, the Minister talks about risks as well as the efforts to mitigate them. What will the Government do to support households on low incomes, particularly low-income families, if food prices rise? Will they raise benefits to support low-income families should food prices rise significantly after a no-deal Brexit?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

This is an area that we shall have to look at if there is a fiscal event organised by the Chancellor later this year. The economy, however, is in great shape: we have unemployment levels that the Labour Party would have been proud of if it had been in office, the lowest unemployment for 40 years and the strongest level of growth over the past few years—even since the referendum result that Labour was always telling us would be such a disaster. Many European countries would give their hind teeth for the UK’s economic performance and unemployment levels.

Photo of Lord Bridges of Headley Lord Bridges of Headley Conservative

My Lords, while I welcome the nature of this report, and, like my noble friend Lord Forsyth, its comprehensive approach to these matters, I have a question about the reference on page 142 to the powers of the Northern Ireland Civil Service. My understanding is that the Northern Ireland Civil Service does not have all the powers required in the event of no deal. Will he confirm whether that is so, what the consequences are, and when the Government intend to address the situation?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

We have been liaising extensively with the Northern Ireland Civil Service, and indeed—the noble Lord, Lord Wigley, will be pleased to know—with the Welsh Government and the Scottish Government. If we have any announcements to make on that, we will make them in due course.

Photo of Lord Chartres Lord Chartres Crossbench

My Lords, I thank the Minister for repeating the Statement. Will he confirm how many organisations are currently receiving funding for the asylum, migration and integration programmes via the responsible authority in the UK, and whether these will be placed at risk from a no-deal Brexit?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I do not have the figures for the number of organisations in front of me, but I will gladly write to the right reverend Prelate with them. But we have given guarantees to organisations receiving EU funding that they will continue to receive that funding after a no-deal exit.

Photo of Lord Kerr of Kinlochard Lord Kerr of Kinlochard Crossbench

My Lords, with regard to security, page 154 shows that we are taking powers to ensure that,

“Border Force Officers will have greater scope to refuse entry on the basis of criminal behaviour”.

How will they access real-time information about criminal behaviour in future?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

One of the challenges of Brexit is internal security. We have done a huge amount of work on that behind the scenes. It is disappointing that the EU seems to be refusing to discuss many of those points with us, but we are, the noble Lord can be assured, putting in place all the appropriate mitigations so that we can still get access to much of this information.

Photo of Lord Hain Lord Hain Labour

I echo the implication of the question from the noble Lord, Lord Bridges. Will the Minister confirm that no deal in respect of the Irish border will require direct rule, so that the necessary civil contingency arrangements can be put in place? There is no question that that is so, and I would be grateful if he confirmed it. Can the Minister also explain why he said one thing to your Lordships—it was also said by the Minister in the other place—on the question of a deal, while a No. 10 source is quoted in the Guardian online, just an hour ago, as my noble friend Lady Hayter indicated, following conversations with Chancellor Merkel and other leaders, including in Dublin, that a deal looks,

“essentially impossible, not just now but ever”?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

With respect to the noble Lord’s first question, I will not go further than the answer I gave to the noble Lord, Lord Bridges. I take the point made by the noble Lords, but when we have announcements to make on such matters, we will do so in due course. I will not comment on off-the-record sources in the Guardian.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Crossbench

Given that any delay would have to be decided collectively by the 28, I ask the Minister to answer a straightforward question: will the Government send a letter asking for a delay if 19 October arrives without a deal?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I have to give the noble Lord 10 out of 10 for persistence. We have been around this course a number of times. I will give him the same answer I gave in the debates and the Questions last week: the Government will of course abide by the law.

Photo of Lord Purvis of Tweed Lord Purvis of Tweed Liberal Democrat Lords Spokesperson (International Trade)

Page 29 of the Government’s paper shows that British exporters would see price increases on 60% of the UK’s exports to the EU. It says that these include increased prices of 65% for beef, 53% for lamb and 10% for cars. The Government must have estimated the total value extra of British exports regarding price increases. What are they for those businesses exporting to the EU?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

We have been very open about the fact that some of the sectors the noble Lord mentions face very real challenges due to the EU’s protectionist nature and the imposition of tariffs. We stand ready to help those sectors in a no-deal scenario and we have interventions ready to mitigate the worst effects of tariffs in those sectors.

Photo of Lord Marlesford Lord Marlesford Conservative

My Lords, does my noble friend agree that for Northern Ireland to be outside the single market when Great Britain is inside it in no way infringes the constitutional position of Northern Ireland as part of the United Kingdom? If he does so agree, could not exactly the same argument apply to the customs union?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I thank my noble friend for his question. The proposal we have put forward is for Northern Ireland to be aligned with the EU single market for agri-foods and industrial goods but not part of the customs union, but he makes an important point.

Photo of Lord Haskel Lord Haskel Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, under the heading “Harnessing Economic Opportunities”, the paper speaks of,

“a different approach to government procurement”.

What will this approach be? Is the idea that it will help UK companies? Will it incorporate British Standard 95009, a new standard that sets out the social and economic standards for public procurement? Is the idea of this to help UK companies? If so, how will that operate under WTO rules?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

Of course we will always want to act in compliance with WTO rules, but the noble Lord will be well aware of the EU public procurement directives, which offer a very rigid and inflexible approach to public procurement. It is one of the many opportunities that we will be able to indulge in with smarter regulation but, of course, any proposals will be fully discussed in this House and the other place.

Photo of Viscount Waverley Viscount Waverley Crossbench

My Lords, this has been a tortuous process, but there will come a point when we will need to rally around the flag. Does the Minister agree that the time will come to keep politics out of this process and that we will start accepting the practical reality of no deal and the subsequent consequences? As things stand, what shortcomings still require urgent attention, or are the Government satisfied with the level of preparedness as set out in Operation Yellowhammer?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

The noble Viscount makes a good point. I am reminded of the famous quote that an independent is a guy who wants to take the politics out of politics. I am not sure that we will ever take the politics out of an issue such as this. Operation Yellowhammer is mentioned in the report. It comprises the reasonable worst-case planning assumptions that we are operating under. It is put forward by the Cabinet Office Civil Contingencies Secretariat, which operates under a strict set of guidelines. We are attempting to mitigate the effects against those guidelines.

Photo of Lord Caine Lord Caine Conservative

My Lords, as somebody who has just finished a nine-year stint as an adviser in the Northern Ireland Office, I lend my support to the comments of my noble friend Lord Bridges and the noble Lord, Lord Hain. In the unfortunate event of no deal, it will be absolutely crucial that the Government take powers to provide for the control and direction of the Northern Ireland Civil Service and Northern Ireland government departments, and appoint additional Ministers to the Northern Ireland Office to carry out and discharge those powers in the interests of the good governance of all the people of Northern Ireland.

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

My noble friend speaks on this subject with great authority. I entirely understand his point, but from his knowledge he will also understand why I cannot go any further than the answer I gave earlier.

Photo of Lord Liddle Lord Liddle Labour

My Lords, this is a factual question, not a pejorative one. What is the Government’s central estimate of the additional average time that it will take a lorry to pass through the channel ports from Dover to Calais, and what is their estimate of the economic cost of the delays that will result?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I am always suspicious when anyone gets up and says, “This is a factual question”. The noble Lord knows very well that it is impossible to put numbers on these issues—it depends on a huge range of factors. If he tells me what the exact interpretation and application of the regulations will be by the French authorities, I may be able to get closer to an answer that he wants. Our job is to ensure that businesses and hauliers are well prepared. That is why we are investing so much in a huge public information campaign. One of the interesting statistics is that more than 80% of hauliers crossing the short straits are not British operators; they are mainly from other European countries. This is one of the reasons why we need to reach out to those countries, to haulage associations, drivers, organisations et cetera, to ensure that those organisations know the requirements and have the appropriate paperwork in place to ensure that there are no delays.

Photo of Baroness Bull Baroness Bull Crossbench

My Lords, page 67 of the report, in the section on services, makes it clear that UK businesses and individuals operating in the EU will need to comply with host state rules, including on business travel, investing in and running companies, getting professional qualifications recognised and the levels of access to market. This may mean different regulations in every domain in which they operate. Can the Minister help me understand how this aligns with the Statement, which says that we will have,

“autonomy over the rules governing our world-leading services sector”?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

The noble Baroness is a doughty defender of the services sector, and rightly so; it makes an invaluable contribution to the UK. The distinction is that we will be able to regulate our own services sector, but the regulations that apply on exports in individual EU and non-EU countries are matters for those countries themselves.

Photo of Lord Wrigglesworth Lord Wrigglesworth Liberal Democrat

Given the IFS estimate that the economy is smaller by £60 billion as a result of the Brexit process, can the Minister tell the 60% of the electorate who did not vote for Brexit how much this whole exercise has been costing the United Kingdom since the Conservative referendum?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I think it was a UK referendum, not just a Conservative referendum. We are committed to honouring the result. I entirely understand the position of the Liberal Democrats: they want to forget about it and disavow the result, hoping that it will all go away. That is an offence against democracy, but I am sure that we will have this debate when it comes to the next general election.

Photo of Lord Howarth of Newport Lord Howarth of Newport Labour

My Lords, does the Minister accept that most people in this country will not share the indignation expressed by some noble Lords about the Government preparing for no deal, but will think that it is the obvious responsibility of the Government, while continuing to work towards a deal, to prepare for the contingency of no deal, which remains a very real possibility? Does he also accept that whatever the present intransigence of the Commission, the member states of the European Union will surely recognise that it is in their interests to work very closely and collaboratively with us on issues of security?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

As always, the noble Lord makes very good points. Most people will of course accept that it is the legal default, and we should be preparing appropriately. I also entirely accept his other point. A lot of security co-operation takes place outside of the EU sphere, and we have been assured by the people responsible that that co-operation will continue, but of course, some security co-operation relies on access to EU databases et cetera. It is extremely disappointing that the Commission does not wish to discuss how we can better keep people safe in these areas.

Photo of Lord Morrow Lord Morrow DUP

My Lords, do not the comments of the German Chancellor to the Prime Minister—that Northern Ireland must remain in the EU customs union for ever—now reveal the true nature of both Dublin and the European Union? Furthermore, this demonstrates clearly what some of us have been saying for quite a while: that the backstop was intended to be neither temporary nor an insurance policy; rather, it was a device to remove Northern Ireland from the United Kingdom.

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I have seen lots of these rumours flying around on social media, and I adopt the same policy as I do towards other off-the-record briefings. I have not seen an official read-out of that phone call, but I hope that those were not comments that the German Bundeskanzlerin would make. If that were the case, the noble Lord would be correct, in that it is unacceptable to have a customs border within the territory of the United Kingdom.

Photo of Baroness McIntosh of Hudnall Baroness McIntosh of Hudnall Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, I had understood that there was an additional 10 minutes of Back-Bench time on the Statement and it says 30 minutes on the screen. Would it be in order for this debate to continue?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I understood that it had been extended; I was not watching the clock. I am happy to stay and answer questions for as long as the House wishes, but it is for the Whips to determine.

Photo of Baroness McIntosh of Hudnall Baroness McIntosh of Hudnall Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, I hope that the Minister would agree that, whether we leave the European Union with a deal or without one, we will need to have good relationships with our friends and colleagues in Europe in the future. That was implied in the question from my noble friend Lord Howarth. I do not agree with his views on Europe, but I do agree with him on that. Does the Minister think that last night’s briefing from Downing Street to the Spectator, which has not been denied or repudiated since, is likely to encourage co-operative and fruitful relationships with our partners in Europe, particularly in the event of a no deal? I very much hope we can avoid that, but I do not see much prospect of it at the moment.

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

Apparently there was a mix up in communications, but I am happy to answer the noble Baroness’s question. She made a good point in the first part of it: of course, we have to have good and friendly relations with European Union countries, both under the aegis of intergovernmental relations with the EU and bilaterally, and we are ramping up co-operation in embassies in order to do that. The reality is that there has to be a deal, whether that happens before our exit on 31 October or afterwards; it is not possible for us not to have a deal in our relations with the European Union. I totally agree with the noble Baroness on that point.

I cannot respond to all off-the-record briefings that appear on social media and elsewhere.

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe Conservative

In his Statement, my noble friend said that one of the opportunities of exit would be having our own seat at the World Trade Organization. What changes in policy does he expect to adopt as a result of us sitting alone at that table? Given the demise of the Trade Bill, how will Parliament and business be able to contribute to that important policy in future?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

My noble friend makes a good point. We will want to be international champions for free trade, which is under threat in some parts of the world. The Trade Bill has not yet reached its demise; it is currently suspended and I hope there will be an opportunity to bring it back. On the more general point, we will want to consult closely with Parliament on our future trade relations.

Photo of The Earl of Devon The Earl of Devon Crossbench

My Lords, the Minister stated that the no-deal mitigation plans for meat exporters are in place. Does this include the mass slaughter of livestock for which there is no longer an EU market, given the huge hike in tariffs? The chairman of the Heart of the South West LEP has said that the impact of a no-deal Brexit on agriculture in the south-west will be considerably worse than foot and mouth. Do the Government agree?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I answered a question earlier on this business and I fully accept that the challenges of a no-deal exit are particularly acute for various meat and livestock sectors. We are aware of that, we are working closely with them, through the Department for Environment, Food and Rural Affairs, and we stand ready with a package of assistance to aid those sectors.

Photo of Lord Shipley Lord Shipley Liberal Democrat

My Lords, in reference to the reply that the Minister gave to the noble Lord, Lord Liddle, page 15 of the report says:

“The Government has prioritised the smooth and continued flow of goods in and out of the UK in the event of the UK leaving without a deal on 31 October 2019”.

The Statement says:

“I want to pay particular tribute to the automotive, retail and transport sectors, including authorities at the Port of Dover and Calais, as well as Eurotunnel, for the extent of their Brexit preparations”.

In view of the doubt the Minister expressed about the position in Calais, will he confirm that this Statement and report mean that traffic will flow smoothly through Dover and Calais in the event of a no-deal Brexit?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I can certainly confirm that traffic coming into the country will flow smoothly, because we have said we will prioritise flow over checking. We hope that the French authorities will adopt a similar position, but we are doing our best to alert drivers and others, on a reasonable worst-case scenario, about what delays may occur and to advise them to minimise those delays by turning up with the correct paperwork.

Photo of Lord Tomlinson Lord Tomlinson Labour

Does the Minister accept the judgment in the Scottish courts yesterday, where it appears that the judge argued that because he accepted the assurances given, both in writing and orally, by the Prime Minister or his aides at No. 10, there was no need to seek a declaration ordering the Prime Minister to honour the obligations that he appears to have entered into in Parliament? Does the Minister agree with the judge that it is now incumbent on the Prime Minister, therefore, to honour the requirements of the amendment, passed in this House originally, to give Parliament a meaningful vote, and also for Parliament to have the right to have the Benn Act taken fully into account?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

We will abide by the law and of course we accept all court judgments.

Photo of Lord Howell of Guildford Lord Howell of Guildford Conservative

My Lords, since we have this extra time, I ask my noble friend, in the midst of all this animosity, whether the United Kingdom is or is not, under international law and the 1993 treaty, as many legal authorities argue, still a member of the European Economic Area. If we were, that would obviously vastly ease the problem of deal or no deal and enable us to have an orderly transition and comply with all necessary aspects of the law.

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

My understanding is that when we leave the EU, we also leave the European Economic Area: we are members of that by virtue of our membership of the EU.

Photo of Lord Judd Lord Judd Labour

The Minister stated with absolute certainty that the Government are convinced that when a narrow majority of the population voted in the referendum to leave, they did so for a number of reasons listed in the Statement. What is the evidence that the majority of people voted for all these principles spelled out in the Statement? I have seen none. It is purely subjective, purely rhetorical and purely emotional. What is surely clear is that nobody, or very few people, can possibly have begun to understand in the referendum what all the implications and costs would prove to be. How can a Government committed to democracy and bringing the country together countenance going ahead with the course they have chosen without the people being given the opportunity to say whether they accept all these consequences or not?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I suspect that the noble Lord and I will not agree on this one. We think that the referendum result needs to be respected.

Photo of Lord Sterling of Plaistow Lord Sterling of Plaistow Conservative

My Lords, three and a half years ago, I was asked to put together a team from my old company, P&O, to cover every aspect of transport in every form along the roads. On what is happening at Calais and Dover, Manston Airport will be used for the Dover-Calais runs, and the M40 will be used for the tunnel. One hour before the meeting this morning I was fully updated on the work that is being done. I assure my noble friend Lord Forsyth that what is shown in this document today is vastly advanced compared with how it has been for many years, and my compliments go to those involved. Most people want to come to an agreement—I hate the word “deal”—but if we do not, I reassure your Lordships that in practice, so much of what everybody is talking about today is to do with software, and many companies have already been set up to handle that. Can the Minister ensure that this is publicised? The software aspects of nearly everything we are involved in are the key to our success.

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

My noble friend makes some good points. We have put a huge amount of work in to make sure that traffic continues to flow freely through the Channel ports.

Photo of The Earl of Listowel The Earl of Listowel Crossbench

With the leave of the House, can I press the Minister a little further on the impact of a no-deal Brexit on low-income families in particular? I recognise the Government’s great achievement in achieving such a high rate of employment, but as a member of the All-Party Parliamentary Group for Children, I have been examining for several years the impact of the cuts in local authority funding on families with low incomes. Many of the essential services that support low-income families have been lost; they have carried a heavy burden through the years of austerity. Can the Minister please look carefully, as far as he can, at mitigating any adverse impact, particularly of possible significant food price rises?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

I thank the noble Earl for his persistence in this matter. He is quite right to raise these important issues, and I commend the work he has done in this area. We will of course keep this matter under review, and will certainly look closely at any appropriate mitigations.