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Brexit: Preparations - Statement

Part of the debate – 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.