Leaving the EU: Extension Period Negotiations — [Mr Laurence Robertson in the Chair]

Part of the debate – in Westminster Hall at 9:30 am on 22nd May 2019.

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Photo of Julia Lopez Julia Lopez Conservative, Hornchurch and Upminster 9:30 am, 22nd May 2019

I will go on later in my speech to talk about some of the alternative arrangements that are already being worked up. There is a group within Government that actually has the resources now to deal with that issue, and the EU is also looking at alternative arrangements. I think that the question now becomes this: do we make those alternative arrangements now, or after we have signed a withdrawal agreement that is effectively an international treaty that will bind us into a number of things that are not in our country’s interest?

Tied into EU rules on goods, we will find that we have little leverage in negotiating access for our critical services, either with the EU or with new trading partners. However, there is absolutely no point in directing our frustration over this substandard withdrawal agreement at the EU. We have been out-negotiated, hoisted by the petard of an article 50 process that British diplomats designed; this poor outcome has come about through our complicity in its sequencing and design.

However, the withdrawal agreement has been neither signed nor ratified, so there remains a chance for us to pause and read the writing that the British public—if not Britain’s politicians—have seen on the wall for some time, namely that if we go ahead with this agreement, we will give up our ability to secure an attractive future relationship with the EU and instead will find ourselves in an unsustainable, asymmetric relationship with the EU, which will arguably leave us with less say over the rules and regulations that govern us than we have now. The transition period will only extend political uncertainty, and therefore economic uncertainty, because we do not know to what we are transitioning. That will throw a blanket over an economy that desperately wants a sense of direction. Whatever Bill now comes before us in Parliament will not change what has been negotiated in Brussels; we must not waste the next four months attaching funereal adornments to a thoroughly dead horse.

The public also know that the EU is unlikely to reform any time soon because the existing system benefits its most influential members. The EU will not draw up, at least in these current negotiations, a bespoke relationship with the UK, because it has decided that it values the integrity of the single market over frictionless trade with us, and it has also determined—quite correctly—that it has the leverage to reject our overtures regarding special treatment.

Parliament has so far done its job in judging this agreement to be against our interests. However, it has not accepted the consequences of that judgment. Despite attempts by parliamentarians to suggest practical amendments, the Prime Minister and the EU have made it quite clear that no other withdrawal agreement is available. They have also made it clear, through the sequencing of talks, that there can be no negotiations about the future relationship, beyond the broad-brush political declaration, until we have formally left. To put it another way, we will only be permitted to move to stage 2 once we have tied our hands behind our backs in stage 1.

I say with deep regret that we are left to face an unavoidable question: will we leave without a formal withdrawal agreement, with the economic challenges that presents, or will we vote to revoke article 50, and face the democratic consequences of that action? If parliamentarians wish to revoke article 50, let them vote for it and explain to their electorates why they now seek to overturn the inexorable logic of what they themselves put into law. Alternatively, we must face leaving without a withdrawal agreement and use the time before we leave to do our damnedest to make that work, while leaving the door firmly open for discussions with the EU on an alternative withdrawal agreement. Such an outcome, however, will require more than cosmetic preparation and jingoistic mantras about WTO terms. It will need major policy prescriptions, strong Government direction and co-ordination, transparency about the state of our preparedness and potentially even a fresh mandate if Parliament contrives to frustrate this process.

I am grateful to have the Minister for no deal here this morning so that he can set out with honesty and clarity the challenges that we would face in delivery, and how we can best mitigate them, while maximising the leverage of any advantages that this freedom might provide.

The urgent priority for Government in such a scenario would be to address the absence of an underpinning philosophy about Britain’s place in the world. My concern at this absence is reflected in Friday’s National Audit Office report on future trading policy, which effectively said that the UK will not get what it wants if it does not know what it wants.

The Brexit vote has often been misinterpreted as a misty-eyed reflex to return us to Britain past, but I see it instead as a judgment about the future—about where the world is going and whether the trajectory of the EU puts us in the right place to tackle the new challenges ahead. We are moving into an era of substantial regional trading blocs, in the form of China, the US and the EU. However, the UK has ultimately been unable to reconcile itself to Guy Verhofstadt’s vision, which he expressed this week, of an EU empire as the best way to flourish in this era, because we believe that the nation state still has fundamental relevance in maintaining the social and economic pact between Government and citizens that safeguards our cohesion.

Leaving the EU must not mean simply jumping into the arms of an alternative bloc. We must set ourselves up as a dynamic, open trading nation like Australia, Singapore and Canada, with strong links to all major powers and co-operation with the most forward-thinking, mid-tier nations on global standards for new technologies and data, the rule of law, security, and constantly evolving free trade agreements that break new ground on environmental stewardship, sustainable development and people-to-people exchange. Globally, we can be a bridge, a mediator and a thought leader; domestically, we can be a place of safety, liberty, creativity and prosperity, comfortable with the value of our nationhood and proud of our collective, modern identity.

Secondly, we need to move with speed—but not haste—in drawing up a new independent trading policy, ensuring that we avoid entering substandard agreements out of political imperative. We need to quickly establish whether the EU is genuinely interested in rapidly striking a comprehensive FTA along Canada lines, or whether it would seek to drag that process out to stifle talks with other nations. As things stand, it has been difficult for us to roll over existing FTAs, for example, because third countries want to see the shape of the future UK-EU trading relationship: how much flexibility over our own rules we are going to have, and how much access to the EU market.

Before making that approach to the EU, we have to undertake a hard-nosed assessment of our negotiating leverage, be it money, access to goods and financial markets, or co-operation on research and security. We must then answer broad strategic questions such as whether we have the capacity to attempt parallel negotiations with other countries, and whether to roll the Department for Exiting the European Union into the Department for International Trade so that the Government speak with a consistent voice. Immediately after tomorrow’s elections, we will require swift diplomatic analysis of how the new make-up of the European Parliament and Commission has changed the European power dynamic, and the extent to which that alters the landscape of future talks.

Thirdly, we need to accept that future access to the EU market will not be as good as our current arrangements, or is unlikely to be. Trading on WTO terms is not a cure-all, otherwise Governments would never seek to improve those terms via FTAs. We need urgently to identify which businesses will be most affected by that change in access and mitigate its impact, whether through a bold programme of tax cuts, greater regulatory freedoms that can drive competitiveness, or specific short-term support packages from the state. I would be grateful if the Minister explained what cross-departmental work has already been done in this area.

There also needs to be an analysis of long-term impacts. In financial services, for instance, the EU will want to avoid immediate shocks to its own institutions, but will then try to create a medium to long-term drag for firms so that they base themselves in the single market. What is our strategy to provide an even more compelling pull for services firms to retain, or move, bases here? How ready is our trade remedies regime, and are we really prepared for dealing with our own defensive producer interests, which we have hitherto hidden behind the EU to arbitrate?

Fourthly, Northern Ireland will require intensive and sustained focus. All parties, including the EU and Ireland itself, have agreed that there cannot be a hard border, so political impetus and financial resourcing need to be given to the alternative arrangements working group on how existing techniques—not new technologies—to check and clear goods away from the border can be implemented. I would appreciate the Minister’s update on that work, as well as on the state of preparedness at Dover and other major ports; on progress in rolling out authorised economic operator and trusted trader schemes; and on HMRC support for businesses dealing with new paperwork requirements.

If we are to take a tighter approach to immigration from the EU, we will need a major boost to our domestic skills agenda, including the adequate resourcing of our vocational education and college system; intensive investment in recruitment to the health and social care sectors; and incentivisation of businesses to train UK workers. What discussions has the Minister had about the preparedness of the labour market to tackle any impact of no deal?

To make this policy effort work, we will need to rally businesses, citizens and the civil service. Enough of the attacks on one another. Civil servants are just that: dedicated, professional citizens with a desire to serve. However, they cannot compensate for an absence of political direction. Once that has been provided, we must trust them to deliver.

That change of attitude must also translate to our dealings with the EU. Enough of the constant wartime references, and of speeches made in the UK that we think are not being heard in Brussels. The EU is not an enemy, but an organisation comprised of treasured partners; we need a reciprocation of that attitude, while reassuring the EU that it should not fear contagion. For Brits, our membership of the EU has always been more transactional, because as an island nation our borders are comparatively well defined. A desire for political stability, even if at times it comes at the price of economics, takes precedence for many continental European nations.

This new era therefore allows for a renewal of our relationship that will let each party move in a trajectory with which it is more comfortable. That relationship will require the establishment of fresh diplomatic frameworks for dialogue on issues of shared importance, and I would be grateful if the Minister explained what discussions he has had with the Foreign and Commonwealth Office about how we are gearing up our presence across the continent. The National Audit Office has also identified that DIT is under-resourced for the new relationships we wish to build. Can the Minister advise us on how quickly we might step up our presence in those countries with which we wish to deepen trading ties?

There are many other areas of no-deal preparations that require intensive focus. However, as other hon. Members wish to contribute, I will conclude by raising a bizarrely under-discussed aspect of Brexit that goes to the heart of this nation’s political malaise. Representative democracy works by citizens effectively subcontracting political decision making to a class of people in a way that gives those citizens the freedom to live their lives and prosper. They then endorse a framework and strategic direction for those decisions via a general election, or—in the case of Brexit—a referendum. In many ways, contempt for the political class has grown over these past few years in line with politicians’ avoidance of the kinds of decisions that they are explicitly elected to make, and their insistence on blaming institutions like the EU for failings.

Brexit was a signal to this place that the public want us to make more of our own decisions and then be accountable for them, but it is astonishing how few parliamentarians welcome the raft of powers that will soon make its way across the channel. We have not even begun to contemplate what that restoration of powers will mean for Parliament, and how it can be used to reinvigorate our pact with the electorate. In that vein, I would be grateful if the Minister could tell me what urgent thought is being given to rebalancing with the legislature the power that has been transferred to the Executive from Brussels via Henry VIII clauses in this period as a means of managing short-term Brexit challenges. Such power vested in Government may seem expedient now, but will rapidly seem less attractive under a Corbyn Government.

I fear that for some time, our political class has harboured a simultaneous inferiority and superiority complex about this nation’s abilities. One group of politicians consistently talks down our country’s inherent strength and resilience, while another parrots slogans of exceptionalism that diminish the practical challenges ahead. The public believe in this nation’s future beyond the EU, but expect us to be clear-eyed in its delivery. The Prime Minister has indicated that she will not take us forward in such an endeavour should her withdrawal agreement fail again, so the duty will fall upon any leadership contender to set out with resolve, and in forensic detail, their response to some of the issues I have highlighted. In doing so, I hope they will place service to nation, rather than personal ambition, at the heart of their task.

Regarding the latest EU extension period, EU President Donald Tusk warned

“do not waste this time”,

but it is not his wrath about which we should be worried. If on the road to 31 October, we do not employ the lessons we have learned over these past three years, the electorate may well indicate tomorrow that they are more than willing to bestow democracy legitimacy on another group of people.