That, further to the resolutions of this House on 14 and 28 January, and that of the House of Commons on 14 March, it is expedient that a joint committee of Lords and Commons be appointed to consider and report on the costs and implications for the United Kingdom of exiting the European Union without a withdrawal agreement on 31 October 2019, and that the committee should report its findings by 30 September 2019.
My Lords, I have tabled this Motion, following discussions across the House, because while leaving the EU without a deal was previously viewed as a mere bargaining chip, now it looms as a real possibility. Your Lordships’ House has been clear that it opposes a no-deal Brexit as damaging to the interests of the UK, and MPs have expressed similar views.
At what could be his last appearance at the Dispatch Box as Chancellor, Philip Hammond restated that leaving without a deal would be,
“bad for the British economy”.—[Official Report, Commons, 2/7/19; col. 1056.]
Yet Ivan Rogers, who served with distinction as permanent representative to the EU, has predicted that, with patience running out and a new Prime Minister likely to move the goalposts, no deal is now the most likely outcome. We cannot know for certain what either Conservative leadership candidate will do come 11 pm on 31 October with no ratified deal. However, neither seems alarmed at the prospect. This is perhaps unsurprising, given that their current pitch is not to the nation but to the mere 0.3% of UK adults who are members of their party.
Boris Johnson, never one to fuss about detail, does not realise that without a deal there will be no implementation period. No withdrawal agreement means just that—no agreement. Just out. End of. But as both contenders now consider no deal a serious option, we need to be 100% honest about the implications for our economy, policing and national security, food and medicine supplies, transport, travel and every area of our lives where we currently interact with the EU.
I am grateful for the work of colleagues across your Lordships’ House on various EU committees, plus the expertise offered by hundreds of witnesses, that has resulted in many detailed reports assessing the implications of exiting with or without any agreement. Those reports will be invaluable to the proposed Joint Committee. With the deadline at the end of October and a new Prime Minister later this month, it is time to update and reassess the risks and implications.
This Motion, like others we have considered, is designed to be helpful to this House and the other place, ensuring that, when debating contentious issues, we deal with fact and not just opinion. Even those who opposed our special Select Committee on the then Trade Union Bill later confirmed its value. We also agreed a similar procedural Motion on the English votes for English laws legislation in 2015. At that time the Government refused to engage, but the stakes are so much higher now. Honest, forensic assessment is essential.
I know that there are some, even in your Lordships’ House, for whom crashing out holds no fear. If convinced of the benefits of a no-deal exit, they should also welcome such an inquiry.
One task of the Joint Committee will be to assess our readiness for and the implications of an abrupt exit. Last week we heard of the imminent departure of Tom Shinner, the top civil servant of the Department for Exiting the European Union who was overseeing no-deal planning. He follows HMRC’s Karen Wheeler, who until last week was responsible for no-deal border planning covering the Port of Dover and Northern Ireland. We also know that Oliver Robbins will cease his role; demonised by some, he remains the only person who has managed to negotiate a deal that respects both the Government’s and the EU’s red lines.
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:
I agree that Mr Johnson’s Charge of the Light Brigade, do or die bravado risks disguising quite how momentous is the decision that he seems to contemplate with such insouciance. It is momentous for how the world sees us, for the prosperity of our people and for the security and unity of the kingdom. I leave these great themes to the two previous speakers. They have been well addressed. I will make four simple, factual and, I am afraid rather familiar points and add two footnotes. My intention is simply to draw attention to the gravity of the step being considered with such surprising insouciance.
On fact 1, the cliff edge, the noble Baroness, Lady Smith, has already said that without a withdrawal agreement there is no transition period. She is right, and even Mr Johnson has now spotted that. I am less sure that everyone understands that, if the Article 50 process ends on 31 October—and both contenders for No. 10 are against extending it—there is no way in which a transition period can be revived. The concept is dead because the concept is only in Article 50. Once Article 50 is discharged, there is no relevant legal base in the treaty, no specific article about ex-partnership relationships, and no relevant provision in the articles dealing with relations with third countries.
Mrs May’s withdrawal agreement is now denounced by both contenders—both the one who voted for it and the one who voted for it and against it. But if it is dead and if it is replaced by no deal, so is gradual transition. The cliff edge is a real crash out—it means crash out, straight down, on 31 October.
The second fact is that everyone I think now accepts that the decision to start the Article 50 process was a revocable decision, but I am not sure that everyone yet understands that the decision to end the process is an irrevocable decision. Article 50 spells out that, once the process ends, a member state cannot revive its membership, either wholly or in part; it can only apply de novo under Article 49 for accession. So there is no ladder back up the cliff after 31 October.
My Lords, I declare an interest as an adviser to two major Japanese companies.
We have heard three impressive speeches from one point of view, and it is no surprise that I shall strike a slightly different note in what I have to say about the problems we confront. I shall vote against the proposal for yet another committee—we seem to live in a world of committees—and against the opposition Motion because it aims at the wrong target at the moment. There is no sufficiently deep thought behind it and, frankly, I do not think it does credit to the great social democrat element in the Labour Party which is vital to the nation’s political health, or used to be. It is wrong because the whole idea and concept of a crude, tear-away, “one leap and we’re free” Brexit on or by 31 October is, as I shall show, impossible. It is a chimera, and shouting about deadlines and delivery, however loud, will not make it otherwise.
The reasons for this basic reality are twofold: there are political aspects and there are technical aspects. On the political side, first, it is obvious that the other place will move heaven and earth to prevent a crude, break-away no deal. Secondly, there are just too many inescapable legislative aspects to unravel to make it possible in the time available before 31 October. We just cannot expect systems of law and procedures which have grown together over 45 years, however irritating and pointless they have become, to be wrenched apart or replaced in a few weeks or days. Thirdly, a walk-away no-deal Brexit on 31 October requires half a dozen or more major Bills, according to the House of Commons Library, simply to make it possible to proceed lawfully in daily business covering trade, agriculture, fisheries, immigration rules, social service administration, financial services and a whole lot else. It is physically impossible to fit all that in before the October date. Those are the political facts. They are opinions really, but they are certainly called facts.
My Lords, I appeal to both Boris Johnson and Jeremy Hunt—more in hope than in expectation, I fear—to read the cogent, cool and indisputable speech of the noble Lord, Lord Kerr. It would be a mercy for us all, if they did.
One of the principles set out in the Prime Minister’s letter triggering Article 50 was that the UK’s withdrawal from the EU would cause no harm to the Republic of Ireland. This is vital because the bilateral relationship between our Government and the Republic’s is the lynchpin of the 1998 Good Friday agreement and the peace process. Yet a no-deal Brexit would have profoundly damaging consequences for both the Republic of Ireland and Northern Ireland, which voted by 56% to 44% to remain in the EU in 2016.
Back in late 2010, the coalition Government proposed a small bilateral loan to the Republic at the height of the financial crisis. The Chancellor, George Osborne, then said:
“I judge this to be in Britain’s national interest … Ireland accounts for 5% of Britain’s total exports … we export more to Ireland than to Brazil, Russia, India and China put together. Ireland is the only country with which we share a land border, and in Northern Ireland our economies are particularly linked, with two-fifths of their exports going to the Republic”—[Official Report, Commons, 22/10/10; col. 38.].
Those are the words of the former Chancellor. Fully two-fifths of Northern Ireland’s exports go to the Republic.
Ireland’s economy repaid the loan and has bounced back since those dark days of 2010. Our fifth largest export destination has increased its trade with us to over £50 billion a year; 200,000 jobs here in Britain are with Irish companies; 60,000 directors of UK companies are Irish citizens; and the Dublin-London air route is the world’s second busiest. With no deal, the Republic officially foresees up to 85,000 job losses, just at the point where the Irish economy has reached full employment. A hard-earned return to budget surplus will reverse back into a deficit, with knock-on effects for public services and infrastructure investment, and of course serious damage for its close neighbour, Northern Ireland.
My Lords, the noble Baroness, Lady Smith of Basildon, asked for facts. In January 2017, the National Crime Agency warned the All-Party Parliamentary Group on Policing and Security what would be lost if we left the EU without a deal. Being a trained police officer, I took contemporaneous notes. These are the facts: we would lose the Schengen Information System, meaning that police officers would no longer be able to carry out checks via the police national computer on people and vehicles on the streets of the UK, for those wanted under the European arrest warrant, for missing people, for travelling sex offenders, or for those suspected of being involved in terrorism, anywhere in the EU.
We would lose the European arrest warrant. Norway and Iceland want to be part of the European arrest warrant. They will not get full access to it, because it is against the constitution of countries such as Germany to extradite their nationals to non-EU states. They applied in 2001 and agreement was reached in 2006, but it is yet to be implemented.
We would no longer be a member of Europol, to which the UK is one of the biggest contributors. It currently has a British director and 700 staff producing pan-European action plans and organised crime threat assessments. Third-party countries have only partial access and play no part in its leadership. The UK would become a third-party country.
We would lose ECRIS, a secure messaging system where criminal convictions in the courts of one country are shared across the EU. It is also used to analyse convictions to determine patterns of offending. It will be far more difficult for us to stop foreign criminals entering the UK because we will not necessarily know that they have convictions.
We would lose Prüm, a system that rapidly compares DNA, fingerprints and vehicle registrations across the EU; for example, a DNA profile found at a UK crime scene can be compared with databases of those convicted across the EU within a few seconds or up to 24 hours. We would have to fall back on alternative arrangements under Interpol, which take months; some are never replied to.
My Lords, I am glad to follow the noble Lord, Lord Paddick, and particularly glad to give unequivocal support to the Motion tabled by the Leader of the Opposition; I am just sorry that it has taken so long.
Three years ago, in the wake of a referendum that had divided our country almost equally, I told your Lordships’ House that we needed a Parliament that could come together and look at the facts. I was anxious to have an innovation: a Grand Committee of both Houses. It could have been done. I like to think that had it been done, we might not be in quite the mess that we are in today. Certainly, were it not for the ending of the Northern Ireland Assembly and Executive, we would not be in this mess. Many of the points made cogently by the noble Lord, Lord Hain, would have been appreciated by many of the parties in the Northern Ireland Assembly. We have had this extraordinary dichotomy that, on the one hand, 56% of the people of Northern Ireland voted to remain and, on the other, their only parliamentary representatives who take their seats in Westminster are leavers. When the history of this period comes to be written, I think that this will be seen as one of the most significant facts.
Having been in Parliament for just over 49 years, I am very depressed for our country as we approach 31 October. Of course, I hope fervently that a deal can be done. Like many remainers on this side of the House and on the Cross Benches, I would have accepted the Prime Minister’s deal, as negotiated by Olly Robbins, to whom the Leader of the Opposition referred in her speech. I wish Her Majesty’s Opposition in the other place had realised that you cannot leave an institution and retain all the benefits of membership. This was a deal negotiated by a determined and expert team, agreed by both sides; Parliament should have accepted it.
We are where we are, but where is that? I am ashamed for my party because of the way we are conducting the leadership election. It should have been decided in the other place. I do not know what the result would have been, but whoever had been elected Prime Minister—elected leader of the party and gone to the Queen to receive the seals of office—should have been working now. We are wasting time that we do not have to waste. I thought it grotesque—I use the word deliberately—that yesterday, when we had more news of the gravest crisis in Hong Kong since the handover, our Foreign Secretary, who I personally admire and like very much, was in Northern Ireland with Mr Boris Johnson, appealing for the party vote.
I did not approve of the sartorial elegance of the Liberals but at least I could applaud their sentiments. Their sartorial elegance is not always what it might be but their sentiments were sound. However, the turning of the back was a shameful gesture, and one of which no true Brit could possibly be proud.
I want to be proud of my party again. I will always be proud of my country, but at the moment I am ashamed for my party.
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Despite the EU asserting that it will not reopen discussions on the withdrawal agreement, the two leadership candidates are busy appointing negotiating teams. Mr Johnson is relying on that man of moderation, Jacob Rees-Mogg, and Brexit Secretary Steve Barclay, who in presenting the Government’s case on the extension to Article 50 said:
“I commend the … motion to the House”.—[Official Report, Commons, 14/3/19; col. 628.]
He then voted against it—just the man to lead sensitive negotiations requiring trust. Jeremy Hunt, meanwhile, has engaged former Canadian Prime Minister Stephen Harper. Perhaps he will bring some much-needed reality to trade negotiations, given the Canadian experience. Or perhaps not, given last night’s report that Canada is refusing to roll over CETA in the event of no deal.
The National Audit Office reports that the new customs IT systems are not ready. Meanwhile, crucial legislation on immigration and trade is not on the statute book, and it is hard to see either Bill being enacted by October. While hundreds of no-deal SIs may have superficially transferred the functions of EU agencies to UK public bodies, are we truly confident that they have the capacity to deliver from day one? For example, the Health and Safety Executive would immediately take over chemicals regulation, despite never having had this responsibility before.
Many other examples exist. We should also be concerned about food and product safety if UK bodies lose access to EU-wide alert systems and databases with nothing in place to take on that responsibility. As the Road Haulage Association declared today, businesses still do not know what is expected of them, with the potential for massive backlogs at ports costing billions. A Joint Committee should be prepared to assess whether the necessary legislation, structures and organisations are in place and operational.
A committee should also consider the economic implications. The Society of Motor Manufacturers and Traders estimates that without a deal customs delays could cost up to £50,000 a minute. Some £4.5 billion of WTO tariffs would undermine our auto industry’s competitiveness just when British manufacturing is fighting for its survival. Tesco, Britain’s largest retailer, has warned that no deal in October would be more problematic than it would have been in March, given the pressures of Christmas. Other food manufacturers and retailers remain apprehensive about their ability to import and preserve fresh fruit, vegetables and other perishable goods. The Bank of England estimated an immediate hit to the economy roughly equivalent to the 2008 financial crisis and a crash in the pound, disrupting trade and closing businesses.
In an unprecedented joint letter to the Prime Minister, the heads of the TUC and the CBI warned of the dangers to the economy, stating that the shock would be felt for generations to come. The danger is real, yet Mr Hunt has said that, in the event of no deal, he would tell the owners of a bankrupt business that their sacrifice had been worth it. How? To quote him, because we would be living in,
“a country where politicians do what the people tell them to do”.
That is not leadership. Politicians should tell the truth and one way of getting to the truth on this matter would be via a committee that examines, interrogates and presents the evidence.
I hope the Minister has listened to those who represent the UK’s interests across the world, including diplomats who believe that the handling of Brexit has significantly damaged our global standing. I hope he will acknowledge that, in the event of crashing out, we will immediately cease participation in EU defence missions, leading to a loss of influence in peacekeeping and anti-piracy efforts. I also hope he has read the excellent if harrowing committee report on security and policing which outlined how the UK would lose vital security databases and schemes, many with no precedent existing for third-country access. A diminished UK does not just put our own UK citizens at risk; it also damages our privileged relationships with partners such as the USA and Canada. Such drastic changes are not compatible with the vision of an outward-looking global Britain offered in the referendum.
Given the lack of clarity and predictability, surely it is right for Parliament to be fully informed and engaged. However, despite criticising Dominic Raab for suggesting that Parliament should be prorogued to force through no deal, Boris Johnson is still toying with that idea. This would be disturbingly undemocratic and the coward’s way out. Whatever happened to the Vote Leave campaign pledge to uphold UK parliamentary sovereignty?
While we have all these and many more predictions and anecdotes, Parliament has not recently been afforded an opportunity to study and comment on them, hence the Motion today. A Joint Committee of both Houses, possibly drawn from the existing membership of our own EU Committee and the Commons Exiting the EU Committee, would examine the evidence. First, it would have the power to request the type of documents that the Government have been reluctant to make available to Parliament and the public. Secondly, it would have the authority to question Ministers, civil servants, diplomats and businesspeople. Thirdly, it could provide an up-to-date picture for the incoming Prime Minister. Finally, it would give both Houses an opportunity to discuss its findings in advance of the October deadline.
I know, as does the Minister, that there are some in Government who see this Motion in the spirit it is intended and welcome it as a positive step forward, so I hope that the Minister can tell us that the Government will accept our proposals and then diligently work across both Houses—all parties and the Cross Benches—to ensure that the committee is swiftly established and able to start work. If he does not, we cannot accept marching towards the cliff edge without an up-to-date assessment of what lurks beyond. With or without Government’s support, I urge your Lordships’ House to support this proposal to provide the House of Commons with the opportunity to consider its merits and to continue working to avoid the worst of all outcomes: a chaotic, damaging, no-deal Brexit. I beg to move.
“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.
For the third fact, I am sorry that I will have to mention that GATT Article XXIV Clause 5(b), even though the Government—and I pay tribute to the Minister—the Bank of England, the WTO and the EU Commission have all rightly pointed to its irrelevance on 31 October. We and the EU could not maintain the mutual tariff-free trade that Mr Johnson says he wants without having to eliminate all tariffs on all our trade with all WTO members. Clause 5(b) provides a glide path towards a customs union or a free trade agreement, provided that the destination is agreed and the schedule of reductions is approved, but it has never been used for a move in the opposite direction. The application would have to be made jointly by us and the EU, and the EU would not join us because it thinks that the application would fail and because there is no legal basis in the treaty that it could use to do so.
It follows that on 31 October we would either have to build a tariff wall against imports from our largest supplier, or remove all our tariff walls against all suppliers, or be in breach of WTO rules—from the start, on 31 October. The EU has long since said what it would do in that situation. If we go with no deal, the EU’s common external tariff will apply to us from day 1. There is no parachute for our importers or our exporters—for any of our traders there is no parachute. It will be our biggest ever step away from free trade on 31 October.
My last fact is that the legal base on which the EU could then negotiate a new relationship with us would be Article 218, perhaps combined with Article 207 and maybe also Article 217. We would then find ourselves mourning the lost protection of Article 50. Under Article 50, the position of the 27 is decided by qualified majority, meaning that we cannot be held to ransom by any single member state. After 31 October, we could be. Since an Article 217 and 218 agreement would be a mixed agreement, including matters not of EU member-state competence, EU positions would require unanimity. Of the first three files that the EU has said that we would have to look at in negotiations—citizens’ rights, the money and the backstop—at least two raise issues well outside exclusive EU competence. So the whole negotiation could stall immediately. If a single member state were unhappy about how we proposed to treat its nationals or had some unrelated point, perhaps about fisheries, that it wanted to press upon us, once outside the EU, unprotected by Article 50 rules, we would find that no member of the 27 would have to persuade the others to seek a concession from us: it could insist. EU positions, up until now a majority-determined highest common factor of member-state positions, will become a unanimity-determined lowest common multiple of member-state demands. Life will be a little harder for our negotiators when the rules of the game change on 31 October.
My first footnote is this: if, acting on Mr Johnson’s proposal, we decide to withhold some or all of the money, the negotiations will not start. The EU runs on law. We made legally binding commitments, and the total has been jointly computed and agreed by our Prime Minister. Were we to resile, it would be self-defeating. It would not assist the negotiations to do so: it would prevent them. Equally, the 27 will not, in my view, agree to drop or time-limit the backstop. They take seriously their commitment to the Good Friday agreement—and outside Article 50, it takes only one of them to take a stand.
My final footnote is this: an Article 50 agreement does not require 27 national ratifications. A mixed agreement, such as any future agreement that we might have, will do. The Canadian agreement got stuck in the Wallonian Parliament; the Ukrainian agreement required a referendum in the Netherlands. The referendum requirement has two effects. First, it makes the negotiators look over their shoulders. They feel domestic pressure to use the veto given to them by the unanimity rule. Secondly, it adds a couple of years—perhaps more—after the deal is struck, for national ratification procedures, referendums or whatever. A no-deal Brexit is not just an event: it is a process. Leaving on 31 October would condemn us to a protracted period—five, seven, I do not know how many years—of continuing no deal.
I cannot see how Mr Johnson and Mr Hunt can tell us that that is what people voted for in 2016. In yesterday’s Times, Rachel Sylvester recalled the official Vote Leave campaign leaflet, ruling out no deal. The leaflet said:
“Taking back control is a careful change, not a sudden stop—we will negotiate the terms of a new deal before we start any … process to leave”.
Now we have Mr Johnson saying that we should end it with no negotiated deal. I think we know what electorate he is appealing to, but I cannot accept that it would be undemocratic to put his proposal to a wider electorate. It is so different from what he was saying three years ago that it must be right that Parliament, when it is required to take the no-deal decision, is made fully aware of the costs and implications before irrevocable decisions are taken that would have infinite effect and run for many years. So I strongly support the Motion in the name of the noble Baroness.
However, it is the technical impossibilities of a no-deal exit in the hard, brutal sense which are even more interesting and conclusive. If on 31 October we leave the Lisbon treaty complex for good under the Article 50 procedure, we remain by default within the European Economic Area agreement treaty, which is a multilateral treaty between states. No process to withdraw from the EEA under Article 127 has been triggered, whatever some Brussels lawyers, or indeed our own Civil Service advisers, may say. We remain as a contracting partner within the EEA treaty structure, which means participating provisionally, after leaving on 31 October, in the single market and leaving whenever we chose later, having given 12 months’ notice. That timing would be entirely up to us.
I ask your Lordships to give thought to some of the comments of the noble Lord, Lord Owen, who is not in his place, who has gone into this very profoundly, that for a temporary or provisional staging post post-Brexit, this is a quite comfortable place to be. It gives us a better space than the much-disliked withdrawal treaty and provides extensive freedoms to tackle the next phase of all the key issues, both security and economic, in the period ahead. In this period, we can have unrestrained powers to make treaties and trade agreements, just as Norway has in the EEA. We can carry on setting our global agenda. We can duly leave the EU by 31 October and the EEA by, say, 31 December 2020, but it would be entirely our say-so, not anybody else’s. We can start the long process of fisheries and agricultural reform on our own lines. Our trading terms with the rest of the EU will remain tariff-free in the single market for the interim transition, while we design a new FTA with Europe, so there is no immediate disruption and smashing up of supply lines. We have the time and flexibility to complete our practical and sensible immigration controls, which are badly needed.
The ECJ has no locus in the EEA, although we would be temporarily under the EEA court’s much lighter, consensus-based jurisdiction. We would pay the EU for our legal obligations on leaving, as is proper, but buy only into the other EU programmes that we want to join. We would have time to sort out the hopeless bind into which Dublin has talked itself, where simultaneously it must install border controls at the insistence of Brussels, as an EU member, when of course that is the very last thing that the Dublin Government want to do. There were always ways round this dilemma, even with existing technology—let alone new technology—but they were always going to take time to work out. I agree with many in this House who believe that we should be generous and helpful to the Irish Republic in its agonising choice. Our membership of the EEA for 18 months would give time for that.
The essential point to grasp is that it is going to happen anyway, and by default. Calling it no deal is a complete misnomer, which is why I question the opposition Motion. Even if nothing is done, we become—for a limited time—a non-EU member of the EEA, giving notice of our intention to leave in due course. This is where we will find ourselves, like it or not. If Brussels tries to force us out of the EEA treaty we will have ample recourse for this, frankly, unreasonableness through the Vienna Convention on the Law of Treaties. Why should it do that? This orderly and gradual procedure is utterly in its interests, step by step. The silly mistake of the two prime ministerial candidates is to keep depicting, in blood-curdling terms, what might happen as no deal when, in fact, a most elaborate set of deals and new arrangements will have to happen once we withdraw from the EU treaties on 31 October. It reconciles the 31st imperative with realism, orderliness and a step-by-step approach.
I know—and others have observed and will observe—that Boris Johnson has said that the chances of a hard no deal happening are a million to one against. He is wrong. There is no chance at all of a hard-line no deal. No such thing exists or can occur. In fact, the whole vocabulary of hard Brexit versus soft Brexit, so beloved by the BBC and others, is going to become irrelevant and redundant against what actually will happen if we just move on to a fixed transition period, provisionally within the EEA for 18 months or so, with a complex series of deals unfolding.
If the ERG crew in my party in the other place cannot accept this near-default reality position under a new leader and would prefer suicide, then they are to be pitied. A general election would certainly follow, wiping most of them away and leaving them to be condemned by history. As for the opposition Motion before us, instead of this sterile jousting about something that cannot happen, we should remember something that JS Mill wrote long ago about our politics: that, when all is said and done, the contending parties of this nation share the truth between them.
If Brexit really does have to happen, I will agree with the spirit and letter of the backstop arrangements—an insurance policy to ensure that the border stays open at all costs. Make no mistake: no deal means a hard border—a legal requirement of WTO, and therefore EU, external frontier rules. The impact on Northern Ireland and its fragile economy would be grave. The head of the Northern Ireland Civil Service, in measured words, wrote to the political parties of Northern Ireland earlier this year:
“The consequences of material business failure as a result of a ‘no-deal’ exit, combined with changes to everyday life and potential border frictions could well have a profound and long-lasting impact on society ... a no-deal exit could result in additional challenges for the police”.
Wales’s key port of Holyhead, the third busiest port in the UK, its work overwhelmingly with Ireland, would be especially badly hit. As the Welsh First Minister, Mark Drakeford, said,
“a no-deal Brexit would be catastrophic for the Welsh economy”.
One-third of the value of cross-border trade is in agri-food, and there is simply no way of maintaining the frictionless trade and processing of such goods—including all of Northern Ireland’s fresh milk, which is processed in the Republic—across the border in a no-deal scenario. The import duties, plus detailed rules that require certification, document inspections and checks on agri-food products crossing the border, will all but cripple the industry. Ninety-four per cent of those who trade across the Irish border are small or micro-enterprises. Few, if any, of these have the capacity or resources to implement the measures needed in a cliff-edge Brexit—still less the resources to pay sudden new tariffs.
One of the most likely means of temporarily managing the catastrophic fallout for Northern Ireland would be for the UK and the EU to invoke Article XXI(b)(iii) of GATT—the so-called “security clause”. This would allow exemption from the responsibility to properly enforce a customs border on the grounds that the reimposition of customs controls would pose a risk to the peace process. However, in so doing, we would be essentially declaring Northern Ireland unstable, insecure and unfit for normal trading or investment—in other words, doing the dirty work of the dissident republican terrorists for them.
As your Lordships’ Select Committee on the European Union has pointed out, the costs and disruptions from the customs requirements, including tariffs, that would flow from trading under the very WTO rules that hard Brexiteers, including potentially our future Prime Minister, champion,
“could severely affect the border and UK-Irish relations”.
The Good Friday agreement, recognised as a treaty under international law, brought peace after decades of horrific conflict, but it would be catastrophically damaged by no deal.
Both the Tory leader candidates yesterday spuriously suggested that novel, but so far completely unidentified, technology can prevent a hard border, but unless there are common trade regulations and customs rules on either side of the border, no amount of fancy, undeveloped technology can resolve the problem. It is not the backstop but a no-deal Brexit that will threaten the union between Northern Ireland and the rest of the UK, which is a major reason why no deal must be stopped, and stopped now.
We would lose access to cross-border surveillance where suspected criminals are kept under surveillance in other EU countries and EU suspects are kept under surveillance in the UK. For every one request from the EU, the UK makes seven requests for such assistance to the EU. We would also lose joint investigation teams that operate under the Eurojust process to tackle pan-European crime.
The existing legislative framework—for example, common data protection standards and the European Court of Justice to resolve disputes—enables greater and more effective law enforcement co-operation. A no-deal Brexit, as my noble friend Lord Newby said, would result in the UK being less safe and less secure. I am confident that a Joint Committee will confirm these facts.
The noble Baroness, Lady Smith of Basildon, said quite rightly that we are dealing with 0.3% of the electorate, but in Northern Ireland we are dealing with 500 paid-up members of the Conservative Party. What a distortion of priorities, an appalling spectacle and a national disgrace that we should be conducting this election among 160,000 people in the whole of the United Kingdom when we desperately need a Government. I honour Theresa May, but she is a lame—duck Prime Minister and the Government are in a state of suspended animation while this goes on, with nobody knowing who will occupy which posts after the votes have been counted. I appeal to those who control the rule-making in my party—a party that I have hitherto always been proud to belong to and to which I have belonged for 63 years—to realise that this is not the way to choose a Prime Minister. It may be the way to choose a Leader of the Opposition but not a Prime Minister.
What can we now do? The answer is: not a great deal. I wish I could share the sanguine approach of my noble friend Lord Howell of Guildford. I admire him greatly; he has done great service in both Houses of Parliament. He is just stepping down, having had a very distinguished period as chairman of our International Relations Committee, and we are all in his debt. I hope he is right in all that he said, but I fear he is too optimistic.
What could a committee of both Houses do, composed of good men and true, as it would be, with a great deal of expertise from your Lordships’ House? The noble Lord, Lord Kerr of Kinlochard, would have to be a member of it so we would have to give him his summer holiday, but it is just possible that it could produce a persuasive report that would make whichever candidate emerges as the winner, and as the new Prime Minister, realise that above all his responsibility was to the nation.
To chase the votes of the sort of people who turned their backs in the European Parliament yesterday is totally shameful.