Brexit Readiness and Operation Yellowhammer

Statement

My Lords, with the leave of the House, I will now repeat a Statement made today by the Chancellor of the Duchy of Lancaster in another place:

“Mr Speaker, with your permission I would like to make a Statement on our preparations to leave the European Union and the steps that we are taking to be ready for every eventuality. Some 17.4 million people voted in the referendum in June 2016 to leave the European Union—more than have ever voted for any proposition in the history of our democracy—and the Government are committed to honouring that verdict. The Government are committed to securing a good deal with our EU partners, and negotiations have been led by the Prime Minister, the Brexit Secretary and the Foreign Secretary. Those negotiations have seen significant movement over recent weeks.

Until recently, the EU has maintained that the withdrawal agreement was sacrosanct, but now it has acknowledged that it can be changed. Until this point, the European Union had also said that the backstop was inviolable but, again, European leaders have said that they are not emotionally attached to the backstop, and that there are other ways of ensuring that we can safeguard the gains of the Good Friday/Belfast agreement and ensure smooth trade flows across the island of Ireland. I commend the Prime Minister and his colleagues for the progress made in those negotiations, and I hope that everyone in the House will agree that it is better for all of us if we can leave the EU with a withdrawal agreement in place. But government needs to be prepared for every eventuality.

Since the Prime Minister took office, he has created a new Cabinet structure to ensure that across government we take all the steps necessary to prepare for exit. A new Cabinet committee, XO, has met 48 times and brought greater focus and urgency to our preparations. Our top economic priority is to ensure that we can maintain a smooth and efficient flow of goods, and people, from the UK into the EU and vice versa. We need to make sure that businesses are ready for changed circumstances and new customs requirements. Of course, some goods require not just customs checks but other procedures, particularly food and products of animal origin. We have been working with Defra and the relevant sectors to ensure that those businesses are ready.

We take very seriously our responsibility to ensure that the rights of millions of EU citizens in this country are protected, and are working with our European partners to ensure that UK nationals in EU nations also have their rights safeguarded. The XO committee has also taken steps to safeguard and enhance national security and the operation of our criminal justice system, to enhance the free flow of personal data across borders, and to ensure that we can support the devolved Administrations in their work and in particular the Northern Ireland Civil Service in its vital work.

With your permission, Mr Speaker, I would like to go into a little more detail about how we can facilitate the free flow of goods across borders. In this context, I would like to explain the role of Operation Yellowhammer in the Government’s planning. If the UK leaves the European Union without a withdrawal agreement, we will be a third country, subject to the EU’s common external tariff, trading on WTO terms, and exports will be subject to new customs and sanitary and phytosanitary checks. These are unarguable facts, pose significant challenges, and constitute the base scenario with which we all have to work.

The Government’s Civil Contingencies Secretariat has used these facts to develop a reasonable worst-case scenario of what might happen, including in cases where appropriate mitigations are not put in place and readiness measures are not implemented. That reasonable worst-case scenario, and the steps required to mitigate it, is the work undertaken under the name Operation Yellowhammer. As the National Audit Office reported in March, work on Operation Yellowhammer has been going since June 2018. The NAO made it clear that:

‘Departments are working on the basis of a reasonable worst case scenario’.

Many of the challenges Operation Yellowhammer identifies relate to flow at the border. It contains careful estimates of how flow might be affected through a range of factors, including if steps are not taken to help businesses to be ready. That is why the Government have taken significant steps to ensure that businesses are ready. Specifically, in adjusting to this new situation, we know that businesses require support to deal with those new customs procedures, and HMRC has acted to support traders. Importers will have access to transitional simplified procedures, which ensure that businesses have time to adjust to new duties. Businesses exporting to the European Union will need a specific economic operator registration indicator number from HMRC. HMRC has already allocated EORI numbers to 88,000 VAT-registered businesses which currently trade with the EU and beyond. We have also introduced postponed accounting for import VAT and negotiated access to the common transit convention so that both imported and exported goods can continue to flow across international borders without the payment of any duties until they reach their final destination.

We have established new transit sites in Kent and Essex to ensure that trucks can flow freely carrying goods into France and beyond to the wider EU. We are also providing tailored information to hauliers and businesses through a range of sites across the country to ensure the greatest level of readiness. We have funded business representative organisations to share information with enterprises large and small to prepare for exit.

We have also worked with the authorities in both Dover and Calais to smooth trade. I take this opportunity to thank in particular the French authorities for the work that they have done to ensure the operation of a smart border at Calais so that compliant consignments should experience no delay.

The steps we have taken are designed to ensure that business is ready for exit without a deal on 31 October, but these steps will in any case be necessary for life outside the single market and the customs union when we have a new free trade agreement with the EU.

Thanks to work undertaken under the previous Government and accelerated under this Administration, many businesses are already well prepared. For any business that is in any doubt about what is required, the Department for Business, Energy and Industrial Strategy is conducting roadshows and visiting businesses in their premises, while GOV.UK/Brexit provides all the information required.

There are, of course, specific additional requirements for those who are exporting food and products of animal origin. There will be sanitary and phytosanitary checks. Traders will require export health certificates for food and catch certificates for fish. Hundreds of vets have now been trained to issue these certificates, and additional personnel certified to support them. Again, the French authorities have taken steps to ensure the smooth flow of critical produce. They have specifically created a new border inspection post at Boulogne-sur-Mer to ensure that fish and shellfish products caught in the UK today can be on sale in the European Union tomorrow.

As well as making commerce flow, we must safeguard the rights of individuals. That is why the Government have provided the most comprehensive and generous offer to EU citizens in this country to guarantee their rights. Under the EU settlement scheme, more than 1 million people have already been granted status and the Home Office is helping thousands of new applicants every day. If any Member of Parliament finds that any of their constituents are having difficulties with that process, I would welcome them getting in touch directly with me and the Home Secretary.

In the same way, we have taken steps to secure the rights of UK nationals in the EU, including access to healthcare after exit. We will continue to work with our partners in member states to provide further protection for UK nationals. It is important that UK citizens in those countries register with the appropriate authorities. On GOV.UK/Brexit, details are outlined, member state by member state, to enable every citizen to have the rights that they deserve.

Also this month, the Government committed to increasing the UK state pension, which is paid to nearly 500,000 people living in the EU, every year for three years after a no deal exit. Previously the commitment was solely for the financial year 2019-20.

As well as making sure that UK nationals in the EU and EU citizens in the UK have their rights protected, we want to make sure that UK citizens can continue to travel in the EU without impediment. That is why UK nationals will have visa-free travel into the EU, and we are also talking to EU member states in order to understand how people who provide professional services can continue to do so, member state by member state.

Let me turn briefly to security. It is absolutely vital we ensure that, as we leave the EU, we have the right approach to safeguarding citizens in this country. That is why we have been talking to the EU about making sure we can continue to have access to law enforcement and national security instruments. It is also important to recognise that, as we leave the EU, it will be the case that there are new tools available to ensure that we can better deal with people trafficking, smuggling and other criminal activity.

Let me turn briefly to the situation in Northern Ireland. This Government are absolutely committed to the Good Friday/Belfast agreement; absolutely determined to ensure that there will be no infrastructure at the border in Ireland; and absolutely determined to uphold the functioning of the all-Ireland economy. That is why we have no checks at the border and no tariffs. Of course, we wait to see what Ireland and the EU Commission will decide on their side of the border, but we stand ready to work with them to help safeguard commerce and rights across the island of Ireland.

Leaving the EU without a deal certainly provides economic challenges, which I do not shirk from, but it also provides economic opportunities. There is the opportunity to secure new trade deals and to become a strong voice for freer trade at the WTO; the opportunity to develop new technologies which will help feed the world and enhance our environment; the opportunity to overhaul government procurement to better support growing British businesses; the opportunity to introduce a fairer, more efficient and more humane immigration system; the opportunity to deal more effectively with cross-border crime; the opportunity to invest more flexibly and generously to support overlooked communities; and the opportunity to strengthen our democratic institutions.

Leaving the EU was a clear instruction from the British people and this House now has a clear choice. Do we honour that instruction or do we continue to delay and seek to frustrate the British people’s verdict? This Government are clear: we must honour that decision. That is why I commend this Statement to the House”.

I will thank the Minister for repeating the Statement; but where are the plans for a deal? The Statement has got nothing on them. That is not because they are being kept confidential in order to aid negotiations, as the Minister claimed earlier. It is not even to stop Parliament scrutinising the potential deal. It is because there is nothing to scrutinise.

We need to consider the UK offer before it is consolidated into a deal. This Statement is all about a no-deal departure, despite the Act passed this month to ensure that we do not leave without a deal. So are the Government planning to flout the law again, because they do not appear to have an idea of what deal they and the EU could accept? The Government say that they want to remove the backstop, but to replace it with what? What else would guarantee no hard border within Ireland? The Statement does not explain where these various physical checks will take place. It admits that, with different tariffs, rules and standards across the EU, with a third-country border there simply have to be checks. That is what happens if you are not in the same customs regime. If our immigration rules are different, checks to ensure that people do not fly into Dublin and then arrive unchallenged here imply a hard border, as happens everywhere else between the EU single market and non-EU single market countries.

The Statement says:

“We will allow goods from the Republic of Ireland free circulation into NI”,

but says nothing about EU citizens there coming freely into the UK. Going forward, that would not be in accordance with our immigration policy, which would obviously be different from that of the EU. What plans do the Government have in that regard?

There are 36 days to go. We have not seen the plans for a deal. We have not even seen the complete plans for no deal—a prospect that continues to haunt the car industry, the pharmaceutical industry, transport, exporters, manufacturing and business. And not just business: consumers would pay the price, with WTO tariffs on cars and vans costing the EU and UK industry and consumers almost £6 billion a year. The BMA worries about the healthcare costs of EU citizens. We read that hospitals in Kent are booking hotel beds for staff because they fear that they will be unable to travel on blocked roads after a no-deal exit, and Northern Ireland police are planning to cancel annual leave in those circumstances. But still the Government throw taxpayers’ money at no-deal preparations despite an Act of Parliament which says that that cannot happen unless the Commons agrees it, and we know that the Commons will not agree it.

My Lords, I am very puzzled by a great deal in this Statement. The optimism on negotiations suggests that the European Union has moved and given way to us on a range of significant areas, and it does not suggest that we have moved at all. If that is the way that the negotiations are going, then pigs are flying the channel every day. Perhaps the Minister would like to suggest whether the British Government have moved their position at all as the negotiations move forward or whether we are expecting, as the European Research Group has suggested, that the EU will have to give way when it comes to the final point and we will not have to give way or change our position at all.

On Northern Ireland, the position has always been entirely clear that an open border without any checks or infrastructure between the EU and the UK after we leave would be open to smuggling, illegal border crossings and a whole set of issues which seem to have eluded those who wanted a hard Brexit when much of that was evident years ago. Here we are, with five weeks to go, and there is a lot of material here about last-minute discussions on issues that were evident after the referendum and indeed were entirely evident when the coalition Government consulted on this. I was one of the Ministers in the coalition Government who took part in a major consultation exercise with representatives from business, justice and others, which fed back detailed arrangements for the Government on what was regarded to be in Britain’s best interests, and which No. 10, by and large, ignored.

I am puzzled that discussions are mentioned here only about relations with France. We have borders and some significant trade with Spain, Belgium, and the Netherlands. Can the Minister assure us that conversations with them about border controls have also taken place?

The Minister said that action will be taken,

I thank the noble Baroness and the noble Lord for their comments. Let me run through their questions in turn, starting with the noble Baroness, Lady Hayter. I repeat what I said to her earlier: negotiations are continuing. They continued last week and are continuing today. The Prime Minister met a number of European leaders, including Leo Varadkar, at the United Nations yesterday. My Secretary of State met Michel Barnier last week. There is a technical team in Brussels today conducting negotiations. Papers are being exchanged and talks are ongoing, so we are keen to get a deal. I can assume only that the bluster from the noble Baroness is to hide the absolute lack of clarity on Brexit from her party, which has no policy at all. She tells us that it is keen to avoid no deal. Of course, the Labour Party could have avoided that by voting for a deal, but it has so far managed to be against everything that is suggested, while at the same time telling us that it wants to respect the result of the referendum.

The noble Baroness referred a number of times to the legislation in the Benn Act. That Act does not prevent us leaving with no deal. I think that she knows this very well but, as she repeated in her questions, it merely hands the power to decide whether we leave with no deal to the European Union and, of course, undermines our negotiating position. With regard to the tabling of a Bill, she can be reassured that as soon as we have a conclusion to the talks, we will want to table a Bill as early as possible to enable full consideration. But as we discovered with the Benn Act, it is amazing how quickly the House can operate when it has the will and desire to do so.

Turning to the comments by the noble Lord, Lord Wallace, let me repeat again that we want a deal. Of course, in any deal-making situation, compromises will be required from both sides. We have compromised considerably on our side. It is time for the European Union to compromise as well.

I would take his entreaties on a need to get a deal with a little bit more seriousness if his party had not done its level best to undermine our negotiations. Fairly incredibly, Lib Dem MEPs wrote to Jean-Claude Juncker only last week urging him not to make a deal with the UK, genuinely trying to undermine our negotiations. From the way that they are doing this and by voting against our negotiations at every opportunity, one might think that they are actually keen to get a no-deal exit.

My Lords, I wonder whether the Minister can help me. When I heard him replying to a question on the first matter on our Order Paper today—the Private Notice Question—I thought I heard him say that we shall leave the European Union on 31 October if we do not get a deal. If I am wrong and misheard him, this question has no moment. However, if I am right, that would be the most extraordinary statement. It would be clear that the Government’s approach to this is that, if we cannot get a deal, we shall leave anyway. As I understand it, I would have thought that this is against the law and contrary to what the Government have been saying. This all needs to be checked with Hansard. However, if I heard him properly, he ought to reconsider the statement.

I will stick by the statements that I made earlier. For those that were not here earlier, let me repeat that it is the Government’s firm intention to abide by the law—we can do nothing else—and it is also our intention to get a deal. We will work hard for that. Let me repeat the point made to the noble Baroness, Lady Hayter: the Benn Act does not prevent us leaving with no deal. That is the legal default because of the notification of the withdrawal Bill that this House and the other place voted for. That is the default law of the country. It is now the European Council that decides whether we leave on 31 October.

My Lords, ages ago we were told that there were some essential Bills to go through before the 29 March Brexit deadline: trade, immigration, agriculture, fisheries. What has happened to them? Are they still essential and, if they are not essential, what has changed in the meantime?

Those Bills are not essential. We have all the appropriate legislation in place to enable our departure on 31 October. Secondary legislation that we do not yet have in place will be put in place by then.

My Lords, this debate —for want of a better word—demonstrates, I am sure the noble Lord would agree, the total division across Parliament. It is only a shadow of the immense divisions across the country, which the bishops find at every level, as they are immersed in every local community. The divisions are shaking this country apart. They are shaking us apart in all our great institutions, whether it is Parliament or the courts, which are portrayed as having launched a coup d’état—a slightly unlikely idea—and it is causing serious damage to our economy. We are hearing in our debates the incapacity of Parliament not only to make a decision but to find any way through the deadlock. The divisions are so deep that we cannot expect, I fear, as the noble Baroness, Lady Hayter, suggested, that cross-party work could bring a decision on what we do, but can we not at least ask the Government to look for alternative means of setting a path to making a decision?

At the moment, all we hear regarding a decision is that one side says it is definitely this and the other side says that. I am used to this in an organisation that is split at every level; I am well aware of division, so I am speaking from deep familiarity. The way forward must be, as we have done on numerous occasions, to work out how to get to a decision, because the present means of handling it through Parliament is not working. We need to draw on wider experience, on mediation and other forms, so that Operation Yellowhammer and the Statement that we have heard at least form part of a clear plan to arrive at a firm decision. Does the Minister agree?

I do in fact agree with a large part of the most reverend Primate’s remarks. I was not going to say it, but compromise is of course required. I remind the most reverend Primate that we attempted cross-party talks under the previous Administration, but they were not successful. I personally believe that the withdrawal agreement that we negotiated was a compromise. Those who would have preferred a so-called “clean-break” Brexit did not get everything they wanted. There were some aspects of the withdrawal agreement that I was not completely happy with, but I thought it was a good compromise with the EU. It was hard fought and hard negotiated but the fact is that it was rejected three times in Parliament.

It remains the Government’s objective to get a deal but, given the attitude of some of the opposition parties, I am not confident that, even if we did get a deal, they would be prepared to facilitate its passage through Parliament. We are between a rock and a hard place. I firmly believe that the strength of our democracy and political system depends on satisfying the wishes of the 17.4 million people who voted in the referendum that we should leave the European Union. We attempted to do it with a deal, but that did not prove successful: Parliament did not vote for that.

In my view, Parliament is not complying with the wishes of the referendum Act that it passed and authorised. We asked people for their opinion in the referendum. We sent however many million leaflets to every house in the country saying, “We will abide by your decision”, but we are not abiding by that decision and that is the problem. I would welcome the good offices of the most reverend Primate for some mediated way forward. I would be happy to engage with that, but I firmly believe that, for the strength of our democracy in this country, it is essential that we deliver on that referendum result.

The noble Lord, Lord Callanan, seems to give the impression that the referendum result was unambiguous—we all know that we are in this difficulty because it was not. As the most reverend Primate the Archbishop of Canterbury said, there are many different sorts of compromise. Would the noble Lord, Lord Callanan, withdraw his reiteration that the referendum result was somehow unambiguous, and as such, for example, incompatible with staying in the internal market and customs union? There are many ways in which things could be agreed, and the referendum result is not one he can rely on as unambiguous.

I do not know what the noble Lord’s definition of ambiguity is, but in response to the question “Do you wish to remain in the European Union or leave the European Union”, the country replied, “leave the European Union”. The noble Lord might think that is ambiguous, but I do not.

Just before we were so rudely interrupted on 9 September, the Secretary of State, Mr Gove, gave evidence to your Lordships’ EU Committee, and undertook that an up-to-date version of the Yellowhammer paper would be published shortly. When I saw there was to be a Statement on Yellowhammer today, I assumed that it was good news and we were about to see the up-to-date version, because the Government had been at pains to say—although the Sunday Times did not agree—that the version we had seen was out of date. When are we, when are business and the people who really need to see it going to see the Yellowhammer paper?

The Minister was delightfully optimistic about the progress of our negotiations, as he was earlier in the afternoon—Pangloss rules in Newcastle—but I ask him to take note of two things. First, in Brussels the most striking development of the last two years has been British negotiators revealing that the text in the political declaration indicating that we wished to preserve a level playing field on social, environmental and labour law, state aid and business taxes, was going to have to go and we no longer believed in it. That has fed the impression in Brussels that we are planning for a wave of deregulation and on becoming a low tax, low welfare society, that would be highly competitive with the European Union. That may be what we are planning for—it is not what we have told the country—but that is the implication and it has had a considerable effect in Brussels. That is why in Brussels they are saying that progress in the last two weeks has gone backwards. Secondly, could the Minister also say, whether in his view, creating that impression assists or does not assist the search for ways of maintaining an open border on the island of Ireland?

The noble Lord, Lord Kerr, asks a number of questions. In response to his first question, yes, we are intending to update the Yellowhammer documentation and it will be published shortly. I cannot give him a precise date yet; it is a fairly weighty document. With regard to the level playing field, as the noble Lord knows very well, we already exceed EU minimum standards in most areas of social and environmental legislation. There is an ongoing question about whether we should continue to have identical legislation aligned to the European Union, or whether we might choose to do things differently. In my view, one of the huge advantages of Brexit is that we no longer have these things dictated to us—we can argue for them in this Parliament, and we can decide what standards we wish to have. I am in favour of higher environmental standards, and we already have higher environmental and social standards than many countries in the EU. Those decisions would be for this Parliament to take in future and I do not know why noble Lords are so keen to contract out those decisions to a foreign body.

My Lords, I thank the Minister for repeating this Statement, which says that in leaving the EU there is,

“the opportunity to develop new technologies which will help feed the world and enhance our environment”.

The only technologies which have not been developed are those that are below the highest global food safety standards in the world—the standards of the European Union. That is why we do not have GM foods, chlorinated chicken or hormone-treated beef. Following on from what the noble Lord, Lord Kerr, said, this Statement suggests that this Government are going for a bargain basement standard on food safety and animal welfare. Would not the Minister agree?