To ask Her Majesty’s Government what contingency plans they have in the event of a deal not being agreed with the European Union by the end of the transition period.
The Question was considered in a Virtual Proceeding via video call.
My Lords, at the end of this year we will have recovered our economic and political independence on the basis of the agreement that we reached in October. Whether our relationship is on a Canada model or an Australian one, we will be leaving the single market and the customs union at the end of the year. As such, there is a fixed baseline of guaranteed changes for government, citizens and businesses to prepare against in these areas.
My Lords, no one could have foreseen that the Covid-19 pandemic would take place when the withdrawal agreement was drawn up. Does the Minister agree that if there is a no-deal Brexit there is no contingency plan that can prevent enormous damage to the economy, jobs, business and industry? Furthermore, is he not aware that every reputable body and commentator says that we ought to extend the timetable in order that we can get a better deal for this country? Surely that is the way forward.
My Lords, I do not agree with the noble Lord in the picture that he presents of either unpreparedness or impossibility. We will seek and are seeking a free trade agreement with the European Union and we are carrying on negotiations in a number of areas, including one that I know is important to him: we are committed to seeking reciprocal agreements with the EU, for example, for family reunion of unaccompanied children. This work goes on and it can be done.
My Lords, given that the Social Market Foundation has calculated this week that the regions that will suffer most from the double shock of a no deal plus the pandemic will be the north-west and the Midlands, as well as sectors crucial to the economy such as finance and insurance, what plans do the Government have to mitigate the damage that this will do to such vital areas of the country and the economy?
My Lords, the Government seek to extend the opportunities of our being outside the European Union and to enable businesses and citizens to prepare for the change for which the people of this country voted and for which Parliament legislated. Of course, in our strategy of levelling up, we will have particular regard to any parts of the country that are affected in particular ways.
My Lords, in his evidence to your Lordships’ House’s EU Committee last week, the UK’s Brexit negotiator, Mr David Frost, said that
“the Canada and Australia outcomes are similar”
if not identical. These are of course shorthand for a free trade agreement and no deal. Why are the Government so minimalist in their aims compared to the goal of
“an ambitious, broad, deep … partnership … with a comprehensive … Free Trade Agreement at its core”
that they signed up for in the political declaration last October?
My Lords, I watched the evidence given by my right honourable friend the Chancellor of the Duchy of Lancaster and by Mr David Frost. I thought that they came over—I hope your Lordships will agree —as people who were seeking a responsible and reasonable agreement with the European Union. I am confident that those negotiations will succeed.
My Lords, Goldman Sachs has estimated that Britain’s economy has already lost 2.5% of GDP since the referendum. According to the Government’s own calculations, Brexit will cost 6.7% of GDP, or £130 billion, over the next 15 years. What assessment have Her Majesty’s Government made of the combined economic cost to the UK of Brexit and Covid-19?
My Lords, I am a veteran of listening to baleful predictions about what might happen if the British people made the decision that they did. The Government have made it clear that they will invite evidence and opinions from a range of economists and others as to what the future might hold, but our position is that this is an opportunity and a duty, and we intend to deliver it.
The Earl of Sandwich (CB)
My Lords, does the Minister accept that if no progress is made soon with the EU on farming and animal welfare standards, which is an issue of great concern to Parliament as well as to the country, it must surely inhibit our negotiators in the US FTA in maintaining those same standards and is therefore likely to lead to an inadequate mini-deal?
My Lords, the noble Earl is quite right to refer to the importance of agricultural products, which is obviously a matter being discussed in the ongoing negotiations. I am not following him into any linkages. My interest and that of the Government is to secure the best outcome in the negotiations that are going on as we speak.
My Lords, yesterday’s EU Committee report described the continued uncertainty and lack of time for a deal, combined with the pandemic, as
“a potent threat to economic prosperity and political stability in Northern Ireland.”
Businesses still do not know what to expect by way of customs processes, regulatory checks and exit summary declarations on goods from GB to Northern Ireland. Without a comprehensive free trade agreement, the consequences for Northern Ireland could be seismic. Can the Minister outline plans to advise businesses in Northern Ireland and GB and help them prepare for the future in case such an agreement is not reached by the year end?
My Lords, I read with great interest your Lordships’ report on the Northern Ireland protocol. I do not agree with every judgment in it, but it was very valuable and the Government will make a response in due course. I said—I think when I answered the noble Baroness on a previous occasion—that a business engagement forum in Northern Ireland is imminent. A process of engagement with business across the country is of great importance, is ongoing and will be intensified.