Preparations for Leaving the EU

Mr Speaker, with your permission I would like to make a statement on our preparations to leave the European Union on 31 October and the steps we are taking to get ready.

It is the strong desire of this Government to leave the EU with a deal, and our proposals to replace the backstop were published last week. I commend the Prime Minister and the Exit Secretary for their continued efforts to ensure that we can leave the EU with a withdrawal agreement in place. We have put forward a fair and reasonable compromise for all sides that respects the historic referendum result, and we hope that the EU will engage with us seriously. In setting out these proposals, we have moved. It is now time for the EU to move, too. If it does, there is still every chance that we can leave with a new deal. However, if the EU does not move, this Government are prepared to leave without a deal on the 31st. We must get Brexit done, so that the country can move on and focus on improving the NHS, cutting crime, helping families with the cost of living and further improving school standards.

In preparing for every eventuality, we are today publishing our “No-Deal Readiness Report”. This document is a comprehensive summary of the UK’s preparedness for leaving the EU without a deal. It sets out the preparations that the Government have made and how these have been intensified under the determined leadership of my right hon. Friend the Prime Minister, and it also outlines the steps that third-party organisations need to take to get ready.

The actions in this report reflect our top priority: ensuring that we maintain the smooth and efficient flow of goods and people from the UK into the EU, and vice versa. The actions are also aimed at ensuring that we continue to support citizens, upholding their rights and helping them to prepare for the changes ahead. My right hon. Friend the Chancellor, to prepare for Brexit, has doubled funding from £4 billion to £8 billion. We have published a significant volume of material relating to no-deal planning, including 750 pieces of guidance setting out the steps that businesses, traders and citizens should take to prepare. We have also published 31 country guides for all EU and European Free Trade Association states, setting out what UK nationals living there need to do to get ready for Brexit.

This morning, my right hon. Friend the Trade Secretary has published the temporary tariff regime, which will apply from 1 November. In all, it liberalises tariffs on 88% of goods entering the UK by value. It maintains a mixture of tariffs and quotas on 12% of goods, such as beef, lamb, pork, poultry and some dairy products, to support farms and producers that have historically been protected through high EU tariffs in the past. I should say that, as a result of cutting these tariffs, we should see a 15% reduction in the cost of honey from New Zealand, a 9% cut in the cost of grapes from South America and of course a 7% reduction in the cost of wine from Argentina.[Official Report, 16 October 2019, Vol. 666, c. 3MC.]

Businesses raised a number of points in response to the publication of the tariff schedule in March. The Government listened carefully to these representations and have made three specific changes as a result: we are reducing tariffs on heavy goods vehicles entering the UK; we are adjusting tariffs on bioethanol to retain support for UK producers; and we are also applying tariffs to additional clothing products to ensure that developing countries continue to have preferential access.

But it is not enough just for Government to get ready; we need businesses and citizens to get ready too. Even with every Government project complete and necessary IT systems in place, flow at the border would still be affected if hauliers do not have the right paper- work. If companies do not prepare, they will face challenges in trading their goods and services with the EU. While the Government can of course lobby EU member states to improve their offer to UK nationals who are living in their countries, we need individuals to act as well—to register for residency and to make arrangements for continued access to healthcare. For that reason, the Government have invested £100 million in one of the largest public information campaigns in peacetime. [Interruption.] I am glad hon. Members have noticed.

Through both mass market and targeted advertising, we are alerting business and citizens to the actions they need to take to get ready. We are also providing a further £108 million to support businesses in accessing the information and advice they need. My right hon. Friend the Business Secretary is overseeing a series of events with businesses around the country, designed to provide information on all the steps they need to take to get ready, including actions that will support the flow of trade through the short strait. My right hon. Friend the Health Secretary has also today established a trader readiness support unit for suppliers of medical products. This week, Her Majesty’s Revenue and Customs is writing to 180,000 businesses, setting out the full range of steps that they need to take in order to import and export with the EU after we leave.

Of course, in advance of 31 October, we will continue to use every means at our disposal to communicate to business the need to get ready. I want to pay particular tribute to the automotive, retail and transport sectors, including authorities at the port of Dover and at Calais, as well as Eurotunnel, for the extent of their Brexit preparations. On a recent visit to the west midlands, the heartland of our automotive industry, I was impressed by the steps that manufacturers are taking to prepare. Retail businesses have also made significant strides: Morrisons, for example, now reports it is “prepared for all eventualities” in the UK, while the Co-op says it is

“prepared for the worst case”.

Of course, risks remain and challenges for some businesses cannot be entirely mitigated, even with every possible preparation in place, but the UK economy is in a much better position to meet those risks and challenges, thanks to the efforts of these sectors and companies, and to my right hon. Friend the Chancellor.

It is also the case that the impact of no deal on both the UK and the EU will depend on decisions taken by the EU and its member states. On citizens’ rights, internal security, data protection and of course the vital position of Northern Ireland in the United Kingdom, we have taken decisions that will benefit UK nationals as well as EU citizens. I hope the EU will match the generosity and flexibility that we have shown.

Through the EU settlement scheme, we have ensured that every EU citizen resident here by 31 October can acquire a formal UK immigration status, protecting their right to live and work in the UK. To date, 1.7 million citizens have applied and 1.5 million have been granted a status. Those who have not yet applied have until the end of December 2020 to do so. So far, very few EU member states have made as generous an offer to UK nationals as the UK has made to EU citizens. We do not believe that citizens’ rights should be used as a bargaining chip in any scenario. EU citizens in the UK are our friends and family, and we want them to stay. We now hope that the EU extends the same hand of friendship towards UK nationals as we have to EU nationals.

At the same time, keeping our fellow citizens safe should be a priority. My right hon. Friend the Home Secretary has written to Commission Vice-President Frans Timmermans to ensure effective arrangements are in place on the exchange of passenger name record data, disconnection from Schengen information system II and working arrangements with Europol, as well as the transfer of law enforcement data. We hope the EU will respond positively, in the interests of the shared security of us all. We have also unilaterally ensured that personal data can continue to flow freely and legally from the UK to the EU and the European economic area. A swift adequacy decision from the EU would reciprocate this arrangement, providing legal certainty to EU entities and companies.

With respect to Northern Ireland, to avoid a hard border we have committed not to introduce any checks at the border between Northern Ireland and Ireland. The limited number of checks that do need to take place, due to international obligations, will all be carried out well away from the border and will only affect a very small number of businesses. The Irish Government and the EU have not yet set out how they will manage the Irish border if we leave without a deal. We urge them now to match our commitment.

Let me, finally, turn to the opportunities from Brexit as laid out in this report. For the first time in 50 years, the UK will have an independent trade policy and we will be able to take our own seat at the World Trade Organisation. We will be able to introduce a points-based immigration system that prioritises the skills that we need as a country. We will have autonomy over the rules governing our world-leading services sector, and we will continue our leading role in setting global standards for financial services. We can be a beacon for the world in setting progressive policies on farming, fishing and the wider environment. Outside the jurisdiction of the European Court of Justice, we will set our own rules, putting in place smarter, more responsive regulation.

Of course, no deal will bring challenges. I have been open about that today, as I have been in the past. It is not my preferred outcome, nor the Government’s. We want a good deal. Whatever challenges no deal may create in the short term—and they are significant—they can and will be overcome. Far worse than the disruption of no deal would be the damage to democracy caused by dishonouring the referendum result—17.4 million people voted to leave, many turning up to vote for the first time in their lives. They voted to ensure that the laws by which we are governed are set by the politicians in this place whom they elect. They voted for a fairer migration system that attracts the brightest and the best. They voted to end vast financial contributions to the EU budget, and instead invest in the people’s priorities such as the NHS and our brave police service. That is what the British people voted for, and that is what this Government will deliver. I commend this statement to the House.

The Prime Minister should be here. Talks with the EU are collapsing as we speak. The proposals that the Government introduced last week were never going to work, and instead of reacting to challenge by adapting them they are intent on collapsing the talks and engaging in a reckless blame game. It will be working people who pay the price. The Prime Minister should be here to account for his actions.

It is no good pretending that the proposals would work. That is simply not going to wash. You cannot take the UK and Northern Ireland out of the customs union and avoid customs checks. You cannot have customs checks without infrastructure in Northern Ireland. The Government know that, which is why they refuse to answer the very simple question—where will the checks take place? You cannot give a serious response to the EU’s concerns about protecting the integrity of the single market simply by saying, “We’ll put that question off until later.” You cannot be serious about upholding the Good Friday agreement while proposing what amounts to a veto for one party in Northern Ireland over the all-Ireland regulatory zone. Consent of all communities in Northern Ireland is at the heart of the Good Friday agreement, and the Government have ridden roughshod over that principle.

That is why the proposals were never going to work, but instead of responding to legitimate questions from the EU27 or in this House by actually answering them, the Government appear to be pulling the plug, descending into a reckless blame game, instead of putting the country first. Sources close to No. 10 say that a “deal is overwhelmingly unlikely”. Sources close to No. 10 say that it is “essentially impossible”. Sources close to No. 10 have begun blaming people—it is Parliament’s fault, it is the Opposition’s fault, it is the Benn Act, it is Germany, it is Ireland—absolutely defining the character of the Prime Minister, a man who never takes responsibility for his own actions.

I am grateful to the shadow Brexit Secretary for his questions. First, he asked where the Prime Minister was. The Prime Minister is talking to our EU partners, attempting to secure a good deal, and he is doing so with the full-hearted support of everyone on the Government Benches. The question that many people will be asking outside the House is why, if the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) says that he is anxious for a deal, he declined to support one on the three opportunities he had to do so. If he wants to be taken seriously as an advocate of compromise and a deal why, in cross-party talks in which we both took part, did he attempt to erect an obstacle at every turn to consensus across the House? That is the conclusion that people will draw.

There is another conclusion that people will draw. The no-deal report was made public three hours before the right hon. and learned Gentleman began asking questions. Having had time to absorb 156 pages, he did not have a single question about no-deal preparation; not a single point to make about how any sector could be better prepared; not a single suggestion, query or contribution about how we can ensure that British business is in a robust position. There was just a series of questions that we have come to expect from him about politics, rather than policy; about positioning, rather than practicalities.

The right hon. and learned Gentleman asked about customs checks in Northern Ireland. He knows—it has been made clear—that those customs checks can take place away from the border, at the manufacturer or other distribution sites. He also asked whether our proposals were serious about maintaining the integrity of the single market. They allow the EU to maintain the integrity of the single market, but is he serious about maintaining the integrity of the United Kingdom, because he and his party are more than willing to see a customs border erected in the Irish sea? We would be the only sovereign nation in the world with such a customs border, but he is more than prepared to dance to the EU’s tune, rather than standing up for the UK.

When Mrs Merkel says that either the UK or Northern Ireland have to stay in the customs union, is she speaking for the EU following consultation with the other 25, or is she just making it up and assuming they will go along with her totally unrealistic and inflexible view?

I do not know what the contents of the telephone call between the Prime Minister and the Bundeskanzlerin were earlier today, but we remain committed to working with the German Government and other EU Governments to find a deal. I am sure we can find a way through.

It saddens me that in the middle of this political crisis what we have is a pathetic masquerade from this Government pretending that they are competently arranging our departure from the European Union, when in fact everyone knows that there is no agreement as to how that departure will take place and that without an agreement it is simply not possible to plan in a proper way how it would take place. The responsibility for that is entirely of the Government’s own making: a mixture of their bellicose intransigence in their negotiations with our European partners and their arrogant contempt in trying to establish a political majority in this Chamber, and using the Brexit vote for their own narrow political ends.

Now the Government are in a situation where the only thing they can possibly do is contemplate crashing out of the EU without a deal. I have to remind the Chancellor of the Duchy of Lancaster that that approach would be illegal, because we have passed a law to say that we will not leave the European Union with no deal. I therefore want to ask him: why is he preparing this document, which is called the “No-Deal Readiness Report”? Perhaps it should be called “Preparedness for Breaking the Law” since that is essentially the course on which he is now engaged. Why is he preparing this, rather than trying to come back to this House properly with proposals we can debate on the negotiations they are having with the European Union? To my eyes, and to those of many colleagues, it looks as if the Government are not in the least bit serious about getting a deal at all, but are in fact engaging in gesture politics, deliberately setting conditions they know cannot be met in order to come back here and try to blame everybody but themselves for the consequences.

I have two specific questions relating to the statement. The Opposition spokesman referred to the IFS report, a damning report that came out this morning. It tears away all credibility for there being an economic case for Brexit. The IFS is saying that the difference between asking for an extension and considering this issue further, or crashing out with a no deal in three weeks’ time, is 4% of GDP over the next three years. I invite the Minister to tell us whether this now means that, as we complete the first decade of Tory austerity, he and his Government are preparing for a second decade, because that is surely the consequence of the course they are on.

I am very grateful to the hon. Gentleman for his questions. On the first question about the IFS report, we respectfully disagree with some, not all, of its conclusions. An extension would only generate further uncertainty. Not only would that extension involve us continuing to pay money into the European Union, but the uncertainty would mean that the investment decisions that business wants to make would still be put on pause. Business leaders, including many of those who backed remain such as the founder of Carphone Warehouse, now argue that we need to leave, deal or no deal, in order to have the certainty on which to plan for the future. That is what business wants overwhelmingly: to leave with a deal, but at least to ensure that we have certainty.

The hon. Gentleman asked about EU nationals, and he makes a very fair point. The majority of those who have been granted status have been granted settled status. Pre-settled status is for those people who have not been in the country, or cannot demonstrate that they have been in the country, for five years. Once they have been here for five years, however, they move automatically and smoothly to settled status. The number of people who have applied for status is increasing every day. It is also the case that our offer is significantly more generous than that for all save a tiny number of EU member states.

Those were the serious questions that the hon. Gentleman asked. I know that he used to be the proprietor of a comedy club in Scotland. I felt he was trying his hand at some Dadaist and surrealist comedy when he accused my party of trying to establish a majority for political purposes in the House of Commons. That is Scottish National party policy: trying to establish a bogus, broken-backed majority with Jeremy Corbyn as Prime Minister for blatantly political purposes. As for using Brexit for our own ends, it is the Scottish National party that has been attempting to weaponise this argument to push its separatist and sectarian agenda. As for gesture politics, that is the hallmark and stock-in-trade of the SNP. I am afraid the hon. Gentleman was guilty of a psychological phenomenon known as projection, which is accusing your opponents of the sins of which you yourself are guilty.

I thank my right hon. Friend for his statement. I am sure that the 3 million EU citizens who live in our country will very much welcome that their rights to health, education and welfare are being fully protected in the event of no deal. Does he have any hope of being able to secure similar rights for British nationals who are living, working and studying in EU countries, particularly those who may need to secure healthcare benefits?

My right hon. Friend makes a very, very good point. The picture across member states varies. Some member states, Spain in particular, have done an enormous amount. Of course, Spain is the country that has the highest number of UK nationals living abroad. I also have to commend the Government of Denmark for the approach they have taken. We are working with EU member states to ensure that there is access to reciprocal healthcare. We are also ensuring that UK citizens abroad continue to have access to pension uprating and the welfare benefits to which they are entitled. I hope that more EU member states will improve the offer to UK nationals.

Notwithstanding the Chancellor of the Duchy of Lancaster’s beguiling manner at the Dispatch Box, his statement today bears only a passing relationship to reality. No. 10 is briefing that the talks are going nowhere. He knows that if that remains the case, the Prime Minister will be under a legal obligation to write to apply for an extension which, if granted by the European Union, will mean that we will not be leaving the European Union without a deal on 31 October. The right hon. Gentleman wrote in March this year:

“We didn’t vote to leave without a deal.”

Why is he now advocating on behalf of a Government policy that he himself has admitted there is no mandate for?

I am grateful, as ever, for the thoughtful tone in which the right hon. Gentleman asks his questions. I am also grateful for the opportunity, which I hope I will have, to appear in front of his Committee to discuss in detail some of the provisions within the document. We take a different view on the Act that bears his name. I think it weakens the UK Government’s position. He in all conscience believes that it strengthens the UK’s position, but we disagree on that. It is of course possible, for a host of reasons, that we might leave on 31 October without a deal, and it is prudent that this Government—and indeed the Scottish Government and the Welsh Assembly Government, led by Labour—are preparing for that, because that eventuality is a realisable and potential outcome. In the meantime, I am anxious to secure a deal. I argued that we should leave the European Union without a deal, but if it is impossible to leave the European Union without a deal, then, much though I regret it, we have to leave.[Official Report, 16 October 2019, Vol. 666, c. 4MC.]

Looking at me imploringly, and now to be heard, is the longest-serving member of the Speaker’s Panel of Chairs: Sir Roger Gale.

You will recall, Mr Speaker, that some weeks ago you afforded me the opportunity to ask the Prime Minister what provision would be made for pension uprating, healthcare and benefits for expat UK citizens. My letter seeking a clarification of the broad-brush answer awaits a response, but I have had the opportunity to read the no-deal readiness report, and not one word in it offers long-term comfort to the thousands of now increasingly frightened and elderly UK citizens living within the rest of the EU. This is not a matter of reciprocal arrangements; it is within the clear gift of the United Kingdom Government to look after our own people. Will my right hon. Friend give a clear undertaking that that will be done?