Beyond the impasse

Wilf Stevenson on avoiding a ‘no deal’ catastrophic Brexit

In July 2016, the then Brexit Secretary David Davies looked into his crystal ball and boldly told reporters that the UK, post-Brexit, could negotiate a “free trade area massively larger than the EU”. A year or so later, Trade Secretary Liam Fox was still presenting the same rosy forecast. Responding to concerns that all was not plain-sailing at the Department, he begged “Believe me, we'll have up to 40 ready for one second after midnight in March 2019”.

We actually leave, if there is no deal, at 11pm on 29th March 2019, and maybe a miracle could occur in the first hour after Brexit, but figures published by the government last week show that that scenario is unlikely to be realised.

With the Commons voting last week to make clear its opposition to a no deal outcome, one would think the focus in Westminster ought to switch to finding a way out of the impasse? An impasse created by a government with incoherent red lines and an inconsistent negotiating stance. But with just over seven weeks to go, Ministers are timetabling hundreds of pieces of ‘no deal’ secondary legislation. Along with a so-called ‘continuity’ Trade Bill that fails even to mention how they expect new trade deals to be scoped, negotiated and agreed by Parliament – let alone the devolved administrations who will have major trade responsibilities in their territories after exit day.

Some in government are beginning to understand the scale of the potential catastrophe that lies ahead. Health Secretary Matt Hancock said recently that we will be forced to prioritise medicine over food. Defra hopes that food imports can be waived into the UK without checks but there is no telling the consequences of border hold-ups on time-sensitive goods – whether fresh produce or radioactive isotopes for cancer treatment. And should checks be needed, there is no room at Dover for inspection posts, and only token attempts have been made to model the chaos likely to hit Kent and roads to other ports.

With few Free Trade Agreements in place, a no deal Brexit will see the UK treated as a ‘third country’ by the EU, and our exports will be caught by tariffs – including cars at 10%, and shoes at 8%. According to trade expert David Henig, agricultural exports will face an even higher charge – such as 42% on cheddar cheese.

UK products which require testing will have to be done so at the exporters’ cost in the EU. Goods will take longer to go through customs checks, as there is no mutual recognition of systems. Many UK staff will no longer have the right to work in the EU, and our road haulage companies will be restricted. There will be no data adequacy or financial services equivalence. The knock-on impact for businesses, jobs and the wider economy would be a disaster. Indeed, Mr Henig concludes: “no deal puts up a high economic barrier between the UK and our largest and nearest trading partner. This cannot be a sustainable long-term position”.

A Labour-led, cross-party amendment to the Trade Bill suggests that the legislation – should it pass – is not implemented until and unless Parliament has voted expressly for ‘no deal’. By pressing this measure later today in the Lords, we hope the government will think again about the folly of allowing the country to crash out of the EU.

Lord Wilf Stevenson of Balmacara is a member of Labour’s frontbench team in the House of Lords. He tweets @WilfStevenson

Published 4th February 2019

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