Raw deal

Dianne Hayter on the threat to Britain’s prosperity posed by hard Brexit rhetoric

In rather timely fashion, this week’s House of Lords debate on Brexit: deal or no deal – a recent report from our EU Committee – coincided with the first anniversary of the Prime Minister’s Lancaster House speech. A speech where Mrs May regrettably gave legs to the rather vacuous “no deal is better than a bad deal” nonsense.

In hoping that both the report (and the debate) help ministers move on from using scare tactics that those across the negotiation territory view as bluster, four issues stand out.

Firstly, a unanimity of advice to the Committee that the ‘no deal’ option lacks merit. The report notes “very few witnesses identified any positives arising as a result of ‘no deal’”. Labour Lords colleague and former Chancellor Alistair Darling told the Committee he was struggling “to find any country of any significance that traded purely on WTO rules”, while the CBI’s John Foster said ‘no deal’ would see 90% of UK exports by value face tariffs. Still, as the Committee concluded, the very repetition of the rhetoric risks becoming a self-fulfilling prophecy.

Ministers insist ‘no deal’ is an option but then act surprised when the EU27 appear to continue to prepare for such an eventuality. Indeed, David Davis has had the effrontery (in a letter to the Prime Minister) to attack their ‘damaging’ no-deal planning, even consulting lawyers (at tax payers expense) over the EU’s preparations. As the Commission spokesman responded: "We in the European Commission we are surprised that the United Kingdom is surprised that we are preparing for a scenario announced by the UK government itself."

What the EU has done is to stress that companies (especially in haulage and aviation) should prepare in case the UK leaves the single market and customs union on 29 March 2019, warning that certain agreements or contracts could be at risk with ‘no deal’. In such a situation, some companies may need to relocate to another member state. As the Commission makes clear in related documents, if there’s no deal agreed by October 2018, the status quo would come to an abrupt halt next March.

The second issue is that it’s difficult to believe the government really believes ‘no deal’ could ever be satisfactory, given it would mean the following long list of problems: no security for UK citizens living abroad, the likelihood of a hard border in Ireland, immediate imposition of tariffs, customs checks, travel visas and less flights to continental Europe, nuclear materials stacked at the border, no judicial cooperation or European Arrest Warrants, no new trade agreement with any other country, and the loss of all 57 existing trading relations with third countries, 17 mile tailbacks at Dover, a devastating impact on our farming community, food safety and food prices, a rift in the all-Ireland energy electricity market posing threats to Northern Ireland’s lights, the financial sector in jeopardy, and – according to a thorough impact assessment commissioned by the Mayor of London – some half a million jobs under threat, and a decade of lower employment and economic growth with perhaps £50bn investment lost. Not forgetting the lack of a transition accord – something not possible without a deal.

Thirdly, the Whitehall farce returned last week with the anticipated new ‘No Deal Brexit Minister’ failed to appear replaced by a new minister who doesn’t even want a transition. So ‘No No Nanette’ is becoming ‘Yes, No, Maybe: we’ll tell the EU27 we want a deal, but appoint a Minister who doesn’t?’ It would perhaps be funny if not so serious. As the report puts it, failure to reach agreement is not a continuation of the status quo. No Deal would mean the abrupt cessation of over 40 years of economic, political and legal partnership. Or in the words of Lord Jay, the Chair of the Committee: “It is difficult, if not impossible, to envisage a worse outcome for the UK”.

Finally, with Peers preparing for the imminent arrival of the Withdrawal Bill, the decision to close the EU door behind us with no agreement on our future relationship should not be taken by ministers. It should be taken by Parliament on behalf of the nation and Labour will seek to amend the legislation to ensure this happens.

Baroness Dianne Hayter is Shadow Brexit Minister in the House of Lords. She tweets @HayteratLords

Published 17th January 2017

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