Charlie Elphicke is the MP for Dover. This speech was made to introduce his Commons adjournement debate yesterday.
“I rise to address the preparedness of the United Kingdom to leave the European Union with no agreement.
Brussels warns that the talks on a Brexit deal are taking longer than they should. The IMF issues cautions about risks to the global economy. Only today, it was reported in The Times that one of the European Union’s many presidents, Donald Tusk, has warned of the risk that the talks will collapse. Planning for no deal is not simply a negotiation point; increasingly, it is the responsible thing to do in the national interest.
This is not due to lack of effort on the part of the Prime Minister, who set out a positive and forward-looking proposal in her Florence speech. She even made a bold financial offer to move the talks forward. Last week she flew to Brussels ahead of the European Council to underline the positive case that we make. What was the response of the European Council? It said that we must agree the so-called Brexit divorce bill, and it will not talk trade until we sign on the dotted line. That does not look promising. How can we agree a price until we know what we are paying for? Even if we overcome the impasse on money, the trade talks may not go easily either.
Moreover, there is a serious risk of our being offered a bad deal which is worse than no deal. The risk is that we shall be asked to pay £50 billion as a settlement for a trade deal that requires us to adhere to EU rules. If that happened, we might as well never have left. We would be run by remote control, without a seat—or a say—at the table. Our ambition to seek the opportunities that are open to us around the world would be lost, as we would not have the flexibility to change our rules as we might wish to. That would be the worst of all worlds. It is a deal we should not take, and it is a deal that we will not have to take if we make sure we are ready on day one, deal or no deal.
Let us remember that we all want a deal. The EU would benefit from a deal every bit as much as we would. The EU is already the winner in free trade with the United Kingdom: we buy £100 billion more in goods from the EU than we sell to it.
That is precisely the point. The intransigence of the EU27’s negotiating position will ultimately be detrimental to their own economic interests. It is therefore absolutely right for us to prepare for no deal, because this country will thrive regardless.
My hon. Friend has made a powerful point. He is absolutely right. If we lived in a world of tariffs, they would hit EU exports to the UK to the tune of £13 billion, but our exports to the European Union would be hit by only £6 billion. Tariffs would hurt the European Union twice as much as they would hurt the UK, and that is why a deal is in the interests of everyone. What is more, the lawyers are clear that the EU has no legally valid claim for its divorce bill. As a matter of international law, no deal will mean no money for the EU. Frankly, we could just say, “See you in court; we’ll test your case,” and take it to an independent court or international arbitration, because we know what the position is. That is another reason why a deal is in the interests of the EU.
The UK is also an important part of the security guarantee for the entire European continent. We are not just a defence umbrella; we also have a great treasure-trove of information and expertise, as well as being a bridge to the “Five Eyes”. That is why a deal that includes data and information sharing is needed by all, and why the Home Secretary is right to say that no deal on security would be unthinkable because it would be crazy for the EU not to want to continue to share information and data after we leave the EU. We might not want to be controlled by Brussels, but that does not mean we do not want to co-operate and have a positive relationship with all the remaining EU27 member states.
What about the view of the British people? This is yet another case where the people are way ahead of our political system. Here we hear voices, particularly from the Labour party, about how we should just write a blank cheque and fold on a deal whatever the terms, yet the British people say, “No, we didn’t vote to leave the EU only to pay out vast oceans of cash and be run by remote control.” So it is little surprise that a recent Sky News poll found that 74% of people think that no deal is better than a bad deal, and it appears that patience is starting to wear thin with the EU because a poll by Opinium last Friday found that 37% of people want the UK to leave the EU without a deal if by March 2019 no satisfactory deal has been reached.
Does my hon. Friend agree that if we do not set the agenda for the circumstances of both having a deal and not, the EU will do it for us, and that is the antithesis of what the people voted for in the EU referendum?
My hon. Friend, who is a powerful advocate and champion for his constituency, makes a powerful point, and he is absolutely right, because the British people believe that the future is global, not regional or continental. They are right to do so: 90% of future world economic growth will come from outside the EU. Moreover, the EU has been in relative decline for the past 40 years: 40 years ago the EU accounted for 30% of global GDP; today the figure is just 15%. That is a massive relative decline, and it is hard to fathom why the OECD would want us to continue to be involved in an organisation whose share of GDP seems to be pointing in a southerly direction.
As the wider world grows, we can grow with it. The figures powerfully underline that, as did the Governor of the Bank of England in a powerful speech to the International Monetary Fund just last month, in which he said that the British people had taken a decision to step back in order to jump forward. He said that there will be short-term economic turbulence, but in the longer term Britain could be doing really quite well, and there was massive rationality in the decision taken.
We will have many debates on this issue, and I congratulate the hon. Gentleman on securing this debate. First, we should congratulate the Brexit team which is working very hard on our behalf to try to accomplish a deal. A deal would be preferable, but Brussels must be very careful about what it wishes for, as a bad deal or no deal would be a bad deal for them.
I completely agree with the hon. Gentleman, particularly on his generous remarks on the Secretary of State for Exiting the European Union and his ministerial team, who work day and night in our national interest, seeking to get the best deal for us.
That brings me neatly to the case for being ready on day one: why should we be ready on day one? Already establishment figures are saying that this would be wasted spending. I say it is in the national interest and is the best investment we can make. There are three key reasons for that.
The first reason is for insurance. We buy house insurance before we are burgled. In the same way, we should insure against the risk of error in the current negotiations, or things going wrong at the last minute. We should insure against the risk that there is not a meeting of minds by making sure we are ready on day one, and prepared for every eventuality. Secondly, we should be ready on day one in order to get the best deal. Any experienced negotiator knows that if you have the other side stuck to the table, they will have to do a deal. You can then hit them with a higher price and worse terms.
Is not one of the UK’s major problems the fact that Her Majesty’s Government are approaching this issue with multiple voices, with the Foreign Secretary giving his vision of Brexit in the pages of The Daily Telegraph and the Prime Minister, who is hardly hanging on to power, giving another? Is that not the reason why there is no deal coming forward and no compromise being offered from Brussels?
A deal is in everyone’s interests, and that is what we hope to get. The British internal market is the best deal for all the country, including the people of Scotland.
I congratulate my hon. Friend on securing this debate. With all this talk about the Government speaking with different voices, let me remind the House that Germany does not have a Government yet, Spain is in total chaos, the Netherlands has only just managed to get a Government and Mr Juncker seems to spend an awful lot of time in bars getting 28 pints of beer and not being able to figure out who is with him. Also, they are all now giving out separate messages about what their future relationship with the UK would be. Does that sound like speaking with one voice?
As ever, my right hon. Friend makes a powerful point.
My third point is that this would be no-regrets spending. We should have made this investment long ago. Our customs systems are creaking, our border systems are ageing and our roads are not resilient. In other words, this is investment that we ought to make anyway. There are strong reasons for us to invest now to have world-class systems. Singapore manages customs clearances in seconds, and Australia has cutting-edge border controls. We could have systems like that—systems that keep murderers out of the country and ensure that we can track down visa overstayers swiftly and help them home—yet it takes years to build the simplest road, and our airports and ports suffer from long-term underinvestment. This has cost our economy billions of pounds already.
Being ready on day one is not simply about Brexit; it is in the national interest to ensure that we have fast, efficient networks that will help to drive our economy forward. It is not just my own constituency of Dover that is affected. Gridlock at Dover will mean gridlock for the British economy. The midlands engine will conk out if it cannot get vital components, and the northern powerhouse will cease to whirr if it cannot get parts on time. Tailbacks are not new on the roads to the channel ports, and this underlines why we should be committing to this spending, irrespective of a no-deal scenario. A no-deal scenario without planning could also cause delays, damaging the economy and preventing Britain from taking advantage of Brexit’s opportunities. Even if a deal is struck, Britain will be hampered if we do not have world-class infrastructure. That is why we ought to be investing in it now. In order to enable the greatest opportunities of Brexit to be grasped, we must start preparing for a no-deal scenario right away. This would be responsible, no-regrets spending.
I have a response to the naysayers who say that it would be wrong to invest now. I say that it would be wrong to wait until the last moment, and that it is in the national interest that we invest now. At least £1 billion should be allocated in the November Budget to invest in upgrading our systems and infrastructure so that we will be ready on day one to forge ahead on day two. Will the Minister tell the House what discussions are happening on this, and whether such investment might be forthcoming? Some will say that however ready we are, those across the English channel will not be ready and that we should therefore not even bother. They say that we should simply run up the white flag. Can the Minister confirm that ports on the other side of the channel will be required to upgrade their systems in line with the World Trade Organisation global trade facilitation agreement that came into force last February? That agreement was warmly welcomed by the European Union. Can he also confirmed that article 7 of that agreement makes detailed provision for fast customs clearances, electronic payment systems and trusted trader regimes? Does he agree that if we start preparing now, there will be no need for queues of lorries on either side of the channel? Will Britain take the case to Geneva and start insisting that EU member states spend money now to facilitate trade in a non-discriminatory way, as required under the WTO trade facilitation agreement?
There are those who say that our systems cannot possibly be ready in time, and that our systems of administration and Government organisation simply cannot cope with all this. Those are not people who believe in Britain. Nor are they people who have studied our history. The history of our island story is that when there is a need, there is no obstacle that we cannot overcome and no challenge that we cannot meet. That is true. Sometimes we are a bit late to the party and a bit late to realise the pressing issues facing our nation, but we always get there in the end. Our history books are clear on that. We can do this, and we must do it to deliver the greatest opportunities to our future generations by seeking a global future.
In addition to the infrastructure costs of customs and borders, which are the right things to plan for, is it not incumbent on parliamentarians and Departments to speak to businesses and say, “This is what WTO means”? As the days progress and as the intransigence of our EU partners sadly does the same, it is looking more and more likely that WTO rules will apply, and that is nothing to be fearful of.
My hon. Friend makes a powerful point. Half our trade is conducted under WTO rules, and we manage that quite successfully.
We have spent long enough waiting for the EU to get its act together. Three quarters of the country agrees that we should be prepared to walk away if progress cannot be made, and it is vital that we have the option to do so and that we are fully prepared. That is why we must be ready on day one to forge ahead on day two —deal or no deal.
Steve Baker’s reply speech from the despatch box can be read here.