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Brexit: Costs

Volume 787: debated on Wednesday 29 November 2017


My Lords, with the leave of the House, I will repeat a Statement made in answer to an Urgent Question by the Chief Secretary to the Treasury in another place earlier today.

“Mr Speaker, our negotiating team are currently in Brussels discussing our exit from the European Union. In fact, our officials have been working on it for months. It would be completely wrong of me to cut across those discussions by commenting on speculation on the financial settlement. It would not be in our national interest either.

The Prime Minister made it clear in her Florence speech that the EU member states would not need to pay more or receive less money over the remainder of the current budget as a result of our decision to leave. She also made it clear that the UK will honour its commitments made during the period of membership in the spirit of our future partnership.

As we have said before, nothing is agreed until everything is agreed. Any settlement that we make is contingent on our securing a suitable outcome, as outlined by the Prime Minister in her Florence speech. We will meet our commitments and get a good deal for UK taxpayers. We want to see progress towards a preferred option, which is an implementation period followed by an ambitious future economic partnership. In the Budget we set aside £3 billion in addition to £700 million we have already allocated to make sure that our country is fully prepared for all eventualities.

What we have seen today in the media is simply speculation. We will update the House when there is more detail to give”.

My Lords, I was going to welcome the Statement, but I had hoped it would be a bit more definitive than the Minister has managed. We think that developments have gone a considerable way to securing the financial settlement, which of course is of great importance. I hope the Minister will accept that we expect the settlement to be a good deal for the nation, a fair settlement for the taxpayer and one that will meet our international obligations. The settlement will need to reduce the uncertainty that has obtained in the British economy over the period in which the Government have been negotiating so far. The Government must recognise that there is a real economic cost to those levels of uncertainty. Will the Minister accept that to get a good trade agreement in the next phase of the negotiations—the important phase—they should be based on trust and the Government should ensure that they earn that trust? Moreover, in circumstances where we may be negotiating positively in the wider world as well, such a reputation for trust will stand us in good stead for the future. The Government have so far pursued a negotiating strategy that has lacked transparency, which has caused considerable anxiety. I hope they will do better in the future.

I welcome the support that the noble Lord offered to parts of the Statement, but the Government have a specific responsibility, which Parliament has endorsed, not to release information that would undermine our negotiating position. We are in the midst of one of the most complex and important negotiations that this country has ever undertaken in peacetime. It cannot be right that we should have to give a running commentary that will be observed and undermine our negotiating position. We do not want that to happen. At the same time, we are very mindful that we have a duty to keep Parliament informed as far as possible. The position is that we are negotiating the best possible outcome that we can achieve. We have a particular target in relation to the Council meeting taking place in mid-December. We are making every effort and working in a good spirit towards a successful completion of that negotiation.

My Lords, the £50 billion to £55 billion being discussed is the net sum of our unpaid bills and commitments, so will the Minister answer the Question and tell us the costs of Brexit: the cost of a complex new customs system and of replacing 39 regulators; the cost to business of losing “just in time” in trade; the cost to the public of the collapse in sterling; the cost of Christmas dinner, which is up by 20% this year; and the cost of financial services not being able to sell across Europe? Then perhaps we could understand the shape of the Government’s negotiation.

I accept that there are costs, but there are also benefits that will come from Brexit. As for the costs, there is our net contribution of £10 billion a year. We have set aside £3 billion, which the Chancellor announced in the Budget, to prepare government departments and the devolved Administrations for all eventualities and outcomes. This is the right and proper way to implement a decision of the British people.

Does my noble friend accept that what he has said will seem reasonable to many people: the member states will, over the budget period, receive what they would have expected to receive? But will any payments be made beyond that, apart from pension liabilities?

My noble friend tempts me a little further than we are aware at present. The negotiations are happening in a complex situation—it is fast-moving and changing—but our team is out there trying to secure the best deal for the British taxpayer, which I am sure it will.

On careful reflection, does the Minister agree that the point made by the Foreign Secretary that the EU will have to “whistle for it” was just bluster and wholly unhelpful?

This negotiation is going on across a whole range of headings and there have been remarks on both sides. The key ambition is that set out by the Prime Minister in her Florence speech, where she set out a rational, well-argued and clear vision for our exiting in a way that honours our obligations but also prepares a new relationship of economic partnership with our European friends.

Does my noble friend agree that, regardless of any disagreements between Brexiteers and remainers, nothing could be more damaging to Her Majesty’s Government than that we should default on obligations properly entered into by previous Governments?

We have honoured those obligations and they are part of negotiating a settlement. The Prime Minister set out in her Florence speech that we will continue to honour that, that no country will have to pay in more and no country will get out less. I think that has been well received by our European partners and we look forward now to moving on to negotiating the more important area for us of continued trade with the frictionless access that we want to a very large and important single market.

My Lords, further to the point made by the noble Lord, Lord Lamont, will the Minister confirm that, if there is indeed a transition period beyond 2020, we may well need to make further payments for that period?

My Lords, is it not somewhat grotesque of the eurocrats to try to extract more money from us in pursuit of continuing free trade than we owe under our present commitments, when that free trade is so much more in the interests of EU exporters than it is in ours? Is not the underlying problem that the eurocrats’ absolute priority is to keep their failing project of European integration alive because it pays them so well, no matter how much damage it does to the real people of Europe?

I am not going to respond in the terms that the noble Lord has set out because it is important that we are in a serious negotiation not with enemies but with people with whom we want to be friends. We want a constructive relationship with them in the future and it behoves us to recognise that in our language and the way we go about the negotiations. The Prime Minister’s speech in Florence was a textbook example of that.

My Lords, have there been any discussions yet in this divorce, as it is called, about not only the alimony but the fate of the matrimonial home—all those buildings in Brussels to which we have contributed? Are we going to get our money back?

There are assets on the balance sheet of the European Commission and, be they buildings, satellites or anything else, they will be part of the assets factored in to a fair and reasonable settlement for the United Kingdom.

My Lords, in honouring our commitments—I very much welcome the fact that we will honour our commitments—will the Government explain to Parliament and the wider public the many positive programmes that this money will go towards and on which we hope we will be able to co-operate with the European Union in future? To pick up on the point made by my noble friend Lord Anderson, can we be assured that no more statements such as that about the EU whistling for its money will be uttered from Government Benches?

Certainly, in relation to the ongoing programmes and relationships we are having, once the negotiations have been completed, it is important that we ensure that the British taxpayer understands the importance and value of those ongoing relationships as part of the wider settlement.

My Lords, we shall hear first from the noble Viscount, Lord Hailsham, and if there is time, from the noble Lord, Lord Robathan, afterwards.

My Lords, as a committed remainer I say to my noble friend that if the reports are true, I welcome them. Is it not also correct, however, that they are difficult to reconcile with the advantages identified by the Brexiteers in the course of last year’s referendum campaign? Should we not treat those stated advantages with a degree of caution?

Much as I understand the point my noble friend makes, in all this we should not be involved in fighting the battles of the past. We ought to be coming together and uniting with the single purpose of ensuring that we get the best possible deal, the best possible access to the European Union and the closest possible relationship without being a member.