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Brexit: Economic Analyses

Volume 788: debated on Wednesday 24 January 2018


Asked by

To ask Her Majesty’s Government what analyses they have carried out of the effect of the United Kingdom economy of the potential outcomes of the Brexit negotiations including (1) leaving the single market, (2) leaving the customs union, and (3) leaving the European Union with no deal, on the future trading relationship between the United Kingdom and the European Union; and when they intend to publish those analyses.

My Lords, the Government are undertaking extensive work to support our exit negotiations and to inform our understanding of how our EU exit will affect the UK’s domestic policies and framework. Ministers have a duty not to release information that could risk undermining our negotiating position. This is a position that Parliament has endorsed.

My Lords, the absurd mantra that, “No deal is better than a bad deal” has now been replaced by, “We will get the best deal for Britain”. In the event that Brexit actually happens, the best deal is bound to be worse than our current arrangements with the European Union. The only issue is: how much worse? How bad will the deal have to be for the Government finally to face down the Brexit fanatics in their own ranks and exit from Brexit, as most voters now want?

My Lords, I think the Brexit fanatics are on the Liberal Democrat Benches. We on this side of the House believe in democracy and that the referendum result should be implemented, and we will negotiate a full and comprehensive partnership with our European partners.

Will the Minister confirm, as will be confirmed by the Norwegian foreign office, that the EU EEA agreement provides not only for membership of the single market but of the EU/EEA agencies, and that it would be very foolish, given the 50% chance that that is where we will wind up, if we continue to wind down our involvement in these agencies, which is certainly not an automatic consequence of the referendum result?

My Lords, we are not winding down our membership of these agencies. We are members of the European Union until March next year, and we will continue to meet all our obligations and commitments during that period. I was in Brussels all day yesterday, consulting with the European Parliament on these issues. The Norwegian deal is not a superior deal, in my view. We want a proper, bespoke arrangement that will benefit the United Kingdom and respect the Brexit result.

My Lords, if the Government were misguided enough to initiate an inquiry into the three questions posed by the noble Lord, would they add a fourth, which would be a study of whether they expect European trade with Britain as a percentage of our total trade to continue to decline in the next 10 years, as it has in the last 10 years? If the Government were misguided enough to initiate such a study, would they ensure that it was not done by the same officials who made such misguided and wrong forecasts about the immediate impact of a Brexit verdict in the referendum?

My noble friend makes an important point. We are conducting a wide range of analysis on all possible scenarios, but we still remain of the view that a deep and comprehensive partnership between ourselves and the EU is manifestly in both our interests. Therefore, that is where we think we should end up.

My Lords, the Minister will be aware that the Electoral Commission was undertaking an investigation into the role of Russia in the Brexit referendum. Can the Minister convey to the House whether the Government yet have the results of that investigation, or indeed, whether they are undertaking their own investigation? If Russia had a major impact on that referendum, it raises questions about how Parliament should react.

I am sorry, but I do not agree with the noble Baroness. It is the reddest of red herrings to try to cast doubt on the referendum result. I have no knowledge of what investigations the Electoral Commission is undertaking, but I am certainly not aware that the Government are undertaking any such studies.

My Lords, in what way can this Conservative Government make the traditional, if often unjustified, Conservative claim to be pro-business and pro-jobs when they have slapped down a CBI demand to stay in the customs union, along with a TUC demand to stay in the customs union and the single market, and when they refuse to publish Brexit impact assessments or a position paper on financial services? When will they open eyes blinded by dogma to the real needs of the economy?

Well, this Government are pro-business and pro-jobs, and I can only assume that the noble Baroness has missed the unemployment figures this morning, which show that unemployment under this Government is at a 42-year low.

As the Minister has stated, is it not a simple matter of common sense that, while these negotiations are ongoing, anything that seeks to reveal the Government’s position on any issue whatever can only undermine the Government’s position?

My noble friend speaks great sense. It is a matter of common sense—but, apparently, it is not a common sense shared by the Liberal Democrats.

Did the Minister notice in this morning’s newspaper the report of a study produced by the Bank of England which estimated that 10,000 financial service professionals will leave this country between now and Brexit day? Goodness knows how many will leave after that. Are the Government entirely indifferent to news of that kind?

I have not seen that study. I shall go away and have a look at it, but I do not believe that it can be accurate. We have the best and most successful services industry in Europe, and we want that to continue. We will be negotiating with our European partners to bring that situation about.