Dianne Hayter: “PM’s Brexit white paper is dead in the water”

Dianne Hayter speech in the House of Lords, Monday 23rd July 2018

It would be churlish not to welcome the appearance of the White Paper – albeit a year after needed, since it has to be reflected in the “Political Declaration” of the Withdrawal Agreement.

But, my Lords, it’s a White Paper:

  • unacceptable to two Cabinet Ministers who’d agreed it;
  • unacceptable to the EU who’ve rubbished it;
  • unacceptable to the government, which accepted ERG amendments that undermined it;
  • unacceptable to much of industry, the City and business;
  • unacceptable – I imagine – to this House, unacceptable to the Commons without DUP votes, Lib Dem no-shows, a handful of rogue Labour votes and some dubious government whipping; and
  • unacceptable to the Opposition, being grounded on a flawed Facilitated Customs Arrangement, an absence of migration clarity; inadequate plans for services, and failure to guarantee the Good Friday Agreement.

Apart from that, it’s probably a runner!

Why so unacceptable? First, it’s based on a fallacy. Second, it’s devised to satisfy a divided Conservative Party rather than satisfy UK plc. Thirdly, because some think talk of “No Deal” will somehow bring everyone on board.

Yet pretending to threaten a No Deal – which would cost households £1,000 and see an 8% drop in GDP (twice this in the North East) – is nonsensical if the conservatives ever want to win an election again, as crashing the economy would never be forgiven not just by workers and consumers, but by business, the city and manufacturing, which have traditionally trusted the Tories to manage the economy in the national interest.

Borrowing the words of a former Prime Minister from the Party which took us in to Europe, and who herself wanted the Single Market:

No, No, No!

No Deal is not an option – so stop being diverted by it.

Trade deals

For all the positives (common rulebook, a role for the ECJ, a catalogue of issues raised by our EU Committee), the White Paper is based on a fallacy: that there are profitable, exciting markets across the globe currently closed to us, but would magically open the moment we left the EU.

The notion we’re leaving in favour of some wondrous US trade deal better than what we have with our nearest, 500 million-strong, market (as well as the 57 with whom we share agreements) just doesn’t hold water.

It is a fantasy that we 60 million can negotiate better than the EU’s half a billion. Indeed trade policy experts think our status as a supplicant means we will struggle to secure good deals, especially from the US, China and India. Furthermore, we face a highly protectionist President – witness his “America First” rhetoric. A President who is:

  • unleashing trade wars with China, the EU, Canada and Mexico;
  • filed five WTO complaints against trading partners, and even queried the WTO; and
  • imposed import tariffs[2] on solar panels, washing machines, steel and aluminium.

And what does he want from the UK? Given he claims the EU – a “foe” – has treated the US “unfairly”, he wants more access to our market, not opening their market to us.

It’s “a predatory policy towards Brexit Britain .. designed to take advantage of [our] .. need for trade deals.” He wants America to sell us more: agriculture, and cars (Liam Fox offering to reduce tariffs on US cars, which will hardly help our automotive industry!).

Trump isn’t interested in a deal if we maintain EU standards, saying the Prime Minister had “probably killed” hopes of a deal by staying close to these.

Business

What of business? The CBI President said that, without a customs union, “sectors of manufacturing .. risk becoming extinct”. And following Chequers, over 100 entrepreneurs and business leaders wrote that: “The cost, complexity and bureaucracy created by crashing out of the customs union and adopting alternative arrangements is the last thing that .. businesses need as we seek to grow and employ more people.”

Your Lordships have often heard from Airbus, Rolls Royce, freight transport and others. But one new example is UK publishing, the world’s largest exporter of books with a third going to the EU. The Publishers Association fears Brexit could damage this as “It’s not just tariffs  … It’s the non-tariff barriers, customs checks and delays. That means .. books sat in a customs warehouse in Calais rather than in a bookshop in Dusseldorf.”

Services 

Services are even more alarmed. Not only as it’s often impossible to distinguish goods from services, as complex manufactured products (aircraft engines and cars) combine servicing, design, IT, training and marketing into the physical components which get screwed together.

Even more, banking, medicine, leisure, law, accountancy, IT comprise 80% of our economy, and an even higher proportion of employment, their healthy trade surplus helping offset a deficit on manufactures and agriculture. Yet Services drew the short straw in the White Paper causing alarm to financial organisations and companies who describe this as a “real blow for the UK’s financial and related professional services”.

The financial sector had anticipated a deal based on “mutual recognition”, with the EU accepting that their and our financial regulations were equally robust. The City was therefore deeply disappointed that this was abandoned in favour of “expanded” equivalence which is patchy, unilateral and makes us subject to ‘third country’ regime.

The White Paper itself admits we “will not have current levels of access” to EU markets, yet is vague on how services, and millions of jobs, will be protected, and our competitive advantage not shipped to New York or the continent.

Europe

And what do our partners think? The Plan has yet to find favour with the Commission, which insists that the four freedoms are indivisible. Added to which, we only seem to want EU’s most talented citizens, apparently putting the rest in the queue with Koreans and others. The Commission doubts the facilitated customs arrangement could be made to work, and has yet to be convinced we’ve sorted the Irish border.

Public

As for the public, only 13% think the PM is handling Brexit well, 75% judging she’s making a mess of it. Well, they’re right about that!

And it’s not just Remainers. The Labour Brexiteer, John Mills, reckons “Negotiations .. could hardly have been worse handled”. Indeed, he goes further and says “It is not clear that there is now a good Brexit solution available to us.”

Yesterday’s poll makes hard reading for the government. They must know that the more they pretend No Deal is viable, the harder it will be to sell a negotiated deal as satisfactory. So all their dancing around a band of irreconcilable anti-Europeans itself undermines navigating a realistic way forward.

Labour 

For Labour, the absence of a deal for services is a major shortcoming. This isn’t a “nice to have” add on, but key for our future prosperity. And both for Ireland, and across all borders, the facilitated customs drivel is simply impractical. IT cannot check the safety of food, composition of manufactured goods to assure compliance with rules of origin, let alone the imposition and allocation of tariffs or VAT.

Conclusion

My Lords, the truth is that the Prime Minister is stranded in a mire of her own making. She tried to escape the clasp of the ERG, only to retreat at the first whiff of gunfire. She must now complete the task of facing them down, move away from their impossibilist demands, discard Red or Blue lines and step towards the majority opinion in Parliament – indeed along the lines Labour has long sketched out – embracing a customs union and a Single Market deal. The PM must unite the Commons and the country by prioritising the economy, jobs, agriculture and the environment, peace in Ireland, and the national interest.

Another former Conservative Prime Minister, Sir John Major, said yesterday that every Tory should prioritise: “People, People, People”. This means negotiating a deal which is in their interests, and putting a good deal ahead of the Conservative Party’s civil war.

If the Prime Minister changes course, she can deliver a majority for that deal – a majority this White Paper will not create.

This speech first appeared on Labour Lords.