My Lords, with the leave of the House, I will now repeat a Statement made today by the Chancellor of the Duchy of Lancaster in another place:
“Mr Speaker, with your permission I would like to make a Statement on our preparations to leave the European Union and the steps that we are taking to be ready for every eventuality. Some 17.4 million people voted in the referendum in June 2016 to leave the European Union—more than have ever voted for any
proposition in the history of our democracy—and the Government are committed to honouring that verdict. The Government are committed to securing a good deal with our EU partners, and negotiations have been led by the Prime Minister, the Brexit Secretary and the Foreign Secretary. Those negotiations have seen significant movement over recent weeks.
Until recently, the EU has maintained that the withdrawal agreement was sacrosanct, but now it has acknowledged that it can be changed. Until this point, the European Union had also said that the backstop was inviolable but, again, European leaders have said that they are not emotionally attached to the backstop, and that there are other ways of ensuring that we can safeguard the gains of the Good Friday/Belfast agreement and ensure smooth trade flows across the island of Ireland. I commend the Prime Minister and his colleagues for the progress made in those negotiations, and I hope that everyone in the House will agree that it is better for all of us if we can leave the EU with a withdrawal agreement in place. But government needs to be prepared for every eventuality.
Since the Prime Minister took office, he has created a new Cabinet structure to ensure that across government we take all the steps necessary to prepare for exit. A new Cabinet committee, XO, has met 48 times and brought greater focus and urgency to our preparations. Our top economic priority is to ensure that we can maintain a smooth and efficient flow of goods, and people, from the UK into the EU and vice versa. We need to make sure that businesses are ready for changed circumstances and new customs requirements. Of course, some goods require not just customs checks but other procedures, particularly food and products of animal origin. We have been working with Defra and the relevant sectors to ensure that those businesses are ready.
We take very seriously our responsibility to ensure that the rights of millions of EU citizens in this country are protected, and are working with our European partners to ensure that UK nationals in EU nations also have their rights safeguarded. The XO committee has also taken steps to safeguard and enhance national security and the operation of our criminal justice system, to enhance the free flow of personal data across borders, and to ensure that we can support the devolved Administrations in their work and in particular the Northern Ireland Civil Service in its vital work.
With your permission, Mr Speaker, I would like to go into a little more detail about how we can facilitate the free flow of goods across borders. In this context, I would like to explain the role of Operation Yellowhammer in the Government’s planning. If the UK leaves the European Union without a withdrawal agreement, we will be a third country, subject to the EU’s common external tariff, trading on WTO terms, and exports will be subject to new customs and sanitary and phytosanitary checks. These are unarguable facts, pose significant challenges, and constitute the base scenario with which we all have to work.
The Government’s Civil Contingencies Secretariat has used these facts to develop a reasonable worst-case scenario of what might happen, including in cases where appropriate mitigations are not put in place and
readiness measures are not implemented. That reasonable worst-case scenario, and the steps required to mitigate it, is the work undertaken under the name Operation Yellowhammer. As the National Audit Office reported in March, work on Operation Yellowhammer has been going since June 2018. The NAO made it clear that:
‘Departments are working on the basis of a reasonable worst case scenario’.
Many of the challenges Operation Yellowhammer identifies relate to flow at the border. It contains careful estimates of how flow might be affected through a range of factors, including if steps are not taken to help businesses to be ready. That is why the Government have taken significant steps to ensure that businesses are ready. Specifically, in adjusting to this new situation, we know that businesses require support to deal with those new customs procedures, and HMRC has acted to support traders. Importers will have access to transitional simplified procedures, which ensure that businesses have time to adjust to new duties. Businesses exporting to the European Union will need a specific economic operator registration indicator number from HMRC. HMRC has already allocated EORI numbers to 88,000 VAT-registered businesses which currently trade with the EU and beyond. We have also introduced postponed accounting for import VAT and negotiated access to the common transit convention so that both imported and exported goods can continue to flow across international borders without the payment of any duties until they reach their final destination.
We have established new transit sites in Kent and Essex to ensure that trucks can flow freely carrying goods into France and beyond to the wider EU. We are also providing tailored information to hauliers and businesses through a range of sites across the country to ensure the greatest level of readiness. We have funded business representative organisations to share information with enterprises large and small to prepare for exit.
We have also worked with the authorities in both Dover and Calais to smooth trade. I take this opportunity to thank in particular the French authorities for the work that they have done to ensure the operation of a smart border at Calais so that compliant consignments should experience no delay.
The steps we have taken are designed to ensure that business is ready for exit without a deal on 31 October, but these steps will in any case be necessary for life outside the single market and the customs union when we have a new free trade agreement with the EU.
Thanks to work undertaken under the previous Government and accelerated under this Administration, many businesses are already well prepared. For any business that is in any doubt about what is required, the Department for Business, Energy and Industrial Strategy is conducting roadshows and visiting businesses in their premises, while GOV.UK/Brexit provides all the information required.
There are, of course, specific additional requirements for those who are exporting food and products of animal origin. There will be sanitary and phytosanitary checks. Traders will require export health certificates
for food and catch certificates for fish. Hundreds of vets have now been trained to issue these certificates, and additional personnel certified to support them. Again, the French authorities have taken steps to ensure the smooth flow of critical produce. They have specifically created a new border inspection post at Boulogne-sur-Mer to ensure that fish and shellfish products caught in the UK today can be on sale in the European Union tomorrow.
As well as making commerce flow, we must safeguard the rights of individuals. That is why the Government have provided the most comprehensive and generous offer to EU citizens in this country to guarantee their rights. Under the EU settlement scheme, more than 1 million people have already been granted status and the Home Office is helping thousands of new applicants every day. If any Member of Parliament finds that any of their constituents are having difficulties with that process, I would welcome them getting in touch directly with me and the Home Secretary.
In the same way, we have taken steps to secure the rights of UK nationals in the EU, including access to healthcare after exit. We will continue to work with our partners in member states to provide further protection for UK nationals. It is important that UK citizens in those countries register with the appropriate authorities. On GOV.UK/Brexit, details are outlined, member state by member state, to enable every citizen to have the rights that they deserve.
Also this month, the Government committed to increasing the UK state pension, which is paid to nearly 500,000 people living in the EU, every year for three years after a no deal exit. Previously the commitment was solely for the financial year 2019-20.
As well as making sure that UK nationals in the EU and EU citizens in the UK have their rights protected, we want to make sure that UK citizens can continue to travel in the EU without impediment. That is why UK nationals will have visa-free travel into the EU, and we are also talking to EU member states in order to understand how people who provide professional services can continue to do so, member state by member state.
Let me turn briefly to security. It is absolutely vital we ensure that, as we leave the EU, we have the right approach to safeguarding citizens in this country. That is why we have been talking to the EU about making sure we can continue to have access to law enforcement and national security instruments. It is also important to recognise that, as we leave the EU, it will be the case that there are new tools available to ensure that we can better deal with people trafficking, smuggling and other criminal activity.
Let me turn briefly to the situation in Northern Ireland. This Government are absolutely committed to the Good Friday/Belfast Agreement; absolutely determined to ensure that there will be no infrastructure at the border in Ireland; and absolutely determined to uphold the functioning of the all-Ireland economy. That is why we have no checks at the border and no tariffs. Of course, we wait to see what Ireland and the EU Commission will decide on their side of the border, but we stand ready to work with them to help safeguard commerce and rights across the island of Ireland.
Leaving the EU without a deal certainly provides economic challenges, which I do not shirk from, but it also provides economic opportunities. There is the opportunity to secure new trade deals and to become a strong voice for freer trade at the WTO; the opportunity to develop new technologies which will help feed the world and enhance our environment; the opportunity to overhaul government procurement to better support growing British businesses; the opportunity to introduce a fairer, more efficient and more humane immigration system; the opportunity to deal more effectively with cross-border crime; the opportunity to invest more flexibly and generously to support overlooked communities; and the opportunity to strengthen our democratic institutions.
Leaving the EU was a clear instruction from the British people and this House now has a clear choice. Do we honour that instruction or do we continue to delay and seek to frustrate the British people’s verdict? This Government are clear: we must honour that decision. That is why I commend this Statement to the House”.
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