Exiting the European Union Committee

Oral evidence: The progress of the UK’s negotiations on EU withdrawal, HC 372

Wednesday 3 April 2019

Ordered by the House of Commons to be published on 3 April 2019.

Watch the meeting

Members present: Hilary Benn; Sir Christopher Chope; Stephen Crabb; Mr Jonathan Djanogly; Richard Graham; Peter Grant; Wera Hobhouse; Andrea Jenkyns; Stephen Kinnock; Jeremy Lefroy; Pat McFadden; Craig Mackinlay; Seema Malhotra; Mr Jacob Rees-Mogg; Emma Reynolds; Stephen Timms; Mr John Whittingdale; Hywel Williams; Sammy Wilson.

Questions 3923 - 4036

Witnesses

I: Rt Hon Stephen Barclay MP, Secretary of State, Department for Exiting the European Union.

Examination of witness

Witness: Stephen Barclay.

Q3923  Chair: Secretary of State, can I welcome you back to the Committee? Thank you very much for making time to see us today. I know you would like the session to conclude by 11.15, and we will do our level best to accommodate you. As ever, colleagues, it depends on the succinctness of the questions and indeed the answers.

Just before I start, can I just ask you about one thing? Last Wednesday, when the House was about to start debating indicative votes, your departmental Twitter account tweeting a graphic criticising one of the motions on the order paper, Common Market 2.0, saying, , “Common Market 2.0 would not respect the referendum result”. That tweet was subsequently deleted. Can I just ask, for the record, whether you you aware of this? Did you think this was an appropriate use of the departmental Twitter account?

Stephen Barclay: I can say, Mr Chair, I was not aware of the tweet. I am not aware, so this is the first I have heard. I think colleagues around the room will probably know I am less prolific on Twitter than some of our parliamentary colleagues, so I do not know. It may be, but I am purely taking it on you raising it now. I do not know if that was seen as a political tweet and therefore it was deleted on that basis, or on what basis it was first tweeted or corrected. I am very happy to take that away, but I was not aware of it.

Q3924  Chair: You were not aware of it. I think the fact that it was deleted means that somebody in your Department thought, on reflection, it was not a terribly wise thing to have done.

Stephen Barclay: In which case that is probably why it was then quickly deleted.

Q3925  Chair: Thank you very much. Following the Prime Minister’s statement last night, first I have a factual question. When are the Government going to apply for the further Article 50 extension she has now agreed to?

Stephen Barclay: The normal process is that papers are prepared for heads of Government in advance of a Council. That is part of the role of the team supporting President Tusk. There will usually be discussions at sherpa level to shape that documentation in the run up to a Council. The intention behind what the Prime Minister set out last night is to meet with the Leader of the Opposition today to establish whether there is scope for common ground and, if so, how quickly that can be established. It will largely be shaped by those discussions in the coming days as to when any requests are made. The actual formal pitch would come from the Prime Minister at the Council on the 10th, but normally, in practice, there are papers shared in advance to try to shape that discussion.

Q3926  Chair: Is it the Government’s intention to seek a specific end date to this further extension, or not?

Stephen Barclay: What Cabinet have agreed is that, first, there would be discussions with the Leader of the Opposition to establish what can and cannot be agreed. Subject to that, then there is a question as to whether we have binding indicative votes, so to what extent we can, as a House, reach agreement. Colleagues around the table will know that all the options to date put to the House have failed to secure support, so that is what we need to establish. The view of an extension was then in order to deliver that by 22 May, because that was the original date set by the Council. You will know, Chair, that we do not have an automatic right to any extension. It is a question for the EU Council to determine, because the House chose not to exercise the right that we had to 22 May when the House voted against the withdrawal agreement last Friday.

Q3927  Chair: If the extension was applied for or was granted to 22 May, and if we do not take part in European Parliament elections, is it your understanding that would preclude any further extension being granted by the EU for that reason?

Stephen Barclay: There are two issues, Chair. First, for any extension to 22 May or, if sought, beyond, the EU has been very clear, and there is a consistent message from EU leaders on this, that there needs to be a clear purpose. Part of the question the UK Government would need to answer is what the clear purpose of extension is if, after three years, every option before the House has been rejected and the House has not been able to establish any clear purpose. Therefore, the extension to the 22nd would be in the context, first, of the Government and the Leader of the Opposition having come to an accommodation. On that basis, there could be confidence that the legislation could be passed and ratified in the time to 22 May, because, again, I suspect that would be one of the questions the EU Council would have around the extension, not just if there is agreement on a way forward but if the House can then deliver legislation by the 22nd.

If you were to seek—it is not the Government’s position—an extension beyond that, you will recall the Prime Minister is on record as saying she would not seek an extension beyond the end of June. We can get into the distinction between 22 May and when the parliamentary elections are and when the MPs take their seats and the issue for the difference in timing there. The Prime Minister has been clear she would not seek an extension beyond that, but if one was sought you would still have to answer the question of what the purpose of that extension is, because the House has not come to any resolution.

Q3928  Chair: That is extremely clear, but the question was about the European Parliament elections. Let me put it another way. Are the Government currently intending to start planning the process to hold European parliamentary elections?

Stephen Barclay: As a contingency plan, the Chancellor of the Duchy of Lancaster has written to the Electoral Commission to say, given some have already started some contingency planning, any costs associated with that would be reimbursed, as a contingency. It is not our intention to hold the European parliamentary elections.

Q3929  Chair: Returning officers will start the process. They will call for nominations. They will prepare and, presumably, that could be stopped up to just before polling day. What is the mechanism for stopping them?

Stephen Barclay: The reason for that contingency, if one takes it—again, it is not the intention to hold a general election—is if, for example, there was a scenario where a general election, for whatever reason, was triggered, I suspect, and it would be for the Cabinet Secretary to determine, the Cabinet Secretary might say that, in that instance, in order not to fetter a future Government, the European parliamentary elections would need to be held. That is why the contingency has been put in place, to ensure that returning officers are able to prepare, but that is reliant on the fact that you would go ahead with a longer extension, and that is not Government policy.

Q3930  Chair: That, I think, answers my question. In effect, the Government acknowledge that, if they have not held the European parliament elections, the possibility of getting an extension beyond 22 May, for example to 30 June, would not, in all likelihood, be possible. The EU would say, “Hey, you did not take part in the European Parliament elections and therefore we cannot give you any more time”.

Stephen Barclay: Yes.

Chair: That is very helpful.

Stephen Barclay: I can be very clear on that. If you do not hold the European parliamentary elections, my understanding, and the Government’s understanding, is that you would not be able to take a long extension to the end of the year. The reason for that is a matter of treaty. This is often portrayed purely in a UK context, but it is not just the right to representation of people in the UK, in terms of the European parliamentary elections. The question would also arise for UK citizens in European countries, as to whether they voted in the European elections in those countries, whether that is Spain, France, Italy or wherever. Under treaty law, if you were still a member, the elections would have to take place.

The reason EU leaders, I suspect, would not agree to any deviation from that is, first, because that is their view of the legal position, but, second, it would potentially put into question the legitimacy of the Commission if it has not been constituted through the correct parliamentary elections. If, for example, under a motion previously in your name, Chair, and that of Yvette Cooper and others, which looked at an extension to the end of the year, you were to have a long extension to the end of the year, you would need European parliamentary elections. I think previously there has been a debate on whether you could reappoint the existing MEPs or if there was another way of doing it. Our understanding is you would have to hold European elections if you were to extend to the end of the year.

Q3931  Chair: That is a very helpful clarification, Secretary of State. What if the EU comes back and says, “You cannot have the length of extension you are looking for, but we will give you a longer one”? Would the Government come back to Parliament at that point to take Parliament’s mind? I ask that in the context of today’s order paper and Yvette Cooper’s Bill. In the light of what the Prime Minister said yesterday, we have a business motion and one amendment, which happens to stand in my name, that provides for a Bill and would also provide for further indicative votes on Monday. The Government could possibly say, “We are actually quite happy with both of those”. I wondered whether a change of approach was imminent.

Stephen Barclay: Such are the strange times we operate in, Chair, that I feel I should invite you to come and sit next to me to answer questions from the Committee on your legislation that is going before the House today. You are bringing the legislation, not me.

Chair: That is obviously a very popular suggestion, Secretary of State, yes.

Stephen Barclay: It is your legislation and there is a seat here, Mr Chair, for you to come and answer the questions of the Committee on your legislation. You do not need me to tell you what is in it. I suspect this audience has read it and cogitated on it, but for others perhaps watching that have not, my understanding of your legislation is that it seeks to pass in law the requirement for the Prime Minister to agree to the extension imposed or the extension the EU Council sets out. That has to be agreed at 28, so it requires the UK agreement. The legislation seeks to fetter the discretion of the Prime Minister on that, but with the scope to come back the following day, if it is different to what has been set out by the House, and have a vote the following day.

Chair: Just in the interest of complete accuracy, the Bill puts the onus on the Prime Minister to specify the length of extension she is seeking. That could be amended by the House, so you are correct in that sense. You are right: if the EU says, “We will give you an extension that is to a different date than the one the Prime Minister proposed to the House and was agreed by the House”, the Prime Minister has to come back and put that to the House, just for the record.

Stephen Barclay: It could be a cost-neutral innovation for you to come and give evidence to your own Committee.

Q3932  Chair: Yes, indeed. Will a new statutory instrument be required to change exit day, given what happened last night?

Stephen Barclay: It is probably not for me to point out potential flaws in the legislation you are bringing forward at this stage.

Chair: No, I am talking about your legislation under the 2018 Act.

Stephen Barclay: Sorry, I thought we were talking about the Cooper Bill.

Q3933  Chair: No, I am asking about exit day, because you had to bring a statutory instrument previously to change exit day. If we get a new extension to a different date, it will presumably require another statutory instrument.

Stephen Barclay: It will, for the same reason.

Chair: It will. That is all I wanted to check.

Stephen Barclay: Just to clarify on the point, what is agreed at the EU Council at heads of Government is the international legal position. This is why we had the SI last week, and I think there was some confusion over that SI, because there was a suggestion the SI was changing the date of exit. It was not, insofar as, in international law, the date of exit had been changed. It had been changed by the decision reached at 28 at the EU Council. What needed to be done, for consistency of the legal position, was for the domestic legal position to be brought in line with the international legal position. That is why you have the SI, in essence, as a point of legal clarification, so we do not have businesses in our constituency having one date in UK law and a different date in international law. The SI is to ensure those two dates align.

Q3934  Chair: Is the general understanding correct that the talks between the Prime Minister and the Leader of the Opposition will begin today?

Stephen Barclay: They will.

Q3935  Chair: Are the Government intending to talk to the leaders of any other political parties?

Stephen Barclay: They have been doing so. In terms of the statement last night, it was very much on the discussion between the Prime Minister and the Leader of the Opposition. That is because, first and foremost, both manifestos have a clear undertaking to implement the referendum result. Also, because time is very much of the essence, if we are going to pass the legislation to ratify our departure, in blunt numbers terms, an agreement between the two main parties is the best mechanism for doing so.

Q3936  Chair: When do the Government make a decision under this new timetable about whether to hold their own indicative votes?

Stephen Barclay: It will be shaped by the discussion today. Obviously, one cannot pre-empt that discussion, so I do not think there is a formal, rigid timetable around that. There will obviously be discussions today and it depends whether further discussions are needed or where those discussions conclude.

Q3937  Chair: Are you anticipating the terms of those different indicative propositions would be drafted by the Government? Would they come out of the meeting that is taking place today? Who would draft them?

Stephen Barclay: We need to take things one step at a time. Let us have the discussions today. There is a clear commitment in both manifestos to deliver on the referendum. There are areas of common ground that are not often reflected in some of the public debate. For example, I think there are many, if I may say, on the Labour benches that do not particularly have an objection to the withdrawal agreement but who voted against the withdrawal agreement last Friday because they were concerned around the scope within the political declaration and whether it was sufficiently tight. Colleagues will correct me, but I do not think particularly many who opposed the withdrawal agreement last Friday would necessarily have an objection to that.

I think people recognise that whatever deal is agreed comes with the withdrawal agreement. The EU has been very clear that is not open for renegotiation. In terms of the discussions today, notwithstanding the vote against the withdrawal agreement, it may be there is common ground on the withdrawal agreement. It sounds a slightly illogical point, given the votes, but actually, if you look at what is in the withdrawal agreement, I do not think there is a material objection.

There are then areas, for example, on dynamic alignment. In practice the Government’s position was we were concerned with dynamic alignment because of the future commitment on it, which we felt the House of Commons should decide, on workers’ rights. On the other hand, we have already made a commitment on workers’ right to accept the current proposals that are underway at a European level, so actually, in practice, the commitment the Government have given on workers’ rights for this Parliament is not massively dissimilar to dynamic alignment. It is more the length and the future element of it. Again, the political debate on it perhaps is more overblown than the substance on that issue, because, as I say, the Government have given commitments on workers’ rights.

These are areas we need to get into. The Opposition has said that it wants a customs union but with a say on EU trade policy. We were concerned as to the deliverability of that, but clearly we need to discuss that further with the opposition. We will explore that as part of the discussions today.

Q3938  Chair: My final question, Secretary of State, is the Prime Minister said, in, I think, the most significant part of her speech last night, “The Government stand ready to abide by the decision of the House”. That is quite a statement. Since you mentioned a customs union—it lost by three last time—if the House were to vote for the UK to be in a customs union with the EU, the Government would accept that. Is that correct?

Stephen Barclay: What the Prime Minister was signalling last night is, stage one, have the conversation, see if we can get agreement. If that does not bear fruit, the question that then arises is whether there is a way, in a House that has not been able to agree anything to date, of getting a resolution. The message—and I am sure we all get this in our constituency emails and so forth—is that there is a very strong desire in the country, particularly in the business community but more widely, to say, “How do we bring this to a resolution? How do we actually get something resolved?”

Q3939  Chair: I agree with that, Secretary of State, but the very specific question is about the Prime Minister’s words. She said, “If we cannot agree on a single unified approach, then we would instead agree a number of options for the future relationship that we could put to the House in a series of votes to determine which course to pursue. Crucially, the Government stand ready to abide by the decision of the House”. This is a very simple question. We all understand the context. If the House voted that we should be in a customs union with the EU, the Government would abide by that.

Stephen Barclay: The commitment there is to look at a mechanism for binding indicative votes. The issue with the current approach is they are indicative. The motions are not binding.

Q3940  Chair: This would make it binding.

Stephen Barclay: The suggestion then would be that we would have something binding. To be very clear, my personal view is I have serious concerns in terms of a customs union, because I think it has risks in terms of our trade defences. It has risks in terms of our lack of say on trade policy. It is not what I campaigned for in the referendum. It is not what is in our manifesto. As I said on one of the media programmes earlier today, there is a remorseless logic to the numbers of the House of Commons.

If the Government cannot get their business through, and if, in law, through your legislation, no deal is taken off the table, you are then left with an unpalatable choice in my view, but a choice nonetheless, between either not having Brexit, through a long extension—and once you go past the European parliamentary elections it can be extended, extended, extended and extended again, and never come to a resolution—or you end up with what is referred to as a softer Brexit.

I do not welcome that. I do not think that is the desirable option. The House has already rejected the permanent customs union that the father of the House set out, for very good reasons. My colleague, the right honourable Member for Chelsea and Fulham, has spoken at length about the issues with a customs union. Ultimately, if that is where the numbers of the House of Commons go, the Government would, in order to bring this to a resolution, in the national interest, accept what the House voted for.

Chair: I think at the end that is a yes in answer to that question.

Q3941  Mr Whittingdale: Following up on that, essentially what the Prime Minister appears to be asking is for the Opposition to support the withdrawal agreement in return for amending the political declaration in a way that can achieve a majority in the House of Commons. I have asked you this before, but I would like to explore it again. To what extent are we bound to pursue the course contained in the political declaration by the terms of the withdrawal agreement?

Stephen Barclay: We are bound insofar as, if one goes to Article 174, best endeavours, we have to act in good faith and go into that as a negotiation. If, for example, in accordance with the Labour policy, we are seeking a say on the EU’s trade policy and the EU refuses, that is part of the negotiation that we would have to enter into. We are bound in terms of going into that with good faith.

Also, there is a slight paradox sometimes in some of the criticisms. Some people, indeed at a previous session of this Committee, have argued to me that the political declaration is not worth the paper it is written on and it is not binding. It would be a slightly odd position for the same people then to argue that commitments to negotiate the political declaration were so binding as to be unacceptable. Our own wing, John, of that debate need to decide which of those two arguments they are going to run. They cannot run them both.

Mr Whittingdale: I would not like to bet.

Stephen Barclay: They may try to run them both, but logically they cannot run them both.

Q3942  Mr Whittingdale: I listened to you talking about this this morning, and you were suggesting that the Opposition should take confidence from the fact that the composition of Parliament is not going to change, whatever happens to the leadership of the Government. Therefore, the challenge of finding something acceptable to Parliament would remain. That would not be the case, obviously, if there were a new Parliament. In those circumstances, basically the slate is clean and we start again. There is nothing we are signing up to in the withdrawal agreement that necessarily requires us to deliver something in the political declaration.

Stephen Barclay: First, in signing up to the withdrawal agreement, we have signed up to the backstop, which obviously would still stand, whether that is with a new Parliament. I know that is an issue of great concern to a number of members of the Committee. It is not a question that we would reach this agreement, have a general election and the slate is wiped clean. I am not trying to suggest that, because the backstop would still be there. It is also a point of long established constitutional principle that Parliament cannot bind its successor, so yes, a general election. However, the Leader of the Opposition’s policy is to seek a general election, so it would be slightly odd to argue that he cannot enter into an agreement in line with his manifesto because of the risk of a general election that he is seeking.

Q3943  Emma Reynolds: Good morning, Secretary of State. You said on the radio this morning, and you reiterated it to us today, that one of the reasons for the change in approach is simply the parliamentary arithmetic and getting a deal through the House. If the Prime Minister agrees with the Leader of the Opposition to drop her red lines of leaving the customs union and there is an agreement on remaining in a customs union—I know you have just spoken about whether that is deliverable, but just say, for the sake of argument, that is something they agree, and I know it is something Jeremy Corbyn has been very insistent on, in terms of our position—if that position is then put to the House of Commons, will all Cabinet Ministers and all Conservative MPs be expected to follow the whip on that?

Stephen Barclay: As you well know, questions on whipping are always for the respective chief whips of both parties. That will be what the whipping is.

Q3944  Emma Reynolds: Let me put it another way. If the rationale for the change of approach is to get a deal through Parliament, are you confident that, in the situation in which the Prime Minister and Jeremy Corbyn agree a customs-union-style Brexit, that will get through the House of Commons with Conservative support?

Stephen Barclay: If one looks at just the numbers of Members of Parliament between the two main parties, if an agreement is reached between the two respective leaders, it is my expectation there would then be a stable majority to deliver on that. How the Government, and also Nick Brown on the Labour side, deliver that, whether they do that through a three-line whip, whether that is for the payroll, is a question of whipping for business managers to resolve. What is clear is, if the Leader of the Opposition and the Prime Minister are able to come to an agreement, my view is there would be a majority in the House to deliver that.

Q3945  Emma Reynolds: Given your reservations you have explained to us this morning, but also on the Floor of the House, about a or the customs union, would you support such an agreement?

Stephen Barclay: You made reference to my interview this morning. What I said is we are going to sit down without preconditions, but it is not a blank cheque. It will depend where those decisions land. What I have already alluded to is that this will be a question not as to whether something is desirable or not. I have already set out my views in terms of a customs union. The question will be what the least worst option is.

What is very clear is we are at a key point in our history. We need to come together in the national interest. That is the generous and bold offer the Prime Minister has set out. There will need to be compromise, and there will need to be compromise on all sides. That will apply to me just as it will apply to many others. That is not about saying that I will accept X or Y. We will have to look at different things and different Members will come to their view. It will depend on the suite or the package, if agreed, and it is a question as to whether it will be agreed. We will need to compromise and that will include accepting things I may dislike, but the alternative to that is potentially no Brexit at all and I feel that would be extremely damaging, from a democracy point of view. Also, a point that is often missed is it would also be very damaging internationally, to our reputation internationally, if we did not deliver Brexit. Sometimes that point gets overlooked.

Q3946  Emma Reynolds: If there is a fairly rapid agreement between the Prime Minister and the Leader of the Opposition—we do not know yet, but for the sake of argument—even if that took place and whatever deal was agreed was put through the House relatively quickly, it still remains a big question as to whether the Government, even with cross-party support, can get through the legislation it needs to. It is not only this, but obviously the big part of that is the withdrawal agreement and implementation Bill, which obviously has to go to the Lords as well. How confident is the Government that, even if you were to get, in the best-case scenario, relatively quick agreement with the Leader of the Opposition, you can get all the legislation you need to get through by 22 May? Surely, the EU would be quite nervous about that, because even if you had this political agreement, it is still quite a tall order, even if we do not have any recess at all for Easter.

Stephen Barclay: Part of reaching an agreement would be to reach an agreement that includes the business motion, through the usual channels, in terms of how that would then be dealt with. It is a long established point that the House can move quickly when it is minded to, but it cannot move quickly if there is not a sufficiently stable majority to do so. If the two main parties came together, the House would be able to move quickly. You would agree that through the usual channels and have a business motion as part of the package to deliver that. You are absolutely right, Emma, that the withdrawal agreement Bill is a significant piece of legislation, but if both sides, in line with our manifestos, have agreed to deliver it, I am confident the House of Commons would be able to move quickly to do so.

Q3947  Emma Reynolds: Could I ask one last question? Michel Barnier said yesterday that the options now available to the UK were no deal or a long extension, and by “long extension” he meant beyond the European parliamentary elections, so we would have to hold elections. What is your response to that?

Stephen Barclay: First, you see a range of statements from different people at different times. What is clear is that any extension would be subject to agreement with the EU Council. The fact that they spent five hours debating it last time probably indicates there were a range of views around the table. At its crux, when people such as Michel talk about a long extension, it is more in the context of if there is a stable majority to get the withdrawal agreement Bill through. That is why, if there is an accommodation with the Leader of the Opposition, that would be a very compelling case to present to the Council that actually it is a credible plan.

There are many leading voices in Europe who do not particularly want the UK to take part in the European parliamentary elections. Obviously, it would change the numbers of MEPs. It will have an impact on top jobs in the European Commission, so there is an issue there. I think, to be frank, there is a degree of Brexit fatigue within EU institutions and we see that again in terms of some of the comments. They want to get this resolved and if they see an agreement that enables us to get this resolved by 22 May without it then impacting on the European parliamentary elections, I think there are many in Europe that would welcome that.

Q3948  Emma Reynolds: Is there not also a nervousness that we keep going back and asking again and again? The likelihood is, because of the uncertainty in our own Parliament and what we have seen so far in terms of difficulty in reaching a consensus in our own Parliament, that if we simply extend until 22 May, we get to 22 May or thereabouts and we ask for another extension. Is there not nervousness from some EU leaders? I accept there are differences in opinion, but is there not a nervousness that we will keep doing that, and actually it would be more logical and a cleaner form of agreement to extend to the end of the year? If we have to have European parliamentary elections, so be it, but then at least there is more time for Parliament to get through the legislation that it requires and for the EU to agree that.

Stephen Barclay: I agree with part of that, but not the other part. There would be nervousness of extending beyond the 22nd because of the impact on the European parliamentary elections. In terms of an extension to the end of the year, as I say, there would be many in Europe that would not welcome that. That is partly because they feel this is taking a significant amount of time for them and, to be frank, they have other things they want to talk about. They do not just want to talk about Brexit in the EU institutions. There are other things they want to be grappling with.

Secondly, it is unclear what the purpose of that longer extension is. Thirdly, many of their own businesses do not want the uncertainty to be elongated and actually want this resolved. Many within the EU, certainly many I have spoken to, want a resolution of this matter and want it resolved as quickly as possible.

Q3949  Stephen Crabb: Good morning, Secretary of State. Could I pick up on a couple of things you have said in answer to previous questions? First, on international reputation you will be aware that the media coverage across Europe in recent days about where we are at in this Parliament and the position of the Government has been pretty dire. To what extent are concerns about the hit on our international reputation weighing heavily on you and your Cabinet colleagues at the moment?

Stephen Barclay: Very much. First, if you look at the spring statement—it is a political point, but I can be forgiven for making it—it had a lot of very positive economic news in it that largely got lost in the narrative around Brexit. What is very clear, if you talk to the Chancellor and others, is there is a significant amount of investment that wants to invest in the UK. Some of that is being held back by the Brexit debate. From an international reputation point of view, if we can get resolution on this, that will be a source of significant confidence within the business community, and particularly around that investment.

There is a second point, which is the point I was touching on, which is around our democratic reputation. As a country, we have always been seen around the world as a beacon of democracy, a country where Governments change between political parties without institutional instability, where votes are respected, where people are not told, “Sorry, we are not going to respect your vote. Vote again”. In terms of some of our soft power, if one looks at our DFID budget, our seat on the G7, G20, UN Security Council, our international reputation, I think that international reputation is damaged.

Q3950  Stephen Crabb: Do you feel the last two years have been a humiliating experience for the United Kingdom?

Stephen Barclay: We should not lose sight of the fact that, first, we are untangling a very complex relationship built over four decades. We did not go in with one switch where we were in today’s position. It has accumulated over a long period of time. Trying to untangle that complex web is a major undertaking. Certainly, the retired civil servants who have spoken about this have talked about what a big challenge that is. We are doing so at a time when the country itself is split, 52/48, but also when Parliament is split; it has not agreed on a single thing so far. Therefore, to do that, with that complexity in both the public and the parliamentary context, was always going to be a very challenging endeavour. What we are seeing is a reflection of that.

Q3951  Stephen Crabb: In response to questions from Emma Reynolds a few moments ago, you talked about what the mood of the EU might be in response to requests for an extension. What do you think the chances are that they would turn round and, rather than entertain the possibility of further extensions, say, “We are not going to put up with this soap opera anymore”, and basically say to us, “You will be leaving without a deal”? They probably will not want the negative headlines before the European elections, so they might give us a few months to prepare for that beyond the European elections. Are you preparing for that scenario, where the EU basically turn round and actually impose a solution on us because we cannot come up with a plan ourselves and say, “You are out”?

Stephen Barclay: First, the UK has no legal right to an extension, so that will be subject to the agreement of the other 27 heads of Government, and it only takes one to refuse. That is why, in my personal view, it was a mistake for the House not to support the withdrawal agreement last Friday, because that was the right the Attorney General referred to. In truth, I do not think the House actually has an objection to the withdrawal agreement, but it voted against it. In doing so, it removed the legal right we have to an extension to 22 May. Now, whatever our debate decides, Parliament does not decide whether we have an extension beyond the 12th, because any EU leader could choose to say, “No, we are not going to give an extension”. That is why, as you referred to, we are maintaining our no-deal preparation. That decision will come on 10 April, and if it were to happen then obviously we would leave on 12 April.

There are risks to the EU from no deal if you look at Ireland in particular, but it is not just Ireland. 41% of Irish exports come through the short straits, so it is not just the border issues in Ireland. There are significant issues in terms of no-deal consequences for them. That is why their stance around the backstop, in terms of the unilateral exit and the discussions the Attorney General had, was so disappointing, but there will be implications for them as well.

Q3952  Stephen Crabb: Secretary of State, do you get the sense that the patience and the goodwill is pretty much dry now on the EU side? Are you feeling that pressure or any change in attitude from them on this issue?

Stephen Barclay: Much of this is in the public domain. Many EU leaders have expressed their frustration at the lack of a resolution in Parliament. You have seen EU leaders with the front page of the Guardian, with its headline, “No. No. No”, with the indicative votes. These are issues in the public domain: that there is frustration in Europe at the lack of a resolution in the House of Commons. As I alluded to in my answers with Emma, there is a desire in Europe to be discussing other issues as well. They have their own domestic political priorities, so it is not all about Brexit.

At the same time, I think there is a recognition that no deal brings significant costs to the EU. Our political debate underestimates some of the implications of no deal within the EU, which are significant. There is a desire to avoid no deal, but it requires the House to come to a resolution.

Q3953  Stephen Crabb: Can I just ask one final question? Thank you for your answers so far. In response to another earlier question, you talked about this being an extraordinary period, red lines perhaps shifting and it being a very fluid situation. For you personally, where are your red lines at? You talked about the reservations you have over a customs union, but that is just one red line here. There are others, are there not? There is second referendum. There is freedom of movement. What would make you personally stop and say, “Sorry, this is not a Brexit I can go along with”?

Stephen Barclay: As I said on the radio today, we are not having preconditions, but it is not a blank cheque. The devil in these things is always in the detail and we need to see the detail of that. The key issue in this was my frustration in terms of the debate around the backstop. People can look at things in isolation and say whether they like it or do not like it or what the flaws are in a particular proposal, but it is not about the thing in isolation. It is about the balance of risk. It is the balance of risk between the backstop and the Prime Minister’s deal compared to a softer Brexit.

I felt, on the balance of risk, that people had overstated the risk of the backstop. We have debated it before, but actually it breaks the four freedoms. There are lots of reasons why, from an EU point of view: fishing, the safeguards around it, et cetera. People looked at it in isolation. In my view, they did not look at it in terms of the balance between that and the alternatives. With the discussion around a softer Brexit, what I and I think all Members of Parliament, because we all have one vote on these things, will need to bear in mind is what the balance of risk is between that and the other options that are before us. It is not a question of whether I look at something in advance and say, “I will tick this thing and put a cross next to that option”. The question will be what the package is and how that, on the balance of risk, compares to the alternatives.

Q3954  Wera Hobhouse: In the possibility—a currently unlikely possibility—that a confirmatory referendum was attached to a deal that was negotiated, would you then vote against your own deal because it was part of a composite vote? If there was a deal that has been negotiated between the Prime Minister and the Leader of the Opposition, but the option was to combine that with a confirmatory vote to the public, i.e. a people’s vote, in that case, would you vote against your own agreed deal?

Stephen Barclay: It is just worth stating an obvious point: we all have one equal vote on this, so it is not that Ministers have a larger vote in any shape or form. I have said there are no preconditions to talks and that is our starting point. On a hierarchy of risk for me, personally, the idea of a second referendum, as I have frequently said, prolongs uncertainty and risks taking us back to the very starting point. If we then vote remain, we are back to where we started. We will need to look at this in terms of the hierarchy of options. I have my personal view on that, but it is right that we have the discussions, and we will see where they go.

Q3955  Wera Hobhouse: You would not vote against that deal itself if it was combined with a people’s vote. We have been talking about composite options now, to actually combine a deal with a people’s vote and then vote on that package. You would not vote against that package.

Stephen Barclay: It is not, as I understand it, the Labour Party manifesto position to have a second referendum. I think that was a conference resolution. I do not think that was the manifesto position.

Q3956  Wera Hobhouse: I am asking you.

Stephen Barclay: I do not think it is a revelation to the Committee that I do not think we should have a second referendum, because it takes us back to square one. That is my personal view, but the Prime Minister will have the discussions and we will see where they lead.

Q3957  Mr Djanogly: Are the United Kingdom Government prepared for a no-deal Brexit on 12 April?

Stephen Barclay: The Government, over two years, have done a huge amount to prepare and is in pretty good shape. Certainly, in the meeting I had with one of the senior officials leading this piece of work yesterday morning, in light of some of the media reports, they were able to give me very good reassurance in terms of the work the Government have done. Where there is more risk is around third parties, so businesses and what member states’ preparations are. We can get into either.

Part of the difficulty with business is if they think no deal is not going to happen, because they hear the debate in the House of Commons, they hear the House voting against no deal, they see that legislation is being brought forward to prevent no deal, the message some businesses take from that is, “Is it worth us preparing if we do not think it is going to happen?” Likewise, from a member state perspective, a lot of that has been done through the Commission, rather than through member states. Therefore, there have been constraints in terms of what bilateral discussions we have been able to have with member states.

Q3958  Mr Djanogly: I take it from your answer that, yes, the Government are prepared for a no deal on 12 April. How much notice will systems and businesses receive of a no-deal outcome?

Stephen Barclay: Businesses have notice now, today, that no deal is a possibility on the 12th, because it is not within the control of either Her Majesty’s Government or Parliament, with the exception of Parliament choosing to revoke. That would be the only scenario in which there would be a sovereign right to prevent no deal. Otherwise, it would be a question of whether the EU Council decides to grant an extension, because Parliament chose to forgo its right to control the process when it voted against the withdrawal agreement on Friday.

Q3959  Mr Djanogly: On 29 March it was reported that member state ambassadors had war-gamed the EU’s response to a no-deal Brexit. According to an EU diplomatic note of the meeting, “The expectation is that the UK will come back quickly after a no-deal Brexit, with a request to keep open the vital connections, access to markets and transport links it needs for the British economy to survive”. Could you please advise us which connections, access and links are being prioritised by the Government and how receptive is the EU being to discussing this with you?

Stephen Barclay: There have obviously been significant discussions. Let us just put a bit of context on to it. Four-fifths of the hauliers that use our roads are European hauliers. 30% of the lorries that go back through Calais are empty. It is in both sides’ interest to keep the flow of goods. 80% of our economy, by the way, is services, not goods. Our political debate almost always focuses on the goods side and less on the services side, but on the goods side it is in both sides’ interest. I alluded to the fact that a significant proportion of Irish exports come through the short straits, so it would not just be the UK, I suspect, keen to see the flow of goods maintained through the short straits.

There would be other interests from exporters to the UK. In the run up to European parliamentary elections it would be disruptive to those businesses if that was not happening, particularly that time of year. You get a lot of fresh produce coming from Europe. It is also, as I say, in the interest of some member states as well. There would be an interest, but we have worked very hard, and Chris Heaton-Harris in particular has done a huge amount of work in terms of our preparation for no deal. Alongside that, it is not just the lorries through the short straits.

You also have the ferry contracts, which have been much debated in the House, around priority goods, particularly medicines. Also, you have what can be brought in through containers, as opposed to on the back of a lorry. You get a spectrum of ways that we would seek to mitigate any impact.

Q3960  Mr Djanogly: You said that 80% of our economy is services and then proceeded to give examples for goods, so if we can just have a little look at services.

Stephen Barclay: Your question was about the flow of goods and what they had war-gamed. I was simply trying to answer the question, but alluding to the fact there is a bigger debate out there.

Q3961  Mr Djanogly: You answered the question, but I am just saying services is important, so let us have a little look.

Stephen Barclay: As a lawyer, Jonathan, I would expect you to.

Q3962  Mr Djanogly: Let us have a little look at services. Let us take transfer of data, which is going to be important across services, or let us take insurance contracts, of which there are billions of pounds worth. Where are we on those two after hard Brexit?

Stephen Barclay: The reason I referenced the services is so much of political debate tends to be on goods. I personally think things like data are under-focused on, to a certain extent, particularly given the nature of our economy. You will be well aware that WTO does not cover the data adequacy issues, and that is why I was trying to point attention to that. The material question there is to what extent temporary arrangements would be agreed. Would there be data adequacy? The Commission has not given an undertaking to grant data adequacy. Within that, one would then have to ask about the extent for financial institutions like Deutsche Bank, where there are flows of information back and forth. What would be the situation in that instance? The UK can say, but actually, in practice, for a financial institution like BNP Paribas or Deutsche, or these institutions there, the question would come to data adequacy and what temporary arrangements the Commission would be willing to undertake, but these are the risks. This is why I have been quite clear with some colleagues around the table that WTO—

Q3963  Mr Djanogly: You do not know. You have not started.

Stephen Barclay: The Commission has not agreed to data adequacy, but there would be implications for them around data flows as well. These are some of the risks.

Q3964  Mr Djanogly: What actually happens the day after hard Brexit?

Stephen Barclay: As part of contingency planning, for example, where we can there are things institutions can do around putting in standard contractual terms around this. There are questions as to whether short‑term provisions would be given on data. There is guidance on gov.uk around it, but these are some of the risks in the no deal, as to what the legal position would be on the transfer of data.

Q3965  Mr Djanogly: Do you have meetings planned? I know the EU is not prepared to talk about it, because it has said it will not. Do you have meetings booked to discuss this with them? If banks cannot transfer their data, if television companies cannot transfer data, if video producers cannot transfer data, this country’s economy is going to grind to a halt very quickly. What are we going to do?

Stephen Barclay: All I am saying is data flows both ways.

Q3966  Mr Djanogly: Okay, so we know we can get stuff into the UK, because you are saying we will be able to. That is a good move, but what about getting stuff outside of the UK?

Stephen Barclay: As I just alluded to, there are provisions businesses can make to prepare, such as on a contractual basis. Part of what is not covered in a WTO situation would be the data adequacy requirements. The question would be for the Commission, taking the banks example, from a financial stability point of view, of what work-arounds would be agreed as part of that.

Q3967  Mr Djanogly: Will the billions of pounds of insurance contracts be valid?

Stephen Barclay: Again, what the Commission has been clear on is they would look to temporary arrangements for a period of time. Again, from a financial stability point of view, it would be damaging to their businesses if they were not continued.

Q3968  Mr Djanogly: Does this point to the fact that we need a deal?

Stephen Barclay: I do not think it is a revelation, Jonathan, that I have been arguing very hard for a very long time—and upsetting some of my colleagues on the Brexiter wing of the debate—that it is in both sides’ interest to have a deal. That needs to reflect the referendum and the Prime Minister’s deal is the best way to do that. Given that three times that has failed to carry the House, we are in a situation where, in a Parliament where we do not have a majority, we need to establish if there is a deal for which Opposition support can be secured. You know, because you speak to a lot of businesses, that the clear message from the business community is that they need a deal, and that is what we are working towards.

Q3969  Sammy Wilson: Minister, last week the Prime Minister introduced a new argument as to why it was important to get the deal through, namely that preparations for no deal had not been adequately made in Northern Ireland. Given that most of the preparations are done centrally, whether it is lorry licences, driving licences, planes flying, or the preparations for medical supplies, which are done by local trusts and are being done by local trusts, where are the gaps in preparations in Northern Ireland for a no deal?

Stephen Barclay: The concern, in terms of the preparation in Northern Ireland, was very much stated by the head of the civil service in Northern Ireland, who I know wrote to all the main political parties to set out concerns. The material issue, in a no-deal scenario where there are decisions, for example, to support businesses, some of the immediate decisions a Government would need to take, is whether the civil service without an Executive would feel confident making some of those decisions, and what support would be needed. I think the head of the civil service in Northern Ireland has set out his concerns as to whether the powers he has are sufficient or would give him sufficient cover to be making that range of decisions.

Q3970  Sammy Wilson: That is despite the fact that already Invest NI, for example, is advertising the support it can give to businesses and the advice it can give to businesses. I am just trying to drill down, because I cannot see any gaps, given that most of the preparations are done by central Government and what support is required by local agencies has already been given by local agencies. Stockpiling for medical supplies is being done by trusts and indeed is well advanced. I just wonder what the head of the civil service believes, speaking in general terms. What specific areas would still need to be done? Also, why would preparations for no deal in Northern Ireland require direct rule? That is something I would not be objecting to, but why would it require direct rule when there are already Government agencies doing those and central Government are carrying out most of the preparation?

Stephen Barclay: This, as I say, is a position that has been set out both by the head of the civil service in Northern Ireland and by the Cabinet Secretary. To answer the question, the sorts of areas would be, if there was a part of the economy that was particularly hit by no deal and the Government, for example, wanted to make a financial support intervention, whether the head of the civil service would have the powers to make those sorts of decisions? That is the sort of example they were referring to.

Q3971  Sammy Wilson: Did a Bill not go through Parliament giving the head of the civil service and Permanent Secretaries those powers?

Stephen Barclay: You know the letter the head of the civil service set out. Obviously, it is for Parliament to debate whether it accepts it or not. Traditionally, where emergency legislation is needed, that tends to go through the House with the support of both sides. Given that we cannot know whether there would be no deal on the 12th or not, any legislation, if that was necessary, would need to go before the 10th. We would not know until the end of day on the 10th. This is a concern the civil service has set out: that it is not confident it has the powers it needs.

Q3972  Sammy Wilson: The legislation already has gone through—it went through about three months ago—giving the powers to Permanent Secretaries to make decisions in the absence of Ministers.

Stephen Barclay: As I am saying, they do not feel it does, but I am very happy to have a further conversation with you offline if that is helpful.

Q3973  Stephen Timms: I just want to understand a bit more clearly what might happen between now and the European Council in a week’s time. As you have explained, the Prime Minister and the Leader of the Opposition are meeting today, with the aim of, together, proposing some changes to the political declaration. If they agree some changes, I am right, am I not, that the EU would have to agree those changes before the new package came back to Parliament for a meaningful vote?

Stephen Barclay: Yes, you are absolutely right. Basically, any extension beyond the 12th would need the consent of the EU leaders. Anything that is agreed between the Leader of the Opposition and the Prime Minister would need legislation to ratify, and that is not going to be passed by the 12th.

Q3974  Stephen Timms: That was not quite what I was thinking. If they agree something today, a change to the political declaration, the EU would have to agree those changes, would it not, before the revised package came back to Parliament for a meaningful vote?

Stephen Barclay: One of the criticisms of the political declaration is its scope. Within the scope of that, should we agree something that is within that scope, that is not something that needs fresh agreement, because that is within the political declaration. The EU has said it is willing to respond quickly to any request in terms of the political declaration. Michel Barnier has made comments.

Q3975  Stephen Timms: Suppose, for the sake of argument, that the Prime Minister and the Leader of the Opposition decided that the UK should be in a customs union and that should be included in the political declaration. Do you think the EU could respond very quickly to say that is fine?

Stephen Barclay: First, they have publically said that one would have to see. There is also nothing to say that the two leaders cannot agree what our negotiating objectives are, because what our negotiating objectives are is a UK decision. We can say, “We will negotiate on the following basis”, and agree to enter negotiations on that basis.

Q3976  Stephen Timms: That would not require a change to the political declaration at all.

Stephen Barclay: No.

Q3977  Stephen Timms: We know that by the end of next week we have to decide for sure whether we are going to go ahead with the European parliamentary elections. In practice, on what day between now and the end of next week does that decision have to get taken?

Stephen Barclay: It is not the Government’s policy to go ahead with the European parliamentary elections. It is not within our control to make that decision unilaterally anyway, because there is no automatic right, so should Parliament decide that it still cannot compel it, because it is an EU Council decision. If Parliament or, more to the point, the Government wanted to do that, then it would have to decide ahead of the Council on 10 April, because we would have to make that request to EU leaders.

Q3978  Stephen Timms: It would have to be by Tuesday, then, of next week.

Stephen Barclay: The Prime Minister will make that request when she presents on the 10th, but the normal run of these things is that papers are prepared in advance to shape those discussions.

Q3979  Stephen Timms: You made the point that the Leader of the Opposition has talked about a form of customs agreement that would keep a say for the UK in future trade deals, and you suggested that might be quite difficult to deliver with the EU. It strikes me that if something along those lines was to be agreed between the Leader of the Opposition and the Prime Minister, there might be a process—at least taking a few days—for that to be agreed by the EU as being included in the political declaration.

Stephen Barclay: Not as a negotiating objective. The UK can unilaterally agree that as a negotiating objective.

Q3980  Stephen Timms: That would not require a change to the political declaration. You have indicated that it is conceivable that the Prime Minister and the Leader of the Opposition might agree that changes to the political declaration, or indeed the current political declaration with the withdrawal agreement, would have to be subject to a confirmatory public vote. If that was to be agreed, how long an extension would the Government want from the EU to enable that to happen?

Stephen Barclay: Do you mean if the Government were to agree a confirmatory vote?

Stephen Timms: Yes.

Stephen Barclay: That is a very undesirable option because it takes it back to square one. People call it a confirmatory vote. First, there are different types of confirmatory vote. You can have a confirmatory vote purely on leave options, because one of the arguments that people use for a confirmatory vote is they say, “Yes, people voted to leave, and, yes, the Government of the day wrote to every household saying it would respect the decision to leave, but people did not know what type of leave they were getting, and therefore there should be a further vote because they were not clear what type of leave they were voting for”. In that scenario, you could have a confirmatory vote between the different types of leave options: no deal versus whatever deal is taken forward.  That is one scenario.

Most of the proponents of a confirmatory vote actually mean a second referendum, because they want to include a remain option on the table. The issue that would need to be addressed there is the level of uncertainty that that would prolong, particularly within the business community, and the chilling effect that that would have on investment. 

In terms of the length of time needed for a second referendum, the clear advice that I have had—Chair, we had this exchange in our previous session—is that there are questions around, first, what the question would be. Is it two questions? Is it three? What are the spending limits? That has been an area of litigation since the last referendum. That would be a highly contested area. What is the purdah period? That was an issue that was contested prior to the last referendum. How long would it take for the legislation to get through the House? I suspect even members of this Committee would probably fight quite hard against that legislation, so that legislation would take some time to pass both Houses, not just the Commons.

The indication tends to be that legislation on the second referendum would take around 12 months. People will have their own views, but you have to pass the primary legislation, you have to resolve the Electoral Commission issues, and you have to then have the purdah period in the run-up to any referendum. You may then end up with a result that takes us back to where we were before, and does not end the uncertainty, because people will then say, “We want a best of three.”

Q3981  Stephen Timms: You are suggesting it would entail an extension of at least a year in order to achieve that?

Stephen Barclay: If there was a second referendum then the legislation for it would take around 12 months.

Q3982  Stephen Timms: Can I ask one final question? One way or another, it seems quite likely that Parliament will not agree the withdrawal agreement and political declaration—which might be changed—before the European Council meets a week today. If that is the case, would the Government request an extension beyond 22 May? If so, how long an extension would they ask for?

Stephen Barclay: The position agreed by Cabinet is with a view to an extension up to 22 May. There has been no Cabinet agreement to an extension beyond 22 May.

Q3983  Peter Grant: Stephen, can I first of all apologise? I need to leave before the end of this morning’s session. The Prime Minister’s statement yesterday referred to discussions with the Leader of the Opposition to look for a shared proposal that would be brought forward.  Is it safe to assume, given that both party manifestos said freedom of movement ends when we leave the EU, that nothing is going to come forward that would allow freedom of movement to continue?

Stephen Barclay: As I have said to a number of questions, we are having these discussions in good faith.  The Prime Minister has set out a generous offer and recognises that this is a key time where we need to act in the national interest and come together to see, in the context of the House not agreeing anything, whether an agreement can be reached.

You are absolutely right, Peter, that both manifestos said they wanted to end freedom of movement. In a way, in my answer to Emma, that is what I was alluding do: if one actually looks at the manifestos, there is perhaps more common ground than sometimes one would get a sense of from some of the parliamentary debate. Let us be honest: there are divisions within both parties, and there will be some within the Labour movement that may want to retain freedom of movement, just as there are some who would seek a second referendum. These are discussions that our two leaders need to have, but what is clear is that there were commitments in the manifesto. The question is, looking at those commitments, whether there is an area for common ground.

Q3984  Peter Grant: The Prime Minister then went on to say, “If we cannot agree on a single unified approach then we would instead agree a number of options for the future relationship that we could put to the House”. When she said, “We would instead agree a number of options”, does that mean the Cabinet, or does it mean the Prime Minister and the Leader of the Opposition between them putting forward options to the House?

Stephen Barclay: The Government would then agree.  Sorry, which line are you referring to, because there are different bits?

Q3985  Peter Grant: It is immediately after she is referring to the hope that she can agree with the Leader of the Opposition on a way forward. She then says, “If we cannot agree on a single unified approach then we would instead agree a number of options for the future relationship that we could put to the House in a series of votes to determine which course to pursue”.

Stephen Barclay: Yes, you were right the first time. The intention then would be, if we cannot agree, to look at whether there is scope for us to agree on some binding votes on a range of options to try to bring this to a resolution. We would seek to agree that.

Q3986  Peter Grant: The House of Commons would then be asked to agree on options that had been put forward jointly by the Prime Minister and the Leader of the Opposition.

Stephen Barclay: Yes, that is my understanding.

Q3987  Peter Grant: That is without any input from other opposition parties.

Stephen Barclay: I know there have been discussions with your leader. My understanding of the SNP’s position is that it wishes to revoke. Clearly this is a phased approach, and the first issue is to discuss with the Leader of the Opposition.

Q3988  Peter Grant: Finally in the Prime Minister’s statement, she goes on to say, “Crucially, the Government stand ready to abide by the decision of the House, but to make this process work, the Opposition would need to agree to this too”. Is she still referring to the official main opposition party, or is she saying that, having been excluded from the process of deciding what we get to vote on, all other parties have got to agree to the result as well? When she says, “The Opposition have to agree to it”, is that only applying to the official Opposition?

Stephen Barclay: There would be a desire to agree it as widely as possible. The objective here is not to be bound by that, because if you have a situation where one party has a veto then we may never get to a situation of resolving anything. The intent that the Prime Minister is signalling here is that we are at a key point in time. This has gone on now for a significant period. The House has opposed everything, and, to be frank, collectively we need to find a way of coming to a decision. The obvious starting point for that is to say, “Both main parties’ manifestos made a series of commitments. Can an agreement be reached there?” If the answer to that is no, is there a way, through having binding votes, of the House finally coming to a resolution, given that there is a pressure of time, ahead of the Council on the 10th?

Q3989  Peter Grant: Given the very obvious pressure of time, would you accept that seeking to rule out any possibility of the UK participating in European Parliament elections is creating additional pressure of time, and that it would be better, as a way of keeping options open, if we participated in elections and then potentially either did not take up the seats or withdrew from the European Parliament when we finally leave? What is the thinking between deliberately and unnecessarily putting everybody under this intense pressure of time, when, if the Prime Minister talks to an Opposition team participating in a democratic process, we can give ourselves a bit more time. It will also make it more possible for the Prime Minister and the Leader of the Opposition to come up with something that Parliament can agree to.

Stephen Barclay: The pressure of time comes from the vote that the House of Commons took last Friday. Had it agreed the withdrawal agreement, we would have until 22 May. That was a right that the House of Commons chose not to exercise. That is its democratic choice. The reason we have a pressure of time until 10 April—or more materially until 12 April, but in essence to 10 April and the Council—is because the House chose not to exercise the right that it had under the previous EU Council conclusions.

Q3990  Peter Grant: Some people would say that if a Government are struggling to get a key policy through Parliament, assuming the Government do not decide to just collapse and call a general election, they have a responsibility to keep working at it until they can find something that Parliament can support, which is accepting that Government are accountable to Parliament. Others would say it is Parliament’s duty to agree to whatever the Government put forward, which effectively makes Parliament a servant of the Government. What you are saying, and the Prime Minister’s reaction to the vote last week seems to suggest, is that the Government view is that it is up to Parliament to agree with the Government, rather than it is up to the Government to co-operate with Parliament. Where would you put yourself on that?

Stephen Barclay: I would not characterise it like that. It is not just the Government saying that we need to resolve this; many people in Parliament are saying that, and many people in the country are saying that. If you look at the various statements of many business leaders and trade union leaders, there is a widespread desire to bring this to a resolution. I do not think it should be characterised as purely Government saying we need to bring this to a head; many people in the business community, the trade unions and the public at large are saying, “It is now three years since we voted to leave”. The House has rejected every option that has been put before it. We now need to come to a resolution, and what the Prime Minister is setting out is a generous offer to say, “How do we come to an accommodation, reflective of the two main parties’ manifestos, to resolve this issue?”

Q3991  Peter Grant: In answer to the question from Jonathan, you have referred to doubts about the data adequacy requirements if we leave without a deal on 12 April. Some of your Cabinet colleagues and, it would appear, the civil service in Northern Ireland are seriously concerned that leaving very soon with no deal might require the reintroduction of direct rule over Northern Ireland. Given those potential consequences, how concerned are you that two of your junior Ministers in your Department, including the Minister for no-deal preparations, actively and voluntarily voted for no deal last week?

Stephen Barclay: As I said in my answer to Jonathan, a huge amount of work has been done by the Government in preparation for no deal, but I was equally candid with the Committee that not everything is within the Government’s control. There are concerns, and that is why we are working so hard to secure a deal, because a no-deal outcome will be disruptive to the economy. I have always been clear on that. It is the legal default position. It is also the fact that it may be a consequence of the EU Council, so that risk cannot be ruled out and it is right that we prepare.

To be frank, there have been a lot of stories in the media talking about the Queen having to leave London and no flights happening. There have been a lot of stories that have exaggerated some of the risks. I accept there are risks with no deal. There are even greater risks with no Brexit. The desirable outcome is to secure a deal, and we have an opportunity, as a House, to try to do that in the coming days.

Q3992  Seema Malhotra: Can I just ask you a very brief question? Following up from the discussion you had with Mr Whittingdale, you said that we were bound in good faith on the political declaration. Obviously there has been a bit of debate about how binding it will be, bearing in mind it is not legally binding. If there was to be an attempt to change that or to disregard what had been agreed and voted through this House by, for example, a future leader of your party, would you see that as being interpreted in bad faith?

Stephen Barclay: With any legal question as to whether you have satisfied or failed to satisfy the test of good faith, that is a legal question and it would be one for the arbitrator. There is a significant body of international law as to how that would be assessed, but in essence it goes to the heart of paragraph 17 compared to paragraph 19 of the Attorney General’s most recent legal advice. Paragraph 17 said that there would be an issue in terms of either side acting in bad faith. There was not with paragraph 19; the reason some colleagues have an issue with it is that you could terminate if both sides acted in good faith.

Q3993  Seema Malhotra: I just want to be quite specific on this point. In relation to the political declaration, which is not legally binding but which is seen as part of a package, if we had an agreement on a political declaration that, for example, went through this House and then there was an attempt to roll back on that by a future Prime Minister in this House, against what had been agreed by Parliament, would you see that as something that could be interpreted as being in bad faith?

Stephen Barclay: First, the numbers of the House of Commons will not change. You can change the leader but you are not going to change the numbers. That is why I think the issue is sometimes overstated around there being a future change of Conservative leader and whether that would lead to a different approach.

Q3994  Seema Malhotra: This is a question of confidence about what any discussions could be worth if the potential intention could be to roll back on anything that is agreed, if it is going in the political declaration.

Stephen Barclay: There are two issues. First, there is just a practical issue, to be frank, which is that the numbers of the House of Commons will dictate it. To go to the meat of your question, which is, irrespective of the numbers, if a future leader decided to disregard the political declaration and row back on it, in that instance the interplay with the withdrawal agreement and the legal requirements and obligations within that would be enforceable to the EU.

Q3995  Seema Malhotra: That is very helpful. Could I ask you also in relation to the possible extension of Article 50? I understand the Government’s position is not to extend beyond 22 May, but have you discussed a possible extension with business leaders? If so, what have they raised with you?

Stephen Barclay: The overriding message from business leaders is that they want a deal, and linked to that, they want it done as quickly as possible.

Q3996  Seema Malhotra: What would their concerns be? I know we are short of time. I do understand. For example, is there something specific that could affect them at the moment in relation to leaving anyway? What guidance or advice are you giving to businesses in preparing for trade in such difficult circumstances at the moment, in relation to the short and medium term, particularly, for example, in relation to trade done under EU free trade agreements with other countries? Are you giving them some specific and clear guidance? What are they raising with you otherwise?

Stephen Barclay: You have previously raised this in the House as well, in terms of where we are with international agreement. We can obviously get into that. Sometimes the issue on international agreements is not the numbers; it is the percentage of trade related. The Swiss is a fifth, just in one contract; 21 of the 40 is 0.8% of the trade.

Seema Malhotra: For some businesses it could be 80% of their exports and imports.

Stephen Barclay: The quantum of agreements is sometimes slightly different to the percentage of the share attached to them. In terms of the messaging to business, again—a bit like the House of Commons—it varies massively depending on the businesses and what they do. A significant amount of effort has gone in to the comms campaign; that has been ramped up significantly. I hope you have all heard the various radio adverts; I certainly hear them driving around the constituency. That is to raise awareness of the issues and to direct people. Trade bodies themselves have done a huge amount of work around that. It very much depends on the business. One of the key issues around the flow of goods is getting traders to register, so that they are ready with the right documentation. Part of this is also whether people think no deal or a deal is coming, or whether Parliament is not going to be able to reach a decision.

Q3997  Hywel Williams: You said a moment ago that if the Prime Minister and the Leader of the Opposition do not agree, they will then agree on the list of options to be put to the House. I understood that other party leaders or parliamentary leaders would not be involved in drawing up that list. Will the list be in a form that is then amendable? Can we put amendments into that list, or can you not tell us at the moment?

Stephen Barclay: I would rather come back with a precise answer, because obviously we had a pretty long, seven-hour session yesterday and I have been doing media and various things this morning. Perhaps I can come back to you on the precise framing of that. The key objective behind it is, “How do we get to a resolution?” because time is now very much of the essence. The question is how we get to a point where the House can decide on something and then people undertake to follow that through.

Q3998  Hywel Williams: I appreciate there are a number of ifs there that you might want to address. Can I just turn—inevitably, I suppose—to the role of the devolved Governments in all of this? How do you intend to involve the devolved Governments in negotiations on future relationships, and how have you involved them in the negotiations on the rollover agreements?

Stephen Barclay: It is something we touched on last time. It is something I am personally very keen that we do. It is one of the lessons that come out of the first phase. There is more we can do in terms of the engagement with the devolved Administrations. It was my first meeting; I have attended a number of meetings with colleagues there.

One of the areas we have already moved on is inviting the Welsh First Minister and the Scottish Government as well to a number of the key Cabinet meetings—Cabinet sub-committees that we have. They are invited there. There has been the JMC process, which people have been attending. What is also important is it is not just the quantity of meetings; it is the quality of engagement. Part of the tension there in the past has been what we can share with Parliament and what we can share with the devolveds. It is the timing; obviously, if we share information with the devolved Administrations before Parliament that creates some tension. Part of the resolution to this is particularly at official level. There is a lot more work that can be done at official level; we have agreed to that and that is in the process of being set up.

Q3999  Hywel Williams: You will know that there have been concerns about the performance of the Joint Ministerial Committee. It has described as being not fit for purpose. We understand from your colleague, the Secretary of State for Scotland, that the Prime Minister has commissioned a review of the relationships with Governments. Can you tell me when that will be reporting?

Stephen Barclay: I cannot offhand, but I am very happy to write to you following the Committee, if that is helpful to update you on the precise timing.

Q4000  Hywel Williams: Following on from evidence that we had last week from Daniel Greenberg, he identified ways in which you could include the devolved Governments in deciding the terms of external relations into the future. He offered three options in response to a question of mine. Those were a legal obligation, duty to have regard or a duty to consult. Do you have any particular views on those?

Stephen Barclay: There are several issues within that. The first is a constitutional point about what a UK decision is. From a UK Government point of view, it is important that that is reflected in our approach. On the other hand, we very much recognise that, particularly as we go into the next phase of negotiation, there will be certain sectors that particularly apply geographically within certain parts of the United Kingdom. There is very much a desire to work much more closely, not just at official level but particularly at official level, in terms of bringing in the expertise and sharing a lot more information. That is a lesson that we can take from the first phase: that there is scope for us to do much more on that. As relationships develop, it is not just the structure; it is also the relationships that enable that to happen.

Q4001  Hywel Williams: The question was about how firm the consultation was.

Stephen Barclay: We had a touch of this with the IMA, appointments to the IMA and whether that is something that there is a power of veto over or consultation over. I know it is something that the Secretaries of State for both Wales and Scotland have been discussing with respective Ministers, and we are keen to lean into it as best we can.

Q4002  Stephen Kinnock: You rightly said earlier on that the majority of Labour MPs do not have an issue with the withdrawal agreement. The fundamental problem for us has always been the political declaration and the very vague and woolly nature. We call the spectrum of outcomes a blindfolded Brexit. You then argued that we could separate the withdrawal agreement from the political declaration, and of course that is what was tried last Friday. Section 13.1 of the Withdrawal Act is crystal clear: “The withdrawal agreement may be ratified only if the negotiated withdrawal agreement and the framework for the future relationship have been approved by a resolution of the House”. Can you just explain how you think it would be compliant with our constitutional requirements if we were to vote only on the withdrawal agreement?

Stephen Barclay: There are two points I would make. First, it was not the Government that separated the withdrawal agreement from the political declaration; it was the EU Council. The EU Council conclusion was that a right to an extension to 22 May was affixed to the House approving the withdrawal agreement. The reason why the vote last Friday was so important—and to some extent underreported, because we have had so many votes so perhaps some of the significance of it was underappreciated—is because the EU Council had given us a legal right to extend to 22 May based on a withdrawal agreement, as you have just alluded to, Stephen, that they thought the House of Commons largely agreed with. In rejecting that we rejected the right to extend until the 22 May, so it was not the Government that made that distinction; it was the EU Council that made that distinction in separating the withdrawal agreement from the political declaration and attaching the right to an extension to 22 May to the withdrawal agreement alone.

In terms of your second question, which is about if that vote had gone through—obviously it did not—you are absolutely right; it would not have satisfied Section 13.1 in terms of the meaningful vote. This is slightly history now because the vote did not go through, but the intention was then to address the 13.1 requirement through the passage of the withdrawal agreement Bill.

Q4003  Stephen Kinnock: It just seems an extraordinary state of affairs that we have passed primary legislation in this House that seems to play second fiddle to the situation that you just described. Certainly for us, the blindfold just got thicker, without having a political declaration on the table.

Stephen Barclay: You do take a very close, expert interest in this. With respect, first, it is the EU Council that made the distinction, not the UK Government. Secondly, the requirement could be met through the passage of the withdrawal agreement Bill. What I find odd, if I may equally put it back to you, is in your opening question you said, “We did not really have a problem with the withdrawal agreement, but we voted against it and therefore lost the right to an extension to the 22nd when we did not really have an objection to it”.

Q4004  Stephen Kinnock: No, the point is voting against something that is not compliant with our own binding legislation, the withdrawal Act. Just projecting forward a bit, if the Prime Minister and the Leader of the Opposition are able to agree changes to the political declaration, a number of colleagues have referred to this major concern about the lack of good faith and lack of trust, and that once the Prime Minister has gone, a new leader of the Conservative Party takes over and the goalposts could shift radically and dramatically away from what has been agreed. Would the Government be prepared, as a part of these negotiations, to ensure that whatever is agreed between the Prime Minister and the Leader of the Opposition over the next 48 hours would then be anchored into the Withdrawal Agreement and Implementation Bill on the same principles that you just outlined?

Stephen Barclay: That is primary legislation.

Q4005  Stephen Kinnock: In order to ensure that we have it embedded in primary legislation so that we can trust the negotiating mandate and the goalposts will not shift, will the Government agree to embed that into the Withdrawal Agreement and Implementation Bill?

Stephen Barclay: I absolutely get the point you are saying, which is about the extent to which we will pass in primary legislation, in essence, the negotiating objectives that are there. As I said earlier, I do not want to prejudge or pre-empt those conversations, but I would not be surprised if part of the request from the Leader of the Opposition was about how they get comfort in terms of, for example, workers’ rights, in terms of what the commitments are that we are seeking to make and what the mechanism is to provide that comfort. Those are for the discussions between the Prime Minister and the Leader of the Opposition.

Q4006  Stephen Kinnock: My final question is just on the letter that Mark Sedwill has sent to Government and all Whitehall Departments.

Stephen Barclay: Which has been duly leaked, surprisingly.

Q4007  Stephen Kinnock: He thinks that the Government would come under pressure to bail out companies on the brink, it would seriously hamper the ability of the police and security services to keep people safe, it would lead to the reintroduction of direct rule in Northern Ireland and it would lead to a recession because the pound’s depreciation would be far more harmful than in 2008, because we would be an isolated case of depreciation rather than with the global issues of 2008. Our legal authorities and judicial system would be put under enormous pressure. Do you agree with Britain’s highest ranking civil servant that these would be the disastrous consequences of a no-deal Brexit?

Stephen Barclay: Stephen, you would expect me to answer this in this way, and I am sure various Ministers will have given the same answer with the same question, which is that Government Ministers do not comment on leaked documents. Sammy addressed this in terms of his earlier concerns, so there are a range of views in the House of Commons. What I have always been clear on is that there are risks with no deal, which is why we need to seek a deal. That is what the Prime Minister is focused on, and that is the purpose of the discussion with the Leader of the Opposition.

Q4008  Jeremy Lefroy: I do apologise. I am having to go very quickly after this because of a Westminster Hall debate. Secretary of State, what is the estimate of the UK’s financial obligations in the case of no deal? We know about the roughly £39 billion in the case of a deal.

Stephen Barclay: It is a very good question, because I often hear people quote the famous House of Lords report suggesting that we have no financial obligations, whereas actually a closer reading of that report said we would also have legal obligations to meet. There are several parts to that question, if I may say. For example, on tariffs things are being collected and, as you would expect, there is a clear legal obligation. There are certain things that are part of the settlement that has been reached, and the EU would obviously expect that to be addressed.

As the Prime Minister repeatedly said at the time, that settlement was reached in the context of, “Nothing is agreed until everything is agreed”, to use the phrase that the Prime Minister stated at the time. We would need to look at that. I know Peter Bone on this Committee has previously suggested that in the event of no deal zero would need to be paid; that suggests that there are no legal obligations in the event of no deal. That would be a difficult argument to sustain.

Q4009  Jeremy Lefroy: Would you expect us to be required to pay a considerable part or all of the current financial framework up until the end of 2020 even if we left without a deal, given that if we leave with a deal we would be within the single market and the customs union, and therefore continuing as normal, paying that money?

Stephen Barclay: It depends, because a lot of what is referred to as the £35 billion to £39 billion figure included the interim transitional period. If you are talking about no deal, there is obviously a question mark, because there is a difference there. There is then a question within the legal obligations on hierarchy, where they sit. Obviously I do not want to pre-empt what would be further discussions with the EU in that context. There is obviously a question in terms of no deal and what other arrangements are reached with the EU.

Q4010  Jeremy Lefroy: Finally, you would expect a considerable sum to be payable in the event of no deal, although you could not be specific with how much.

Stephen Barclay: Those are your words. What I was saying was that within the figure that gets banded around there are various components. There are components that relate to the implementation period, and if it was a no-deal exit without the implementation period, clearly that is different. There are questions around how you disengage the 2019 period compared to future years, because obviously we are into the 2019 period, so there are questions around that. There are questions around the wider discussions on no deal and what negotiations there will be. We had a debate earlier around data and some of these issues. It is a very interesting point because there is quite a bit of complexity within it.

Q4011  Sir Christopher Chope: Secretary of State, were you one of the 14 Cabinet Ministers who voted in support of no deal at yesterday’s Cabinet meeting?

Stephen Barclay: As you well know, one should always be cautious about media reports. Discussions at Cabinet are confidential so we do not comment on the nature of them.

Q4012  Sir Christopher Chope: That is all you are going to say about it.

Stephen Barclay: It depends what other questions you ask me.

Q4013  Sir Christopher Chope: How can a national newspaper come up with 14 names unless those names have been divulged by members of the Cabinet?

Stephen Barclay: You are suggesting that something was leaked from Cabinet. That might be an odd concept.

Q4014  Sir Christopher Chope: It is interesting that you are not denying that you are amongst them.

Stephen Barclay: I am neither confirming nor denying, so you are slightly trying to load the discussion.

Q4015  Sir Christopher Chope: You also said that at the Cabinet meeting there was no agreement to an extension beyond 22 May. You divulged that from the Cabinet. Can you also answer the question as to whether there was agreement at the Cabinet to rule out any extension beyond 22 May?

Stephen Barclay: Again, with respect, you are putting words into my mouth. What I referred to was the Prime Minister’s statement. The Prime Minister’s statement referred to the period up until 22 May.

Q4016  Sir Christopher Chope: You said there was no agreement at the Cabinet to an extension beyond 22 May.

Stephen Barclay: That is because that is in the Prime Minister’s statement. The Prime Minister’s statement was saying, because it is reflective of the EU Council’s conclusion, which was to give the House a right to an extension until 22 May—I personally think it is hugely regrettable that we did not exercise that right last Friday—and therefore the proposal for discussion with the Leader of the Opposition today is in with the context of that previous right. That was agreed by the EU, and it is in the context, as Emma touched on earlier, of the European parliamentary elections and the concern around legal risk to the institutions, around whether it is the 22nd or you go to 2 July or wherever on the spectrum that goes. That is the context around the date of the 22nd.

Q4017  Sir Christopher Chope: Can I try it a different way, then? The Prime Minister is going to write a letter to the President of the European Council prior to the meeting on Wednesday next week. If that letter asks for an extension up to 22 May, and when the Council meet they say they will only agree to a longer extension, will the Prime Minister have to come back and get approval from her Cabinet to sign that off, or has the Cabinet given her authority to sign up to a longer extension at that Council meeting?

Stephen Barclay: It is a very good point. In answer to that, first, there is some road to run before that question arises, because there is a question as to whether an agreement can be reached through the discussions with the Leader of the Opposition. There is a question as to whether the House, through binding votes, could reach a resolution.  There is also a question as to whether the EU Council would consent to an extension, and, if so, for what purpose. They have been very clear about that, if there was to be a longer extension. In essence, all of those arise before that question that you pose, which is, if the only option was a longer extension, whether that is something the Government would sign up to. The timing of that Cabinet discussion will obviously be an issue to look at closer to the time.

Q4018  Sir Christopher Chope: What I am really asking is if the Prime Minister is going to be given a free rein at the European Council meeting on 10 April to do whatever she wants, or is she going to be required, either by the Cabinet or by Parliament, to make any agreement to what happens there conditional upon approval by the Cabinet or by Parliament?

Stephen Barclay: I just want to check the precise constitutional point of law. As a matter of practice, it is agreed by heads of government. The normal way would then be for that to be discussed with Cabinet if we get to that point. These are decisions that are reached at heads of Government level. That is the constitutional position.

Q4019  Sir Christopher Chope: The constitutional position is that the Prime Minister could exercise her veto at that Council meeting until she had obtained approval from Parliament and the Cabinet for her to remove her veto.

Stephen Barclay: She may be required for the reason where we started this session, which is the legislation in the name of Yvette Cooper, if that legislation is passed. The question you are asking is a very pertinent one, but it is one some way down the track, albeit I appreciate these would be events next week. There are quite a few decisions that will come before, because if the Cooper legislation goes through then what that says is that in the event that the EU Council give a different length of extension, which is the point that you are raising, in that instance the Prime Minister would be required to come back to Parliament the following day for a vote of the House. It is not in any way an attempt not to answer the question. What I am saying is there are a number of conditions that are going to apply. It may be a matter of law that the Prime Minister has to come back to Parliament the following day.

Q4020  Sir Christopher Chope: With the greatest of respect, you have misunderstood the purpose of the legislation. What it says is if the European Council agreed. The Prime Minister has a veto at that European Council, and the question I am asking is whether she would exercise that veto unless or until she has received approval, either from the Cabinet or Parliament, for acting in support of a Council decision taken by 27 other countries.

Stephen Barclay: With respect, I have not misunderstood the question. What I was saying is it may be by law that Parliament has said that she must accept an extension.

Sir Christopher Chope: No.

Stephen Barclay: That is the nature of the legislation.

Q4021  Sir Christopher Chope: What it is saying is that if the Council agrees an extension she must accept it, but she is a member of the Council and she has a veto. If she exercises her veto, the Council will not be able to agree an extension.

Stephen Barclay: We had that discussion earlier, and I accepted that this is a decision at 28, not 27. We already covered that point. The point is that any extension agreed—if an extension is agreed, one should say—is agreed at 28. On that instance, yes, it would need the Prime Minister’s agreement. What you are asking, or what I am putting it as, is two subsets of that. There is the subset that is, “What does Parliament legally require her to do, and then to what extent, under the Ministerial Code, is she bound by doing so?” and separate to that, “To what extent would there be a discussion around what acceptance or otherwise of that decision would inform the negotiating approach?”

Q4022  Sir Christopher Chope: Can I just ask you one other question? When is Operation Yellowhammer going to be reinstated?

Stephen Barclay: Reinstated?

Q4023  Sir Christopher Chope: It was going to be starting in the week ending 29 March. It was going to start on that Monday, and then it was deferred. Obviously we are now a similar period away from leaving on 12 April without a deal, so when is Operation Yellowhammer going to begin?

Stephen Barclay: First, Operation Yellowhammer is run out of Cabinet Office rather than DExEU. In terms of our wider no-deal planning, first and foremost each Department is responsible for its no-deal planning. That responsibility sits with the Secretary of State. Within DExEU we co-ordinate that, with the exception of Operation Yellowhammer, which is co-ordinated through the Cabinet Office. Those no-deal plans have not stopped; they have continued, because there is still a risk of no deal happening, subject to what the Council decides on 10 April.

Q4024  Richard Graham: Is there any precedent you can think of where the Government of the United Kingdom has reached an agreement with a foreign Government or multinational entity and the subsequent legislation not been approved by Parliament?

Stephen Barclay: You as a former diplomat will probably know better than I. I am not aware of any, but we live in strange times.

Q4025  Richard Graham: Would it be fair to say that the failure of Parliament to approve the withdrawal agreement Bill, both on Government and Opposition benches, given that both parties were elected on a manifesto to respect the result of the referendum, is an extraordinary failure by our Parliament?

Stephen Barclay: This has been a difficult period for Members of Parliament. Members of Parliament have strongly held views, as the public have, but particularly on the withdrawal agreement I have already said I was surprised, given that, as Stephen touched on in his question, many Members of Parliament in the past have not indicated strong objections to the withdrawal agreement. That would have given us a legal right to an extension until 22 May. It is surprising to me that that did not carry the House, but at the same time I am very respectful of the fact that these are very important issues and Members of Parliament do feel strongly on them.

Q4026  Richard Graham: That is essentially the reason why the Government have had to agree to these negotiations with the Leader of the Opposition. While, of course, there will be much criticism from Conservative voters, for whom Jeremy Corbyn is not perhaps a folk hero, there will of course also be criticism on the Labour side that the Leader of the Opposition is supporting a Conservative Government to reach a solution. Compromises are going to have to be made on both sides. Is your effective understanding of our aims therefore to reach agreement to pass the withdrawal agreement Bill, and seek agreement on any changes to the political declaration, and get that through Parliament in terms of legislation, and then present that effectively as a fait accompli to the Commission and the Council of Ministers?

Stephen Barclay: Not quite. First, I would say there does need to be compromise, and that is the nature of the offer the Prime Minister made yesterday evening. Secondly, we have to be realistic that the divides in Parliament are not purely on party lines now; they are very much on leave and remain, but also types and the second referendum. Some of these issues actually span the party divisions. Thirdly, we have to reflect the fact that the Government do not have a majority, and if 35 of our Members of Parliament will not support the Prime Minister’s deal, and if Parliament legislates to take no deal off the table, then the remorseless logic of that is that either you have no Brexit at all, which risks the European parliamentary elections three years after voters voted to leave, which is hugely damaging, or you have a different type of Brexit.

In terms of the EU Council, I do not think that on the 10th the EU Council will take the view that they can defer a decision. It is a matter for them as to what they say, but I think they will want to have comfort that any technical extension to pass the withdrawal agreement Bill will be deliverable. That is why, if there is scope for the two main parties to reach an agreement, it would give comfort that the passage of the Bill was deliverable.

Q4027  Richard Graham: Thank you, but my question, Secretary of State, was really about what you expect that we should be able to take to that Council of Ministers meeting. Are you assuming that we should be able to have approved the withdrawal agreement Bill and reached agreement on wording for changes to the political declaration, or just the one but not the other?

Stephen Barclay: What we have to take to the Council is clear purpose as to what the UK plan is, because in essence that is what they have asked for. In the time between now and the 10th, we are not going to be able to pass the legislation for the withdrawal agreement Bill, but the question for the House is whether there is something on which the House can unite. If so, will the legislation to ratify that be something that we can deliver?

Q4028  Richard Graham: That sounds more like an agreed intent, with the intention of getting that all through in legislation by 22 May.

Stephen Barclay: The objective will be to get the legislation through by 22 May. The point is that the Council is on 10 April. The question will be whether, on 10 April, we have a clear purpose for an extension to 22 May. That is the crux of the discussions today.

Q4029  Richard Graham: Is it your understanding that if, for example, the customs union was included as part of the consensus that Parliament arrives at, there would have to be elements in the next phase of negotiations to look at what sort of regulatory alignment would be needed in order to ensure completely frictionless movement across the border in Northern Ireland?

Stephen Barclay: It depends what is agreed, but you are right on the substance of the points. People talk about customs union or customs arrangements, whereas much of the friction on the border is from regulatory alignment issues rather than from the issue of the tariffs. The devil would be in the detail, but it is a question for the Prime Minister and the Leader of the Opposition to discuss what it is that accords with the manifesto positions of both parties, and which both parties can come to an agreement on.

Q4030  Richard Graham: As quite a lot of our constituents do have difficulties in getting all of the detail of what the single market and customs union mean, can you confirm that being in a customs union still means that we will bring back control of our immigration, control of our fisheries and agricultural policies and not involve significant annual payments.

Stephen Barclay: Yes. If you look at the Prime Minister’s original deal, it gave control over immigration, fishing and agriculture, but with an independent trade policy. It is why I felt that was the best way forward compared to some of the other options that we are now having to look at.

Q4031  Richard Graham: Of course, there is nothing to prevent us from reaching a services agreement with the USA, for example, if we are in a customs union with the EU.

Stephen Barclay: That depends on how desirable it is, and what it is on service as opposed to goods.

Q4032  Richard Graham: Services are excluded from a customs union.

Stephen Barclay: The question will then be to what extent the US wants to include other issues.

Q4033  Chair: Secretary of State, can you just clarify one thing? You appeared to indicate earlier that if agreement was reached between the Prime Minister and the Leader of the Opposition on a different way forward it would not necessarily then be put to the EU to change the current political declaration. You talked about it being negotiating objectives of the UK. It is a very important point. Can we be absolutely clear on this? Picking up Richard’s point, if agreement was reached that we want to be in the customs union, would the Government then take that to the EU and say, “Can we amend paragraph 23 of the political declaration to reflect this new position from the UK Government?” I think it would be that paragraph.

Stephen Barclay: I suspect part of the discussion today will be about what that is, as part of coming to an understanding. First, it is about whether an understanding is reachable but also whether and to what extent that requires a change to the political declaration. If so, obviously the EU would need to agree to that, although they have indicated a willingness to respond quickly. What I was referring to in the exchange with Stephen was alongside that, or separate to that, there are things that the UK can put into the withdrawal agreement Bill on a unilateral basis. Again, without pre-empting those discussions, I am sure in the discussions that is where some of the debate will be.

Q4034  Chair: I understand completely that, for example, the scrutiny and approval process for a negotiating mandate for the next phase of the talks is a matter for the UK Parliament, but on changed objectives I do not understand why the Government would not want to have the political declaration changed to reflect those. You say we would have to decide whether we are going to do it or not; I do not understand why the Government would not want a new and different political declaration to reflect whatever had been agreed, either in the talks with the Leader of the Opposition or through the indicative votes; the Prime Minister has said quite clearly that the Government would abide by the decision of the House.

Stephen Barclay: I do not see that one precludes the other. What I am saying is that as part of the discussion there may be things that require a change of political declaration, but that would then need to be discussed with the other side, because that is agreed. There may be other things where it is a negotiating objective, in which case that is a unilateral decision.

Q4035  Chair: Give me an example of a negotiating objective that you think should not be included in the political declaration.

Stephen Barclay: If you take Labour’s objective that says that the UK will have a say on EU trade agreements, you might say that is a negotiating objective and legislate for that.

Q4036  Chair: What you are actually saying there is you do not think the EU would agree to that by means of a change to the political declaration.

Stephen Barclay: I am not passing the comment. What I am saying is you are asking me for an example and I have just given one. There are things where you can say, “That will be our negotiating objective and in good faith we will go and negotiate that”. There are other things where you may say, “Within the scope of the political declaration it is already there, within the scope, but to allay the concerns that are characterised in the Chamber as the blind Brexit charge, we are going to narrow it down and agree that with the EU”. That is the distinction I would draw.

Chair: Secretary of State, thank you very much indeed.