Stephen Kinnock: Thank you, gentlemen. Some of the leadership candidates for this Conservative leadership election are using the term “managed no deal”. Mr Barnier has said, “If the UK were to leave the EU without a deal, let me be very, very clear. We would not discuss anything with the UK until there is an agreement for Ireland and Northern Ireland, as well as for citizens’ rights and the financial settlement”. There seems to be a disparity with what the leadership candidates are saying, which is that we would leave with no deal and then start doing side deals, somehow circumnavigating the withdrawal agreement by doing these side deals. That seems to conflict quite clearly with Mr Barnier’s position. Based on your contacts in Brussels—and I am sure you are talking to your counterparts across the European Union—can you give an assessment of the phrase “managed no deal” and what validity you think it has as a negotiating position, also in light of Monsieur Barnier’s comments? Would anybody wish to comment on that?
Sydney Nash: From an auto perspective, the concept of a managed no deal does not really make sense. As I set out earlier, we are highly integrated as a sector; we have supply chains that crisscross the continent. For anything to be managed, it has to be managed not unilaterally by the UK, or unilaterally by the EU, but there has to be some sort of agreement between the sides as to how this will be managed, how we continue to move things across the border, the basis of contractual arrangements, et cetera. The two things seem contradictory. No deal suggests nothing has been agreed and the two sides are operating separately, but to manage something, when you have an integrated sector like ours, needs the two sides of the equation to be operating co operatively and reaching some form of agreement. It does not quite seem to make sense.
Stephen Kinnock: Does anybody else care to comment on that? I am particularly looking at this point that there will be no negotiations about anything in the event of a no-deal exit, because the outstanding issues in the withdrawal agreement, the divorce items, if you like, are still outstanding. Until such time as those issues have been resolved, there will be no side deals, no negotiations, no further discussion. Is that your assessment, Mr Rycroft?
Tim Rycroft: I cannot at the moment see why see it would be in the EU’s interest to do things that would mitigate the impact of no deal for us. If you look at some of the issues we talked about earlier, whether it is health marks for products of animal origin, heat treated pallets, fortification of flour, these are all things we would want a side deal on in that event. These are things that would mitigate some particular impacts, and none of them has really been resolved. Discussions have taken place and opening positions have been set out, but I do not get any sense that the EU is in a rush to resolve those and reassure us that they can all be done in the event of no deal.
Stephen Kinnock: This question is related to that. A lot of the commentary coming out of Brussels is that the EU is not worried about a no-deal scenario because its view is that the British economy would not be able to withstand the shock and that, within a matter of months, the British Government would be forced to put the withdrawal agreement through Parliament and to come to Brussels on the basis of those terms. That is affecting the mindset in Brussels because, in essence, there would of course be some damage to the EU, but far, far less damage to the EU than there would be to us, and, therefore, no deal is a price worth paying in terms of getting the withdrawal agreement over the line perhaps some months later. Of course, it would be a somewhat unusual situation, because we would be re entering the EU on that basis, so that raises a number of quite challenging legal questions about how that would work in practice. Have you, in your scenario planning, thought through that eventuality: that we crash out with no deal on 31 October but are then forced to come back and negotiate terms on the basis of the withdrawal agreement a few months later?
Seamus Nevin: It needs to be borne in mind that the new Commissioners will not have taken up their seats until several weeks after the crash out date at the end of October. Mr Barnier’s team has also been disbanded. His chief negotiator, Sabine Weyand, has moved to a new job. It appears from their end that they consider the negotiations to be finished. It would look like there will be nobody at the end of the phone to pick up a call from the UK if we were to decide to phone them immediately after a no-deal Brexit, if we crashed out at the end of October. The politics of this would be very difficult to predict, so I am not entirely convinced by the assumption that we will come back straight away, simply because it would depend on the nature of the disruption and how significant it is from day one. It is a very, very difficult scenario to try to predict, and it is one we would be very keen to avoid, for those reasons.
Nick von Westenholz: There are so many potential scenarios we have been wrestling with over the last couple of years. As the NFU, we have tried to avoid getting involved in these political considerations. We have set out what is a workable Brexit for us. I made a distinction earlier: the concerns I have raised here today are concerns with a no deal, crash out Brexit. We have laid out some clear principles, which we feel mean we can move forward with Brexit in a way that works. They involve things like maintaining as free and frictionless trade as possible with the EU, developing our future agricultural policy that supports UK farmers, etc. Those remain the way we are dealing with this. No deal is out of the question for us. I would be very concerned with a scenario predicated on the fact that that might, at some point, lead to returning to the EU or softening the blow, because it may well not. What we are very concerned about is simply no deal and finding a way to avoid that outcome.
Stephen Kinnock: The final question is around the ecosystem that is the customs union and the single market, working in a very integrated way. It is often said that, if you look at border checks, 80% of the checking is single market related rather than customs union related. Do you see a customs union only type deal, looking to the future relationship, as being viable, or do you believe that single market membership, or close participation in the single market, would also be a precondition for you being able to continue on the basis of the business models you would like to see going forward?
Tim Rycroft: For us, a customs union without a single market would be a very difficult situation and very far from where we want to be.
Seamus Nevin: A customs union is necessary but not sufficient. We would require regulatory alignment, whether that means membership of the single market, and equally the ability to trade in services, so labour mobility would be an important element for us too.
Sydney Nash: The same applies to automotive. We need both for frictionless trade.
Nick von Westenholz: In the short to medium term, whether you call it a customs union or single market, or you refer more to customs arrangements and regulatory alignment, they are pretty critical to maintaining that free and frictionless trade. There are question marks, in the much longer term, on how long that is politically viable, particularly if we give up our voice and influence in shaping those rules. That is where problems arise, but that, I would hope, being optimistic, is something that could be adjusted and taken forward over the longer term, so we can come to a bespoke arrangement, essentially, where we maintain and retain a degree of governance and control over the rules that we are, as farmers, required to adhere to.