UK/EU Future Economic Partnership

(Limited Text - Ministerial Extracts only)

Monday 5th March 2018 Commons Chamber

[The Prime Minister (Mrs Theresa May)]

With permission, Mr Speaker, I shall make a statement on our future economic partnership with the European Union.

In December, we agreed the key elements of our departure from the EU, and we are turning that agreement into draft legal text. We have made clear our concerns about the first draft that the Commission published last week, but no one should doubt our commitment to the entirety of the joint report. We are close to agreement on the terms of a time-limited implementation period to give Governments, businesses and citizens on both sides time to prepare for our new relationship, and I am confident that we can resolve our remaining differences in the days ahead. Now we must focus on our future relationship: a new relationship that respects the result of the referendum, provides an enduring solution, protects people’s jobs and security, is consistent with the kind of country that we want to be, and strengthens our union of nations and people. Those are the five tests for the deal that we will negotiate.

There are also some hard facts for both sides. First, we are leaving the single market. [Interruption.] In certain ways, our access to each other’s markets will be less than it is now. We need to strike a new balance. However, we will not accept the rights of Canada and the obligations of Norway.

Secondly, even after we have left, EU law and ECJ decisions will continue to affect us. The European Court of Justice determines whether agreements that the EU has struck are legal under the EU’s own law. If, as part of our future partnership, Parliament passes a law that is identical to an EU law, it may make sense for our courts to look at the appropriate ECJ judgments so that we both interpret those laws consistently—[Interruption] —as they do for the appropriate jurisprudence of other countries’ courts. However, the agreement that we reach must respect the sovereignty of both our legal orders. That means that the jurisdiction of the European Court of Justice in the United Kingdom will end. It also means that the ultimate arbiter of disputes about our future partnership cannot be the court of either party.

Thirdly, if we want good access to each other’s markets, it has to be on fair terms. As with any trade agreement, we must accept the need for binding commitments, so we may choose to commit some areas of our regulations, such as state aid and competition, to remaining in step with the EU’s.

Finally, we must resolve the tensions between some of our objectives. We want the freedom to negotiate trade agreements around the world. We want control of our laws. We also want as frictionless a border as possible with the EU, so that we do not damage the integrated supply chains on which our industries depend, and do not have—[Interruption.]

[Mr Speaker]

Order. A very considerable level of orchestrated heckling is taking place in the House, including heckling from some Members who will doubtless later grin at me and seek to catch my eye. They may find that there is a clash between the two. We should set a good example that will impress our dear and loyal Canadian friends, and indeed, for that matter, the British people. The House can rest assured that I will allow the maximum possible questioning and scrutiny on this occasion, as I always do, but the Prime Minister is entitled to be heard with courtesy.

[The Prime Minister]

There are tensions in the EU’s position, and some hard facts for it. The Commission has suggested that an “off the shelf” model is the only option available to the UK, but it has also said that in certain areas, none of the EU’s third-country agreements would be appropriate; and the agreement envisaged in the European Council’s own guidelines would not be delivered by a Canada-style deal. Finally, we need to face the fact that this is a negotiation, and neither side can have exactly what we want. However, I am confident that we can reach agreement, so I am proposing the broadest and deepest possible future economic partnership, covering more sectors and involving fuller co-operation than any previous free trade agreement.

There are five foundations that must underpin our trading relationship: first, reciprocal binding commitments to ensure fair and open competition, so that UK business can compete fairly in EU markets and vice versa; secondly, an independent arbitration mechanism; thirdly, an ongoing dialogue with the EU, including between regulators; fourthly, an arrangement for data protection that goes beyond an adequacy agreement; and, fifthly, free movement will come to an end. But UK and EU citizens will still want to work and study in each other’s countries, and we are open to discussions about how to maintain the links between our people.

We then need to tailor this partnership to the needs of our economies, and we should be absolutely clear this is not cherry-picking. Every free trade agreement has varying market access depending on the respective interests of the countries involved. So if this is cherry-picking, then so is every trade arrangement. What matters is that our rights and obligations are held in balance.

On goods, a fundamental principle in our negotiating strategy is that trade at the UK-EU border is as frictionless as possible, with no hard border between Northern Ireland and Ireland. This means no tariffs or quotas, and ensuring that products only need to undergo one series of approvals in one country. To achieve this, we will need a comprehensive system of mutual recognition. That can be delivered through a commitment to ensure that the relevant UK regulatory standards remain as high as the EU’s, which, in practice, means that UK and EU regulatory standards will remain substantially similar in future. Our default is that UK law may not necessarily be identical to EU law, but it should achieve the same outcomes. In some cases, Parliament might choose to pass an identical law. If the Parliament of the day decided not to achieve the same outcomes as EU law, it would be in the knowledge that there may be consequences for our market access. And we will need an independent mechanism to oversee these arrangements, which I have been clear cannot be the European Court of Justice.

We also want to explore the terms on which the UK could remain part of EU agencies, such as those critical to the chemicals, medicines and aerospace industries. That would mean abiding by the rules of those agencies and making an appropriate financial contribution, and the UK would also have to respect the remit of the ECJ in that regard. Parliament could decide not to accept these rules, but with consequences for our membership and linked market access rights.

Lastly, to achieve as frictionless a border as possible and to avoid a hard border between Northern Ireland and Ireland, we also need an agreement on customs. The UK has been clear it is leaving the customs union. The EU has also formed a customs union with some other countries, but those arrangements, if applied to the UK, would mean the EU setting the UK’s external tariffs, being able to let other countries sell more into the UK, without making it any easier for us to sell more to them, or the UK signing up to the common commercial policy.

That would not be compatible with a meaningful independent trade policy, and it would mean we had less control than we have now over our trade in the world, so we have set out two potential options for our customs arrangement: a customs partnership where, at the border, the UK would mirror the EU’s requirements for imports from the rest of the world for those goods arriving in the UK and intended for the EU, or a highly streamlined customs arrangement, where we would jointly implement a range of measures to minimise frictions, together with specific provisions for Northern Ireland. Both would leave the UK free to determine its own tariffs, which would not be possible in a customs union.

Taken together, the approach we have set out on goods and agencies, and the options for a customs arrangement, provide the basis for a good solution to the very specific challenges for Northern Ireland and Ireland. My commitment to this could not be stronger: we will not go back to a hard border between Northern Ireland and Ireland; nor will we break up the United Kingdom’s own common market with a border down the Irish sea. As Prime Minister, I am not going to let our departure from the EU do anything to set back the historic progress made in Northern Ireland; nor will I allow anything that would damage the integrity of our precious Union. The UK and Irish Governments and the European Commission will be working together to ensure we fulfil these commitments.

That approach to trade in goods is important for agriculture, food and drink, but here other considerations apply. We are leaving the common agricultural policy and the common fisheries policy, and will want to take the opportunity to reform our agriculture and fisheries management and regain control of access to our waters. I fully expect that our standards will remain at least as high as the EU’s, but it will be particularly important to secure flexibility here to make the most of our withdrawal from the EU for our farmers and exporters. We will also want to continue to work together to manage shared stocks in a sustainable way, and agree reciprocal access to waters and a fairer allocation of fishing opportunities for the UK fishing industry.

On services, we have the opportunity to break new ground with a broader agreement than ever before. For example, broadcasting and financial services have never previously been meaningfully covered in a free trade agreement. We recognise that we cannot have the rights of membership of the single market, such as the country of origin principle or passporting, but we should explore creative options, including mutual recognition, to allow broadcasting across borders. My right hon. Friend the Chancellor will set out more detail on financial services later this week. We will also look to agree an appropriate labour mobility framework that enables travel to provide services in person, as well as continued mutual recognition of professional qualifications. Finally, our partnership will need to cover agreements in other areas, including energy, transport, digital, civil judicial co-operation, a far-reaching science and innovation pact, and cultural and educational programmes.

We cannot escape the complexity of the task ahead. We must build a new and lasting relationship, while preparing for every scenario, but with pragmatism, and calm and patient discussion, I am confident we can set an example to the world. Yes, there will be ups and downs over the months ahead, but we will not be buffeted by the demands to talk tough or threaten a walk out, and we will not give in to the counsels of despair that this simply cannot be done—for this is in both the UK and EU’s interests. As we go forwards, foremost in my mind is the pledge I made on my first day as Prime Minister: to act not in the interests of the privileged few, but in the interests of all our people, and to make Britain a country that works for everyone. My message to our friends in Europe is clear. You asked us to set out what we want in more detail. We have done that. We have shown we understand your principles. We have a shared interest in getting this right, so let us get on with it. I commend this statement to the House.

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[Jeremy Corbyn]

Thank you, Mr Speaker.

Does the Prime Minister now agree that the Brexit Secretary was wrong when he told the House of Commons in January last year that a Tory Brexit deal will deliver the “exact same benefits” as the single market and the customs union? If so, why has it taken her so long to say so?

In her speech, the Prime Minister said that she wants “good access”. Can she make it clear today whether that means tariff-free access? The Prime Minister said that she wants a “customs arrangement”, but does that cover all sectors of industry or just some? Which will be excluded, and with what consequences in terms of tariffs and other barriers? Does the Prime Minister still think that a good trade deal can easily be reached with the Trump presidency after its unilateral imposition of tariffs on steel and aluminium imports, which follows its disgraceful attack on Bombardier?

It is possible to retain the benefits of the single market and the customs union. The problem is that we have a Prime Minister who is being held hostage by the extremes in her Cabinet who are willing to sacrifice parts of British business and industry and willing to risk a hard border in Northern Ireland to carry on with their ideological crusade to shrink the state, slash investment and bring about an economic race to the bottom.

The Prime Minister said in her speech that, in areas like workers’ rights and the environment,

“we will not engage in a race to the bottom in the standards and protections…There is no…political constituency in the UK which would support this”.

That simply is not true. In the recent past, we have seen the Secretary of State for International Trade write:

“It is intellectually unsustainable to believe that workplace rights should remain untouchable”.

The Leader of the House has said:

“I envisage there being…no regulation whatsoever—no minimum wage, no maternity or paternity rights, no…dismissal rights, no pension rights”.—[Official Report, 10 May 2012; Vol. 545, c. 209.]

The Foreign Secretary has described EU-derived employment legislation as “back-breaking”, and in its leaked assessments, the exit analysis from the Department for Exiting the European Union stated that there could be opportunities for the UK in deregulating in areas such as the environment and employment law. There clearly is a political constituency that supports a race to the bottom on workplace rights: it is called the Cabinet.

On the crucial issue of Northern Ireland, the Prime Minister offered no real solution. Instead, she rehashed an already discredited Government idea to use a mix of technology and good will to ensure no hard border—an idea that the Brexit Secretary has already conceded is mere “blue-sky thinking”. Does the Prime Minister not understand that this is not just about cross-border paperwork and trade? There is also the issue of maintaining the social peace that has endured for 20 years. Will she condemn the ridiculous remarks made by the Foreign Secretary last week, when he not only compared the Irish border to that of Camden and Islington, but wrote her a letter saying it was not the British Government’s responsibility to prevent a hard border?

There are some things we do welcome in the Prime Minister’s statement—[Interruption.] I knew Members would be pleased. For one, it is clear that she has now abandoned her ridiculous red line regarding any role for the European Court of Justice, which opens the door to her welcome adoption of Labour’s position of the UK remaining a key part of the European Union agencies that are of benefit to this country.

As I set out last week, Labour’s priority is to get the best Brexit deal for jobs and living standards to underpin our plans to upgrade the economy and invest in every region and every community in this country. The Conservative Government’s reckless austerity is damaging our country, and the increasing sense of drift over Brexit risks increasing that damage. Now the Prime Minister admits that her Brexit plan will reduce our access to European markets and leave people worse off. We have had 20 months of promises, soundbites and confusion. However people feel about Brexit, it is clear to them that this Government are nowhere near delivering a good deal for Britain.

[The Prime Minister]

The Leader of the Opposition raised a number of issues. First, he raised the issue of steel tariffs and the position of the United States of America, and I spoke to President Trump about this yesterday. May I just say to the right hon. Gentleman that we are much more likely to get a positive result by engaging with the United States of America than by standing on the sidelines sniping and shouting at them, as he always does?

The right hon. Gentleman talks about workers’ rights and other standards. We have been very clear: this Government are not just maintaining workers’ rights, but enhancing them; and we are committed to maintaining high environmental standards. He asked whether we want a deal that was tariff-free. I gave him the statement in advance, so if he had read it, he would know that I referred to tariff-free access in my statement. He talks about ideological crusades, and I have to say that only person in this House—[Interruption.] Well, not the only person, because the shadow Chancellor is also on an ideological crusade.

There is a fundamental flaw at the heart of what the Leader of the Opposition has chosen as his approach towards the European Union and the post-Brexit relationship. He talks about free trade agreements with the European Union, yet he is clear that he would go against one of the key elements of ensuring that we could have such trade deals, notably the issue around state aid. He would tear up rules on state aid and fair competition, as he does not believe in fair competition—that is perfectly clear.

At the very beginning of the right hon. Gentleman’s remarks, he asked about the withdrawal agreement—the draft legal text on the withdrawal agreement that was published by the European Union last week—and he referred to my speech last Friday as if it was about the same thing. I have to tell him that it was not, actually, so may I just explain? There are three issues and three elements of the process at the moment. We are negotiating the final arrangements for the implementation period, which we hope will be agreed in March—we certainly intend that they will be. Alongside that, we are looking at the legal text of the withdrawal agreement—Michel Barnier has made it clear that, on his timetable, we would be looking at October for that—and we now want to start negotiations on the future economic partnership and the future security partnership.

The right hon. Gentleman talks about the European Court of Justice. The jurisdiction of the Court in the United Kingdom will end. We will bring back control of our laws to this Parliament—to this country—unlike the Labour party’s position, which is to remain in the single market and, in effect, remain under the jurisdiction of the ECJ. We will also take control of our borders, unlike the Labour party’s position—[Interruption.] Well, Labour Members do not seem to know what their position is. The Leader of the Opposition said that the Labour party would bring free movement to an end, but at the same time the shadow Brexit Secretary said that “easy movement” would continue. We know that Labour Members would not bring back control of money, because they have said that they would pay whatever it takes to the European Union regardless.

The right hon. Gentleman talks about delays. This Government are focusing on making a success of Brexit and on delivering for the British people, but Labour has nothing to offer. Labour voted against moving on the negotiations in the European Parliament. Labour Members twice voted against the Bill that delivers Brexit in this Parliament; now they have gone back on what they promised on the customs union; and over a week ago the shadow Chancellor said that Labour would keep “all options open” on whether or not to have a second referendum. This Government and this party are clear: there will be no second referendum. We are delivering for the British people, and we are going to make a success of it.

[Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I congratulate my right hon. Friend on what I thought was an excellent speech—clear and determined, giving the European Union a very clear sense of direction. I thought that perhaps the most important point in the speech—the point voted on in the referendum—was about taking back control, so does she agree that bringing back to a British Parliament all decisions about our arrangements is exactly about delivering on that? When she gets into negotiations about trade arrangements with her European counterparts, will she remind them that cake exists to be eaten and cherries exist to be picked?

[The Prime Minister]

I am grateful to my right hon. Friend. He is absolutely right that when people voted in the referendum to leave the European Union, they voted to take back control of our borders, our money and our laws. We are absolutely clear that when we have left the European Union, decisions over our laws and standards will be for this Parliament to take. We will take back control.

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

I thank the Prime Minister for early sight of her statement.

It is now over 18 months since the referendum. At a time when the United Kingdom should be putting the finishing touches to its negotiating position, this Government are still struggling to find paper on which to write down their wish list. It was nothing short of a humiliation for the Government last week that when the EU presented a draft legal text for withdrawal, the Prime Minister gave a speech expounding empty rhetoric one more time.

No single market and no customs union mean that there is no solution that would prevent a hard border in Ireland. The Government’s own analysis has revealed that growth would be hit by up to 9% in such an extreme scenario. Scottish Government analysis revealed that Scots could face a loss of £2,300 per person each year, with our GDP around £12.7 billion lower by 2030. That is the reality of the Government’s plans.

Last month, as the Prime Minister gathered with her Cabinet at Chequers, there was one glaring absence. Where was the Secretary of State for Scotland? Scotland’s voice was not heard at those crucial Cabinet discussions. There has been a flagrant disregard by this Government of the nations that make up the United Kingdom. The Scottish Secretary might not have been invited to Chequers, but rest assured that Members on these Benches will be in this Chamber, speaking up for Scotland at every opportunity—[Interruption.]

[Ian Blackford]

Thank you, Mr Speaker.

We will settle for nothing less than continued membership of the single market and customs union. Scotland voted to stay in the EU. We cannot—we will not—be ripped out of the single market and customs union against our will. We will defend the jobs that the Prime Minister is prepared to trade away. We in Scotland must determine our own destiny. We are a European nation and we intend to stay one. Will the Prime Minister finally recognise that staying in the single market and the customs union is the least damaging outcome for jobs and prosperity?

[The Prime Minister]

The right hon. Gentleman talks about having Scottish nationalist MPs in this House, but I note that there are only nine here today, which is, of course, fewer than the number of Conservative Scottish Members of Parliament. The decisions that led to the approach in my speech were taken by the whole Cabinet, not by a sub-group of the Cabinet, and all members, bar one who was in this House at the time, were present when that decision was taken.

The right hon. Gentleman talks about timing. Like the Leader of the Opposition, he appears to have misunderstood the fact that the European Union set out at the beginning that there would be different phases to this negotiation. I was always straight with the House that I believed that citizens’ rights should be in the first phase. They were; we agreed that in December. Many people, including possibly the right hon. Gentleman—I cannot remember—were sceptical about whether we would get that deal. We did get that deal, and now we move on to the second phase of the negotiations.

May I say to the right hon. Gentleman that, yet again, he has tunnel vision on there being only one approach to take on a single market and a customs union? We will ensure that we get trade with the European Union that is tariff-free and as frictionless as possible; that there is no hard border between Northern Ireland and Ireland; and that this country will be able to run an independent trade policy, negotiating trade deals around the rest of the world.

Finally, the right hon. Gentleman talks about Scotland as an independent nation taking decisions. Yet again, I remind him that, from the point of view of Scotland’s economy, the most important thing is to be part of the United Kingdom.

[John Redwood (Wokingham) (Con)]

The Prime Minister speaks for the big majority of the British people when she says that both sides now need to get on with it. Will she confirm that the British Government will ensure that we are ready to leave in March 2019, with or without a deal, and with or without a positive response from the EU?

[The Prime Minister]

I can reassure my right hon. Friend that we will be leaving in March 2019 and that we continue to work on all scenarios to ensure that we are ready.

[Hilary Benn (Leeds Central) (Lab)]

Although the Prime Minister’s speech provided some welcome additional detail on her view of the future partnership, the Irish Foreign Minister, Simon Coveney, said yesterday that she had not done so when it comes to

“maintaining a largely invisible border on the island of Ireland.”

Regardless of the means that she has in mind for achieving that, is she able today to give a guarantee to businesses in Northern Ireland and the Republic that their manufactured goods and agricultural products will be able to cross the border without checks, controls or infrastructure when we leave the European Union?

[The Prime Minister]

I welcome the right hon. Gentleman’s opening remark in which he said that I had provided more detail in the speech I gave on Friday. He might like to have a discussion with the Leader of the Opposition about the fact that there was such detail in the speech.

We will not return to a hard border between Northern Ireland and Ireland. We want that free flow of goods, services and people to be able to continue—of course we are committed to the common travel area—and we also want the free flow of goods, services and people between Northern Ireland and the rest of the United Kingdom. That is why we took the position that we did on the proposal that came forward last week from the European Commission. That would have meant a border down the Irish sea, which is unacceptable.

[Anna Soubry (Broxtowe) (Con)]

No one can doubt the determination of our Prime Minister to get the very best deal for our country in these most difficult of negotiations. In her speech on Friday, she was frank about the complexity and economic consequences of the deal that she seeks with the European Union. In the spirit of that frankness, and given that it is undoubtedly the case that any deal will bear considerable administrative costs, will the Prime Minister undertake to keep this House, and therefore our constituents, fully apprised of those administrative costs of our eventual relationship and deal with the European Union?

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[The Prime Minister]

As we have said before, we will of course make information available to this House, when it is possible to do so, as we go through this process of negotiation. A certain amount of information has already been made available, for example about the amount of money that my right hon. Friend the Chancellor of the Exchequer set aside for the contingency preparations that are being made by Departments. My right hon. Friend will be aware of some of the other steps that we have taken, including setting up two new Departments when I became Prime Minister, to ensure that we had a Department focused on exiting the European Union and another—the Department for International Trade—focused absolutely on making a success of the opportunities that will be open to us once we have left the EU.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

The Prime Minister is still proposing that we will be outside a customs union and have different external tariffs and commercial policies, which she knows will mean burdensome rules of origin checks, and customs checks on goods crossing borders to ensure that businesses do not evade or avoid those different external tariffs. She has proposed that 80% of businesses in Ireland would be exempt from any of those checks, but she will be aware that security experts have warned of the risk from not just physical infrastructure at the border, but an increased incentive for smuggling, particularly given the links between smuggler groups and paramilitary organisations. Why is she continuing to pursue a policy on the customs union that involves a risk of increasing both the smuggling and security threats?

[The Prime Minister]

First, I remind the right hon. Lady that the 80% reference was in one of the options on future customs arrangements between Northern Ireland and Ireland. Of course, what I set out in the speech in relation to that border issue was about not just the customs arrangements, but the regulatory standards that this country will be following once we have left the European Union. We are not going to be in a customs union—we are not going to be in the customs union—because that would prevent us from being able to follow an independent trade policy, which is something that we should be following because we can see great opportunities for companies, businesses, jobs and prosperity in the UK as a result.

[Sir William Cash (Stone) (Con)]

Given my right hon. Friend’s confirmation in both her speech on Friday and her statement today that our EU policy rightly rests on fundamental UK principles in our national interest—namely, the sovereignty of our own Parliament and our own judiciary, our own democracy and the integrity of the United Kingdom—does she agree that the official Opposition’s continuous unprincipled reversals of their policy betrays not only their own voters, but the country?

[The Prime Minister]

My hon. Friend is absolutely right. We consistently hear the Opposition saying one thing about their Brexit policy one minute and something else the next. Crucially, they would not be delivering for the British people, because they would stay in the single market and the customs union, they would see the jurisdiction of the European Court of Justice, and they would continue to pay sums of money over to the European Union. Those are the very things that people voted against.

[Sir Vince Cable (Twickenham) (LD)]

May I first congratulate the Prime Minister on the fact that, after 20 months of tough negotiation, she appears now to have delivered at least a trade deal with her own Cabinet? In her future independent trade negotiations with the economic nationalist and warmonger in the White House, what exactly are the Prime Minister’s red lines, and do they include the NHS?

[The Prime Minister]

I am absolutely clear that as we look to negotiate a trade deal with the United States of America, the national health service will remain as it is today. It will remain free at the point of use. The national health service is not for sale. We continue to stand by the principles of the NHS, and we will be very clear about that when we come to negotiating a trade deal with the United States.

[Several hon. Members rose—]

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

Thank you, Mr Speaker, for that compliment.

Does my right hon. Friend, having made such a generous offer to the European Union, expect more generosity than it has shown so far? I think particularly of the aggression in the draft legal text of suggesting a solution to the Irish problem that would have been in contradiction to the confidence and supply agreement with the Democratic Unionist party, threatening the existence of the Government. Does my right hon. Friend think that it is right for the European Commission to behave in such a high-handed fashion?

[The Prime Minister]

We are in a negotiation. Both sides put their positions at various stages. Just as the European Commission chose to put that position forward, so it was absolutely right for this Government to be clear—I repeated it last week in Prime Minister’s questions and I am happy to do so again—that the suggestion that there should be a border down the Irish sea separating Northern Ireland from the rest of the United Kingdom is completely unacceptable to this Government and, I believe, to any Government in the United Kingdom.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

On Friday and today, the Prime Minister said that our access to one another’s markets would be less than it is now. This is the public burial of the claim made by her Brexit Secretary a year ago in this House that the Government’s aim was to secure the “exact same benefits” as we now enjoy. The Prime Minister has admitted to the country that there is an economic cost to Brexit, so will she now tell us what is that economic cost, when the public will be told about it, and who will pay it?

[The Prime Minister]

Life is going to be different in the future because we will have a different relationship with the European Union. While the right hon. Gentleman and the Labour party consistently focus only on our relationship with the European Union, we, as a Government, are ensuring that we get the best possible trade deal with the European Union, together with trade deals with countries around the rest of the world, and that we develop our economy so that we have a Britain fit for the future.

[Dr Sarah Wollaston (Totnes) (Con)]

The Prime Minister is rightly putting the needs of patients first in seeking associate membership of the European Medicines Agency. Will she go further in doing the same and commit to freedom of movement, both now and in future, for researchers and those in the health and care workforce who seek to work and study in each other’s countries?

[The Prime Minister]

When we leave the European Union, free movement, which has been one of the pillars of the EU, will end. However, as I said in my statement and in my speech on Friday, EU citizens will continue to want to work and study here, and UK citizens will continue to want to work and study in the EU27. We will be setting out our proposals for our immigration rules on that, and we will stand ready to discuss the arrangements that will be made in future.

[Emma Little Pengelly (Belfast South) (DUP)]

I thank the Prime Minister for her robust rejection of the disgraceful European Union attempts to interfere in the internal constitutional affairs of our sovereign United Kingdom. Does she agree that in finding and pursuing the customs solutions outlined today, there is nothing—nothing—that could create additional barriers or additional requirements in relation to Northern Ireland’s trade with Great Britain in the internal market of the United Kingdom?

[The Prime Minister]

I am very happy to make it clear that we are looking for an arrangement that both maintains the internal market of the United Kingdom and ensures that we have no hard border between Northern Ireland and Ireland. We have set out proposals on how we can achieve that. I look forward to discussing those with the European Commission, and also with the Taoiseach and the Irish Government.

[Sir Nicholas Soames (Mid Sussex) (Con)]

Will the Prime Minister confirm that the Commission is now in full possession of all the issues upon which we are to negotiate, and thus that there is no good reason why these talks should not now proceed apace in an orderly and friendly fashion?

[The Prime Minister]

Absolutely. The European Union asked for more detail to be set out. I said that I would do that at the appropriate time. I have now done so both on security and on our economic partnership. My message to the European Union in relation to the negotiations is, “Let’s get on with it.”

[Kate Hoey (Vauxhall) (Lab)]

The Prime Minister made some very sensible suggestions in her speech about the relationship with regard to the border between Northern Ireland and the Republic of Ireland. Has she read a very good report by the European Parliament’s Committee on Constitutional Affairs about how the border issue can be solved by innovative technology and so on? Will she make sure that her officials also read that before they go back into negotiations?

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[The Prime Minister]

I can tell the hon. Lady that I am aware of that report and have asked officials to look at it very carefully. I believe it gives some very good proposals for solutions.

[David Duguid (Banff and Buchan) (Con)]

I welcome my right hon. Friend’s commitment yet again to leave the common fisheries policy and the common agricultural policy—a commitment that is very welcome in my constituency in Scotland, which might surprise some Opposition Members. What impact does she think this new freedom will have on those sectors?

[The Prime Minister]

Obviously, we have to set our new agricultural policy and fisheries policy, but I believe that these freedoms will open up new opportunities for fishermen and farmers across the whole United Kingdom.

[Emma Reynolds (Wolverhampton North East) (Lab)]

Could the Prime Minister name an international border between two countries that are not in a customs union and have different external tariffs where there are no checks on lorries carrying goods at the border?

[The Prime Minister]

There are many examples of different arrangements for customs around the rest of the world. Indeed, we are looking at those—including, for example, the border between the United States and Canada.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I thank my right hon. Friend for her statement and congratulate her on a calm speech that has been widely welcomed. It was based on both the principles she has consistently set out towards leaving the European Union and the realistic compromises this nation will have to make to achieve a comprehensive trade agreement. Do we not now owe it to her to get behind her and her negotiations, instead of undermining her all the time, as the Opposition are doing?

[The Prime Minister]

I thank my hon. Friend. I think it would be a much stronger position if the Opposition were to get behind the Government and agree to support the approach we are taking to get the best possible deal from Brexit. We are focused on delivering for the British people. Sadly, the Opposition want to frustrate Brexit and fly in the face of the vote that was taken by the British people.

[Mr Ben Bradshaw (Exeter) (Lab)]

Do President Trump’s trade barriers, aimed primarily at us in Europe and against Canada, and the news from this lunchtime that the Americans are offering us a worse deal on open skies than the one we currently enjoy as members of the European Union, ever make the Prime Minister think that we might be making a mistake by removing ourselves from our single biggest market and the world’s biggest free trade area?

[The Prime Minister]

It is very important that the British people voted for us to leave the European Union. If the right hon. Gentleman is saying that we should stay in the single market and in the customs union, he is suggesting that the trade policy for the United Kingdom will be determined by the European Union without our having a say in it. That would mean that the European Union would determine our external tariffs and the basis on which we traded with countries around the rest of the world. If he really thinks that the European Union, in those circumstances, would put the interests of the United Kingdom first, I have to tell him that I do not think it would. It is better for us to have our own independent policy.

[Mrs Kemi Badenoch (Saffron Walden) (Con)]

Will my right hon. Friend clarify that, contrary to the comments made by the Leader of the Opposition, the establishment of an independent arbitration mechanism will mean that the ECJ will not have jurisdiction over our future relationship?

[The Prime Minister]

My hon. Friend is absolutely right.

[Alison McGovern (Wirral South) (Lab)]

The Chancellor of the Exchequer will soon give us the spring statement. At that moment, the Office for Budget Responsibility will publish its financial outlook for our country. What instructions has the Prime Minister given to the OBR for it to produce that forecast? What has she informed it of her new policy for Brexit?

[The Prime Minister]

The OBR is an independent body. It determines its own forecasts and makes its own judgments about the future, and we look forward to seeing what it brings forward at the time of the spring statement.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

President Trump’s threats over steel products remind us that, alongside an independent trade policy, we need independent and effective trade enforcement and trade defence measures. What assurance can the Prime Minister give the House that we will have those systems in place from day one when we leave the European Union?

[The Prime Minister]

We are indeed working on ensuring that we have the necessary structures in place, and legislation will be brought forward to this House in due course in relation to those issues. My right hon. Friend made reference to trade remedies. Of course it is very important that we are able to determine those trade remedies, rather than leaving it to the European Union to determine them for us, as would happen under the policy of the Leader of the Opposition.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Since the Brexit that the Prime Minister has set out is nothing like the Brexit we were promised—no “exact same benefits”, and far from £350 million a week for the NHS, we have nurses actually leaving the NHS and fewer coming in—does she not think it will be right to give the people the right to have a say on the final deal?

[The Prime Minister]

We actually have more nurses working on wards in the NHS now than we did in 2010. The British people were given a vote by this Parliament on membership of the European Union, and we are delivering on their decision.

[Michael Fabricant (Lichfield) (Con)]

The Prime Minister has consistently said that she wants a unique Brexit trade deal for Britain, and she has said again today that Canada and Norway are not the models for us. Is she aware that Angela Merkel has pointed out that Norway has a population of only 4 million, and Canada has a population of only 36 million and trades with the United States? Is the Prime Minister as pleased as I am that Angela Merkel has been able to form a Government, and does she agree that Angela Merkel, being the pragmatic lady she is, will have considerable influence on the European Union in securing a good deal for the United Kingdom?

[The Prime Minister]

I was pleased to speak to Chancellor Merkel yesterday to congratulate her on the formation of her Government. I look forward to the negotiations we will be having with Germany and the other members of the European Union. She and others have all been clear that, as we look to the future relationship, we must recognise that the models that already exist do not meet the requirements of the United Kingdom.

[Mr Chris Leslie (Nottingham East) (Lab/Co-op)]

The Prime Minister has been forced to admit that market access will be less. She wants to be straight with the public. This time last year, she promised that we would have

“the same benefits in terms of that free access to trade.”

Does she regret that?

[The Prime Minister]

We are setting out on negotiating a free trade deal that will ensure that, for goods, we continue to have tariff-free and as frictionless as possible trade across borders. We have also set out our ambition for financial services, digital services, broadcasting and a whole range of other areas. We will be achieving the benefits of the trade with the European Union in some cases in different ways, but that does not mean that we are not going to have the benefits of a good trading relationship with the European Union in future.

[Maggie Throup (Erewash) (Con)]

I welcome my right hon. Friend’s pragmatic approach to the negotiations with the EU, and her ongoing commitment to getting the best deal for Britain. Does she agree with me that by fixing the roof and eliminating the day-to-day budget deficit, Britain is now in a much stronger position to be able to forge new trading relationships with the rest of the world, as well as the EU, and make a success of Brexit?

[The Prime Minister]

My hon. Friend raises a very important point. It is of course the decisions that have been taken by Conservatives in government since 2010, which have put our economy in a much stronger position, that enable us to be able to do those very good trade deals. If we just look at what has happened recently—productivity is up, borrowing is down, employment is up—this is a strong economy, and we should have optimism about our future.

[Diana Johnson (Kingston upon Hull North) (Lab)]

Siemens is doing great work in east Yorkshire—in Hull, with a renewables factory, and in Goole, with plans for a train factory—so will the Prime Minister tell me whether she believes there will be the same access to European markets for Siemens once we have left the EU in March 2019?

--- Later in debate ---

[The Prime Minister]

I am very pleased to welcome the investment—and the continued investment—that Siemens is making in the United Kingdom. I meet the senior directors of Siemens from time to time to discuss their investment in the United Kingdom. We have been clear, as I said in my speech on Friday, that we have been listening to businesses. That is one of the reasons why we have talked about maintaining high regulatory standards in goods crossing borders, so that we can maintain that good trade access between the United Kingdom and the European Union in the future.

[George Freeman (Mid Norfolk) (Con)]

May I congratulate my right hon. Friend on a reassuringly and typically business-like speech on Friday? It sent a clear message that there will be no hard Brexit, only hard choices. Will she reassure me and the UK life sciences sector that her proposal for associate membership of the European Medicines Agency means that we will be able to sell medicines into Europe and continue to lead in the pioneering technologies of tomorrow’s medicines?

[The Prime Minister]

I am very clear about the important role that the life sciences industry plays in the United Kingdom, and I pay tribute to the work that my hon. Friend has done with it here in the United Kingdom. We wish to explore the possibility of some form of associate membership of those agencies. That is in the interests not just of the UK but of people across the EU, in terms of getting medicines to market more quickly.

[Peter Kyle (Hove) (Lab)]

The European Union has published the draft text of its legal stance of its negotiating position. The Prime Minister makes a speech, which does give more detail, but is still full of ambiguity. When will she publish the legal text of her negotiating stance?

[The Prime Minister]

I did try to explain this to the Leader of the Opposition, but I will have another go. The legal text that was published by the European Commission is not a legal text on its negotiations for the future economic or security partnership; it is a legal text on withdrawal agreement. We are working on that with the Commission, but what I have done is set out, from the United Kingdom’s point of view, what we want to see from our future economic partnership, just as I set out our future security partnership in Munich a few weeks ago. We now wait for the response from the European Union to our putting out our proposals before they have put out theirs.

[Mr Peter Bone (Wellingborough) (Con)]

In 389 days’ time, the United Kingdom will leave the dreadful European Union superstate. The Prime Minister will end the free movement of people; she will stop sending billions and billions of pounds to the EU each and every year; and we will make our own laws in our country, judged by our own judges. Does the Prime Minister find it slightly disconcerting that she is the first Conservative leader who has been able to unite those on these Benches on Europe?

[The Prime Minister]

I am very pleased that on these Conservative Benches we are united in the aim of ensuring that we deliver on the vote of the British people, we leave the European Union and we do it with a good deal that leads to an optimistic future for this country.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

It is obvious that the Prime Minister sees a US trade deal as something of a priority, so will she guarantee that there will be no sacrifice of either the interests of UK farmers or our animal welfare and environmental standards in order to secure such a deal?

[The Prime Minister]

The United States has expressed interest in a trade deal with us—so have a number of other countries around the world, such as Australia and others—but as I have said, and as the Environment Secretary and others have said, we remain committed to high animal welfare and environmental standards.

[Sir Desmond Swayne (New Forest West) (Con)]

Were a settlement close, how will the Prime Minister react to entreaties to delay departure by agreement within article 50?

[The Prime Minister]

It is our intention to ensure that we can negotiate what is necessary to negotiate within the time scale that is set within article 50.

[Helen Goodman (Bishop Auckland) (Lab)]

Yesterday, I had an email from a senior businessman in the north-east, who says that the Prime Minister and her Cabinet

“seem to ignore…the real nature of global trade today…Our businesses wishing to trade with China or the USA build new facilities there”.

They do not

“send goods halfway around the globe…We…want…to share in existing EU arrangements”.

Why does the Prime Minister not start listening to the CBI and the chambers of commerce?

[The Prime Minister]

The CBI, the chambers of commerce and the Federation of Small Businesses welcomed what I set out in my speech on Friday as an ambitious programme, and welcomed the degree of detail in my speech. We are listening to business. That is why I put what I did in my speech about regulatory standards.

[Paul Masterton (East Renfrewshire) (Con)]

As a Conservative, it is always pleasing when pragmatism trumps ideology, but as a Unionist, it is vital that our departure from the EU does not undermine the political, constitutional or economic integrity of our Union. Can the Prime Minister confirm that it is her position that there will never be any differentiated deal for any constituent part of the United Kingdom?

[The Prime Minister]

I am absolutely clear that we want to maintain the United Kingdom. This is a precious Union of four nations but one people, and it is in the economic interests of all parts of the United Kingdom that we maintain the internal market of the United Kingdom. We do not want to see, and we will not see, Brexit leading to any break-up of the United Kingdom.

[Jenny Chapman (Darlington) (Lab)]

My hon. Friend the Member for Wolverhampton North East (Emma Reynolds) asked earlier where an example could be found of a border between jurisdictions. The Prime Minister gave the example of the border between Canada and the United States as being soft and frictionless. There are guns and armed customs guards on that border. Surely that is not what she has in mind? Can she perhaps find another example?

--- Later in debate ---

[The Prime Minister]

What I said was that we are looking at the border arrangements in a number of countries around the world. We are looking not just at the border arrangements the European Union has with a number of countries—it has a variety of customs arrangements with various countries—but more widely around the world. I have set out what I believe is a future arrangement for customs that will suit the United Kingdom and the European Union, and will ensure no hard border between Northern Ireland and Ireland. As the hon. Member for Vauxhall (Kate Hoey) pointed out, this has been picked up in the European Parliament and it has been made clear that there are innovative solutions that can deliver exactly what we are talking about.

[Mr John Baron (Basildon and Billericay) (Con)]

I commend the Prime Minister for her speech on Friday and her statement in the House today. With record inward investment, record manufacturing output and record low unemployment for a generation, when does she think economic reality is going to dawn on the doomsters on the Opposition Benches, particularly when it comes to the economic prize that will be available once we have left the EU?

[The Prime Minister]

Unfortunately, the Opposition are turning their face away from what is actually happening in our economy: productivity up, employment up, borrowing down. We are seeing good results in our economy, but there is more we can be doing. I am optimistic about what we can achieve through our trade arrangements with the EU in the future, but also, as we go outside and become a much more outward-looking country, with an independent trade policy.

[Joanna Cherry (Edinburgh South West) (SNP)]

The Prime Minister said that last week’s speech was not about draft withdrawal agreements produced by the EU, and I understand that. However, in answer to a number of questions from hon. Members today, she has suggested that that draft withdrawal agreement does not accurately reflect what she agreed to in December. If that is the case, when is she going to produce an alternative draft that does reflect accurately what she agreed to in December?

[The Prime Minister]

What I have said about the draft withdrawal agreement is that the European Commission chose to put in it—it is a lengthy document—a particular reference to the issue of the border between Northern Ireland and Ireland. That was the third option in the December joint report. The Taoiseach and I are both very clear that we want to resolve the issue using the first option in the report, notably the UK’s overall relationship with the European Union. There are ways in which all three options can be developed, including that third option, which is different from that produced by the European Commission, and that produced by the European Commission could not be accepted by the UK Government.

[Vicky Ford (Chelmsford) (Con)]

Competition policy is the glue that holds together all free trade agreements. Does the Prime Minister agree that the suggestion from the Labour party that it could somehow remain in the single market while running reckless through state aid policy is a fantasy fiction drama worthy of an Oscar?

--- Later in debate ---

[The Prime Minister]

My hon. Friend is absolutely right. She has hit the nail on the head.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

My constituency neighbour, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), may tell the Prime Minister that cherries are there to be picked and cake is there to be eaten, but however sweet it seems fudge is no way to run the country. So can she tell us straight? There are £400 million of public contracts that have full or partial EU funding and are due to expire in the next four months. Does she intend to renew or replace them, many of which are with education and skills facilities, or does she need to find a bus to write it on first?

[The Prime Minister]

Obviously, while we are still members of the European Union, we are looking at maintaining our relationships within the EU and maintaining our obligations and rights as a member of the EU. One issue that will be looked at in relation to the withdrawal agreement is what happens to contracts that are in place at the point at which we leave and what arrangements will pertain to those contracts.

[Richard Graham (Gloucester) (Con)]

I welcome the balance and realism in the Prime Minister’s speech. To allay the concerns of those who have continually argued that the only deal available to us would be a clone of previous deals with other countries, will my right hon. Friend confirm today that both her Government and the European Commission’s preparations show clearly that the deal reached with us will be unique, bespoke and multi-tiered, and will confirm the continuing existence of many areas of co-operation between our two areas, while respecting the result of the referendum?

[The Prime Minister]

My hon. Friend is absolutely right. This is a relationship that we will be building across a number of areas. I have spoken specifically about economic partnership and in most detail about the goods trade between the EU and the UK in the future. There is the security partnership as well and our work on civil judicial co-operation. There is a whole range of areas in which we will be building a new relationship but a continuing good relationship with the EU, because we may be leaving the EU, but we are not leaving Europe.

[Stephen Timms (East Ham) (Lab)]

The reality, unfortunately, is that the hard Brexit that the Prime Minister is now pursuing will lead inexorably and inevitably to a hard border in Northern Ireland. Between Canada and the United States, there are border checks of exactly the kind that she rightly says—unlike the Foreign Secretary—that she does not want in Northern Ireland. Will she confirm that she cannot name a single example anywhere in the world of an international border with no customs union and no border checks? It is a fantasy.

[The Prime Minister]

The Opposition need to stop thinking in this binary fashion—that either you are in a customs union or you cannot have suitable customs arrangements. This is exactly the problem. We have set out very clearly the options that are available. I have elaborated on another aspect of the relationship—notably, the regulatory standards. These two go together in building that trade relationship, which means no hard border between Northern Ireland and Ireland.

[Robert Neill (Bromley and Chislehurst) (Con)]

May I congratulate the Prime Minister on the pragmatic tone of her statement and her speech, which fits the natural tenor of our party, as well as our country? May I also congratulate her on her recognition of the importance of civil judicial co-operation in this matter, but will she accept that, consistent with the findings of the Justice Committee in the last Parliament, the Lugano convention arrangements are not a sufficient basis on which we should seek to go forward, as they are both more costly and slower than the existing procedures? We need something better than that.

[The Prime Minister]

We will be looking very closely at the arrangements that we want to put in place in relation to civil judicial co-operation. What is interesting about the Lugano convention is that it shows that the European Union is willing to enter into arrangements with other countries, so there is no reason why we cannot do that once we have left the European Union.

[Heidi Alexander (Lewisham East) (Lab)]

If continued ease of trade with Europe for our financial services firms, broadcasters, insurance providers and IT companies ends up being dependent on an EU immigration regime that is broadly similar to that which we have at the moment, what will the Prime Minister choose: the economy or her precious immigration targets?

[The Prime Minister]

When the British people voted to leave the European Union, one of the issues that they were voting on was the need for this country to take control of its borders to bring an end to free movement, and we will do exactly that.

[Several hon. Members rose—]

[Sir Edward Leigh (Gainsborough) (Con)]

Thank you for picking the succulent cherry at last, Mr Speaker. It seems to many of us that the Prime Minister’s calm good sense is moving the country from the gloomy valley of “Project Fear,” peopled by the shades of former Prime Ministers, into the hopeful uplands of “Project Reality”. What could be more unifying and more Conservative than her pragmatic approach of proceeding by sensible, pragmatic and moderate steps to re-establish the sovereignty of Parliament?

[The Prime Minister]

I thank my hon. Friend; I think that is absolutely right. Negotiations are taking time. They have been set out, as we know, in article 50 for those two years. What is important is that we approach them with the right, pragmatic, calm approach, but recognising in all this the optimistic future that lies ahead for the United Kingdom.

[Tom Brake (Carshalton and Wallington) (LD)]

The Prime Minister has one chance to pull back from the abyss described in her own impact assessment. Is she willing to stand up for the majority in this country who do not want the disastrous hard Brexit and give Parliament and the public a meaningful vote that includes the option of staying in the EU, and to vote for an exit from Brexit, or will she let herself be dragged down by the inconsequential and deluded men who sit on her Front Bench and become the third Conservative Prime Minister in history to be brought down by Europe?

[The Prime Minister]

There was a time when the Liberal Democrats actively wanted a referendum on EU membership. We gave the people a referendum, they voted, and there will be no second referendum, no exit from Brexit; we are leaving the EU and delivering on the vote of the people.

[Helen Whately (Faversham and Mid Kent) (Con)]

May I thank the Prime Minister for her clear-sighted approach—as opposed to one that sees our negotiations with the EU through foggy red lenses of a battle between socialism and capitalism—and commitment to securing an agreement that is good for the whole UK and that will endure the test of time?

[The Prime Minister]

My hon. Friend has raised an important point that nobody else has referenced: this agreement needs to endure. The worst thing would be if we came to an agreement that in a few years was beginning to unravel. It is important that the agreement be an arrangement and partnership with the EU that will, as she says, stand the test of time.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

The Prime Minister accepted in her Mansion House speech last week that the UK would not be able to trade on the same terms with the EU post Brexit. Under her Government’s calculations, how much of a hit will her Brexit be to the UK economy?

[The Prime Minister]

The idea that we can benefit only from carrying on working in exactly the same way is wrong. We will have a different partnership and relationship with the EU. Yes, there are some hard choices for us to make and some areas where access will not be the same as in the past, but that does not mean that the country’s economy cannot go from strength to strength as a result of getting the right relationship with the EU and trading around the rest of the world.

[Andrew Selous (South West Bedfordshire) (Con)]

How can we best ensure that the considerable good will that many EU countries have towards the UK is fully reflected in the negotiating mandate given to Michel Barnier by the EU?

[The Prime Minister]

I discussed with President Tusk last week the approach that the UK thinks appropriate, and I hope that we can have a good and open dialogue in our future negotiations. I have set out my proposals for the UK’s future partnership, and we look forward to hearing from the EU what its proposals are.

[Ian Murray (Edinburgh South) (Lab)]

What will the Government do if any or all of the Prime Minister’s five tests are not met?

--- Later in debate ---

[The Prime Minister]

We are working to ensure that our five tests are met.

[Andrew Bridgen (North West Leicestershire) (Con)]

Canada did not pay anything for its comprehensive free trade deal with the EU. Given that we will be the biggest export market for EU goods after we leave and are offering a very generous divorce package, contingent on a deal, does my right hon. Friend agree that we should be expecting and demanding a much better deal than Canada got?

[The Prime Minister]

I am clear, and have said several times, that the relationship we already have with the EU is such that we are in a different position from Canada. We can have a free trade agreement and economic partnership that goes well beyond that which the EU negotiated with Canada.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

The Prime Minister has admitted that life will be different, so does she now accept her own Government’s comprehensive analysis, which many of us have been to see in the Treasury? It shows that the gains from trade will be offset by the losses and that there will be a hit to our economy in every scenario that involves leaving the single market and customs union—with borrowing going up, austerity continuing and deregulation coming through—and if not, can she explain how on earth this is in the national interest?

[The Prime Minister]

The analysis I think the hon. Gentleman is talking about did not actually analyse the sort of arrangements we are talking about for our future economic partnership.

[Ross Thomson (Aberdeen South) (Con)]

In her statement, my right hon. Friend reaffirmed her commitment to strengthening the UK as we leave the EU. Does she agree therefore that, if the Scottish Government are to be true to their word about reaching an agreement with her Government, they should immediately drop their plans for a dangerous and unwelcome EU continuity Bill, which is driving a sledgehammer through the devolution settlement?

[The Prime Minister]

I agree with my hon. Friend that the continuity Bills are unnecessary. What everybody needs to do—and certainly what we as a Government are doing—is focus on getting the arrangements right, particularly in relation to clause 11, and carry on negotiating to make sure we get it right for the future.

[Layla Moran (Oxford West and Abingdon) (LD)]

Staying in Euratom is vital for jobs and ground-breaking scientific research throughout the United Kingdom. Given that the Prime Minister now wants us to remain a member of EU agencies, and has accepted a role for the European Court of Justice, will she listen to those in the industry and ensure that we stay in Euratom?

[The Prime Minister]

I have referred to the interests that both the UK and the European Union have in our maintaining a close relationship with Euratom in the future. Membership of Euratom is an integral part of membership of the European Union, and we are coming out of Euratom as we are coming out of the EU, but, as the hon. Lady will know, we are making arrangements to ensure that we can maintain that close relationship.

[Mr Speaker]

I call Rebecca Pow.

[Rebecca Pow (Taunton Deane) (Con)]

Thank you, Mr Speaker. I was just about to give up.

Much as I love gardening, I do not grow cherries, but if I did, I would want to pick them, and if I had a surplus I would want to trade them, openly and fairly. Does the Prime Minister agree that we need a balance, supporting a wider range of sectors than other free trade agreements? Does she agree that that is in both our interests and that we must have fair and open competition for everyone?

[The Prime Minister]

I congratulate my hon. Friend on her entrepreneurial spirit. She is absolutely right. We want to ensure that there is fair and free competition. I have referred to binding commitments in relation to state aid and competition because I think it important that if we are to have that free trade, we are able to do so on a basis that is truly, fairly competitive.

[Mr Speaker]

It is nevertheless of great interest to learn about the gardening habits of the hon. Member for Taunton Deane (Rebecca Pow). I feel duly uplifted by that discovery. I simply say to the hon. Lady: never, never give up.

[Wes Streeting (Ilford North) (Lab)]

At the time of the referendum, both Tony Blair and Sir John Major warned of exactly the scenario faced by the Prime Minister now in relation to the Northern Ireland-Republic border, which is presumably why a majority of people in Northern Ireland voted to remain in the European Union. If everything is as plain sailing as the Prime Minister suggests, why has the Foreign Secretary written her a memo entertaining the prospect of a hard border? Given that he has undertaken to publish that memo but has not found time to do so, perhaps the Prime Minister could prod him—or even jab him as hard as necessary—to get that memo out of him as soon as possible.

[The Prime Minister]

The answer to the hon. Gentleman’s question is that the Foreign Secretary has not said that. He is absolutely clear that there will be no hard border between Northern Ireland and Ireland. That is the position of the Government, and that is what we are working on. We have set out proposals, and I look forward to discussing them with the Commission and the Irish Government.

[Wes Streeting]

Clip him round the earhole. Get the memo out of him.

[Jeremy Lefroy (Stafford) (Con)]

Thank you very much, Mr Speaker. I am not sure that my family would say that.

May I thank my right hon. Friend for two things in particular? The first is her absolute upholding of the United Kingdom—our United Kingdom—and our internal trade within our United Kingdom. The second is her point about the frictionless border. In my area of the west midlands, that is incredibly important. We are manufacturing exporters, and we rely on “just in time” deliveries to enable us to export our fine products around the world.

[The Prime Minister]

The point about the importance of the integrated supply chains that we now see across the UK and the rest of the European Union has been made to me, and to others in the Government, by businesses. That is precisely why I said what I did in my speech about regulatory standards. Many businesses have made it clear that, to maintain those supply chains, they need to be able to operate on the basis of the same regulatory standards. That is why we want to have that frictionless border, and why we have made proposals to do just that.

[Mr Speaker]

Let us hear from another very well-behaved person—in fact, a cerebral academic, I think. Nick Thomas-Symonds.

[Nick Thomas-Symonds (Torfaen) (Lab)]

I am most grateful for the compliments, Mr Speaker.

The Prime Minister has said that alignment is possible in two ways, either by having the same rules or by having the same consequences flowing from different rules. Which of those two categories will the automotive sector fit into, given that so many jobs in the country depend on it, not least in my constituency?

[The Prime Minister]

It will clearly be up to Parliament to decide which rules apply in the future. As I pointed out in my speech on Friday, the automotive industry is a very good example of what I said in response to the question from my hon. Friend the Member for Stafford (Jeremy Lefroy) about integrated supply chains. We have been clear about this. Choices will be made about the areas where it is right—where Parliament will say that it wants an identical law, and where it wants the same outcome but wants to achieve it by a different means. Many businesses have made it very clear that they want to maintain the same regulatory standards, which is why that is one of the options that will be available.

[Alberto Costa (South Leicestershire) (Con)]

Yesterday, Italy had its general election. My hon. Friend the Member for Gainsborough (Sir Edward Leigh) and I met Luigi Di Maio, leader of the Five Star Movement, whose party has led in the results today. Over the last two years, Mr Di Maio and I have corresponded; he was my guest here in Parliament, and I invited the Foreign Secretary to meet him two years ago. Given the Prime Minister’s commitment to ensuring that this country has maximum access to the single market while coming out of free movement, which is exactly what Mr Di Maio has suggested Britain should have, should she not meet him as soon as possible?

[The Prime Minister]

We are of course looking with interest at the results of the general election in Italy, and we will of course enter into discussions with the Italian Government when that Government are formed.

[Wera Hobhouse (Bath) (LD)]

The Prime Minister has struggled today to find any examples of a customs border without physical border checks, and indeed every expert we have heard in the Select Committee on Exiting the European Union has said that no such thing exists in the world, so how long does the Prime Minister think it will take to agree and implement this new thing in the world, if she thinks it is possible?

[The Prime Minister]

A number of Opposition Members suggest that we can adopt something only if somebody else is already doing it. Actually, what we have put forward is a number of proposals to deal with this issue of a customs arrangement, together with the commitments on regulatory standards that ensure we get that frictionless border between Northern Ireland and Ireland, and we stand ready to sit down and discuss them with the Commission and the Irish Government.

[Andrew Percy (Brigg and Goole) (Con)]

Last week, Siemens announced a £200-million investment that will create 700 jobs in Goole. That proves the value of the economy of the north, so as the Prime Minister negotiates for Brexit, as well as obviously looking out for the interests of Northern Ireland, the City and Scotland, will she look out for the interests of the north? That requires approaching this process with flexibility, but it also means standing up for the voters of the north, who voted in huge numbers to leave, and who, since the referendum, have been patronised and insulted as being too thick, too northern or too racist.

[The Prime Minister]

The aim is to ensure that when we leave the European Union, we have a result that is good for the whole United Kingdom—not just Scotland, Wales and Northern Ireland, but the whole of England, including the north. My hon. Friend is absolutely right that voters in the north of England voted overwhelmingly to leave the EU. This Parliament gave them that vote; it gave the people of the United Kingdom that vote, and it is right that we as politicians deliver on that, rather than talking, as the Liberal Democrats do, about a second referendum. The Labour party, too, will not rule out a second referendum. It should be listening to the people and giving them what they voted for.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

First chlorinated chicken, then hormone-pumped beef, and now a trade war. Are those really a price worth paying to keep holding hands with Trump? We should be holding him to account.

[The Prime Minister]

We are discussing with the United States of America a potential trade deal, and we will also be doing that with other countries around the world, such as Australia, because we are ensuring that we are developing the economy of the future for this country; that will bring jobs and prosperity to this country in years to come.

[Bill Wiggin (North Herefordshire) (Con)]

I congratulate my right hon. Friend, but can she confirm that, during the implementation period, we will be free to sign international trade agreements?

--- Later in debate ---

[The Prime Minister]

That is certainly what we intend to put in place. We will have the details of the implementation period confirmed fairly soon, but we are clear that we need to be able to sign those trade agreements during that implementation period.

[Clive Efford (Eltham) (Lab)]

Are there any circumstances in which, following the transition period, we would make a financial contribution to the European budget in order to have access to any markets?

[The Prime Minister]

No. One of the key elements of the first stage of negotiations was the financial settlement, and the details of that were set out in the joint report we published in December. We have said that if we chose to be a member of any agencies, such as on the security front—I have cited Europol in the past—we would of course expect to pay some costs of membership of those agencies, but we have agreed that financial settlement with the European Union.

[Huw Merriman (Bexhill and Battle) (Con)]

In her message to the European Union, the Prime Minister rightly said that we have a shared interest with it in getting this right. Does she agree that the 498 MPs who gave her the mandate to trigger article 50 have a shared interest in putting the national interest first?

[The Prime Minister]

My hon. Friend is absolutely right. As well as Parliament voting overwhelmingly to give people the referendum, it also voted overwhelmingly to trigger article 50, and every Member of this House should be behind the Government as we do what we are doing, which is delivering on that.

[Thangam Debbonaire (Bristol West) (Lab)]

What assessment have the Prime Minister and her colleague, the Secretary of State for Exiting the European Union, made of mitigating the impact of leaving the customs union on the creative industries, which are so important to my constituency?

[The Prime Minister]

I referred to the creative industries in my speech, and particularly to broadcasting, and the arrangements that we want for the future.

[Martin Vickers (Cleethorpes) (Con)]

I echo the words of my hon. Friend the Member for Brigg and Goole (Andrew Percy) about voters in the north. The voters in our coastal communities were even more supportive of Brexit, and the memories of the original negotiations when the fishing industry was sold out linger on, which is one of the reasons for the heavy vote to leave. My right hon. Friend speaks about the fairer allocation of fishing opportunities; can she give us an absolute assurance that that will mean that the British fishing industry will always be paramount?

[The Prime Minister]

Yes. I am well aware of the concern in many fishing communities about the common fisheries policy, and as I said in my speech and repeated in my statement, we will make absolutely sure that we see fairer allocations for the UK fishing industry in the future.

[David Hanson (Delyn) (Lab)]

I support the Prime Minister’s objectives for Northern Ireland, but given the absence of a customs union, will she give us more detail about what will happen to the hundreds of lorries that go each day from Dún Laoghaire in Ireland to Holyhead, from Larne in Northern Ireland to Stranraer in Scotland, and from Belfast to Liverpool, because that is still not clear to the businesses running those operations?

[The Prime Minister]

It is precisely because the movement is not just between Northern Ireland and Ireland, but between Ireland and other parts of the United Kingdom, that we believe the right way to approach this is to find a solution in our relationship with the European Union overall. That is precisely why it was right for me to say that we did not accept the European Commission’s proposal, which would have meant a border down the Irish sea.

[Richard Drax (South Dorset) (Con)]

My hon. Friend the Member for Cleethorpes (Martin Vickers) has rather stolen my thunder, but I would still like to press the Prime Minister on the fishing question. Once we get our fishing waters back, as I understand we will, will it be our sovereign Government who decide exactly who fishes in our waters?

[The Prime Minister]

Yes, we will be an independent member of the body that negotiates and discusses access to waters, and it will be this Government who determine our fisheries policy.

[Peter Grant (Glenrothes) (SNP)]

On 24 January 2017, the Brexit Secretary assured us that we were going to get

“a comprehensive free trade agreement and a comprehensive customs agreement that will deliver the exact same benefits as we have”.—[Official Report, 24 January 2017; Vol. 620, c. 169.]

It is clear from the Prime Minister’s speech last week and her statement today that that promise has been broken, unless she has invented some kind of Schrödinger’s customs union that we can be in and out of at the same time. Why should anyone else in the world trust this Government to negotiate trade deals in good faith when this Parliament cannot even trust assurances made by her Secretary of State at the Dispatch Box?

[The Prime Minister]

We will indeed be negotiating a comprehensive free trade agreement. That is the economic partnership that I set out in my speech. Within that, we will have a comprehensive customs arrangement that will enable us to continue to trade with the European Union on as tariff-free and frictionless a basis as possible.

[Matt Warman (Boston and Skegness) (Con)]

I welcome the subtle and detailed approach to Brexit that the Prime Minister laid out in her speech. As she well knows, the issue of immigration was crucial in seats such as mine. Can she remind hon. Members that, as we leave the European Union and as freedom of movement ends, it will fall to this House to draw up our immigration policy in the future?

[The Prime Minister]

I can absolutely confirm to my hon. Friend that it will be for Parliament to decide what our immigration policy is for the future.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

Vauxhall motors in my constituency is fighting for survival, and we desperately need future trading arrangements in the automotive sector to be no less favourable than they are now. Can the Prime Minister give a guarantee on that today?

[The Prime Minister]

I set out very clearly in my speech on Friday why I separated goods trade from other areas of trade with the European Union. I have also set out how we can ensure that we maintain the integrated supply chains that are currently so important to industries such as the automotive industry.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

We read in the Financial Times today that the United States

“is offering Britain a worse ‘Open Skies’ deal”

than the one we currently have as an EU member. Is that not a precursor to the hundreds of deals that the UK will have to negotiate once we leave the EU?

[The Prime Minister]

No. We are discussing with a number of countries around the world how we can improve our trade arrangements with them even before we have left the EU and how we can get into the position of having a free trade agreement with those countries.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Following the Prime Minister’s speech on Friday, she was asked by a journalist, “Is Brexit worth it?” She failed to give a direct answer; will she answer today? Is Brexit worth it: yes or no?

[The Prime Minister]

Yes.

[Kirsty Blackman (Aberdeen North) (SNP)]

The Prime Minister finds herself between a rock and a hard place—or perhaps between two brick walls—when she talks about not agreeing with any of the three trade scenarios put forward in the Government analysis. She has plans for a bespoke deal that will not be any of those scenarios, so does she expect GDP to be hit or to increase in her bespoke scenario, and by how much?

[The Prime Minister]

We have said all along that we are looking for a bespoke trade deal with the European Union. We have said all along that that will recognise the integrated nature of the UK’s markets with the EU’s markets at the moment, but also that we will be able to continue to trade around the rest of the world. As for growth, I am pleased to say that growth has actually been up, in recent figures.

[Daniel Zeichner (Cambridge) (Lab)]

I think the Prime Minister has acknowledged that there will be costs to this process, but most people ask this reasonable question when incurring a cost: “How much?” The Government have made some projections, so if we randomly say that there will be a 4.8% cut to GDP, will she explain how much that would mean for every man, woman and child in this country?

--- Later in debate ---

[The Prime Minister]

As I said in answer to one of the hon. Gentleman’s hon. Friends earlier, the analysis that was set out did not include an analysis of the sort of trade deal that we are looking to negotiate with the European Union.

[Nic Dakin (Scunthorpe) (Lab)]

I thank the Prime Minister for speaking to President Trump about his outrageous desire to slap punitive tariffs on UK steel and aluminium. What did he say, and what will she do, working without the EU27, both now and in the future, to ensure that such protectionism does not prosper in this world?

[The Prime Minister]

I was pleased to have the opportunity to raise the issue with President Trump yesterday. Of course, as current members of the EU, we continue to discuss with the EU what approach is being taking in relation to steel, but when we are outside the European Union, we want to continue to be a country that promotes free trade but recognises the overcapacity in steel at the moment. My response is clear: as I said at the G20, and as the G20 has actually adopted, we need a multilateral approach to deal with that overcapacity, and that is what we will continue to promote.

[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

In the light of the US President’s move to impose tariffs on steel and aluminium imports, will the Prime Minister rethink her strategy for a free trade deal with the US following Brexit? Will she act now to ensure that our steel industry is not plunged into crisis once more?

[The Prime Minister]

This Government have taken a number of steps over recent years to help support the steel industry. As I have said, I have raised the issue with President Trump, and we continue to discuss it within the European Union. There is this issue of overcapacity in the steel market around the world, which is why the issue has been raised at the G20. Bringing China into discussions around this is an important element of that, and I continue to believe, as I just said to the hon. Member for Scunthorpe (Nic Dakin), that the right way to approach the issue is to deal with it on a multilateral basis.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

If the Prime Minister is really so confident about getting a multi-layered, customs-type arrangement—the cherry- picked deal that she is looking for—will she explain the purpose of the Haulage Permits and Trailer Registration Bill?

[The Prime Minister]

That particular Bill is, of course, a contingency Bill. Members on both sides of the House ask us to ensure that we make contingency arrangements for every scenario, and that is exactly what we are doing.

[Martin Whitfield (East Lothian) (Lab)]

Thirty-nine bottles of Scottish whisky are exported abroad every second. As the seconds tick by until our departure, can the whisky industry look forward to the same benefits as now, or will it be in a worse position?

--- Later in debate ---

[The Prime Minister]

I believe that the Scotch whisky industry will be in a better position when we are able to have trade deals with countries across the rest of the world. I was very pleased to take a representative of the Scotch Whisky Association with me on my recent trip to China, which is a huge market that could open up to Scotch whisky.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

The UK already has some of the most unbalanced regional growth of any country in Europe, and the Prime Minister’s own Brexit analysis suggests that any deviation from the benefits of the single market and the customs union will only exacerbate that problem. Does she not agree that that is a dereliction of duty and that she should undertake to ensure there is no detriment to the nations and regions of the UK as a result of exiting the European Union?

[The Prime Minister]

Not only will we ensure that we have an exit from the European Union that works for the whole United Kingdom, but as I said on the steps of No. 10 when I first became PM, we want a country that works for everyone, which means every part of the United Kingdom. This is a Government who, through our industrial strategy and our economic policy, are ensuring that we will see growth and prosperity in every part of the United Kingdom.

[Karin Smyth (Bristol South) (Lab)]

The Prime Minister said today that no one should doubt our commitment to the entirety of the joint report published in December. With regard to Ireland, paragraph 47 of the joint report stated:

“The two Parties have carried out a mapping exercise, which shows that North-South cooperation relies to a significant extent on a common European Union legal and policy framework.”

Will she commit to publishing that mapping exercise?

[The Prime Minister]

We have done a number of pieces of work in relation to the border between Northern Ireland and Ireland, looking at the institutions and the structures that currently exist. I said in my Lancaster House speech that, as and when we are able to do so, we will talk about the next stage of our negotiations. We stand by the joint report, and I set out on Friday more detail of the proposals that will meet exactly what was in that report in relation to the border.

[Jim Shannon (Strangford) (DUP)]

I commend the Prime Minister for her courage and fortitude in standing firm. The Republic of Ireland and the EU have made suggestions for a border within the customs union. The people of the United Kingdom of Great Britain and Northern Ireland have voted to leave the EU and the customs union in March 2019, so can the Prime Minister confirm that, should the Republic of Ireland and the EU refuse to make an agreement, it will be the EU, and not the UK of Great Britain and Northern Ireland, who will be responsible for hard border controls?

[The Prime Minister]

We are, of course, clear that we will ensure that there is no hard border between Northern Ireland and Ireland, but we should approach it by saying that this is something for us to discuss with the European Commission and the Irish Government, because it is in all our interests to ensure there is no hard border. It is also in the interests of the Irish Government to ensure there is no border down the Irish sea, given the extent of trade between the rest of the United Kingdom and Ireland. It is for all of us to work together on this.

[Christian Matheson (City of Chester) (Lab)]

I have listened to the answers today, and I respectfully suggest to the Prime Minister that the policy of vague sloganising and keeping her fingers crossed that everything will be all right is simply insufficient. Will she confirm that no deal we get from the proposed solutions she has identified will be more advantageous, financially or economically, than our current position?

[The Prime Minister]

The hon. Gentleman talks about vagueness and lack of clarity. Last year, we published 14 separate papers setting out the UK Government’s proposals on a number of aspects of our future relationship and on our withdrawal from the European Union. We have been making the running in setting out our proposals —through the Lancaster House speech, through the article 50 letter, through those papers published in the summer and through the Florence speech, the Munich speech, and now the Mansion House speech. We wait to hear the response from the European Union, but I am optimistic that we are going to get a deal that works for the UK. I am optimistic about this country because of the actions being taken by this Government.