The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
As we take this debate into the early hours of tomorrow morning, I hope that we will be able to replicate the good humour, good manners and resilience that the Prime Minister showed during her two hours in front of the House this afternoon. [Interruption.] Yes, Mr Speaker, I understand that. As a doctor, I admire good bladder control.
Mr Speaker
I am able to stay in the House for many, many hours. We are not talking about two hours, for the avoidance of doubt. I will very happily be here for 12 hours, if necessary, because I take my responsibilities to the House of Commons seriously.
Dr Fox
It is a pleasure to open this debate on global Britain and the economy as we consider how to honour the decision made by the British people, in a democratic referendum, to leave the European Union. When Parliament made the decision to hold the referendum, it made a contract with the British people that said, “We are unable, or unwilling, to make a decision on this constitutional relationship. This will be decided by the British people and Parliament will abide by that decision.” We have a duty to honour our side of that contract, whether we ourselves voted to remain or leave in the referendum. When we, as Members of Parliament, voted in that referendum, we did so in the knowledge that our vote carried an equal weight to that of other citizens of our country. For Parliament to attempt in any way to thwart or block Brexit by any means would be an act of vanity and self-indulgence that would create a breach of trust between Parliament and the people, with potentially unknowable consequences.
Toby Perkins (Chesterfield) (Lab)
The right hon. Gentleman is raising an important point about the obligation of Members of Parliament as a result of the referendum, but we have also had a general election since that day. That general election could have given the Government an overwhelming majority, which would have seen Brexit move one way, but it did not; it ended up with a very tight House. As a result, we have a Prime Minister who could have sought to bring all of us along with her, but instead seems to have taken a very tribal view. What advice has the right hon. Gentleman given to the Prime Minister?
Dr Fox
The advice I will give to the hon. Gentleman is this. The point was raised in the previous Session that no House can bind its successor, but 80% of Members of this House were elected on a manifesto that said they would honour the result of the referendum. We have a duty to do so if we are to keep faith with our voters.
Henry Smith
Is it not also the case that the Government spent more than £9 million of taxpayers’ money on a leaflet to every UK household saying that the decision of the British people would be respected, so the claim that people did not know what they were voting for or what the outcome would be is nonsense?
Albert Owen
On a point of order, Mr Speaker. I do not make points of order lightly, as you know. The Prime Minister was asked a question earlier about respecting the will of the people and referendums. A number of Members—including, I think, the Secretary of State—voted against the Government of Wales Act 1998 after the 1997 referendum decided the matter. That should be on the record when he lectures us about Brexit.
Mr Speaker
The hon. Gentleman has put his point on the record, and it is there for people to observe if they wish.
Dr Fox
The hon. Gentleman confirms my wisdom in not giving way to him.
It is clear that there are three possible outcomes to our deliberations. I want to say at the outset that Members will determine which route they choose, and while we may disagree, I do not doubt either their motives or their patriotism as they choose the course available to this country. The first option is to accept the deal that has been negotiated—and there is no other deal available. The second is to leave the European Union with no deal, and the third is to have no Brexit at all. Before considering the implications of those options, it is important to underline the fundamental strengths that underpin the UK economy, the changing patterns of our trade and the future patterns of global trade.
Several hon. Members rose—
Dr Fox
I will give way in a moment.
The UK has an excellent economic success story to tell. Since a Conservative-led Government came to power in 2010, exports have grown by 38.1%, at around 6% per year, driven by an increase in services exports of 54.8%. We sold some £618 billion-worth of goods and services in 2017, up 10.9% on the previous year. New figures released last week by the Office for National Statistics revealed that exports of goods and services in the year to November 2018 were worth £630 billion, growing by £13.9 billion since the previous year. There have now been 32 consecutive months of exports growth.
As the UK considers future free trade agreements with the likes of the United States, Australia, New Zealand and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership countries, goods exports to those countries continued to boom. To the USA, they were up to £54.9 billion; to Australia, up to £5.1 billion; to New Zealand, up to £869 million; and to CPTPP countries, up to £28.4 billion. There was other notable goods exports growth to non-EU markets—up 29.2% to Nigeria, up 27.3% to India, and up 18.5% to Thailand. That news comes as London retained its position as the top tech investment destination in Europe earlier this week. According to PitchBook and London & Partners, the capital received £1.8 billion-worth of tech investment in 2018—more than Berlin and Paris combined. So much for the failure that would result from a vote to leave the European Union.
Charlie Elphicke (Dover) (Con)
Is not the key prize of leaving the EU that this country will be able to do trade deals around the world? If we adopted the advice of the Labour party, which is not to leave the EU in any meaningful way, we would not be able to do any trade deals across the globe.
Dr Fox
I will come to the specifics of the freedom to negotiate free trade agreements and the Opposition’s policy on that. The point I was making was that when we voted to leave the European Union, we were told that the very act of voting to leave would result in massive job losses, a loss of investment in the United Kingdom, a collapse in confidence and a recession in the UK economy. Nothing could be further from the truth. We have created jobs. We have seen record inward investment, and we have seen our exports rise to record levels.
Chris Bryant (Rhondda) (Lab)
The Secretary of State said that there were three possible outcomes to our deliberations. Actually, the three possible outcomes to our deliberations today and tomorrow are: first, that the package is agreed; secondly, that the package falls; and thirdly, that the package is amended. The former Brexit Secretary—the middle one—told the Procedure Committee, on legal advice:
“if amendments were passed which purported to offer approval, but only subject to changes being made to the text of either the Withdrawal Agreement or the Future Framework, this would, in effect, amount to Parliament not approving the documents that were put to it. In this circumstance, the Government would therefore not have the authority to ratify the Withdrawal Agreement.”
Does the Secretary of State agree that, if any amendment is carried tomorrow, it will not be possible for the Government to ratify the withdrawal agreement?
Mrs Sheryll Murray (South East Cornwall) (Con)
I have a lot of admiration for my right hon. Friend. He is a much more experienced Member of Parliament than me and has been in this place for a long time. Could he explain to me how we would have no Brexit at all? As I understand it, and as many people are saying, even if the withdrawal agreement falls, the date of 29 March is in the European Union (Withdrawal) Act 2018.
Dame Cheryl Gillan (Chesham and Amersham) (Con)
I am grateful to my right hon. Friend for giving way, particularly as when we stood on our manifesto in 1997, our manifesto was so clearly against Welsh devolution. Does he agree that companies such as GE Healthcare, which is headquartered in my constituency and has just spent £12 million investing in the local economy, are right when they say that ratification of the withdrawal agreement would provide business with the certainty it needs? In contrast, an exit on no deal would present considerable challenges for their operations, supply chains and, most importantly, their customers.
Dr Fox
As usual, my right hon. Friend makes her point concisely. The argument has come from a wide range of business sectors that, while they can price in risk, they cannot price in uncertainty, and certainty is what they are looking for.
It is a matter of fact that the relative importance of the European Union as an export market for the United Kingdom has been declining over the last decade, falling from 48.9% of the total in 2010 to 45.2% in 2017. Of course, the importance of the UK to EU trade varies from country to country. Figures compiled by Japanese investment bank Nomura show that Belgium’s economy is the most reliant on trade with the UK, with around 8% of Belgian GDP dependent on trade with Britain. That is the highest level within the EU27. Belgium exports over £30 billion-worth of goods to the UK, which is Belgium’s fourth largest export market. Belgium’s Finance Minister has previously called for a quick trade agreement with the United Kingdom post-Brexit to protect thousands of jobs in that country. When trade is looked at purely in terms of exports, Ireland is the most exposed country—about 13% of all Irish exports end up in Britain—and the Netherlands also has a large reliance on the UK for exports and GDP.
At the same time as the proportion of Britain’s exports to the EU has fallen, we are trading more with other partners around the world. We export a huge variety of commodities—for example, we sold £22 billion-worth of food, feed and drink abroad in 2017. In the year to November 2018, we sold £33.7 billion-worth of cars, £25.2 billion of medicinal and pharmaceutical products, and £24.6 billion of mechanical power generator products—from aircraft engines to gas turbines, and from steam generators to nuclear reactors. So much for Britain not producing anything any more; we are actually experiencing a renaissance in manufacturing in this country.
We also export a great many services. We are, in fact, the world’s second largest services exporter. In the year to September 2018, we sold some £82.4 billion-worth of business services, £61 billion of financial services and nearly £38 billion of travel services. Here, across the sectors, the UK has huge comparative advantage. Services account for almost half of all our exports—42.4% going to the EU and 57.6% to non-EU countries.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Will the Secretary of State give way?
Lucy Powell (Manchester Central) (Lab/Co-op)
Will the Secretary of State give way?
Seema Malhotra
The Secretary of State is making a very important point about our need to increase trade deals and trade relationships across the world. He has mentioned India, and on Friday I had a very good meeting with businesses in the Indian Business Network that are keen to increase trade with Britain. Does he agree with me that the relationship we have with the EU in trade is not just about our trade with the European Union? We use about 70 trade deals that the EU has negotiated with other countries for about £150 billion-worth of trade. Will the Secretary of State assure this House that there will still be access to those trade deals after we leave the European Union?
Dr Fox
I am grateful to the hon. Lady for raising a very important point. Yes, the Government’s intention is, of course, that we will get this deal through, in which case, when it comes to an implementation period, we will have the opportunity for automatic roll-over. However, as the House would expect us to do, the Government are also preparing, in case there is no deal, to be able to have continuity of these trade agreements. A number of them are close to being signed, and when they are signed, the Government will put them to the House so that the House can make a judgment on them.
Andrew Bridgen (North West Leicestershire) (Con)
Will the Secretary of State confirm that when we leave the European Union we will be the biggest export market for EU goods? Probably something like 17% of all EU exports will be coming to us. Has he or his Department made any estimate of how many millions of jobs in the EU are reliant on this trade with the UK?
Dr Fox
That is why it is to our mutual advantage to get a free trade agreement with the European Union. I hear people say that it would be fine simply to leave purely on World Trade Organisation terms, but if WTO terms were so advantageous, we would not be looking to have a free trade agreement with the United States. It is very clear that free trade agreements are one of the ways in which we can overcome some of the restrictions on most favoured nation status. I imagine that it would be to the advantage of both parties—both the EU27 and the UK—to come to a free trade agreement of some form after we leave so that we can maximise that trade between us.
Dr Fox
I will give way again in a little while.
World trade is at a pivotal moment. We are at the intersection of a series of major global trends—trends so seismic that they have transformed or will transform economies and societies across the world. Services are now a larger part of the world economy than ever before, and they are more easily traded across borders thanks to the internet and digital telecommunications. We live in an emerging knowledge transfer-based trading system, where an engineering report, a 3D printer design, or new advances in machine learning can be just as valuable as the contents of a cargo container.
The transfer of services and expertise in things such as product design and software engineering are becoming ever more important. A revolution in e-commerce is now under way. It is already a major component of world trade—from some of the world’s largest corporations, such as Alibaba and Amazon, to the thousands of small companies that have never before been able to trade internationally. Major new opportunities are arising in the rapidly developing commercial and consumer markets of south-east Asia, Africa and Latin America, and it is essential that Britain leverages its unique strengths to realise them.
Lucy Powell
I thank the Secretary of State very much. Shortly after the referendum, when he first took up the post, he said that the day after we left the EU, which is now only a few weeks away, he would have dozens of trade deals ready to go. How is that going?
Dr Fox
Perhaps the hon. Lady was not listening to the answer I gave earlier, but that process is getting to the point where we are likely to be signing some of those agreements in the very near future, at which point we will put them to the House of Commons.
Not only has there been a revolution in e-commerce, but Britain’s consumers have embraced it, with about 20% of all goods in the UK bought online. At the same time—this is less well known—of all goods sold online, the UK is third globally behind only China and the United States. Last year, one in seven global online shoppers bought UK goods. It is therefore essential that we are able to operate an independent trade policy, allowing us to access the EU market, which remains hugely important to us, without tying our hands in relation to our ability to access markets in some of the world’s fastest-growing economies.
This deal enables us to develop a trade policy that will mean we can make the most of the opportunities of new technologies and the changing shape of the global economy, striking a balance between protecting the markets we already have and tapping into new and rapidly expanding markets elsewhere.
Kirsty Blackman (Aberdeen North) (SNP)
Specifically on e-commerce, the Government promised that in early 2019, the new online service for overseas businesses sending parcels to customers in the UK would be available. Will the Secretary of State tell us when it is going to be available?
Dr Fox
The Department for International Trade is putting increased resources into improving the elements we have to enable businesses to operate online, and we will continue to do so.
We must have a policy that is flexible and nimble, with which we can make the most of the opportunities of new technologies and the changing shape of the global economy. We can boost productivity, raise living standards and promote competitiveness. Working with Parliament, business, civil society and the devolved Administrations, this deal allows us to have an independent trade policy for the first time in over 40 years.
Of course, we have not got everything that we want in this deal, but neither has the EU. There is give and take in any negotiation, and compromises have had to be made. Today, however, I would just like to emphasise what this agreement and the political declaration do. They give the United Kingdom the freedom to decide for ourselves who comes here, how to support our farmers and who fishes in our waters, as my right hon. Friend the Environment, Food and Rural Affairs Secretary set out to the House the other day. They also give us the freedom to open up new markets to world-class British goods and services around the globe.
The political declaration sets out a clearly agreed vision for the UK’s future relationship with the EU and provides instructions to negotiators. What the political declaration does is set out an unprecedented arrangement for UK-EU economic co-operation, provide ambitious arrangements for services and investment, and ensure that our relationship is far more comprehensive than any other free trade agreement the EU has signed to date.
Emma Little Pengelly (Belfast South) (DUP)
The Secretary of State has been a great champion for global Britain—or, as I would like to call it, global United Kingdom—but surely he must be disappointed by many elements of this withdrawal agreement, which ties our hands for the next number of years on the types of trade deals we can do. That situation is exacerbated and much greater in Northern Ireland, where we could, in the words of the Attorney General, be not permanently but almost indefinitely in a backstop that would prevent us from being part of a new UK trade deal situation.
Dr Fox
I will not go back over the ground that the Prime Minister went over extensively this afternoon, but I would say that we perhaps need to take cognisance of the wording of the letter that came from the two EU Presidents—of the Commission and of the Council. They have a very legalistic view, and when they say that something carries legal weight, it tends to do so. I share many of the reservations that many in this House have about the backstop, but I believe that the construction of the backstop and the relationship set out in the political declaration mean that the risk of getting to the backstop is much less than I fear the risk of our being unable to achieve Brexit is. For me, that has been one of the key political balances; Members across the House will have to make that decision for themselves.
The political declaration will enable both parties to deliver the legal agreements that will give the future relationship effect by the end of 2020, covering an economic partnership, but also a security partnership and specific agreements on cross-cutting co-operation.
There has been much speculation about what the alternative to the agreement is—that point was raised by the hon. Member for Rhondda (Chris Bryant), who is no longer in his place. Let me be clear: there is no alternative agreement to that which has already been negotiated. The EU and the UK have painstakingly thrashed out a deal that has been endorsed by our Prime Minister and the 27 leaders of the other EU member states. Failure to accept a negotiated deal will lead us, as I said earlier, to either no deal or, worse, no Brexit.
Toby Perkins
I am grateful that the right hon. Gentleman could not find any better alternatives. Does he accept that the deal has been painstakingly negotiated on the basis of the red lines that the Prime Minister set out right at the start, and that if we had different red lines, we could end up at a different destination?
Dr Fox
The hon. Gentleman should not put himself down in that way; that is normally the business of those on the other side of the House.
It is clear that if we do not accept a negotiated deal, the two other outcomes would be no deal or potentially no Brexit, and I do not think that either of those are acceptable. The Government have been clear that we neither want nor expect a no-deal scenario, but of course the Government will continue to do the responsible thing and prepare for all eventualities in case a final agreement cannot be reached. However, the evidence is clear that the best way forward for our businesses, as my right hon. Friend the Member for Chesham and Amersham (Dame Cheryl Gillan) eloquently set out, and for jobs and for our collective prosperity, is to have a Brexit deal.
Some have suggested that it would be possible under article XXIV of the general agreement on tariffs and trade to maintain tariff-free trade as an alternative to the negotiated agreement in a no-deal scenario. There are two immediate problems facing that suggestion. The first is that it would require the agreement of the EU and be based on the expectation of a future trade agreement or customs union to be operable in WTO law. Although it might be argued, as I am sure many in the House would, that that would be in the economic interests of the EU27, we all know from experience that the politics of the EU can take precedence over economic pragmatism. In the political atmosphere of no deal, it would be difficult to cultivate the good will necessary for that to proceed. Secondly, that suggestion would not deal with all the regulatory issues—the non-tariff barriers—that are so important to many businesses.
Sir Oliver Heald (North East Hertfordshire) (Con)
My right hon. Friend will be aware that last week the Prime Minister met a group of Members from all parts of the House with manufacturing constituencies. There was concern coming through from all parts of the House and from both sides of industry that a no-deal situation would be disruptive and bad for manufacturing. Does he agree that, with the assurances that have come through today from the European Union, Members in all parts of the House who want to ensure that we avoid a no-deal situation could do a lot worse than vote for the deal that is on the table?
Dr Fox
I think that my right hon. and learned Friend, in making his points so succinctly, has just saved himself several hours of waiting. I believe that having a deal is preferable to no deal, but I am not one of those who takes the hyperbolic view that not having a deal would be cataclysmic to our economy. Yes, it may be disruptive, but it is entirely survivable for the UK economy. It is just not preferable, when it comes to the choice between having a deal and not having a deal, which is why I think it is advisable for the House to vote for this agreement.
There are, of course, Members of the House who want there to be no Brexit at all. I believe that would be a democratic disaster. It would be a betrayal of the commitments given by this House to respect the result of the EU referendum and, let me remind the 80% of the Members of the House who were elected on a promise to honour the result of the referendum, the manifesto commitments. There are many who say that democracy exists on the understanding that a voter can change their mind. That is undoubtedly true, but democratic consent by the people is also founded on the understanding that the result of the vote will be carried out. Failure to do so would undermine the trust of the people. Not only that, but it would be politically unacceptable, a betrayal of our principles and, potentially, a seismic and existential threat to our political system. We should not underestimate it. It would create a chasm of distrust between the electors and the elected of an unprecedented nature—a wilful destruction of the reputation of Parliament in the eyes of the people.
Boris Johnson (Uxbridge and South Ruislip) (Con)
I congratulate my right hon. Friend on his speech and particularly on his fortitude in his attitude towards a no-deal Brexit, which I think is entirely laudable. I know that he is a great admirer of the opportunities to increase our trade with the United States. Does he agree that it is a great sadness that the ambassador of the United States was forced to point out that, under this deal, we will be locked so closely into the EU customs union as to be unable to do a deep and thoroughgoing free trade deal with the United States, or indeed with any other significant economy?
Dr Fox
Our freedom to negotiate free trade agreements will be dependent on the level of alignment that we have. What is different about the political declaration, compared with the previous, Chequers proposals, is that there is no specific mention of a common rulebook or frictionless trade. Indeed, it sets out an ambition that we would determine the freedom that we would have by that level of alignment. We need to look, sector by sector, at what level of alignment we would want to have, in order to maximise our freedom. For example, there was a misunderstanding that the United Kingdom would not have control over tariffs on manufactured goods, which clearly we would have and which would be a very big ask in relation to, for example, the United States’ automotive sector in any potential free trade agreement with the United Kingdom.
Several hon. Members rose—
Dr Fox
I will make some progress. I am cognisant of the fact that some 80 Members are down to speak in tonight’s debate.
In coming to these deliberations, the House should also be under no illusion that the United Kingdom could somehow retain the status quo of its EU membership. This is not possible. It was not possible even before the referendum was called, because the EU itself is changing. The EU is committed, let us remember, to ever closer union. Even since the referendum, there have been calls to move to qualified majority voting in areas from VAT to common foreign policy. These may indeed be right for those who wish to move towards greater integration, but they are not the right course for our country. Remaining in the European Union would be either to tie the United Kingdom into a more integrationist future or to create ever more tension and friction between ourselves and our European partners.
Sir Mark Hendrick (Preston) (Lab/Co-op)
Can the Secretary of State tell the House whether he believes that a deal with the United States would be one of the easiest in human history?
Dr Fox
No one who has ever done a negotiation with the United States would use the word “easy” to describe it. That is something that comes across rather quickly to anyone who has had to deal with the United States trade negotiators. It is different, however, from negotiating a trade agreement with the European Union, the difference being that if we are looking at a free trade agreement with the United States, we have to diminish the regulatory and legal differences to get closer to a trade agreement. With the European Union, we begin from identity of regulation and legislation on our trading relationship, which should technically make it much simpler.
What we do not want to do is introduce unnecessary friction and tension. Sadly, that is something that both the Labour leader and the hon. Member for Brent North (Barry Gardiner), the shadow Trade Secretary, as well as the rest of the Opposition, have failed to understand.
As has been made clear on numerous occasions, there could be no joint decision making on trade agreements if the UK is outside the EU in the way that the Labour party pretends there can be. There would be no fully independent trade policy as part of the EU customs union, and the Labour party has absolutely no chance—none, zilch, zero—of negotiating a better deal than the one we have now. There is no need to take my word for it. In response to accusations that Labour’s trade policy was “total fantasy”, Jean-Claude Piris, the long-serving former director general of the EU Council’s legal service, said:
“Obviously this is ruled out. It is contrary to the basic EU principle of autonomy of decision making. Don’t even think about it!”
The Labour party clearly has not thought about it to any satisfactory degree.
Labour’s policy, in so far as I understood it following the Leader of the Opposition’s interview yesterday on “The Andrew Marr Show”, is that Labour intends to hold a general election and potentially another referendum, including all the legislation that would be required for that, all within 72 days of tomorrow’s vote in order to carry out their fantasy policy proposals. It is a total shambles for an Opposition. If they think they could take that to the British public in a general election, they are even more foolish and naive than I had previously considered them to be.
Dr Fox
I will give way to the hon. Lady in a moment.
Let me just say something briefly about two other suggestions. Some Members have raised the prospect of a so-called Norway or EEA option. Re-joining the EEA agreement would mean that we would have to accept all the four freedoms of the single market, including free movement of people. It would not on its own be sufficient to enable our commitments to Northern Ireland to be met, including on avoiding a hard border between Northern Ireland and the Republic of Ireland. We would be stuck in the single market. If this were combined with staying in a customs union, which some have advocated, we would also be prevented from pursuing a fully independent trade policy. It would also leave our financial services industry, as the Chancellor has said, exposed to a rapidly evolving body of EU regulation over which we would have no influence. In many ways, it would be worse than remaining in the European Union, leaving us with many of the restrictions but, in perpetuity, unable to utilise any of the levers of decision making.
Ruth George
The Secretary of State is making a case against all the alternatives, but is it not the case, as he himself has set out, that there are no legally binding certainties in the future declaration? As he himself set out, we will be seeking to please both the USA and the EU on regulatory alignment. Those things are impossible to do. All this deal signs us up to is years more of uncertainty.
Dr Fox
But we will be taking those decisions. That is the whole point of leaving the European Union: those decisions will be in the hands of the British Government and the British Parliament for us to determine what level of regulatory alignment we want, if any, to maximise our access to trading markets.
Several hon. Members rose—
Dr Fox
I will give way one more time in a moment.
There are also Members of this House who have advocated a second referendum, but there are three substantive problems with that suggestion: on practical grounds, democratic grounds and constitutional grounds. First, in practical terms, it would take time for this House and the other place to pass the necessary primary legislation. The Electoral Commission would also have to fulfil its statutory duty to assess the intelligibility of the question to be posed, a process that takes about 10 weeks. A further 12 weeks would be required between the question being determined and the referendum actually being held. It is therefore completely impractical to hold such a referendum before the United Kingdom leaves the European Union on 29 March. It is entirely possible to see such a process taking up to a year before it could be completed.
Secondly, there are clear democratic grounds to oppose a second referendum. This House voted overwhelmingly to hold the referendum to give the decision on Britain’s membership of the European Union to the British people. A “people’s vote” has already been held and it produced a clear, unambiguous instruction from the British electorate for us to leave the European Union. We are honour-bound to respect that.
Kevin Hollinrake (Thirsk and Malton) (Con)
My right hon. Friend is making a very impassioned speech in support of the Prime Minister’s deal. I too am supportive of that deal. On a point of clarification and accuracy, when he talked about the Norway arrangement he said there would be no opportunity to influence the rules. Are there not the powers of co-determination for EEA nations within that body to be able to at least have a say at the initial stages when legislation is drafted?
Dr Fox
I have to say in all candour to my hon. Friend that having spoken to a number of my colleagues in Norway, their advice was to retain the ability to have our own free trade agreement and not restrict our freedom in the way that they have.
This House confirmed that we would respect the result of the referendum when we voted overwhelmingly to trigger article 50 and begin the process of negotiations.
Dr Fox
I have already given way to the hon. Lady and I will not do so again.
This was further confirmed by the last general election in which the two main parties, comprising over 80% of the total votes cast, promised to respect the referendum result. Let us imagine that a second referendum were held in which the remain side won, perhaps with a narrow majority but with a lower turnout. Leave supporters like me could well begin demanding a third referendum, a best of three. Where would the process actually end? We have had a people’s vote and we need to respect the people’s vote. Another referendum would not settle the issue or heal our divisions—quite the opposite. It would further divide our already fractious country at a time when we need to come together.
There is also the constitutional issue. If we overturn this referendum result, we will be setting a precedent that could be applied to other referendums too. Furthermore, a second referendum would create prolonged, not diminished, political and economic uncertainty.
Richard Graham (Gloucester) (Con)
Is not the point about the future trade relationship and the opportunities for global Britain that without this withdrawal agreement there can be no negotiation with Europe, whether to achieve a Canada-plus solution or any other solution? The danger with no deal is that without an agreement at the beginning, we would never be able to structure a future free trade agreement with the European Union.
Dr Fox
As usual, my hon. Friend makes a very good point very clearly. There are, across the House, a number of potential destinations that Members want to see: a Norway-type option, EEA-plus, a Canada-style agreement or FTA-plus. What they all have in common is one thing: there needs to be a withdrawal agreement before we are actually able to have any of them. That is why this particular deal is so important.
Several hon. Members rose—
Dr Fox
I will give way one more time before I finish.
It is time to consign the divisions of the referendum to the past. It is time to raise our sights and acknowledge that there is a world beyond Europe and there will be a time beyond Brexit to build the economic opportunities that this country needs to thrive as a truly global Britain. The withdrawal agreement and political declaration are a way forward to achieve this model; to bring us together, to seize the new opportunities out there in the world economy and to lead our country to a more prosperous, stable and secure future.
While the UK is leaving the European Union, we are certainly not leaving Europe. This agreement provides a foundation on which to build our continued co-operation with our European partners on trading, political and security matters. It will enable us to play a full and active role on the global stage, working closely with friends old and new, and building an independent trade policy that caters to the strengths and requirements of the UK economy. The deal allows the UK to continue to participate in the EU’s existing free trade agreements during the implementation period, as has already been mentioned. Crucially, it will also have the benefit of being able to negotiate, sign and ratify new trade agreements and lay the foundations for future relationships with our trading partners across the world. We need to take a balanced approach, acknowledging the continued importance of our EU partners while taking advantage of opportunities beyond the borders of our continent in the high-growth economies of Africa, Asia and South America, which I believe will be key to our economic success as a global Britain.
The deal will give us the freedom to implement our own trade remedies regime, to protect jobs and livelihoods from unfair trade, to set our own trade tariffs and to take up our independent seat at the World Trade Organisation for the first time in more than 40 years. That will be a key opportunity to further our support for the international rules-based trading system and ensure it delivers free and fair trade and, in particular, to pioneer the liberalisation of trade in services.
As I have outlined, there are fundamental changes in the global economy that simply did not exist when the Uruguay round was concluded, and it is right that we position the British economy to take advantage of them. Even as the information revolution continues to transform our world at a staggering pace with the system of free and fair international trade that uplifts it and underpins it, there is still much to do to reduce existing and emerging tariff and non-tariff barriers to trade that already pose a serious threat to global growth. Britain can play a key role in that.
We have an abiding duty to do what we believe is right for our country. Members will take different views, and, as I said at the outset, I respect their ability to do so. I do not in any way undermine their patriotism in taking different views. The agreement carries out the democratic will of the British people to leave the European Union, as expressed by the referendum. It allows the United Kingdom to take back control of our borders, laws and money and delivers a close and co-operative partnership with the European Union but, crucially, outside it. It delivers for the British economy.
No negotiated agreement is likely to deliver everything that anyone wants—perhaps no agreement ever could, but for our communities, our prosperity and for future generations, I believe this agreement is the right thing for the United Kingdom. I commend the Prime Minister’s deal to the House.
Barry Gardiner
I will conclude on exactly the point that the hon. Gentleman raises, because it is at the heart of the conundrum facing the House and the country. If he gives me time, I will get there.
Barry Gardiner
The Secretary of State makes a bewildering point, because I did not talk about being ill informed about the triggering of article 50, but he makes his own point and perhaps he understands what he means.
Now that the Prime Minister has finally brought her deal back to the House of Commons, it is hardly surprising that Members on both sides do not believe it to be in the best interests of our country. I know that she is now reaching out to her rather unlikely new-found friends in Unite and the GMB, and even to Opposition Members, but colleagues will recognise that this is a paradigm of too little, too late. Workers’ rights and environmental standards and protections are a vital part of Labour’s concern about the future relationship. We cannot agree that the UK should be in a situation in which we might fall behind our EU counterparts. The principle of non-regression from current levels makes it almost impossible to take action against the loss of a specific right but, as the TUC has made clear, what is required is not vague assurances but the binding long-term guarantees that working people need. These are not, even now, being offered.
On 10 December, the Prime Minister called a halt to the first part of the debate. She acknowledged that the package of the withdrawal agreement and the future political framework, as it stood, would not gain the support of the House. She undertook to change it and to come back with legally binding assurances on the backstop after listening to Members’ objections. Indeed, the Secretary of State for International Trade went as far as to say:
“I think it is very difficult to support the deal if we don’t get changes to the backstop… I’m not even sure if the cabinet will agree for it to be put to the House of Commons.”
Well, here it is, and here he is, but the only thing that has changed is that the Prime Minister has lost yet more votes, and more of the confidence of Members and of the country. The letter from the EU that she has brought back is a long way from the significant and legally effective commitment she promised last month. It is a reiteration of the EU’s existing position. She has delayed proceedings in a futile bid to run down the clock but, once again, nothing has changed.
Before the intermission in our debate, when the Prime Minister was trying to press her Back Benchers to support her, she claimed repeatedly that there was no possibility of renegotiation, but then, when defeat seemed inevitable, she scrambled back to Europe in a vain attempt to do precisely that.
Barry Gardiner
The hon. Gentleman is extremely courteous and always punctilious about the truth of what is said in this Chamber. I simply stated the fact that the Prime Minister had said it was impossible to renegotiate but that, when she faced defeat, she tried to do what she herself had said was impossible.
The Government could have used some of this time to respond to the Treasury Committee by providing proper economic assessments containing an analysis of the Northern Ireland backstop and setting out the short-term economic impact of the Prime Minister’s proposed deal. On 11 December, the Committee published its report on the withdrawal agreement and the political declaration. It concluded:
“The White Paper scenario, which is akin to the Chequers proposal, represents the most optimistic and generous reading of the Political Declaration, insofar as it is consistent with it at all. It does not represent the central or most likely outcome under the Political Declaration. Therefore, it cannot be used to inform Parliament’s meaningful vote on the Withdrawal Agreement. The information provided includes no analysis of the Backstop, and there is no short-term analysis of any of the scenarios, including on public finances and on regional and sectoral job losses and gains. The Government has only provided long-term analysis, which does not show how the economy will transition to a new trading relationship, or the path taken by inflation and unemployment”.
The Chair of the Committee, the right hon. Member for Loughborough (Nicky Morgan), commented:
“The aim of this report is not to recommend how MPs should vote, but to ensure that MPs are as informed as possible when it comes to choosing a division lobby. Yet the Government has made this difficult to achieve. The Committee is disappointed that the Government has modelled its White Paper, which represents the most optimistic reading of the Political Declaration, rather than a more realistic scenario. The Committee is also disappointed that the Treasury has not analysed the backstop and fails to include short-term analysis of any of the scenarios, including impacts on public finances and on regional and sectoral job losses or gains.”
In the Chancellor’s letter responding to the Committee, he revealed that
“there is not yet sufficient specificity on detailed arrangements for modelling purposes, and therefore the provisions of the backstop have not been included in the analysis.”
Indeed! Members are being asked to take one of the most important decisions for our country on the basis of inadequate financial information, and it is precisely this lack of specificity that has left Members across the House unable to have confidence in the Prime Minister’s deal.
The Chancellor of the Exchequer (Mr Philip Hammond)
Will the hon. Gentleman acknowledge that the cross-Government modelling to which he refers looked at the situation 15 years out? Of course it does not reflect the inclusion of the backstop. The backstop, if it were used, would be a temporary arrangement, so it is completely irrelevant to the stable state 15 years out.
Barry Gardiner
Of course it was right to look at the 15-year long-term assessment. Nobody is disputing that. Indeed, I will quote later from precisely that analysis. The problem is—and this is not just my criticism but the all-party Treasury Select Committee’s criticism—that these crucial elements of how we will transition to the future relationship have not been analysed or presented to the House.
John McDonnell (Hayes and Harlington) (Lab)
I congratulate all the contributors to today’s many faceted debate. It has been a healthy and straightforward debate where people have been honest with one another and straightforward, and I welcome that.
Mr Speaker, I also congratulate you on your typical display of dedication to the democratic process of this House. You have sat through every hour of every day of this debate, and, as always, you have assiduously performed your duties and done so with fairness, good grace and good humour and I am grateful for that.
In many of the recent vox pops in the media, people have expressed some frustration with the way that Members of this House have been dealing with the response to an implementation of the referendum decision. I say mildly—very mildly at this hour of the morning—that it has not helped that some of the Executive have ascribed false motives to Members across the House with whom they disagree and have accused them of playing games. I do not believe that Members have been playing games; they have treated this matter with the seriousness that it deserves. The vast majority of hon. Members have lived up to the adjective in their title and have behaved honourably. In this debate, hon. Members are asserting the very role ascribed to them: to represent their constituents and to do so to the best of their ability; to exercise their judgment in the long-term interests of their constituents, yes, but, as we have seen from speaker after speaker today, in the long-term interests of this country as well.
For too long, Parliament has been taken for granted by successive Executives. What we are witnessing at the moment is not a coup, as was reported in one newspaper, but an overdue redressing of the balance between the Executive and Parliament and within our democratic system. It is a simple and not a very radical rebalancing and, as we have heard in this debate, the overwhelming majority of Members are seeking not to ignore the referendum result, but to make sure that we do not have imposed on us a Brexit that undermines our economy, costs people their jobs and threatens their livelihoods. Members here are seeking to do their best by their constituents and by the country. They have done that tonight with candour and, in many instances, with some courage.
Let me just turn to some of the many excellent contributions in this debate—there were so many that I will not be able to refer to them all. There are Members on the Government Benches who, with straightforward honesty and, yes, with some courage, expressed their views in opposition to their own party’s position.
The right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) expressly set out his views and concerns about the impact that this deal would have on his constituents, and his view that there is a need to go back and get another deal. The hon. Member for Upper Bann (David Simpson), on behalf of the DUP, honestly expressed the concerns of his party with regard to the backstop. He said clearly that nothing has changed in recent weeks from the promises that there might be some legal assurances that could be provided. I have some disagreement with the right hon. Member for Uxbridge and South Ruislip (Boris Johnson); I do not believe that this is some plot by the deep state.
We have heard from Government Members who have resigned their positions to stand firm on their principles, including the hon. Member for Fareham (Suella Braverman). We have heard from the hon. Member for Bournemouth West (Conor Burns), who explained very honestly that, in his view, this is a fundamentally flawed deal. The hon. Member for North East Somerset (Mr Rees-Mogg) extremely eloquently demonstrated that, in his view, the political declaration in particular is a vacuous statement. The hon. Member for York Outer (Julian Sturdy) expressed his grave concerns, saying that this could be a gamble that could cost growth and jobs.
We heard from the hon. Member for North West Leicestershire (Andrew Bridgen), who is in his place, as well as the hon. Member for Gillingham and Rainham (Rehman Chishti) and the right hon. Member for Chelsea and Fulham (Greg Hands), who gave us the expertise that he has garnered over the years, particularly with regard to European relations. We heard from the hon. Members for South East Cornwall (Mrs Murray), for Amber Valley (Nigel Mills), for Witney (Robert Courts) and for Newton Abbot (Anne Marie Morris), all of whom expressed their honest views that this deal will not provide the certainty that they or their constituents want.
A number of my hon. Friends, with some emotion, expressed their understanding of the motivation for a number of their constituents who voted leave. We heard from my hon. Friend the Member for Blackpool South (Gordon Marsden). This is the first time I have heard Tacitus quoted in this House; that was a breakthrough in itself. In fact, he quoted not only Tacitus, but Oliver Cromwell and Joan of Arc. In addition, my hon. Friend the Member for Scunthorpe (Nic Dakin) expressed very clearly how his community felt left behind in the overall processes of investment. Similarly, my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) spoke about the divided society. My hon. Friends the Members for Midlothian (Danielle Rowley), for Preston (Sir Mark Hendrick), for Birmingham, Edgbaston (Preet Kaur Gill), for Merthyr Tydfil and Rhymney (Gerald Jones) and for Stroud (Dr Drew) all explained the impact of austerity on their constituents that had motivated people in those constituencies to vote leave.
Other Members expressed their concerns about the need for more assurances, including my hon. Friend the Member for Rotherham (Sarah Champion), who made a clear point about the need for assurances over human rights provisions. My hon. Friend the Member for Batley and Spen (Tracy Brabin) mentioned that the levels of deprivation in her constituency may well have motivated her constituents to vote leave. My hon. Friend the Member for Gedling (Vernon Coaker) explained to us all what our responsibilities are now—to come together, take this matter seriously and seek, as best we can, a way forward so that we can take as many people with us as possible.
We heard from others about the social consequences. I pay tribute to the hon. Member for Aberdeen North (Kirsty Blackman), who set out the economic consequences. The hon. Member for Orpington (Joseph Johnson) was extremely clear about the impact that this deal would have on the financial services of this country, and said that we need further assurances on protections. The same is true of my hon. Friend the Member for Huddersfield (Mr Sheerman), the hon. Member for Totnes (Dr Wollaston), my hon. Friend the Member for Westminster North (Ms Buck), the hon. Member for Bracknell (Dr Lee), my hon. Friend the Member for Hove (Peter Kyle) and the hon. Member for Edinburgh North and Leith (Deidre Brock), all of whom explained in detail the social, cultural and economic consequences that this deal would have in their particular areas.
We heard from my hon. Friend the Member for Cardiff West (Kevin Brennan), and my hon. Friend the Member for Canterbury (Rosie Duffield) spoke about the impact on her community, particularly on the university. There were others, including my hon. Friend the Member for Walthamstow (Stella Creasy), the hon. Members for Glasgow Central (Alison Thewliss) and for Edinburgh West (Christine Jardine), and my hon. Friend the Member for Hammersmith (Andy Slaughter), who went beyond the economic consequences to discuss the social and cultural consequences in his multicultural constituency.
I thank those Members who have brought their ideas forward including those who have supported the “Common Market 2.0” proposals such as my hon. Friends the Members for Manchester Central (Lucy Powell) and for Feltham and Heston (Seema Malhotra). But I also thank those Members who, yes, have been very honest and straightforward about their view that there should be another public vote, including my hon. Friends the Members for Ilford North (Wes Streeting), for Huddersfield, for Hove and for Feltham and Heston, who all expressed our own frustration—what has been happening over the last two years in these negotiations that has brought us to this situation?
This debate has been an exemplary demonstration of this legislature performing its constitutional role. It has confirmed for me, and I believe for many other Members, the belief that the deal we will vote on tomorrow is not supported by a majority in this House, and possibly—
John McDonnell
I will come on to that—[Interruption.] I will come on to that, if the right hon. Gentleman will allow me to finish. We have maintained a level of respect in this debate so far—let us try and keep it like that.
I believe that this deal will not go through tomorrow—it will not have the support. But I think we have increasingly found tonight that we recognise that our first responsibility is to avoid the catastrophe of a no-deal Brexit. The House spoke clearly on this only recently when voting on the amendment to the Finance Bill tabled by my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper). Let me remind the House of some of the assessments that motivated that vote at that stage. We have had some reference to them tonight—it is about the impact of no deal. The Government’s own economic analysis put the potential cost of a no-deal Brexit at nearly 10% of GDP. The Bank of England said that it could cause more economic damage than the financial crisis of 10 years ago, including unemployment of 6% and a 14% hit to house prices. The CBI has warned—
The Chancellor of the Exchequer (Mr Philip Hammond)
This has been a wide-ranging and interesting debate that has exposed clearly the different and passionately held views on all sides of the wider argument about Brexit. In my contribution to this debate on 6 December, I set out the economic case for a deal, the damage that would be likely to result from disruption of cross-border supply chains in a no-deal scenario, and how a deal would deliver a dividend for the UK economy in terms of both economic growth and the public finances. Those arguments remain valid, and you will be relieved to hear, Mr Speaker, that I do not intend to repeat or elaborate on them.
We have heard arguments in favour of the full range of options for both exit mechanics and the future relationship between the UK and the EU. Indeed, I think I heard pretty much the full range within the speech of the hon. Member for Brent North (Barry Gardiner). At one moment, I thought he might be on the brink of applying for associate membership of the European Research Group.
A large group of my hon. Friends recognised in their contributions the logic of the Prime Minister’s deal and the need for a compromise so that we can move on as a country. My hon. Friends the Members for Stafford (Jeremy Lefroy), for Thirsk and Malton (Kevin Hollinrake), for Harborough (Neil O’Brien), for Chichester (Gillian Keegan), for Waveney (Peter Aldous), for Gloucester (Richard Graham), for Hitchin and Harpenden (Bim Afolami), for Taunton Deane (Rebecca Pow), for Elmet and Rothwell (Alec Shelbrooke), for North West Norfolk (Sir Henry Bellingham), for Maidstone and The Weald (Mrs Grant) and for Halesowen and Rowley Regis (James Morris), and my right hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald), all made that point. I think my right hon. Friend the Member for Chelsea and Fulham (Greg Hands) was in that category as well.
My hon. Friend the Member for North West Norfolk probably summed it up best when he said that he himself would like “a 100% Brexit” but recognised that only 52% voted for it, so that to unite the country we all have to compromise. This is a time for individual sacrifice in the greater good.
Two of my hon. Friends were a little more blunt in their contributions: my hon. Friend the Member for Monmouth (David T. C. Davies) and my right hon. Friend the Member for Chesham and Amersham (Dame Cheryl Gillan) recognised explicitly that their motive for voting for the Prime Minister’s deal was a fear that the alternative might be no Brexit at all.
Peter Kyle
The Chancellor is praising other people for compromise, but if the deal is defeated tomorrow, will he stick to that principle and will he compromise further with other people who are expressing other views, particularly those of us who think that the public should be brought back into this discussion?
Mr Hammond
The deal that the Prime Minister has presented to Parliament very clearly is a compromise between the views of people on both sides of this argument. It will not deliver 100% of what anybody wants, and the Prime Minister herself has recognised that only this afternoon.
I want to mention my right hon. Friend the Member for New Forest West (Sir Desmond Swayne), because I think he summed up what is still a dilemma for many—that the middle is being squeezed from both sides—and I wish him well in his consideration of these important issues over the next 24 hours.
Opposition Members made many points. A group of them—the hon. Members for Rotherham (Sarah Champion), for Gedling (Vernon Coaker) I think, for Blackpool South (Gordon Marsden), for Scunthorpe (Nic Dakin) and for Merthyr Tydfil and Rhymney (Gerald Jones)—while clearly rejecting the Prime Minister’s deal, which I acknowledge, were all I think signalling that they would wish to be able to support a deal and to find a way forward, explicitly recognising that no one is going to get everything that they want.
I listened carefully to the contributions and the concerns that were expressed, and I believe that the architecture of the Prime Minister’s deal is capable of accommodating such concerns if that is what we as a nation want to do. It is in that spirit that the Government have accepted the amendment proposed by the hon. Members for Bassetlaw (John Mann) and for Don Valley (Caroline Flint). However, we must distinguish between adjustments to the negotiated future relationship and seeking to renegotiate the withdrawal agreement—something that is simply not deliverable. I shall return to that theme later.
A number of hon. Members on the Opposition Benches—the hon. Members for Bath (Wera Hobhouse), for Aberdeen North (Kirsty Blackman), for Midlothian (Danielle Rowley), for Edinburgh West (Christine Jardine) and for Huddersfield (Mr Sheerman)—simply wished to turn back the clock and pretend that this whole thing had never happened. I urge hon. Members expressing that view to consider carefully the wider consequences for our political system if that were to happen. I would say to Scottish colleagues who expressed that view that their arguments would be more powerful if they could show an ability to consider the consequences for the UK as a whole, as well as the consequences for Scotland.
I thought the hon. Member for Manchester Central (Lucy Powell) made a crucially important point, which is that the House needs to find a way to show what it is for, not just what it is against. She went on to make, I think, the sole pitch of the evening for the Norway model.
Joseph Johnson
Has the Chancellor by any chance read the powerful letter in today’s Financial Times from the former EU Financial Services Commissioner, Jonathan Hill? He said that he had yet to meet anybody who felt that the Norway model would work for the UK’s financial services industry. In fact, he felt that EEA members had so little influence on the EU’s rule making for financial services that they were grateful if anybody even replied to any of their correspondence.
Mr Hammond
I have been making effectively the same point myself for about the last year. We concluded that the EEA model would not work for Britain’s most important sector, financial services. The deal that the Prime Minister has negotiated has within it good and strong provisions for financial services and will be a much better result for the financial services industry than the EEA model would be.
Mr Hammond
I will give way briefly to the hon. Gentleman and then I must make some progress.
Lloyd Russell-Moyle
Will the Chancellor explain to us, then, how this deal gives our country more say in how Europe defines its financial services, which we will want to continue to trade with, compared with what we currently have as members?
Mr Hammond
Without wishing to digress too far, the simple point is this. Under an EEA model, the whole of the UK financial services sector and all its sub-sectors would be subject to European Union regulation in perpetuity, without any ability to opt out. Under the model that we have agreed with the European Union under this deal, we will be able to seek equivalence where it is right for us to do so and not to seek equivalence where it is clearly not in our interest to do so, for example in the insurance sector.
A group of my hon. Friends—my hon. Friends the Members for North West Leicestershire (Andrew Bridgen), for Bournemouth West (Conor Burns), for North East Somerset (Mr Rees-Mogg) and for Fareham (Suella Braverman)—made the case for what I will call an ideological Brexit: leaving with no deal and without any fear of the consequences. I profoundly disagree with them, but I respect their arguments. They are sincerely made and genuinely held.
A further group of my hon. and right hon. Friends—my right hon. Friends the Members for Chingford and Woodford Green (Mr Duncan Smith) and for Uxbridge and South Ruislip (Boris Johnson) and my hon. Friends the Members for York Outer (Julian Sturdy), for South Dorset (Richard Drax) and for Amber Valley (Nigel Mills)—made the case for getting a better deal and, implicitly, if that was not achievable, leaving without a deal. I have to say that getting a better deal is not a realistic outcome at this stage in the process. I will return to that theme in just a moment.
Finally, the argument was made by my hon. Friends the Members for Orpington (Joseph Johnson), for Bracknell (Dr Lee) and for Totnes (Dr Wollaston) and by the hon. Members for Ilford North (Wes Streeting), for Walthamstow (Stella Creasy), for Hammersmith (Andy Slaughter), for Stroud (Dr Drew) and for Westminster North (Ms Buck) for a second referendum. Most of those Members were clear that, in arguing for a second referendum, what they are hoping to achieve is a reversal of the Brexit decision.
With just 73 days left before we leave the European Union, we have to recognise the basic architecture of the process we are engaged in, the constraints within which we are operating and the nature of the decision we are faced with. We in this Parliament have essentially three routes open to us over the next few weeks: a negotiated deal where both the divorce arrangements and the future relationship, as well as how we manage the process in an orderly way, are agreed with the EU, with an implementation period guaranteeing a smooth transition; an exit with no deal and no transition, where key elements of the divorce such as the financial settlement will ultimately be determined by the courts, where protections for citizens will be unilateral, with an abrupt end to single market access and other privileges of membership for both businesses and citizens, and where there will be no agreed framework for managing the process of resolving disputes, with all the attendant risks of disruption that that will bring; or the third option, a revocation of the article 50 notice and no Brexit at all.
Wes Streeting
I am grateful to the Chancellor for giving way. Throughout this process he has been far and away the coolest head around the Cabinet table, constantly advocating for the economic interests of the deal over some of the hotheads, many of whom left the Government. So why on earth, at this late stage, is he still countenancing the prospect of no deal? How can he justify spending billions of pounds on preparing for a no deal that he does not want, that the Prime Minister does not want, that this House does not want, that the country does not want and that businesses do not want? It is fuelling uncertainty, it is adding to anxiety and it is costing the taxpayer. It is reckless and irresponsible. Why on earth is a serious person such as the Chancellor still persisting with this absolute fantasy? It is a disgrace. Rule it out!
Mr Hammond
Mr Speaker, we are engaged in a debate here and, whether the hon. Member likes it or not, a number of my colleagues have advocated the merit of a no-deal exit. I have made it very clear that I do not agree with them, but I respect their position because it is a sincerely held position, consistently expressed. While I do not agree with them, I will vigorously defend their right to express their point of view.
Those are the three possible outcomes from where we are now.
Mr Hammond
I will not give way; I need to make some progress.
It is clear to me that the majority of this House is opposed to no deal, for very good reason in my view. When the British people voted narrowly to leave the EU, they did so at the end of a campaign that had emphatically promised them a better life outside the EU. Like the vast majority of us in this House, I won my seat at the general election on a manifesto pledge to deliver on that referendum decision. So although I did not make those promises, I feel bound to ensure that we not only deliver Brexit but do so in a way that makes good on the promise of greater prosperity. A no-deal Brexit would not do that and would therefore, in my view, be seen as every bit as much a betrayal as no Brexit at all.
Stella Creasy
I thank the Chancellor for giving way. He has just said that it is right for this country to do Brexit in a way that would bring prosperity. Will he say which of the Brexit scenarios, which his Department has done the figures for, show this country being better off?
Mr Hammond
It is very clear, and I have had the discussion in the Chamber many times, that the closer our relationship with the European Union, the closer the trading partnership we are able to maintain and the less friction there is in our trading relationships, the greater our prosperity and our economic growth will be. A no-deal Brexit would not do that.
I believe we have an obligation to deliver Brexit, and to do it through a negotiated deal that protects Britain’s jobs and Britain’s businesses. At the other extreme, a revocation of article 50 would indeed be seen as a betrayal. It would reinforce disillusion with the political system and it would seriously risk fuelling populism at a time when we in this country can least afford it.
David T. C. Davies
Will my right hon. Friend confirm that all the statistics, which are being thrown around somewhat inaccurately by some in this Chamber, show that under every and any scenario Britain will be better off? It is simply a case of how much better off—that is what we are arguing about.
Mr Hammond
My hon. Friend is of course right. A number of hon. Members have appeared to suggest in their remarks that we might be absolutely worse off in certain circumstances. The analysis the Government have published shows that that is clearly not the case. The country will be better off. The economy will grow in every modelled outcome. The question is merely by how much.
I believe the great majority of right hon. and hon. Members have either come or will come to the same conclusion as me: that the only Brexit that will protect our economy for the long run while honouring the referendum decision is a negotiated, orderly agreed Brexit, with an implementation period to allow a smooth process from our membership of the EU to a future close partnership with the EU that protects the vital trade, economic security and cultural links between the UK and our neighbours—in short, a deal.
Lucy Powell
I thank the Chancellor for his generous comments earlier about my contribution. To be clear—I say this to offer an olive branch to the Government—the EEA, Norway-plus, common market 2.0 option would involve us voting for the withdrawal agreement, but with a different political declaration that would more closely align us with the single market and the customs union. He might want to think about that before dismissing it.
Mr Hammond
The hon. Lady acknowledges something that the Chancellor of the Duchy of Lancaster said in his contribution a couple of days ago. It is important for us to remember that any form of negotiated solution requires a withdrawal agreement, and that has to include provisions around the financial settlement, citizens’ rights and the Irish border. The EU has made it clear that it is not prepared to renegotiate the withdrawal agreement that has already been negotiated.
I am not suggesting that all those who recognise the need for a deal support the Prime Minister’s deal. I know that that is not true, but I want to make the case that this deal can provide a way forward for all those who support a deal. I want to explain why those who call for a deal, but not this deal, as a number of Members from all parts of the House have done—people who dream of a negotiated arrangement without the Irish backstop or of single market access without the entry fee and without free movement of people—are simply dreaming, because the deal that is on the table represents the high water mark. A withdrawal agreement is a necessary precondition to any negotiated deal with the EU and to any form of transition or implementation period. Without a withdrawal agreement, the EU will not negotiate any form of future relationship.
On citizens and money, we have reached good outcomes in the withdrawal agreement. On the Irish protocol, clearly none of us is comfortable with the temporary backstop arrangement, which is why all of us—the UK Government, the Irish Government and the EU—will be seeking to avoid its use under any circumstances and have committed to using our best endeavours to ensure that it will never be used and that in the unlikely event that it is, it is replaced by new arrangements as rapidly as possible. It is not a trivial point that the backstop fundamentally challenges the EU’s core principles.
We should be in no doubt, either, that the EU means what it says about the withdrawal agreement not being open for renegotiation. If we want a negotiated future relationship of any kind—I say this to the hon. Member for Manchester Central—it will be based on the withdrawal agreement that is before the House tonight.
Sir John Hayes
We have heard once again that the backstop is undesirable and no one wants it. We have heard that it is temporary and an insurance policy. Every insurance policy is time-limited. If neither side wants it and everyone acknowledges that it is temporary, why can we not put a date on it and end it at a particular time? Surely that is not unreasonable.
Mr Hammond
I do not know how much engagement my right hon. Friend has with the insurance industry, but it would baulk at the notion that an insurance policy is time-limited. If someone is covered by an insurance policy against the acquisition of some terrible disease, such as asbestosis, it may be 10 or 20 years later that they discover they are a sufferer. They would expect the insurance put in place to cover them. The European Union and the Irish Government are very clear that the withdrawal agreement is negotiated on the basis that the backstop provides an absolute reassurance that in every circumstance, the Irish border will remain open.
The Prime Minister said earlier this evening that her deal is a compromise, and she was clear in her Lancaster House speech at the outset of the process that achieving an agreement would require compromise. The political declaration that has been achieved has exceeded our expectations in the commitments that the EU has made: an agreement to construct the closest economic relationship between the EU and any advanced economy in the world; a free trade area for goods with no tariffs, no fees, no charges and no quantitative restrictions; a commitment to an ambitious relationship on services and investment, including financial services, building on the most ambitious achievements of EU trade deals; and agreement to further co-operation across a wide range of sectors, from transport to energy and data. It provides a strong basis on which to negotiate the legal text of our future partnership agreement, and the Prime Minister has made it clear that we expect Parliament to play a prominent role as we shape the political declaration into a legally binding text.
Alison Thewliss
Despite what the Chancellor has just set out, the reality is that nothing he has described tonight will be as good as the situation we have now as an EU member state.
Mr Hammond
It is a balance, and I have personally come to the conclusion that the damage that would be done to our political system, the resulting instability and the economic consequences mean that the economic cost of going back would outweigh the economic cost of going forward. I am sorry if the hon. Lady does not agree, but I can assure her that I have thought very long and hard about this.
Those who believe, as his tests suggest the Leader of the Opposition does, that it is possible to have the exact same benefits of being in the EU while being out of it—[Interruption.] I know that the shadow International Trade Secretary agrees with me, because he wrote so in The Guardian this morning. Those people are simply wrong. I recognise that there are people on the Conservative Benches who have a principled objection to the Prime Minister’s deal. I respectfully disagree with them, but I recognise that their motives are honourable.
I wish that I could be as charitable about the Leader of the Opposition and the shadow Chancellor. They say they reject the Prime Minister’s deal because they want a strong and collaborative future relationship, but the Prime Minister’s deal delivers that. They say they want fair management of migration in the interests of the economy and communities, but the Prime Minister’s deal delivers that too. They insist on measures to defend rights and protections and to protect national security and on the capacity to tackle cross-border crime and to deliver for all regions and nations of the UK, but the Prime Minister’s deal does all those things already. The only one of the Labour leader’s tests that the Prime Minister’s deal does not meet is the demand that Britain should receive, as a non-member, the exact same benefits of membership—[Interruption.] I did not say the same thing. Even the Leader of the Opposition must be able to work out that such a demand could never be delivered, and of course that is why he made it. I say to him that it is time to put the national interest first, to stop chasing unicorns and to start engaging in the real debate.
The deal before the House honours our pledge to implement Brexit, delivering control of our borders, laws and money, while also fulfilling our vision for a future partnership with the EU that will support Britain’s prosperity and security in the years ahead. In short, it delivers the Brexit promised in the referendum. That makes it a remarkable achievement—a compromise that everyone in the UK can get behind, however they voted in the referendum. The ability to compromise and find a way through is, after all, one of our great strengths as a nation—it is what gives our society its resilience. It is a characteristic that has been less in evidence in the Brexit debate over the last couple of years, but one that we need to rediscover as a matter of urgency.
No one is going to get exactly the Brexit they want, but in this deal we have a way forward that everyone can live with. Time is not on our side. We as a House now need to move swiftly and decisively to get behind the deal, to make the tough choices needed to simultaneously deliver the Brexit people voted for, protect our economy and our national security and give people the brighter future they were promised. Neither no deal nor no Brexit will allow us to come together as a nation and move on. Both would leave a sizeable proportion of the population feeling cheated and betrayed. The deal is the compromise that can bring the whole nation together, and I commend it to the House.