The Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office (Michael Gove)
With permission, I would like to make a statement on preparations for the end of the transition period.
There are now just 100 days to go until the United Kingdom leaves the single market and the customs union, and that will be a moment of great opportunity, but also of significant change and challenge. It is vital that we all take the steps required to grasp those opportunities, and to meet and master those challenges. The Government are of course committed to negotiating a new free trade agreement with the EU before the end of the transition period, and those talks are progressing; but whatever the outcome of those negotiations, things will change for businesses and individuals as they trade with and travel to the EU. It is important that we, as parliamentarians, all understand that, and that we all take action to prepare.
Whether we secure a good FTA before January or not, whether we get a Canada-style deal or exit on Australian terms, we will have left the single market and the customs union, and that fact means adjustments for businesses trading with the EU; changes for citizens travelling to the EU; and, of course, new responsibilities for Government in both scenarios.
The superb civil servants at Her Majesty’s Revenue and Customs and their colleagues across Government are working with business to ensure that exporters and importers are ready for new rules. Every business trading with Europe will need to thoroughly familiarise itself with new customs procedures and, whether they develop their capacity in-house or work with a customs intermediary, enhanced preparation is vital. The Government have invested in increasing customs agent capacity and supported growth in the sector, and of course we stand ready to do more. HMRC is also able to support businesses to secure authorised economic operator, consignor and consignee status, which will ease the flow of goods.
Businesses that are fully ready for life outside the customs union will also be better prepared for the growing number of export opportunities outside Europe, as the UK establishes new trade relationships with partners across the globe following the highly successful conclusion of our new trade deal with Japan. Because preparing for customs procedures will be required with or without a free trade agreement, these adjustments cannot be left until the last minute. More and more businesses are becoming fully prepared, but there are still many that have not quite taken the steps they need to take. Our survey evidence indicates that while 78% of businesses have taken steps, just 24% believed that they are fully ready. Indeed, 43% of businesses believe that the transition period will be extended, even though the deadline for any extension is now long past and the date on which we leave the single market and the customs union is fixed in law and supported across the House.
The Government are taking action to prepare for that date, with the XO Committee—the EU Exit Operations Committee, the Cabinet Committee charged with preparations for the end of the transition period—now meeting almost daily and taking decisions on trader and haulier readiness, border infrastructure and fisheries protection. The Committee has met 136 times since it was established, and it will continue to meet to ensure that we have taken all the steps required to prepare, but we also need businesses to prepare. The consequences of a lack of business preparedness will be not just missed economic opportunities for those companies that do not prepare but potentially much wider disruption.
That is why today we are publishing our reasonable worst case scenario planning assumptions, indicating what could happen if we do not all secure improved preparedness. I should stress that this is not a prediction or a forecast; it is just a prudent exercise in setting out what could, in the worst circumstances, occur if we do not improve preparedness and, of course, if our neighbours decline to be pragmatic. The scenario builds on an estimate that only 50% to 70% of large businesses and just 20% to 40% of small and medium-sized enterprises will be ready for the strict application of new EU requirements. In those circumstances, that could mean that only between 30% and 60% of laden heavy goods vehicles would arrive at the border with the necessary formalities completed for the goods on board. They would therefore be turned back by the French border authorities, clogging the Dover to Calais crossing. In that scenario, flows across the critical short-strait crossings could be reduced by up to 60% to 80%, compared with the normal rate, and such circumstances could lead to queues of up to 7,000 HGVs in Kent. Those queues and the associated disruption and delay would of course subside, as unready businesses that had had their goods turned back at the French border would not want to repeat the experience, but it is clearly far better for everyone to be aware now of what is needed to prepare, rather than face additional disruption next year. This is why we are publishing our reasonable worst-case scenario today: not just because any prudent Government will always prepare contingency plans for the worst, but to illustrate the costs of a lack of preparedness while there is still plenty of time to prepare.
The Government are committed to doing whatever it takes to help business, and we have brought in a comprehensive series of measures to help businesses and individuals to adapt to the changes ahead. We are helping businesses that import by introducing new border controls on imports in stages, and full controls will be imposed only from July of next year. We have produced a comprehensive border operating model, which provides a simplified guide, complemented by the work of gov.uk for business, and we will be publishing an updated version with more granular detail in the coming weeks. We have invested £705 million in new technology, infrastructure and jobs at the border, and we are ensuring extra personnel: Border Force has recruited more than 1,000 additional staff, with hundreds more being recruited now. We have also made available over £80 million in grants for organisations to recruit and train new customs agents to support an expanded customs intermediary sector.
A new network of information and advice sites will help to ensure that hauliers are up to speed with their new requirements and the correct paperwork. They will be able to check that their documentation is export-ready using the new Smart Freight web portal. We have complemented all this activity with a public information campaign to help businesses to prepare. The campaign communicates the actions that all businesses need to take before the end of the transition period, and there is a user-friendly checker tool on the gov.uk/transition page, which details exactly what businesses need to do.
The Government are taking all these steps to help businesses to prepare, because change requires preparation. But change is what the British people voted for because, outside the single market and the customs union, the UK can exercise all the freedoms and flexibilities of a truly sovereign state. Outside the common agricultural policy, we can support our farmers better and enhance our natural environment. Outside the common fisheries policy, we can revive our coastal communities and improve our marine environment.
We can strike new trade deals, which help developing nations to grow faster and lower prices for consumers. We can develop tailored policies to better support new technologies and level up our economy. We can invest the money that we currently send to Brussels in the NHS, in our science base and in improving productivity in all the nations of the United Kingdom. We can develop freeports, which bring investment to overlooked communities. We can regulate more smartly, legislate more accountably and strengthen our democracy.
These are great prizes, and the British people voted in the 2016 referendum and the 2019 general election to make sure they were delivered. This Government are committed to honouring those democratic choices, and I commend this statement to the House.
Rachel Reeves (Leeds West) (Lab)
I thank the right hon. Gentleman for advance sight of his statement.
The news today that there could soon be tailbacks of 7,000 lorries in Kent is quite extraordinary. I know that the Government have said that they are committed to building new infrastructure, but I did not realise it meant concreting over the garden of England. Today’s warnings are based on a reasonable worst-case scenario, but given that we have a reasonable worst-case Government, we have to assume that these scenarios could play out quite soon.
In their letter to the road haulage industry, the Government say that business should get ready, but what about the Government? There is a long list of promises for the future in the letter: the UK Government will be contacting haulage companies; they will be running targeted advertising; they will be publishing an updated haulier handbook; and they will launch advice stands at UK service stations. Why are these essential prerequisites for a smooth transition not already here? It is all well and good to tell businesses to act now, but without the systems in place, frankly, it is like telling me to bake a cake but forgetting to turn the oven on.
Sectors from farming to haulage and car manufacturing are crying out for the Government to get this right. These sectors are the backbone of British industry, and they are vital to our everyday economy. If we do not listen to these experts, we will lose exports. I met the Road Haulage Association last week. It is tearing its hair out. It has since met Ministers and described that meeting as “a washout”. Frankly, this is not good enough.
In the summer, I visited the proposed lorry park in Ashford, Kent, where construction had just begun. It was with some dismay that I later read that workmen had encountered a Saxon brick wall in their excavations. I hope this is not a metaphor, but can the Minister assure the House that progress there is on track? Another site apparently earmarked is in Ebbsfleet. It is currently a covid testing centre. With the test, trace and isolate system on its knees, this would be farcical if it were not so serious. Is it really too much to ask for a little bit of joined-up government from Ministers?
On 4 September, the Government granted themselves the power to build additional lorry parks in 29 local authority areas without consulting residents. Can the Minister tell us exactly where those facilities will be? That is the least that local people deserve. Will he also tell the House how many customs agents and intermediaries are trained and in place? This is so important for the system to work.
In the summer, the Government admitted that there would be £7 billion-worth of additional bureaucracy for UK businesses. It is the last thing they need right now, so is that still the most accurate assessment of the costs for businesses?
It has been estimated that 10 new IT systems will be needed to make our new trading relationship with the European Union work. Can the Minister list those IT systems and guarantee that they will be in place and fully operational on 1 January? Given that we were promised a contact tracing app, first in May, then in June and then in July, and it is now September, what assurance can he give that this time the Government will deliver that vital technology and that it will be working and delivered on time? Frankly, the Government’s track record does not inspire confidence.
We have just 100 days until the end of the transition period. Labour’s message to both sides in this negotiation is clear: stop the posturing, and start negotiating. It is in our national interest—it is in all our interests—that the Government get a deal, and get it soon, so that businesses have time to prepare. The Conservatives have had three Prime Ministers and four years since the referendum in 2016. We have seen serial incompetence and countless U-turns. I say to Ministers: get a grip on preparations, and get a grip now. The transition period comes to an end on 31 December. Will the Minister guarantee, not just to this House but to the whole country, that we will be ready?
Michael Gove
I am grateful to the hon. Lady for her questions. She makes the point that there have been three Prime Ministers and four years since the referendum and alleges that there have been some U-turns. This Government have been consistent in our determination to honour that referendum result. If we are thinking of U-turns, I think of the Labour party, which at different times has been in favour of a referendum or of extending the transition period, against our exit from the EU, and it now seems to be resolutely in favour of that exit. I am grateful that the Labour party has now taken the decision to recognise the democratic verdict of 2016, but when reflecting on U-turns, flip-flops and changes of position, we should all exercise appropriate humility.
The hon. Lady asks what is required in order to prepare. We will, of course, be stepping up our intensive co-operation with business, but when the chief executive of the port of Dover appeared in front of the Committee on the Future Relationship with the European Union in June this year, he made it clear that at that point it was possible for any business to know exactly what was required, from the acquisition of an economic operators registration and identification number, to securing a customs intermediary or having in-house capacity. Everyone knew at that stage what would be required on our departure from the customs union and the single market. That information is there, and we want to ensure that more and more businesses, including those who think the transition period will be extended, realise that, as the hon. Lady rightly pointed out, there is no turning back from that date, and we all need to be ready by 1 January.
The hon. Lady asks about our determination to secure a deal. We are determined to do everything we can to secure a deal, but one purpose of this statement is to underline that, whether or not we secure a deal, because we are leaving the single market and the customs union, there are some activities that all businesses must engage in. I hope that Members across the House, whatever their views of the merits of our departure from the European Union, will work with the Government to ensure that businesses are directed towards the information they need and given the support they deserve.
The hon. Lady mentions to her visit to Ashford. I am grateful to her and to others for drawing attention to the need for additional infrastructure at or near the border, as well as Government investment to ensure that we are ready. The Ashford motorway site will provide transit facilities for those who are exporting, and from July 2021, it will also provide facilities for those who are importing. I am grateful to everyone who has played a part in ensuring that that site will be ready on time.
The hon. Lady refers to the Ebbsfleet site, which was acquired by HMRC some time ago, in preparation for a potential no-deal exit before the withdrawal agreement was secured. It was temporarily allowed to become a testing site, but testing facilities have now moved to another location in Kent. Ebbsfleet, along with North Weald, is available as a transit site. It is important that this Government, like all Governments, ensure that we provide not only for the public health of our people, but also for the free flow of commerce.
The hon. Lady refers to customs agents and intermediaries. The £80 million provided has not yet been fully drawn down, and I hope that our exchanges today will encourage businesses and others to ensure they have access to that money. She asks about IT systems, and systems such as the import of products, animals, food and feed system have been in place for some time now. That new IT system will replace the EU trade control and expert system—TRACES—to which we will, of course, no longer have access. Other systems such as the smart freight system or the goods vehicle movement service are in operation and being tested with business now.
As I said earlier, it is vital to recognise that business needs our support to navigate, meet and master these challenges and to take advantage of these opportunities. The Government stand ready to work with everyone across the House to ensure that business is ready, and at what is undoubtedly a difficult time for the economic life of our country, we will do what we can to help.
Damian Green (Ashford) (Con)
I can assure my right hon. Friend that the so-called Saxon wall on the Ashford site is in fact a myth: it is not Saxon and it is not holding up work.
The prospect of 7,000 trucks queuing to cross the channel will send a chill through my constituents, because we know the disastrous effect that has on all the roads in Kent. I very much support my right hon. Friend in his work to prepare the road haulage industry for the end of the transition period, but may I ask about the Government’s own preparations and specifically the smart freight system that he mentioned, which is essential for the smooth running of traffic across the channel? Can he give a guarantee that that system will be fully up and running and operational from January?
Michael Gove
My right hon. Friend makes a number of very important points, and I am grateful to him for clearing up the point about archaeology, which I failed to address in my response to the hon. Member for Leeds West (Rachel Reeves), but his expertise in this area is greater.
My right hon. Friend is absolutely right that we want to avoid the level of congestion that this reasonable worst-case scenario sets out, and he is also absolutely right that that requires people to work together. It requires not just the haulage industry, but in particular those goods exporters who commit goods to haulage to be ready in time. Part of that is the smart freight system, which has been developed and is being shared with business. We want to make sure that people use a relatively simple process to get what will become known as a Kent access permit, which means that they can then proceed smoothly through Kent because they have the material required. If they do not have the material required, through policing, ANPR cameras and other means, we will do our very best to ensure that his constituents are not inconvenienced.
Pete Wishart (Perth and North Perthshire) (SNP) [V]
Today is the day when all the Brexit chickens come home to roost, only of course they will not, because they will be sitting in a 7,000-strong lorry queue on a Kent motorway for two days, waiting to be dispatched. I remember the days of the easiest deal in history, of having our cake and eating it while observing the sunny uplands, when even the Duchess himself told us that we hold all the cards. Well, it seems that the only card we are holding is the joker with his “Spitting Image” mush all over the front of it. What I do not understand is why he continues with the charade of seeking a deal when we know that it is the no deal that they all want and all covet?
I can tell the right hon. Gentleman that the Scottish people are also scenario planning. We are planning our best-case scenario, when we get out of rogue state UK before the worst of this Brexit madness consumes our beautiful nation. His European counterparts must be looking forward to the next round of talks with all the relish of a vegan being served a platter of chlorinated chicken.
We are told that the talks are at a delicate stage; they are so delicate that the EU is close to telling the UK to go and get stuffed, and I can see its point. It is having to deal with a UK that is prepared to tear up the withdrawal agreement that was oven-ready and the greatest deal ever just a few months ago and, in the process, break international law, but there is one good thing that has come out of all this: it has focused Scottish minds on the type of future that we want. Do we want a future in rogue state UK, with all the horror of their low-deal, no-deal Brexit, or a future as a normal European nation making our own decisions free of this clown-shoed Government? As a famous son of Aberdeen, the right hon. Gentleman must know which direction the Scottish people are travelling in.
Michael Gove
I do not know where to begin: chickens or cake. Those questions were a mixter-maxter of mixed metaphors the likes of which even the most impressive makar would be proud. It was a remarkable performance —they usually are. I thank the hon. Gentleman for referring to the fact that “Spitting Image” has fashioned a rubber puppet in my likeness. It is one of the greatest honours that has ever been paid to me, and I hope that other Members will enjoy that recognition in due course.
The hon. Gentleman asked about chickens. One of the things we will do is ensure that we prioritise day-old chicks, and fish and shellfish from Scottish harbours to make sure that they reach the fish market in Boulogne without let or impediment. As we take back control of our waters, and access to our marine resources enables Scotland to get thousands of new jobs and millions in new investment, we want to be able to take full advantage of that. Sadly, one of the Scottish Government’s decisions is that they wish to re-enter the European Union, give up access to that bounty and sell Scotland’s coastal communities short. I gently suggest that that is probably a mistake.
The hon. Gentleman makes the point that the best-case scenario for Scotland is independence. That has long been his position. Of course, while we set out to answer questions in this House, there are many questions about independence that have not been answered. What currency would an independent Scotland use? How would UK pensions be guaranteed in an independent Scotland? What would be the replacement for the furlough scheme in an independent Scotland when HM Treasury was no longer capable of providing that money? As Andrew Wilson’s growth commission has pointed out, an independent Scotland would have to pay a premium for borrowing on international markets. No pounds, no pension and poorer, an independent Scotland—unless the hon. Gentleman can come up with better answers—is the worst case of call.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
May I ask a question that actually matters in relation to jobs and the economy in Scotland? With only 100 days to go to the end of the transition period, will my right hon. Friend confirm that the UK Government have given up on the EU’s resolving the Airbus-Boeing dispute, which has led to damaging tariffs on Scotch malt whisky in the US? Will the UK Government pursue a bilateral resolution of that dispute to see those tariffs lifted and enable the Secretary of State for International Trade to negotiate a free trade agreement that banishes such tariffs forever?
Michael Gove
My right hon. Friend is absolutely right to raise that issue. It is because of the EU’s mishandling of the Airbus project that the US imposed tariffs on malt whisky that did not exist beforehand, hitting one of Scotland’s most important exports. My right hon. Friend the International Trade Secretary has been negotiating on Scotland’s behalf directly with the US to see those tariffs lifted. She has already secured progress on gin and I hope that she will secure progress on whisky. The excellent Karen Betts, chief executive of the Scotch Whisky Association, has been appointed explicitly as an adviser to the Secretary of State to help ensure that the UK Government, with their negotiating weight, can do for the Scotch whisky industry what the EU was not capable of doing.
Hilary Benn (Leeds Central) (Lab)
I am grateful to the Secretary of State for his statement, although a queue of 7,000 lorries would not be much of a great prize for the country. As he knows, for months, those who move goods for a living across the short straits have been warning Ministers that systems and training will not be ready in time. Now the industry says that it is being “fitted up” to take the blame for the Government’s failure to grasp, in the words of one logistics expert involved in the talks, “real-world complexities”. The Chancellor of the Duchy of Lancaster just told the House that the Goods Vehicle Movement Service and the Smart Freight IT systems are in operation. When did that happen?
Michael Gove
They have been developed. They are in operation now. We are refining with business exactly how they should operate for businesses’ benefit.
Mr Andrew Mitchell (Sutton Coldfield) (Con)
I congratulate my right hon. Friend on his “Spitting Image” puppet and on the literary prowess visited on him in recently published diaries.
I remind my right hon. Friend of his considerable generosity in coming to the west midlands to attend a roundtable with manufacturers some 12 months ago. He did that with our outstanding west midlands Mayor, Andy Street. As my right hon. Friend discharges his most important duties as set out in his statement, will he remember two of the points that were raised with him at that roundtable? The first is concern about just-in-time supply chains and the second is the importance of removing tariffs on finished goods and components in those supply chains.
Michael Gove
I am grateful to my right hon. Friend. I was not aware that there were any diaries being published this week.
Michael Gove
I will look out anxiously when I next pass Waterstones in Camberley.
On the substantive point that my right hon. Friend makes, he is absolutely right. There is no better champion of the automotive sector than the West Midlands Combined Authority Mayor, Andy Street. The roundtable that I had with him, as well as the opportunity I have had with him to visit Jaguar Land Rover to talk to Ralf Speth and others, have impressed upon me the importance of doing everything we can to support that sector, on which so many jobs depend. That is why we are so anxious to secure a deal.
Ben Lake (Ceredigion) (PC)
The Minister will be aware of the considerable concern that Welsh ports such as Fishguard and Holyhead will be severely impacted by any delays to the introduction of the goods vehicle movement and smart freight systems. Could he tell the House what proportion of vehicles crossing the Irish sea from Wales to Ireland he expects to face disruption in the Government’s reasonable worst-case scenario?
Michael Gove
Goods coming from Ireland to Wales should not face impediment because we are staging our processes in the way that I described. For goods going the other way, much depends on the determination made by EU member states about the processes they will apply, but we are working with the Welsh Assembly Government to invest in a facility near Holyhead in Anglesey, to ensure that transit and other procedures can facilitate the flow of traffic and trade.
Sara Britcliffe (Hyndburn) (Con)
The people of Hyndburn and Haslingden voted overwhelmingly to leave the EU and for someone who would respect their decision, and yet they are still urging me to press the Government not to extend the transition period. Can my right hon. Friend confirm that the EU has accepted that we will not accept or seek an extension to the transition period and that, at the end of this year, we will deliver on our promise to the British people and regain our economic and political independence?
Michael Gove
My hon. Friend makes absolutely the right point. The certainty of knowing that we will leave on that date and the publication of the information today will, I hope, help businesses to prepare with certainty for the end of the transition period. Every Conservative Member of Parliament was elected on a manifesto which made it clear that we would end the transition period on 31 December. One of the difficulties we have in this House is that, while those on the Opposition Front Bench quite rightly support that position, Labour politicians in power, such as the First Minister of Wales and the Mayor of London, take a different position. The leader of the Labour party was talking yesterday about patriotism. I think it would be patriotic if he were to make it clear that Labour is united in backing the British people.
Feryal Clark (Enfield North) (Lab) [V]
The Government have promised a shared prosperity fund to replace EU structural funding for regeneration and growth since 2017. Despite originally promising a consultation, we have not seen one. There have not even been any engagement events since the Prime Minister took office. When will the Minister publish the framework through which the shared prosperity fund will work, to keep it accountable and prevent pork barrel politics and bungs to target seats?
Michael Gove
The hon. Lady makes an important point. The Secretary of State for Housing, Communities and Local Government will outline how the shared prosperity fund will be distributed. She is right: as a result of our departure from the European Union, we will have more money to spend on our priorities, and we will, of course, spend that money on what the Prime Minister has called the levelling-up agenda. There are parts of our country—overlooked communities and undervalued families—that have been neglected by Labour local authorities for far too long and now have Conservative MPs in this place, and it is vital that their advocacy on behalf of their constituents to improve their productivity is supported. That is why everything from new free ports to increased investment will go to those areas that have been neglected by Labour for far too long.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
The figures that my right hon. Friend has given today on business preparedness for 31 December are concerning. Is not the important advice that he has given that those businesses should either do the paperwork themselves or get an intermediary to do it on their behalf?
Michael Gove
My hon. Friend is right. We want to help and support business. That is why we have provided the funding that we have. One reason for publishing the reasonable worst-case scenario today is to draw attention to the fact that, if we do not all work together, there will be disruption, but if we do work together, there are huge opportunities to be seized.
Kevin Brennan
Seven thousand HGV lorries parked end to end would stretch from this building to Dover—that is the scale of the problem that the Minister has set out. Where will the 29 extra lorry parks be? We need to know that. This is about Government preparedness. His statement seemed to be all about passing the blame on to business for the chaos being caused by his Government.
Michael Gove
No. The hon. Gentleman, by emphasising that figure, is helping, because what we want is to avert that scenario. As I pointed out, it is not a prediction, but it is a warning. He is right that there is a responsibility on Government, which is why we have invested in the sites in Ebbsfleet and North Weald, Ashford, Warrington and the west midlands. Should we need to deal with specific areas of traffic management in Kent, steps have been taken with the Kent resilience forum to do just that. The reason for publishing the scenario today is to avert that happening. I hope he will work with businesses in his constituency to make sure they let Government know what more they need to be ready.
Alun Cairns (Vale of Glamorgan) (Con)
The most senior Labour politician in office in the UK is the Welsh First Minister, and he has called for the transition period to be extended beyond the end of the year. Some people see that as a way of avoiding or delaying Brexit. I can advise my right hon. Friend that the Welsh people voted in greater numbers than the average across the UK to leave the European Union. Can he reassure me that the end of the year will be the end of the transition period?
Michael Gove
My right hon. Friend makes an important point. The result across the United Kingdom—we voted as one United Kingdom—was clear, but it is true that support for leaving the European Union was very strong across Wales. I have great respect for the First Minister of Wales and we have worked well together in dealing with the covid pandemic, but I do think that my right hon. Friend is absolutely right. It would be sensible now for all politicians, rather than saying that the transition period should end later and creating that illusory prospect, to work together to prepare for 31 December.
Christine Jardine (Edinburgh West) (LD)
The road haulage industry has been talked about a lot, and its workers have kept food on supermarket shelves and medicines in our pharmacies through the recent crisis. The statement says the Government have put aside £80 million for customs agents. How many agents do we have at the moment? How many will we need on 1 January? How many will this training provide on 1 January to ensure that the haulage industry can keep operating?
Michael Gove
The hon. Lady is right. The haulage industry has been doing a fantastic job. I make no criticism of the industry or of individual hauliers—quite the opposite. Most of the work required will be required by the companies that are exporting rather than by the haulage industry, and it is they who will either hire customs intermediaries to do the work for them or, as my hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown) pointed out, do that work in house. So some of the work is being done in house, some by major players and some by companies such as Kuehne+Nagel, which is expert in the area. The market is moving; the response we have had from some is that, particularly in the past couple of weeks, there has been significantly greater call for their services, and they are recruiting, but the £80 million we have has not been entirely drawn down yet, and we keep the amount we are providing under review to ensure that if more is needed, more can be provided.
Ben Everitt (Milton Keynes North) (Con)
I am sure we are all aware that when we finally leave the transition period, at the end of the year, we will also be leaving behind the common agricultural policy, which has done such damage not only to agricultural economics but to our environment. Will my right hon. Friend detail how the replacement system we are preparing will be better for farmers, fairer, better for our agricultural economy and our environment, and support our target of net zero?
Michael Gove
My hon. Friend makes an important point. As the Secretary of State for Environment, Food and Rural Affairs has pointed out, as we move away from the common agricultural policy, we move to a system where farmers can be supported with public money to provide public goods—for example, increasing the organic content of their soil or contributing to better and cleaner management of our waters—and, as the recent trade deal secured by my right hon. Friend the Secretary of State for International Trade shows, we have improved access for our superb produce to new markets.
Jim Shannon (Strangford) (DUP)
I thank the Chancellor of the Duchy of Lancaster for his statement. Last Friday, I had the opportunity to meet Gordons pharmacy in Newtownards. As a type 2 diabetic, I declare an interest. Many are saying that insulin and other medications will not be able to be sourced post-Brexit. Will the right hon. Gentleman tell me what progress has been made to ensure that the supply of medicines from the EU to the UK, and then from GB mainland to Northern Ireland, will continue after the transition period ends?
Michael Gove
The hon. Gentleman raises a very important consideration, because of the operation of the Northern Ireland protocol. I was discussing yesterday with a Minister of State at the Department of Health and Social Care, and officials in the Northern Ireland Office and other Departments, how we can make sure that the supply of medical goods continues uninterrupted to Northern Ireland. He is quite right that one of the single most important is insulin, because of the particular requirements that diabetics like him, and indeed my father, faces.
Mary Robinson (Cheadle) (Con)
I am grateful for the statement setting out the current position. During these uncertain times, it is vital that businesses have as much clarity as possible, especially the many businesses in Cheadle that rely on trade with the EU. In addition to the preparations my right hon. Friend outlined, we can give those businesses the certainty they deserve by agreeing a free trade deal with the EU this year. Can my right hon. Friend therefore reassure my constituents that the Government continue to work towards that prime objective?
Michael Gove
Yes, absolutely. The Government are absolutely committed to securing a Canada-style free trade agreement. One of the difficulties we have had in the talks is that, as our negotiator David Frost pointed out, the European Union still has not come to grips with the fact that we will be a sovereign equal, not in the size of our economy but in our democratic mandate. There are, therefore, still one or two sticking points, because it is seeking to tie us to its rules rather than recognising that we will follow our own path. However, I am confident we can overcome those difficulties and secure a free trade agreement, which would be in everyone’s interests. Of course, many preparations that businesses are required to undertake are the same whether or not we have an FTA.
Stephen Farry (North Down) (Alliance)
Businesses in Northern Ireland and elsewhere urgently need to see the detail of the border model between Great Britain and Northern Ireland. Previously, the Chancellor of the Duchy of Lancaster promised that that would be published by the end of July. It is desirable that we see the outcome of Joint Committee and future relationship negotiations, but they are not essential for that. Will he therefore give a revised commitment on when we will see that?
Michael Gove
Yes. The hon. Gentleman makes a very good point. The Joint Committee should, God willing, meet next Monday in Brussels. I will be seeing Maroš Šefčovič then, as we seek to make progress on those matters. The hon. Gentleman will know that we made more than £200 million available through the trader support service and support for IT to help businesses in Northern Ireland. Even though it has been a subject of contention in this House, the provisions in the United Kingdom Internal Market Bill are there to make sure that Northern Ireland’s businesses do have a guarantee that, whatever happens, they will not be required to have export declarations when goods move from Northern Ireland to Great Britain, because the principle of unfettered access is so important.
Julie Marson (Hertford and Stortford) (Con)
I welcome my right hon. Friend’s statement, in particular the extra £705 million for infrastructure at our border. Will he be able to update us a bit more on how the technological solutions are developing, such as the smart freight service, to facilitate movement across the borders?
Michael Gove
I am very grateful to my hon. Friend for making that point. Yes, there are a number of systems. For example, I mentioned earlier IPAFFS, which is critical for those in the agrifood sector and has been developed for some time now. The smart freight system and the GVMS are being operated within Government at the moment, in consultation with business, and we hope they will go live so they are there for all to see in their ideal form in the course of the next few weeks.
Daniel Zeichner (Cambridge) (Lab)
In just 100 days, all food exports to the EU will require an export health certificate and an authorised vet to sign it off. Do we have enough vets to do that? I understand that £80 million has been made available for the 50,000 custom agents required. Can we be told how much of the money has been drawn down and put in place? As a former IT person, may I ask the right hon. Gentleman if he is really confident that the IT systems will be in place and working?
Michael Gove
Those are three very good points. On the question of vets yes, but there is a requirement on every part of the United Kingdom to play their part. For example, we have been talking to the Northern Ireland Executive about making sure that the specific need for vets and the new border control posts in Northern Ireland is satisfied. It is the case that there are vets and others who can carry out that job across the UK, but for example I hope, fingers crossed, that the Scottish Government have provided enough money to Aberdeenshire Council to make sure that those who provide export health certificates in the harbours of Fraserburgh and Peterhead are in place. I do not think that voters in either Fraserburgh or Peterhead would forgive the Scottish Government if they had not made that investment and had used the money elsewhere. I am sure they will not have done so.
On the point about IT, we are working hard, internally and with authoritative expertise, to make sure that those IT systems will work. I do not think any of us can make a confident prediction that everything will always be perfect, but some of the very best people in Government and in the private sector are committed to making them work.
Jo Gideon (Stoke-on-Trent Central) (Con)
Would my right hon. Friend agree that, as we reach the end of the transition period, as well as seeking a positive future relationship with the European Union as a sovereign independent nation, we are well positioned to take advantage of new global opportunities? Will he join me in congratulating advanced ceramics research company Lucideon in my constituency, which is set to receive a £1 million boost as a result of the new Japan trade deal that the UK and Japan have agreed in principle? Lucideon’s joint venture with a Japanese partner will bring new jobs to Stoke-on-Trent Central and plans for an advanced ceramics campus in north Staffordshire a step closer.
Michael Gove
I agree with my hon. Friend that that is unmitigated good news. The ceramics sector is well placed to take advantage of new international trade deals, and it could not have a more effective champion than my hon. Friend.
Sir Mark Hendrick (Preston) (Lab/Co-op) [V]
With the end of the transition period fast approaching and our borders with the EU woefully ill-prepared for the trading arrangements a no-deal Brexit will bring, may I ask the Minister how the £700 million he has announced will, over the three months he has available, enable us to recruit and retrain the hundreds of new customs officers required to carry out border checks? With so little time left to fully test, install and commission the smart infrastructure technology required to implement those checks, is this not just another example of what the whole of Brexit has been about—wishful thinking and self-deception, rather than accepting the reality on the ground?
Michael Gove
The first part of the hon. Gentleman’s question was, I think, very apposite. The £705 million is being made available of course to ports. It will also help pay for inland infrastructure, but I should stress that much of that infrastructure will be required only when we ourselves are imposing checks, which will not come until next July. Any individual Member of this House who will be seeing infrastructure built in their constituency will be contacted, if they have not already been, by my colleagues Lord Agnew and the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez).
Aaron Bell (Newcastle-under-Lyme) (Con)
The people of Newcastle-under-Lyme voted very clearly to leave the European Union, but contrary to the wild claims from the SNP spokesman earlier, they are not seeking a no deal. They want a good, fair, constructive deal negotiated in good faith with the EU, but they do want this over and done with. Would the Minister join me and them in rejecting the calls from senior members of the Labour party, such as the Welsh First Minister and the Mayor of London, to extend the transition period? We cannot have that happen, because if it does happen, it will only lead to more uncertainty for business. We need to move on.
Michael Gove
My hon. Friend makes an absolutely important point. We have set out a timetable, and sticking to that timetable will enable people, I hope, to take all the steps required. He makes the point that we on this side of the House do not seek a no deal: quite the opposite—we are keen to seek a deal. But one question that has never been answered is if there were ever a vote for independence in Scotland—I am sure there will not be ever, but if there were ever—the SNP has never made it clear whether it would rely on there being a negotiated settlement or would go for a no-deal Scexit. It is one of the many questions that the SNP declines to answer.
Andrew Gwynne (Denton and Reddish) (Lab) [V]
I was listening very carefully to the Chancellor of the Duchy of Lancaster about business preparedness, not least because it is only three months to the end of the transition period. Businesses in the food and drink industry in my constituency would love to be able to be ready for Brexit, but there is no guidance yet about what labels businesses need to use to legally sell their goods in the EU and in Northern Ireland next year. When will the Government announce these measures, so that food and drink manufacturers are not held back from making the preparations they need to make?
Michael Gove
The hon. Gentleman makes an important point. Some of that detail has already been published, but there is more that depends on the negotiations. If he gets the companies in his constituency with particular concerns to get in touch with me directly, I will work with him to provide them with the information we have.
Sir Desmond Swayne (New Forest West) (Con)
The markets Bill does not break any law, does it?
Patricia Gibson (North Ayrshire and Arran) (SNP)
The UK Government fought an election and won a majority in this House on the basis that they had an oven-ready Brexit. In March last year, the right hon. Gentleman said:
“We did not vote to leave without a deal”;
now, we are staring down the barrel of a no-deal Brexit, the consequences of which will be magnified by the economic fallout from Brexit. What does the right hon. Gentleman say to those who voted for his Government on the basis that they had an oven-ready Brexit and now feel utterly betrayed?
Michael Gove
I have not met anyone in that position. The truth is, of course, that we left on 31 January. Increasingly, I find lots of people in Scotland who, the more they look at the position of the Scottish National party and the Scottish Government, are becoming yes-to-no voters—that is the growing trend.
Stephen Hammond (Wimbledon) (Con)
I welcome my right hon. Friend’s statement. He will know that there are two important industries in the UK that begin with the letter F: one contributes £1.4 billion to the UK economy; the other contributes £132 billion and employs more than a million people. In his July statement, my right hon. Friend committed the UK to upholding international norms so that there is a free flow of capital and efficient markets. Is he convinced that he can still deliver those international norms so that there is delegation? Is he convinced that there will be equivalence for UK financial services in July 2021?
Michael Gove
I am confident of that. One thing about equivalence is that it is what is called an autonomous process in the EU. To be very fair to the EU, since the Prime Minister drew attention to the slow progress of some of those autonomous processes, it has meant an acceleration, so I am confident, yes.
Justin Madders (Ellesmere Port and Neston) (Lab)
I do not think we have had clarity in response to earlier questions as to how many customs agents are in place now. Will the Secretary State provide that figure? Will he also guarantee that when the time comes, any business that needs the services of a customs agent will be able to access one?
Michael Gove
Customs agents are provided by the market. It is the case that a number of customs intermediaries’ businesses are growing, and a number of other businesses will employ people in that role. Just as I cannot precisely state at any given time in a dynamic market how many people are doing exactly what job, I can state that the £80 million that we have made available has not yet been fully drawn down. Any company that operates in customs will know that come 1 January there will be increased demand for its work, so this is an opportunity to expand and Government stand ready to help.
Brendan Clarke-Smith (Bassetlaw) (Con)
As we reach the end of the transition period and take back control, I welcome the Government’s United Kingdom Internal Market Bill. One issue that has been raised many times during the debates is the EU’s refusal to give us third country listing. Does my right hon. Friend agree that third country listing is vital to agreeing a deal with the European Union? Will he assure me that he will continue to push to make the EU take reasonable steps to make sure that it happens?
Michael Gove
My hon. Friend is absolutely right. The reluctance to grant, or slow pace in granting, third country status for food exports to the UK has been concerning, but thanks to the Prime Minister’s having drawn attention to the issue, progress has been made.
Gareth Thomas (Harrow West) (Lab/Co-op)
Further to the question asked by the hon. Member for Wimbledon (Stephen Hammond), the Chancellor of the Duchy of Lancaster will know that financial services firms in the UK generate a huge number of jobs, a not insignificant number of which are held by my constituents. Will he tell the House exactly what progress has been made on the vital issue of achieving equivalence, and what remains to be sorted out?
Michael Gove
The hon. Gentleman makes an important point. Equivalence is decided by the EU. It is an autonomous process separate from but occurring in parallel with the negotiations. As I mentioned earlier, with the Prime Minister having drawn attention to the slow pace in these processes, we have seen an acknowledgement of that on the EU side. The EU is obviously a sovereign equal and will make its own decisions, but I should say that it helps EU businesses to have access to the broad and deep capital markets that we have in this country. Were the EU to cut itself off from our capital markets and financial services, the cost of EU businesses’ transactions would increase and their shareholders would lose out.
Mr Richard Holden (North West Durham) (Con)
This Government were elected with an overwhelming mandate to get Brexit done. In fact, substantially in order to ensure that the 2016 vote was respected, constituencies such as mine and others across the blue wall returned Conservative MPs for the first time ever. Will my right hon. Friend confirm that, in order that to give businesses clarity and to respect the will of the people of North West Durham, there will be no extension to transition?
Michael Gove
Yes. My hon. Friend is a brilliant advocate for the people of Consett and the whole of his constituency. There will not be an extension.
Chris Stephens (Glasgow South West) (SNP)
In the worst-case scenario that the Secretary of State outlined, on the basis of no employment Bill, which the Government had committed to, and the European Union looking to strengthen workers’ rights for zero-hours contract workers, agency workers and those workers susceptible to short-term shift changes, are the Government still committed to at least matching the employment protections of the European Union?
Michael Gove
It is a good question from the hon. Gentleman. He has a distinguished background in the trade union movement and elsewhere in defending workers’ rights, and I pay tribute to him for his work in that area. Yes, we want to ensure that we protect workers’ rights. We will always look at what the EU and other jurisdictions are doing to see where we can match and, where possible, exceed the protections offered.
Jacob Young (Redcar) (Con)
I and many of my constituents want to see supertrawlers banned from destroying our marine wildlife and damaging our fishing towns, which is something that we cannot do while part of the EU. My right hon. Friend has long been committed to support our fisheries as we leave the EU, so will he confirm that after 31 December we will have the ability to stop foreign supertrawlers operating in our seas? At a time when our negotiations are at their fiercest, will he stand firm on our commitment to take back control of our waters?
Michael Gove
My hon. Friend is absolutely right that one of the benefits of departing from the EU is that we can safeguard our marine environment from predators, and we will take all steps necessary to do so.
Carla Lockhart (Upper Bann) (DUP)
Seven thousand truck long queues in Kent and two-day delays to trade would be disastrous for UK businesses, but so too would any delays and queues as a consequence of checks imposed within the UK as a result of the repugnant Northern Ireland protocol. What assurances will the right hon. Gentleman give me and businesses in Northern Ireland that no such delays will feature at Larne? Will he give an assurance to meet me and the major agrifood sector businesses in the not-too-distant future?
Michael Gove
I am grateful to the hon. Lady for raising that and for the opportunity I had to visit Ulster Carpets in her constituency over the summer. The Government are committed to ensuring that the Northern Ireland protocol operates in such a way as not in any way to disadvantage Northern Ireland’s agrifood businesses. I would be delighted to meet them with her.
Sir Edward Leigh (Gainsborough) (Con)
Despite all the scare stories, surely there is no bar to a deal. We will surely not undercut the EU on state aid—we will not return to picking winners and all that rubbish—and with the regulation of business, we will not create a bargain-basement economy or produce rust buckets like the Morris Minor I drove to university with a hole in the floor in 1968. Breaking news just now, however, is that if the deal is conducted late, there might be not indeed an extension of the transition period, but a two-year implementation period. I want now an absolute commitment from the Secretary of State: no extension to transition and no implementation period. We want a clean break, as we promised the electorate, at the end of this year.
Michael Gove
Everything my right hon. Friend said I completely agreed with, apart from one thing—I cannot believe that he went to university in 1968. He looks much younger than that.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
This morning I met the North East England chamber of commerce and local businesses. We discussed the massive investment in technology and digital skills required by the pandemic to move processes, services and products online. Now we have another transition to face, so will the Minister list each IT system with which a business will have to interface, and when it will be available to be tested by them so that they can begin the process of preparedness?
Michael Gove
The border operating model, which we published earlier, outlines the IT systems—
Michael Gove
It was published in July. It outlines the IT systems with which business will interact, but of course we are augmenting and updating it, so it will be published later this month.
Damian Collins (Folkestone and Hythe) (Con) [V]
Does the Chancellor of the Duchy of Lancaster accept that although the worst-case scenario situation of 7,000 queuing lorries would be intolerable for people in Kent and my constituency, even only half that number would require the closure of the coast-bound M20? Will he assure us that he will do all he can to ensure that that is not the reality that people are confronted with next year?
Michael Gove
My hon. Friend makes a very good point. It is precisely because we want to avoid that scenario that we are sharing it today in order that Government can be held to account for doing everything possible to avoid it, and so that we can work with business in order to avoid it. We have to be ready for the worst, which is why we have taken appropriate contingency plans. In order to avert that scenario, we want to work with him and those in his constituency, and businesses everywhere, to ensure that we can be ready. Eurotunnel, in his constituency, has been brilliant in the support that it has been giving to the business sector as well.
Bill Wiggin (North Herefordshire) (Con)
How much does my right hon. Friend think the EU will lose in the event of no deal? Is not this figure not helped by senior Labour politicians suggesting that we might extend the transition period?
Michael Gove
My hon. Friend is absolutely correct that no deal is in nobody’s interests. The fact that the First Minister of Wales or the Mayor of London are holding out the prospect of an extension to the transition period does not contribute to the concentration of minds and—to be fair to the hon. Member for Leeds West (Rachel Reeves)—the productive work required in order to secure a deal.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The London School of Economics estimates that a no-deal Brexit could lead to a 63% decrease in exports to the European Union. For the salmon farmers, the crofters producing lamb and the shellfishermen in my constituency, that could be absolutely ruinous. What comfort can the Chancellor of the Duchy of Lancaster give to the people in my constituency whose livelihoods depend on that export market?
Michael Gove
The right hon. Gentleman makes an important point. One of the things that the Government have always stressed is that in the event of a no-deal exit, the sectors that would be most adversely affected by tariffs would be in the agriculture sector, with red meat producers particularly hard hit. That is why we are anxious to avoid that outcome and to secure a deal. Come what may, there will be new processes, but also new markets, for producers in Orkney and Shetland. I will work with him to make sure that, in whatever eventuality, we support the high-quality producers in his constituency.
Dehenna Davison (Bishop Auckland) (Con)
My right hon. Friend will know that I share his vivacious optimism about Britain’s future as an independent sovereign trading nation, but the farmers of Teesdale and Weardale are understandably concerned about what happens if we get to the end of the year without an agreement. Will he reassure the House and my constituents that all is being done by our negotiators to reach that deal? Does he agree, in terms of the future of Britain’s trading policy, that our independence as a trading nation will provide great opportunities for our agricultural sector?
Michael Gove
I am grateful to my hon. Friend for attributing to me vivacity as well as optimism. I am certainly optimistic, but it is Conservative Members who were elected in the 2019 general election who provide the vivacity, including herself. She is absolutely right to raise the concerns of farmers in Teesdale and Weardale, and indeed across the north-east. As I mentioned in response to the previous question, it is red meat producers who, in the event of no deal, will most need our support, but it is also red meat producers, particularly lamb exporters and sheep farmers, who have a great deal to gain. One of the biggest consumers of lamb and sheep meat in the world is the US. At the moment, our access to the US market is restricted. It is one of many markets, including markets in the far east and the middle east, to which we could have access. My hon. Friend’s advocacy on behalf of the farming sector and on behalf of free trade shows the way to future prosperity for the constituents she serves so well.