Business Rates

Bernard Jenkin Excerpts

Tuesday 2nd April 2019 Commons Chamber

[Mel Stride]

I will have to come back to my hon. Friend with an answer to that specific technical question, but I will gladly do so.

Several Members rightly mentioned our high streets package. My right hon. Friend for New Forest West (Sir Desmond Swayne) made reference to the fact that it is not all about business rates; it is also about how we design and evolve our high streets to face the changing nature of retailing, which of course includes the rapid advance of online retailing.

Several Members mentioned the digital service tax that we are committed to bringing in by 2020, and we will do so unilaterally in the absence of a multilateral move on the behalf of other countries.

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

I congratulate my hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown) on securing this excellent debate. All these welcome measures that the Government introduce do not really address the fundamental flaw in this tax. Take the economically unlucky town of Harwich, which I represent. A capable family business in Harwich has developed the Pier hotel over the years to make it a real jewel in the crown of an otherwise rather economically depressed town, but what is that family’s reward? They get clobbered for extra business rates. The less successful hotel businesses carry on paying less rates but the most successful hotel and restaurant gets clobbered for a big increase in rates. If the tax operates in that way, how can that be rewarding success in depressed economic areas?

[Mel Stride]

Earlier in my speech, I went through at length the large number of reliefs that we have brought in to make sure that across the piece we are bearing down wherever we can, particularly in respect of those smaller businesses that might find expenses of this kind particularly arduous. Given that we have had a rather lengthy debate preceding my remarks—

Finance (No. 3) Bill

Bernard Jenkin Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 8th January 2019 Commons Chamber

[Nicky Morgan]

I have great respect for my right hon. Friend, and on this issue he speaks much good sense, as always. I hope that right hon. and hon. Members will listen to what he has to say. I am conscious of the time, so shall move on.

Over the past two years, we have heard it said in the House that no deal is better than a bad deal. I have to say that no deal is a terrible deal and it would be a gross dereliction of the responsibility of Members of this House to inflict no-deal on our constituents.

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

rose—

[Nicky Morgan]

I am afraid I am going to make some progress. My hon. Friend will be able to intervene on other Members.

Those who wanted Brexit talked often about the taking back of control. I have not had time to watch the film broadcast on Channel 4 last night, but I understand that that was a key part of it. As I have said before, it is right that control should come back to this Parliament, and it is right and it is time for Members of Parliament on all sides to make it clear to the Government that a no-deal Brexit outcome is absolutely unacceptable.

It will have been noticed that many of those who have put their names to amendment 7 are Chairs of Select Committees. The Treasury Committee took evidence in December—I am grateful to all Committee members, who have varying views on Brexit—and we produced a unanimous report. One thing that was made very clear is that, compared with today’s trading arrangements, and assuming no change to migration arrangements, our GDP would take a 7.7% hit on a modelled no-deal scenario. That is greater than the impact of the 2008 financial crisis. Members who have been in the House since 2010, and perhaps just before, will know the impact of the financial crisis on our constituents.

Finally, as a wise general said to me a few weeks ago, Britain is renowned for its confidence and competence. Currently, we are demonstrating neither. A no-deal Brexit will completely destroy any reputation we have for confidence and competence. The Government decided to put off the meaningful vote, although hopefully we will get it either this week or next. It is time for Members of Parliament on all sides to start ruling out options that would be deeply damaging to our country. That is what amendment 7 and 8 are about, and I will be delighted to support them both, should they be voted on.

Taxation (Cross-border Trade) Bill

Bernard Jenkin Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Monday 16th July 2018 Commons Chamber

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

Will my right hon. Friend give way?

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

Will my right hon. Friend give way?

--- Later in debate ---

[Sir Desmond Swayne]

rose—

[Sir Bernard Jenkin]

rose—

[Anna Soubry]

I said that I would go down the row first. In a moment gents; hang on.

--- Later in debate ---

[Anna Soubry]

I will take another intervention.

[Sir Bernard Jenkin]

I think the point that my right hon. Friend did not want to take is that there are plenty of businessmen who are in favour of leaving the European Union.

The point that I wanted to raise with my right hon. Friend is that her whole argument is passionately based on the fallacy that one cannot have just-in-time supply chains crossing international customs frontiers. In fact, that is the way that most of the rest of the world trades. At Toyota in her own constituency—I met Toyota last week—quite a substantial proportion of its componentry arrives from outside the European Union to be bolted on to its cars. She is putting up these completely false fears that just-in-time supply chains are threatened by trading across customs frontiers.

[Anna Soubry]

I have to say to my hon. Friend that that is absolute codswallop. When I went to Toyota, we were shown exactly the places where the parts had come from. For example, some parts had come from Japan. There was a special arrangement with Japan whereby the parts come into the factory and sit in a bonded warehouse. Those parts number less than 1% of the total. Toyota has 2.5 million parts coming into that factory, and the vast majority come from the European Union—it relies on frictionless trade.

With great respect to my hon. Friend, he is somebody who makes the case that we should be a member of the World Trade Organisation. Let us just get this one straight. If our country joins the World Trade Organisation—[Interruption.] Well, we are a member through our membership of the European Union. If we are a member of the WTO in our own right, we will have to abide by its rules, which say that every member must secure its borders—I repeat, must secure its borders. That does not just mean that our country, when we leave the European Union, must secure its borders, but that the European Union, whether it likes or not, must secure its borders. What does that mean? There will have to be a hard border between Northern Ireland and the Republic of Ireland. It is dishonest and disingenuous for people to stand up and make out that something other than that is the reality.

The White Paper faces up to Brexit reality, and that is what Conservative Members must now do. We have to face that reality, just like I have had to face the reality that we are leaving the European Union. Hon. Members have to do the right thing by their constituents and put trade and business at the heart of Brexit.

--- Later in debate ---

[Mr Leslie]

Yes, indeed.

It is helpful if we view the two Bills we are considering today and tomorrow as a piece, as they interrelate with one another. Many of the amendments tabled for the Trade Bill tomorrow on a customs union are also on today’s amendment paper. I say gently to the Government, “Nice try with your facilitated customs arrangement, but it is not going to fly for a number of different reasons.” I urge the Chancellor and the Minister to stop putting down red lines. They will only find that they come back and embarrass them when they have to accept a customs union.

Let me quickly go into detail on why a customs union really will have to apply in this situation. There may be Conservative Members who agree with me on this point. The facilitated customs arrangement may well apply if we have a free trade agreement with the EU, but only a customs union gets rid of what is known as the rules of origin requirements—the local content thresholds needed to prove whether an FTA is in place to qualify for preferential tariff arrangements. Under a customs union, we do not have to have rules of origin checks. That is a massive advantage of the customs union.

[Sir Bernard Jenkin]

That is not actually correct. It is quite common in a free trade agreement to have what is known as an auto-pact, so that there can be frictionless arrangements, for example for the motor industry. The same could apply for aerospace.

[Mr Leslie]

There are certain manufactured goods where they have that, but across the piece of a whole economy we do not see a circumstance where rules of origin have been abolished in the way the hon. Gentleman describes. Rules of origin are really quite burdensome for manufacturers to prove. They have to count the content and document where components come from. They then have to lodge those documents as they cross the border. My point is that the facilitated customs arrangement, with its rules of origin requirements, will have friction at the border. For that reason, we are going to have to accept that a customs union is preferable.

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[Yvette Cooper]

No, I will not, because there is a time limit and I want to finish my speech early so that others can contribute.

Members who oppose any form of customs union are underestimating the significance of rules of origin checks which, according to the Government’s own analysis, can burden businesses with additional costs amounting to between 4% and 15%.

[Sir Bernard Jenkin]

Why would any company bother to carry out expensive rules of origin checks if paying the tariff, which might be as little as 2%, would be much cheaper? It is as simple as that.

[Yvette Cooper]

That is really flipped logic. The hon. Gentleman is effectively saying, “They do not have to do the checks because they can all just pay the tariffs.” Why on earth are we going through this whole process in the first place if all we are going to get is a tiny reduction in tariffs that no one will take advantage of in order to get any benefits?

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

I hope that the penny is now dropping among those who inflicted the EU referendum and the subsequent chaos on the country as to precisely what damage this Tory farce is doing to our standing in the world and to our economy. We are two years on, yet no real progress has been made. Tory rivalries, leadership ambitions and factionalism are making this country a laughing stock, and Tory Members should be ashamed. I am sorry to say that Labour Front Benchers also often contribute to the farce.

I want to speak in favour of accepting new clauses 1 and 12 if they are pushed to a vote, and to speak against new clause 36, which is clearly a wrecking amendment. I hope that, when the Minister responds, he is able to explain why new clause 36 does not drive a coach and horses through the Chequers agreement. Everyone in the House knows that it does, but Ministers appear to be pretending that it does not. I commend the right hon. Member for Broxtowe (Anna Soubry), who is no longer in her place, for the anger and passion that she brought to the debate, and for starting to set out the consequences of Brexit. So far, the debate has been rather short on consequences. There has been a lot about aspirations, ambition, ideology and speculation, but rather little about the consequences of Brexit. Some Government Members pretend that Brexit will have no impact on the UK economy. Others are more honest, including the hon. Member for Harwich and North Essex (Sir Bernard Jenkin), who has just left his place—

[Sir Bernard Jenkin]

I am here.

[Tom Brake]

I am sorry—the hon. Gentleman is present. He was more honest. I hope that he does not feel that I am misinterpreting him, but I listened carefully to him, as I hope others did, when he spoke on the “Today” programme on Radio 4 this morning, and I think that what he was doing, perhaps paraphrasing our outgoing Foreign Secretary, was to say, “F*** business”. He was saying that all businesses care about are profits, but I think they care about whether they are able to do the job they are required to do and provide the jobs in this country.

[Sir Bernard Jenkin]

Unlike probably the vast majority of right hon. and hon. Members, I actually used to work in manufacturing industry. I worked for the Ford Motor Company, and I also used to invest in manufacturing businesses. It really is a bit rich when people who know next to nothing about manufacturing lecture those of us who have been in business on the things we know about. Does the right hon. Gentleman dismiss the views of people such as Sir James Dyson and J. C. Bamford and the many other manufacturers who wanted to leave the European Union when we had the referendum?

[Tom Brake]

The hon. Gentleman might be surprised to hear that I also worked in business before I came into Parliament. I worked for manufacturing businesses, among others. He mentions the two businesses which he in fact can mention because they are in favour of coming out of the European Union. We have heard rather a lot about those two businesses. One has of course relocated most of its production to China, so I am not sure it is particularly well positioned to talk about these things—

--- Later in debate ---

[Sir Bernard Jenkin]

I am very pleased to follow the right hon. Member for East Antrim (Sammy Wilson), who has put on the record a great deal of fact and truth about the way in which the Northern Ireland issue has been treated in the negotiations and by the negotiating parties. What he missed out in his remarks was that this was not an issue until the Varadkar Government were elected. The expectation was that there would be an invisible customs frontier in Northern Ireland. That was confirmed by Bertie Ahern when he gave interviews on the subject. It was confirmed by the head of the Irish customs organisation when he gave evidence to the Irish Dáil. It was confirmed by Jon Thompson, the head of Her Majesty’s Revenue and Customs, when he initially gave evidence to the Treasury Committee. This was not an issue until it was made an issue.

We are being asked to believe two extraordinary things. The first is that the Irish Republic itself might put infrastructure at the border of Northern Ireland, when the only reason that the Irish Republic recognises that there is a frontier between the Republic of Ireland and Northern Ireland is that it signed the Good Friday agreement—the Belfast agreement. Secondly, when President Juncker appeared in front of the Dáil a few months ago and was pressed to give an assurance that he would not force the Republic to put infrastructure at the border, he more or less gave that assurance. In fact, it was perfectly clear that he was not going to say, “We will force you to put infrastructure at the border,” so it is clear that the EU is not going to force anyone to put infrastructure at the border.

It is still the policy of the Government that we might leave even without a withdrawal agreement, on WTO terms. Under such circumstances, we will not put any infrastructure at the Irish border in Northern Ireland, and we will challenge the Irish Republic and the EU Commission not to do the same in the interests of peace in Northern Ireland. It is perfectly possible to manage an infrastructure-free customs frontier in Northern Ireland, and that is what will happen. It is pure obstinacy on the part of the Commission that it will not negotiate with the United Kingdom a free trade agreement on the basis of making an agreement with the whole United Kingdom, instead of excluding Northern Ireland.

[Kevin Hollinrake]

My hon. Friend is making some very good points. I certainly do not argue that we should be members of customs union, but the Freight Transport Association recently gave the example of a situation whereby a trailer full of 40 different consignments goes from Birmingham to Belfast, and then goes into 40 different white vans in Belfast. How does my hon. Friend propose that we would meet our responsibility to pay customs in such a situation?

[Mr Speaker]

Order. I am immensely grateful. May I encourage the hon. Member for Harwich and North Essex (Sir Bernard Jenkin) to draw his remarks to a close? He is within his time, but a lot of other people want to speak and I am being pressed by people who, quite understandably, want time. If the hon. Gentleman—with his brilliant eloquence and pithiness—could wrap up in a minute or two, that would be marvellous.

[Sir Bernard Jenkin]

Thank you, Mr Speaker. Just to answer my hon. Friend’s point, I think that we have to be practical. There will be a change in the way in which people treat consignments because they are crossing a customs frontier, but as the technology develops it will be possible to track individual consignments or multiple consignments in trucks across customs frontiers. We have discussed this matter with Revenue and Customs in this country. Ultimately, in future—looking ahead 10 or 20 years—the idea of customs frontiers existing between countries that trade tariff-free will become obsolete. To hinge our entire Brexit policy on the issue of not having customs declarations and customs frontiers is very last century, and we should not be captured by that.

My remarks are directed primarily at amendment 72, which I confess has turned out to be disappointingly uncontroversial. It was the intention of the European Research Group, a group of Conservative Back Benchers, to table four amendments—one or two of them in the light of the Chequers agreement and the White Paper—to test our understanding of the intention of Government policy. Every single one of our amendments, we believe, reflects Government policy. I do not imagine that the Government would have accepted any of them as calmly as they have if they did not reflect Government policy.

[Mr Grieve]

No, it is because they are useless.

[Sir Bernard Jenkin]

My right hon. and learned Friend, who seems to be becoming a remainer again, judging from his article in the Evening Standard—

[Anna Soubry]

Oh, come on.

[Sir Bernard Jenkin]

No, that is what he said. He said that we will have to rethink Brexit completely if we cannot get a satisfactory arrangement. That is the direction he is going in. I respect his view, but throwing around insults like “useless” is not elevating the debate.

My amendment 72 simply removes from the Bill an extraordinarily powerful Henry VIII provision that we should be signed up to a customs union with the European Union simply by order. Following the amendment that my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) tabled to clause 9 of the European Union (Withdrawal) Bill, I thought that what is sauce for the goose is sauce for the gander. I do not suppose that I shall hear him speak against my amendment, because it puts Parliament back in control of the decision to join a customs union with the European Union. That is what I think we should do.

[Mr Speaker]

Ahem!

[Sir Bernard Jenkin]

I end on this one point, Mr Speaker. We have heard a lot about 40 MPs having an excessive amount of influence in this Chamber. In fact, 17.4 million people voted leave in the referendum, and 70% of Conservative MPs and 60% of Labour MPs represent leave constituencies. It would be bizarre if, in the end, the House of Commons, which was elected predominantly on leave manifestos, put up road blocks against leaving the European Union, and I do not believe that it will.

[Mr Speaker]

Thank you. The time limit will have to be reduced, with immediate effect, to five minutes.

Treasury Spending: Grants to Devolved Institutions

Bernard Jenkin Excerpts

Tuesday 3rd July 2018 Commons Chamber

The House proceeded to a Division.

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

On a point of order, Madam Deputy Speaker.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Does the hon. Gentleman’s point of order relate to the Division?

[Sir Bernard Jenkin]

It does.

[Madam Deputy Speaker]

The hon. Gentleman may make his point of order.

[Sir Bernard Jenkin]

Madam Deputy Speaker, do you suppose that the Scottish National party would be calling so many Divisions this evening if it was Scotland that was playing an important football match?

[Madam Deputy Speaker]

I appreciate that the hon. Gentleman’s point of order relates to the Division, but it is not of course a point of order. I just have a fervent hope that, one day, Scotland will be playing an important football match.

Once again, I ask the Serjeant at Arms to investigate the delay in the No Lobby.

A120 Dualling

Bernard Jenkin Excerpts

Tuesday 19th June 2018 Westminster Hall

[Giles Watling (Clacton) (Con)]

It is an honour to serve under your chairmanship, Mr Hollobone. The A120 has long been in my heart as something needing improvement since well before I became involved in local or national politics.

Driving from my constituency—where we have wonderful beaches; it is a great tourist venue—and going westbound, as my hon. Friend the Member for Braintree (James Cleverly) said, it becomes completely blocked up at the section between Marks Tey and what we call cholesterol corner. I am sorry that I have to iterate that. Going from my constituency along the A120 has been a regular commute of mine. It sort of peters out beyond Bishop’s Stortford, where it goes back to being a two-way road, and then it peters out altogether in the middle of the countryside. The section between Stansted and Harwich is an absolute nightmare and has been for years.

We are now celebrating the decision on a preferred route, in which the A120 will be dualled between Braintree and Marks Tey—or south of Kelvedon, I should say. That is not ideal for me, but it is light years ahead of what we have to put up with now. I commend the application for RIS2 funding for this and I hope the Minister will take it further. It also should not be forgotten, as my hon. Friend mentioned, that the A120 is trans-European network route. It is a curious thing—all the major cities are supposed to be linked, east to west, from Moscow to Dublin. This section of the A120 is part of that, and it is a two-way road. It is nonsense. This is a major step towards realising that ambition.

I take this opportunity to call for further work, further down the line, to complete the A120 in an area that does not go through my constituency but that affects it hugely. My hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) knows all about it. It was built in the ’70s and it is now crumbling and beginning to fall apart. It needs a renewal, so why not get the whole thing done, from Harwich all the way to Stansted, and finish the job?

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

I am most grateful to my hon. Friend for raising that part of the A120—from Horsley Cross to Parkeston— which is vital for the economy of north Essex and is crumbling, as he says. However, I believe the Government should be able to say something this afternoon about the Highways Agency activity on that bit of the road and the resources that will be committed to it in the short term, if not the long term.

[Giles Watling]

My hon. Friend is right. I am delighted to hear that the Government can say something about that section, because it is still holding us up. Cars can still bowl along it at about 55 mph most of the time, but it is still a single lane on either side. It takes forever.

I look forward to our delivering a new, world-beating infrastructure across Britain, east to west, which we need now more than ever. We have not had that over the years. The A14 was improved many years ago, and it is about time the A120 was brought into line, so let us get that infrastructure in place. While I am standing here, I might as well mention that we ought to improve the railways in our area, too.

--- Later in debate ---

[Rachael Maskell]

I fully understand the scheme; I have read it in much detail. That is why I am making the case that it is so important that we give people real choice.

In my closing remarks—

[Sir Bernard Jenkin]

Will the hon. Lady give way very briefly?

[Rachael Maskell]

Very briefly, then.

[Sir Bernard Jenkin]

I am extremely grateful to the hon. Lady. Will she just give an assurance that the Labour party supports the dualling of the A120 all the way from Colchester to Parkeston, which is a stretch of road that is long overdue for dualling?

[Rachael Maskell]

I think I have made myself perfectly clear in today’s debate, with all due respect. What I have said is that we believe that we should have a fully integrated, intermodal approach to transportation, which, as I have—

European Affairs

Bernard Jenkin Excerpts

Thursday 15th March 2018 Commons Chamber

[Mel Stride]

Whether it is a transition period, an implementation period or whatever period one seeks to term it, the important thing is to understand what the period is about, and we have always been clear about that. It is a period in which we will remain closely involved—similar to how we are at the moment—so that when we move into the post-transition or implementation period we have undergone just one set of changes and that we have certainty in the interim for British businesses, which is exactly what they have been telling us they would like.

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

I repeat these words:

“I propose that we aim for a trade agreement covering all sectors and with zero tariffs on goods. Like other free trade agreements, it should address services.”

Those are the words used by President Tusk in introducing the guidelines, which seem to accept the principle that there should be a comprehensive free trade agreement between the United Kingdom and the EU.

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

I shall proceed as quickly as possible. The hon. Member for Sheffield Central (Paul Blomfield) rather marred his speech by playing the man and not the ball. It is much better if we deal with the arguments, instead of imputing motives or sentiments that were at that very moment being disowned by my right hon. Friend the Member for Wokingham (John Redwood). That was rather unfortunate.

I wish to point out that the agenda is not being set by a small group of MPs; it is being set by the British people—more than 52% of the electorate. Those who argue against leaving the customs union or for staying in the single market are arguing against the right of the British people to take control of their own affairs. Let us make no bones about this: the Labour party has now adopted a position in favour of some kind of weaselly half-Brexit, which is not what the British people voted for. The Prime Minister said that she does not recognise any distinction between hard or soft Brexit; there is leaving the European Union or somehow staying in, which seems to be the position the Labour party has now adopted.

Let me set out two contexts. First, many who supported remain seem to believe that people who voted leave in the referendum were voting to turn their back on the world. They claim that the UK’s decision was driven by isolationist and xenophobic undercurrents and see the leave vote as representing intolerance, prejudice and a call for protectionism. Vote Leave did not campaign for that. We deliberately left the Vote Leave website up—Members can take a look if they like. Vote Leave did not argue for isolation, intolerance or economic protectionism. Those may be the views of a vociferous minority, but the Ashcroft polling that was undertaken at the time of the referendum found that for nearly half of leave voters, the biggest single reason for wanting to vote leave was

“the principle that decisions about the UK should be taken in the UK”.

Lest we forget, that is the first context. The debate was about taking back control—about democratic self-government and our country’s right to make its own laws, to decide its own taxation and spending and to choose how it engages with other countries on matters such as trade, foreign affairs and defence. It was about leaving a bloc that is not only in relative economic decline but increasingly in a state of economic and political crisis.

[Sir William Cash]

I very much agree with my hon. Friend. Had the speeches by Mr Juncker and President Macron about moving towards a more integrated Europe—a sovereign Europe, as President Macron says—been put to the British people before the referendum, we would have had a proportion of the vote vastly greater than 52%.

[Mr Jenkin]

I was going to make that point later in my speech, but shall no longer do so, for the sake of brevity.

The EU undermines democracy, prosperity and international co-operation. It is plagued by high unemployment, high debts, an ageing population that is much too dependent on state welfare, a dysfunctional euro, unaccountable political institutions and a democratic crisis. It puts up barriers to the combination of world-class universities, technological innovation and venture capital that is fundamental to the technological innovation on which the future of our economy depends.

Since the referendum, we have seen the landmark statements to which the Chairman of the European Scrutiny Committee, my hon. Friend the Member for Stone (Sir William Cash), referred. In fact, Martin Schulz, the former President of the European Parliament, wants a full united states of Europe by 2025. The formation of the euro, which was always a political project, transformed the EU, making full integration an imperative to try to prevent the eurozone from breaking up. In the end, the euro will fail anyway, because there is no political consent for the scale of fiscal transfers necessary to compensate for the huge internal trade imbalances.

The second context is economic. Shortly before the referendum, the Treasury forecast that a leave vote would inflict an economic shock on the UK, leading to reduced trade and foreign direct investment, recession, and the loss of 500,000 jobs. I am sorry to disappoint the hon. Member for Sheffield Central, but the Treasury’s analysis has proved to be manifestly wrong. It also ignored the long-term future of global trade and economic growth. Between 2016 and 2017, UK GDP increased by 1.7%, and economic growth continues to surpass expectations. Tax receipts are higher than expected, and the UK is running a current budget surplus for the first time since the year leading up to July 2002—long before the crash, and two years earlier than anticipated just last year. UK unemployment has continued to fall from 8.5% in late 2011 to 4.4% in late 2017, and the unemployment rate was recently at its lowest point since 1975.

Although some businesses are moving parts of their operations to other EU countries, the number of jobs being moved is significantly lower than expected. Foreign direct investment has continued to grow and, since the referendum vote, there has been a string of major inward investment decisions. In fact, the year of the referendum, 2016, turned out to be another record year for inward investment. We have seen Wells Fargo committing to a new £300 million London headquarters and Nissan announcing its new Qashqai and X-Trail models to be built in Sunderland, making Sunderland a super plant of 600,000 vehicles a year. In December 2017, GlaxoSmithKline revealed its plans to invest £40 million in the UK’s life sciences sector. At the beginning of this month, Siemens committed to building a £200 million train manufacturing plant in the UK if it wins orders for new rolling stock, and, just last week, Toyota announced that it will build the next generation of its Auris hatchback at its Burnaston plant in Derbyshire, including a £240 million upgrade of the plant.

That is not a matter for gloating or complacency, but it shows that inward investment is not dependent on membership of the EU. What about the longer-term prospects for trade and economic growth? In recent years, UK trade has shown a well-established trend, as the proportion of UK exports sent to the EU has been declining. It peaked at 54% of UK exports in 2006. By 2016, that had fallen to 43%. That decline in the importance of our EU trade has set in despite the UK being in the EU, in a customs union and in the single market. Conversely, over the same period, the non-EU share of UK exports has increased. For example, China’s share of UK exports grew from 1.6% in 2006, worth a mere £5.4 billion, to 3.3%, worth £16.8 billion, in 2016.

Trade has also grown significantly with the Commonwealth. UK exports to Commonwealth countries have increased from 8.8% of our exports, worth £21.5 billion, in 1999 to 8.9%, worth £48.5 billion, in 2016. The Commonwealth is a fast-growing market, reflecting much of our language, values and administrative and constitutional heritage, and therefore has great potential for the UK.

The EU is still the UK’s largest trading partner if taken as a bloc, but if we consider individual countries, the UK’s largest trading partner is the United States of America. It seems to have passed the hon. Member for Sheffield Central by that, while the UK has had a trade deficit with the EU every year since 1999—worth £82 billion in 2016—we achieved a £39 billion trade surplus with non-EU countries in 2016. Outside the EU and the customs union, the UK will be able to develop new trading relationships with many of these countries, but not under his party’s policy. Some of these opportunities, including the possibility of joining the Trans-Pacific Partnership and the strong prospects of a comprehensive free trade agreement with the US, including financial services, more than match the potential of our existing relationships with the EU.

The 11 TPP countries have a population of almost 500 million people and represent more than $10 trillion in economic output, which is 13.5% of the global total. The Commonwealth has a population of 2.3 billion people. A comprehensive trade deal with the US, which includes services, would give UK firms better access to its population of more than 320 million and to the world’s largest single economy. With the UK accounting for 7% of world service exports and the USA 15%, they would together account for over a fifth of the global total—a market of huge significance.

Outside the EU, the UK will also be better placed to develop trading opportunities with countries in Asia and Africa, where the most rapid growth is expected to occur in the future. When concluding free trade agreements, we can set our own negotiating priorities that best match our economic interests. The EU has historically represented the UK’s interests poorly not just because it is incredibly slow, but because, inevitably, the EU cannot prioritise UK trading interests such as access for services, which is, of course, of prime importance to our economy. EU negotiators have to take account of 28 states’ interests, which can be very different from our own, and to reflect the protectionist priorities of producer interests, such as the Italian shoe industry, French agriculture and the German chemicals manufacturers.

[Vicky Ford]

I am very much enjoying listening to my hon. Friend’s speech and hearing him talk about opportunities for trade outside the EU, but, bearing in mind that nearly half our trade is with the EU, that 40% of that is in services, and that services growth has been increasing year on year, does he not agree that we should try to do both? The EU economy is growing at the moment. We can grow our trade with the EU and with other parts of the world if we strike an amicable trading relationship with the EU as we leave.

[Mr Jenkin]

I could not agree more with my hon. Friend. We are on exactly the same page, and we can both support the Prime Minister’s negotiating objectives on that basis.

Returning to the UK the power to negotiate and sign trade deals will not only speed up trade negotiation for the UK, but enable the Government to negotiate in the UK national interest. The hon. Member for Glenrothes (Peter Grant) asked which countries we were talking about. The Department for International Trade is pursuing opportunities in countries around the world, and Australia and Brazil, to name just two, have already expressed an interest in concluding free trade agreements with the UK.

[Peter Grant]

I am grateful to the hon. Gentleman for giving way on that point. As a matter of accuracy, may I point out to him that I asked not what countries we hoped to do deals with, but for one country that has said that it will give the United Kingdom a better deal than it would give us as part of the European Union? To date, I have not received a single answer to that question. If he can he tell us now of one country that has said that it will give an isolated Britain on its own a better trade deal than a Britain that is part of the European Union, I am quite sure that his colleagues in the Department for International Trade would be delighted to speak to him.

[Mr Jenkin]

I think the hon. Gentleman is somewhat playing with words, because nobody will say what kind of deal they will give us until we are actually in the negotiations and making progress. He is asking a question to which he well knows the answer for his own political reasons.

In relation to our trade with the EU, the Prime Minister in her recent speech called for trade at the UK-EU border to be as frictionless as possible. The EU has agreed, as I mentioned earlier, that tariffs and quotas should be avoided and, in the draft negotiating guidelines published earlier this month, it also agreed to the principle of an EU-UK trade deal. Perhaps that is the answer to the hon. Gentleman’s question. There should also be mutual recognition of products and standards, which is no more than the kind of standard agreement that the UK has with many other countries with which it does not have a free trade agreement—incidentally, I think that that is what is meant by a customs arrangement. It means goods need approval in only one country to meet the required regulatory standards in other countries in normal circumstances.

Although we recognise that certain aspects of trade in services are intrinsically linked to the single market, we should note that services trade has nothing whatsoever to do with being in or out of a customs union, because tariffs are not charged on services. The Prime Minister is right to insist that barriers should be introduced only where absolutely necessary. There is no reason for the EU to prevent UK firms from setting up in the EU as we will continue to allow EU firms to set up here. We should agree on an appropriate labour mobility framework and on the recognition of qualifications to provide for the mobility of skilled labour. The Prime Minister also called for the UK and EU economies to remain closely linked in areas including energy, transport, digital, law, and science and innovation. That is perfectly achievable if there is good will on both sides.

The UK is committed to remaining a close friend and neighbour of the EU, and the Prime Minister has made that perfectly clear with a comprehensive economic partnership.

Trade is, of course, of great importance to the economy. In the UK, about 28% of what we produce is sold abroad, and this business activity supports millions of jobs. We also import much of what we consume, and trade allows consumers to access a wider variety of goods, at competitive prices, but the volume of trade is only marginally affected by agreements between countries. Neither the EU nor the UK has a trade agreement with the US, but the US is nevertheless our largest trading partner.

When discussing trade, we must remember that trade agreements are only one factor upon which our economic future depends. How we educate our people, how we regulate our economy, the flexibility of our labour market, and investment in infrastructure, science and technology are far more important to our prosperity than trade agreements. Domestic Government policies have a much bigger impact on economic performance than whether the UK is inside or outside a customs union with the EU. As the hon. Member for Sheffield Central himself pointed out, Germany exports to the rest of the world from within the EU, but with many countries, it does not even have a trade agreement, let alone a customs union agreement.

Let us get all this in proportion. It is far more significant that the UK’s departure from the EU will give us greater flexibility, more responsibility, more accountability and more control over how we manage our economy as we regain: the ability to set our own tariff schedules; the ability to set our own regulatory standards and decide how they should be applied; the unencumbered freedom to set VAT rates; the freedom to relax restrictions placed on UK public procurement; and policy flexibility over things like fishing and farming.

[Vicky Ford]

I think that my hon. Friend just said that he did not think that there was value in having trade agreements with other third countries. I would like to clarify that, for example, our trade with South Korea has more than doubled—increased by 100%, as the Foreign Secretary said—since the signing of a trade agreement between South Korea and the EU, of which we are a party.

[Mr Jenkin]

I am not discounting the value of free trade agreements. I am asking that we dispose of some prevalent misconceptions that our prosperity depends only on free trade agreements and being part of the customs union. It is actually relatively at the margins of the overall prosperity of our economy.

It is not necessary to be a very large country or part of a large trade bloc in order to be prosperous. Many very small states export a far higher proportion of their GDP across customs frontiers. For example, Switzerland’s exports are worth 66% of its GDP, and South Korea’s are worth 42%—far higher than the UK’s. Neither of these countries are in any kind of customs union, so they achieve this across traditional customs frontiers and their people have very high living standards. In fact, the EU is Switzerland’s main trading partner, and it is not even a member. Other small trading countries include Singapore, whose exports are actually far bigger, at 172% of GDP, and Hong Kong, whose exports are 187%, because it imports and exports such large volumes. But neither is part of a customs union or of any kind of single market; they just get on with it.

Control over our own laws offers far greater opportunities to develop our economy and export than the removal of customs checks when trading with other countries. The cost of customs processes is low and declining in comparison with other costs, such as anti-competitive regulation, behind-the-border barriers to trade and the reduction of tariff barriers. South Korea had substantial tariff barriers before the free trade agreement. We gain the opportunity to focus on those matters in trade negotiations, alongside investment in science and tech, educating our people, and ensuring flexible labour markets and a competitive tax regime. So much of the debate about leaving the EU lacks this perspective.

Even so, our future opportunities outside the EU are important. Even the European Commission expects 90% of global economic growth over the next 10 to 15 years to be generated outside Europe. The UK can flourish outside the EU, perhaps not with a Corbyn Government—that might be a bit of a problem—but certainly with a sensible Conservative Government. The only question is whether we all work hard to embrace these opportunities or continue trying to hide from them. Outside the EU, instead of pretending that we can insulate ourselves from a rapidly changing world and from the effects of technological and societal change, with a failing model of regulation and centralised power—without all that—we will have the freedom and flexibility to respond, adapt, survive and prosper.

--- Later in debate ---

[Peter Grant]

I got them from Her Majesty’s Government. If the hon. Gentleman wants to tell me that we should never believe anything that Her Majesty’s Government’s civil servants tell us, that is a debate in itself. Those were the figures that were released, with significant protest, by Her Majesty’s Government to the Brexit Committee. I highly recommend the document to him.

Having had the analysis done at significant expense, those who instructed it to be carried out now seem to want to downplay it—to discredit it. I am pleased that we are no longer hearing, certainly from Ministers, any suggestion that there was anything incompetent, unprofessional or negligent in the performance of those who produced the figures. Of course, those who think that the Treasury’s figures are wildly too pessimistic have had the opportunity to produce their own. We might even find somebody who produces figures that give the lie not only to the Treasury but to the Scottish Government and to any number of other professional bodies. Those bodies do not always agree on the exact figures, but few, if any, are producing a scenario that looks anything other than deeply, deeply damaging for our economy and for the social cohesion of our four nations.

During the Minister’s speech, he took an intervention from one of his colleagues about an article in The Times. Interestingly, his answer seemed to suggest that it was only when they read it in The Times that the Government knew that there had been some softening of the attitude in Brussels towards our ability to negotiate trade deals. Perhaps the Minister could clarify that when he winds up. Would it not be typical of the shambolic nature of the Government in conducting these negotiations if they were getting their information from the front pages of Rupert Murdoch’s newspapers rather than from direct face-to-face contact with our European friends and allies?

When the Government were asked to name a single country that is saying that it would give us a better trade deal out of the EU than within the EU, yet again not a single country was named that is willing to do so. There is a lot of ambitious and grand talk of all the countries that want to trade with us—a wish list, a pie-in-the-sky list. There is, as yet, absolutely no reason to believe that any of these countries will give us a better deal than we could get by staying exactly where we are. We need to remember that what the Government ask for ain’t necessarily what they are going to get, because there are 27 other Governments over there who are just as determined and just as entitled to look after the interests of the people they represent.

The hon. Member for Harwich and North Essex (Mr Jenkin) used the tired old argument that we have a trade deficit with the EU and a trade surplus with the rest of the world, and we should therefore concentrate on the rest of the world. I leave aside the fact that some of us do manage to have a trade surplus with the European Union. The logical consequence of that argument is that, if the rest of the world has a huge trade deficit with us, why in the name of goodness would they want to continue trading with us? It is not because Europe is bad at industry and manufacturing that it has a trade surplus with us—it is because it is better at it than we are. The cradle of the industrial revolution has allowed others to overtake us in investment and reinvestment and improving manufacturing efficiency.

[Mr Jenkin]

rose—

[Peter Grant]

I will give way in a moment.

That is why the Germans can manage to have a trade surplus when we cannot. It is not because they are cheating or because the rules are loaded in their favour; it is because they use more of the profits of their industry to invest in it rather than hiving them off to some kind of offshore tax haven where they are never seen again.

[Mr Jenkin]

I am glad that the hon. Gentleman had the opportunity to add his rather more socialist point. The problem with the regulatory regime in the European Union is that the whole system is not geared towards our interests and our economy, not least because Germany enjoys a very artificially depressed currency. The Germans have by far the biggest trade surplus as a consequence, and their currency never appreciates because they are in the euro. That has cemented in a completely unfair disadvantage, institutionalised by the European Union.

[Peter Grant]

So modern industrialised nations that are in the euro do better than those that are not in the euro. That is an interesting argument for the hon. Gentleman to make. I am not saying that I would necessarily agree with its inevitable conclusion, but he does seem to be tying himself in knots very effectively.

I must come back to the comment with which I challenged the Labour spokesperson, because it is very important. When we are talking about the rights of citizens, whether they have lived here their entire lives, come here from other countries, or gone from here to other countries, we should be absolutely uncompromising in celebrating immigration as a good thing. Yes, it sometimes means that bad people come here, but thousands, millions, tens of millions of times more often it means that good people can come here and that our people can go to other places. The exchange of ideas, for example, is something that we cannot put a price on. As well as talking about free movement of people, I want us to be talking about free movement of ideas, because that is what is at stake more than anything else.

To suggest that immigration is responsible for the low-paid, insecure jobs on these islands lets the Government off the hook. Last week, the Leader of the Opposition told an audience—not a very big audience, admittedly—in Dundee:

“We cannot be held back—inside or outside the EU—from …preventing employers being able to import cheap agency labour, to undercut existing pay and conditions in the name of free market orthodoxy.”

I am disappointed that Labour Front Benchers have not apologised for that and invited their leader to withdraw, as a lot of their Back Benchers have. It is not the European Union that is responsible for low pay on these islands; it is successive Governments who eventually introduced a minimum wage but left us with one that is still not enough for people to live on. It is not the European Union that allows employers and agencies to exploit vulnerable, desperate workers; it is domestic legislation. Coming out of the protection of EU employment law is not going to make it easier for vulnerable employees to speak up for themselves. The gig economy—the low-pay economy—is not going to improve by our coming out of the European Union. Indeed, I worry that it will get significantly worse. If anybody thinks that the Conservatives want to come out of EU employment legislation to improve workers’ rights, they really need to look back at the past 100 years of employment law history on these islands.

As I said, it is unfortunate that Brexit has become an all-consuming obsession for the Government, and now for this Parliament, but it is inevitable, because if we get it wrong, as the Government seem determined to do, generation after generation will be paying the price socially and economically. We discovered that we have moved on from the previous Government policy—that the EU can “go whistle” for any payment—to talking about payment for part of the deal of about £37 billion, which we will still be paying if and when I am 104 years old. Possibly some right hon. and hon. Members here will not be around to see that. That is how long it will take simply to pay for a bad deal.

I have hardly even mentioned the potential catastrophe in Ireland. I am deeply concerned that Ministers still seem quite taken with the “Smart Border 2.0” proposal that was published a few weeks ago. “Smart Border 2.0” explicitly says that it relies on automatic barriers, infrastructure, surveillance cameras and staffed checkpoints at the border of Northern Ireland and the Republic of Ireland. If the Minister says nothing else in summing up, I hope he will say clearly—and in such a way that none of his Back Benchers can try again—that the “Smart Border 2.0” proposals are so inconsistent with the Government’s commitments and so incompatible with the Northern Ireland peace process and the Good Friday agreement that, although an interesting idea, they will go no further, that the Government will take them no further and certainly that the EU will take them no further when it is listening to the Government of the Republic of Ireland.