Oral Answers to Questions

Debate between Lord Lilley and David Jones

Thursday 27th April 2017 Commons Chamber

[Mr Jones]

First, these are the draft guidelines; the final guidelines will not be issued until 29 April. They are the guidelines under which the European Union wants us to operate the discussions, but it remains to be seen what our response will be.

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

Although my hon. Friend the Member for Gainsborough (Sir Edward Leigh) and I are of one mind, we have two questions—and only one knighthood.

The Government are right to seek a continuing free trade agreement with the European Union: it will be in the interests of the European Union as well as in ours, and it will be the first, best outcome. However, Ministers cannot admit what I think is quite likely, which is that politics may trump economics and that there may be no deal. Will they therefore confirm that in those circumstances we will go to a good, second-best outcome, which is trading on most favoured nation terms, as do the European Union’s most successful partners—the USA, China, Japan and Russia? It would mean an average tariff of 4%, which is relatively small beer compared with a 15% improvement in competitiveness because of the exchange rate, while saving £10 billion a year, which is equivalent to a 7% tariff on our exports.

[Mr Jones]

Let me say quite clearly that the Government’s ambition and intention are to achieve the best possible free trade agreement with our EU partners. However, our position is also that we expect to negotiate toughly and—unlike Labour’s, our position will be made clear to the European Union—that we are prepared to walk away from the negotiating table if it is not possible to achieve a deal that suits us.