Exiting the European Union and Global Trade

Bim Afolami Excerpts

Thursday 6th July 2017 Commons Chamber

[Tom Brake]

I am sure that there will be some excellent cross-fertilisation going on there. Of course I congratulate Robbie Gibb on his new role.

As the Minister will know, the Liberal Democrats favour staying in the single market and the customs union, and we are disappointed that the Government made no attempt to secure that while talking to the other EU countries about freedom of movement. We need to hear the Minister’s assessment of the cost of leaving the single market and the customs union. What would be the cost of reaching no deal? What would be the cost of a bad deal or a good deal? The Secretary of State for Exiting the European Union has said that he cannot tell us what these costs are because we do not know what the deal is, yet we hear successive Ministers saying that leaving the European Union is going to be absolutely brilliant and a bonanza for British business. They can tell us that, yet they cannot say what the cost of leaving the European Union with either no deal or a bad deal would be. Will the Minister tell us what those costs would be, or is there a cover-up going on?

We also need to hear how many deals the Minister expects to be struck when we leave the European Union. How many does he expect to be secured in the first, second, third and fifth years after our departure? We have heard from other Members what the average time is for securing a trade deal. I would also like some feedback from the Minister on the countries with which the European Union has already struck a deal or is about to finalise one. Canada and South Korea are examples, and I understand that Japan is now close to securing such a deal. I would like to know how long those countries think it would take to secure a new deal with the UK at some point in the future. Given that informal discussions have started, I also think we are entitled to know what countries such as China, India and Brazil have been saying to the British Government about their expectations of how many more Chinese, Indian and Brazilian citizens will be able to come to the UK on the back of any trade deals. People will be interested to know those facts.

The Minister has heard from many contributors this afternoon about the importance of freedom of movement. He will have been lobbied by a series of companies and organisations across the board about their concerns over the impact of restricting freedom of movement. He will have heard from companies that innovate, and from companies similar to the one in my constituency that is worried that it cannot gain access to engineers from the UK, because we simply do not have enough of them, and that the number of engineers from the European Union, on whom it relies, is already decreasing because those people are seeking opportunities elsewhere. Such companies know that it will cost them more to secure engineers from outside the European Union because they will have to pay visa costs. That is already happening with the recruitment of nurses. My local hospital is no longer recruiting nurses from the European Union because they do not want to come here, partly because of the fall in the value of the pound. Instead, it is securing nurses from India and the Philippines. However, it is now having to pay roughly £1,000 per visa for each of those nurses—a cost that it did not have to meet for nurses from the EU.

We also need to hear what the Government are trying to embed in these trade deals. We have heard the Secretary of State for International Trade talk about the shared values he has with President Duterte of the Philippines. I do not have that many shared values with someone who is on record as saying that he has gone around his country using extrajudicial killings to dispose of drug dealers, but maybe the Secretary of State does share values with him. We need to hear from the Minister how he is going to embed issues such as human rights and environmental rules into the trade deals. We need to be sure that they will be decent deals and that they will not simply be secured at any cost.

Earlier today I asked the Leader of the House to confirm whether the Government will release the report on the funding of extremists in the United Kingdom. I am worried that the report may not be published simply because it might jeopardise the trade deals we have secured with Saudi Arabia.

[Bim Afolami (Hitchin and Harpenden) (Con)]

rose—

[Christian Matheson]

rose—

--- Later in debate ---

[Bim Afolami (Hitchin and Harpenden) (Con)]

I start by declaring an interest. Before entering the House, I worked as a corporate lawyer in the City for Freshfields Bruckhaus Deringer and for Simpson Thacher & Bartlett, and as a senior executive at HSBC.

I will specifically address financial services post Brexit. I echo my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) on how much of an asset financial services are to our country. I will not repeat the statistics he outlined, but they are all accurate and true.

It is worth considering why our financial services sector is such a world leader, which is not just because it has been around for a long time but because the in-depth, unique infrastructure surrounding financial services—whether it be the lawyers, accountants, consultants or the like—makes Britain such a good place for this industry. Those advantages are not going to change.

It is true that business never likes uncertainty, and there is undoubtedly uncertainty in certain areas of our regulatory and legal frameworks surrounding financial services. If the House will indulge me, I will address two of those areas. First, as Members will fully appreciate, a key area that has been highlighted is this country’s desire to continue benefiting from the single passport for financial services that operates within member states of the European Union, whereby a firm that obtains authorisation to carry out a particular activity in one state can carry out such activity in other member states without further authorisation or regulation. It would be good to hear from the Minister and the Secretary of State whether we intend to try to maintain that position.

Another area of real uncertainty is the principle of equivalence. At the immediate point of exit, EU law will form part of UK law and, therefore, as a matter of fact will be equivalent. However, it should not be controversial for the United Kingdom to keep the bulk of EU financial regulation then in force as, frankly, much of it was either largely driven or written by the United Kingdom or derives from international accords of one kind or another. That is another area where certainty for business would be appreciated. In particular, the clearing of euros in the City of London is attracting a lot of concern.

Having said that, we need to ensure that our reasonable concerns about this uncertainty do not lead us in the long term, post Brexit, to try to keep everything the same as now. Why should that be? It would mean accepting wholesale a European regulatory framework that we would no longer have a role in shaping, and which would consequently allow the European Union—if, perish the thought, it wished to cause us difficulty—to stifle the activity of our financial services sector.

I do not have time to go into what I think the vision for financial services should be post Brexit. [Interruption.] That is a shame for everybody. We need a transition in order to get there, but our financial services sector has a bright future after Brexit. I look forward to the Minister’s response.