New Partnership with the EU

David Davis Excerpts

Tuesday 17th January 2017 Commons Chamber

[The Secretary of State for Exiting the European Union (Mr David Davis)]

I say to the hon. Member for Cardiff South and Penarth (Stephen Doughty), who has just made a point of order, that I spent many years sitting on the Opposition Benches—

[Chris Bryant (Rhondda) (Lab)]

Making that point.

[Mr Davis]

Not making that point, but making a rather more pertinent one, which was that we did not have the opportunity at all to interrogate Mr Tony Blair after he had been on the radio and television. But today is a parliamentary day and I wish to share with Parliament what I think are some important points.

I would like to update the House on the Government’s plans for exiting the European Union. Today, the Prime Minister is setting out a plan for Britain. It is a plan to ensure that we embrace this moment of change to build a confident, global trading nation that seizes the new opportunities before it, and a fairer, stronger society at home, embracing bold economic and social reform. It is a plan that recognises that the referendum vote was not one to pull up drawbridges and retreat from the world, but rather a vote of confidence in the UK’s ability to prosper and succeed.

It is a plan to build a strong, new partnership with our European partners while reaching beyond the borders of Europe, too, forging deeper links with old allies and new ones. Today we set out 12 objectives for the negotiation to come. They answer the questions of those who have been asking what we intend while not undermining the UK’s negotiating position. We are clear that what we seek is that new partnership: not partial EU membership, not a model adopted by other countries, not a position that means we are half-in, half-out. Let me address each of our aims in turn.

First, we will provide certainty wherever possible while recognising that we are about to enter a two-sided negotiation. We have already made announcements about agriculture payments and student funding. Our proposal to shift the acquis—the body of EU law—into UK law at the point of exit is designed to make the process as smooth as possible. At the point of exit, the same rules and laws will apply, and it will then be for this Parliament to determine changes in the country’s interests, for we also intend to take control of our own laws and end the authority of the European Court of Justice in the UK. Laws will be made in this Parliament, and in the devolved Assemblies, and interpreted by our judges, not those in Luxembourg.

We will aim to strengthen the Union between our four nations. We will continue to engage with the devolved Administrations, and we will ensure that as powers are returned from Brussels to the UK, the right powers come to Westminster and the right powers are passed to Edinburgh, Cardiff and Belfast. Another key objective will be to maintain the common travel area between the UK and the Republic of Ireland. No one wants to see a return to the borders of the past.

In terms of immigration, we will remain an open, tolerant nation. We will continue to welcome the brightest and the best, and to ensure that immigration continues to bring benefits in terms of addressing skills shortages where they exist, but we will manage our immigration system properly, which means that free movement to the UK from the European Union cannot continue as before. We want to guarantee the rights of EU citizens who are already in this country and already make such a great contribution to our society, in tandem with similar protections for the rights of UK citizens in EU countries. We would like to resolve that issue at the earliest possible moment.

UK law already goes further in many areas than EU minimums, but as we shift the body of EU law into UK law we will ensure that workers’ rights are not just protected but enhanced. In terms of trade, we want to build a more open, outward-looking, confident nation that is a global champion for free trade. Membership of the EU’s internal market means accepting its four freedoms, in terms of the movement of goods, services, capital and people, and complying with the EU’s rules and regulations. That would, effectively, mean not leaving the EU at all, so we do not propose to maintain membership of the EU’s single market. Instead, we will seek the broadest possible access to it through a comprehensive free trade agreement with the EU. We want it to cover goods and services and to be as ambitious as possible.

This is not a zero-sum game. It should be in the interest of both the UK and the EU. It is in all our interests that financial services continue to be provided freely across borders, that integrated supply chains are not disrupted and that trade continues in as barrier-free a way as possible. Although we will seek the most open possible market with the European Union, we also want to further trade links with the rest of the world, so we will deliver the freedom for the UK to strike trade agreements with other countries. The Department for International Trade has already started to prepare the ground and it is clear there is enormous interest around the globe in forging new links with the UK.

Full membership of the EU’s customs union would prohibit new international deals, so we do not intend to remain part of the common commercial policy or to be bound by the common external tariff. Instead, we will seek a customs agreement with the EU with the aim of ensuring that cross-border trade remains as barrier-free as possible. Clearly, how that is achieved is a matter for negotiation.

The UK is one of the best places in the world for science and innovation, with some of the best universities in the world, so we must continue to collaborate with our European allies. When it comes to crime, terrorism and security, we will aim to further co-operation with EU countries. We will seek practical arrangements in these areas to ensure that we keep our continent secure and defend our shared values.

Finally, in terms of our exit, we have said repeatedly that it will be in no one’s interests for it to be disorderly, with any sort of “cliff edge”—the words used by the Opposition—as we leave the European Union. We intend to reach broad agreement about the terms of our new partnership with the EU by the end of the two-year negotiation triggered by article 50, but then we will aim to deliver an orderly process of implementation. That does not mean an unlimited transitional period where the destination is not clear, but time for both the UK and EU member states to prepare for new arrangements, whether that be in terms of customs arrangements, the regulation of financial services, co-operation over criminal justice, or immigration controls.

Those are the aims and objectives we set today for the negotiation to come. Our objectives are clear: to deliver certainty and clarity wherever we can; to take control of our own laws; to protect and strengthen the Union; to maintain the common travel area with the Republic of Ireland; to control immigration; to protect the rights of EU nationals in the UK and UK nationals in the EU; to protect workers’ rights; to allow free trade with European markets; to forge new trade deals with other countries; to boost science and innovation; to protect and enhance co-operation over crime, terrorism and security; and to make our exit smooth and orderly. That is the outline of an ambitious new partnership between the UK and the countries of the EU.

We are under no illusions: agreeing terms that work for both the UK and the 27 nations of the European Union will be challenging, and no doubt there will be bumps on the road once talks begin. We must embark on the negotiation, however, clear that no deal is better than a bad deal. As the Prime Minister has made clear today, the UK could not accept a punitive approach, so let me be clear that we do not expect that outcome.

We are confident that if we approach the talks in a spirit of good will, we can deliver a positive deal that works for the mutual benefit of all. It is absolutely in our interests that the EU succeeds, and it is absolutely in the EU’s interests that we succeed too. That will be one of our central messages: we do not want the European Union to fail; we want it to prosper politically and economically, and we will seek to convince our allies that a strong new partnership with the UK will help it to do that.

Our approach is not about cherry-picking; it is about reaching a deal that fits the aims of both sides. We understand that the EU wants to preserve its four freedoms and chart its own course. That is not a project that the UK will now be a part of, so we will leave the single market and the institutions of the European Union. We will make our own laws and decisions about immigration. Let me be crystal clear, if there has been any doubt: the final deal agreed between the UK and the EU will be put to a vote in both Houses of Parliament before it takes effect.

To conclude, we are leaving the European Union but we are not leaving Europe. We will continue to be reliable partners, willing allies and close friends with our European neighbours. We will be ready for any outcome, but we anticipate success, not failure. The UK will embrace its new place in the world with optimism, strength and confidence.

--- Later in debate ---

[Keir Starmer]

Mr Speaker, let me give three examples without the details: the European Aviation Safety Agency, which deals with safety; the European Medicines Agency; and Europol, which I worked with for many years. Those are the bits of the EU that we should be seeking to retain, not throw away.

It was the previous Prime Minister who got us to this place without any forethought or planning. This Prime Minister has now chosen a risky implementation plan. She owns the consequences now, in 2019 and beyond.

[Mr Davis]

When we started down this route, I said to the House that the Government had been given a national instruction that we would attempt to interpret in the national interest. That seemed to me to be the right approach. Rather than a 52/48 approach, it is an approach that encompasses everybody’s interests. I hope that we have done that today.

The hon. and learned Member for Holborn and St Pancras (Keir Starmer) is a very talented man, and his questions were as forensic as we would expect. He asked about membership of the single market, so we answered that. We laid out the claims on the customs union, which was another of his questions. He asked for detail to scrutinise the plan to see where we are going. Within the context of not undermining our negotiation, that is entirely what we have tried to do. I had hoped to see some Opposition Members support what we think is a responsible, thoughtful but realistic plan that takes on board the instruction that we have been given by the British people to take us out of the European Union, but in a way that preserves our interests as best we can, whether security interests, economic interests or whatever.

Let me deal with some of the specific points raised by the hon. and learned Gentleman. I will put aside my disappointment at the tone. He says that a free trade agreement will need to have a disputes resolution procedure. So it will; they nearly all do. It does not have to be the European Court of Justice, though. We can agree that he has just got the thrust of it wrong. As for the other things: tariff-free, I agree; impediment-free, I agree. Alignment of regulation? That may well be necessary in some aspects, but we will see as the negotiation develops. On goods and services, I agree. The hon. and learned Gentleman is not putting up any hurdle that, frankly, we do not intend to cross ourselves.

Now, on this question of threats, this was not a threat. It was the Chancellor saying in an interview, “Well, if you go down the route of a punitive approach, this is the consequence and this is what will happen.” Nations defend themselves. Nobody says it is what we want to do. It is specifically not what we want to do. We want the freest, most friendly possible relationship we can get, and that is what we will set out to do.

The other areas, including questions on matters such as criminal justice, home affairs issues and so on, will develop as we go through the negotiation. The Prime Minister is a very distinguished ex-Home Secretary—the longest-lasting Home Secretary in modern times—and she has as good a grip of our home affairs needs as the ex-Director of Public Prosecutions has. He can take it as read that we will, over time in this House and, most particularly, in the negotiating chamber with the Europeans, address all the issues he raised. I happen to think that they will have as much interest in resolving those issues as we do. The negotiation is predicated on us doing what is in the interests of everybody: ourselves, the Europeans and all our neighbours in our part of the globe. That is what we intend to do and what we intend to deliver on.

[Sir William Cash (Stone) (Con)]

I am sure that my right hon. Friend will acknowledge that the Prime Minister’s speech is principled, reasonable and statesmanlike. The 27 member states’ Heads of Government said only a few weeks ago at the last Council summit that there would be no access to the single market unless we accepted all the four freedoms. Does my right hon. Friend agree that that presents a difficulty? Will he accept, therefore, that it is essential that we clear that with the other member states on the basis of principle, reasonableness and statesmanship?

[Mr Davis]

I have tried throughout the past six months not to respond to the sometimes emotional comments from various people around the continent. I am slightly surprised in my hon. Friend, however, because he of all people would pull me up if I confused access to the single market with membership of the single market. Pretty much every country in the world that is not subject to sanctions has access to the single market. We will have access to the single market. The question is about the terms. My job and the job, frankly, of everybody, including the Opposition, is to persuade our opposite numbers in Europe that it is also in their interests that we all have equal access to each other’s markets, and that is what I intend to do.

[Peter Grant (Glenrothes) (SNP)]

I thank the Secretary of State for the advance copy of his speech, and for recognising the correct place to make this statement; it certainly was not at Lancaster House. Today, the Prime Minister and the Secretary of State have completed an unholy trinity of worthless Westminster promises to the people of Scotland. They promised to take account of the 62% remain vote in Scotland and to consider all options for Scotland’s future. They have broken that promise today. They promised during the referendum campaign and in their election manifesto that leaving the EU does not mean we have to leave the single market. Today they are breaking that promise. As for the promise they made in 2014 that remaining in the United Kingdom would guarantee Scotland’s place in Europe—well, we all know where that has gone. I hope the Secretary of State will pass the message back to his boss that if she insists on giving Scotland only one option to remain in the European Union, Scotland will take that option.

We know with certainty that Brexit means hard Tory Brexit. We do not know what it might be disguised as, but we know what it will be. Will the Secretary of State accept, even at this late stage, that the promises that he and Prime Minister made must be honoured? Exactly how does he propose to recognise the 62% remain vote in Scotland and the overwhelming—nay, unanimous—view in Scotland that our membership of the single market and free movement of people into and out of Scotland are essential for our wellbeing? Has he actually read the Scottish Government’s paper, “Scotland’s place in Europe”?

[Mr Davis]

indicated assent.

[Peter Grant]

Given that he is nodding, will he give an undertaking that the paper will be properly and thoroughly discussed at the Joint Ministerial Committee meeting next week? Finally, will he give an undertaking that before any non-returnable steps are taken, the Parliaments of all our devolved nations will be given a chance, even on an advisory basis, to consider the Government’s plans before they are implemented?

[Mr Davis]

It has been my privilege to chair the Joint Ministerial Committee on EU Negotiations on which Mike Russell broadly represents the Scottish Government’s position. I gave him an undertaking that we would debate that paper at the next JMC (EN), as it is known in Whitehall jargon, and that is what we will do. I have been very careful not to comment publicly on it because, as I said, we want to give it the most open debate possible. There are parts of it with which I disagree and parts with which I agree. On the question of the protection of workers’ rights or the maintenance of our terrific universities, I am entirely on side with the paper. I suspect that Mr Russell might be surprised by how pro-devolution I am. Nothing will be taken away from the devolved Administrations and, indeed, we have to decide what passes to them from the European Union. That will be a rational debate based around the interests of the United Kingdom and of Scotland. The hon. Member for Glenrothes (Peter Grant) must take it as read that we will take very seriously the idea that we do not allow any part of the United Kingdom or any nation of the United Kingdom—Scotland, Wales, Northern Ireland or England—to lose out in this process. We are determined in that.

[Anna Soubry (Broxtowe) (Con)]

I will continue to campaign for our membership of the single market and to make the positive case for immigration because I believe in the free movement of people from the European Union, but may I make it very clear that I welcome the Prime Minister’s—I nearly said Her Majesty’s—speech and the statement made by the Secretary of State? It is realistic and provides much-needed clarity. The tone is to be hugely welcomed as it marks a genuine desire to bring about a consensus and to reunite our country. In that spirit, would my right hon. Friend commit—this is not unreasonable—to putting those 12 objectives into a White Paper and bringing it to this House so that we can finally debate the single market, the customs union and the free movement of people? So far, we have not and many of us feel that Parliament has been deliberately precluded from all this.

[Mr Davis]

First, on my right hon. Friend’s slip of the tongue, I often make the same mistake; it is probably why I am where I am. [Laughter.] Look, I will go to the substance of my right hon. Friend’s request. The Prime Minister and I have tried today to answer all the questions we are able to without undermining the negotiation. Regarding debates in the House and in this Chamber, I can see entirely a place for debating the very things my right hon. Friend mentioned, and that is what I will seek to get.

[Edward Miliband (Doncaster North) (Lab)]

The Secretary of State and the Prime Minister have both more or less admitted today what has been obvious for months—that it will take more than two years to have a trade deal with the EU ready to go. But there follows a crucial question for many businesses up and down the country, which is what the arrangements will be when we leave the EU and that trade deal is not yet complete. From listening to the Secretary of State and reading the Prime Minister’s speech, we are none the wiser what that will be. Will the Secretary of State enlighten us on that crucial point, which matters hugely to families and businesses?

[Mr Davis]

I will correct one or two things the right hon. Gentleman got wrong about what I said. He is wrong to interpret what I said as any suggestion that we will not be able to negotiate this outcome in the timetable in front of us. I said the issue was that we would look at implementation issues, because they may well take time. I cited some of them—borders, customs and various other aspects that might take time to put into effect. It will be in the joint interests of the European Union and ourselves to put those in place. But more widely, I cannot think how I could have been clearer. I have answered every single question, with one exception, that the Labour spokesman put to us. I have tried to answer as many as I can of the ones the Select Committee put to us. We have been very clear. I do not think anybody out there will believe the Labour party now when it says, “We don’t know what the negotiating strategy is.” It is as plain as a pikestaff, and the right hon. Gentleman should recognise that.

[Mr Andrew Tyrie (Chichester) (Con)]

The Prime Minister has indeed given clarity: we are leaving the single market, and we are leaving the customs union. But further to the point that has just been asked, in the implementation phase the Prime Minister has proposed after article 50—that period of adjustment to a deal—will all the detailed terms already have been finalised, or are the details of the so-called bold and ambitious deal, as she put it, to be worked out during the implementation phase?

[Mr Davis]

My right hon. Friend wrote a very wise paper, which I referred to in a previous exchange here. He will recognise that the negotiating balance changes at the end of the two-year period, so it is very important that we conclude the deal by then. The implementation is a different matter; it may take time, and it does take time, but we cannot control that, whether we are putting in place a new customs arrangement or whatever it might be. So there are practicalities there, and it is the practicalities that will drive this.

[Hilary Benn (Leeds Central) (Lab)]

While the Prime Minister has made things clearer today, and I welcome, in particular, the commitment that Parliament will have a vote on the final deal and that the Government will seek transitional arrangements—both things that the Select Committee called for in its first report—there is one big issue where there is still uncertainty for businesses, and that is the continuation of tariff-free and barrier-free trade. Given the Government’s unequivocal commitment today to that goal, will the Secretary of State tell the House whether, if remaining in the customs union turns out to be the only way of ensuring that—because what we ask for is not necessarily what we will get—that is what the Government will do to honour that commitment to British businesses?

[Mr Davis]

What the Government will do is abide by the instruction given to them by the British people, and that instruction was to leave the European Union. I am afraid that is inconsistent with membership of the market. But what we have said in terms is that we intend to deliver the very thing the right hon. Gentleman says British business is uncertain about, and that is tariff-free and barrier-free access to the European market.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

May I, too, welcome the increased clarity the Prime Minister has brought to the EU debate today? I just hope that the 27 remaining countries in the EU will take this opportunity to embrace the positive spirit in which this plan has been put forward. The Prime Minister said in her speech that she was putting

“the preservation of our precious Union at the heart of everything”.

In that spirit, may I ask the Secretary of State whether those parts of the country that are net beneficiaries of funds from the EU, such as Wales and Cornwall, will continue to get that level of funding so that they, too, can take advantage of the great opportunities ahead?

[Mr Davis]

The aim of our entire strategy is to improve the economic prospects of the country, and to do that for everybody. Our Prime Minister has been very forward in talking about the benefits for all. One of the things that has passed almost unremarked but was, in fact, remarkable was the speed with which the Treasury stepped in very early on—on universities, farming and structural funds. It made a decision in four weeks, in the middle of August—something I cannot remember in my lifetime in this Parliament, which is quite long. I think my right hon. Friend can take it as read that we will do everything possible to make sure that all parts of the United Kingdom benefit from this policy.

[Mr Douglas Carswell (Clacton) (UKIP)]

I applaud the Prime Minister’s speech and her vision of a liberal Brexit. Can the Minister confirm that, where mutual co-operation is needed between the EU and the UK after we have left, such as on intelligence sharing, arrangements will be put in place on the basis of bilateral treaties, rather than supranational legislation with us as the supplicant?

--- Later in debate ---

[Mr Davis]

One of the things the Prime Minister has made plain is that we are not the supplicant, either in this negotiation or in what follows. Britain is the intelligence superpower in Europe; we are critical to the defence of Europe from terrorist threat, and we are critical to the military support of Europe and to dealing with migration, with our Navy at work. Those things will continue; they are very often on a bilateral basis anyway, but they will be done on a treaty basis that is equal to both sides.

[Sir Edward Leigh (Gainsborough) (Con)]

I think we should loyally support the Government. [Laughter.] Will the Secretary of State confirm that insisting on controlling our own borders and insisting on doing international trade deals are inconsistent not just with membership of the European Union but with the customs union and the single market? So I agree that, after the welcome tone of today’s speech, it is not hard Brexit—it is full Brexit.

[Mr Davis]

With respect to my hon. Friend’s opening remarks, my health is fragile these days, so will he be careful about making such assertions about supporting the Government? However, it is plain that we have endeavoured to put together the option that gives the best outcome for Britain while obeying the decision of the people. That is what we have done, and it will work.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

The Prime Minister, in the first part of her speech, made a welcome commitment to enhance and protect workers’ rights, but at the end she was threatening to take them away, undercut the rest of Europe and rip up the British economic model if we do not get what we want. Can the Secretary of State now withdraw that threat and be clear that Britain will not do that, because if the Government are prepared to rip up workers’ rights as soon as the negotiations get difficult, how can we trust them to ensure that the rest of Britain’s interests are protected if the negotiations get difficult?

[Mr Davis]

I will say to the right hon. Lady what I said to the head of the TUC only a couple of weeks ago: there is no circumstance under which we will rip up workers’ rights. That is my commitment from the beginning in this job, and it will be my commitment for as long as I am in it.

[Mr Steve Baker (Wycombe) (Con)]

The Governor of the Bank of England recently told the Treasury Committee that the financial stability risks to the eurozone are greater than those faced by the UK. Will the Secretary of State undertake to offer the European Union a full agreement to ensure that, through the withdrawal agreement, the eurozone continues to enjoy access to the City of London?

[Mr Davis]

The Governor and my hon. Friend make a very good point. The existence of the City of London ensures a pool of liquidity and an almost bottomless source of low-cost finance for most of the industries of Europe, so countries have every interest in doing the deal we have described. I reiterate that that is what we are relying on: that it is in everybody’s interests to do this—economically, socially and in terms of financial stability.

[Andy Burnham (Leigh) (Lab)]

As the Secretary of State knows, I support reforming freedom of movement, but in a way that does least damage to the economy, and particularly the regional economy. I see in the Prime Minister’s speech today that she makes specific mention of protecting the interests of Cardiff, Edinburgh, Belfast and the City of London, but there is no mention at all of the north-west of England, Greater Manchester or, indeed, any English region. Rather than leaving these crucial decisions to a London-centric, right-wing clique around the Prime Minister, is it not time now to open up this debate, give Greater Manchester a voice in it and establish a Brexit committee for the nations and regions?

[Mr Davis]

If the right hon. Gentleman is not careful, I shall invite him to jump on the M62 and come to visit me at my home in Yorkshire—that right-wing bastion in the north of England. What I would say to him is this: as he might imagine, I am acutely conscious of the needs of the north, and what I am intending to do—I had not intended to announce it today, but I will, since he has asked—after the mayoral elections is to get all the mayors of the north to come and have a meeting in York to talk about precisely that.

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

It is a magnificent plan, but before the Secretary of State negotiates it, may I urge on him enormous patience, because our partners will first want to discuss the money —the division of the assets and liabilities?

[Mr Davis]

I almost reiterate the answer I gave to the previous question, which is that I am from Yorkshire, and we are known to be just like the Scots but a lot less generous.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

Today’s speech is a result of what we get when immigration policy is allowed to dictate economic policy rather than considering these crucial questions of immigration and economics together. The Prime Minister set out a plan to leave the European Union but did not set out a plan to keep anything like the current access to our biggest single market for jobs, businesses and trade. During the referendum campaign she said that pulling out of the single market would mean a loss of investors and going backwards on international trade. So what economic assessment did the Government make of the impact of today’s speech on jobs, trade and prosperity— or was the speech made without any such assessment at all?

[Mr Davis]

First, the outcome of the referendum last year was not principally about immigration, although a very large part of it was; it was principally about control of our country. If we talk to the people who voted, they would say that that is what they were concerned about, and that is what this is about. Since I was party to the writing of this speech, I can tell the right hon. Gentleman that we had the economic future of the country, the security of the country, the sovereignty of the country and our part in the world all squarely in our sights when we wrote it.

[Alex Chalk (Cheltenham) (Con)]

My right hon. Friend made it clear in his statement that “no deal is better than a bad deal”. In the unlikely—I am sure—event that we were to get a bad deal and the House were to vote against it, what would be the impact on our status within the European Union?

[Mr Davis]

The referendum last year set in motion a circumstance where the UK is going to leave the European Union, and the vote will not change that. We want to have a vote so that the House can be behind and support the policy that we are quite sure it will approve of when we get there.

[Kate Hoey (Vauxhall) (Lab)]

I welcome the Prime Minister’s speech today in the sense that it gives certainty to the millions of Labour supporters who voted to leave and now know that, “Taking back control”, is not just a slogan but actually means something. Will the Secretary of State assure us that in this interim period before we leave the EU, we will continue to work to negotiate trade deals with other countries—some of which might be nearly finished—so that we are ready to go when we actually leave?

[Mr Davis]

Of course we will do that; the hon. Lady is entirely right. We are constrained by a thing called the duty of sincere co-operation, which requires us not to do things that jeopardise actions by the European Union, so if the European Union currently has a trade deal in negotiation, we have to be very careful about how we impact on that. Of course we cannot actually sign anything until the day we leave, but I have a very strong suspicion that there will be a lot of things ready to sign on the very next day.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

I apologise, Mr Speaker, for being unavoidably rather late in the Chamber. While I welcome the tone of the Prime Minister’s statement today and the commitments to free trade, internationalism and so on, which are very welcome, does my right hon. Friend agree that when he is negotiating free trade agreements or customs unions with any other country or group of countries, the parties both agree to be bound by sets of rules which neither of them is going to change? Any agreement involves submitting to some means of resolution of disputes, be it arbitration, a court of law, or the World Trade Organisation rules. What I do not understand when reading the Prime Minister’s statement or listening to my right hon. Friend is which country in the world is going to enter into a trade agreement with this country on the basis that the rules are entirely what the British say they are going to be on any particular day and that if there is any dispute about the rules, it is going to be sorted out by the British Government. [Hon. Members: “More!”]

[Mr Davis]

Opposition Members have a very short memory. I can forgive my right hon. and learned Friend because he did not hear the very first question, which was on exactly this point. I answered it in the same way that I am going to answer this one, which is to say that of course there will be agreements between us and they will be arbitrated by an organisation that we agree between us—not normally the European Court of Justice.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

Can the Secretary of State be absolutely crystal clear about this: do his statement and the Prime Minister’s speech today represent the totality of the plan promised to Parliament, and will there be a White Paper—yes or no?

[Mr Davis]

I was asked by the Select Committee to present a plan as quickly as possible, and that is what we have done.

[Heidi Allen (South Cambridgeshire) (Con)]

I am very pleased to hear that priorities include allowing EU citizens to stay here and allowing us still to access the vital skills that we need, especially for science and innovation. While appreciating that the Prime Minister’s negotiation cannot be open for all to see and that no running commentary will be possible, will the Secretary of State commit to listening to the globally recognised scientific organisations in my constituency, because their needs and requirements must be reflected in our negotiating aims?

[Mr Davis]

Broadly, yes. My hon. Friend is the Member for South Cambridgeshire. I was in Cambridge only just before Christmas to speak to a number of high-tech organisations—one of which was ARM, but a number of others as well, including some pharmaceutical ones—with the direct intention of informing exactly how we approach some of these complex matters in the negotiation.

[Sammy Wilson (East Antrim) (DUP)]

The Government took a wise decision to inform our EU partners that in the event of intransigence during our negotiations to establish a new partnership, we would not take it lying down and would use the fiscal and legislative levers at our disposal to ensure that Britain’s economic case was represented properly. Is the Secretary of State surprised at the casual way in which the Opposition have dismissed the use of these levers on the basis that it might start a trade war? Does he not accept that the sure way of getting intransigence from the EU is to throw away this economic deterrent that we have at our disposal?

[Mr Davis]

I am mildly disappointed but not surprised. What is perhaps surprising is that whenever we hear somebody threaten some sort of punishment sanction, the Opposition never say a word. This is something in the national interest, and every single member of our nation stands to gain by that.

[Mr Dominic Raab (Esher and Walton) (Con)]

I welcome the detailed plan set out by the Prime Minister for a post-Brexit Britain that means that we are a self-governing democracy and a firm friend to Europe but also with a global perspective. Does my right hon. Friend agree that it is absolutely vital that this is a positive vision, because that is how we can unite the country and make sure that Britain goes from strength to strength?

[Mr Davis]

My hon. Friend—my old friend—goes right to the heart of this. The purpose of this, and the reason we addressed the questions put by the Opposition, was that we wanted to get people behind a vision of Britain that will be in everybody’s interest—north and south; England, Scotland, Wales and Northern Ireland; every part of the country, rich and poor—and that is what we intend to do.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

In 45 minutes, the Prime Minister has not delivered a plan—she has delivered a Pandora’s box. Let us talk of just one example raised by my right hon. Friend the Member for Leeds Central (Hilary Benn). The Prime Minister said that she wants us to leave the common commercial policy and the common external tariff but to have associate membership of the customs union—a type of membership that does not yet exist and that nobody else has. Can the Secretary of State tell us exactly what this means for deals like the Nissan deal on which thousands of jobs depend, or any others that are in train—or simply, what cake it is that he wants to have and eat this time?

[Mr Davis]

First, Nissan has decided to enlarge its investment in Britain, so it is clearly persuaded of this circumstance. Secondly, we have said from the beginning that the relationship—the new partnership—that we want to have with the European Union will be unique; it will be brand new. It is unique in many ways. Let me give the hon. Lady one example. In the trade deal that we are seeking to arrive at, we will have the same standards of production applying to all of Britain that apply to the European Union now. There is no other trade deal in the world like that. The same thing applies to the customs agreement. We are in a position where currently we have no customs barriers, so why should we not have a completely frictionless one when we get to the end of the deal?

[Dr Tania Mathias (Twickenham) (Con)]

Does the Secretary of State agree that having a strong, fair and global Britain must include showing support for EU nationals currently living and working in our communities? To that end, does he agree that we should unilaterally guarantee their rights, which would demonstrate our good will with a clear statement of intent?

[Mr Davis]

What we have done is to seek at the earliest possible opportunity to try to establish with the national Governments of those EU nationals an agreement covering those EU nationals, about whom we care deeply, but also British citizens for whom we have legal and moral responsibility—the point to remember is that we have a legal and moral responsibility for our own citizens—and those nations have not yet taken up the offer.

[Keith Vaz (Leicester East) (Lab)]

Further to the point made by the hon. Member for Twickenham (Dr Mathias), the speech contains the word “guarantee”, so there is a commitment from the Government that they want to do this. However, with 3.5 million EU citizens living in our country, what will be the cut-off date—23 June, the date we trigger article 50 or the date that we leave? Certainty is extremely important, and work needs to be done on the basis of when people arrived because a number of EU citizens will have arrived without passports, but with identity cards.

[Mr Davis]

The right hon. Gentleman will know, as the long-standing ex-Chairman of the Home Affairs Committee—it published a report on this, and put up three dates—that this is strictly a matter for the Home Office to initiate and to set policy on. However, the aim is clear: we do not want people who came to this country in good faith to feel fear or concern about their future. We want to be able to guarantee their future in terms of not just residency rights, but all the other things that go with it, such as welfare support and so on, and that is what we intend to do. He will forgive me if I do not pick a date out of the air, because he knows what would happen: that would create an instant problem either with a sudden rush of people arriving or concerns for those who arrived after that date, and I do not wish to make this any more difficult for people—very good, decent, productive people—than I want to.

[Ben Howlett (Bath) (Con)]

I, too, welcome the Prime Minister’s tone and her outlined objectives as she enters into the Brexit negotiations. I am also pleased that she has listened to her hon. Friends across the Government Benches about putting that to a vote in Parliament. Does my right hon. Friend agree that to ensure the Government are in tune with the will of Parliament, a full debate on the single market is desperately overdue? Does he agree that we should aim for a 0% tariff agreement with the European Union, so that Britain can be the best friend and neighbour of our European partners? To do anything else would certainly make my constituents, and I think Britain, poorer.

[Mr Davis]

My hon. Friend goes to the heart of the strategy. We want not just a 0% tariff, but—let us remember that we have an 80% services economy—non-tariff barriers. In many ways, non-tariff barriers are as important as the 0% tariff, and perhaps a bit harder to negotiate.

[Sarah Olney (Richmond Park) (LD)]

Once the UK has left the EU, there will be a £9 billion hole in EU finances. Given reduced resources, why do the Government believe that the EU will prioritise negotiating a trade deal with the UK over more lucrative markets, such as the US or China?

[Mr Davis]

I am afraid that the hon. Lady is wrong about the more lucrative markets. Once we are outside the European Union, we will be the largest market for the European Union, and it does not want to lose what it already has, which is the massive trade deficit—in their direction, as it were—that is very important for many millions of jobs on the continent.

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

I warmly welcome the statement by my right hon. Friend and the speech by the Prime Minister earlier. I am sure my right hon. Friend is aware of the importance of the British university sector for research, jobs and growth. That sector is particularly challenged by the process of exiting the European Union in relation to the workforce and many of the grants that it gets from the European Union. Will my right hon. Friend commit to prioritising working with the university sector to make sure it has a viable and strong future in a post-Brexit world?

[Mr Davis]

We are already doing that. As I mentioned to my hon. Friend the Member for South Cambridgeshire (Heidi Allen), I was in Cambridge just before Christmas with that very much in mind. Let me reiterate the point—I know I have previously made it from the Dispatch Box—that my job is, as it were, to bring back control of immigration policy to the UK, but hon. Members should not assume that we will do anything other than interpret that immigration policy in the UK’s national interests. We are a science superpower, and that science superpower status depends on our access to talent—our ability to get people to come and work in our universities, win Nobel prizes and do what they do very well here—and that is very much square and centre in what we are attempting to achieve.

[Ms Angela Eagle (Wallasey) (Lab)]

The Secretary of State was an early advocate of a White Paper. Downing Street has made it clear that there will be no White Paper, and that the Prime Minister’s speech is all we are going to get. Is he disappointed by that, and will he go back and ask her to think again so that we can have meaningful debates, with votes, ahead of the final agreement?

[Mr Davis]

Frankly, the hon. Lady should read the speech. It is almost 7,000 words of very closely argued strategy on our approach to the European Union. It answers all her questions that we can answer at this stage, and that is what we set out to do. We set out to help Parliament with its decisions, and I think that is what we have done.

[Lucy Frazer (South East Cambridgeshire) (Con)]

The hon. and learned Member for Holborn and St Pancras (Keir Starmer) suggested that the European Court of Justice would retain jurisdiction over disputes in respect of the trade deal. Given that the Canada trade deal contained an arbitration clause, does the Secretary of State think that that is absolutely necessary?

[Mr Davis]

There is always an arbitration clause in any trade deal, but who carries out the arbitration forms part of the deal. That is what we will agree, and I think it is incredibly unlikely that it will be the European Court of Justice.

[Caroline Lucas (Brighton, Pavilion) (Green)]

May I suggest to the Secretary of State that his Government’s threat to turn Britain into a corporate tax haven floating off the edge of Europe is not what people voted for on 23 June, and that people also did not vote to wreck our environmental protections? Will the Government therefore introduce a new environmental protection Bill, as advocated by the Environmental Audit Committee, so that vital safeguards for nature are neither quietly dropped through secondary legislation, nor bargained away in the rush to conclude new trade deals, for example with the US?

[Mr Davis]

The way in which we have—very clearly, I think—structured this with the great repeal Bill is so that all existing protections in law will be put into British law, and anything thereafter will be for this Parliament to decide, which has not been true for about 40 years.

[Mr Peter Bone (Wellingborough) (Con)]

In the Secretary of State’s long and distinguished political career, did he ever think that in his political lifetime a British Prime Minister would make such a splendid speech on the EU, totally in line with the British people?

[Mr Davis]

Absolutely not. Sadly, however, that will not get me a pay increase.

[Chris Bryant (Rhondda) (Lab)]

Russia has been up to its usual tricks in trying to stir up trouble between Serbia and Kosovo this week, and it is of course trying to face down the United States of America and, for that matter, other members of NATO on the border with Poland and Estonia. I believe that the bedrock of our national security is NATO—I hope my party does, too—but on coming back from the EU, successive Foreign Secretaries, Home Secretaries and Prime Ministers have come to this House and said that they are proud to have been able to make sure that the EU keeps strong sanctions in place against Russian territorial aggression. How will we be able to do that in future when we have left the European Union?

[Mr Davis]

We will be able to do that by bilateral negotiation, but let me go back to the fundamentals of what the hon. Gentleman said. He is right that we need to contain Russian expansionism, and that that is an important part of this country’s role in the world. One of the most important parts of what was an incredibly important speech was where the Prime Minister made it very plain that we will continue to be a good global citizen and a good European citizen, particularly on matters of regional security.

[James Morris (Halesowen and Rowley Regis) (Con)]

I welcome today’s statement and the clarity it brings. In the black country and the wider west midlands economy, businesses have driven export growth, particularly outside the European Union. Does the Secretary of State agree that any agreement on access to the single market must not constrain the ability of west midlands exporters to continue to ply their trade outside the EU and grow their exports?

[Mr Davis]

My hon. Friend makes a point that goes to the heart of the approach to the customs union. The reason we are not going to be a part of the common commercial policy is to enable us to make the deals that enable black country industrialists to make the maximum out of international trade.

[Hannah Bardell (Livingston) (SNP)]

EU workers in Scotland contribute £7.5 billion to our economy, not to mention the huge contribution they make to our social fabric. What is the Secretary of State going to do to protect their rights and Scotland’s place in Europe, which they voted for by a majority in the EU referendum?

[Mr Davis]

There is a part of the Scottish Government’s report that relates to this issue. As I said to one of my colleagues earlier, we will not be managing the immigration policy or migration policy in a way that harms the national interest. That means not causing labour shortages or shortages of talent and so on. That applies not just globally, but to each nation state of the United Kingdom.

[Victoria Atkins (Louth and Horncastle) (Con)]

I welcome the Prime Minister’s plan for Britain and her speech today. I represent a rural constituency that has a long history—and future—of agriculture. Will my right hon. Friend assure the House that agriculture will be central in any trade negotiations, and that the high quality of food standards for which British farming is famed will be a key principle in those negotiations?

--- Later in debate ---

[Mr Davis]

Very simply, the answer is yes. We are a large market for European agriculture and food production, but they are a large market for us too, and we will keep that in mind.

[Stephen Timms (East Ham) (Lab)]

On rethinking immigration policy, will Ministers consider allowing EU citizens to come to the UK if they have a firm job offer in the UK as part of the quid pro quo for barrier-free access to the single market, which the Secretary of State said is his goal?

[Mr Davis]

If I remember correctly from the Prime Minister’s speech, she made the point that this is not at all a policy to shut out Europeans; it is a policy to deliver the best interests of the United Kingdom and the best interests of the European Union. We will therefore keep that in mind.

[David Rutley (Macclesfield) (Con)]

I welcome the Prime Minister’s speech and her plans. Does my right hon. Friend agree that his negotiations will be greatly enhanced by his commitment to working with British business, and that the Government’s commitment to shaping a modern industrial strategy with British business will provide a clear vision for our post-Brexit economic future?

[Mr Davis]

The two policies, the industrial policy and the negotiating policy with the European Union, fit together hand in glove. My hon. Friend is quite right. We have paid an enormous amount of attention to business, finance, manufacturing, aviation, energy and so on—every single sector; 51 different sectors—to get the best possible deal that suits all of them. We will continue to do so.

[Mr Chuka Umunna (Streatham) (Lab)]

Trading with the EU under WTO rules would be vastly inferior to our current arrangements, with 10% tariffs on cars, 13% tariffs on clothes and up to 40% tariffs on the agricultural produce the hon. Member for Louth and Horncastle (Victoria Atkins) was talking about. For the sake of clarity, will the Secretary of State be absolutely clear: does the Prime Minister’s commitment to an interim implementation arrangement amount to the Government ruling out leaving the EU with no deal at all, and amount to the Government ruling out ending up trading under WTO rules, because that would be very, very damaging for jobs and businesses in this country?

[Mr Davis]

What the Prime Minister said in terms is that a bad deal is worse than no deal for a variety of reasons, one of which is that if you walk into a negotiation with no other option you will not do very well.

[Jeremy Lefroy (Stafford) (Con)]

I welcome the Prime Minister’s tone this morning in the building formerly known as Stafford House. Does the Secretary of State agree that the issue of no cliff edge and of a really well worked out implementation plan is incredibly important, not just for businesses but for the entire economy and all the people of the United Kingdom—and, indeed, of the EU?

--- Later in debate ---

[Mr Davis]

As ever, my hon. Friend is right. The point I tried to make earlier—I think it was made this morning, too—is that this is not only important to us, but to the European Union.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

If we are looking for things that unite us and enable us to exit the European Union more smoothly, may I suggest to the Secretary of State that he starts talking to the Home Office and to Ministers who deal with universities to find a way to properly remove the numbers of international students from the immigration figures?

[Mr Davis]

Having explained earlier how I got the job by being oleaginous to the boss, I think answering that question would lose me the job because that is a matter for the Home Office. As I said earlier in answer to other questions, the right hon. Lady can be sure that the operation of the immigration policy after we depart the European Union will be in the national interest. That includes in the interest of our incredibly powerful and effective university sector.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

As the shadow Minister said, this is not a hard Brexit and nor is it a soft Brexit. This is a plan for Britain on Brexit. The pound is up almost 3% since the Prime Minister’s announcement this morning, so I urge my right hon. Friend not to give in to the voices opposite who want a constant commentary, but to carry on the very clear strategy, laid out since he took the post, of making announcements when there is something to announce. The markets today prove that that stability works.

[Mr Davis]

I am slightly loth to pin the entire effectiveness of the strategy on the currency markets, although I have to say that the two speeches have managed to move the pound by a total of 5%. I have made more money on that than in the rest of my entire industrial career! But I take the point. This is a very important issue and we must not give a running commentary on it. However, the Opposition had a point: clarity is worth while and that has been demonstrated today.

[Phil Wilson (Sedgefield) (Lab)]

The Prime Minister said in her speech that we are leaving the single market and that she is going to negotiate a free trade agreement with the EU. She said that the free trade agreement

“may take in elements of current single market arrangements in certain areas”.

She continued:

“If so…it is reasonable that we should make an appropriate contribution.”

Will the Secretary of State today confirm that the Government are considering continuing to make a financial contribution on that basis to the EU?

[Mr Davis]

The hon. Gentleman should have listened to the questions, when the Prime Minister elaborated and pointed out that there are elements of the European Union where it is to our benefit—some of the research arrangements and so on. We are not in the business of going into great detail beyond that. As I have said before, we are not closing doors but nor are we committing to things at this point.

[Richard Drax (South Dorset) (Con)]

Well done the Prime Minister; well done my right hon. Friend. Does he share my optimism that access to the European markets will not be affected by our departure? The millions of European workers will not allow their politicians or their bureaucrats to threaten their livelihoods simply to punish the United Kingdom.

[Mr Davis]

I am sure my hon. Friend is right and I particularly like the opening part of his question.

[Dr Alasdair McDonnell (Belfast South) (SDLP)]

I commend the right hon. Member for Broxtowe (Anna Soubry) for her sanity and common sense, and the right hon. and learned Member for Rushcliffe (Mr Clarke) for bringing a degree of integrity to the discussion.

Does the Secretary of State for Exiting the EU recognise that I, and thousands of others in Northern Ireland, will not be leaving the EU willingly? We recognise the very significant benefits that have flowed from EU membership. We hold EU passports and we intend to retain them. What arrangements will he make to accommodate the people like me and the 70% of my constituents who voted to remain in the EU and intend to retain the benefits? Will he, while he is at it, perhaps tell us how he intends Northern Ireland to have its voice heard at Joint Ministerial Committee meetings and in the negotiations generally over the next three months?

[Mr Davis]

Since the beginning of this process—since I took up my post—we have put the preservation of the stability and the interests of Northern Ireland pretty much at the top of the tree of the negotiations, particularly on issues such as maintaining an open border and preserving the economic basis of Northern Ireland, which is very dependent on trade with the Republic of Ireland. On the JMC, I do not know if it has gone yet but yesterday I approved a letter to the Northern Ireland Executive—although the next Government are now subject to an election, most Ministers are still in place—asking that during the interim period they send representatives, whether ministerial or otherwise, so that we are always across the interests of Northern Ireland. The hon. Gentleman must take it as read that I am absolutely committed to maintaining the stability, peace and prosperity we have got used to in the last several years.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

As the Secretary of State said, giving up our membership of the EU and the single market is not incompatible with our negotiating access to the single market, either in whole or in part, but has he yet considered the red lines he might put down on what we pay for such access?

[Mr Davis]

I have considered them, but the idea that I might talk about them is another matter. There is a naive belief in modern politics that we have to establish, in some butch way, red lines. If we were to establish a red line, we would invite those with whom we are negotiating to make that red line very expensive. I do not therefore intend to get into the business of laying out red lines here, there and everywhere; I intend to get the best possible outcome for the country.

[Dame Rosie Winterton (Doncaster Central) (Lab)]

The Prime Minister has said we will be leaving the jurisdiction of the European Court of Justice, but will the Secretary of State, who has been a strong advocate of human rights, confirm that we will not be leaving the European convention on human rights?

[Mr Davis]

As the right hon. Lady knows, I have history in this area. They are completely separate entities, and the latter has nothing to do with this.

[Tom Pursglove (Corby) (Con)]

I wholeheartedly welcome my right hon. Friend’s statement and that of the Prime Minister. Steel production is hugely important in Corby and east Northamptonshire, so will he pledge to continue to consult widely on the future of the steel industry to make sure we get these arrangements right, because this is a vital and strategically important industry for our country?

[Mr Davis]

The short answer is yes.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

The Secretary of State talked about bumps in the road, but this threatens to be a head-on car crash for Wales, where trade with Europe supports 200,000 jobs. Does the Secretary of State have any idea how many jobs will be lost in Wales as a result of the Government’s chosen path?

[Mr Davis]

The intention is none. To that end, the JMC will be considering a submission from the Government of Wales in—I think—the meeting after next.

[Stephen Hammond (Wimbledon) (Con)]

I believe that the Prime Minister’s plan is a pragmatic one setting out our ambition to continue to attract the best talent, to have access to the single market and to ensure a phased implementation. It certainly recognises the ambitions of the financial services industry. Will my right hon. Friend confirm to the House that he will follow the Prime Minister’s lead, put the needs of the financial services industry at the forefront of his negotiations and secure mutual recognition and equivalence in those negotiations?

[Mr Davis]

Following my earlier oleaginous comments, of course I will follow the Prime Minister’s lead. Yes, financial services are an enormously important industry, supporting—along with all the associated service industries that support it—1.9 million jobs, so we will treat it as incredibly important. It also generates a great deal of revenue for the Treasury, however, so even if I did not pay attention to it, I am sure the Chancellor would.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Some 58% of north-east exports are destined for the EU—10% more than the UK average—which leaves our region the most exposed to leaving the single market, so will the Secretary of State say what assessment he has made of the risks and what conversations he has had with business organisations and others in the north-east to ensure that our voice is heard in these discussions and that the jobs that depend on our access to the single market are not put at risk?

[Mr Davis]

I am not a southerner, so the hon. Lady will understand that I come at this with a slightly different view from some. Companies such as Nissan clearly took a view too. I want to make it clear to the hon. Lady that the aim of this strategy is to deliver the maximum possible access to the EU marketplace, as well as access to other global marketplaces. Those two things will be to the benefit of the north-east as much as anywhere else.

[Amanda Milling (Cannock Chase) (Con)]

Nearly 70% of my constituents voted to leave the EU, so I very much welcome the Prime Minister’s speech today and my right hon. Friend’s statement outlining the plan for delivering exit. On trade, will he outline in a little more detail how the Government will ensure that businesses such as those in Cannock Chase can make the most of global trade opportunities as we exit the EU?

[Mr Davis]

Strictly speaking, my hon. Friend should address that question to the Department for International Trade. One element of its work involves negotiating new deals, but the other involves facilitating access to those markets, particularly for medium-sized businesses—the ones where we underperform—so it will be doing that as well.

[Margaret Ferrier (Rutherglen and Hamilton West) (SNP)]

The second of the Prime Minister’s Brexit principles is that leaving the EU will mean that our laws will be made in Westminster, Edinburgh, Cardiff and Belfast. In the spirit of principle 1, which is that the Government will provide certainty wherever they can, will the Secretary of State now provide details to the House of what further devolution—the right powers, as he called them—there will be to the devolved Administrations following our exit from the EU?

[Mr Davis]

First, not a single power will come away from the devolved Administrations—[Interruption.] Yes, but if one were to listen to people sometimes, one might think we were going to strip the Scottish Parliament of powers, which is not true. Secondly, on the hon. Lady’s specific question, I can give the principles but not the details at this stage: my presumption is that we will devolve wherever possible, so long as it does not undermine the UK single market, which is incredibly important to Scotland—about five times more important than the European single market—so long as it preserves the Government’s ability to carry out international negotiations and so long as we can meet international standards. Those are very important. Subject to that, however, I am on her side in terms of devolving.

[Jason McCartney (Colne Valley) (Con)]

I totally agree with my right hon. Friend that the UK is one of the best places for innovation and science, not least because we have many world-class universities, including in my hometown of Huddersfield. Is that not exactly why our European allies will be eager to build a strong new relationship?

[Mr Davis]

Of course. If the European negotiators take a rational approach, we will do this deal inside the two years, and it will be good for both sides.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

No deal might be better than a bad deal, but is not the reality that no deal means that, despite their best efforts, the British Government have been unable to conclude what they regard as a satisfactory outcome to the negotiations, leaving us therefore with what the other 27 members want to impose on us, and does that not sound like a pretty bad deal?

[Mr Davis]

No. Being left with what the 27 nations want to impose on us is the definition of a bad deal.

[Craig Mackinlay (South Thanet) (Con)]

I am sure that the Secretary of State shares my enthusiasm for the clarity in the Prime Minister’s speech today on her vision for a global Britain, and freedom from the customs union and the constraints of single market membership, but how will he impart that same enthusiasm to our EU friends and partners as we approach this future in order that they might realise it is as good for them as it is for us—that it is a positive-sum game?

[Mr Davis]

That last point is the most persuasive: it is a positive-sum game, and will be to their benefit as well. The EU has had a difficult five years in economic terms, so if anyone has an appetite for more jobs, business and trade, it is the EU, and we are its biggest market.

[John Mann (Bassetlaw) (Lab)]

EU procurement rules have led to the privatisation of parts of the health service, including part of the ambulance service in the east midlands. Will the Secretary of State guarantee that when these negotiations are concluded and put in front of Parliament, we will have the opportunity, if we so choose, to renationalise the entirety of the health service, and indeed the rail industry, without EU procurement rules getting in the way?

[Mr Davis]

What the hon. Gentleman will understand better than most is that once we have exited the European Union, every change in law will be subject to this Parliament’s decision.

[Henry Smith (Crawley) (Con)]

I very much welcome the Prime Minister’s speech today, and indeed my right hon. Friend’s statement. Over the weekend, the New Zealand Prime Minister visited London and expressed a desire for a trade deal, and US President-elect Trump also wants a swift deal with the UK. There seems to be some confusion, so can my right hon. Friend confirm that we cannot negotiate global free trade deals if we remain members of the customs union?

[Mr Davis]

My hon. Friend is exactly right. The common commercial policy prevents us from making such deals, which is why we have come to the conclusion that we have.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

The 12-point fantasy wish list includes the UK doing away with free movement, coming out of the customs union and leaving the single market, yet we are to maintain a common travel area and free movement with Ireland. How can that work for Ireland, when we are constantly told that such arrangements would not be possible between Scotland and England?

[Mr Davis]

That was an interestingly conflated question. If I remember correctly, the common travel area started in 1923 and has nothing to do with the European Union.

[William Wragg (Hazel Grove) (Con)]

My right hon. Friend is the man with the plan. [Interruption.] Opposition Members may mock if they wish, but will my right hon. Friend ensure that those wanting a running commentary will not get their way in wrecking the negotiation?

[Mr Davis]

Of course.

[Lady Hermon (North Down) (Ind)]

The Secretary of State and indeed the Prime Minister are very keen to repeat that no one wants a return to the borders of the past between Northern Ireland and the Republic of Ireland. Of course no one wants a return to those borders, with Army patrols and all the rest of it, but the reality is that we cannot have a return to the border of the past because we do not have the Army watchtowers. They have gone, but dissident republicans have not; they have murdered two prison officers in the last four years in Northern Ireland, so this is a really serious issue.

I do not want to go back to that very hard type of border, but the border is porous in South Armagh, and there is 300 miles of porous border. If we are not going back to the borders of the past, are the British Government proposing to outsource our immigration control to the Irish Government when it comes to Limerick, Dublin and Shannon? What are the British Government going to do? I hope that some light is thrown on this in this debate today, because I am so tired of hearing that soundbite: “No one wishes to return to the borders of the past.”

[Mr Davis]

The first thing to say is that there is, of course, an open border now. I do not wish to give the hon. Lady soundbites, but there are other open borders in Europe—though perhaps not in places with quite the same security issues—such as those between Norway and Sweden, where customs and excise work across the border, but it is frictionless. That is what we would aim for. On the security front, the hon. Lady’s question is more one for my right hon. Friend the Secretary of State for Northern Ireland.

[Gareth Johnson (Dartford) (Con)]

Some 44% of our exports go to the European Union. Does the Secretary of State agree that in many respects, that figure is part of the problem, given that just 7% of the world’s population live in the EU? Does he agree that today’s decision to come out of the single market gives us a wonderful opportunity to be more global and international with our trading partners? [Interruption.]

[Mr Davis]

Yes, it is a really difficult one. My hon. Friend will know better than me that over the last 16 or 17 years, the balance of our exports to Europe and the rest of the world has almost turned around. It was about 60:40 in favour of Europe 20 years ago; it is now almost 60:40 the other way. That reflects the much higher growth rates in global markets than in the European Union. This is one of the opportunities arising from our exit from the European Union.

[Kerry McCarthy (Bristol East) (Lab)]

The Prime Minister has come up with this wish list and a threat of a scorched earth policy of slashing taxes and protections, and inevitably public services, if she does not get what she wants. Many of the Secretary of State’s colleagues would regard that as an ideal scenario—as the economic model that they would love to see implemented—so how will he square those things during the negotiations, and ensure that we hold out for the best deal, rather than this deal, which would be absolutely terrible for this country?

[Mr Davis]

It would help the hon. Lady if she read the speech with a slightly more impartial view. It says in terms that our preferred outcome is the freest possible open market with the European Union, as well as the rest of the world, and that is what we intend to achieve.

[James Cartlidge (South Suffolk) (Con)]

Whether we like it or not, it is a statement of economic fact that a large part of our economy is heavily dependent on hard-working, unskilled migrants from the European Union. Does my right hon. Friend accept that there is still likely to be some unskilled migration into this country after we leave the EU? If so, will it be the case, as at present, that unskilled migrants can come to this country legally only from the EU, or will our migration system be global, too?

[Mr Davis]

My hon. Friend is right that a level of unskilled migration is likely to continue. Where from and how it is to be controlled will be matters for the new immigration policy, which will be under the control of this House—a point to which I keep returning. My job is to return the policy here; it will then be the job of this House to make the right decision in the British national interest, and I am sure that it will.

[Matt Warman (Boston and Skegness) (Con)]

My constituency voted, as Members know, more strongly than anywhere else in the country to leave the European Union, and I know that many people in Boston and Skegness will welcome the clarity and tone of today’s announcement. Does the Secretary of State agree that when the people of Boston and Skegness voted for this country to be able to control its immigration policy and do our own trade deals, they were voting knowingly to leave the customs union and the single market?

[Mr Davis]

I do not want to get into trying to interpret everybody’s inner thinking, but the simple truth is that advocates on both sides of the argument made it plain during the campaign that they thought leaving the European Union meant leaving the single market. I cannot think that the decision was made in ignorance.

[Albert Owen (Ynys Môn) (Lab)]

The Secretary of State has said that maintaining the common travel area between the Republic of Ireland and Northern Ireland is an objective, and he has mentioned the history, but for the first time ever, one partner will be a member of the European Union and one will not. Can he give some clarity to people such as myself, who are by a porous border with the Republic of Ireland, on whether the common travel area will mean the free movement of people, or the free movement of people, goods and capital? Many people who travel do so with goods under these arrangements. Will Welsh ports be subject to customs?

[Mr Davis]

Let me pick up both parts of the question. The hon. Gentleman is right: only one of the two countries in the area will be in the European Union. I discussed that issue with Mr Barnier, and the point that came across very clearly was that the European Union is very proud of its position in the peace process and does not want to jeopardise it. I believe that the terms of the 1949 Act will apply, whereby Irish citizens will be treated the same as British citizens and vice versa.

[Robert Jenrick (Newark) (Con)]

I am loth to disagree with my parliamentary neighbour, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke)—people are trying to build a statue of him in my constituency, but I put that to one side—but I cannot think of a single trade treaty between the EU and another country that uses the European Court of Justice to organise its dispute issues. Every treaty that the EU has ever signed, as far as I am aware, uses either an international arbitration system or the World Trade Organisation, so there is absolutely no reason why my right hon. Friend and the Government could not achieve that in our negotiations.

[Mr Speaker]

It would be good if it were a speaking statue. I fear that otherwise it will not fully capture the richness of the right hon. and learned Member for Rushcliffe (Mr Clarke).

[Mr Davis]

My hon. Friend the Member for Newark (Robert Jenrick) is right. I cannot imagine that most countries doing deals with the European Union would agree that the European Union’s own court could make the judgment; the judgment would of course be made by an independent court, and generally is.

[Helen Hayes (Dulwich and West Norwood) (Lab)]

The Secretary of State has confirmed that my constituents who are EU nationals will still be used as bargaining chips to secure the rights of United Kingdom nationals living in the EU. The uncertainty is already having an impact on our NHS, universities and the construction sector, among other sectors of our economy. Why will the Secretary of State not retain the moral high ground, confirm the rights of EU nationals living in the UK and their status as valued members of our community and important contributors to our economy and public services, and then seek to hold EU countries to the same high standard of decision making as regards the rights of UK nationals?

[Mr Davis]

The point about dealing with people as a block is that it makes no one a bargaining chip. The trouble is that once we start separating groups, we will turn the remainder into a bargaining chip, and that is absolutely what we must not do. We have a legal responsibility to our citizens. That being said, I have said many times, in every public forum in which I speak about this subject, that we are determined to secure a good, guaranteed position for those people. They should not worry. We just need to get all the other countries lined up to agree with us to do that. We wanted to do it earlier, and we tried to, but we have not been able to do it yet. We will do it as soon as we can.

[Mr Andrew Turner (Isle of Wight) (Con)]

Will my right hon. Friend explain what will happen to fisheries?

--- Later in debate ---

[Mr Davis]

With great respect to my hon. Friend, I will not go into every single sector of the negotiation, but it is pretty plain that we have a very strong hand on fisheries.

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

It is a pity that the Secretary of State was unable to be present for the statement by the Secretary of State for Northern Ireland. If he had been present, he would have recognised that the White Paper—that is what the Secretary of State for Exiting the European Union called it—is a catastrophe. Will he assure us that the Ireland Act 1949, which he has mentioned and on which I have pressed him several times, will not be revoked either before or after Brexit, and that the United Kingdom Government will confirm that they will not impose a hard border with their closest European Union member, Ireland?

[Mr Davis]

I think I have said that many times.

[Daniel Zeichner (Cambridge) (Lab)]

When Switzerland voted in 2014 to restrict immigration, its future participation in key EU research programmes was thrown into doubt. Just a few weeks from the deadline, it has reached a compromise that allows it full participation, in return for free movement with some tweaks. Our science, research and university sector demands no less. Today, however, the Prime Minister offered no more than an aspiration: she offered no plan at all for the sector. Two years of uncertainty will do huge damage. Just how much damage to one of our key sectors are the Government prepared to countenance?

[Mr Davis]

As nonsense questions go, that pretty much takes the biscuit. We have made very plain indeed what we intend in this regard. We are a dominant scientific power in the European Union. We have worked night and day to ensure that we guarantee the position of students and research grants, and we will continue to do so. If the hon. Gentleman plays that down, he will harm the very sector that he is supposedly trying to protect.

[Neil Gray (Airdrie and Shotts) (SNP)]

Given that nearly everything that has been said by the Prime Minister and the Secretary of State today is incompatible with the Scottish Government’s “Scotland in Europe” compromise document, how do the UK Government plan to honour the promise to take those proposals seriously, unless they now plan to explore all options to support continuing Scottish membership of the single market?

[Mr Davis]

As I said in an earlier answer, that paper will come before us in a few days’ time. It has, of course, more than one component. The hon. Gentleman talks as though it were only about the so-called—opt-out, do they call it? But it also contains questions about devolution, and the treatment of employment and immigration, all of which we will discuss at that time. We will treat those questions seriously, as we always have.

[Joanna Cherry (Edinburgh South West) (SNP)]

At the weekend it was reported that Michel Barnier, the EU’s negotiator, was prepared to contemplate a special deal for the City, and the UK Government have indicated in the past that they might look at special sectoral deals for the City and for Nissan. Does the Secretary of State accept that there is scope for the differentiated deal that the Scottish Government seek if he and his Prime Minister have the political will to support it?

[Mr Davis]

This is very unusual for the hon. and learned Lady, but she has not quite got Michel Barnier’s statement right. What he is reported to have said, although I think he subsequently denied it, is that he saw that there would be risks to the financial stability of the European Union if it did not maintain open access for the City of London. The hon. and learned Lady was also wrong in saying that we had talked about special deals for any sector. We have not. [Interruption.] The aim of the British Government is to ensure that the whole economy succeeds as a result of this policy, not just one part of it; and that includes Scotland.

[Wes Streeting (Ilford North) (Lab)]

The Secretary of State says that no deal is better than a bad deal, but what he has not made clear is that no deal is a bad deal. Given that the Chancellor told the Treasury Committee that the Prime Minister should enter the negotiations with the widest possible range of options available, why have the Government today chosen to rule out the best possible deal with the European Union, which is membership of the single market, membership of the customs union, and, as a result, free-flowing goods and trade with the largest single market in the world on our own doorstep and access for British businesses to half a billion customers?

[Mr Davis]

I do not know where the hon. Gentleman was on 23 June, but the British people pretty much rejected that.

[Mark Durkan (Foyle) (SDLP)]

Brexit is a bigger factor in the political discoloration in Northern Ireland at the moment, partly because common membership of the EU and its institutions was absolutely germane to the Good Friday agreement. The Secretary of State needs to recognise that any negotiations that follow these elections and precede the restoration of our institutions will involve returning to and renewing fundamentals of the Good Friday agreement. That means that people will be looking at strand 2, and the need to ensure that the island of Ireland can work and be worked as part of the European economic area in the future.

The question of when powers over rights are transferred or devolved after the great repeal Bill will be a key political issue. No one in Northern Ireland will trust the House of Commons with the dilution of rights before powers are devolved when any attempt to improve them can be vetoed by the Democratic Unionist party, as we have seen in the past. It would be like asking Attila the Hun to mind your horse.

[Mr Davis]

I am not entirely sure that I understand the reference, but one of the reasons why I wrote to the Northern Ireland Executive was to ensure that we had representation in the Joint Ministerial Committee during the election process. I do not foresee the removal of any rights, and, as I said to a Labour Member earlier, this is one area in which we expect a great deal of co-operation from the European Commission to secure an outcome that will be beneficial for everyone.

[Mr Mark Hendrick (Preston) (Lab/Co-op)]

Will the Secretary of State tell the House why on earth the other 27 members of the European Union should give the UK the benefits of single market membership without the costs? A bespoke deal that provides barrier-free and tariff-free access to the single market sets a precedent, and offers other EU states an incentive to leave the European Union. How is that good for them?

[Mr Davis]

Let me, at the risk of repeating myself, pick one industry and one country. The German car industry sells 800,000 cars a year to the United Kingdom, and I think it has every interest in keeping that market open.

[George Kerevan (East Lothian) (SNP)]

The Prime Minister ended her speech this morning on a very gracious note: she said that the victors in the Brexit debate in the UK should be magnanimous towards those who lost. I put it to the Secretary of State that magnanimity means accepting that Scotland wants to stay in the single market and that the discussions from now on should at least leave the door open to that ask from Scotland.

[Mr Davis]

As I said earlier, and as I have said to Mike Russell, I have not commented publicly on the report even though I have read it in detail because I want to have an open discussion about it later. That does not mean that we are going to agree on everything, but we are going to treat it with respect.

[Kate Green (Stretford and Urmston) (Lab)]

The EU is in the process of concluding international trade deals with, for example, Japan and Canada, which the UK Government have warmly supported, believing they will be good for the UK economy; I understand that the UK Government estimate that the Japanese deal could be worth £5 billion annually to the British economy. How quickly can those deals be replaced when we leave the EU, and what modelling have the Government done of the potential cost to our economy if they cannot quickly be replaced with new deals?

[Mr Davis]

There is little point in modelling what is not going to happen. For many of the most important deals for us, the expectation is that we will get, as it were, an immediate transfer, and then we will start talking about improving the deals between us. Not all EU trade deals have been that beneficial for Britain, and we could certainly improve some of them.

[Tom Elliott (Fermanagh and South Tyrone) (UUP)]

I noted the Secretary of State’s assertion about controlling our own laws and ending the authority of the European Court of Justice in the United Kingdom, and I want to put it on the record that I support that proposal. When that takes place, what will be the authority or standing of any decision relative to the United Kingdom that has already been taken by the Court?

[Mr Davis]

I assume the hon. Gentleman is talking about the standing of case law. That will be frozen at the point when we leave, and whether we change that will then be up to us in this House.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

Free trade in goods is much easier to achieve than the free flow of services where non-tariff barriers are the problem. How will the Government seek to ensure the continued success over time of UK financial service exports to Europe when we no longer get a say in the regulatory harmonisation that has facilitated that success so far?

[Mr Davis]

The hon. Gentleman may have noticed that last week TheCityUK, which obviously has an interest in the area he refers to, was talking about mutual recognition and external equivalence, as it were, rather than passporting. We have not arrived at a conclusion on that yet, but he is right that the goods side of it will be easier. That is partly because the single market is very incomplete in services. However, notwithstanding that, we have been very successful in this area, and he may take it as read that we will continue to facilitate that success.

[Ian Paisley (North Antrim) (DUP)]

The Secretary of State will know that my constituency had the largest leave vote in Northern Ireland, and one of the largest in the United Kingdom by dint thereof. Will he confirm that he will not fall for some flawed, special status, hokey-cokey, half-in, half-out arrangement that is currently being sought by some people, and instead give my constituents absolute clarity and certainty that the Brexit deal will apply to all of Northern Ireland in the same way as it will apply to the people in his constituency?

[Mr Davis]

Yes, it will apply across the whole United Kingdom I think, but, as I have said, I am trying not to prejudice other discussions. What I will say to the hon. Gentleman is this: in what we are doing in this negotiation, the interests of Northern Ireland and his constituency will be at the forefront of our thoughts.

[Tommy Sheppard (Edinburgh East) (SNP)]

Three quarters of my fellow citizens in the great city of Edinburgh voted not to turn their back on the EU, Mr Speaker, so you will forgive me if I wholeheartedly do not welcome today’s statements. However, I welcome the Secretary of State’s now repeated suggestion that he will take seriously the proposals of the Scottish Government, so let me press him on this matter. Some in his party have said that there can be no differential arrangements in the regions and nations of the United Kingdom post-Brexit on principle, even when it can be demonstrated that they will benefit the UK as a whole. Does he share that view, or will he consider proposals on their merits?

[Mr Davis]

I have said already that we will respect the view of the Scottish Government on this, but I have also said that that does not mean that we will agree on all parts. Let me mention one practical issue that I, if nobody else, have to deal with. The leading Norwegian members of EFTA have said that the aspect the hon. Gentleman refers to will not work for them, and the Spanish Europe Minister has said that it will not work for them either. We clearly have a few hurdles to get over before that becomes a runner.

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

The new Britannic isolation that the Government now seek must not be at the expense of EU nationals in this country—or indeed, I accept, UK nationals in Europe. The Secretary of State has said that he has tried to resolve this issue and wanted to do so some time ago, so can he tell us exactly what the problem is? What barrier is in the way that is stopping him resolving that, and how do we best get it lifted?

[Mr Davis]

It requires all members of the European Union together to agree.

[Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)]

The Prime Minister’s fixation with leaving the jurisdiction of the European Court of Justice clearly jeopardises the extent of our ongoing co-operation in EU justice and home affairs issues, which she says she values. If those ambitions collide, surely the Secretary of State will agree that security co-operation must trump leaving the European Court’s jurisdiction.

[Mr Davis]

We have security arrangements with other allies—America for a start—which do not run into that problem, so I would not think that that is an issue.

[Callum McCaig (Aberdeen South) (SNP)]

“No deal is better than a bad deal”: I am slightly perplexed by that. How could a negotiated deal possibly be worse than something that the Secretary of State refers to as a “cliff edge”? Is he really that bad at negotiation?

[Mr Davis]

Another hon. Member referred to a deal in which we had to take all sorts of penalties from all sorts of European nations. That would be a bad deal.

[Patrick Grady (Glasgow North) (SNP)]

Of all the laws and regulations that will be democratically repatriated to this Parliament by the great repeal Bill, which is the first that the Secretary of State himself would like to see reformed or repealed? When the great repeal Bill goes through, can he guarantee that the rights of this Parliament to scrutinise legislation will be maintained and the great repeal Bill will not be the great power grab?

[Mr Davis]

On the question about the first one to repeal, I do not really have a favourite, but I will tell the hon. Gentleman the last one: the protection of the employment rights of United Kingdom citizens both in Scotland and in the rest of the UK, because I made the promise from the first day in this job that that is one thing we are not going to change.

[Carol Monaghan (Glasgow North West) (SNP)]

rose—