Oral Answers to Questions

David Davis Excerpts

Thursday 1st February 2018 Commons Chamber

[Chris Bryant (Rhondda) (Lab)]

5. Whether he plans for the UK to be subject to rulings of the European Court of Justice during the transition period.

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

In Florence five months ago, the Prime Minister set out a proposal for the implementation period under current terms, utilising the existing structure of European Union rules and regulations, including the European Court, for that time-limited period. That is necessary so that there is only one set of changes for businesses and people and minimum disruption. We are also clear that our priority will be getting the right arrangements for Britain’s relationship with the EU in the long term, out of the single market, out of the customs union and without direct jurisdiction of the European Court.

[Chris Bryant]

So the European Court will be deciding on issues in this country, and if British businesses want to continue doing trade with the rest of Europe, they will have to abide by all the rules of the single market, and British citizens will have fewer rights in the rest of Europe than they have now. In essence, the Government are turning us from being a proud partner with European colleagues into a vassal state. Will the Secretary of State propose that we hand them over some Danegeld as well?

[Mr Davis]

I think that is the first time I have seen the hon. Gentleman in alliance with my hon. Friend the Member for the 19th century.

[Mr David Jones (Clwyd West) (Con)]

15. If the Government were regrettably to accept the EU’s negotiating guidelines, so that the United Kingdom remains subject to the jurisdiction of the European Court of Justice during any implementation period, what arrangements would be put in place to safeguard Britain’s interests, given that there will be no British judges?

[Mr Davis]

As my right hon. Friend well knows, we are going into negotiation on this matter almost as we speak. During that period, my primary concern is any new laws coming into effect over which we have had no say, and we will aim to set up arrangements to ensure that they do not harm the United Kingdom.

[Paul Blomfield (Sheffield Central) (Lab)]

After the Prime Minister’s Florence speech, the Under-Secretary of State for Exiting the European Union, the hon. Member for Fareham (Suella Fernandes), who I welcome to the Front Bench, co-ordinated a letter from the European Research Group describing the Government’s policy on the transitional period as staying in the EU “by stealth”. She has not yet replied to my letter of 14 January, offering her the opportunity to retract that view. Does the Secretary of State agree that it is these divisions at the heart of the Government that jeopardise our negotiations? Will he confirm that all his Ministers support Government policy on the transition?

[Mr Davis]

It is almost sine qua non that all my Ministers support Government policy, which is more than I can say for Opposition Front Benchers.

[Mark Pawsey (Rugby) (Con)]

6. What steps he is taking to ensure the Government engage with the international business community during negotiations for the UK to leave the EU.

--- Later in debate ---

[Ged Killen (Rutherglen and Hamilton West) (Lab/Co-op)]

9. Whether the Government plan to accept the EU’s guidelines for phase 2 of the negotiations for the UK leaving the EU.

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

It is not for the UK to accept or reject the European Union’s directives. This is its mandate for negotiations, and we have our own set of objectives. In my speech last Friday, I set out our position on what we would like to see in the implementation period, and we look forward to continuing the discussion with our European Union counterparts. Let me be clear: that work has not stopped. Following the declaration of insufficient progress in December, officials have continued technical discussions on separation issues, Northern Ireland and governance arrangements. I will shortly meet Mr Barnier to continue to the process.

[Ged Killen]

For workers who arrive during the transition period under existing freedom of movement rules, what arrangements will the Government make to ensure that workers who are crucial to industries in Scotland, such as fisheries, social care and hospitality, and who do not meet tier 2 visa requirements, are not simply sent home at the end of the transition period?

[Mr Davis]

We will be discussing in some detail with the European Union the treatment of people after our actual departure from the Union. The hon. Gentleman must take it as read, as I have said several times, that they will be treated properly, that we will not do anything to undermine our economy, and that we will do everything possible to ensure that the industries he talked about are supported.

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

The Secretary of State and his junior Ministers keep saying that they want a bespoke deal. When are they going to set out what that actually means? When are they going to tell us what the elements of that bespoke deal will be, and when will they cost the bespoke deal’s implications for the economies of these islands? When?

[Mr Davis]

There can be few policies that have been talked about more by Prime Ministers than this one. There have been two major speeches—Lancaster House and Florence—and two White Papers, and something like 15 Bills will be going through this House over the course of the Parliament, so the House will not be unaware of all aspects of the bespoke deal. We have also made very plain what we see as different in what we are seeking from other deals. For example, we are aiming for the free trade agreement to be comprehensive and tariff-free. On the customs agreement, we are aiming for the most frictionless one possible—we have a variety of proposals that we talked about in front of the Select Committee on that—and the House will be kept fully informed. On the costing, as we have said, I think on Monday, we will of course release all the information necessary once it is no longer sensitive to the negotiations, but before the House makes a decision.

[Hannah Bardell (Livingston) (SNP)]

10. What recent discussions he has had with Cabinet colleagues on the Scottish Government’s paper on “Scotland’s place in Europe: People, Jobs and Investment”, published on 15 January 2018.

--- Later in debate ---

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

13. What factors the Government plan to take into account in determining their position on the length of the transition period in negotiations for the UK to leave the EU.

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

As I have said before, the duration of the implementation period should be in the region of two years, and the Commission’s position indicates a period of similar length: so far it has talked about 21 months. The aim on both sides is to give individuals, businesses and Governments time to plan and initiate the changes that must be made to allow a smooth and orderly transition, and to secure the best possible outcome for the United Kingdom.

[Sir Desmond Swayne]

Could it be shorter?

[Mr Davis]

If I simply accept the European Commission proposal, then yes.

[Mr Speaker]

Unlike the question from the right hon. Member for New Forest West (Sir Desmond Swayne), which was commendably pithy—and again I exhort him to issue his textbook for the benefit of all colleagues.

[Andy Slaughter (Hammersmith) (Lab)]

I will do my best, Mr Speaker.

The EU has made it clear that EU citizens coming to the UK during the transition period should be eligible for settled status; the Prime Minister says they will not be eligible. Is that a red line, or are the Government willing to compromise on that? I thought nothing was agreed until everything was agreed.

[Mr Davis]

The hon. Gentleman is right that nothing is agreed until everything is agreed, but in the joint report that we concluded and got agreement on in December the EU agreed that the transition date, or end date for ongoing permanent residence rights—not possibilities, but rights—will be March 2019.

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

17. What recent discussions he has had with Commissioner Barnier on the transition arrangements for the UK after March 2019.

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

At the General Affairs Council on Monday the European Council agreed its negotiating directives on the implementation period. Now that the Commission has a clear negotiating mandate we hope to move quickly to begin detailed discussions on the implementation period. Given the alignment in our positions we are confident we can reach political agreement by March. There remain a number of areas that we now need to discuss with the EU to ensure the period operates smoothly. We look forward to progressing substantive discussions.

[Mr McFadden]

When it came to the divorce bill, after a lot of huffing and puffing and wasted time the Government simply signed on the dotted line. What will be different in the transition period we are negotiating compared with the EU guidelines issued this week?

[Mr Davis]

As to the right hon. Gentleman’s opening remark, as he is an intelligent and well-informed person it is amazing that he does not differentiate between a £100 billion demand and a £35 billion outcome; that seems to have been a somewhat useful exercise by the Government.

As for the next stage, there is a negotiation to be undertaken. There is a variety of important areas, but the primary area for me is the question of our right to sign trade deals during the implementation period so we can bring them into force immediately after we leave. That is a massive advantage for the United Kingdom to have.

[Thangam Debbonaire (Bristol West) (Lab)]

Businesses in my constituency tell me that continued membership of the single market and customs union during the transition period will help them safeguard jobs, yet the Prime Minister on 18 December ruled this out. What have the Prime Minister and Secretary of State got against the employment of people in Bristol West?

[Mr Davis]

With the greatest respect to the hon. Lady, the purpose of the implementation period, which was asked for by just about every business organisation, is to ensure they face stability in the couple of years in the run-up to the conclusion of the future relationship. That is what is going to happen, and that is why companies and the CBI and others welcomed it when we announced it.

[Heidi Alexander (Lewisham East) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

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

As we accelerate the pace of our negotiations with the European Union, I gave a speech last Friday to lay out the terms of the implementation period for our new relationship. This period, a bridge to the future, will be strictly time-limited and see a continuation of existing structures and rules. We will no longer be a member of the EU, which is a legal requirement for signing a new trade treaty, while still ensuring the continuity of our businesses and their trading relationships. We will use this period to ensure we are best placed to grasp the opportunities of Brexit, and that will mean signing new free trade deals with countries around the world.

[Heidi Alexander]

Given reports today of a huge gap between the UK and the EU on how financial services will be able to be traded freely in a post-Brexit environment, can the Secretary of State set out exactly how he sees this trade operating successfully in future, and exactly how he plans to protect the jobs of the 1.1 million people in the UK who work in this sector?

[Mr Davis]

First, not only have we not yet engaged in the future relationship negotiation, but the EU has not yet decided its own negotiating guidelines. They will, we expect, be laid down by the March Council on 22 March, and to that end I am talking to every member state that I can in order to ensure that we are at the same place on this issue, rather than having, as the hon. Lady terms it, “a huge gap”. Indeed, at the end of these questions I am going to Luxembourg for specifically that issue.

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

T2. Can the Secretary of State confirm that we will find a way, during the implementation period, to negotiate a way to address the consequences of any EU legislation that is deemed contrary to our national interest?

[Keir Starmer (Holborn and St Pancras) (Lab)]

There have been lots of questions this week about the leaked EU exit analysis Whitehall briefings, but this is the first chance I have had to ask the Secretary of State about it directly, so I will choose my words carefully. Can the Secretary of State confirm when he first knew that economic modelling work on Brexit scenarios was being undertaken across Whitehall?

[Mr David Davis]

Actually, the right hon. and learned Gentleman does not have to ask me; he should read the book. In addressing the Select Committee on 6 December last year, I said in terms:

“We will at some stage—and some of this has been initiated—do the best we can to quantify the effect of different negotiating outcomes as we come up to them. Bear in mind that we have not started phase 2 yet. In particular, we will try to assess, in bigger categories, the effect of various outcomes in financial services and in terms of the overarching manufacturing industry, agriculture and so on. We will do that a little closer to the negotiating timetable.”

I say that because I read with great interest in Hansard and elsewhere this morning various reports about my being traduced, so I thought that I should tell the House that actually I told the Select Committee that this work was under way last December.

[Keir Starmer]

I think it follows that in December the Secretary of State knew that this modelling was going on. Can he confirm when he was first talked through the economic modelling of the Brexit scenarios by his Department—not when he told others, but when he was talked through it?

[Mr Davis]

Let me say something on that as well. One of the things that the right hon. and learned Gentleman has been trying to pretend over the course of the last few days is that somehow my colleagues have been critical of the civil servants doing this job, because the outcome is as yet a work in progress—[Interruption.] That is what it is: a work in progress. I say that because we are trying to do something that is incredibly difficult. Every institution that has tried it has failed—[Hon. Members: “Answer the question!”] I am going to answer the question. Every forecast that has been made about the period post-referendum has been wrong. As I told the Select Committee, the Bank of England—the best forecasting organisation in the business—forecast for 2017 a reduction in exports, but there was growth of 8.3%. It also forecast a reduction of 2% in business investment, but it grew by 1.7%. It forecast a reduction in housing investment, flat employment growth, and growth of 0.5% versus 1.1% being the outcome. What has been going on is an attempt to find a way of getting a better outcome. In those terms, I talked to my own Department and the cross-departmental group in early January on this matter.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

T3. The Nord Stream 2 pipeline—the undersea oil and gas pipeline that Germany intends to build directly to Russia—has been condemned by the American Secretary of State, Rex Tillerson, as a threat to the security of countries in central and eastern Europe. Does the Minister agree with that sentiment?

--- Later in debate ---

[Mr David Davis]

I am happy to reassure my hon. Friend on that point. The British people voted to leave the EU—17.5 million of them—in the biggest mandate in our history, and we are committed to respecting the result of the referendum. The Government have undertaken a wide range of ongoing analysis to ensure that we get the best deal for the British people in our EU exit negotiations, but whichever outcome we choose to negotiate for—most of that has been chosen—it will involve leaving the EU and respecting that democratic mandate.

[Vicky Foxcroft (Lewisham, Deptford) (Lab)]

T7. The independent “Preparing for Brexit” report commissioned by the Mayor of London found that a hard Brexit will lead to the loss of 56,500 more jobs in London alone than if the UK remains in the single market and customs union. Does the Minister agree that that is clear evidence that a hard Brexit will be catastrophic for jobs?

[Mr Davis]

No, I do not. As I explained earlier, one of the great difficulties with such forecasts is that they have proved to be entirely wrong at every turn so far, and that is not just the view of a politician. The smartest and most innovative economist in the country is probably the deputy Governor of the Bank of England, Andrew Haldane, who referred to the forecasts as having faced a “Michael Fish” moment—in other words, they must find out why they did not work. A forecast is not evidence to be relied upon. It may be an opinion, but it is not evidence.

[Priti Patel (Witham) (Con)]

T6. Over the last 45 years, British taxpayers have had far too much of their money taken from them to go to the EU. Now that we are leaving, can the Secretary of State give an indication of the value of our share of EU assets and what will happen to the share that we have contributed? Is he negotiating to get it all back?

[Mr Davis]

My right hon. Friend picks up on an important point. It is a component of the negotiations that brought the public claim down from £100 billion to £35 billion—part of that was offset by our assets.

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

T8. The chemicals industry is the largest sectoral employer in the Grangemouth area of my constituency. It exports 60% of its goods to the EU and imports 75% of them from the EU, and it is rightly concerned about frictionless and tariff-free trade coming to an end. Will Ministers tell us what the EU exit analysis projects for that sector?

--- Later in debate ---

[Karin Smyth (Bristol South) (Lab)]

On 11 January Lord Callanan visited Bristol, and he made a promise to Hartcliffe residents in my constituency that there would be more jobs after Brexit. Had he been briefed by the Department on the true state of the modelling analysis when he made that promise to those people?

[Mr David Davis]

As I told the House earlier, every forecasting model of the post-referendum performance of the British economy by every major organisation—the banks, Government organisations and, indeed, international organisations—has proven wrong. One of the ways they have been proven wrong is because employment in this country has grown, despite all the forecasts, to record levels today. We will be seeking to do the best we can to ensure that that growth record is maintained.

[Bob Blackman (Harrow East) (Con)]

rose—

--- Later in debate ---

[Bob Blackman]

Will my right hon. Friend confirm that we will be able to implement decisions during the transition period and not wait until the end to implement everything that is agreed?

[Mr Davis]

We will be able to do some of them, for example, our proposal to put in place a registration scheme and so on. We will also be able to sign trade deals, but not bring them into force.

[Nic Dakin (Scunthorpe) (Lab)]

How are the Government working with the UK steel industry to make sure it prospers post-Brexit?

[Mr Davis]

We have had meetings. My Department alone has had meetings with 350 companies, not all in steel, but in all the user industries. We have a regular meeting between the Chancellor, the Business Secretary, myself and leading business representative organisations, and of course we talk directly to the individual companies.