European Economic Area: UK Membership

Debate between Edward Leigh and Stephen Kinnock

Monday 6th November 2017 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

I beg to move,

That this House believes that for the UK to withdraw from the European Economic Area (EEA) it will have to trigger Article 127 of the EEA Agreement; calls on the Government to provide time for a debate and decision on a substantive motion on the UK’s continued membership of the EEA; and further calls on the Government to undertake to abide by the outcome of that decision.

I thank the Backbench Business Committee for granting today’s debate, and I thank right hon. and hon. Members on both sides of the House for supporting the application for it. In particular, I thank my hon. Friend the Member for Lewisham East (Heidi Alexander) and the right hon. Member for Broxtowe (Anna Soubry) for co-sponsoring the motion.

If the referendum result was indeed a vote to take back control, this House must surely have its say on that critical issue. I rise to commend the motion to the House, because all options both for the transition and for the comprehensive trade and partnership deals must be on the table. I first want to set the debate in context by outlining what the European economic area is and what it is not. I will then explain how EEA membership can square the circle between market access, sovereignty and control. I will also illustrate how EEA membership offers a sensible and workable transition out of the European Union—a bridge, rather than the potentially catastrophic cliff edge of exiting on World Trade Organisation terms.

First, what is the EEA? Simply put, it is an internal market between the EU28 and Norway, Iceland and Liechtenstein. It was set up in 1993 to allow the participation of non-EU states in the single market. However, the EEA internal market excludes single market features such as fisheries and agriculture, and it does not entail membership of the customs union. That means that EEA members are able to negotiate trade deals with third countries, either bilaterally or through the European Free Trade Association. That is how Iceland became the first European country to strike a bilateral trade deal with China in 2011.

It is through EFTA membership, in conjunction with the EEA, that unfettered trade in goods is achieved. EEA-EFTA membership could therefore provide a solid basis on which to sustain frictionless trade between the UK and the Republic of Ireland post-Brexit.

[Sir Edward Leigh (Gainsborough) (Con)]

The hon. Gentleman just talked about a “catastrophic cliff edge”. Clearly, it is in the interests of our country that we have a free trade deal, but will he put that in context? Exports in 2016 accounted for 28% of our GDP and EU exports for 12.6%. Last month, the World Bank published a study showing that in the event of no deal and WTO rules, British trade with the EU might fall by 2%. That is 2% of 12.6%, or a quarter of 1% of our overall GDP. Therefore, when he talks about a catastrophic cliff edge, let him put it in context.

[Stephen Kinnock]

I thank the hon. Gentleman for his intervention. May I suggest that he takes a trip to the port of Dover? The Brexit Select Committee, of which I have the honour of being a member, visited it recently and we were told that an additional two minutes of processing time on the 10,000 heavy goods vehicles that go through the port would result in a 13 mile tailback. A WTO Brexit, we were told, would add a lot more than two minutes. We therefore have to look at this debate in the context of the institutional capacity of our country to cope with a WTO Brexit, which is critical.