European Economic Area: UK Membership

Debate between Gareth Thomas and Stephen Kinnock

Monday 6th November 2017 Commons Chamber

[Stephen Kinnock]

I will make some progress.

Carolyn Fairbairn of the CBI said only yesterday:

“We remain extremely worried and the clock carries on ticking down”.

As a result, she said, more

“and more firms are triggering their contingency plans to move jobs or change investment plans.”

Reality has finally bitten, even in the minds of some of the most deluded Brexiteers, that it was always a fantasy to think it would be possible to complete the divorce and the final trade deals in parallel. A solid cross-party consensus on the need for a transition deal has therefore emerged, as was made clear in the Prime Minister’s Florence speech. All parties in the House also agree that we must leave the EU by walking over a bridge rather than by jumping off a cliff, and the EU has welcomed the fact that the Government have finally started to show some signs that they understand the realpolitik of the negotiations.

Given that an off-the-shelf transition deal is inevitable, it is clear to me that EEA-EFTA is the only viable option. The EEA and EFTA are well-established and well-understood arrangements that offer the clarity, stability and predictability that the British economy so desperately needs in these turbulent times. Transferring from the EU to the EEA and EFTA would allow us to balance sovereignty and market access. Crucially, such a transition deal would buy us time for negotiate the final comprehensive trade and strategic partnership deal that will shape the terms of the UK’s relationship with the EU for decades to come, while also allowing us to enter into independent trade negotiations with third countries because we would be outside the customs union.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

Is my hon. Friend’s point not all the more pertinent and timely in the light of the visit of the United States trade representative, Wilbur Ross? He certainly seems to be implying that a US-UK trade deal would take significantly longer than the 19 or 24 months to which the Government are clearly hoping to secure agreement for a transition deal.

[Stephen Kinnock]

I think that there is unanimity, almost, on the issue of the timing. I would add that the benefit of EFTA is that it is not a customs union but a free trade area, thus enabling us to connect with the vital single EU market but also to strike third-country deals with countries including, potentially, the United States.