EU: Withdrawal and Future Relationship (Motions)

Greg Hands Excerpts

Wednesday 27th March 2019 Commons Chamber

[Keir Starmer]

I will make some progress, because I have spent a lot of time at this Dispatch Box and I have been able to make my case. Others want to make their case today and I want to give them the opportunity to do so.

Motion (K) mirrors the plan that we have set out. It was in the letter from the Leader of the Opposition to the Prime Minister in February. I remind the House that the pillars are a comprehensive and permanent customs union with the EU, close alignment with the single market, dynamic alignment on rights and protections, accompanied by much stronger commitments on agencies and security. We have never pretended that this will be easy or painless to negotiate. It involves compromise and negotiation, but we believe that it could be negotiated, and it would form the basis of a deal that protects jobs, rights and the economy.

Turning to motion (J) on the customs union, Labour’s support for a customs union is well known. I want to be clear that a customs union on its own is not enough. A customs union protects manufacturing supply chains and is relevant to the protection of the border in Northern Ireland, but it has to be part of a wider package, hence our motion (K), which sets out the package that we believe is needed. However, motion (J) is worded to specify that a customs union is a minimum part of any deal and we will support it on that basis.

[Greg Hands (Chelsea and Fulham) (Con)]

Will the right hon. and learned Gentleman give way?

[Keir Starmer]

I will just make some progress and then I will. Turning to motion (M), we will support this motion tonight, because at this stage it is now clear that any Brexit deal agreed in this Parliament needs further democratic approval. That is what this motion would do. It would put a lock around any deal that the Prime Minister forces through at the 11th hour or any revised deal that comes about at this very late stage. It would ensure that any Tory Brexit deal is subject to a referendum lock and it is consistent with commitments that the Leader of the Opposition and I have made from this Dispatch Box in recent weeks.

In relation to motion (D)—the common market and Norway motion—I want to be clear that we have concerns about this proposal, and it has not been our preferred option. We have concerns about the lack of a commitment to a permanent and comprehensive customs union, although I listened carefully to the words that were just exchanged in the House. However, we recognise that this motion would deliver a close economic relationship with the EU and would help to protect jobs, rights and the economy. It is credible and it is deliverable, so we believe that this motion should remain an option and continue in the process. We will therefore be recommending that Labour Members vote for it tonight.

This is an extremely important and welcome debate. It is frankly two years overdue. This is the debate that the Prime Minister should have started two years ago at the beginning of the process, but we are where we are, and Parliament finally has the chance to shape the way out of the Prime Minister’s mess.

--- Later in debate ---

[Mr Clarke]

I will not give way to my fellow collaborator on revoking.

I will support common market 2.0 and anything that resembles it, though I will not dwell on it further, as I have already dealt with it. I come then to my motion (J). As I have already indicated, it is not my first preference—the two I have already named are my preferences—but it is tabled to maximise support in the House so that we can move on Monday towards our really taking control and actually putting the Government, though they do not accept it, in a much stronger position than they are today when it comes to the future negotiations.

Motion (J) advocates a customs union only—a permanent customs union, I point out to the hon. Member for Leicester West (Liz Kendall), who intervened earlier on this point—and would keep the minimum needed for frictionless trade and an open border in Ireland. We would also need some understanding or moves on regulatory convergence, but that does not need to be dealt with at this stage. If we started with the premise that we will be permanently in a customs union, it would bring greater clarity to the next stage—the really important stage—of the negotiations. I think that every other EU member state would be ready to accede to that, and it would improve the climate of the negotiations.

The motion is designed to appeal in particular to Labour Members who are demanding it and to my more cautious right hon. and hon. Friends in the Conservative party. Those who have hang-ups about rule making and use medieval language about vassal states and all the rest of it are talking about the single market. Motion (J) does not include the single market. The customs union guarantees a reasonably frictionless relationship and the possibility of completely open trade in the future, and leaves all the other things to be decided in the negotiations.

[Greg Hands]

Will my right hon. and learned Friend give way?

[Mr Clarke]

No, I will not.

That is the basis on which I tabled motion (J), and I commend it to the House. Members may prefer a different motion; I shall vote for several. I think that we should all vote for as many of the motions as we can, and then we will see which is the strongest. We will not be dismissed by the more fervent members of the Government saying that they have all been defeated, and none of them secured an individual majority. On Monday, we could move on to how we sift them out.

Above all, for Labour Members this will, I hope, pave the way for allowing the withdrawal agreement to go through, because their main argument is not about the contents of the withdrawal agreement but about the “blind Brexit” that worries them so much. Even in motion (J)—if we cannot get a stronger one—there is not a blind Brexit any more. Labour Members could at least abstain, so that we could secure the withdrawal agreement and then move on to what really matters—the serious long-term negotiations on the big issues, which we shall have to handle much better than we are doing now.

My last word is this. If we fail, and if we are faced in a fortnight’s time with no deal, I think the feeling in the House is so strongly against that outcome that we must all vote to revoke at that stage. A great many members of the public will probably think that we have got ourselves into such a mess that it might have been sensible to do that anyway. We should stop now, sort out what we are doing, and perhaps start again if the House is still enthusiastic about leaving. However, I hope we can avoid that conclusion by demonstrating that Parliament is capable of orderly debate, reasonable conclusions, and contributing to the better governance of this country as part of this process—including, I hope, my motion (J).

--- Later in debate ---

[Greg Hands (Chelsea and Fulham) (Con)]

It is always a pleasure to follow the hon. Member for Wirral South (Alison McGovern). I am going to speak on the perhaps narrow but extremely important topic of the customs union. I will speak specifically against motions (J), in the name of my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), and (K), in the name of the Leader of the Opposition, and what I believe to be the seriously defective proposal of a customs union with the European Union while we would not have a seat at the table.

I have given this question a great deal of consideration over the last almost three years, particularly in my two years spent at the Department for International Trade in charge of trade policy. A customs union has its superficial temptations. Obviously, it keeps trade close, although, it is worth pointing out, not necessarily frictionless; we would need the single market as well for that. It avoids having to agree to free movement, it may not need financial contributions, and clearly, it is likely to provide short-term relief for industrial supply chains, but it would be a historic mistake.

Customs unions have been successful in history, but essentially, for countries going in the opposite direction—for countries coming together into a political union. Look at the history of the Zollverein in Germany in the 19th century, which was all part of the process of German unification. Look at the partial customs union, in the name of the European Coal and Steel Community in 1947 or 1949—I forget which—which was a precursor to the EEC and the treaty of Rome. However, we are heading in the opposite direction. This is the wrong compromise, and a customs union would give short-term relief at the cost of long-term pain and a democratic deficit that would grow and grow over the years. I have written articles about this, notably today in The Times Red Box.

Our trade policy would end up being set by others and that would be a historic mistake. I will give four or five quick examples of where this would have a really serious impact on this country. Tariff policy, for example, would be set by the European Union to protect its products from others coming in and it would not be set in the interests of the UK, which are likely to be different. For example, in the current trade dispute between the United States and the European Union, there are punitive tariffs on bourbon coming into this country. Let us say that there is a future trade dispute between the EU and the US involving Scotch whisky. Obviously, that is not produced in the European Union and there would be no incentive for the EU in that customs union to seek to defend Scotch whisky.

On trade agreements, we have talked before about the Turkey trap. Essentially, if the EU entered into a trade agreement with a third country and the UK were in a customs union, we would have to offer access to our markets but we would not get the reciprocal access to that country in return. That would be a massive democratic deficit. It amazes me that it is the official Labour policy to do this. I remember well the disputes around the Transatlantic Trade and Investment Partnership. The biggest objections to TTIP came from the Labour side. Now we have a situation where trade policy will be determined by others without even a UK seat at the table. If Labour thought at the time, when we had a seat at the table, that TTIP would lead to US private healthcare companies gaining access to the NHS, what will it be like when we do not have a seat at the table? But that is the official Labour policy.

On trade remedies, I am amazed that the hon. Member for Stoke-on-Trent Central (Gareth Snell) has put his name to one of these motions. It is absolutely incredible. Trade remedies would be conducted by the EU, not this country. They are currently conducted by the EU, but we have a seat at the Trade Council—I was at that seat for a long time—and participate in trade remedies to defend our products. There is no guarantee—in fact, it is highly unlikely—that the EU would do the same, particularly for a product not produced in the EU. When it comes to doing WTO-compliant studies of products, we can guarantee that the studies that would take priority would be those defending the interests of EU members, not those of non-members. I find it amazing.

Finally, on trade preferences and access to the developing world, I find it staggering that the Labour party is proposing ceding control over trade preferences to Brussels without the UK having a seat at the table. That would be unacceptable to my constituents and, I believe, to theirs.