EU: Withdrawal and Future Relationship (Motions)

Greg Hands Excerpts

Monday 1st April 2019 Commons Chamber

[Mr Speaker]

We now come to the motions relating to the United Kingdom’s withdrawal from and future relationship with the European Union. I inform the House that I have selected the following motions for decision by recorded vote: motion (C), in the name of Mr Kenneth Clarke; motion (D), in the name of Mr Nick Boles; motion (E), in the name of Mr Peter Kyle; and motion (G) in the name of Joanna Cherry.

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

On a point of order, Mr Speaker. Could you perhaps clarify why you have selected for debate motion (C), in the name of my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), when exactly the same motion with exactly the same words was debated and rejected by this House only three sitting days ago? For the benefit of those watching, could you perhaps explain why this can be brought back three days later, but the 585-page withdrawal agreement cannot?

[Mr Speaker]

The short answer to the right hon. Gentleman is that the House has agreed to the process that has unfolded, and therefore it is entirely procedurally proper for the judgment I have made to be made, and that is the judgment that I have made. The right hon. Gentleman will have noted the view expressed in the debates last week, and let me say in terms that are very clear—he may not approve of them, but they are clear—that the purpose of this discrete exercise, as I think is understood by colleagues across the House, is to try to identify whether there is potential consensus among Members for an approach to the departure from and the future relationship with the European Union. It is in that spirit and in the knowledge that it is wholly impossible, colleagues, to satisfy everybody, that I have sought conscientiously to discharge my obligations to the House by making a judicious selection. That is what I have done, that I readily defend to the House and that I will continue to proclaim to be the right and prudent course in circumstances that were not of my choosing, but with which, as Chair, I am confronted.

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[Mr Clarke]

My right hon. Friend and I are in complete agreement. As he quite rightly says, we must avoid no deal occurring by default in a fortnight’s time simply because the House of Commons could not agree on anything. In fact, 400 Members of the House of Commons have voted against no deal, and it would be calamitous just to collapse into it because we cannot reach any compromise among ourselves about what we actually wish to put forward.

I am trying to illustrate that my motion, which is for a permanent customs union, is perfectly compatible with a wider look at the subject but sets a basic agenda. I think it will help to minimise what I regard as the damaging consequences of leaving the European Union, and enable us to reassure the business and other interests in this country—some of them are absolutely panic-stricken—who view the great unknown and the end of the common market with great concern. I hope that the public, who are as polarised as this House in their opinions, will begin to be reassured. I hope that people will be reconciled to a compromise of leaving the political European Union but staying in the common market, to use the language of Eurosceptics over the years.

[Greg Hands]

Will my right hon. and learned Friend give way?

[Mr Clarke]

No, I will not give way. As I have said, we have just had two hours of filibustering, and I do not want my speech to be spun out.

Let me illustrate why I think motion (C) does not conflict with the body of opinion in most of the political parties in this House, starting with the Conservative party. My motion does not conflict with the Prime Minister’s withdrawal agreement. Indeed, it slightly complements it, and it deals with a different subject. Motion (C) deals with the political arrangements—the non-binding political declaration and the nature of the later negotiations that will have to take place to determine our long-term future.

As I said last week, the motion answers the concerns of the Labour party, which has supported it. The Labour party says that it will not vote for the withdrawal agreement, not because of its contents, but because it represents a blind Brexit in which we have absolutely no idea what the Government are going to do. To approve the withdrawal agreement would be to give the Government a blank sheet of paper and allow them to carry on arguing inside the Cabinet about what objectives to seek in the negotiations that would follow. What this motion suggests is that the House mandates the Government—whatever shape they take and whatever the Government—to make a permanent customs union one of their foundations in the negotiations. I will come back to the only reason that they have ever given for being against the customs union, which is the only basis for voting against it.

[Greg Hands]

Will my right hon. and learned Friend give way?

[Mr Clarke]

No, I am not going to give way. It would be unfair to other Members who have had this whole debate crammed into three hours. In 1972, we used to have all-night sittings on much smaller issues than this. I do not recommend going back to that, but I object to listening to my colleagues having to speak on three-minute time limits because chaps want to get to dinner and will not sit after 7 o’clock in the evening in the middle of the week, which is where this rather pathetic Parliament has got itself recently. That is my last digression from my theme. [Interruption.]

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[Mr Clarke]

No, I am sorry; I will go back to being strict, though when I refer to parties or people, I feel it is courteous to let them respond.

Let me now deal, finally and very briefly, with the only substantial argument that has been raised in the House against the customs union from the beginning to the end of our debates. That argument is that it will stop us having our own customs arrangements with third party countries, and it is repeated by Ministers over and over again.

[Greg Hands]

Will my right hon. and learned Friend give way?

[Mr Clarke]

No, I will not, in the interests of other Members who wish to speak.

First, that argument is not actually accurate. It is true that trade agreements with other countries would mean that we would not be able to make changes in external tariffs. Of course, we would have the benefit of no tariffs at all: totally tariff-free entry into the rest of the EU. What we would be able to have trade agreements on is the service economy, service industries, which constitute the vast majority of this country’s GDP.

I have been involved in trade negotiations quite a lot over the years. It is not vanity, but simply my longevity, which leads me to say that I have probably had more experience of trade arrangements and dealings than any other Member. In every Department that I have occupied, I have led trade delegations to somewhere or other. During my spell at the Department of Trade and Industry and my spell at the Treasury, I became heavily involved in trade deals, particularly with the Americans, China, and large parts of Latin America. I led for the last Government—the coalition Government—on the EU-US TTIP negotiations. Although the Commission conducts the negotiations on a mandate that it has been given by the 28 member states, certain of the bigger ones—such as Britain—remain a constant presence, and go backwards and forwards to try to ensure that the process is going smoothly. So I have been involved in many attempts to secure trade deals, some successful and some not. Opening up the Chinese market is a very slow business: I could have told President Trump that.

Some of my right hon. and hon. Friends ascribe great weight to an American deal. TTIP failed. It was given that strange title—the Transatlantic Trade and Investment Partnership—because Obama’s officials said that it would not be possible to get anything called a free trade agreement past America, which is quite a protectionist country. Certainly Congress is protectionist, and that was under Obama. The problem with the Americans was, first of all, that we wanted to open up access to services. Tariffs do not matter much in European-American trade. They are vestigial. All the Europeans, including the British, are quite content to abandon tariffs in both directions, because they are fairly small. The auto industry, on both sides of the Atlantic, did not really want tariffs. It is regulatory differences, and getting regulatory equivalence, or convergence, that stand in the way.

We wanted the Americans to open up public procurement, which they would not do—and, anyway, it is a state-by-state process, which makes it more difficult—and to open up the service sector, particularly financial services. The lobbies in Congress are too strong for that to make much progress. The present President has given no indication that he would open up any market to us. The approach that he has taken to trade negotiations, when he talks about a trade agreement and takes on the Mexicans, the Canadians and the Chinese, is that he wants America to export more to them and wants them to export less to America. We have a large trade surplus with America, and that is what he has in mind. It is perfectly plain. His obsession is with food and agricultural products, and that means giving up our standards of animal welfare and food quality—which, owing to British lobbying, are very high in Europe—and accepting America’s lower standards involving hormone-treated beef and chicken.

If any Members think we can influence that—if they think that with such a trade agreement we can somehow start tightening up American food standards and animal welfare—I can only tell them that the agriculture lobby in Congress is extremely powerful, and would not take the slightest notice of British interests in such matters. The Australians would probably agree to a deal, but we would have to face the problem of hormone-treated beef, because that is what they want to export to us. The New Zealanders would want a deal as long as the quotas were lifted from their tariff-free exports of lamb. I am sure that they would be happy if we could think of anything that we wished to sell to New Zealand that we do not sell at the moment. But those negotiations will not compensate for the loss of our European markets if we stay outside the customs union and the single market and erect great barriers in our way.

I have made a modest case—it is modest compared with my own views; nobody in this House is a greater supporter of the European project than I am and nobody in this House wants Britain to remain in the EU more than I do, if that were in the realm of the possible. To reject motion (C) again would run the risk of the adverse reaction outside that we got when—as I think we all anticipated—there were minorities for every motion last week. Now is the time for hon. Members to get behind motion (C). If they wish to get behind common market 2.0, they should feel free to do so, and those who want to reinforce the revocation argument if otherwise we would crash out with no deal should vote for that.

So far, the process has been a shambles. The public hold their political parties and politicians and the institutions of Government almost in contempt. Today, we must start to bring that to an end. All I propose is a modest step compared with most others on the Order Paper. It is perfectly compatible with the wider ambitions of a large majority of this House. It is fitting that I should open the debate because my motion is the basic, obvious beginning. If the House wishes to add more, I shall probably vote with it.

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

I am glad that we are resuming this indicative vote exercise. It has been a good debate today. There has been a good tone, with good contributions from around the House. I recognise that no majority was found last week for any option, but I equally recognise that Parliament is trying, at some speed, to complete a process that the Prime Minister should have carried out two years ago.

May I begin by saying a few words to all Members across the House, but particularly to colleagues sitting on the Labour Benches behind me? I recognise that many Members have a single preferred option and understandably want to push that option as hard and as far as possible. No one wants to stand in the way of that, but I do urge colleagues to enter into the spirit of the exercise we are now engaged in. That means supporting options other than their own preferred option in order to break the deadlock. It is important that we find a majority if we can this evening—if that is possible. I do recognise how difficult that can be for individual Members and how they have grappled with the positions they have tried to take, but I ask them to enter into the process in that spirit. I thank them for the approach they have taken so far.

As far as the Labour position is concerned, it will again be to support amendments that are consistent with the two credible options we have been advancing time and again: a close economic relationship with the EU based on a customs union and close single market alignment; and a public vote to prevent no deal or a damaging Brexit.

[Greg Hands]

Will the right hon. and learned Gentleman give way?

[Keir Starmer]

I am going to come to the customs union in a minute, and I will take an intervention then.

On that basis, we will whip support for motion (C), the customs union as a minimum, in the name of the Father of the House; for motion (D), common market 2.0, in the name of the hon. Member for Grantham and Stamford (Nick Boles); and for motion (E), on a confirmatory public vote, in the name of my hon. Friend the Member for Hove (Peter Kyle), assisted by my hon. Friend the Member for Sedgefield (Phil Wilson). I will come to motion (G) in one moment.

On motion (C), Labour has long supported a customs union. It is a vital component of any deal which will genuinely protect manufacturing, and it is necessary to protect against a hard border in Northern Ireland. As I said last week, it must be a minimum, and that is written into the motion in terms. That is the position of the Labour party.

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[Greg Hands]

On the customs union, I would like, if I can, to take the right hon. and learned Gentleman back a few years to when the Labour party was wholly opposed to the Transatlantic Trade and Investment Partnership—I think it was before he was in the House. At the time, the UK had a seat at the table. Now, as he is proposing it, the UK would not have a seat at the table and the EU would set our trade policy. Why is he in favour of that arrangement, particularly at a time when the United States says it wants to launch trade talks with the European Union? The EU has, in general, a system of social insurance, not our system for the NHS. How does he think that this is a better arrangement to defend his NHS?

[Keir Starmer]

That is a serious point. Before the Labour party surfaced its proposition for a customs union, we had long and hard discussions with the EU about the sort of customs union that we were considering—not the customs union, but a customs union—and we looked at the influence that now exists for EU members, and how one could devise a pillar that gave influence to a very close third party. I have stood at the Dispatch Box many times and said that that would not be easy, but that is why we have always said that we should have a customs union with a say. We have sought to discuss that with the EU, and it is telling that when we put our proposal to the Prime Minister, the EU was very warm about the possibility of negotiating it. I take the right hon. Gentleman’s point, but we have, I hope, addressed it in our approach to the customs union.

On motion (D), Labour’s preference remains the approach that we set out in the letter to the Prime Minister in January this year—that is, a customs union and single market alignment. However, we recognise that motion (D) has a number of similarities and could deliver a close economic relationship with the EU. The motion has been revised since the first phase of indicative votes and now includes further detail about the form of the envisaged customs arrangements, which have similarities with the approach that the Labour party has set out.

The motion does not specify that those arrangements should be permanent—that is our preferred option—but it does say that they should be in place at least until alternative arrangements can be found. There remain differences between our policy position and motion (D), but the motion would allow for close economic partnership with the EU. It is a credible proposition, and on that basis we will support it this evening.

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

I will begin by answering my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), who said that he had not heard a single argument against a customs union. I credit him for staying for the whole debate, because I am going to give him plenty. He also said that I had been involved in a filibuster, but my contribution to the business of the House motion lasted for one minute and 13 seconds. That must be the shortest filibuster that there has ever been. I did once speak for one hour and 43 minutes on beer duty, but I do not think that one minute and 13 seconds really counts.

Why is a customs union a very bad idea? Broadly speaking, it would mean a huge loss of control over our economic policy, a decline in our foreign policy influence and a huge democratic deficit. Trade policy is not just about trade deals. It is about much more, which we would be handing over to the European Union without a seat at the table. There are tariffs, remedies and preferences as well as trade agreements, and these would all be given over. The House of Commons would abrogate its responsibility in relation to the UK’s trade policy. This is not Andorra or San Marino, which are currently in customs unions with the European Union. This is the world’s fifth largest economy.

My right hon. and learned Friend the Member for Rushcliffe and I were on the same side in the referendum in 2016, so I am approaching this debate not as some kind of Brexiteer, but from the position of what makes sense for the UK’s trade policy. It makes no sense in our democracy for the House of Commons to vote tonight to hand over control of UK trade policy to Brussels. It would mean that a Maltese Commissioner, a Latvian MEP, a Portuguese Commissioner and a Slovene MEP would all have more say over UK trade policy than any elected politician, including the UK Prime Minister. That is not democratically sustainable, nor is it sustainable for our foreign policy.

My right hon. and learned Friend and I served in the Government together. At that time, I went into various rooms in foreign countries to speak to foreign Governments, so I know that trade is one of the aspects of leverage that we have. As a member of the European Union, the UK has influence on EU trade policy. That will obviously be gone when we are no longer a member, but under a customs union we would also have no influence over our own trade policy. We would be unable to have those conversations with the Government of the United States when we can say, “Well, if we can do this on some other area, we will have a word in Brussels on this particular trade issue.” All of that would be gone.

[Mr Kenneth Clarke]

I am grateful to my right hon. Friend for giving way because I did not have time to give way to him in the end. I think he would acknowledge that it is a slight exaggeration to say that the British Government would have as little influence over deals being negotiated by the EU as a Latvian MEP if we moved into a customs union. As the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) just said, a big economy such as ours would add to the attractions of the EU market for a negotiating partner, so surely we should put in place a structure giving us far more consultation and involvement in the negotiations than my right hon. Friend is describing—not as good as now, but perfectly adequate.

[Greg Hands]

I think that is wishful thinking. The European Union is highly likely to prioritise the interests of its members versus the interests of non-members. That has always been the case. There are also serious arguments as to whether European Union rules would even allow a non-member to have an influence on EU trade policy. I am afraid that that is just a fact.

Entering into a customs union would be democratically unsustainable. Tariffs would be set by people who are not accountable to this House or to our constituents. That could be damaging for goods coming into the country, if those people were to set high tariffs on goods that our consumers would quite like access to. It could also happen the other way around with things such as trade remedies, as has been briefly mentioned. All these incredibly important aspects, including trade defences, would be handed over to Brussels. Now, Brussels might look after our trade remedies, but it would not give them priority. It would give the defence of its own industries—the fee-paying members of the European Union—priority over countries such as ours. This would mean that those all-important WTO investigations into, say, the ceramics industry, would be relegated below investigations to protect, for example, the German or Dutch steel industries.

On trade deals, the Turkey trap has been mentioned; this is about the asymmetry. The EU would offer access to our 65 million consumers without necessarily being able to achieve anything in return. I can guarantee that the UK asks would be the ones that would be dropped first, and that the UK items of defence would be the ones that the EU would concede first. It is inevitable because we would not be a fee-paying member of the European Union, so we would not be a priority.

[Steve Brine]

I am listening very carefully to my right hon. Friend. I have a lot of respect for him, I have read his article and I have listened to every speech so far during today’s debate, so I understand what he does not want, which is a customs union. But bearing in mind that Parliament has yet to decide what it does want—and has rejected all other options, and the Prime Minister’s withdrawal agreement and political declaration—what is he arguing for?

[Greg Hands]

I continue to argue for the Prime Minister’s agreement, and that is where I think we should head. People talk about a compromise; that is the best compromise, and it is the one that my hon. Friend and I have both voted for.

I am astonished that the Labour Front Benchers are supporting the idea of handing over our trade policy. They were the people most passionately against TTIP, and other trade agreements, due to the access that it would supposedly have given foreign companies to the NHS. As it happens, I do not buy into that idea, but the idea that it will now be fine because we are handing over trade policy to the EU without having a seat at the table is for the birds. I think it was Senator Elizabeth Warren who said,

“If you don’t have a seat at the table, you’re probably on the menu.”

That is exactly what I fear will happen in an EU customs union if motion (C) is passed this evening.