Exiting the European Union and Global Trade

Iain Duncan Smith Excerpts

Thursday 6th July 2017 Commons Chamber

[Dr Fox]

My hon. Friend makes an excellent—and key—point. Getting the global economy moving requires the major liberalisation of services in the same way as we had the liberalisation of goods as the focus of the Uruguay round. One thing that comes from that is that countries such as the United Kingdom, where about 80% of the economy is service-driven, are less dependent on being part of a geographical bloc for trade. When it comes to trade in services, what matters is that we are dealing and trading with countries that are functionally similar rather than geographically proximate. That is a change in globalisation we would do well to understand in the debate as we leave the European Union.

It is not just about raising living standards in developing and developed countries. There is, I think, an even more compelling case for free trade. The prosperity it can create is the basis of a social stability that underpins political stability. We have seen that around the world. That political stability, in turn, underpins our security. In other words, they are all part of the same continuum, and we cannot disrupt one element without disrupting the whole. That is why Governments of both colours in this country have tended to see development, prosperity and security as a single policy objective. It is a truth that we need to understand in this interdependent, globalised era.

[Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)]

It is not just us making this case. In the discussions with those who are involved in the World Trade Organisation—even though we are a member, we want to get back our voting rights—they have made it pretty clear that they celebrate the re-arrival of the UK as a voting member of the WTO for one vital reason: they feel that globally it has begun to stall and the UK is the single biggest exponent of free trade. It always has been, and they want to welcome us back for that reason alone, if nothing else.

[Dr Fox]

My right hon. Friend is absolutely right. It is important that we can show our trading partners globally that whatever our differences in the mechanics through which we go about the task, there is an overwhelming belief in the concept of free trade in this country. As I said at the outset, the global trading environment needs someone to champion free trade at a time when many countries feel that we are rolling backwards, away from the progress that we have made. If we as a country can speak with a strong voice about the principles of free trade, citing examples from history as to why it has benefited some of the poorest people in the world, we will make a moral as well as an economic case.

--- Later in debate ---

[Barry Gardiner]

Perhaps if I can finish responding to the Secretary of State’s intervention, at an appropriate juncture the hon. Gentleman might catch my eye.

There is no difference between the Secretary of State and me on those matters. In fairness, I will say that in the past 50 years there have been 15 sets of quarterly balance of payments figures that have been worse than last week’s, and one of them was under a Labour Government, just after the global financial crisis. The other 14 have all been in the past five years, under the Conservatives.

It would be mean of me to give the right hon. Gentleman too hard a slapdown because the Chancellor has been doing it so effectively on behalf of us all. Only yesterday, we read that the Chancellor is demanding that the Secretary of State prove the case that our ability to strike trade deals after Brexit will make up for losing tariff-free access to the EU. In other words, the right hon. Gentleman is being asked to justify his job as the Secretary of State for International Trade once leaving the customs union gives us the competence—perhaps in this case I should say the right—to negotiate our own independent trade agreements.

[Mr Duncan Smith]

Will the hon. Gentleman give way?

[Barry Gardiner]

I will, in a little while.

A year on from the referendum, a year on from the Government’s announcement that they were taking back competence in international trade negotiations, the Cabinet is still divided on what it has all been about. That is extraordinary. The country is crying out for leadership, and all its current leaders can do is sit around the Cabinet table plotting who amongst them should be their next leader. A year on, what has been achieved?

[Mr Duncan Smith]

rose—

[Barry Gardiner]

I give way to one of their previous leaders.

[Mr Duncan Smith]

The hon. Gentleman is busy asking the Government what their position is. We have set that out very clearly: out of the single market, out of the customs union, and making trade deals. As he speaks for the Opposition, perhaps he can now clarify what their position is. After the election, having fought on a manifesto containing a clear commitment to leave the European Union, Labour’s leader and shadow Chancellor said, “We are leaving the single market. We are leaving the customs union.” The right hon. and learned Member for Camberwell and Peckham (Ms Harman) said, “We are leaving the single market. We are leaving the customs union.” But when the hon. Member for Brent North (Barry Gardiner) and his colleague the shadow Brexit Secretary, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), were interviewed, they never confirmed what their leader and the shadow Chancellor said. They have been doing an intricate dance around the matter, so I ask the hon. Gentleman a simple question: is the Labour party’s position to leave the single market, to leave the customs union and to make trade deals?

[Barry Gardiner]

I urge the right hon. Gentleman to read precisely what our manifesto says. We have made our position on those points extremely clear: we are leaving the European Union; that means that we want to secure the best benefits, and we will look to secure exactly what the Secretary of State for Exiting the European Union said he would achieve, which is the exact same benefit benefits as we currently have inside the European Union.

[Mr Duncan Smith]

Will the hon. Gentleman give way?

[Barry Gardiner]

The right hon. Gentleman really must allow me to respond to his first intervention before seeking to follow it up with a second. The trouble with the right hon. Gentleman is that he does not want to listen to the answer. [Interruption.] Is he quite calm?

[Mr Duncan Smith]

No, I am not.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I am sure that Mr Gardiner will take the intervention when he wants to.

[Barry Gardiner]

As I was saying before I was persistently—and, I must say, quite rudely—interrupted, we have set out very clearly that we will try to secure exactly the same benefits that the Secretary of State for Exiting the European Union claimed would be procured in the negotiations, but we are not fixated on the structures; we are fixated on the outcomes. But we will be leaving the European Union. The right hon. Gentleman can be assured that we are committed to honouring that manifesto commitment.

[Mr Duncan Smith]

rose—

[Barry Gardiner]

No, the right hon. Gentleman has had his chance.

A year on, what has been achieved? It took Donald Trump’s Administration seven weeks to produce a trade policy paper. This maladministration has failed to do so in an entire year. I have now been asking the Secretary of State to produce a trade White Paper for seven months. How extraordinary it is that the Department for International Trade has existed for a year but has completely failed to set out its mission and vision in a White Paper so that British businesses can have some clarity about their future.

Nor was there any clarity in the Conservative manifesto. It was scant on detail and peppered with vague promises, such as:

“We will work to forge a new culture of exporting”

and

“We will take a more active role in supporting British consortia to win…contracts”.

Of course, we were promised a trade Bill, which has now been confirmed in the Queen’s Speech. The accompanying notes actually state that one of the main benefits of the trade Bill will be:

“To meet the manifesto commitment to ‘introduce a Trade Bill”.

Well, yes, but it is something of a tautology.

I am heartened to note that the Secretary of State clearly read our manifesto, because since the general election his Department has adopted Labour’s manifesto pledge to guarantee market access for the least developed countries to the same level they currently have with the EU. Since the general election the Government have also agreed with Labour’s manifesto pledge to address trade remedies. If only they would agree to publish a trade White Paper that integrates industrial strategy with international trade policy, that creates a network of regional trade and investment champions to promote exports, that promises full transparency and scrutiny of future trade deals, and that builds human rights and social justice as a key strand in trade policy, perhaps our encounters at the Dispatch Box would become a lot more consensual.

The challenges we face in leaving the EU are not insurmountable. Ours is a great and proud country and we are an enterprising people. Our goods and services are among the best in the world, our economy is a dynamic and attractive marketplace for investment, and we will be a thought leader in the next wave of industrial growth. However, if we are to rise to these challenges, we need more than the patriotic flag-waving we have seen from the Government Front Bench; we need clarity and careful planning, which we have not had.

We are setting out to leave our major trading partner. Where is the road map? There is no White Paper. Where is the estimate of costs? That appears to be what the Chancellor has now started demanding. Government Ministers appear incapable of presenting anything approaching a unified view on the matter. The Prime Minister repeatedly tells us that

“no deal is better than a bad deal”,

and her Chancellor says that actually

“no deal would be a very, very bad outcome for Britain”,

while her Brexit Secretary tells us that he is “pretty sure”, but “not certain” and “not 100% sure”, that there will ever be a deal.

The truth is that no deal is not a trump card to be thrown on the negotiating table in some macho gesture; it is actually the procedural outcome of article 50, because if we fail to negotiate a deal within the two-year period, we will be ejected from the single market of the European Union and put on World Trade Organisation terms. Far from being a trump card to be played, no deal is actually a cliff edge over which we would be pushed.