European Free Trade Association

Ian Murray Excerpts

Wednesday 7th February 2018 Westminster Hall

[Ian Murray (Edinburgh South) (Lab)]

It is a pleasure to serve under your chairmanship for the first time, Mr Gapes. We normally sit side by side on the Select Committee on Foreign Affairs, so the roles are slightly changed this morning. I also pay tribute to the hon. Member for Wimbledon (Stephen Hammond) for bringing this timely debate to the Chamber.

I say to the Government, at this time of national crisis and debate, it should not really be for Back-Bench Members of Parliament to have to bring debates to Westminster Hall on so critical a matter. If it is about taking back control, Parliament should be debating this every single day of every single week, so that the public can have a real view about where we are heading as a country in exiting the European Union. We are clearly no longer in a debate about staying in the EU; instead, we are talking about the least worse option when we leave.

The hon. Gentleman’s arguments clearly demonstrate that EFTA is one of the options the Government could choose to ensure we have the least worse exit from the EU. Whether it is leaked, not leaked, written, not published or whatever, the Government’s analysis shows that this is the least worse option, so why would they not take it? I have consistently said in the main Chamber, in Westminster Hall, and indeed in newspaper articles, that whether one agrees with these arguments or not, the fact that the Government have taken them off the table shows that their direction is towards a place that will fundamentally damage the UK economy for generations to come. It is also clear to anyone who follows this debate in any kind of detail that the goals, aims and objectives the Government have set themselves when leaving the European Union are completely and utterly incompatible—incoherent—with the red lines they have set themselves.

A trade deal with the European Union. Maintaining tariff-free, frictionless access. Ensuring the issues around Northern Ireland are resolved. Achieving regulatory harmonisation. Staying in European programmes such as Erasmus and Horizon 2020—Edinburgh University has issued its annual report, the back pages of which show where it gets its research funding from, and there is page after page showing tens of millions of pounds that come from the European Union. If the Government want to achieve all of those objectives—I have no doubt that they do—I suggest they reach out, keep everything on the table and say to Parliament, when taking back control, that the best way to achieve all of those objectives is through EFTA, the EEA, a single market or a customs union. Whichever way we want to look at it, let us keep those options on the table and have those arguments.

EFTA is important because it is about economic integration between its members. The EEA allows that economic integration between the EFTA members and the European Union. That seems to me to be very similar to the Prime Minister’s goals and objectives in both her Lancaster House and Florence speeches. We want free, frictionless trade. We want regulatory harmonisation. We want goods and services to be included, as my hon. Friend the Member for Streatham (Chuka Umunna) said. As the hon. Member for Wimbledon said, this is not CETA, but is it CETA plus plus plus, which the Secretary of State for Exiting the European Union mentioned a few weeks ago?

[Stephen Doughty]

My hon. Friend is making an excellent speech. Does he agree that the problem the Government have got themselves into is that instead of keeping all the options open, the Prime Minister is having to respond to the extremists in her own party on a reactionary basis and close off options, exactly when we should be exploring the possibilities of all the options and the best way forward for the country?

[Ian Murray]

My hon. Friend hits the nail on the head. This Government are not looking at the best possible option for exiting the European Union. They are trying to resolve a decades-long problem in their own party, which is now raising its ugly head again, as we have seen in the newspapers in the last few weeks. I firmly believe that many senior members of the Government and influential Members on the Government Back Benches would rather see the UK fall off a cliff, to achieve their ideological goals and take control of their own party, than do what is in the best interest of the country.

I will wrap up, because I am aware others want to speak. EFTA is the ninth largest trading partner in the world in goods and the seventh largest in services. It is the third largest trading partner with the EU in goods and the second largest in services. If that deal was put on the table to the United Kingdom by Michel Barnier today, we should bite his hand off to take it. It is on the table, it is here and it is ready made. The Government would be committing a massive dereliction of duty if they did not at least consider the option of staying in EFTA.

--- Later in debate ---

[Mr Walker]

My hon. Friend makes an interesting point. It is certainly true that a number of the EFTA states have those bilateral arrangements, but it is important to note that even if EFTA members were to welcome us back—as the hon. Member for Glenrothes pointed out, that is not a certainty—we would not have immediate or automatic access to their 27 FTAs. Our entry into each one would need to be negotiated individually with the third countries involved. That process would take time, with no guarantee of success. EFTA is not an off-the-shelf model that would deliver ready-made trade deals, as some have suggested. Instead, as I said earlier, leaving the EU offers us an opportunity to forge a new role for ourselves in the world: to negotiate our own trade agreements and to be a positive and powerful force for free trade. As Members know, we are committed to delivering continuity in the EU’s existing trade relationships with third countries.

[Ian Murray]

Will the Minister give way?

[Mr Walker]

I will not right now. We want continuity, rather than the replacing of agreements with their mostly shallower EFTA counterparts. We are already in discussions with third countries over how to put the arrangements in place upon exit, and I will come back to that point.

[Ian Murray]

Will the Minister give way?

[Mr Walker]

I cannot give way right now because I have to cover a few more points.

Another important drawback of EFTA membership is that it requires free movement between its members. A number of Members have touched on that. It is true that Liechtenstein has a derogation from the principle of free movement of people under the EEA, but Members will agree that the UK is in many respects different from Liechtenstein, which is a country with a population numbering less than most of our constituencies—in 2016, the population totalled some 37,000. It is also worth noting that in 2016 more than a third of Liechtenstein’s population were not Liechtenstein citizens.

We of course want the UK to remain an open and tolerant country. It is important to note that the Prime Minister has written to EFTA citizens and EU citizens to assure them that we want to reach agreements that protect their right to achieve settled status in the UK.

Finally, I reiterate that there can be no question of our ties of friendship with our EFTA friends and neighbours, nor of our commitment to them. Taken together, the EFTA bloc of states is our third largest export partner in goods and services after the EU and the USA—that is larger than India and China combined. We receive 5% of our imports by value from them, making EFTA our fourth largest import partner. Norway and Iceland were also founding members of NATO. I reassure Members that we are seeking to maintain our excellent relations with EFTA states, with whom we have long-standing cultural and economic ties, as well as crucial trading relations. The Prime Minister wrote specifically to EFTA nations.

I do not have a great deal of time to go into the implementation period, but it is important to note, as the hon. Member for Greenwich and Woolwich said, that we are seeking only one set of changes. It is crucial that business does not face two sets of changes. With that, I give my hon. Friend the Member for Wimbledon the floor for a chance to respond.