Achieving Economic Growth
Kevin Hollinrake Excerpts(2 years, 1 month ago)
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Rachel Reeves
Our scheme is very clear. We would introduce a windfall tax, use that money to reduce VAT on gas and electricity bills from 5% to zero, and expand the warm home discount from the measly £140 that people get today to £400. We would fund that through the windfall tax, through the additional VAT receipts that the Government are getting in at the moment because prices are so high, and through receipts from the additional corporation tax that the oil and gas companies are paying. The Government will end up doing this. The only question is when they will get on and deliver for their constituents. Oil and gas companies are making record profits and people are paying record bills. It is a question of whose side you are on. The Government are very clear that they are on the side of the oil and gas companies; the Opposition are very clear that we are on the side of ordinary families and pensioners.
The Government have failed to introduce not only the windfall tax, but the employment Bill that has been repeatedly promised. There is a real-world price: allowing scandalous threats of fire and rehire to continue to drive down conditions at work, not just in the appalling P&O case, but in other sectors. Fire and rehire should have been outlawed, but thanks to this Government’s actions it is being encouraged. Employment rights for the modern world of work will not just protect workers, but boost growth and financial security. That makes for a stronger economy with firm foundations, rather than allowing a race to the bottom that takes away dignity as well as eroding family finances.
Rachel Reeves
I give way to my hon. Friend the Member for Swansea West (Geraint Davies).
Rachel Reeves
Conservative Members voted against the windfall tax not for the first time, not for the second time, but for the third time. Every single Conservative MP opposed what they know is the right thing to do. A Labour Government would tackle the cost of living crisis head-on. We would introduce a windfall tax on oil and gas producer profits to cut household bills by up to £600, a home insulation policy that would save millions of households up to £400 a year, and a discount on business rates for high street firms funded by a tax on the online giants. Perhaps the Chief Secretary can tell us in his speech why the Government will not abolish the unfair, outdated and unjustifiable non-dom tax status, and use that money to keep taxes on working people down.
Finally, Labour would put a stop to the Chancellor’s fraud failures, which allowed £11.8 billion of taxpayer funds to go criminal gangs, drug dealers and worse. We would claw back every penny of taxpayers’ money that we could, because the public are sick of being ripped off and they want their money back.
We are now in the worst of all possible worlds, with inflation high and rising, and growth low and falling—in other words, there is stagflation. This Conservative Government must address the underlying weaknesses in our economy, which are the result of years of Tory failure. Growth has stagnated, not just this year but over the last 12 years, falling from 2% on average under the last Labour Government to just 1.5% a year in the decade leading up to the pandemic.
The Conservatives have failed to work with British industries—employers and trade unions—to create the economic growth that would benefit everyone, and for 12 years that approach has sown chaos and uncertainty, making it impossible for businesses to invest with confidence. Now the UK economy has the worst growth projections of any G20 economy but one: Russia.
Rachel Reeves
The Bank of England has issued a stark warning of a downturn next year, with GDP projected to fall, and it is not set to get much better after that. [Interruption.] The Chief Secretary says, from a sedentary position, that it is set to get better. Oh, yes—growth in the following year is expected to be 0.25%, almost 10 times lower than what the Office for Budget Responsibility predicted in March. Well, done, Tory Government!
We have heard nothing from this Conservative Government about what they will do to change the situation, and if the Chief Secretary is proud of that record, good luck to him. The Government have no plan to provide the catalytic investment that we need to create new markets, no plan to get trade moving again and tackle the supply chain problems facing businesses, and no plan for a new industrial strategy to make the most of Britain’s potential, bringing good jobs to all parts of Britain. The Conservatives have become the low-growth party, and our country is paying the price.
Rachel Reeves
The figures from the International Monetary Fund show that investment as a proportion of our economy in the UK is 18%, if we take both public and private investment into account. In other similar economies that the IMF looks at, it is 23%. If we add that up over the next six years—the IMF’s forecast horizon—we see a projection of £1 trillion less investment in the UK than in other countries. These are huge missed opportunities to create the jobs and industries of the future that my hon. Friend wants to see in Warwick and Leamington and all of us want to see in our constituencies.
The Government’s lack of action is felt by businesses. In April, the price of materials for UK manufacturers increased at its fastest rate since records began, with prices up by nearly a fifth on the previous year. When I speak to businesses, they are worried about falling consumer confidence and a lack of spending power, as well as the costs that they are having to face.
Rachel Reeves
The British Retail Consortium has explained that the rising cost of living has crushed consumer confidence and put the brakes on consumer spending. So many businesses that worked tirelessly to adapt and survive the pandemic were banking on this year to recover, and it is just not happening.
Rachel Reeves
We could be so much better. Our geography, our universities and our industrial heritage offer so much potential, but the Government do not do enough to unlock it. I have seen the brilliant businesses and emerging industries that will power our economy and lead the world: businesses such as Nanopore, a technology and life sciences firm that started as a research team at Oxford University and now employs more than 600 people; Rolls-Royce in Derby—I was there a couple of weeks ago—which is leading pioneering research with world-leading engineers developing carbon-neutral technologies; and Castleton Mills in my own city of Leeds, once a key part of West Yorkshire’s textiles industry but now a creative, collaborative space housing freelancers, remote workers and start-up businesses.
Rachel Reeves
However, the success that I see all around the country could be strengthened with strong leadership and vision from the Government. Ministers are more concerned about the next headline or photoshoot than about creating credible plans for growth and success. Today, as inflation spirals out of control, where is the £3.4 million PR budget in the Treasury, and what is the Treasury doing?
Rachel Reeves
I will give way to the hon. Gentleman. [Hon. Members: “Hurray!”]
Kevin Hollinrake
I will sit here again next time.
The hon. Lady mentioned earlier the support for households in the form of the £200 discount on their energy bills. That went to 100% of households. The £150 council tax deduction reached 80% of households. Will the hon. Lady tell us what percentage of households would receive the £600 per household to which she referred?
Rachel Reeves
It is great to see Conservative Members taking so much interest in this. It suggests to me that a policy from them on the windfall tax is coming soon, and it will be welcome.
We have said that the £600 would go to a third of households. We would increase the warm home discount from £140 to £400, and that would go to a third of households. The hon. Member is, like me, an MP in Yorkshire. Across Yorkshire, every day, an extra £4.5 million is spent on energy costs as a result of the Conservative party’s failure. A total of £220 million has been spent in the seven weeks since the energy price cap went up. Constituents in Thirsk and Malton, like my constituents in Leeds West, are looking for answers, and an expansion of the warm home discount, paid for by a windfall tax, would make a massive difference throughout our region in Yorkshire.
We need an ambitious plan for the future. That is why Labour will scrap business rates, and the system that replaces them will incentivise investment, promote entrepreneurship and bring life back to our high streets. The race is on for the next generation of jobs, and Labour will make the investment we need with a growth plan to bring opportunities to the whole country, working in partnership with great British industries to get us to net zero and revitalise coastal communities and former industrialised towns. We do not want to be importing all the technologies and products we need; if we can make it here in Britain, we should do so. That is why a Labour Government will buy, make and sell more here at home.
We will make Brexit work, with a bespoke EU-UK veterinary agreement to cut red tape for the food and agriculture industries and mutual recognition of professional qualifications to help our fantastic business services industries and to make it easier for our creative industries to tour and perform. Unlike the Conservatives, Labour will ensure that our economy grows and prosperity is shared.
Mr Clarke
I am clear that we were right to implement the majority decision of the people of this country to leave the European Union. The Procurement Bill is designed precisely to make sure that small and medium-sized businesses can access the benefits of public procurement in a way that works to their considerable benefit.
We have made excellent progress against our plan for growth: a landmark capital uplift in the spending review I chaired last autumn; the creation of the UK Infrastructure Bank led by my hon. Friend the Economic Secretary; more funding for apprenticeships and skills training; a big injection of public investment in R&D; and the launch of the UK-wide Help to Grow scheme.
I want to see us go further by looking at innovative supply-side solutions to problems, particularly in delivering the homes people need, in ensuring people have access to the services they need and in carefully managing the risk of inflationary spirals. As my hon. Friend the Member for Rugby (Mark Pawsey) alluded to, this is all about creating the conditions for private sector growth. In his Mais lecture earlier this year, the Chancellor set out his plans to create the conditions for that growth by supporting a culture of enterprise through a focus on capital, people and ideas, and the Government have already taken steps to encourage business investment, including through the super-deduction.
On expenditure incurred between 1 April 2021 and the end of March 2023, companies have the right to claim 130% capital allowances on qualifying plant and machinery investments, allowing them to cut their tax bill by up to 25p in every £1 they invest, making our capital allowances regime one of the most competitive anywhere in the world.
The power of our private sector is also seen in our tech industry, in which there was more than £27 billion of investment in 2021. The UK sits alongside the United States and China as one of only three countries in the world to have produced more than 100 tech unicorns. The UK boasts a thriving start-up scene, with a new tech business launching every half an hour throughout 2020.
Kevin Hollinrake
I declare my interest on this point.
The Chief Secretary to the Treasury talks about investment in private sector businesses. Equity investment is vital. The enterprise investment scheme and the seed enterprise investment scheme are fundamental to private sector investment in businesses, and they are due to expire in 2025. Will he announce from the Dispatch Box today that the schemes will be extended?
Mr Clarke
My hon. Friend tempts me. In all seriousness, we are acutely aware of this issue. Indeed, I have had meetings on it this week, and the Economic Secretary is looking at it very closely. We want to make sure we have the right investment climate to support the kind of activity to which my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) alludes.
As the Prime Minister told the House last week, we need the legislative firepower to fix the underlying problems in our energy supply, housing, infrastructure and skills, which are driving up costs for families across the country. The Queen’s Speech will help us to grow the economy, which is the sustainable way to deal with our cost of living challenges, and will ensure that we deliver on the people’s priorities. The Bills it outlined will do so in many different ways.
Every corner of the country can contribute to, and enjoy, economic growth, which is why we created the UK Infrastructure Bank, the establishment of which will be completed by the UK Infrastructure Bank Bill. The bank will be explicitly tasked with supporting regional and local economic growth and helping to tackle climate change as it goes. With £22 billion of capacity, it will be able to support infrastructure investment and level up the whole United Kingdom, in turn boosting private sector confidence and unlocking a further £18 billion of private investment.
The energy security Bill will build on the success of the COP26 summit in Glasgow, reduce our exposure to volatile global gas markets, and deliver a managed transition to cheaper, cleaner and more secure energy, all while we continue to help with energy costs right now, through a £9 billion package, an increase to the warm home discount and the £1 billion household support fund.
I have already alluded to the importance of skills. We have achieved plenty on that already, but we are far from done. Everyone, everywhere should be encouraged to fulfil their potential. The higher education Bill will help to ensure that our post-18 education system promotes real social mobility, putting students on to pathways along which they can excel. It will give them the skills they need to meet their aspirations, in turn helping to grow the economy.
Meanwhile, a bonanza of Brexit Bills, led by my right hon. Friend the Minister for Brexit Opportunities and Government Efficiency, mean that we will continue to seize the benefits of our departure from the European Union, and create a regulatory environment that encourages prosperity, business innovation and entrepreneurship. Regulations on businesses will be repealed and reformed and it will be made easier to amend law inherited from the European Union.
I alluded earlier to the Procurement Bill, which will make public sector procurement simpler, providing opportunities to small businesses that for too long have been out of their reach. New procedures will improve transparency and accountability and allow new suppliers to the market to bid for future contracts.
Another benefit to Brexit is the freedom with which we can now negotiate entirely new trade arrangements with partners around the world. The Trade (Australia and New Zealand) Bill will enable the implementation of the United Kingdom’s first new free trade agreements since leaving the European Union, spurring economic growth through our trading relationships, creating and securing jobs across this country. Well may Opposition Front Benchers snipe, having spent years trying to prevent our exit from the EU. Conservative Members know that we have honoured our contract with the British people, which is ultimately why we are in government to deliver on those opportunities and they are in opposition.
Part of having a growing economy is of course about investors knowing that we are one of the safest and most reliable places in the world to do business. The economic crime and corporate transparency Bill will send that message out loud and clear, cracking down on illicit finance that costs the economy and the taxpayer an estimated £8.4 billion a year, and strengthening our reputation as a place where legitimate businesses can create and grow jobs.
The final Bill to which I will draw the House’s attention today is the financial services and markets Bill. The UK now has a unique opportunity to assess whether it wants to do things differently, to ensure that the financial services sector has the right rules and regulations for UK markets and to further enhance a system that is already the envy of the world. The Chancellor and the Economic Secretary have been outspoken in expressing an ambitious vision for a sector that can contribute so much to this country: more open, more innovative and more competitive. The financial services and markets Bill represents further progress towards making that vision a reality, establishing a coherent, agile and internationally respected approach to financial services regulation that is specifically designed for the UK, removing red tape, promoting investment and giving our financial services regulators new objectives to ensure a greater focus on growth and international competitiveness.
That is a full and ambitious agenda, supporting and encouraging economic growth in many mutually reinforcing ways across the entire country. We continue to keep the wider situation under review, including the impact of Russia’s illegal invasion of Ukraine. But, crucially, our focus is on the best solution of all: a growing economy supporting high-wage, high-skilled jobs.
The Prime Minister told the House last week that our ambition is to
“build the foundations for decades of prosperity, uniting and levelling up across the country”.—[Official Report, 10 May 2022; Vol. 714, c. 17.]
That is what the public rightly expect and that is where our collective efforts will be focused in this parliamentary Session.
Hilary Benn (Leeds Central) (Lab)
This morning, the Foreign Secretary said:
“We are in a very, very difficult economic situation”.
We all recognise that that is true. Although there are some things that no Government can control, I encourage Ministers to reflect a little more on some of the difficulties that they have brought upon themselves and British business.
In his speech, the Chief Secretary to the Treasury somehow neglected to mention the fact that our goods trade with the European Union since January 2021 has had to contend with red tape, bureaucracy and costs, including transport costs, which the Government have dumped on British business via the deal that they concluded. We know that we have small and medium-sized companies that are struggling to export to the EU. The right hon. Member for Ashford (Damian Green) talked about the importance of the cultural sector, but we know that musicians and performing artists face visa applications and customs declarations, which they find incompatible with trying to tour in Europe.
We know that farmers are suffering from a shortage of labour. On Monday, when I was in Kent—I am co-convenor of the UK Trade and Business Commission—I talked to a fruit farmer. He said that, last year, he could not pick 8% of his crop. What has he done this year? He is reducing the amount that he plants. What does that do for British food security? It has benefits for other countries that are growing more, but it is making it harder for British farmers to grow more here.
While businesses are having to cope with all that cost, the Government have for the fourth time postponed checks on EU businesses exporting into the United Kingdom, so they face less of the checks and costs that the Government have just dumped on to British businesses. The Office for Budget Responsibility, as Members will know, says that the UK has,
“missed out on much of the recovery in global trade”.
According to Her Majesty’s Revenue and Customs, the number of UK businesses exporting goods to the EU fell by an astonishing 33% last year compared with the year before. That is mainly small businesses that have said, “We can’t be bothered with all of this. We’re giving up exporting.” How does that help economic recovery?
Kevin Hollinrake
The right hon. Gentleman is making a strong point, and I am not a remoaner in any shape or form, but of the Bank of England’s evidence to the Treasury Committee this week, the evidence from the Governor of the Bank of England, his written evidence or the minutes of the Monetary Policy Committee meetings on the labour shortages the UK faces, not a single one mentioned Brexit. Why does the right hon. Gentleman think that is? Is it not the case that we must confront the brutal facts if we are going to solve some of these problems?
Hilary Benn
I can only report what I was told by the farmer on Monday. He has relied over the years on workers who have come from eastern Europe, and he says, “They’re just not coming in the same numbers, and that’s why I can’t pick my crops.” That is the point I am making.
Kevin Hollinrake (Thirsk and Malton) (Con)
It is a pleasure to speak in this debate. I will focus my remarks on the work of SMEs in driving economic growth. As we often say in this place, they, more than anything else, are the engine room of economic growth.
Taking a step back from that, the most important thing in driving economic growth—the foundation of which is productivity, which leads to prosperity—is more competition. Competition is very good for opportunity but also very good for consumers: it drives down prices and drives up service. When we started our estate agent business back in 1992, we quickly got to a leading market share in our marketplace. We were doing quite well. Two or three years later, we noticed lots of other “For Sale” and “To Let” boards popping up all over the place as new competition came in and was taking market share from us. Suddenly we were no longer the new kids on the block—the people who had got to No. 1. We had been pushed off our perch as the market leader. That made us look at what we were doing and become more efficient and more effective, work harder, and put a new package together so that we could once again become market leaders. That is the effect of competition—the driving force behind all the benefits for consumers that we see from competition. That is how it works in reality.
Clive Lewis
What competition drives the energy, water and rail sectors? They seem to be natural monopolies, if I am not mistaken, so can the hon. Gentleman tell me how the free market and competition help to drive down prices in those sectors?
Kevin Hollinrake
That is quite interesting, because energy distribution was very competitive in this country, with a huge expansion in the number of energy distributors that led to a driving down of prices very effectively. Where people got caught out was with the huge increase in wholesale costs, which drove lots of them out of business. However, that was an excellent example of how competition does work and drives down prices for consumers and increases choice. As to source energy, I agree that there are not enough big producers, which is why we must be careful when one or two big companies dominate the marketplace.
G.K. Chesterton said:
“Too much capitalism does not mean too many capitalists, but too few capitalists.”
That is why we need to focus on competition, making sure that the environment is very attractive to new businesses starting up and growing—SMEs. All our policies should focus on small businesses, not on big businesses, which can generally look after themselves.
We have to look at the brutal facts, I am afraid. I was a bit disappointed, as I said earlier, by what the Governor of the Bank of England said to the Treasury Committee about some of the issues we are seeing with labour shortages, which are driving inflation. We looked at some of the issues that SMEs, in particular, are facing in terms of accessing labour. In 2020, the last year we have reliable data for, net migration into the UK dropped by 88% from 271,000 people down to 34,000 people. People may say that is a good thing because we wanted to get a hold of immigration, and some of it may be due to covid effects. Nevertheless, pubs, restaurants and farmers, all of whom are generally SMEs, are finding life very difficult. We have to make sure that there is an available supply of labour. Another issue causing particular problems for SMEs is red tape at the borders—non-tariff barriers, as they might be called. There is a 45% reduction in the number of SMEs exporting to the European Union. These are facts we have to confront and deal with.
Levelling up is of particular interest to me as a representative of the north—from the north and for the north. We need to make sure that we level up properly and that the opportunities are spread equally nationwide. It is a huge undertaking. In relative terms, the gap between the north-east and London and the south-east in terms of productivity per capita is as wide as it was between East Germany and West Germany prior to reunification. It took 30 years and $2 trillion to narrow that gap. It is the right thing to do but it is a long haul. We need to get the private sector to invest, which was the lesson from East Germany. Such things as the enterprise investment scheme and the seed enterprise investment scheme are vital for equity investment to SMEs. Those measures are due to expire in 2025, and we need to see them extended. I would also like to see enhanced tax breaks for the EIS and SEIS so that businesses in the less well-off parts of the country can attract more investment capital into those areas.
Finally, one thing could make a massive difference. Lots of SMEs in this country will not borrow—some 73% would rather grow more slowly than borrow—which is partly because of the lack of trust between small businesses and big banks. Other parts of the world have something called regional mutual banks—Germany is a good example—that expanded lending during the financial crisis. In the UK, we contracted lending during the financial crisis—about 20% on either side. Regional mutual banks lend more into the economy at key times, and that could be a good policy for driving SMEs forward in our regions.
Oral Answers to Questions
Kevin Hollinrake Excerpts(4 years, 5 months ago)
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Steve Barclay
In which case the hon. Lady should well know that the specific issue of documentation versus digital was raised with the Minister for Security, who was clear that although there will be a letter to provide a document, it would have reference to the digital number. That issue was explored at length. She will also know that citizens do not lose any rights when they get pre-settled status, and that they then move on to settled status. Those issues were debated—that is what a Committee stage is for—and addressed by a Home Office Minister at that time.
Kevin Hollinrake (Thirsk and Malton) (Con)
The Secretary of State for Exiting the European Union (Steve Barclay)
I continue to have regular conversations with ministerial colleagues on all aspects of exiting the European Union, including agricultural policy.
Kevin Hollinrake
Our farmers and food producers are required by domestic legislation to observe high standards for the environment, the workplace and animal welfare. Will the Secretary of State confirm that under future free trade agreements, tariff-free imports will be allowed only from producers that also observe those standards?
Steve Barclay
My hon. Friend is right to raise the issue, about which there has been a live discussion at the Oxford farming conference, as he will know. The UK has always been a leading advocate of open and fair competition. I assure him that we are absolutely committed to maintaining high standards through a robust domestic enforcement regime.
European Union (Withdrawal Agreement) Bill
Kevin Hollinrake ExcerptsTuesday 7th January 2020
(4 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 7 January 2020 - (7 Jan 2020)
Steve Barclay
I welcome the constructive way in which the hon. Gentleman raises his concerns about security while recognising the general election mandate and how it plays into this clause and its reflection of the manifesto.
I draw the hon. Gentleman’s attention to two things. First, the withdrawal agreement commits both sides, including the European Union, to using their best endeavours to reach agreement. Secondly, the political declaration commits to a timescale of the end of 2020. That is why we are confident that this can be done to the timescale, and it is a reflection of the commitments given by both the UK and the EU in the withdrawal agreement and the political declaration.
Kevin Hollinrake (Thirsk and Malton) (Con)
Does the Secretary of State agree that all things are possible when both parties to a negotiation are willing to proceed in good spirit? Indeed, in a briefing to EU politicians in November 2019, Michel Barnier said the timescale would normally be far too short but that Brussels would strive to have a deal in place by the end of 2020. It is clearly possible to do this deal for the end of 2020. Does my right hon. Friend agree that is the right approach to take?
Steve Barclay
I very much agree with my hon. Friend. Indeed, the Commission President will be meeting the Prime Minister tomorrow, and I will be meeting Michel Barnier, to act on that constructive spirit. Both sides have committed to the timescale.
I am conscious that the House is now in a different place, but many Members will recall that it was often said it was impossible to reach an agreement before, indeed, the agreement was reached.
Paul Blomfield
I was quite involved in the debate during the referendum, and I listened carefully to what many of the Government Members who were advocating our departure were saying. They talked about a bonfire of regulations. The direction of travel for leaving the European Union was fairly clear: it is to free ourselves of those rights and protections that defend working people, protect the environment and protect consumers and to create a different sort of economic model. The hon. Member may not agree with my description, but I think that a “race to the bottom” summarises that pretty well.
Kevin Hollinrake
The hon. Member asks what the problem is with new clause 4, because if we have done a deal by the end of 2020, we will leave anyway. The point is that if we are not allowed to delay, the imperative on both sides of the negotiating table is to get this done by the end of 2020. If we allow it to be extended for another two years, the negotiations are bound to take longer. Why can he not approach these negotiations with confidence? The Government are confident that they can do it within the period. Michel Barnier, whom I quoted earlier, seems confident that it can be done. Why can his party not approach the negotiations in that spirit?
Paul Blomfield
If the Government were so confident, why did they build into the withdrawal agreement the provision to be able to extend? It was a cautious insurance policy. They were right to do so. We are trying to help them with the problems that they are creating for themselves now.
Many Government Members know that there is a potential for us not to have secured the sort of deal that this country needs by the end of December. If, unamended, this Bill forces the country into a no-deal crash-out—which was described, for example, by Make UK, the voice of the manufacturing sector, as “the height of economic lunacy”—the Government will regret not having taken the opportunity to make some provisions along the lines of new clause 4, which protects the UK from the entirely unnecessary threat of no deal. It simply builds on the mechanism for extending the transition period that is already baked into the Government’s own withdrawal agreement; it is oven ready, as the Prime Minister would like to say. For the same reasons, we do not accept the insertion of clause 33, which is grandstanding nonsense that prohibits Ministers from agreeing to an extension to the transition period.
Let me be absolutely clear again: we are not seeking to delay Brexit—the UK will have left the EU in three weeks’ time—nor do we want to stay in the transition period any longer than is necessary, but the flexibility that we are proposing provides the certainty that business needs. There is no point in replacing the previous cliff edge, about which the hon. Member for Wimbledon (Stephen Hammond) expressed real concern, with the new cliff edge if the flexibility that we are suggesting is not there.
Kevin Hollinrake (Thirsk and Malton) (Con)
I will keep my remarks mercifully brief, restricting them to new clause 4. This would be a detrimental amendment to the Bill, because it would completely undermine the negotiations that the Government have to undertake. I understand the concerns about a no-deal situation at the end of 2020—I am very concerned about that, too—but we must follow the golden rules in a negotiation. I have negotiated many things in my life, although clearly not something as large as leaving the European Union—but who has? However, there have been some things that would have had a much bigger direct impact on my life, certainly in terms of business negotiations. Some of those have been life-changing and, particularly in negotiations with our banks, pretty much life-threatening. The golden rule in any negotiation is that a person has to walk into them with confidence. That is absolutely how we have to undertake the negotiations. Of course, as the right hon. Member for Orkney and Shetland (Mr Carmichael) said, there are some downsides to these negotiations. It is therefore even more important to walk into them with confidence. We must believe that we can do this deal.
Mr Carmichael
The provision for an extension to be concluded by 1 July was in the withdrawal agreement that the Prime Minister negotiated. Did he do that because he lacked confidence?
Kevin Hollinrake
We are in a different situation. I am still involved in my business; it has grown a lot over the last 26 or 27 years, and I have concerns about the impact on it of the wrong kind of exit from the European Union. However, I still think it is absolutely right to set the deadline of the end of 2020 to do this deal. In our manifesto and all the statements in the general election, it is true that we said that we would do this deal by the end of 2020 and that we would be out completely by then. It would be wrong and a breach of the trust that the people had in us in the general election for us now to say that there could be a further extension.
Michael Tomlinson
My hon. Friend is absolutely right about confidence, but does he agree—he has alluded to this—that it is not just confidence, but a firm deadline that is required, rather than a flextension or the risk of a further extension or postponement? We saw that in the last two Parliaments. That fundamental error, which was made by previous Administrations, will not be made by this one.
Kevin Hollinrake
My hon. Friend is absolutely right. The date is the imperative that makes sure that both sides will be looking towards that date to finalise negotiations. There are incentives and imperatives on both sides of the negotiating table. If there is the right spirit of negotiation between the two parties, and we undertake the negotiations in that frame of mind, we will absolutely be able to do this deal. However, if we provide the opportunity for an extension, we hand over the advantage in the negotiation to the other side. That is the absolute reality. We cannot do that, nor do we need to.
There are a number of reasons to think that we can do the deal within the timescale. We start from a position of total alignment, which is bound to help. This is different from a normal free trade agreement, in terms of the negotiations. Clearly, there have to be negotiations on what happens about divergence, but we start from a position of absolute alignment, which, to my mind, makes these negotiations totally possible in the next 12 months.
Dr Whitford
No one has ever negotiated a trade deal in just 11 months, so is it not likely that we will end up with something incredibly primitive? As for casting up that people voted for this in the election, what they voted for was the Government party saying, “We will achieve that by the end of the year.” They did not vote for it saying, “Well, never mind—we will crash out with no deal if we fail.”
Kevin Hollinrake
The hon. Lady makes a very good point, and I do not want to do that either. However, if she reads the comments from Michel Barnier that I quoted earlier, from the Financial Times of 26 November 2019, she will see that he said that normally such a period would be far too short, but that Brussels would strive to have a deal in place. Clearly, he thinks that he is capable of doing that. He talks about how he would sequence negotiations. For some things, we would have to kick the can down the road a bit and put some contingencies in place to deal with those. Clearly, he thinks that it is possible that we can do that deal.
Dr Whitford
The political declaration has a huge wish list of aspirations. Are they going to be negotiated later, or does the hon. Gentleman really think that including the European Medicines Agency, the European Chemicals Agency and all the various things that are in the wish list will be achieved by the end of the year?
Kevin Hollinrake
There may be a staging process; we do not know how the negotiations are going to roll out yet. Michel Barnier said that Brussels could take contingency measures to deal with those kinds of issue, because he does not want economic disruption. There is an appetite on both sides. What the European Union has done far better than the UK Parliament is negotiate as a bloc, together. There has not ever been any difficulty from its side in terms of people wanting different things, whereas clearly the UK Parliament has not behaved like that. As a result, the biggest vulnerability within the European Union from a poor trade deal or no trade deal is with regard to the Republic of Ireland.
The Republic of Ireland’s GDP growth rate is around 5%. Most financial commentators say that if there was a no-deal Brexit, the Republic of Ireland would go into recession. The EU would not want that. It would not leave the Republic of Ireland behind. The UK has imperatives in striking a deal and so has the EU. To my mind, that means we can do a deal in the next 12 months. I urge the Opposition to have more confidence in their position. The remarks from the hon. Member for Sheffield Central (Paul Blomfield), the Opposition Front-Bench spokesman, betrayed a lack of confidence, appetite and enthusiasm for this whole thing.
We cannot deal with Brexit like this—and I voted to remain. We must walk forward with confidence not only about our new relationship with the European Union, but, crucially at this time, about our negotiations on the trade deal.
Graham Stringer (Blackley and Broughton) (Lab)
It is a pleasure to see you in the Chair, Sir George.
It has been mentioned that I am the only Labour Back Bencher in the Chamber, which is a double privilege. First, I think I am the only Labour leaver from the last Parliament left in the House. Secondly, the hustings for the start of the Labour leadership election are going on upstairs, which is important. One of my party’s problems is that although many of our supporters voted to leave the EU—and are enthusiastic about leaving—they are very poorly represented in the Labour party itself.
There is an element of tilting at windmills in this debate. I do not believe the catastrophe theories about the next 11 months or so. The public want us to get out, and it is in the mutual interest of the EU and its member states and the UK to get as good a deal as possible, so I do not believe the catastrophic predictions. I voted against the previous Prime Minister’s deal three times, and against the current Prime Minister’s deal—in November, I think—but I did so because there were not simple majorities and I believed there was a better deal out there. Going through the Lobby, I was aware that some were voting against because they wanted a better deal—one we believed would better represent the decision in the 2016 referendum—but that others were voting to delay the process because they wanted, either by measures in this Chamber or by a second referendum, to overturn the 2016 decision itself.
I am pleased we are now to leave the EU on 31 January, but I am less pleased that, because of tactical mistakes made by my colleagues, we are in a minority against the Conservative Government and look like being so for some time. I take issue with both the philosophy and the detail of the remarks of my hon. Friend the Member for Sheffield Central (Paul Blomfield) from the Front Bench. The debate about whether we should remain in or leave the EU was never simply about the economy. Much of the debate—certainly this is one of the things that has motivated me since the 1975 referendum, when I voted to leave—is about the democratic argument. I believe it is better for both the economy and our society if people in this country elect the people who make our laws rather than letting unelected and appointed people in other countries make them. That is a fundamental principle of democracy. Without it, we simply do not have a democracy. I also think that making our own regulations and laws for our own industries is likely to make us economically more efficient and proficient.
The other side of my hon. Friend’s argument is that the Conservatives want a race to the bottom. They might or might not. I am in the Labour party, not the Conservative party, because my philosophy differs from theirs on many issues, but it is better in a democracy if we argue those issues out in general elections such as the one we have just had. If the Conservatives, as they tend to, want a more free-market approach, they should argue for that, and if we want a more interventionist approach, we should argue for that, and whether we win or lose the argument is up to the electorate. At present, however, our ability to support our own industries depends not on whether we or the Conservatives win an election, but on rules for state intervention and support set down by the EU.
Checks on Goods: Northern Ireland and Great Britain
Kevin Hollinrake Excerpts(4 years, 8 months ago)
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Stephen Barclay
I know the hon. Gentleman reflects the very legitimate concerns in his constituency about some of the details, but I do not accept his characterisation of this. The strong representations we have had in government were on the need to safeguard the Belfast/Good Friday agreement, to ensure there was no infrastructure at the border in Northern Ireland, and to mitigate. Indeed, our commitment to Northern Ireland to address specifically the concerns he raises is reflected in another part of this package that has not been mentioned at all this morning, which is the new deal for Northern Ireland that the Secretary of State has been discussing with parties in the wider context of getting the Executive back up and running. It would be an odd position to suggest that the Conservative and Unionist party is not committed to Northern Ireland when indeed part of this package is a new deal which addresses the levelling up that the Prime Minister has committed to, in Northern Ireland and across the United Kingdom.
Kevin Hollinrake (Thirsk and Malton) (Con)
It is quite understandable that hon. Members who represent Northern Ireland raise concerns about this issue, but is not the key point that these arrangements will be superseded by a future free trade agreement and that there are compelling reasons to think we can strike a deal that suits both sides, not least because of the impact on Ireland if we did not? Its GDP growth rate is currently 5%, but it will go into recession if we do not agree a UK-wide free trade agreement.
Stephen Barclay
As a senior business figure in his previous career, my hon. Friend understands both the dynamic impact from an economic point of view and also the terms of the agreement, which are exactly as he says: the free trade agreement will supersede these arrangements. These arrangements can be part of this, but the free trade agreement is where we will then take it forward.
European Union (Withdrawal) Acts
Kevin Hollinrake Excerpts(4 years, 8 months ago)
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Kevin Hollinrake (Thirsk and Malton) (Con)
The right hon. Gentleman talks about workers’ rights. The EU entitlement for holiday pay is four weeks. In the UK, it is 5.6 weeks. If we wanted to reduce that entitlement and to reduce standards, why would we not have done that already?
Keir Starmer
Because the Labour party and other Opposition parties would never countenance it, and I do not think the Government would either. [Interruption.]
Withdrawal Agreement: Proposed Changes
Kevin Hollinrake Excerpts(4 years, 8 months ago)
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Kevin Hollinrake (Thirsk and Malton) (Con)
In Michel Barnier’s speech in October last year, he said that a hard border in Northern Ireland needed to be avoided; that customs checks would be required, but they could happen using existing customs transit procedures; and that regulatory checks would need to increase, but they could continue to happen in the Irish sea. Does that not sound remarkably like the Prime Minister’s deal? Is it not time for the EU to negotiate in good faith, so that Members across the House can vote for this deal and we can leave on 31 October?
James Duddridge
I thank my hon. Friend for that information, and I had not quite linked the two together. Perhaps we should call it not the Prime Minister’s proposal, but the Barnier solution.
EU: Withdrawal and Future Relationship (Motions)
Kevin Hollinrake Excerpts(5 years, 3 months ago)
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Kevin Hollinrake (Thirsk and Malton) (Con)
It is an honour to follow the hon. Member for Vauxhall (Kate Hoey). She made some important points about the manifesto promises and about living up to them. There are some other promises that we need to live up to. Time and again, I have heard colleagues criticise the Prime Minister, in the House or on the media, for setting out her red lines and not budging from them. For me, those red lines simply represent the promises that were made before the referendum. It was certainly not just a binary question about the options of staying and leaving. The question about what leaving meant is critical to this debate, because the promises that Vote Leave set out—I believe the hon. Member for Vauxhall was a member of the Vote Leave campaign—
Kevin Hollinrake
The hon. Lady shakes her head. I apologise.
Vote Leave, which was the primary advocate for leaving, clearly set out promises to control our borders, control our laws and control our money, while having a free trade agreement. I have read the Vote Leave manifesto several times, and the words were, “There is a free trade area that stretches from Iceland to the borders of Russia, and we will be part of it.” Those were the promises that were made.
I believe the Prime Minister has come back to this House with a deal that meets the promises made; that is what her deal does. There is not a single motion on this Order Paper that lives up to those promises, however; all of them incorporate compromises that move outside those red lines. She has come back with a Goldilocks deal—not too hard, not too soft—but still people will not accept this deal.
If we do not approve the Prime Minister’s deal in the days and weeks to come—hopefully days—I think certain Members in this House might well look back and think, “That was our opportunity and it has now gone.” We should support the Prime Minister’s deal, because I do not think, having a small business background, that it is right that we should think of taking an uncalculated risk with the lives and livelihoods of small businesspeople, who we know could be affected by a no-deal exit. So we definitely need to leave with a deal.
How do we leave with a deal if we do not support the Prime Minister’s deal? It means we have to remove at least one of the red lines. From my perspective, despite the fact that it would breach the manifesto promises, I would remove the red line on the single market. There will be challenges, certainly particularly between Northern Ireland and Ireland, but most of them are solved by membership of the single market. Some 80% of the border challenges are about the single market. Barnier said it himself: customs checks need not happen at the border.
We can do without the customs union, but we need the single market for regulatory standards, particularly on foods. A humble cottage pie sat on a supermarket shelf in Northern Ireland has passed over that border typically seven times. If there were regulatory checks, they would have to happen every single time according to EU rules; and it makes the rules, and we have been part of that system for 46 years, so we cannot simply say now “We don’t agree with your rules despite the fact that we’ve been happy”—or relatively happy—“to sit within them for 46 years.”
I will support two motions this evening. One is motion (D) brought forward by a number of colleagues, including my hon. Friend the Member for Grantham and Stamford (Nick Boles) and the hon. Member for Aberavon (Stephen Kinnock). Many colleagues have been big advocates of common market 2.0; it is a free trade agreement. I have concerns about it: I have concerns about the customs union, and the longevity of the customs union and our ability to exit it. Paragraph (1)(c) says we will need to agree with the EU our exit from the customs union, and I cannot see what incentive it would have to let us leave.
If we approved this motion, we would also have to agree lots of things with the Opposition. I do not have an issue about working cross-party on this at all, but I do fear that if we approve this, as we take the legislation forward over the next months and years, Labour Front Benchers will ask an ever higher price, because there is a political divide between the Opposition Front Bench and the Government Front Bench.
The other proposal I will happily accept is motion (H). It represents an excellent way forward; it is bold and decisive, and I will support it this evening.
Leaving the EU: Parliamentary Scrutiny
Kevin Hollinrake Excerpts(5 years, 12 months ago)
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Hilary Benn
I thank my hon. Friend for his work on the Committee. I hope he will forgive me if I do not comment on party considerations in making this statement here today, but he raises an important issue about the nature of the political declaration. We heard clearly in evidence that it will not be a treaty or draft treaty, although there was some debate when we heard from Guy Verhofstadt about whether including it as an annexe to the agreement would give it greater force. It will come down to this question: will the House think there is sufficient certainty about the nature of our future relationship on all the things I mentioned a moment ago to the Chair of the Select Committee on Health, the hon. Member for Totnes (Dr Wollaston), in the political declaration or not? If we approve it and there is not that certainty, the House will really be saying, “Well, let’s see what happens.”
There are two parts to this negotiation: the withdrawal agreement, which is the divorce settlement, and which is important, and our future relationship on trade, security, the fight against terrorism, foreign policy and services—80% of the British economy is services—which is the really important bit. Therefore, the more detail and the more certainty the political declaration can offer, and the more the parties to the negotiation can show they are committed to turning that into a treaty, the better it will be for Parliament as it makes its judgment.
Kevin Hollinrake (Thirsk and Malton) (Con)
I thank the right hon. Gentleman for his report and his very informative statement. He alluded in his comments to having some frustrations about the speed of negotiations, and attributed that not just to this side of the channel but also to the other side. Does he agree that it is time for Brussels to move aside the politics and to start thinking about the economic interests of its citizens, and to move forward in a more constructive fashion with the negotiations?
European Union (Withdrawal) Bill
Kevin Hollinrake Excerpts(6 years ago)
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Matthew Pennycook
I disagree with the hon. Gentleman. Crashing out of the European Union without a deal is exactly what this amendment is designed to prevent. [Interruption.] Yes, it is.
Seema Malhotra
I thank the hon. Gentleman for that comment, but I do not agree.
Legislation is passed in this House not just to plan for when things go well but to provide protections and a route map for actions when things do not go well. There may well be an honest intention to reach a deal by October 2018, but there is no guarantee. I am not talking down the Government’s negotiation attempts, but there is a real possibility that that may not happen.
Let me be clear: this is not about an unnecessary extension of, or thwarting of, the process; it is about providing for clarity in this House, in the circumstances that may arise, about what happens in the final months before Brexit. This can only be helpful in managing the risks of Brexit for our country in the event that a deal is well under way but not reached, or that a deal has not been agreed. It would certainly not be against the spirit of the referendum result, and it could be precisely in the national interest at the time.
Kevin Hollinrake
As a remainer who voted to remain and campaigned heavily to remain, and who would do so again if we ever had another referendum—not that I am advocating that—I think it is fair that Members on both sides of the House raise their concerns about the economy and the effect on jobs and trade. As you know, Mr Speaker, I am still involved in business to this day, so this has a potential personal impact on me. It is quite reasonable that colleagues will want to see the substance of this deal. That is the temptation, but it is not a position I advocate, for a number of reasons.
The Prime Minister has sought to mitigate the effects of leaving, even in difficult circumstances. We have to keep this in perspective and take into account the fact that our exports to the European Union account for around 12% of our trade and of our economy. We also have to remember that the Prime Minister is quite rightly taking a staged approach to withdrawal, which involves staying in the customs union until we have customs processes in place, and maintaining regulatory alignment until we negotiate a reasonable new approach.
Subsection (5) of the new clause proposed in Lords amendment 19 raises the prospect of the Government following “any direction” that Parliament gives. Similarly, new subsection (5C) proposed in amendment (ii) to Government amendment (a) in lieu of Lords amendment 19, tabled by my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve), raises the prospect that Parliament will simply send the Government back to the negotiating table. What will happen if we go back to the negotiating table and the European Union says no? There is no clarity at that point. It opens up and allows the possibility of staying in the EU for an extended time, with no clarity about how long that will be; it may be weeks, months or years. We should remember that those on the other side of the negotiating table do not want the United Kingdom to leave the European Union, and that raises the prospect of their being even more difficult in those negotiations, which are very difficult in the first place.
Angus Brendan MacNeil
I have heard a number of times that the meaningful vote might or would enable the European Union to give us a bad deal. I argue that it is the contrary. A UK Government with any wit about them would say to their negotiating opponents, “We’ll never get this through Parliament unless it is improved.” It actually strengthens their hand in the negotiations, rather than weakens it, if they have any wit about them.
Kevin Hollinrake
I find that assessment of the circumstances very hard to follow. We are not negotiating on our own; we are negotiating with another party, and clearly it is in their interest to put a bad deal on the table in that situation. That would delay the exit process, which is effectively what these amendments seek to do. I am not saying that my right hon. and learned Friend the Member for Beaconsfield is looking to frustrate the process of Brexit, but it would delay the process of Brexit and raise the possibility of that process never happening at all. We are handing over the negotiating advantage to the EU.
The Solicitor General
I thank my hon. Friend for giving way. I want to reiterate the commitment that I have given at the Despatch Box on behalf of the Government to further discuss the matter with my right hon. and learned Friend the Member for Beaconsfield and others. I am particularly interested in new subsections (5A) and (5B) of his proposals and want to use that as the basis of a structured discussion as we reach the Lords amendments.
Mr Speaker
I advise the hon. Member for Thirsk and Malton that others wish to speak.
Kevin Hollinrake
I am about to conclude, Mr Speaker.
The amendment would hand over the negotiating advantage to the EU and raise the prospect, whether Members intend it or not, that we may never leave. Opposition Members should not support it.
Several hon. Members rose—
Leaving the EU: No-deal Alternatives
Kevin Hollinrake Excerpts(6 years, 4 months ago)
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Antoinette Sandbach
I absolutely share my hon. Friend’s concerns. There are concerns in relation to intellectual property and the vast majority of our service industry, which is a huge contributor to our balance of trade. He is quite right to outline the deep flaws that a WTO Brexit would bring.
The most preferable option in terms of a Government deal is the Government successfully completing their negotiation with the EU and securing the “deep and special partnership”. I support the Government’s work and the comments by the Brexit Secretary in his speech yesterday that we need to ensure a broad base of mutual recognition of standards. Without those, we would risk many of the drawbacks that we would face under a no-deal Brexit, especially with regard to the non-tariff barriers that are in fact the biggest concern for our economy. However, I press the Government to ensure that the service sectors are included in the deal that they strike. Services make up nearly 80% of our economy. Service industries such as legal services, insurance services, consultancy services, the music industry and the aviation industry contribute to our balance of payments surplus in service trade with the EU. A failure to strike a deal could cost us about 75,000 jobs and £10 billion in tax revenue.
Some hon. Members may think that simply remaining in the EU is an option. Rather than pressing for this currently unachievable choice, I would encourage hon. Members to see if we can deliver a Brexit that removes us from ever closer union and the political institutions of the EU, while seeking to maintain our prosperity and our trade links, which brings me on to my final option. This final option is the one that, aside from the Government’s plan, would be the best for Britain. Re-joining the European economic area/European Free Trade Association would be a bold step towards preserving our prosperity and provide many answers to the questions that are currently vexing Ministers.
EEA-EFTA would give us access to its free trade agreements spanning 27 countries. EFTA has free trade agreements with, among others, Turkey, Canada, Columbia, Mexico, Egypt and Israel. There are ongoing negotiations with India, Indonesia and Vietnam. These agreements, as well as EEA membership, would give a market of over 900 million customers for our products and services.
Kevin Hollinrake (Thirsk and Malton) (Con)
I congratulate my hon. Friend on securing this important debate. Is she proposing EFTA-EEA membership as a transition or a permanent safe harbour?
Antoinette Sandbach
I am proposing a permanent safe harbour. If we went into EEA-EFTA, we would have an opportunity to shape and influence that trade body going forward. It delivers what many of my constituents originally voted for in the 1970s, an economic free trade area, but its great benefit and advantage is that it removes us from the ever closer union, which is what many of my constituents who voted leave were concerned about.
Stephen Kinnock (Aberavon) (Lab)
It is a pleasure to serve under your chairmanship, Mr Sharma. I congratulate the hon. Member for Eddisbury (Antoinette Sandbach) on securing this important debate.
As the Government’s own analysis shows, a no-deal outcome would mean that growth would be 8% lower nationwide, 10% lower in Wales and 12% lower in the midlands, Northern Ireland and the north-west—and the north-east would take a huge 16% growth hit. Tariffs would be 10% on every movement along the supply chain of an industry such as the automotive industry, which is so vital to the steel industry in my constituency. It would crush not only that industry but connected industries.
Kevin Hollinrake
Anybody—any hon. Member—can see those figures in the Treasury report, but the report caveats them by saying that that is without any other Government interventions or reaction of businesses in adjusting to a new world of trade with the European Union. Does the hon. Gentleman accept that?
Kevin Hollinrake (Thirsk and Malton) (Con)
It is a pleasure to serve under your chairmanship, Mr Sharma. I congratulate my hon. Friend the Member for Eddisbury (Antoinette Sandbach) on securing this debate.
The alternative to no deal is, of course, a deal, and that is what the Prime Minister has set out to get. I was pleased to hear her support a deal that will mean free and frictionless trade in goods and services between the UK and the European Union.
That is a perfectly sensible position. Why would the European Union not want to adopt it? We have a trade deficit with the EU, particularly with Germany, of course, so it is sensible economics that the EU would give us a deal. That is a win-win situation, as Dr Stephen Covey said in his book, “The 7 Habits of Highly Effective People”, which is a habit that I aspire to but will probably never achieve. Nevertheless, win-win is hugely important.
Stephen Covey also refers in his book to the “dialogue of the deaf”. That is when one negotiator is speaking one language—I am not talking about foreign languages—and the other negotiator is speaking a different language. The difficulty is that we are, quite rightly, talking sensible economics, yet the EU is talking politics. It is talking about the politics of survival of the EU. For us to leave with a good deal would almost undermine the very fabric of the EU, which calls into question the EU’s ability to agree a deal. Therefore, it is difficult to get the deal that the Prime Minister is setting out to achieve. It is possible—politics is the art of the possible—but it will require compromise on all sides. That has to be the key to this negotiation.
None of us should accept being locked into the EU or it holding us to ransom by threatening us, for its own reasons. That is not an emotional point; it is simply a point of the negotiations. We cannot be held to ransom in achieving and delivering on the objective that the British public gave us of leaving the EU.
That is the reason I did not support the “meaningful vote” amendment to the European Union (Withdrawal) Bill. We have to accept at all cost the deal that the Prime Minister negotiates with Europe, and the EU needs to understand that. We will then give effect to the decision of the British people.
Nigel Huddleston
On the question of a meaningful vote, does my hon. Friend agree that we may as well at least discuss the EEA option? The political reality is that, at either the 2022 or the 2027 general election, one of the major political parties is highly likely to adopt it as a potential option, depending on how the scenario plays out in terms of the Brexit deal. Why not have that discussion now, because it is almost certainly going to come back to us in a future election?
Kevin Hollinrake
My hon. Friend makes an interesting point. My point is that I will accept the deal that the Prime Minister negotiates. We will get a deal. I guess that it will not be the deal that we are all hoping for, but we will get a deal and I will accept it in Parliament. However, others may not and that is where plan B possibly comes in.
We should look at other options. Clearly, EFTA and the EEA have been discussed as an option and promoted by my hon. Friend the Member for Eddisbury as a return to the Common Market. There are difficulties, however, with regard to timescales and non-tariff barriers, which would still be an issue in terms of customs checks, border checks and sanitary and phytosanitary checks. The Northern Ireland situation has improved to some extent but it is still an issue, with the potential for a hard border. We are potentially rule-takers, of course, but there are fewer rules—we currently have to take 20% of the rules, according to the House of Commons Library. Free movement of people is a consideration, of course, although there are potentially some ways to control that, using articles 112 and 113. Another question is: is the proposal a transitional arrangement or a permanent state?
Ultimately, leave we must and therefore compromise we must, in order to deliver on and honour the decision made by the British public. I call on all sides in this debate—by which I mean Members of our party and of the Opposition—to look at all possible options, be willing to compromise over a deal that comes back, and consider where we will get to. Hopefully we will get the deal we want, but if we do not we have to consider a sensible plan B and I think that is what my hon. Friend the Member for Eddisbury was alluding to.
Paul Blomfield
I really love the pedantry of this. I was clear that we are talking about a customs union that serves the needs of the British economy and British manufacturing.
As my hon. Friend the Member for Greenwich and Woolwich argued previously, the EEA-EFTA model raises challenging issues and would need to be supplemented by customs arrangements, but it should not be lightly discounted, because there are features of the EEA-EFTA model that we would want to see as part of any final deal.
Paul Blomfield
I was just about to mention the hon. Gentleman, so I am delighted to give way.
Kevin Hollinrake
I await with anticipation what the hon. Gentleman will say. When he said he would not lightly discount EFTA and the EEA, does that mean the official Opposition are not discounting it as an option?
Paul Blomfield
I think that is fairly clear: we want to keep options on the table, in an economy-first Brexit negotiation. I was going to say that the hon. Gentleman’s points about the political ideology of the EU27 were reflected, ironically, at the weekend in Munich by the Prime Minister, when she warned the European Union not to let “political doctrine and ideology” stand in the way of a good deal on security—the hon. Gentleman is nodding. She was right, but if that is good enough for security, why is it not good enough for the economy? Political doctrine and ideology from the European Research Group has framed the Government’s approach from day one, ignoring not simply the 48%, but so many of the 52% who did not vote for an extreme and destructive Brexit.
We have now had two of the series of Cabinet speeches apparently defining the “road to Brexit”, and they highlight the depth of divisions. We had the Foreign Secretary’s damp squib, setting out his ambition for regulatory divergence, contradicted yesterday by the Brexit Secretary, who tried to reassure everybody that little would change. Tomorrow, of course, the Cabinet will try to resolve the differences.
At this moment, out of the shadows, comes the European Research Group again, with a letter echoing the one co-ordinated by the Minister when she was its chair, seeking to derail the Government’s policy on the transitional period, and with it to ensure that the country stumbles towards the extreme and destructive Brexit that the vast majority of people simply do not want. Perhaps the Minister will take the opportunity, having not yet replied to my letter of several weeks ago, to reject that approach, and make it clear that she supports Government policy on the transition.
There has been a lot of common ground in today’s debate. The Opposition hope, even at this late stage, that the Government can reach out to the common ground in Parliament and in the country, with a sensible approach to the negotiations that face us in the few short months that we have left, seeking a Brexit that puts the economy first and keeps all options on the table.