Oral Answers to Questions

Kwasi Kwarteng Excerpts

Thursday 6th December 2018 Commons Chamber

[Mohammad Yasin (Bedford) (Lab)]

8. What assessment he has made of the potential effect of the proposed EU withdrawal agreement and political declaration on manufacturing industry in the UK.

[The Parliamentary Under-Secretary of State for Exiting the European Union (Kwasi Kwarteng)]

The Government’s analysis shows the deal that the House is considering will deliver for every section, region, nation and sector of our country, including the manufacturing sector. I assure the hon. Member for Blaydon (Liz Twist) that it has grown by 9.5% since 2010.

[Liz Twist]

The Attorney General’s legal advice on the backstop states:

“any GB goods crossing the border into the EU will be subject to third country checks”.

How much damage does the Minister think that will cause to manufacturers, like those in the north-east, where my constituency is based, who rely on just-in-time supply chains?

[Kwasi Kwarteng]

The prospects for manufacturing under the Government’s policy are actually very strong. [Interruption.] I will answer the hon. Lady’s question. I think the House will be very interested to learn that Sir Roger Carr, the chairman of BAE Systems, which has locations near the hon. Lady’s constituency, said that the deal is

“something that had the key elements of what people were looking for, particularly in the sense of a pathway to frictionless trade, control of our borders and preservation of the UK.”

Manufacturing has nothing to fear from this deal.

[Mohammad Yasin]

No. 8, Mr Speaker.

[Mohammad Yasin]

Dunbia Cardington is a major employer in Bedford. Despite years of trying to recruit staff locally, the business relies on workers from the EU, who make up 90% of the workforce. Does the Minister agree that the Government’s future immigration policy, which restricts the low-skilled workforce that the factory depends on, puts the future of the company at risk?

[Kwasi Kwarteng]

I completely reject that idea. As we have stated very clearly, the rights of EU citizens who are already here are absolutely guaranteed under the terms of the withdrawal agreement. We look forward to having a skills-based immigration policy that will absolutely guarantee that the talent we need can come to this country.

[Mr Philip Hollobone (Kettering) (Con)]

Will the Minister confirm that the proportion of the British economy that is dependent on EU-linked supply chains is just 3%?

[Kwasi Kwarteng]

Those are my hon. Friend’s figures, and I know what his views on the subject have been over many years. The deal under consideration will be a sure footing on which we can grow the economy. I think the scare stories are misplaced and we have a bright future ahead, particularly in relation to our exports and our trade policy.

[Sir Desmond Swayne (New Forest West) (Con)]

Why would the world’s eighth largest manufacturer want to leave 20% of its economy subject to the acquis?

[Kwasi Kwarteng]

My right hon. Friend has well-known views about these issues. Many manufacturers and businesspeople in Britain seek an assurance that they will be able to trade freely with the EU, and I think the acquis communautaire is something that they value.

[Sir Vince Cable (Twickenham) (LD)]

The Minister will be aware that engineering employers and the CBI have given cautious support to the Government’s proposal on the basis that the transition and the common customs area will protect their supply chains. What further reassurance can he give them that these arrangements might be long term, or even permanent?

[Kwasi Kwarteng]

The right hon. Gentleman is absolutely right, and I commend him for his honesty in suggesting that many businesspeople think the deal is a very good one. Certainly, businesspeople in my constituency want the deal to go ahead. I think that we will secure a frictionless or very good free trade arrangement with the EU, and I think that our businesses will grow and be encouraged by the free trade agreement that we get.

[Jenny Chapman (Darlington) (Lab)]

Labour’s policy of a permanent customs union is supported by, among others, the TUC, the CBI and the Engineering Employers Federation, which said:

“Loss of access to both the single market and the customs union would condemn the manufacturing sector to a painful and costly Brexit.”

On 17 July, this House came within six votes of accepting a customs union as a negotiating objective. Is it not obvious that if the Prime Minister supported it and ignored the empty threats of the European Research Group, there would be a majority in this House for a customs union?

[Kwasi Kwarteng]

The hon. Lady makes a fair point, but she will also appreciate that the deal under consideration is supported by businesses for that very reason. It can secure ongoing relationships with the certainty that we need. The problem with the Labour proposal of permanent membership of the customs union is that it completely destroys any idea that we can have an independent trade policy, which is set out on the first page of the political declaration. The Labour proposal is unambitious and completely constrains our ability to do the independent trade deals that will drive our economy in the future.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

6. If he will make an assessment of the potential merits of the recommendations contained in the Scottish Government document, “Scotland’s place in Europe: assessment of UK Government’s proposed future relationship with the EU”.

--- Later in debate ---

[Mr Virendra Sharma (Ealing, Southall) (Lab)]

7. What recent discussions he has had with the Secretary of State for International Trade on the potential effect of the proposed withdrawal agreement on the UK’s ability to trade with the US.

[The Parliamentary Under-Secretary of State for Exiting the European Union (Kwasi Kwarteng)]

DExEU Ministers and officials, as the House probably knows, engage regularly with the Department for International Trade on EU exit and trade matters. Our officials also jointly attend the US-UK trade and investment working group, which has met five times already. As the withdrawal agreement states, we will be free to negotiate, sign and ratify free trade agreements during the implementation period, and we will be able to bring them into force after that implementation period is complete.

[Mr Sharma]

Is President Trump wrong when he says that the withdrawal agreement is a good deal for the EU but a bad deal for Britain?

[Kwasi Kwarteng]

President Trump can justify his remarks for himself, but the US ambassador, Mr Woody Johnson, recently said:

“Britain is the perfect trading partner for the United States”.

That relationship is already the strongest we have—the United States is our single biggest trading partner, accounting for 20% of our trade—and there is no reason to suggest that that would be in any way jeopardised by the deal.

[Rachel Maclean (Redditch) (Con)]

There has been much talk about the backstop. In the unlikely and frankly unwelcome event that we find ourselves in it, will the Minister please confirm our position with respect to being able to sign trade deals with the United States and other countries?

[Kwasi Kwarteng]

As I suggested in my earlier response, the United States is our single greatest trading partner as of today. There is no reason to suggest that that relationship cannot develop. Under article 129 of the withdrawal agreement, as Members know, we can negotiate, sign and ratify free trade agreements. It is very important to emphasise that point. Those relationships will kick in and take effect after the end of the implementation period.

[Jim Shannon (Strangford) (DUP)]

Since the legal advice of the Attorney General has proven that Northern Ireland is to consider GB as a third country, will the Minister outline how our trade relationship will proceed if this dastardly and despicable deal manages to slip through?

[Kwasi Kwarteng]

As the hon. Gentleman has heard me suggest from the Dispatch Box, this is a good deal. It works for Britain and it is a very secure basis on which to provide the certainty from which our businesses can grow. With regard to the Northern Ireland backstop, it is not a situation that we want to be in; we hope to conclude a free trade arrangement before the backstop kicks in, and I have every confidence that we will manage to do so.

[Michael Fabricant (Lichfield) (Con)]

Can we have a little bit of honesty in this House? The Minister knows full well that as long as we remain in the backstop, we can talk as much as we like to the United States, and we can sign an agreement with them, but we cannot implement an agreement with them or indeed with anyone else as long as we remain in the customs union. Will my hon. Friend just get up to say, “Yes, that’s true actually”?

[Kwasi Kwarteng]

I think that my hon. Friend’s interpretation of the withdrawal agreement is slightly different from my own. The first thing I should say is that the backstop is a hypothetical situation; it is not a situation that the Government intend to be in. Let me repeat to the House: if we complete a free trade agreement, the backstop falls away—it is not something that we intend to pursue. [Interruption.] With respect to concluding trade deals, as he knows and as I have said, the withdrawal agreement states that we can sign those deals and they will be—[Interruption.]Forgive me—they will absolutely be concluded, or kick in, after the end of the implementation period.

[Ms Angela Eagle (Wallasey) (Lab)]

I repeat the question from the hon. Member for Lichfield (Michael Fabricant), because the Minister did not answer it. He surely has to confirm at the Dispatch Box that the deal means that any trade deals that might be signed cannot be implemented until we are out of the customs union and single market. He just has to get up and say that that is true.

[Kwasi Kwarteng]

I simply reject the premise of the hon. Lady’s question. It is clear, and is stated clearly in the political declaration, that we will embark on negotiations with the EU and we will conclude them. That is our principal objective—to conclude a free trade agreement with the EU before the end of the implementation period.

[Diana Johnson (Kingston upon Hull North) (Lab)]

10. What recent discussions he has had with the Home Secretary on the immigration White Paper.