Covid-19: Future UK-EU Relationship

Penny Mordaunt Excerpts

Wednesday 15th July 2020 Commons Chamber

[The Paymaster General (Penny Mordaunt)]

It is a pleasure to respond to this Opposition day debate, not least because it affords me the opportunity to pay tribute to UK and, in particular, Scottish businesses, which have been so resilient and creative during these unprecedented times. It is not just that we want the economy to recover and that we want to beat coronavirus; it is that we can only defeat coronavirus, and whatever might follow it, if the economy recovers. Without businesses and the tax revenue that they generate, we will not have an NHS or a care system, or room for manoeuvre at the Treasury. I want to thank all those businesses for what they have endured and for all the efforts they are taking to keep going. I am sure the whole House would agree with that.

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

Will the Minister give way?

[Penny Mordaunt]

One moment, please. I should also like to genuinely and sincerely congratulate the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) and his party on having a policy on the transition period, which is more than the official Opposition have managed to do to date.

In the time I have, I want to touch on some of the very understandable issues that concern hard-pressed businesses about next year and about how the Government are helping to mitigate the economic effects of coronavirus and to prepare for when we will take back control of our borders and leave the single market and the customs union. These will bring significant changes, and also opportunities, for which we all need to prepare, which is why we have already undertaken a series of measures to help businesses and individuals to get ready for the end of the transition period, whatever the circumstances are.

Before I do that, however, I want to put this debate in context. I wonder what the right hon. Member for Ross, Skye and Lochaber thinks the odds are of the Government extending the transition period. How likely does he think it is that we would do that, given that its end date is enshrined in law; given that the Government of the UK were elected on a mandate not to extend the transition period; given that the deadline for asking for an extension to the transition period has passed; given that doing so would simply prolong the negotiations and bring uncertainty for our businesses; given that it would hinder our economic recovery; given that an extension would see us paying more to the EU, which is not a good idea; given that we would have to back EU laws and decisions that we had no say in designing, which is an even worse idea; and given that the legislative and economic flexibility that we need to respond to coronavirus would not be possible? What are the chances of the Government doing that? What are the chances of this Opposition day debate succeeding or having any influence? I suggest none.

The Government have been very clear multiple times that we will not extend the transition period. Some might argue that it is not only undesirable to do so but now impossible, so why are we having an Opposition day debate on this issue, on this particular topic, and not on, say, rewards for health and care staff, not on investment in Scottish infrastructure, and not on food standards or Scottish farmers, which my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) debated recently? Why are we having this debate in a week when key negotiations are ramping up and David Frost is going into bat for Scotland’s interests—[Laughter.] I am sure that Scottish fishermen do not appreciate Members laughing. Why not have a debate on issues that might strengthen his hand in negotiation? Why not hold a debate on fishing or, indeed, on any practical or tangible issues that Scottish MPs on these Benches have been talking about at every single opportunity they have been given to stand up for their constituents. Why pick this issue? Why pick the issue of the transition period? Sadly, it is because the purpose of this debate is not to influence or secure change, or even to suggest any further practical measures that could help business. There was no mention in the right hon. Gentleman’s speech of the phased approach, the Goods Vehicle Movement Service, or Treasury schemes. No, this Opposition day debate is designed to do what Scottish nationalists always try to do, which is, sadly, to further divide, to sow seeds of doubt, to undermine confidence and to highlight differences right at the moment when everyone should be pulling and working together. Stirring up division is clearly something that SNP Members enjoy, and I have never understood those motivations in politics. Even if that is what floats your boat, to do it now, when we should be maximising the benefits and focusing on those benefits for the whole of the United Kingdom and for the sake of all our citizens, is truly amazing. It shows, sadly, that SNP Members, and anyone else supporting them today, will have learned nothing from the past few years.

The sizeable majority that this Government enjoy is, in very great part, down to the fact that the people of this country want to move forward. They want to look to the future, not unpick the past, and they respect democracy. This Opposition day debate is simply an attempt to undermine and prevent an instruction given to this Government by the people of the United Kingdom. The right hon. Gentleman and his colleagues wish to return to division, to chaos, to paralysis, which is what pushing out the deadline for negotiations would do. The motion does not focus on anything practical in the report. That is not surprising really as that report was written prior to the announcement on the phased border and the border operating model. None the less, it is the SNP’s debate today, so, despite the fact that events and people have moved on, I will focus on the issues that those Members have raised.

[Alan Brown]

I thank the Minister for giving way and ending her lecture, telling us what we should be thinking about. If we are talking about division, a lot is predicated on what she said about control of our borders, ending free movement and controlling immigration. Earlier she talked about business resilience. Can she tell me how ending free movement will help businesses, how it will help the fruit and vegetable growers who already cannot get people to do their work? Can she explain what good that will do for the economy and what it will do for food exports, when we have a reliance on EU vets?

[Penny Mordaunt]

I have been through the detail of the report mentioned in the motion and looked at each sector that it focuses on and mentions. We have not just brought through schemes that help to support business and to mitigate the changes that are going to have to be brought in. The Treasury has also introduced schemes in the wake of coronavirus, and I will come on to that. However, I want to address—

[Several hon. Members rose—]

[Penny Mordaunt]

Bear with me.

I want to address the issues the report raises, because the reasons why we are having this debate are illuminating. The report proposes a two-year delay to our timetable and claims that not having one would reduce Scotland’s GDP. The version of the report I have seen says that that will be by £1.8 billion, but the hon. Gentleman refers to £3 billion—a figure that many dispute. However, some say that the cost to UK GDP of a delay would be around 2%.

There are a number of interesting graphs to support the right hon. Gentleman’s points, but I would ask any SNP Member present to add an additional line—one illustrating the hit to Scottish GDP from the break-up of the United Kingdom. Pre Brexit, the Scottish Economic Association put the cost of Scottish independence at 5.5% of Scottish GDP, stating that that would be even greater after Brexit. So why does £1.8 billion or £3 billion matter, when £5.5 billion does not?

The right hon. Gentleman cannot wring his hands about the 144,000 jobs contingent on exports from Scotland—jobs that we are determined to protect—while discounting the 545,000 jobs reliant on trade with the United Kingdom. He cannot claim to mourn the end of EU funding mechanisms that bring benefits to Scottish citizens—and that will be replaced, I might add—and at the same time discount the very real United Kingdom dividend to the taxpayers of Scotland of about £2,000 per household. He cannot complain about the results of negotiations, on the grounds that he thinks he has not been consulted, and at the same time advocate extending a transition period that would make us subject to EU laws, schemes and decisions over which he has had no say whatever. He cannot claim to use economic forecasts to make one argument, but disregard them for another. And he cannot claim to be a democrat, while ignoring the results of votes.

This debate is simply about creating conflict and division, just as the right hon. Gentleman’s press release today is. He has not seen the details of the proposal he alluded to at Prime Minister’s questions earlier, but he does not need to, because the facts are irrelevant to his case, as were many of the things he said in his speech about these proposals.

I want to turn to the substance of what we are doing to support business, because, after all, that is what matters. There will be significant changes and opportunities ahead, and we will help businesses and citizens to manage the necessary adjustments in a very practical and flexible way in order to minimise the challenges and maximise the opportunities. None of those schemes did the right hon. Gentleman mention.

In the withdrawal agreement struck by the Prime Minister, we removed several significant uncertainties that were a feature of our contingency planning ahead of 31 October. We are now taking the necessary steps to ensure that the UK is ready to take advantage of the opportunities. That includes the £705 million of investment announced to make sure we have the right infrastructure, tech and border personnel in place. That is in addition to the £84 million to boost the capacity of the customs intermediary sector. The border operating model and the phased approach we announced earlier have been put in place after extensive consultation with the sector and provide further clarity and certainty for the border industry and businesses.

While we have already made good progress in getting ready for the end of the year, there is still more to do. There are actions that we would strongly encourage businesses and citizens to take now to ensure we are ready to hit the ground running as a fully independent United Kingdom. That is why, earlier this week, we launched a new, major campaign to communicate the steps that we must all take to prepare for the end of the transition period.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I thank the Minister for eventually giving way. She asked many times why we have brought this debate today. Let me just pick out one sector and give her another 1.8. Scotland’s quality food sector exports £1.8 billion of food per year, 70% of which goes to the EU. My question to the Minister is, how many businesses in Scotland has she spoken to about the effects on them, because that, in just one sector, is why we are bringing this debate?

[Penny Mordaunt]

When I came into office I spent a considerable amount of time working with the central office of information and all Government Departments to improve our communications with business. An enormous number of meetings and forums take place not just with me and the Chancellor of the Duchy of Lancaster but with every single Department across Whitehall. Our officials continue to have those discussions and consultations, as do Ministers.

I would say to the right hon. Member for Ross, Skye and Lochaber, who mentioned one or two sectors: you have not spoken about any of the Government schemes. You have not spoken about the phased approach. You have not spoken about free services that are available from Her Majesty’s Revenue and Customs and how they can be improved. You have not called for any of that.

The right hon. Gentleman began the debate calling for leadership and for the Government to adapt. Indeed, the past few months have been an inflection point for nations and individuals. I call on the SNP to adapt: try co-operation; try finding some common ground for the sake of all our businesses and citizens. I would say that to you at any time but now more than ever, against the backdrop of this unprecedented time that we face.

[David Linden]

The Minister talks about the need for the SNP and the Scottish Government to compromise. She is in the Cabinet Office and will be aware of the document, “Scotland’s place in Europe”. Can she name any part of that document, which contains a raft of proposals and compromises from the SNP on the single market and the customs union? On which of those would the United Kingdom Government compromise?

[Penny Mordaunt]

There are many things that I could talk about, but one of the first meetings I held was to put together our negotiating position: we listened carefully to all the devolved Administrations on some of their concerns, particularly on programmes, and we changed our negotiating mandate accordingly. We do listen, and I have taken great pains. I gently point out—I am not going to repeat the vast number of meetings I have had, as I have done that frequently at the Dispatch Box—that as someone who has, in quite difficult circumstances, made sure that I could attend every single meeting that I had planned with the devolved Administrations and the Scottish Government, as I am happy to do, I was stood up by the Scottish Minister. I have shown up for every meeting—the Scottish Minister has not shown up for every meeting.

To conclude, I call on the SNP to adapt—to find common ground—for the sake of all our citizens and businesses, because that is what leadership looks like, and it is what Scotland deserves.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. Before I call the spokesman for the official Opposition, many people in the Chamber are making the serious mistake of calling other people “you”—even the Minister, whom I have never heard make such a mistake before today. I am anxious that people who are new to the House and have not really seen the Chamber operating properly should not be led astray by those who should know better. Throughout Prime Minister’s questions today, people called the Prime Minister “you”. In the Chamber, “you” means the Chair. One addresses other Members as “the hon. Gentleman”, “the hon. Lady” or something else, but not “you”. [Interruption.] Quite. I call Paul Blomfield.