European Union (Notification of Withdrawal) Bill

Richard Fuller Excerpts

3rd reading: House of Commons & Committee: 3rd sitting: House of Commons & Report stage: House of Commons
Wednesday 8th February 2017 Commons Chamber

[Paul Blomfield]

No, I will not.

Clearly, there is much more to be said about our future relationship. There are many more people who wish to speak and many more amendments to be moved. I will draw my remarks to a close—[Interruption.] It is disappointing for me, too.

[Richard Fuller (Bedford) (Con)]

rose—

[Kit Malthouse]

rose—

European Union (Notification of Withdrawal) Bill

Richard Fuller Excerpts

Committee: 1st sitting: House of Commons
Monday 6th February 2017 Commons Chamber

[Hilary Benn (Leeds Central) (Lab)]

I rise to support new clauses 3 and 57. I commend my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook) and my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) for their speeches. The one thing I would add to the forceful case made by my right hon. and learned Friend is this: when the Exiting the European Union Committee took evidence from representatives of Brits living abroad, one might have expected them to make the argument that has just been advanced, but they said the opposite. They said that Britain should give a unilateral commitment now, because they felt that doing so would ease the process of negotiation.

[Richard Fuller (Bedford) (Con)]

I was not at that Committee hearing, and I am quite interested to know whether evidence was taken from ambassadors of EU countries about their Governments’ positions as part of the inquiry.

[Hilary Benn]

No, we have not taken evidence from ambassadors, but we have heard what has been said from the Government Dispatch Box, namely that—from memory—almost all member states are up for this, apart from one or two. We do not yet know who the one or two are, and I hope that they will change their minds so that we can make progress.

I want to address the arguments we have heard thus far in relation to new clause 3. My hon. Friend the Member for Lewisham East (Heidi Alexander)—she is no longer in her place—asked the right hon. Member for Forest of Dean (Mr Harper) whether we should be able to have a vote on certain aspects of the nature of our withdrawal. He said no, because during the referendum campaign it was made clear by leading participants what would happen if we voted to leave, and therefore it is gospel and we cannot argue with it. That is a very interesting argument. On that basis, the NHS will be getting £350 million a week, because that, it was said, would be the consequence of a leave vote—but I will leave that to one side.

The right hon. Gentleman’s central argument, which he made at the beginning of his speech, was to ask what new clause 3 added. I say to him sincerely that it adds accountability. It has been argued that the new clause is unnecessary because the Government are already doing what it would require. If that is true, I would ask why there is a problem with the Government accepting it.

The argument was made that the Government would be forced to reveal all sorts of stuff. All that the new clause says is that the Prime Minister

“shall give an undertaking to…lay before each House of Parliament periodic reports”.

The content of those reports will be for the Government to determine. There is nothing in the new clause about forcing the Government to reveal their hand. When it comes to getting in English the documents that the European Commission is giving to the European Parliament —probably in English, while we still have MEPs, and in the other languages of the European Union—surely there cannot be any argument about that at all. It is entirely sensible.

On the point about confidential documents, I listened carefully to what the right hon. Gentleman and the hon. Member for Stone (Sir William Cash) said. I raised the matter with the Secretary of State when I was first elected as the Chair of the Select Committee, and he replied to me in a letter that

“negotiations will be fast moving and will often cover sensitive material, so we will need to find the right ways of engaging Parliament.”

I welcomed that reply. All that new clause 3 says is that the Prime Minister shall

“make arrangements for Parliamentary scrutiny of confidential documents.”

The arrangements are for the Government to propose. Given the extent to which Brussels is a very leaky place and the fact that we will be negotiating with 27 other member states, I cannot help making the point that I suspect we will find out very shortly after the meeting has concluded where the negotiations have got to, so the Government’s arrangements will be to advise us all to buy certain newspapers, in which one will be able to read what was discussed during the course of the afternoon and evening.

--- Later in debate ---

[Helen Goodman]

I have not thought about that in as much detail as the hon. Gentleman, but it will be interesting to see what the Minister says when he responds to the debate from the Dispatch Box tonight.

As I was saying, we should have proper, structured scrutiny, and I am disappointed that we do not have slightly longer to consider all these matters in more detail.

[Richard Fuller]

It is a pleasure to follow the hon. Member for Bishop Auckland (Helen Goodman), who expressed her view with her usual forthrightness. She was one of the first Members in the House to raise the complex issue of the customs union, for which I am very grateful.

Last July, the right hon. Member for Leigh (Andy Burnham) moved an Opposition motion on guaranteeing the rights of EU nationals in the UK, and I was one of five Conservative Members to support it. It was an excellent motion to propose at that time, and thanks to that motion tremendous progress has been made in the Government’s thinking and statements. We are debating an issue on which there is unanimity of view about what we want to achieve. It goes almost to the point of parody: everyone is agreeing on a point about which they are then going to disagree. The fundamental question is whether placing such a measure in this Bill is the right approach to continue the pressure and achieve what my hon. Friend the Member for South Cambridgeshire (Heidi Allen) spoke about so eloquently.

[Heidi Allen]

My hon. Friend asks whether the Bill is the right place for such a proposal. Should it be that we in this country need legislation to orientate our moral compass?

[Richard Fuller]

I think my hon. Friend knows my view, so I will not dwell on that.

As I looked through the many amendments, I noted that they fall into three main categories: those that ask for or require scrutiny of the Government’s approach; those that seek to frame a position for the Government in the negotiations; and those that seek answers to an imponderable list of questions—most notably those from the hon. Member for Nottingham East (Chris Leslie). Each of those groups in turn is less worthy of the House’s attention. Scrutiny is relevant to how the House sees things proceeding, and I will listen carefully to what the Front-Bench team says about that. I am concerned, however, by some of the comments made by my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) to which he did not receive answers. The idea that we would involve the Government in the negotiations, then involve Parliament in the negotiations and then also involve the courts in the negotiations brings the words “dog’s” and “breakfast” close together very quickly.

On EU nationals here in the UK, many of the contributions to this debate have focused on the easiest side of the argument. My right hon. Friend the Member for Forest of Dean (Mr Harper) mentioned prisoners in the UK, and under last year’s motion those prisoners who have committed crimes in this country would be guaranteed the right to remain. We may want to do that, but it is a hard case to make that we should do that while not giving any consideration to British nationals in other EU countries. As my hon. Friend the Member for South Cambridgeshire might say, we would then seem to be losing our moral compass through legislation.

A number of Members have cited specific examples of where prisoners would already be guaranteed rights in this country. As parliamentarians, we have a responsibility to reduce uncertainty as we go through the process of leaving the EU, and one practical way of doing that is by knowing what the circumstances are for each of our constituents who come to talk to us so that we can explain to them that there is no need for them to be concerned because their rights are secure—the proposal will not cover all of them, and it might not cover as large a proportion as my hon. Friend the Member for Newark (Robert Jenrick) mentioned, but it is a practical example of where we can help to reduce uncertainty.

The third argument on this issue of EU nationals who have the right to remain here, upon which we all agree, is that we have focused all our attention on the Government Front Bench. Hardly anyone has mentioned Angela Merkel. As I understand it, and I get this from two very reputable newspapers—The Sun and the Daily Express—so it must be true, it was Mrs Merkel who said no to a deal. Where are the voices talking about pressing the German Government to make an agreement? I have heard plenty of speeches today about Donald Trump and how terrible we feel about his policies. Well, here is something that affects British citizens in another country and not a word from anyone.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Does the hon. Gentleman agree that, by triggering article 50, we will simply give the EU27 all the rights to deliver our future? We would then have no negotiation, which is why we should delay article 50 and let the people have the final say on the negotiated package. As full members, we have negotiating rights. We would then have the power of time, and we would give the EU27 the incentive to come to the negotiating table because we might vote to stay in the EU.

[Richard Fuller]

The hon. Gentleman would not get a top mark in negotiation analysis at Harvard Business School. The last word the British public want to hear when it comes to this Bill is “delay.” Most people think we should get on with it, if they do not think we have done it already.

It is important for the Government to understand that messaging is important. There is uncertainty, and people feel that perhaps they do not have the right to remain here, so the Government must continue their progress in signalling to people not only that we welcome them here but that our intent is that everyone in the United Kingdom as a legal EU resident will be able to stay. We must not avoid, or fail to pursue, communicating that message.

Equally, the Government must avoid measures that give the optics to British citizens in other EU countries that they have been abandoned. One of the worst things of stating this in legislation is not that it is necessarily a bad thing but that the optics for British citizens in other countries would change dramatically. They would say, “Why have we not been protected?” They would feel even more vulnerable because of the inaction of EU Governments if the UK Government were, by statute, to have to take this measure.

I support the Government on this amendment, and I call on them to continue their progress on the issue to end uncertainty. Ending uncertainty is not just about the rights of EU nationals currently living in the UK; it is about wanting people in the European Union to come to the UK. The progressive message of this Government should not just end with the issues contained in the amendment. We should send a positive message that we will continue to welcome people from the European Union after we leave.

[Stewart Hosie (Dundee East) (SNP)]

I support the new clauses and amendments tabled by my hon. Friend the Member for North East Fife (Stephen Gethins), and I will particularly address new clause 51, in the name of the hon. Member for Pontypridd (Owen Smith).

In particular, I support the argument for a White Paper that includes details of the expected trajectory for the UK’s balance of trade, gross domestic product and unemployment. A number of earlier contributions explained precisely why we need that. My hon. Friend said that Vote Leave failed to provide detailed answers to any of the key economic questions before the referendum and, of course, he is right.

The right hon. Member for Forest of Dean (Mr Harper), who is no longer in his place, demonstrated incredibly ably the confusion at the heart of Vote Leave and why taking a decision today is incredibly difficult. He effectively said—I have spoken to him, so this will come as no surprise to him—that no one in the leadership of the official leave campaign ever argued that we would join the EEA or have an EFTA-type agreement. It might be that the right hon. Member for Surrey Heath (Michael Gove), or one of the other senior figures, never quite said that, but to argue that the leave campaign did not suggest it, and suggest it strongly, is simply wrong. The leave campaign Lawyers for Britain said:

“We could apply to re-join with effect from the day after Brexit… EFTA membership would allow us to continue uninterrupted free trade relations”.

That was still on the website only a few weeks ago.

The former ambassador and Brexit supporter Charles Crawford appeared on “Newsnight” to argue that an EEA option may be the first step of Brexit. Roland Smith, the author of “The Liberal Case for ‘Leave’”, wrote an extended paper titled “Evolution Not Revolution: The case for the EEA option”, so I suspect that there were many people who, indeed, voted for Brexit believing that we were not voting for a hard Tory cliff-edge Brexit and that we would maintain membership of the EEA, EFTA or an equivalent. Given that that now no longer appears to be the case, it is absolutely right, as new clause 51 makes clear, that we have details of the expected trajectory of the balance of trade, GDP and unemployment. Those are not abstracts; they are at the heart of the measurement of our economy, of wages, of living standards and of economic growth. They are the platform for tax yield, which pays for our vital public services. All those words and concepts were almost entirely absent from what I will generously call the first White Paper.

I gently observe that it is not good enough for the Government to produce, after a referendum, a White Paper that is little more that the Prime Minister’s Lancaster House speech dressed up with a few pictures and a couple of graphs. That is not the basis for the economic plan necessary to mitigate the huge potential damage to the economy from a hard Tory Brexit. Make no mistake, that is what we are facing.

--- Later in debate ---

[Dr Wollaston]

I agree with that, and I have also heard from constituents of mine who are British citizens now living in the EU. But my point is that, come what may, it is inconceivable that we would seek to separate families such as this one. There is no doubt that many people are sleepless and sick with worry about this, and we have all seen them in our surgeries. [Interruption.] It is true. I am seeing these people in my surgery. We also need to consider the tsunami of paperwork that we will have to deal with in settling the rights of these citizens if we do not get on with this quickly. We need to keep this simple. There is no way that families such as this should be subjected to vast bureaucracy and vast expense. We all know that this needs to be settled, so in negotiating, surely, making a bold, open offer as a gesture of good will can do nothing but good in this situation.

[Richard Fuller]

I agree with my hon. Friend, but my question to her is: can she cast any thought on why the Chancellor of Germany refused the offer?

[Dr Wollaston]

I have no idea why this is happening, but I am saying, as an important point to the Chancellor of Germany, that making this clear unilateral offer is the right thing to do, and we should get on and do it. There is no reason not to do so. Even if other countries were to take an obstructive and unreasonable line, it would still be inconceivable that our Prime Minister would separate families such as my constituents. So let us get on with this.

European Union (Notification of Withdrawal) Bill

Richard Fuller Excerpts

Tuesday 31st January 2017 Commons Chamber

[Richard Fuller (Bedford) (Con)]

It is a pleasure to follow the hon. Member for Aberavon (Stephen Kinnock). I always listen with interest to his speeches on a wide range of topics, and I have done so again this evening. Since I was elected in 2010, I have studiously avoided speaking in any debate on the European Union or the UK’s membership of it, but tonight that seven-year abstinence must come to an end before the opportunity to speak on the topic has gone. I welcome the speech made by the Prime Minister the other week. Its content and tone provided an important next step towards the way in which our country is going to come together as we leave the European Union. Similarly, today’s debate, in which it has been a pleasure to take part, has represented an additional step forward in that process for the country.

Like many on the Conservative Benches, I commend the speech made by the Opposition spokesman, the hon. and learned Member for Holborn and St Pancras (Keir Starmer). He had a difficult task, and his speech was akin to throwing a rope across the enormous chasm that has existed in the Labour party on this issue. I think we should all commend him for traversing that chasm safely and wisely today. Such wisdom was, alas, lacking from the speech by the former Deputy Prime Minister, the right hon. Member for Sheffield, Hallam (Mr Clegg), who locked his fellow Liberal Democrat Members in the Lib Dem taxicab and drove it over the edge of the chasm. He showed no respect whatever for creating unity between the people on the two sides in the referendum. The Liberal Democrats need to understand that if they speak only to the 48%, they will be out of touch with the direction in which the mood of the British public is going, which is towards bringing us all together.

I want to comment further on the rights of EU nationals. I was one of five Conservative Members of Parliament who supported the Opposition motion to grant automatic rights to EU nationals, and I am still strongly in favour of doing so. The conversation has been about whether we should do that unilaterally or through the negotiations. It has also been commented that the Government have a responsibility to look after the interests of British citizens in other EU countries, and that is undoubtedly true, but I do not believe that it is legitimate to hold one as a counterbalance to the other. I therefore ask the Government to look again at this issue, and to investigate a third option of securing rights bilaterally rather than multilaterally or unilaterally.

One of the Government’s most important tasks in this context is to reduce uncertainty. That will be tremendously important as we move into the negotiations. We will enter into those negotiations in a spirit of friendship, but negotiations are not about friends; they are about interests. If we are honest, we need to point out that it will be difficult for the European Union to reach a deal. We would like to see our points at the top of its agenda, but it is a complex organisation with multiple levels of interests and many other issues that affect that agenda. It is important for the EU to signal its intent by giving the UK the opportunity to have a parallel track on a free trade agreement while we are negotiating our exit agreement.

It is also important for the Government to prepare the British public for the sharp choices that we will face in two years’ time. That will be important if we are to reduce uncertainty, and the Government must be clear that that is their primary goal. Certain options present themselves. The first, and easiest, involves a transitional agreement, but I would point out that such an agreement is completely different from an extension of the negotiations. A transitional agreement goes towards an agreed objective. An extension just means carrying on talking. Extension maintains uncertainty and is without doubt the worst choice for this country. It is a far worse option than the clean break of going to WTO tariffs, which has been much ridiculed and derided by some in this House. The WTO option would provide certainty. It may be uncomfortable and would certainly need accommodation, and it is worse than a clean, new free trade agreement with Europe, but it is better than maintaining uncertainty. The Prime Minister was right when she said that no deal is better than a bad deal. It is the Government’s responsibility to prepare the British public for that option.

The Government's Plan for Brexit

Richard Fuller Excerpts

Wednesday 7th December 2016 Commons Chamber

[Keir Starmer]

I am going to make some progress. I have taken a lot of interventions.

The Government must now prepare their plan and publish it. I put the Government on notice that, if they fail to produce a plan by the time we debate proposed legislation on article 50—assuming that we do debate it and that the Government do not win their appeal—amendments will be tabled by the Opposition and, possibly, Government Members, setting out the minimum requirements of a plan. In other words, we are not going to have a situation where the Government seek a vote in a vacuum or produce a late, vague plan.

[Richard Fuller (Bedford) (Con)]

I congratulate the hon. and learned Gentleman, because he is playing on a very difficult wicket. The motion states

“that there should be no disclosure of material that could be reasonably judged to damage the UK”.

Does he therefore believe that this plan should be a series of hints, an explanation of principle or specific priorities? It would be helpful to know what he means by a plan.

[Keir Starmer]

I think it is pretty straightforward and I have said this on a number of occasions. I fully accept that the Government will enter into confidential negotiations for a number of months and that producing a plan should not undermine that process. This is not the first time that I have said that; I have said it repeatedly. Some argue that we should not produce a plan because saying anything might undermine the negotiations, but I do not accept that. I do, however, accept that there is a level of detail and of confidential issues and tactics that should not be disclosed, and I have never said otherwise.

I want to put the contrary proposition, to see how comfortable Members really are with it. Absent of a plan and of our knowing the objectives and starting position, the Government would then negotiate for two years without telling us any of that detail. Are any Members of this House content not to know any of that between now and March 2019? Hands up who does not want to know that and is happy to say, “I don’t need to know. Whatever you are negotiating is fine by me.”

EU Customs Union

Richard Fuller Excerpts

Wednesday 2nd November 2016 Commons Chamber

[Helen Goodman (Bishop Auckland) (Lab)]

I am pleased to have the opportunity to have a short debate on the UK’s membership of the customs union.

My constituents voted to leave the European Union, largely because of what they see as uncontrolled immigration, but also because of the slightly bossy tendency of some of the EU institutions, which I think can be taken as a rejection of the European Court of Justice. However, they did not foresee all the consequences of the vote, partly because a number of false promises were made—most notably that there would be £350 million extra every week for the NHS, and also that no jobs would be at risk.

In the circumstances, it is reasonable of the Prime Minister to work on the assumption that part of her mandate is to end the free movement of citizens from the EU to the UK. That, in itself, does not amount to a negotiating strategy. The problem is that we are hearing wildly different things from different members of the Government. The Secretary of State for Business, Energy and Industrial Strategy has just reassured Nissan and it is going ahead with significant inward investment. I welcome that. Meanwhile, the Foreign Secretary still seems to believe that it will be easy and straightforward to do free trade deals “very rapidly indeed”.

The Government continue to say that they will not provide a running commentary on the negotiations. I know they claim that that is because they want to maintain confidentiality, but it appears from the outside as if it is because they are finding it difficult to agree among themselves on what should be done.

What I find alarming is the Government’s refusal to answer parliamentary questions. I asked the Minister a written parliamentary question about the Government’s policy on the customs union. He gave a rather opaque answer. I can live with that, but I have also put down a large number of written questions that ask factual things, such as how much we export, what the value of it is and what would be covered by the rules of origin were we to leave the customs union. On those questions, I also received the answer, “We will not give a running commentary.” That is why I felt it necessary to have a debate and explore these issues in more detail. I am alarmed by this situation, because the risk is that decisions will be taken on the basis of rhetoric not facts and on the basis of ideology not analysis.

An intelligent negotiating strategy needs to meet the public’s expectations, to be based on a hard-headed assessment of the national interest and to be deliverable. With that in mind, the Treasury Committee visited Berlin and Rome in September to find out what some of our counterparts might think. I am sorry to say that Brexit is not at the top of the in-tray for the other EU member states. They all see it in the context of their domestic political worries. Angela Merkel is looking over her shoulder at Alternative für Deutschland; Hollande is worried about Le Pen; Matteo Renzi is worried about Movimento 5 Stelle. Probably only the Irish take Brexit as seriously as we do. Over and over again we heard the same word: precedent. There should be no reward for exiting the EU, and no precedents must be set.

I conclude from that that if controlling immigration is going to be part of the British position and we are to move to a more skills-based approach for managing migration, our EU partners are going to say that we cannot remain members of the single market. However, there has not been so much attention paid to our membership of the customs union, which I am beginning to think may be more important, especially if we want manufacturing industry to thrive in this country.

It is worth recalling the history. The customs unions was established in 1968. It is what we joined in 1973, and what the public affirmed with the referendum in 1975. It is what most people call the Common Market. Unlike high levels of immigration or the ECJ, it is rather popular with the British public.

The shadow Chancellor has rather pejoratively described the Government’s approach as a “bankers’ Brexit”. I know why he has done that. We must base what we are doing on some facts. I remind the House that we export more goods—some £285 billion-worth—than we do services, the figure for which is £226 billion. That is a ratio of 56:44. This is important. At the moment, we have a common external tariff, goods move freely within the EU and the Commission has competence for external trade negotiations. The customs union is not the same thing as the single market. Norway is in the single market but outside the customs union, whereas Turkey is in the customs union and outside the single market.

It is also worth recalling that the export of goods into the European Union comprises 48% of our exports. The EU is our biggest partner. Exports to Europe bring 3.3 million jobs. The next most significant partner is America, with 17% of our exports, and way down the numbers is China, our third biggest trading partner, with just 4%, or one 10th of the significance of our European exports. So what would happen if we were to leave the customs union?

[Richard Fuller (Bedford) (Con)]

I am extremely grateful to the hon. Lady for calling this debate. She is precisely correct that this is what most of the debate in the House will be about. She said a little earlier that we joined the customs union when, effectively, we joined the European Union, as was reaffirmed in the referendum of 1975. Is that correct? If so, that sets the basis for what the Government have to argue, namely that in the referendum that we held this year we voted to leave the European Union and the directive is therefore to leave the customs union; we have to argue back from there. Will she clarify that point?

[Helen Goodman]

We joined the Common Market, which is the customs union, in 1973. Now we have voted to leave the European Union. People want to leave the EU, because of their concern about migration and perhaps about the ECJ. In my opinion, the move is not driven by concerns about the customs union, which in fact is very popular. That is what I am arguing.

[Richard Fuller]

We come from different points of view, I suspect, about the referendum—I supported our leaving the European Union—but there are very positive reasons for both sides regarding the customs union. We have to understand where we are coming from after the referendum result. The presumption from that result is that we will leave the customs union. It is therefore beholden on people who may want us to stay in the customs union to argue what strong reasons there are for staying in—and there are strong reasons.

[Helen Goodman]

Let me come on to give some of those strong reasons. If we were to leave, we would face tariffs ranging generally between 5% and 10% on our exports. Even more significantly, our exporters would have to comply with the rules of origin. I think this is the biggest problem. I have the last television manufacturer in Britain, Cello Electronics, in my constituency. It imports a lot of components from China, puts the televisions together and sells them into the European market. The OECD estimates that the cost of filling in all the forms and complying with the rules of origin would add 24% to the export costs of selling into the European market. That would wipe out firms such as Cello, which, as I say, is in my constituency.

In Norway, which is outside the customs union, we know that some exporters find the bureaucracy of the rules of origin so burdensome that they prefer to pay the tariffs. This is really what the Nissan problem was. Belonging to the customs union was the first thing the Japanese Government listed in their hopes for what our deal would be, but the Government cannot take a factory-by-factory approach. Let us look at some of the big industries that would be affected: the automotive industry employs 450,000 people; aerospace 110,000 people; pharmaceuticals, such as Glaxo in my constituency, 93,000 people. All those industries have the same complex integrated international supply chains and would be badly hit were we to leave the customs union.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)]

I congratulate the hon. Member for Bishop Auckland (Helen Goodman) on securing this debate. My constituents, like hers, voted to leave the European Union, so I welcome her comments about listening to that vote. It is also important that we all work together to make this process a success, so I welcome her analysis.

Last week, she posed a question along similar lines to the Prime Minister about the EU customs union and Nissan. I am delighted that since that question was posed, Nissan has announced that it will produce the Qashqai and a new model at its plant in Sunderland. The hon. Lady welcomed that, and so will I. I want to join the chorus of approval that we heard in this place for that decision. It is a vote of confidence, which shows that Britain is open for business and that we remain an outward-looking, world-leading nation. The plant in Sunderland will be expanded through new investment to be a super-plant, manufacturing more than 600,000 cars a year. Some 80% of the plant’s output is exported to more than 130 international markets. The decision is a massive win for the 7,000 direct employees and 35,000 total British employees in the plant and the supply chain.

Turning to the core subject of this debate, the issue of the customs union is an important one. As with all facets of our exit negotiations, we recognise the need for a careful—what the hon. Lady called a “hard-headed”—analysis for a smooth transition that will minimise disruption to our trading relationships and seize the opportunities presented. This is an area in which there is excellent cross-Government co-operation, and I am pleased to be joined on the Treasury Bench this evening by the Financial Secretary to the Treasury, my hon. Friend the Member for Battersea (Jane Ellison). That shows how the Department for Exiting the European Union and the Treasury are working hand in hand on these issues.

I would like to be clear from the outset that—as, I think, we are all aware—no final decision has been taken on our broader future economic relationship with the EU, which includes our approach to the customs union. As with our decision not to trigger article 50 immediately, it is right that we take the time, as the hon. Lady said, to analyse our options carefully and seek to secure the best deal for the whole of the UK.

[Richard Fuller]

Can the Minister help me with the question I posed to the hon. Member for Bishop Auckland (Helen Goodman)? The ballot paper said that we are either leaving the European Union or remaining in it, and we voted to leave. We joined the customs union in 1973. Is not the presumption and the starting position for the Government the fact that we will leave the customs union, so arguments have to be made why we should not do that rather than accepting that that should be regarded as the opening position?

[Mr Walker]

I think it important to engage with arguments on both sides of this debate. The key thing is to secure the UK national interest, so before we take a decision, we will want to listen very carefully to the arguments for leaving the customs union and the arguments for staying in it.

I think we can all agree that the issue has numerous aspects. The hon. Lady speaks with considerable experience of complex economic issues, having been a Treasury fast-streamer serving on the Public Accounts Committee and the Treasury Committee, and a former Minister. She will appreciate that, as the Prime Minister said in her reply the other day, making a full assessment of the options of a customs union is more complex than it might seem when first described to the public.

First, it is important to understand exactly what a customs union is and is not. It is an arrangement that relates to trade in goods; it does not cover trade in services or free movement of capital or people. To facilitate trade, a customs union removes tariffs and customs controls on goods moving between its members. While services are not directly included— they are not subject to either tariffs or customs controls—they have become increasingly embedded in goods production, so a customs union could indirectly affect trade in services industries. For example, in parallel to exporting an aircraft engine, an engineering firm might also provide maintenance services; or in parallel to exporting cars, an automotive firm might provide financial services.

To function properly, a customs union must have a common external tariff, applied equally by all members of the union. That supports the free circulation of goods within the customs union, preventing trade diversion by ensuring that no one trading with the members of the union can be given preferential access to any individual members relative to the others. In the case of the European Union, in practice, we have chosen to make a reality of the common external tariff through the common commercial policy under which the European Commission negotiates on trade on the United Kingdom’s behalf, and in that way sets the common external tariff. In the case of members of the EU and the EU’s customs union, 80% of the tariffs that are collected by member states on imports from non-EU countries are paid into the EU budget, with member states retaining just the remaining 20% to cover collection costs. The UK collected £3.1 billion in tariffs on non-EU imports in the financial year 2015-16.

However, a customs union is only one of the many ways in which countries have sought to minimise the impact of customs procedures and support the free flow of goods. There are numerous examples around the world in which co-operation between customs authorities has helped to reduce the costs of customs processes at the border, short of a customs union. Even in the case of the European Union, the customs union is only part of an approach that also focuses on strengthening systems and processes on the ground. For example, the vast majority of customs declarations in the UK are submitted electronically and cleared rapidly, with only a small proportion experiencing delays—for example, when risk assessment indicates that compliance or enforcement checks are required at the border.

Norway has been involved in customs co-operation with Sweden and Finland, both of which are EU member states and are therefore in the EU customs union, as they have been since the 1960s. Norway has an agreement with the EU to mutually recognise each other’s schemes to impose less onerous checks on exporting firms with secure supply chains. It sits, as an observer, on some of the EU’s committees that discuss customs issues. Notwithstanding the issues raised by the hon. Lady, and although our Prime Minister has made it clear that we are seeking not an off-the-shelf solution but a UK solution, it is important to note the collaborative agreements that exist in other countries. Switzerland and the EU have an agreement that recognises the equivalence of security checks at their external borders, and waives the need to make pre-departure and pre-arrival declarations. If we look more widely, we see that the United States and Canada also co-operate closely on customs issues, including schemes to expedite customs procedures for firms with secure supply chains and collaborative arrangements for operations at the border.