Exiting the European Union and Global Trade

Robert Neill Excerpts

Thursday 6th July 2017 Commons Chamber

[Dr Fox]

If we require a transition to a new environment, it would be common sense to do so, but it would not be acceptable for any of the elements that, in leaving the European Union, we sought to leave to be binding on that transitional agreement. However, that is part of the negotiation. It is a negotiation, and at any point in that I would not take too seriously or literally anything that the negotiators were saying in the public domain.

After we leave the European Union, we will uphold our principles as we negotiate free trade agreements with new partners around the world. Although we cannot negotiate and conclude FTAs while we remain in the EU, the Department has instigated 10 trade working groups with 15 different countries as well as a high-level dialogue with the United States, which will develop into a fully fledged trade working group later this month. Going forward, as I said to the hon. Member for Vauxhall (Kate Hoey), we may find that a new FTA may not be the correct solution for every partner, but we will look at all the measures available to us to ensure the best outcomes for citizens and businesses across the UK. Our dedication to free trade will be constant. With every nation, we will work to remove barriers, liberalise trade and secure market access for British businesses. As we move forward towards ever greater trade liberalisation, we will ensure that our trade remedies continue to protect and promote Britain’s producers.

If the first duty of Government is the protection of its citizens, the Department for International Trade must extend that obligation to our businesses and work to defend the drivers of our prosperity from rule-breaking and anti-competitive measures. Free trade is not a free-for-all; that is why we have the WTO. If we support a rules-based system, we must ensure that those rules are respected and rigorously enforced.

[Robert Neill (Bromley and Chislehurst) (Con)]

I understand and take on board everything my right hon. Friend says about the WTO and a rules-based system, but, as he observed earlier in his speech, the bulk of our economy, and the bulk of our competitive advantage, lies in the services sector, which in the case of the financial sector is not particularly covered by WTO rules. Will the Government be equally committed to making sure that we have global liberalisation of the services sector, which is so critical to us?

[Dr Fox]

I think I said that earlier, and I also said that this morning in questions. If there is a real cause for us to champion beyond the basic case for free trade, it is liberalisation of the services sector. That is the way in which we will unlock the potential of many economies around the world—and, incidentally, it is the best way to unlock Britain’s economic potential in trade.

In my discussions around the world I have been struck by the way in which products—either goods or services—that originate in the United Kingdom are regarded as being at the top end of the quality market. That is where we are best able to compete. There are those who would make the case for a Britain with lower regulatory standards and fewer protections in place across the economy for the environment, for workers and for consumers. Let me tell the House that Britain will not put itself at the low-cost, low-quality end of the spectrum, as it would make no sense for this country economically to do so, nor morally would it give us the leadership we seek. I believe there is no place for bargain-basement Britain. High standards and high quality are what our global customers demand, and that is what we should provide. From our food and drink industry to our technological expertise and our financial services, people across the world buy British because they see the Union flag as a kitemark of quality. The key to our long-term prosperity lies not in abandoning our values and standards but in reinforcing them. High-quality, high-reputation goods and services are the route to highly skilled, highly paid jobs and future prosperity in this country.

This Government’s highest ambition is to build a Britain that works for everyone, not just for a privileged few. It must also be a global Britain, willing to support a rules-based trading system and champion the cause of free trade itself. We do not pretend that the era of globalisation is without its challenges, but we must never cease to show our citizens the benefits that free trade brings to their lives and to this country. We realise that the challenges and opportunities of globalisation, allied to the rapid change in technology, can produce their share of problems and insecurity. We must strive to address the negative aspects of globalisation and ensure that no one is left behind by the pace of change, while harnessing the power of the global economy to spread prosperity across Britain and our trading partners. We must ensure that we equip our country with the skills necessary to navigate those challenges and that those who are disadvantaged are given the appropriate support. We must unfailingly uphold the principles of free trade across the world, nurturing prosperity and banishing poverty to the pages of history.

I believe that the vast benefits that global trade can bring to Britain and the world and the way in which my Department is working to secure those benefits across the whole of the UK are the key to success in the future. The Leader of the Opposition has wrongly dismissed free trade as political dogma, but to do so is to betray the very people the Labour party claims to represent. To attack free trade and to undermine our nation’s proud tradition will deny prosperity to those who need it most. I hope that all Members of this House, regardless of their political persuasion, want the benefits to be bestowed on this country and back our vision of Britain as a champion of global free trade and the benefits it brings.

Two centuries ago, Thomas Babington Macaulay described free trade as

“one of the greatest blessings which a government can confer on a people”.

We intend to do just that. It is in our power to build a better and fairer Britain for future generations. We require courage and conviction to do that, particularly at a time when protectionism is rearing its ugly head. Prosperity, stability and security are the prizes for a strong, rules-based international trading order, and that is what we seek to achieve.

--- Later in debate ---

[Robert Neill (Bromley and Chislehurst) (Con)]

It is a particular pleasure to follow the maiden speech of the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone). It was impressive, elegant and informative all at the same time. I particularly enjoyed it as a descendant myself of “Barra men”, who found their way further south via Inverness-shire. They unfortunately left out Caithness, Sutherland and Easter Ross, skirting it a bit to the south. I know that the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) will be pleased with that reference. All of us in the House look forward to hearing a great deal more from the hon. Member for Caithness, Sutherland and Easter Ross in the future.

I turn to the comments made by my hon. Friend the Member for Gloucester (Richard Graham), who is still here. I take the same approach as he did. I believed that it was right for this country to remain in the European Union, but the decision has been taken and our job is to be pragmatic about how we deliver the result. The need for give and take on both sides must be firmly recognised. This must be a Brexit that works for the 48% just as much as for the 52%. I am sure that the Ministers on the Treasury Bench will bear that in mind. In practical terms, it involves our being open-minded about the nature of the deals that we reach as we leave. No one party’s manifesto vision attained a majority in the House, so the House itself has a particular right to seek to shape the nature of our leaving and of our future relationship with the EU.

I endorse and agree with what my hon. Friend the Member for Gloucester has said about the customs union. It seems to me illogical that we should put ourselves in a worse position than Turkey by ruling out membership of it. On the position of foreign students, as a London MP I see the great benefit of the talent that comes into our universities and into the financial services provided by the City of London, which is a wellspring of our economy and our public services. I hope that we will see some flexibility there.

Because my right hon. Friend the Member for Wantage (Mr Vaizey)—my very good friend—was not able to get this in, I will add that we need to look afresh at Euratom. It seems illogical to exclude ourselves from something that is very much to our technological advantage. Israel is a member of Euratom, so it is perfectly possible to participate in it without being a member of the EU. We should not put artificial obstacles of a rather theoretical and almost theological kind in the way of a good, practical deal, where one can be done.

That brings me to the meat of what I wanted to say, which concerns the financial services sector. I refer to my entry in the Register of Members’ Financial Interests. Some 36% of my constituents work in or around the financial services sector and its supply chain. The sector is critical to them and to the economy: some £45 billion is generated for our economy by the City of London alone, never mind the broader financial services sector across the whole UK, which employs some 2.2 million people. The total tax contribution of the financial services sector for our public services is some £71.4 billion, so I have no truck with Opposition Members who criticise or carp at the work of the City of London and the financial services sector.

The financial services sector is a strategic national interest, and it must be a primary duty of our Government, as we seek to leave the European Union, to safeguard it. In particular, that will require a proper deal to deliver mutual market access. If some compromise on the form of the adjudication or arbitration arrangements is therefore necessary, so be it. At the end of the day, it is much more important for the welfare of this country that we have full and proper access for our financial services sector than that we argue—as with angels on the head of a needle—about different courts of justice and elements of jurisdiction. Modern countries with a global outlook sometimes recognise the need to collaborate and to share jurisdictions in areas of mutual advantage, and we should not rule that out in this case.

This process must also involve meaningful and early transitional arrangements, not ones set to an arbitrary timescale of two years, three years or whatever. The transitional arrangements must apply for as long as it takes to do the job for the financial services sector. The deal we made with the British people was to respect the outcome of the referendum; it was not a vote about how long the process would take or about the manner of our leaving. It is well established from the evidence that for some elements of the financial services sector—derivatives, say, as opposed to insurance or euro clearing—different lengths of transitional arrangements may well be necessary, and we should be flexible in that respect.

Finally, we must continue to have access to global talent. The issue of students has already been mentioned, and one of my hon. Friends referred to the issue of posted workers, which is also very important. The same applies to London’s position as a great international law centre, because the ability of lawyers to move between multinational firms is absolutely critical. Those are the practical things we need to deliver. I say to the Government that they have my support in doing so, but this must all be done in a way that puts the business outcome and the prosperity of this country above any “ologies”, “isms” or any other kind of academic consideration.