European Union (Withdrawal) Act

Ruth George Excerpts

Monday 14th January 2019 Commons Chamber

[Dr Fox]

No one who has ever done a negotiation with the United States would use the word “easy” to describe it. That is something that comes across rather quickly to anyone who has had to deal with the United States trade negotiators. It is different, however, from negotiating a trade agreement with the European Union, the difference being that if we are looking at a free trade agreement with the United States, we have to diminish the regulatory and legal differences to get closer to a trade agreement. With the European Union, we begin from identity of regulation and legislation on our trading relationship, which should technically make it much simpler.

What we do not want to do is introduce unnecessary friction and tension. Sadly, that is something that both the Labour leader and the hon. Member for Brent North (Barry Gardiner), the shadow Trade Secretary, as well as the rest of the Opposition, have failed to understand.

As has been made clear on numerous occasions, there could be no joint decision making on trade agreements if the UK is outside the EU in the way that the Labour party pretends there can be. There would be no fully independent trade policy as part of the EU customs union, and the Labour party has absolutely no chance—none, zilch, zero—of negotiating a better deal than the one we have now. There is no need to take my word for it. In response to accusations that Labour’s trade policy was “total fantasy”, Jean-Claude Piris, the long-serving former director general of the EU Council’s legal service, said:

“Obviously this is ruled out. It is contrary to the basic EU principle of autonomy of decision making. Don’t even think about it!”

The Labour party clearly has not thought about it to any satisfactory degree.

Labour’s policy, in so far as I understood it following the Leader of the Opposition’s interview yesterday on “The Andrew Marr Show”, is that Labour intends to hold a general election and potentially another referendum, including all the legislation that would be required for that, all within 72 days of tomorrow’s vote in order to carry out their fantasy policy proposals. It is a total shambles for an Opposition. If they think they could take that to the British public in a general election, they are even more foolish and naive than I had previously considered them to be.

[Ruth George (High Peak) (Lab)]

rose—

[Dr Fox]

I will give way to the hon. Lady in a moment.

Let me just say something briefly about two other suggestions. Some Members have raised the prospect of a so-called Norway or EEA option. Re-joining the EEA agreement would mean that we would have to accept all the four freedoms of the single market, including free movement of people. It would not on its own be sufficient to enable our commitments to Northern Ireland to be met, including on avoiding a hard border between Northern Ireland and the Republic of Ireland. We would be stuck in the single market. If this were combined with staying in a customs union, which some have advocated, we would also be prevented from pursuing a fully independent trade policy. It would also leave our financial services industry, as the Chancellor has said, exposed to a rapidly evolving body of EU regulation over which we would have no influence. In many ways, it would be worse than remaining in the European Union, leaving us with many of the restrictions but, in perpetuity, unable to utilise any of the levers of decision making.

[Ruth George]

The Secretary of State is making a case against all the alternatives, but is it not the case, as he himself has set out, that there are no legally binding certainties in the future declaration? As he himself set out, we will be seeking to please both the USA and the EU on regulatory alignment. Those things are impossible to do. All this deal signs us up to is years more of uncertainty.

[Dr Fox]

But we will be taking those decisions. That is the whole point of leaving the European Union: those decisions will be in the hands of the British Government and the British Parliament for us to determine what level of regulatory alignment we want, if any, to maximise our access to trading markets.

--- Later in debate ---

[Barry Gardiner]

Oh dear, Mr Speaker!

It is precisely this lack of specificity that has left Members across the House unable to have confidence in the Prime Minister’s deal. I probably should not call it a deal, because the future political framework document is no more than a placeholder for the future trade and security agreements that the Government hope eventually to conclude. It is both this lack of detail and the fact that the Prime Minister has wound down the clock that have significantly reduced the ability of Parliament to be properly involved in the most important decision facing our country.

When my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer), the shadow Brexit Secretary, fought and won the battle for a meaningful vote, which is now scheduled for tomorrow, he made it clear that the word “meaningful” must imply both a level of detail and clarity about what was proposed and a timeliness that would enable Parliament to amend the proposal and the Government to respond appropriately. We should not forget that originally the Government quite correctly wished to pursue the negotiations on the withdrawal agreement and the political framework side by side, but they agreed the chronology set out by the European Union.

That, I believe, was a mistake, but it made it all the more important that the negotiations on phase one be concluded expeditiously. The Government failed to do that. As a consequence, they ended up agreeing to everything that was vital to the EU in the withdrawal agreement and leaving everything about the future trade, security and political agreement that is vital to the UK to fall into a thin wish list, with words such as “the parties envisage”, “the parties will explore”, “the parties will use their best endeavours”.

The truth is that the real negotiations that will affect our economic life and our citizens’ future security have not yet properly begun. Look at the provisions for data protection: we have lost our place on the European Data Protection Board. The Prime Minister said in Munich that staying on it was one of her objectives so that we could continue to influence the rules and development of the general data protection regulation regime that we had been so influential in setting up. We will still have to comply with the scheme, but under the political declaration the EU will “start the assessments” of whether it should recognise the UK as a fit regime and will endeavour to reach a decision by 2020.

It is the same with REACH and the chemicals regulations: these are areas in which the EU is leading the world and in which we were leading the EU. No longer—our chemicals industry has spent more than half a billion pounds registering more than 6,000 chemicals with the EU’s database. The Government are now asking it to re-register every single one with our own Health and Safety Executive because we will no longer have access to that EU database. It is the same for financial services, where we are talking about equivalence, not even mutual recognition: the EU will start assessing whether it can declare our regulatory and supervisory regime is equivalent only after the withdrawal date. Then it says that it will try to reach a decision before the end of June 2020. Well, how very good of it.

The hon. Member for East Surrey (Mr Gyimah) spoke with great clarity and from his own bitter experience of negotiating with the EU when he advised the House:

“We must be clear-eyed as we go into these negotiations because they have been set up for failure. The EU will manage the timetable, it will manage the sequencing of the negotiations, it will set the hurdles and it will tell us when we can progress to the next stage. That is what happened in the first phase of the negotiations and that is what will happen in the second phase. We will always be in a position in which we have to walk away or fold”.

The hon. Gentleman was clear about what he thought would happen, from his own experience of negotiating Galileo. He said:

“we will always fold because the clock will be ticking.”—[Official Report, 5 December 2018; Vol. 650, c. 920.]

I agree. If we give the green light to the Prime Minister’s proposals tomorrow, we will end up not with the unique agreement that the future framework dangles before us, but with a free trade agreement dictated to us by the EU. We will have a long and difficult road to a future trade agreement that will not solve the economic problems we face or heal the divisions in our society. In the weeks since the Government called a halt to this debate, the US ambassador put to bed any idea of a quick and massive trade deal with the Americans. I do not usually find myself in agreement with the Trump Administration, but the assessment made in Washington that there will be little scope for a major trade deal with the United States is one with which I wholly concur.

The future political framework sets out that

“the United Kingdom’s commitments on customs and regulatory cooperation, including with regard to alignment of rules, would be taken into account in the application of related checks and controls”.

There is nothing remarkable there, really—it is what we in the Opposition have been pointing out for a very long time. If we want a strong trade relationship, the facility of market access must be proportionate to regulatory alignment.

[Ruth George]

Does my hon. Friend agree that the problems of regulatory alignment with very different actors such as the United States of America and the EU, with which we will both seek to do a free trade agreement, will make it extremely difficult for us to conclude agreements with both? We will have to prioritise one over the other. The USA has asked for access to our internal health markets and says that we will have to align our food standards down to theirs, so our having to choose might be a very good thing.

[Barry Gardiner]

I am pleased that I gave way to my hon. Friend, who has said what it is critical to understand on both sides of the House: we cannot simply have deals with everybody that are as good with everybody. We will have to pick and choose.

For my own part, I have never been star-struck by the prospect of a trade agreement with the USA; even under President Obama, it wanted us to weaken our food standards so that it could increase access for American agri-foods to the UK.

--- Later in debate ---

[Ruth George (High Peak) (Lab)]

It gives me pleasure to follow the hon. Member for Witney (Robert Courts).

The debate on our relationship with the EU has been dominated today by slogans and emotion, but it is actually about our trade arrangements, which are a very practical matter. It is business that is most affected, and what amazes me is that this Government, who constantly preach to those of us on the Opposition side of the House about not being on the side of business, never sat down with businesses to work out what they needed from our deal with the EU.

I have sat down with the businesses in my constituency, both individually and at business summits, to see what they want from our deal, and they have a wide variety of concerns. The biggest is regulatory divergence, the threat of which is already preventing companies in my constituency from tendering for contracts. They are worried about tariffs and import duties, which raise their costs, and about losing EU funding in grants and loans from the European Investment Bank, which have already reduced from £7 billion a year to just £2 billion in 2017 and will restrict investment in our businesses even more. They worry about the cost and paperwork of visas, making it harder and more expensive to access skills and for their people to move around Europe. They worry about access to the single euro payments area and the VAT information exchange system. These may be boring issues, but they are very real and very practical for all our businesses. They worry about losing their access to free trade not just with the EU but with the 65 countries to which they get preferential free trade access, with a further 25 agreements due to take effect. They also worry about friction at our borders, which will make just-in-time production impossible and lead to late payments if contracts cannot be fulfilled in time.

It is no wonder that the small and medium-sized businesses in my constituency are in despair. Several have already had to set up offices in, and transfer jobs to, EU countries to continue bidding for contracts. It was also reported last week that the banking sector has already moved almost £1 trillion out of the UK, equating to 10% of its assets. The longer we go on with no practical deal in sight, the more businesses will continue to move. So far, we have been cushioned against the full economic impact of the leave vote by the drop in the value of the pound, but we have started to see inflation creeping up and things are becoming more expensive.

Our deal with the EU affects not only businesses but people. Yes, a majority of people voted in 2016 to leave the European Union, and I respect that, but this Government did not respect those people enough to ask them what they wanted from that deal. I asked all the voters in High Peak what they wanted, and half of those who voted leave wanted to stay in a customs union and half wanted access to the single market. The Government have not listened to them, and we have ended up with a deal that is not a deal. It is simply a stopgap until the end of next year and provides no certainty for the future. The only certainty is years of wrangling over a final deal, as the Conservative party wrangles over who its next leader will be and the potential leaders offer alternative versions of our final deal. The Prime Minister can give us no commitments about that deal. She has opted out of leading us into it.