John Bercow
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UK/EU Future Economic Partnership
John Bercow Excerpts(6 years, 8 months ago)
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The Prime Minister (Mrs Theresa May)
With permission, Mr Speaker, I shall make a statement on our future economic partnership with the European Union.
In December, we agreed the key elements of our departure from the EU, and we are turning that agreement into draft legal text. We have made clear our concerns about the first draft that the Commission published last week, but no one should doubt our commitment to the entirety of the joint report. We are close to agreement on the terms of a time-limited implementation period to give Governments, businesses and citizens on both sides time to prepare for our new relationship, and I am confident that we can resolve our remaining differences in the days ahead. Now we must focus on our future relationship: a new relationship that respects the result of the referendum, provides an enduring solution, protects people’s jobs and security, is consistent with the kind of country that we want to be, and strengthens our union of nations and people. Those are the five tests for the deal that we will negotiate.
There are also some hard facts for both sides. First, we are leaving the single market. [Interruption.] In certain ways, our access to each other’s markets will be less than it is now. We need to strike a new balance. However, we will not accept the rights of Canada and the obligations of Norway.
Secondly, even after we have left, EU law and ECJ decisions will continue to affect us. The European Court of Justice determines whether agreements that the EU has struck are legal under the EU’s own law. If, as part of our future partnership, Parliament passes a law that is identical to an EU law, it may make sense for our courts to look at the appropriate ECJ judgments so that we both interpret those laws consistently—[Interruption] —as they do for the appropriate jurisprudence of other countries’ courts. However, the agreement that we reach must respect the sovereignty of both our legal orders. That means that the jurisdiction of the European Court of Justice in the United Kingdom will end. It also means that the ultimate arbiter of disputes about our future partnership cannot be the court of either party.
Thirdly, if we want good access to each other’s markets, it has to be on fair terms. As with any trade agreement, we must accept the need for binding commitments, so we may choose to commit some areas of our regulations, such as state aid and competition, to remaining in step with the EU’s.
Finally, we must resolve the tensions between some of our objectives. We want the freedom to negotiate trade agreements around the world. We want control of our laws. We also want as frictionless a border as possible with the EU, so that we do not damage the integrated supply chains on which our industries depend, and do not have—[Interruption.]
Mr Speaker
Order. A very considerable level of orchestrated heckling is taking place in the House, including heckling from some Members who will doubtless later grin at me and seek to catch my eye. They may find that there is a clash between the two. We should set a good example that will impress our dear and loyal Canadian friends, and indeed, for that matter, the British people. The House can rest assured that I will allow the maximum possible questioning and scrutiny on this occasion, as I always do, but the Prime Minister is entitled to be heard with courtesy.
The Prime Minister
There are tensions in the EU’s position, and some hard facts for it. The Commission has suggested that an “off the shelf” model is the only option available to the UK, but it has also said that in certain areas, none of the EU’s third-country agreements would be appropriate; and the agreement envisaged in the European Council’s own guidelines would not be delivered by a Canada-style deal. Finally, we need to face the fact that this is a negotiation, and neither side can have exactly what we want. However, I am confident that we can reach agreement, so I am proposing the broadest and deepest possible future economic partnership, covering more sectors and involving fuller co-operation than any previous free trade agreement.
There are five foundations that must underpin our trading relationship: first, reciprocal binding commitments to ensure fair and open competition, so that UK business can compete fairly in EU markets and vice versa; secondly, an independent arbitration mechanism; thirdly, an ongoing dialogue with the EU, including between regulators; fourthly, an arrangement for data protection that goes beyond an adequacy agreement; and, fifthly, free movement will come to an end. But UK and EU citizens will still want to work and study in each other’s countries, and we are open to discussions about how to maintain the links between our people.
We then need to tailor this partnership to the needs of our economies, and we should be absolutely clear this is not cherry-picking. Every free trade agreement has varying market access depending on the respective interests of the countries involved. So if this is cherry-picking, then so is every trade arrangement. What matters is that our rights and obligations are held in balance.
On goods, a fundamental principle in our negotiating strategy is that trade at the UK-EU border is as frictionless as possible, with no hard border between Northern Ireland and Ireland. This means no tariffs or quotas, and ensuring that products only need to undergo one series of approvals in one country. To achieve this, we will need a comprehensive system of mutual recognition. That can be delivered through a commitment to ensure that the relevant UK regulatory standards remain as high as the EU’s, which, in practice, means that UK and EU regulatory standards will remain substantially similar in future. Our default is that UK law may not necessarily be identical to EU law, but it should achieve the same outcomes. In some cases, Parliament might choose to pass an identical law. If the Parliament of the day decided not to achieve the same outcomes as EU law, it would be in the knowledge that there may be consequences for our market access. And we will need an independent mechanism to oversee these arrangements, which I have been clear cannot be the European Court of Justice.
We also want to explore the terms on which the UK could remain part of EU agencies, such as those critical to the chemicals, medicines and aerospace industries. That would mean abiding by the rules of those agencies and making an appropriate financial contribution, and the UK would also have to respect the remit of the ECJ in that regard. Parliament could decide not to accept these rules, but with consequences for our membership and linked market access rights.
Lastly, to achieve as frictionless a border as possible and to avoid a hard border between Northern Ireland and Ireland, we also need an agreement on customs. The UK has been clear it is leaving the customs union. The EU has also formed a customs union with some other countries, but those arrangements, if applied to the UK, would mean the EU setting the UK’s external tariffs, being able to let other countries sell more into the UK, without making it any easier for us to sell more to them, or the UK signing up to the common commercial policy.
That would not be compatible with a meaningful independent trade policy, and it would mean we had less control than we have now over our trade in the world, so we have set out two potential options for our customs arrangement: a customs partnership where, at the border, the UK would mirror the EU’s requirements for imports from the rest of the world for those goods arriving in the UK and intended for the EU, or a highly streamlined customs arrangement, where we would jointly implement a range of measures to minimise frictions, together with specific provisions for Northern Ireland. Both would leave the UK free to determine its own tariffs, which would not be possible in a customs union.
Taken together, the approach we have set out on goods and agencies, and the options for a customs arrangement, provide the basis for a good solution to the very specific challenges for Northern Ireland and Ireland. My commitment to this could not be stronger: we will not go back to a hard border between Northern Ireland and Ireland; nor will we break up the United Kingdom’s own common market with a border down the Irish sea. As Prime Minister, I am not going to let our departure from the EU do anything to set back the historic progress made in Northern Ireland; nor will I allow anything that would damage the integrity of our precious Union. The UK and Irish Governments and the European Commission will be working together to ensure we fulfil these commitments.
That approach to trade in goods is important for agriculture, food and drink, but here other considerations apply. We are leaving the common agricultural policy and the common fisheries policy, and will want to take the opportunity to reform our agriculture and fisheries management and regain control of access to our waters. I fully expect that our standards will remain at least as high as the EU’s, but it will be particularly important to secure flexibility here to make the most of our withdrawal from the EU for our farmers and exporters. We will also want to continue to work together to manage shared stocks in a sustainable way, and agree reciprocal access to waters and a fairer allocation of fishing opportunities for the UK fishing industry.
On services, we have the opportunity to break new ground with a broader agreement than ever before. For example, broadcasting and financial services have never previously been meaningfully covered in a free trade agreement. We recognise that we cannot have the rights of membership of the single market, such as the country of origin principle or passporting, but we should explore creative options, including mutual recognition, to allow broadcasting across borders. My right hon. Friend the Chancellor will set out more detail on financial services later this week. We will also look to agree an appropriate labour mobility framework that enables travel to provide services in person, as well as continued mutual recognition of professional qualifications. Finally, our partnership will need to cover agreements in other areas, including energy, transport, digital, civil judicial co-operation, a far-reaching science and innovation pact, and cultural and educational programmes.
We cannot escape the complexity of the task ahead. We must build a new and lasting relationship, while preparing for every scenario, but with pragmatism, and calm and patient discussion, I am confident we can set an example to the world. Yes, there will be ups and downs over the months ahead, but we will not be buffeted by the demands to talk tough or threaten a walk out, and we will not give in to the counsels of despair that this simply cannot be done—for this is in both the UK and EU’s interests. As we go forwards, foremost in my mind is the pledge I made on my first day as Prime Minister: to act not in the interests of the privileged few, but in the interests of all our people, and to make Britain a country that works for everyone. My message to our friends in Europe is clear. You asked us to set out what we want in more detail. We have done that. We have shown we understand your principles. We have a shared interest in getting this right, so let us get on with it. I commend this statement to the House.
Jeremy Corbyn (Islington North) (Lab)
I thank the Prime Minister for the advance copy of the statement. Twenty months have passed since the referendum, and a year has passed since article 50 was triggered—20 wasted months in which the arrogance of some in the Cabinet, who said that it would be the easiest deal in history, has turned into debilitating in-fighting. We have seen set-piece speech after set-piece speech, yet the Prime Minister still cannot bring clarity to the negotiations or certainty to British businesses or workers.
The Prime Minister’s speech on Friday promised to unite the nation, yet it barely papered over the cracks in her own party. Even her own Minister for the Cabinet Office said that it was only “an ambitious opening bid”, so who knows where we will end up? The European Union published a detailed legal document last Wednesday; despite the criticisms rightly made from across the House, where is anything comparable in detail and focus from the UK Government? The reality is that the speech failed to deliver any clear and credible solution to the problems we face. This Government’s shambolic approach to Brexit risks taking us down a dangerous road. This Government’s reckless strategy is putting our jobs and manufacturing industries at risk.
The Prime Minister’s only clear priority seems to be to tie the UK permanently to EU rules that have been used to enforce privatisation and block support for industry. [Interruption.] The Prime Minister now seems to be saying that we will lose some access to European markets and that Britain will be worse off. [Interruption.]
Mr Speaker
Order. I said that the Prime Minister must not be subjected to orchestrated heckling and attempts to shout her down. The same goes for the Leader of the Opposition. Let me give notice now to some of the people who are shouting loudly: if you want to persist in that behaviour, do not be surprised if you do not catch my eye in the questioning. If you want to be called, behave; if you wish to persist with misbehaviour, frankly, you might as well leave the Chamber now.
Jeremy Corbyn
Thank you, Mr Speaker.
Does the Prime Minister now agree that the Brexit Secretary was wrong when he told the House of Commons in January last year that a Tory Brexit deal will deliver the “exact same benefits” as the single market and the customs union? If so, why has it taken her so long to say so?
In her speech, the Prime Minister said that she wants “good access”. Can she make it clear today whether that means tariff-free access? The Prime Minister said that she wants a “customs arrangement”, but does that cover all sectors of industry or just some? Which will be excluded, and with what consequences in terms of tariffs and other barriers? Does the Prime Minister still think that a good trade deal can easily be reached with the Trump presidency after its unilateral imposition of tariffs on steel and aluminium imports, which follows its disgraceful attack on Bombardier?
It is possible to retain the benefits of the single market and the customs union. The problem is that we have a Prime Minister who is being held hostage by the extremes in her Cabinet who are willing to sacrifice parts of British business and industry and willing to risk a hard border in Northern Ireland to carry on with their ideological crusade to shrink the state, slash investment and bring about an economic race to the bottom.
The Prime Minister said in her speech that, in areas like workers’ rights and the environment,
“we will not engage in a race to the bottom in the standards and protections…There is no…political constituency in the UK which would support this”.
That simply is not true. In the recent past, we have seen the Secretary of State for International Trade write:
“It is intellectually unsustainable to believe that workplace rights should remain untouchable”.
The Leader of the House has said:
“I envisage there being…no regulation whatsoever—no minimum wage, no maternity or paternity rights, no…dismissal rights, no pension rights”.—[Official Report, 10 May 2012; Vol. 545, c. 209.]
The Foreign Secretary has described EU-derived employment legislation as “back-breaking”, and in its leaked assessments, the exit analysis from the Department for Exiting the European Union stated that there could be opportunities for the UK in deregulating in areas such as the environment and employment law. There clearly is a political constituency that supports a race to the bottom on workplace rights: it is called the Cabinet.
On the crucial issue of Northern Ireland, the Prime Minister offered no real solution. Instead, she rehashed an already discredited Government idea to use a mix of technology and good will to ensure no hard border—an idea that the Brexit Secretary has already conceded is mere “blue-sky thinking”. Does the Prime Minister not understand that this is not just about cross-border paperwork and trade? There is also the issue of maintaining the social peace that has endured for 20 years. Will she condemn the ridiculous remarks made by the Foreign Secretary last week, when he not only compared the Irish border to that of Camden and Islington, but wrote her a letter saying it was not the British Government’s responsibility to prevent a hard border?
There are some things we do welcome in the Prime Minister’s statement—[Interruption.] I knew Members would be pleased. For one, it is clear that she has now abandoned her ridiculous red line regarding any role for the European Court of Justice, which opens the door to her welcome adoption of Labour’s position of the UK remaining a key part of the European Union agencies that are of benefit to this country.
As I set out last week, Labour’s priority is to get the best Brexit deal for jobs and living standards to underpin our plans to upgrade the economy and invest in every region and every community in this country. The Conservative Government’s reckless austerity is damaging our country, and the increasing sense of drift over Brexit risks increasing that damage. Now the Prime Minister admits that her Brexit plan will reduce our access to European markets and leave people worse off. We have had 20 months of promises, soundbites and confusion. However people feel about Brexit, it is clear to them that this Government are nowhere near delivering a good deal for Britain.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
I thank the Prime Minister for early sight of her statement.
It is now over 18 months since the referendum. At a time when the United Kingdom should be putting the finishing touches to its negotiating position, this Government are still struggling to find paper on which to write down their wish list. It was nothing short of a humiliation for the Government last week that when the EU presented a draft legal text for withdrawal, the Prime Minister gave a speech expounding empty rhetoric one more time.
No single market and no customs union mean that there is no solution that would prevent a hard border in Ireland. The Government’s own analysis has revealed that growth would be hit by up to 9% in such an extreme scenario. Scottish Government analysis revealed that Scots could face a loss of £2,300 per person each year, with our GDP around £12.7 billion lower by 2030. That is the reality of the Government’s plans.
Last month, as the Prime Minister gathered with her Cabinet at Chequers, there was one glaring absence. Where was the Secretary of State for Scotland? Scotland’s voice was not heard at those crucial Cabinet discussions. There has been a flagrant disregard by this Government of the nations that make up the United Kingdom. The Scottish Secretary might not have been invited to Chequers, but rest assured that Members on these Benches will be in this Chamber, speaking up for Scotland at every opportunity—[Interruption.]
Mr Speaker
Order. A very sizeable number of Scottish Conservative Members are waving at the right hon. Gentleman. Mr Ross, you are leading with your flag, at which you have very considerable experience. Mr Blackford, what I would say to you is: KBO, man—just keep going.
Ian Blackford
Thank you, Mr Speaker.
We will settle for nothing less than continued membership of the single market and customs union. Scotland voted to stay in the EU. We cannot—we will not—be ripped out of the single market and customs union against our will. We will defend the jobs that the Prime Minister is prepared to trade away. We in Scotland must determine our own destiny. We are a European nation and we intend to stay one. Will the Prime Minister finally recognise that staying in the single market and the customs union is the least damaging outcome for jobs and prosperity?
Several hon. Members rose—
Mr Jacob Rees-Mogg (North East Somerset) (Con)
Thank you, Mr Speaker, for that compliment.
Does my right hon. Friend, having made such a generous offer to the European Union, expect more generosity than it has shown so far? I think particularly of the aggression in the draft legal text of suggesting a solution to the Irish problem that would have been in contradiction to the confidence and supply agreement with the Democratic Unionist party, threatening the existence of the Government. Does my right hon. Friend think that it is right for the European Commission to behave in such a high-handed fashion?
Several hon. Members rose—
Mr Speaker
Ah yes. Another very well-behaved young fellow, possibly now at the mid-point of his parliamentary career, but I am sure not beyond it—I call Sir Edward Leigh.
Sir Edward Leigh (Gainsborough) (Con)
Thank you for picking the succulent cherry at last, Mr Speaker. It seems to many of us that the Prime Minister’s calm good sense is moving the country from the gloomy valley of “Project Fear,” peopled by the shades of former Prime Ministers, into the hopeful uplands of “Project Reality”. What could be more unifying and more Conservative than her pragmatic approach of proceeding by sensible, pragmatic and moderate steps to re-establish the sovereignty of Parliament?
The Prime Minister
I have referred to the interests that both the UK and the European Union have in our maintaining a close relationship with Euratom in the future. Membership of Euratom is an integral part of membership of the European Union, and we are coming out of Euratom as we are coming out of the EU, but, as the hon. Lady will know, we are making arrangements to ensure that we can maintain that close relationship.
Rebecca Pow (Taunton Deane) (Con)
Thank you, Mr Speaker. I was just about to give up.
Much as I love gardening, I do not grow cherries, but if I did, I would want to pick them, and if I had a surplus I would want to trade them, openly and fairly. Does the Prime Minister agree that we need a balance, supporting a wider range of sectors than other free trade agreements? Does she agree that that is in both our interests and that we must have fair and open competition for everyone?
The Prime Minister
I congratulate my hon. Friend on her entrepreneurial spirit. She is absolutely right. We want to ensure that there is fair and free competition. I have referred to binding commitments in relation to state aid and competition because I think it important that if we are to have that free trade, we are able to do so on a basis that is truly, fairly competitive.
Mr Speaker
It is nevertheless of great interest to learn about the gardening habits of the hon. Member for Taunton Deane (Rebecca Pow). I feel duly uplifted by that discovery. I simply say to the hon. Lady: never, never give up.
Wes Streeting (Ilford North) (Lab)
At the time of the referendum, both Tony Blair and Sir John Major warned of exactly the scenario faced by the Prime Minister now in relation to the Northern Ireland-Republic border, which is presumably why a majority of people in Northern Ireland voted to remain in the European Union. If everything is as plain sailing as the Prime Minister suggests, why has the Foreign Secretary written her a memo entertaining the prospect of a hard border? Given that he has undertaken to publish that memo but has not found time to do so, perhaps the Prime Minister could prod him—or even jab him as hard as necessary—to get that memo out of him as soon as possible.
Mr Speaker
Order. That is very discourteous behaviour. Let us hear from another well-behaved individual. Ah, yes: Jeremy Lefroy.
Jeremy Lefroy (Stafford) (Con)
Thank you very much, Mr Speaker. I am not sure that my family would say that.
May I thank my right hon. Friend for two things in particular? The first is her absolute upholding of the United Kingdom—our United Kingdom—and our internal trade within our United Kingdom. The second is her point about the frictionless border. In my area of the west midlands, that is incredibly important. We are manufacturing exporters, and we rely on “just in time” deliveries to enable us to export our fine products around the world.
The Prime Minister
The point about the importance of the integrated supply chains that we now see across the UK and the rest of the European Union has been made to me, and to others in the Government, by businesses. That is precisely why I said what I did in my speech about regulatory standards. Many businesses have made it clear that, to maintain those supply chains, they need to be able to operate on the basis of the same regulatory standards. That is why we want to have that frictionless border, and why we have made proposals to do just that.
Mr Speaker
Let us hear from another very well-behaved person—in fact, a cerebral academic, I think. Nick Thomas-Symonds.
Nick Thomas-Symonds (Torfaen) (Lab)
I am most grateful for the compliments, Mr Speaker.
The Prime Minister has said that alignment is possible in two ways, either by having the same rules or by having the same consequences flowing from different rules. Which of those two categories will the automotive sector fit into, given that so many jobs in the country depend on it, not least in my constituency?