Leaving the EU: No-deal Alternatives

Stephen Hammond Excerpts

Wednesday 21st February 2018 Westminster Hall

[Suella Fernandes]

The hon. Gentleman pre-empts my comments. The implementation period has been set out and explained in considerable detail by the Secretary of State, and I will come to it later. If he will bear with me, I will deal with his point in my later comments.

We believe that it is reasonable to expect that we can secure an ambitious new economic partnership with the EU, because we start from an unprecedented position: one of convergence. We have the same rules, regulations and values as the EU. That starting point is unmatched by any of the other options explored today—a vital distinction, which makes the prospects of securing a mutually beneficial agreement high. That is why the Government continue to seek that new deep and special partnership with the EU.

Given that much of this morning’s debate has centred on the scenario where the UK leaves the EU without a deal, it is worth setting out the Government’s position on that. As the Secretary of State and my colleagues have clearly explained, the Government are not aiming for—nor do we want—a no-deal outcome. We want to secure a new free trade agreement with the European Union that benefits both parties, our citizens and our economies, and that respects the result of the EU referendum.

There are grounds for optimism that that is eminently possible. We have achieved considerable success in the first phase of the negotiations. We have secured joint agreement on issues previously thought to be insoluble. I am confident that we can build on that success with an agreement about the implementation period, as set out recently by the Secretary of State in his speech at Teesside, and agree on the future relationship with the EU.

As my departmental colleague, my hon. Friend the Member for Wycombe (Mr Baker), the Under-Secretary of State, said in response to a question asked by my hon. Friend the Member for Eddisbury in the House:

“We approach the negotiations anticipating success and a good deal for…the UK”.—[Official Report, 1 February 2018; Vol. 635, c. 957.]

However, let me be clear: although it is in the interests of both the UK and the EU to secure that good deal, we have a duty to plan for all outcomes, including one where no agreement is reached. The Government continue to prepare responsibly for a range of results from the negotiation, including the unlikely scenario in which no agreement can be reached. In reflection of those preparations, the Treasury has already given Departments nearly £700 million to prepare for Brexit, and is making an additional £3 billion of funding available over the next two years to ensure that we are prepared for every outcome.

[Stephen Hammond (Wimbledon) (Con)]

The Minister remarked that the Government are, quite rightly, looking at all potential outcomes. In the unlikely scenario that there is no deal, the Government must surely prepare for what would ameliorate the economic damage that has been shown by the Government’s economic impact studies. Would it not be sensible to make sure that we have preparations for other solutions as well, one of which could be EFTA-EEA?