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Single Market

Volume 616: debated on Tuesday 25 October 2016

11. What assessment his Department has made of the potential effect on the economy of the UK no longer having access to the single market. (906792)

The UK will leave the European Union and will introduce control of migration between Britain and the EU. Working with officials across Government, the Treasury continues to undertake a range of analyses to inform the UK’s position for the upcoming negotiations and we have made it clear, I am afraid, that we are not going to provide a running commentary, but we do want the best outcome for the UK and that means pursuing a bespoke arrangement that will allow our companies maximum access to the European market.

The Chancellor’s predecessor had many a failed target and plan, one of which was a target of £1 trillion in exports by 2020, a target that is nowhere near being reached even with full access to, and membership of, the single market. Meanwhile other countries such as Germany currently export more than we do to China and other growth markets. Does the Chancellor agree that the failure of the Government to improve the UK’s export performance has left us unable to take full advantage of opportunities outside the EU and more vulnerable to—

Order. I think the hon. Lady should leave a full version of her question in the Library of the House.

The Government can of course support and enable exporters, but we cannot do their job for them. It is for British exporters to make their businesses competitive and to go and sell their wares around the world, but we will do everything we can to support them in that endeavour.

Does my right hon. Friend agree that unless, bizarrely, the European Union were to impose trade sanctions on the UK, there would be absolutely nothing to prevent us from having access to the single market when we leave the EU?

My hon. Friend is right in the sense that every nation that is a member of the World Trade Organisation, as we are, has the right to access other members’ markets on WTO terms. However, WTO terms would be quite challenging for some of our industries. For example, in the automotive industry, WTO terms imply a 10% tariff on cars entering other markets.

The Chancellor will know that West Yorkshire is the beating heart of the manufacturing economy in this country, but my manufacturing leaders, and the EEF, feel left out of the loop in relation to their future after Brexit. Can he reassure them, because they are very disturbed about the future?

I can certainly reassure the hon. Gentleman that manufacturing industry is very much in the forefront of our thinking as we approach these negotiations. I am sorry that I have not had a chance to go to West Yorkshire, but I have been engaging with businesses in all sectors of the economy, including many businesses from the north that have attended round-tables in Downing Street over the past few weeks to set out their concerns so that we can take them properly into account.

In welcoming my right hon. Friend’s robust stance on this matter, may I suggest that as there is a large balance of payments deficit with Europe, specifically in the automotive sector, it would be in the EU’s interest to strike a decent deal with us, as he intends to do?

Our intention is to get the very best deal we can with our neighbours in the European Union to allow access for our companies to trade their goods and services into the EU. However, I would just caution my hon. Friend: to look at the economic arguments alone is to miss an important point. There is a political debate going on here in Europe, and European politicians are very conscious of the impact of Britain’s departure on their political project. I do not think we can be certain that economics alone will dictate the course of this negotiation.