Last week, the Chancellor delivered the autumn statement and, thanks to work done since 2010, the fundamentals of the UK economy are strong and we approach EU exit negotiations from a position of strength. Of course there will be ups and downs during the process, but the hard data since the referendum have been far better than many expected or predicted, and growth is forecast to be steady. In the third quarter, UK GDP grew by a half per cent., employment reached an all-time record high, business investment rose by 0.9% and retail sales grew by 1.9%. In the three months to October, companies from Jaguar Land Rover to GlaxoSmithKline have increased investment. The UK is well placed to deal with challenges that may arise from exiting the EU, and ready to seize the opportunities, too.
At the annual general meeting of the all-party parliamentary group on wholesale financial markets and services on Tuesday night, the Chancellor of the Exchequer gave a very public endorsement of a transitional regime for the financial sector beyond the two-year Brexit negotiations. On a scale of one to 10, how closely does the Secretary of State agree with the Chancellor?
On a scale of one to 10, I will give that number when I hear what the Chancellor says myself, rather than hear that routed through the hon. Gentleman. The substantive point—transition—is material. We have said that the first thing to determine is the endpoint and the outcome. Whether we need a transition will be dictated by that in the first instance. As I said earlier to the hon. Member for Wolverhampton North East (Emma Reynolds), what transition means is itself a moot point.
May I return to the question of EU nationals? Home Office figures released this morning indicate that the number applying for permanent residency in the UK has increased by 50% in the quarter since the referendum. The Brexit Secretary keeps returning to the question of people’s opportunity to apply for leave to remain. Does he not recognise that that process is not automatic, costs money, is complex and is not guaranteed? Will he not simply do what the British public want and give them the right to stay?
Frankly, the hon. Gentleman allows me to reiterate the important point I made earlier. [Interruption.] I will get to the issue of leave to remain. By the time we get to the end of the process, five out of six European nationals who are here already will have the automatic right. The hon. Gentleman got that wrong—when it comes down to it, it is effectively automatic. After six years, people get the right to citizenship, which is important.
The hon. Gentleman is right that we would like to resolve this in a fast, expeditious and comforting manner for the individuals concerned, but we have a responsibility to 1 million British citizens abroad, and we must protect them as well.
The Government fully recognise the contribution that tourism makes to our economy and communities in all parts of the UK. Foreign visitors contribute £22 billion to our economy. There were record numbers of overseas visitors each month from July to September—10.7 million in total. I thank my hon. Friend and neighbour for hosting a roundtable with some of the key players in the hospitality sector, which I attended last week shortly after attending the Tourism Industry Council. As the Prime Minister has said, we are confident that our exit represents opportunities for growth in tourism, and we will work closely with the industry to achieve them.
That will be part of the great repeal Bill. If there is any amendment, I would think it would be done through primary legislation in the House.
My hon. Friend is entirely right: there will be no second referendum.
Our intention is to seek the best possible access to the European market, and to provide similar access for Europeans to this market. That is the basis upon which we are approaching the negotiations.
I can confirm that. We had a debate very recently in which that point was reiterated several times.
I recommend to the hon. Gentleman the comments of the shadow Chancellor, who said that Britain should grasp the opportunities available and use Brexit to transform society. Sadly, the shadow Brexit Secretary does not help.
On the question of the port services regulation, does my right hon. Friend accept that it is opposed by the Government, the Opposition, the trade unions and all port employers? The issue is about to be decided by the European Parliament and the Council of Ministers. Does he agree that it should be voted against?
My hon. Friend is entirely right. The regulation is not designed for the British system. We intend to oppose it, but sadly it will be carried by a qualified majority vote.
The OBR, the IMF, the Bank of England, the National Institute of Economic and Social Research and the London School of Economics all say that Britain’s share of world exports will fall post-Brexit. Does that not show how empty the Government’s rhetoric is about us being a global leader in world trade?
The hon. Lady should be very wary about taking economic assumptions underpinning a forecast as a statement of what is going to happen. The outcome after the Brexit process is over will depend very much on the deal we strike. That will be a good deal and there will be an increase in the amount of world trade we take.
Major pharmaceutical investors, such as Eli Lilly in my constituency, use a common EU system for medicine regulation in clinical trials to help British patients to gain access to the best treatments in the world. What work is the Minister doing to ensure that the decades-long co-operation with the EU is maintained after Brexit not just for the benefit of companies but for the benefit of patients?
I assure my right hon. Friend that we will be looking very carefully at that. As I said earlier, no decisions have yet been made about the future location of the European Medicines Agency. Until we have left the EU, the UK remains a member with all the rights and obligations that membership entails. The Medicines and Healthcare products Regulatory Agency continues to play a full role in all procedures of the EU medical device regulatory framework.
What priority has the ministerial team given to achieving continued tariff-free access and continued membership of the single market?
Those are two different things. As I said earlier, we give very high priority to both tariff-free access and access without tariff barriers, at least no more than there are already—there are plenty. That may or may not include membership of the single market, but it is achievable by a number of different methods.
The fishing industry has never fully recovered from the sell-out in the original negotiations to enter Europe. Can Ministers assure me that the fishing industry will have a much higher priority in this set of negotiations?
I can assure my hon. Friend that the fishing industry is at the forefront of our considerations. We have already had several meetings with the industry’s representatives and will continue to do so.
Businesses across a range of sectors in my constituency are concerned about their ongoing ability to attract and retain skilled labour as a consequence of Brexit. Will the Secretary of State say what he is doing both to reassure businesses that in future there will be the opportunity for skilled labour to migrate to this country, and to retain people who are already considering leaving now?
The function of my Department and this strategy is to bring back the control of migration to the British Government and the British Parliament. That will be exercised in the national interest. That means that we would expect to see pretty free movement of highly talented labour and, in other aspects of the economy, it is not in the national interest to cause labour shortages. Therefore, businesses should be aware that this is not shutting the door; it is taking back control.
On reciprocal rights for United Kingdom and EU citizens, does the Secretary of State agree that the Prime Minister is absolutely right to be seeking an early resolution, and to be already speaking with individual member states?
My hon. Friend is exactly right and that is why we have taken this strategy. I hope that, at the end of the day, there will be unanimity so we can get early movement.
Since 2014, Scottish small and medium-sized enterprises have received over €21 million in funding through Horizon 2020. What assurances can the Minister give that firms will be eligible for equivalent funding before and after 2020?
As the hon. Lady knows, the Treasury has already given strong assurances up to 2020, beyond the period of our exiting the EU. That is an important signal to SMEs, universities and others that they should continue bidding for the scheme. The current EU budget and the framework for Horizon 2020 runs only up to 2020.
On the principle of humanitarian assistance to the involuntarily delayed, I call Mr Henry Smith.
My hon. Friend is entirely right. On the day we leave the EU, we will be in perfect alignment with the rest of the EU regulations, directives and so on, which gives us a strong, solid base for moving forward with negotiations.
The Prime Minister, in an attempt to set the right tone for negotiations, has offered an early agreement on the status of EU nationals living in the UK. Is the Secretary of State disappointed that, in a petulant post-referendum response from the EU Commission, this offer has been refused, and will he assure us that, should this hard line continue, there will be no lack of resolve on the Government’s part to detach us from the chains of the EU?
The Government will not be so easily put off, although the hon. Gentleman is quite right. It would have been better if we had got a better response from the EU—but I will not say anything rude about those involved. One of the interesting disciplines of the next two years is that I will be polite to everybody.
Preserving the habits of a lifetime, I feel sure.
The agricultural and food sectors are incredibly significant in the Corby and east Northamptonshire economy, employing thousands of local people. What steps are Ministers taking to engage fully with these sectors to make sure that their needs are totally understood?
My hon. Friend is entirely right. We hold regular meetings, both with our colleagues at the Department for Environment, Food and Rural Affairs and with the various stakeholders in the industry. Only yesterday, I and the Minister of State, Department for Environment, Food and Rural Affairs, my hon. Friend the Member for Camborne and Redruth (George Eustice), held a roundtable at my Department to discuss these very issues.
A major retailer has raised with me whether they would continue to invest in the north-west because of potential tariffs. What comfort can the Minister give to such businesses?
Interestingly, one of the first business meetings I had was in Blackburn, at the invitation of the former MP for the area, Jack Straw. We are clear that we are seeking tariff-free, barrier-free access, and we—I certainly, as a northern MP—have the interests of industry throughout Britain, particularly the north, very much in mind.
Order. We must now move on.