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Trade and Customs Agreement

Volume 624: debated on Thursday 27 April 2017

14. What discussions he has had with the Secretary of State for International Trade on securing a comprehensive trade and customs agreement which provides the exact same benefits which the UK receives as a member of the single market and customs union. (909885)

I think it is me again, Sir. This question was due to be linked with Question 10. The ministerial team have frequent discussions with colleagues across Departments, including the Department for International Trade, on our future relationship with the European Union. One of the Government’s key objectives in the negotiations is to secure a mutually beneficial customs agreement. We are also committed to pursuing a bold and ambitious free trade agreement of greater scope and ambition than any such agreement before it.

In the circumstances, perhaps I should be glad to get any answer. Does the Minister agree with the International Trade Secretary that it needs to be easier to hire and fire workers in the UK?

Our commitment to the security of workers’ rights has been well stated many times—indeed, we actually held a debate in Government time to ensure that that point was well made—and I am surprised that the hon. Gentleman should raise the issue yet again.

The Minister of State, as a near constituency neighbour, will know that car manufacturing is a vital part of the Shropshire economy. Will he give an undertaking to my constituents today that he will ensure that any free trade agreement will protect car manufacturing not only in Shropshire, but throughout the west midlands and the United Kingdom?

A free trade agreement would clearly be of huge benefit not only to Land Rover in Shropshire, but to many other motor manufacturers around the country. As I have said, we are seeking an ambitious free trade agreement that will provide a host of opportunities right across the world for our manufacturers.

The Minister will know that paragraph 19 of the European Council’s draft guidelines for the negotiations on the future EU-UK relationship makes it clear that there must be

“a level playing field in terms of competition”,

with the same social and environmental standards. Does the Minister agree with that principle, and is he therefore be happy to see it embedded in the agreement?

First, these are the draft guidelines; the final guidelines will not be issued until 29 April. They are the guidelines under which the European Union wants us to operate the discussions, but it remains to be seen what our response will be.

Although my hon. Friend the Member for Gainsborough (Sir Edward Leigh) and I are of one mind, we have two questions—and only one knighthood.

The Government are right to seek a continuing free trade agreement with the European Union: it will be in the interests of the European Union as well as in ours, and it will be the first, best outcome. However, Ministers cannot admit what I think is quite likely, which is that politics may trump economics and that there may be no deal. Will they therefore confirm that in those circumstances we will go to a good, second-best outcome, which is trading on most favoured nation terms, as do the European Union’s most successful partners—the USA, China, Japan and Russia? It would mean an average tariff of 4%, which is relatively small beer compared with a 15% improvement in competitiveness because of the exchange rate, while saving £10 billion a year, which is equivalent to a 7% tariff on our exports.

Let me say quite clearly that the Government’s ambition and intention are to achieve the best possible free trade agreement with our EU partners. However, our position is also that we expect to negotiate toughly and—unlike Labour’s, our position will be made clear to the European Union—that we are prepared to walk away from the negotiating table if it is not possible to achieve a deal that suits us.

When the Secretary of State gave evidence to the Exiting the European Union Committee, he told me that the Government had not undertaken any economic assessment of the impact of Brexit since he had been in his post. Will the Minister update the House on whether there has been any progress, and when it comes to publishing the Government’s final deal, will he ensure that it includes an economic assessment of the impact of that deal and an economic assessment of the impact of no deal, so that my constituents and the country can make up their minds themselves about whether no deal is indeed better than a bad deal?

The Department has carried out an in-depth assessment right across 50 sectors of the economy. We have made it clear, however, that it is not in the national interest for us to produce a running commentary on the way in which we are developing our negotiating position, and that will remain the case.