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Commons Chamber

Volume 642: debated on Thursday 14 June 2018

House of Commons

Thursday 14 June 2018

The House met at half-past Nine o’clock

Prayers

[Mr Speaker in the Chair]

Business before Questions

University of London Bill [Lords]

Motion made, That the Bill be now read a Second time.

Object.

Bill to be read a Second time on Thursday 21 June (Standing Order No. 20(2)) .

Oral Answers to Questions

Exiting the European Union

The Secretary of State was asked—

Rights, Standards and Protections

1. What steps he is taking to ensure that there is no change to (a) rights, (b) standards and (c) protections derived from the EU after the UK leaves the EU. (905829)

The UK has a long-standing tradition of protecting rights and liberties. The decision to leave the European Union does not and will not change that. The European Union (Withdrawal) Bill retains the rights, standards and protections derived from EU legislation and treaties as they exist immediately before our departure from the EU. That will ensure that, so far as is practicable, all rights will apply as they did before exit. I have no doubts about the abilities of this House to uphold our rights, standards and protections after we leave the EU.

Given the Prime Minister’s insistence that the Government have committed not to roll back workers’ rights, can the Minister explain why Conservative MPs voted against yesterday’s Lords amendment to protect employment, equality, health and safety, consumer and environmental rights and standards after Brexit?

Our commitment to workers’ rights is unwavering. On the hon. Lady’s specific point, the fact is that, if that amendment had been taken forward, it would have severely damaged our capacity to have a functioning statute book as we left the European Union.

Is not it right that we in this country are not able to exercise some of the rights that people would wish us to exercise? The freedom to be able to transport live animals for slaughter is a freedom that we would prefer not to have. As soon as we leave the European Union, we will be able to take control of those things for ourselves.

My hon. Friend raises a point on which I am sure that many of us have received correspondence. I look forward to the day when it is within the powers of this House to change those rules.

Is not it right that we have a customs union that protects workers’ rights, with the right to allow state aid, the right to allow public ownership, and the right to be able to ban outsourcing and competitive tendering should the Government wish to do so?

If you will allow me, Mr Speaker, I would like to pay tribute to the hon. Gentleman’s capacity to use parliamentary procedure to bring an enormous range of issues into his question. I suggest that he might wish to call an Adjournment debate if he feels that he has not had sufficient opportunity during the passage of the withdrawal Bill to debate all the issues that he raises.

In reference to the honour of the hon. Member for Jarrow (Mr Hepburn), I would simply point out that rights, standards and protections do amount to a pretty broad category, and he has behaved, as usual, in a perfectly orderly, if innovative, manner.

Does my hon. Friend agree that one of the most fundamental rights is to decide who determines our legislation and where that legislation comes from, and that that is exactly the right that we are protecting when we listen to what the people have told us and withdraw from the European Union?

Yes. The fundamental political right is that power should derive from the consent of the governed. In leaving the European Union, we will re-establish that consent on a basis that has been traditionally understood, which is that it is this Parliament that will determine the laws of the United Kingdom.

The Equality and Human Rights Commission has said that the loss of the charter of fundamental rights will lead to a significant weakening of the current system of human rights protections in the United Kingdom. Given that that is the advice of the Equality and Human Rights Commission, what specific steps is the Minister taking to prevent the loss of human rights protections following the loss of the charter of fundamental rights?

We disagree with the commission. The charter of fundamental rights is only one element of the UK’s human rights architecture. Most of the rights protected in the charter are also protected in domestic law by common law, the Human Rights Act 1998 or other domestic legislation. The fact of the matter, which the hon. and learned Lady does not seem to wish to accept, is that this House has voted repeatedly on this very question.

Does the Minister accept that animal welfare and environmental protection are extremely important to British agriculture? What guarantees will the Government put in place to make sure that there is no diminution in that regard? He need not take my word on this—he can take the word of the National Farmers Union.

We have had wide-ranging debates about animals and animal rights, and the hon. Gentleman will know that that is a subject of continuing interest for the Government. The Government have tabled amendments on environmental protections, and the Secretary of State for Environment, Food and Rural Affairs has brought forward a range of proposals on animal rights. I look forward to us carrying those forward.

Mr Linden, you are now much preoccupied with consulting your electronic device, but if you are still interested in contributing to our proceedings, let us hear you.

Mr Speaker, the Secretary of State’s departmental colleague, Lord Callanan, wants to

“scrap the working time directive, the agency workers’ directive, the pregnant workers’ directive and other barriers to actually employing people”.

Which one does the Minister think should happen first?

The Government’s position is that the UK firmly believes in strong labour protections while also embracing the opportunities that arise from a changing world of work. We do not need to stay aligned with the EU to have strong protections for workers, and a key tenet of the Government’s industrial strategy is continually to improve labour standards in domestic legislation.

Northern Ireland Border

2. What recent discussions he has had with Cabinet colleagues on border infrastructure in Northern Ireland after the UK has left the EU. (905830)

The Secretary of State and I have regular discussions with ministerial colleagues about how to avoid a hard border between Northern Ireland and Ireland, and the joint report in December made it clear that the UK is committed to avoiding any physical infrastructure or related checks and controls. By accepting Lords amendment 25, the House has reiterated that position.

I am grateful for that reply, but does the Minister’s reassurance fly in the face of some of the facts on the ground? The Chief Constable of the Police Service of Northern Ireland has stalled the sale of three police stations on the border and submitted a business case for up to 300 officers. Have the Minister and his Cabinet colleagues discussed that proposal and will they be supporting it?

The UK Government could not have been clearer about our commitment to ensuring no hard border between Northern Ireland and Ireland. Although the funding settlement for the PSNI is a devolved matter for the Northern Ireland Administration, which we all want to be restored as soon as possible, the UK Government do not intend to allocate any resources for policing a hard border after our exit from the EU, or for the furtherance of any steps that would contradict or undermine the clear commitments we have made.

Were we to leave without an agreement, we would not put a border there, so if anyone wants one, they would have to put it there, wouldn’t they?

My right hon. Friend raises an interesting point, but it is our intention to leave with an agreement. We have been clear that our first priority is to secure the absence of a hard border through the future relationship between the UK and the EU.

Our Government, the Dublin Government and Brussels have all said that they do not want a hard border. Does the Minister have an understanding from the EU that a hard border, whoever might want it, would be totally impossible to police because of the hundreds of crossing points that everyone in Northern Ireland would use, even if someone tried to implement a hard border on the ground?

The hon. Gentleman speaks with considerable experience and knowledge of the issue. He is absolutely right. That is why, from what I have seen and conversations I have had, London, Dublin, Belfast and Brussels have all been clear about the need to avoid the creation of a hard border.

When we talk about the border between Northern Ireland and Ireland, are we putting the cart before the horse? Surely we need to focus on UK-EU customs arrangements so that we know exactly where we are. We buy 850,000 German cars every year, and £3 billion of flowers and bulbs from the Dutch. Irrespective of what Wetherspoons did yesterday, we still drink more Champagne than the French and will continue to do so.

My hon. Friend is right about the advantages of ensuring frictionless trade between the UK and the EU, and that is the Government’s policy.

Would not this Parliament, and the entire island of Ireland, be reassured by what the Minister is saying about a border if the Government had allowed more time for Members of the House to discuss these hugely serious issues? What will the Government do about that, and will the Minister discuss with his Cabinet colleagues how we discuss these issues in Parliament, rather than listening to the waffle of the Minister?

I seem to remember spending quite a lot of time discussing that issue in Committee, including being harangued by the hon. Gentleman to ensure that the Bill contained a specific reference to the Belfast agreement. Thanks to the changes we have made, and the acceptance of Lords amendment 25, there is now that specific reference, which I am sure he will welcome.

I remind Members that the Prime Minister said that we are leaving the EU and it is our responsibility to find a solution to the Northern Ireland border. On Tuesday, the Government accepted the Patten amendment and rightly committed us to no controls, no checks and no infrastructure on the border in Northern Ireland. How on earth can the Government ensure that that will happen without the UK, Northern Ireland, Ireland and the EU being in, as a minimum, a customs union?

As the hon. Lady knows, we are committed to ensuring customs arrangements that allow for no physical infrastructure at the border. As she also knows, we have put forward our own proposal for a backstop in the EU negotiations, which is an important element of that. We want to secure this for the future relationship between the UK and the EU.

Customs Arrangements

3. What discussions he has had with Cabinet colleagues on future customs arrangements as part of the UK’s negotiations to leave the EU. (905831)

16. What discussions he has had with Cabinet colleagues on future customs arrangements as part of the UK’s negotiations to leave the EU. (905846)

The Secretary of State and I regularly discuss exit issues with Cabinet and ministerial colleagues, including customs. The Prime Minister is clear that we are working towards a customs solution that keeps trade with the EU as frictionless as possible, avoids a hard border between Northern Ireland and Ireland, and establishes an independent trade policy.

Can the Minister tell us how many times the Government’s two working groups on future customs arrangements have met, and how close are they to finally reaching a conclusion between the Government’s two unworkable and undesirable customs options?

Those working groups are meeting regularly to advance the work on both of the options. As agreed yesterday, the Government will provide by 31 October a statement to Parliament on the steps taken to negotiate a customs arrangement with the EU.

Does the Minister agree with the president of the Confederation of British Industry, who warned yesterday:

“If we do not have a customs union, there are sectors of manufacturing society in the UK which risk becoming extinct”?

No, I agree with the Conservative and Labour manifestos that said that we should be leaving the customs union and ensuring that we have an independent trade policy, but we also want to deliver the frictionless trade that businesses up and down our country need.

In the discussions with the European Union, have the Government made it clear that we would not tolerate a solution that put the customs border down the Irish sea, or for that matter, between England and Scotland, as some others want to do?

My hon. Friend makes an excellent point. We have made that abundantly clear, and the Prime Minister has been very clear that no UK Prime Minister could accept such a solution.

Yesterday, I had the pleasure of meeting the chamber of commerce from Portugal. While, of course, it was sorry to see us leaving the European Union, its biggest concern with regard to the customs union was how long it was taking for the entire process to be put together—I hasten to add that we then had a potted history about how Parliament works, sadly. Can I ask the Minister to ensure that, whatever comes through this, we send a message to the Portuguese that they are absolutely with us and trading with us in the future?

Absolutely. My hon. Friend makes an important point. Portugal is our oldest ally in the world—in fact, I think the longest-standing alliance in the world is between England and Portugal—and we want to ensure that the trade between us can continue to flourish, as we do with the trade between the UK and many other EU member states.

Does the Minister think that the sight of Ministers and Whips negotiating in real time their position on the customs union, either from the Dispatch Box or on the Benches, helps or hinders the UK’s negotiating position with the rest of the European Union?

The Government are determined to present the right answer on customs to make sure that we have the frictionless trade we all want to see between the UK and the EU. The sight of the Scottish National party abandoning their parliamentary responsibilities is perhaps not one that encourages confidence from anyone.

17. The director general warned that “opportunities are limited” and are“vastly outweighed by the costs incurred if the UK’s rules change so much that it reduces smooth access to the EU’s market.”Why then did the Government vote against Labour’s amendment for a new relationship with the single market based on shared regulations and common standards? (905849)

Half the Labour party seems to be voting against Labour’s amendments nowadays. We meet regularly with the CBI and with different business groups up and down the country. They are all very clear on the benefits of frictionless trade, and that is the policy of the Government.

The media inevitably focused on the personalities involved in the Cabinet row over a customs backstop last week, but it is the detail of that policy that really matters, so I ask the Minister a very simple question: are we to take from the fact that the Secretary of State and his other two colleagues are still in post that the Government’s position is not to accept, under any circumstances, a customs backstop that is not time-limited?

The Prime Minister has been clear that the backstop arrangements would be time-limited, but I say to the hon. Gentleman that the fact that our entire ministerial team is in post is a sign that our party is united, unlike the Labour party, which has now had 100—100!—resignations from its Front Benchers or Parliamentary Private Secretaries.

Not really an answer, Mr Speaker. Last week’s backstop paper only dealt with customs, but we know that a solution to the Irish border issue requires agreement on far more than that; it requires full regulatory alignment on goods to facilitate all aspects of north-south co-operation. Does the Minister accept that, and will the Government be making the case for full regulatory alignment on goods in future discussions with the EU?

As the hon. Gentleman will know if he has looked at the detail of the joint report, we are talking about alignment in those areas necessary for the functioning of the border and ensuring that there is no hard border. That does not mean full regulatory alignment across all areas; it means specific areas relating to agriculture and industrial goods that could otherwise result in tax at the border. We were clear in our presentations to the EU that there is further discussion to be had on that.

Withdrawal Negotiations

We reached agreement on more than three quarters of the legal text of the withdrawal agreement, locking down full chapters on citizens’ rights, the implementation period and the financial settlement. We continue to build on the progress of March, technical talks have continued and we are focusing on negotiating the right future relationship. These conversations are now well under way, with detailed discussions on future economic and future security partnerships.

In my latest meeting with Michel Barnier on Monday, we discussed a range of issues, from questions of the Northern Ireland protocol, which has just been discussed in the House, to product standards and market access. It was a productive and positive discussion. We will continue to work hard and at pace, and will set out further details in the Government White Paper in due course.

My constituents voted more than any others in the country to leave the European Union. In the past couple of days, this House has worked hard to deliver that. I know they will be grateful for all the Secretary of State’s work. Does he agree that there is no record anywhere in the world of an international negotiation in which a Parliament in place of a Government has delivered a successful micro-managed outcome?

My hon. Friend is exactly right. As we made clear this week on consideration of Lords amendments to the European Union (Withdrawal) Bill, we cannot accept amendments that allow Parliament to instruct the Government on what steps we should take in international negotiation because that undermines one of my three tests, and because such a move would be constitutionally unprecedented.

The current constitutional arrangements have served this country well for hundreds of years over thousands of treaties. Those who have argued for something different did not argue for the House of Commons to negotiate directly our accession to the European Union, or the Lisbon, Amsterdam or Maastricht treaties. It is rather odd that they make such an argument now.

In the light of the House’s rejection of Lords amendments on the European economic area and customs union, will my right hon. Friend now head to Brussels with renewed vigour to support many of my constituents who voted for Brexit, and who want the Government to get on and deliver the result?

I would hope that my vigour does not need renewal, but I will take my hon. Friend’s wishes as I am sure he meant them.

We had a constructive debate in both Chambers and I am pleased that we are now in the final stages of the Bill. This crucial piece of legislation is designed to deliver continuity of law after exit, and ensures that from day one we have a functioning statute book, which will give certainty to both individuals and business. We will build on the hard work at home and in Brussels, and continue to work towards a withdrawal agreement and future framework in October.

I concur with the comments of my Cornish colleague, my hon. Friend the Member for North Cornwall (Scott Mann). People in my constituency simply want the Government to get on and deliver the Brexit that they voted for. Will my right hon. Friend the Secretary of State confirm that the Government’s position remains that they will take back control of our borders? Will he therefore resist all calls for us to join the EEA, which would precipitate continued freedom of movement and not deliver what the majority of people voted for?

Yes. As my hon. and learned Friend the Solicitor General stated in yesterday’s debate on the Lords EEA amendment, continuing to participate in the EEA agreement beyond the implementation period means accepting all four freedoms of the single market, including free movement of people. In the last election, both main parties clearly said that they would not accept that. It is therefore clear that continuing to participate in the EEA agreement beyond the implementation period would not deliver control of our borders or our laws, which the British people voted for. That point was made by a number of Labour MPs in yesterday’s debate—the right hon. Member for Don Valley (Caroline Flint) is not here, and I do not often compliment her, but she made one of the best speeches of the day on exactly that subject.

Our proposals are designed to deliver the best access to the European market consistent with taking back control of our laws and borders. That is what we will do.

The Government’s proposal for a backstop in Northern Ireland did not include an approach on regulatory standards, which is presumably one reason why Michel Barnier, in rejecting it, said that it would lead to a hard border. Do the Government intend to submit a revised proposal to the EU negotiators before the June European Council?

The right hon. Gentleman is uncharacteristically inaccurate. Michel Barnier did not reject our proposal. He said in a tweet after his press conference that he would be discussing it with us, which he did on Monday.

The Government have rejected giving Parliament a meaningful voice in the Brexit deal, but does the Secretary of State recognise that the businesses we represent are crying out for some sort of clarity so that they can deliver on the investment that drives jobs in my constituency? When will he deliver that clarity?

Again—the hon. Lady is wrong. The Government have provided 250 hours of debate on this Bill alone, and there are probably a dozen other pieces of primary legislation, including the withdrawal agreement and implementation Bill later this year. There is a huge range of areas in which Parliament has had its say and will have its say. To come to the point about business investment, in the past year high-tech investment alone—the most important for our future in many ways—was three times in the UK that of any European country. Indeed, it was as much as the next three countries put together.

Political leadership in negotiations is clearly key to their success, but in response to a question I tabled, the Under-Secretary of State for Exiting the European Union, the hon. Member for Wycombe (Mr Baker), informed me that until last Monday the Secretary of State had met Michel Barnier only twice since December—once in February and once at a press conference in March. Two meetings in six critical months. Can the Secretary of State explain his absence? Does paralysis in the Cabinet leave him with nothing to say? Or has he simply been sidelined by officials closer to the Prime Minister?

Is it not wonderful to have the Labour party, of all people, accusing us on this? I am looking at the hon. Member for Huddersfield (Mr Sheerman)—don’t worry. I read a tweet only this morning in which the Labour Whips Office was celebrating the fact that only 75 Labour Members rebelled against the amendment yesterday.

I am slightly pleasantly surprised to see the Secretary of State still in his place—[Interruption.] I suspect that if I am surprised to see him in his place, the Secretary of State and the Prime Minister are significantly more surprised. Particularly as the negotiations go on to look at our future and long-term relationship with Europe, they will inevitably impinge significantly on matters that are properly and constitutionally devolved to the three devolved nations of this Union. This week, we saw the Government force through without debate provisions allowing Ministers unilaterally to remove and change the powers of those devolved nations. Will the Secretary of State tell us what assurances the people in the devolved nations can have that our interests will not be sold out during the next stage of the negotiations?

First, might I say that I am touched that the hon. Gentleman is pleasantly surprised that I am still here? I am very pleasantly surprised to see so many of his colleagues with him today.

On the important substantive question, the Government came up with a number of proposals during the course of the Bill which sought to arrange the mechanism by which powers are passed from the European Union through to the devolved Administrations. Those proposals were welcomed by the Welsh Administration but not by the Scots one. Nevertheless, we are continuing in our discussions with the Scots Administration to endeavour to come to an agreement, and while we are doing our work on the White Paper, we are also talking to them about the policy elements of that so they can have an input.

I remind the Secretary of State once again that it was not the Scottish Government who refused the legislative consent motion but the elected Parliament of Scotland. Four out of five parties agreed that the Government’s actions were not acceptable. Will the Secretary of State confirm that as the Government’s intentions stand, it would be perfectly possible for the Government to return from Brussels with a deal that substantially damaged the interests of the three devolved nations of this Union, and that the only option that Members of Parliament from those nations would have would be to accept that sell-out or to accept a car crash no deal? That is the Government’s intention just now, is it not?

I made it very clear from the beginning of the negotiation process and the policy creation process that we treat the interests of every nation in the United Kingdom extremely seriously and will defend them to the utmost of our ability. There will be a statement later from the Scottish Secretary on the Sewel convention.

Single Market: North-west Economy

5. What recent discussions he has had with Cabinet colleagues on the potential economic effect on the north-west of the UK leaving the EU single market. (905833)

The Department for Exiting the European Union is working with all Departments at both ministerial and official level to ensure that our preparations for exit from, and new partnership with, the EU are on track. We are committed to seeking the best possible deal for the United Kingdom—one that works for all the regions of the country, including the north-west. I was delighted to visit the region earlier this month, and meet local businesses to discuss their views on Brexit.

Despite the very positive work being done by organisations such as the St Helens chamber of commerce, the latest polling shows that confidence among businesses in the north-west has fallen by 22 points, to just 33%. I am intrigued to know to what the Minister attributes that; is it the fact that this Government’s chaotic and shambolic handling of negotiations means that there is a real anxiety among businesses that we will crash out of the single market with no deal?

I very strongly disagree with the hon. Gentleman’s analysis. During my visit to the north-west I was pleased to meet with thriving businesses that are looking forward to the economic opportunities flowing from Brexit, such as trading with an expanded global marketplace. Together with huge investment in the north-west, such as the Mersey Gateway bridge and the northern hub in Manchester, the port of Liverpool, for example, stands potentially to act as an expanded gateway for global trade. This week’s Office for National Statistics trade figures show that exports are rising—by 7% to the end of April—faster than imports. That is good news for ports like Liverpool, good news for the north-west region and good news for the country.

As well as the north-west, all other regions in the UK are important to the Union, including the devolved nations, so can my hon. Friend confirm that no area will be treated unfairly when we leave the EU?

Absolutely; the integrity of the United Kingdom is paramount as we pursue these negotiations. I am very encouraged by the Government’s commitment to securing a unique and mutually beneficial free trade agreement with the European Union that supports our businesses, our jobs and our economy.

Given that all the analyses show that Scottish GDP would fall by 2.9% in the least-worst scenario of our staying in the single market and the customs union when we leave the EU, what GDP figure are the Government working towards with their current negotiating position?

Let us look globally: we have an economy that has increased output—those are the CBI’s figures—we have the OECD upgrading growth forecasts for this year and next, and we have the lowest net borrowing in over a decade. That is a very different picture from that suggested by the predictions that were made two years ago. Let us base our position on facts, not scaremongering about the future.

Free Trade Agreements

6. What assessment he has made of the potential effect of the UK remaining in the customs union on its ability to negotiate new free trade agreements throughout the world. (905834)

8. What assessment he has made of the potential effect of the UK remaining in the customs union on its ability to negotiate new free trade agreements throughout the world. (905837)

9. What assessment he has made of the potential effect of the UK remaining in the customs union on its ability to negotiate new free trade agreements throughout the world. (905838)

We have been clear that the UK will be leaving the EU’s customs union and the single market in March 2019. Only by leaving the customs union and establishing a new and ambitious customs arrangement with the EU will we be able to forge new trade relationships with our partners around the world. If the UK were to remain in the customs union, we would be unable to implement our own trade deals or to set our own tariffs. That would not give us control over our trade policy and it would not be respecting the referendum result.

Any policy whereby Britain leaves the European Union but remains in the customs union would mean surrendering our trade policy to a third party, and would mean that we were required to open our markets to other countries without guaranteed reciprocal access to theirs. Does my hon. Friend agree that no independent, self-respecting nation could tolerate such a position?

I agree with my hon. Friend. A customs union creates an asymmetrical relationship. Turkey is an example of a country in a customs union with the EU but not in the customs union with the EU. The effect of that is that if the EU signs a free trade agreement with a third country—let us say, the US or Canada—goods from the US or Canada can enter Turkey tariff-free, but Turkish goods still face a tariff barrier in Canada or America, which puts Turkish businesses and exporters at a significant disadvantage. With free trade as the big prize for Brexit, Labour’s support for a customs union makes no sense at all.

I do not know whether you are a cider drinker, Mr Speaker, but say the word Somerset and you inevitably think of cider. Last week I held an event for the cider industry trade, to which I invited all the cider makers from Somerset. There was a great deal of positivity and emphasis on the fact that we can grow in the world market when we leave Europe. Does my hon. Friend agree that yesterday’s decision will help us negotiate unfettered and that that will benefit our south-west industries?

I agree with my hon. Friend. You may well agree, Mr Speaker, that cider is a delicious drink and, if I may be so bold, like me you may have had many a joyous occasion, perhaps in your teenage or university days, where the memories were enhanced precisely because of the consumption of cider.

I am very pleased that companies, particularly in my hon. Friend’s constituency and her region, have a can-do attitude to Brexit and are looking forward to increased global trading opportunities. Brexit presents those opportunities, especially for the food and drink industry.

When I have met elected representatives from places as far apart as Wellington and Washington, they have been very keen to do trade deals with the United Kingdom post-Brexit. Will the Minister confirm that that would not be possible if we remained part of the customs union?

Yes. Remaining in a customs union or the customs union with the EU would not be compatible with having a meaningful, independent trade policy. It would mean that we would have less control than we have now over our trading relationships with other countries. Neither leave nor remain voters would want that.

The hon. Lady has given an extremely clear and helpful answer, but the problem is that we have a lot of questions to get through and I want to accommodate colleagues. If all Ministers could be brief, that would be great.

Car manufacturing in this country is world leading, but the president of the CBI has said that if we leave the customs union it would become extinct. What contingencies do the Government have to replace the 800,000 jobs affected, including the 30,000 jobs in the north-east of England?

I disagree with the hon. Gentleman’s description. The automotive sector is one of our great success stories and the Government will continue to support it. Just this April, Vauxhall announced an investment of more than £100 million in its UK plant, to build the next generation of Vivaro vans. We are seeing more and more success in the sector. We have to support that, and that will be an ambition of our future trade agreement with the EU.

As well as the motor sector, the food sector has expressed concern that rules of origin in the supply chain could have a real impact post-Brexit if we are not part of a customs union. What is the Department’s approach? Is it considering a broader definition of “local origin”? How else will it help those sectors deal with rules of origin post-Brexit?

The hon. Lady is right to highlight the issue of rules of origin with regard to the sector. We want to ensure as limited friction as possible, with a tariff-free arrangement for goods, so that we have the integrated supply chains that are vital to the success of the sector.

Will the Minister comment on the Foreign Secretary’s analysis that the Government’s EU negotiations are heading for “meltdown”? Is that not just another example of the chaos and division at the heart of Government?

I think that the hon. Lady’s interpretation is incorrect. The Government are making—[Interruption.] Let us look at the progress the Government have made. We have agreed an implementation period. Led by the Prime Minister, we secured agreement in December on EU citizens, and we are now in the phase of talking about the exciting future relationship with the European Union. I am looking forward to the opportunities and success that will be led by this Government, not the predictions of failure.

EU Withdrawal: No Deal Preparations

It is in everyone’s interests to secure a good deal for both sides and we are increasingly confident that that can be achieved. As my right hon. Friend will be aware, we continue to implement plans for all scenarios. Some delivery has already become evident; more will become public over the coming weeks and months. As an example, I congratulate my colleagues in the Department for Business, Energy and Industrial Strategy, who have made progress on our preparations for exiting Euratom. The Nuclear Safeguards Bill has completed its passage through Parliament, and international agreements have been signed with the International Atomic Energy Agency and the USA, helping to ensure continuity as we leave Euratom.

I am pleased to hear that prudent preparation is being made for leaving without a deal. Does my hon. Friend accept, however, that to provide reassurance to business and the wider public—not to mention to inform our interlocutors in Brussels—the nature and extent of that preparation should be more widely communicated?

I hear my right hon. Friend’s case and I agree that it is prudent for all Departments to prepare for all possible outcomes. We will continue to engage with business to reduce uncertainty wherever we can. Over the next few weeks and months, our preparations for what is an unwanted contingency will become increasingly visible to him and the country.

Deal or no deal, will we still be members of Europol and the European arrest warrant this time next year?

We will be bringing forward and publishing our plans for the future relationship in due course.

EU Scientific Co-operation

11. What steps the Government are taking in their withdrawal negotiations to facilitate ongoing scientific co-operation between the UK and EU. (905841)

As the Prime Minister set out at Mansion House and reinforced at Jodrell Bank, the UK is committed to establishing a far-reaching science and innovation pact with the EU, facilitating the exchange of ideas and researchers, and enabling the UK to participate in key programmes alongside EU partners.

Ongoing co-operation is clearly in both our and the EU’s interest, but world-leading scientists often explain how they need to move to and fro between different countries in order to build knowledge. Will the Minister ensure that the visa system post Brexit will enable researchers to have that flexible mobility?

We have been very clear throughout the process that we want the UK to continue to be able to attack the brightest and the best and to be a magnet for key talent around the world. The announcement of the new start-up tech visas is a good indication of how UK immigration policy can contribute in this space.

The Minister mentions that we want to attract the brightest and the best but missed some of what the question was about, which is of great concern to my constituents in the University of Bristol: the free flow of researchers and scientists around the European Union and the exchange of knowledge. They, and scientific firms in my constituency, say that they are already struggling. What further clarification can he please give?

We have reached some important agreements already with regard to the implementation agreement and the continuation of our existing membership of Horizon during the whole period until the end of the multi-annual financial framework. We now want to secure the science and innovation pact, which we have been discussing in our meetings with the Commission, and those meetings have been constructive and positive.

As a trustee of the Liverpool School of Tropical Medicine, may I ask the Minister what assurances he can give me that the UK Government will provide at least as much funding, through whatever mechanism, after we leave the European Union as is now given to the universities and institutes around this country?

My hon. Friend asks me an interesting question, which is probably more appropriate for a Treasury Minister to answer, but I recognise its importance. The UK is stepping up investment in R&D with our target to ensure that 2.4% of GDP is spent on it. That will make us one of the leading countries in the world for investment in research.

The Rheumatoid Arthritis Pathogenesis Centre of Excellence in Glasgow relies not only on the movement of people and talent but on the movement of medical samples across borders. What will the Minister do to ensure that medical samples can travel unfettered across the EU after Brexit?

The hon. Lady raises a very important point. Having visited the university in Glasgow to talk about some of these issues, I recognise the world-leading research that takes place there. Of course we want to ensure that patients in the UK and the EU continue to benefit from the exchange between us. That is why we have talked not only about co-operation in science but about the benefits of the UK’s continued participation through associate membership of the European Medicines Agency.

International Business Community

12. What steps he is taking to ensure that the Government engage with the international business community during negotiations on the UK leaving the EU. (905842)

The ministerial team undertakes regular engagements with the international business community, both in the UK and abroad. In addition to regular visits to Brussels the ministerial team has undertaken 27 trips across EU member states this year. That is supported by business engagement conducted by our embassies.

I am grateful to the Minister for her reply. Over the past 50 years, considerable expertise has been built up in the North sea energy sector, which has led to enormous global export opportunities. What steps are the Government taking to ensure that that continues after we leave the EU, with particular emphasis on the emerging offshore wind sector?

The UK has been an active member of the North sea’s energy co-operation initiative since 2010. The aim is to explore the most cost-effective way of developing offshore grid infrastructure to exploit the considerable renewable energy resources in the North and Irish seas. The UK brings significant experience and expertise to this co-operation. Working together with other countries through this initiative will enable us to maximise the considerable business opportunities in the emerging offshore wind sector.

Business is getting more nervous as it watches the Government negotiating more with themselves than with the European Union. Can the Minister confirm that it is Government policy to ensure that there are no new impediments to trade for our world-leading service industries, such as financial services, education, the creative industries and others?

Considerable amounts of data have been released recently showing an increase in confidence in various sectors, whether it is retail, services, manufacturing or construction. We have to build on that, which is why the Government are committed to reducing barriers to trade to enable our businesses, our exporters, our manufacturers and our service sector to thrive outside the European Union.

The Minister referred to the offshore wind sector. She visited my constituency, the port of Immingham and neighbouring Grimsby a couple of weeks ago. Does she agree that the facilities there for serving the offshore sector, and the wider trade deals that could follow Brexit, are greatly to the advantage of northern Lincolnshire?

I was delighted to visit the ports of Immingham and Grimsby at my hon. Friend’s invitation. I was very impressed by the energy estuary, which is located there, and by the wealth of experience and output. It is the energy powerhouse for our nation.

The Conservatives are already arguing about what promises were made, or not made, at the Dispatch Box on Tuesday night; the Cabinet cannot agree a position on the EU; and the Brexit Secretary threatens to resign every other week. What message does that send to the international business community?

Well, let us look at the facts. As I said, CBI data shows an increase in output generally, the OECD revised its forecasts upwards for this year and next, and there is record low unemployment throughout the country. Those are signs of an economy that is confident and optimistic about the future, not one such as the hon. Gentleman describes.

May I gently say that with ingenuity, the hon. Member for Banff and Buchan (David Duguid) could shoehorn in his question about fisheries policy, which is a matter of significant interest to the international business community? He is not obliged to do so, but we can happily give him a go.

18. Thank you for that, Mr Speaker. I understand that the Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Wycombe (Mr Baker), met the National Federation of Fishermen’s Organisations yesterday. Can he confirm today that he shares the ambition of the NFFO and the Scottish Fishermen’s Federation that when we leave the EU, we will have actual, as well as legal, authority over all fishing activities in UK waters, out to 200 nautical miles? (905850)

The Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Wycombe (Mr Baker), was pleased to meet the National Federation of Fishermen’s Organisations yesterday. He is keen to keep engaging with the sector. We have been absolutely clear that when we leave the EU, we will leave the common fisheries policy. Indeed, from 2020 we will be negotiating as an independent coastal state. Let me reassure my hon. Friend the Member for Banff and Buchan (David Duguid) that our plans for exit from the common fisheries policy are not affected by the backstop discussions.

Local Government Funding

13. What discussions he has had with Cabinet colleagues on the potential effect on local government funding of leaving the EU. (905843)

My Department continues to work closely with the Ministry of Housing, Communities and Local Government, and with other Departments across Government, to ensure that local government is prepared for the potential effects of EU exit. This work includes assessing any funding issues for local government.

Plymouth City Council’s new Labour council has established a Brexit scrutiny committee to look at the impacts of Brexit on vital public services. What conversations is your Department having directly with local authority leaders to help it to understand the impacts on the vital public services that many millions of people rely on?

Both the Secretary of State and I have met many local authority leaders around the country. We are keen to engage with them so that we understand their concerns about EU exit. Importantly, the UK will continue to participate in the 2014 to 2020 EU programmes until they close, and, thereafter, EU structural funding will be transferred through a UK shared prosperity fund. Comments from local authorities will be very well received.

UK Citizens’ Rights

15. Whether the EU has agreed to reciprocate in full to UK subjects living in the EU the rights that the Government have offered to EU citizens living in the UK. (905845)

The UK has reached an important agreement on citizens’ rights with the EU that is fully reciprocal, but it is of course important to recognise that it is the responsibility of member states, rather than of EU institutions, to implement some aspects of that agreement.

Do the reciprocal rights that the EU is meant to have agreed extend just to the country in Europe in which UK citizens are living, or do they extend right across all 27 member states?

My hon. Friend makes an important point. We are clear that we would like to secure onward movement rights for UK citizens living in the EU, and we will return to this issue in the next phase of negotiations. In several other areas, it is right that the rights are reciprocal between the UK and the EU and that they apply throughout the whole EU.

I appreciate the Minister’s comments about UK citizens living abroad, but does he agree that we still need clarity for EU citizens living here? The David family in my constituency have lived and worked here for 20 years. Both their children were born here, but although one of them is entitled to a UK passport, the other is not. They have now had five different pieces of conflicting advice from UK departments about their passports and citizenship. Is the Minister prepared to meet me to talk about their case and to see whether we can get some clarity on it?

I would be very happy to meet the hon. Lady to discuss this case. We are working closely with Home Office colleagues to ensure that the new settled status system is clearer and easier to use than what has gone before.

Topical Questions

Before I turn to my departmental responsibilities, may I say that today is a sombre day, one year on from Grenfell? I am sure that I speak on behalf of the whole House when I say that our thoughts are with those who suffered bereavement and loss a year ago.

This has been an important week in our policy area. It was Parliament that gave the people a decision on our membership of the EU, by way of a referendum, and it is Parliament that is carrying out their instruction. The European Union (Withdrawal) Bill returns to the Lords as a much studied, much debated and, I think, much better piece of legislation. It demonstrates the Government and Parliament delivering what the people voted for, and I know that Members in the other place will have taken note of the decisions taken and views expressed in the Commons in the past few days.

The agricultural sector in England has had the opportunity to be consulted on the Department for Environment, Food and Rural Affairs’ plans for the industry post-Brexit. As the whole UK prepares to leave the EU, does my right hon. Friend agree that farmers in Scotland would be best served if the Scottish National party, rather than continuing its tactic of manufacturing grievance with this Government, consulted Scottish famers on Scotland’s future agricultural policy?

Leaving the common agricultural policy will deliver significant opportunities for farming, as the consultation to date is already showing. My hon. Friend is right that there has been consultation with the farming sector in England, but the Government are committed to working closely with the devolved Administrations and stakeholders to deliver an approach that works for the whole UK, as I said earlier, and that reflects the needs and circumstances of Scotland, Wales, Northern Ireland and England. That being said, I agree entirely with my hon. Friend: all of us who are involved in these procedures, bar those of the Scottish nationalist party, have learned the lesson that if we actually want to make things happen, we have to turn up and deal with the issues.

May I join the Secretary of State in his comments on Grenfell on behalf of the Opposition and, I am sure, the whole House?

It is good to see the Secretary of State in his place. On the back of an earlier question, I have done a quick tally, and I think that this year he has threatened to resign more times than he has met Michel Barnier.

On Tuesday, to avoid a defeat in this House, the Prime Minister offered a series of apparent concessions to her Back Benchers. Yesterday, after a meeting with the Prime Minister, the right hon. and learned Member for Beaconsfield (Mr Grieve) told Sky News that

“we are going to get a meaningful vote on both deal and no deal. I have no doubt about it”.

Later, the Solicitor General told the “Today” programme:

“I have a problem both constitutionally and politically with a direction given by Parliament”.

Who is right?

My responsibilities are with the Government, so of course I am entirely with the Solicitor General—that follows automatically. Let me put in front of the House what I said during that debate, which is that whatever proposal is put back to the Lords, it has to meet three criteria: first, that we do not bring about the overturning of the referendum result; secondly, that we do not undermine the ongoing negotiation with the European Union; and, thirdly, that we do not change the constitutional structure that has served this country well for hundreds of years, under which the Government negotiates and Parliament passes its view at the end of the process.

Let me press the Secretary of State a little further, because this is a really crucial issue in the process, so we must get it right. Will he say clearly, yes or no—will the Government’s amendment, to be published later today, make it clear that, should the proposed article 50 deal be voted down, it would be for Parliament to say what happened next, not the Executive?

I am afraid that the right hon. and learned Gentleman will have to wait to see the document when it is published. As he says, it will be published later today.

T2. As I think my right hon. Friend is aware, I voted to remain in the referendum, and I do not think that he did. Like us, the country is split, and the leave vote won. Does he agree that unity and strength are the only way forward and that holding a second referendum would be expensive madness leading to further division and strife? (905854)

Not only would it lead to further division and strife, as my hon. Friend puts it, but it would also create an incentive for the European Union to give us the worst deal possible, and surely that must trump all other points.

T3. Most British manufacturing businesses, including businesses in my own constituency in Bath, are part of complex European supply chains. Why does the Minister think that leaving the customs union and the single market—she does not need to repeat that it is the will of the British people—is good for British manufacturers? (905855)

Since the referendum, and contrary to the predictions at the time of the referendum, we are seeing an increase in exports outpacing imports, an increase in manufacturing, and an increase in sales in particular sectors, such as the car industry. We must build on those successes. Leaving the customs union will enable us to develop an independent trade policy beyond the EU and with other countries, and leaving the single market will give us power and control over our rules and regulations.

T6. Can the Minister confirm that, as the UK will be able to sign free trade agreements during the implementation period, we will have taken control of our trade and so will be able to enjoy all the benefits that that offers from March 2019? (905858)

My hon. Friend makes a good point. The green section of the withdrawal agreement includes an express indication that, during the implementation period, we will, for the first time in 40 years, have the freedom to negotiate, sign and ratify trade agreements with third countries, opening our markets for British manufacturers, exporters and businesses, which is a surefire way of generating growth, jobs and prosperity.

T4. In response to my previous question, I think the Minister said that there would be no additional Government resources for the Northern Ireland police force. Will he confirm that additional resources for any contingency would be met from within its existing budget? (905856)

I think the hon. Lady may have misheard me. I said that there would be no resources spent on going against our commitments on the border. That is the point I was making. Obviously, resources allocated by the Government are really a question for the Treasury and the Northern Ireland Office.

T7. Does my hon. Friend agree that coming up with a plan soon to enable seasonal or short-term labour from the EU or the wider world in the form of, say, a seasonal agricultural worker’s visa or seasonal worker’s visa would be really helpful to businesses? We do not necessarily need to keep them waiting until we actually exit the EU, and it would mean they could plan. (905860)

We have been engaging with businesses up and down the country to build a strong understanding of the challenges and opportunities that Brexit brings, particularly in relation to immigration, and that will help us to design a new immigration system that ensures that employers have access to the skills they need. I am happy to tell my hon. Friend that I discussed her proposal with the Minister for Immigration very recently. The Government are alive to my hon. Friend’s arguments, and we will continue to consider them as we deliberate.

T5. Other than the Sewel convention, what is there to stop the Government repeating their unilateral rewriting of the constitution and devolution power grab in other Brexit-related legislation? (905857)

I am very glad that we have legislation now that ensures that the devolution system is respected. That has been recognised by the devolved Government in Wales, and I still think that there is an opportunity for the devolved Government and the devolved Parliament in Scotland to come forward and recognise that fact.

T8. Does my hon. Friend agree that ending freedom of movement will at long last give us control over who can come to this country, and allow us then to create an immigration system that works for science, without limitless immigration from the EU? (905861)

My hon. Friend, who is a great champion of science in the UK, makes a very important point. We want to continue to attract the brightest and best to the UK, particularly those looking to work in our world-leading science and innovation sector. As I said earlier, the announcement of the new start-up visas is an important step in showing that a UK immigration policy can do that.

May I ask the Secretary of State directly whether he thinks that he and his team have the right level of competencies to conduct these difficult negotiations? Is not it about time that he thought very carefully about bringing in some new talent? I would suggest perhaps David Miliband, Gordon Brown and even the former Chancellor of the Exchequer. They might actually help him to do a job that needs attention to detail and real competence.

The attention to detail that delivered the financial crisis of 2008 is precisely what we do not want.

The people of Willenhall and Bloxwich voted enthusiastically and overwhelmingly to exit the EU. Will the Minister assure them that they will get a Brexit deal that they recognise as Brexit?

I can give my hon. Friend that assurance. We are determined to take back control of our laws, borders and trade policy. We will ensure that we go forward as a normal, independent country, where people know that it is this Parliament that governs their lives.

If the Government are so confident of achieving this wonderful trade deal with the EU—outwith the single market and the customs union—that they keep talking about, why are they so frightened to put that deal to the public to see whether it is the kind of Brexit that they expected?

The hon. Gentleman really must learn to pay attention during these questions. The simple truth is that creating such an incentive for the European Union would actually be the one thing that undermined the negotiations.

In any divorce, the assets are divided. Including the £39 billion divorce bill, from the day we joined in 1973 to the day we leave, we will have given £250 billion in today’s money to this organisation. What proportion of the assets are we going to get back?

First of all, I refute the idea that this is a divorce. I prefer to think that we are loving siblings who have decided to grow up and move out into the house next door. We have reached a fair financial settlement, and I am pleased that we have.

The Secretary of State will understand that the natural consequence of proceedings on Tuesday was that amendments regarding Northern Ireland, the devolved regions and the border did not get the thoughtful or considered reflection that they should have. Will the Minister use his influence to ensure that, should those amendments come back to this House, any programme motion will be framed in such a way that thoughtful and considered reflections can be made during our proceedings?

The hon. Gentleman raises a good point. We did spend quite a lot of time discussing some of these issues during the earlier stages of the Bill. I think the amendment that was eventually passed reflected some of that debate, as well as the very good debate in the Lords. But of course these are very important issues, and we will look carefully at the programme motions for any further stages.

Yesterday’s remarks by the outgoing head of the CBI are very serious and need to be taken in that context. Do the Government have any plans to provide a detailed response to those remarks, given the importance of them to the auto industry and many other industries?

We take all remarks from business and business leaders very seriously. We have to make an assessment as to what is in the best interests of the whole country. We also have to balance—for example, with respect to customs union—the interests of existing companies and companies that may make the most of opportunities in the rest of the world when we get freedom from the common commercial policy. My direct answer to the end of my hon. Friend’s question is that we will be publishing a White Paper in the near future, and the matter will be addressed in that White Paper.

Can the Secretary of State confirm that any separate regulatory alignment deal for Northern Ireland will be available to Scotland?

As we said in our proposal to the European Union, the backstop proposal was for the whole of the United Kingdom, and everything else will be for the whole of the United Kingdom, with minor variations that currently exist in Northern Ireland.

Will the Secretary of State join me in appreciating the irony inherent in the news today that even businesses set up by Members of his own party are announcing their intention to move business to Ireland and are warning their investors of the uncertainties of Brexit?

Let us also focus on the recent investment decisions that we are hearing about. We have a record number of foreign direct investment projects in the UK. We have just heard that Amazon will be investing more money to create 2,000 or so jobs in the UK. Multinational global companies in pioneering sectors are choosing the UK, after our decision to leave the European Union, to build their businesses and grow jobs.

The Dutch Government are offering advice on Brexit to Dutch businesses. The Irish Government are offering grants to Irish businesses affected by Brexit. In the absence of anything from this Government, the North East England chamber of commerce has produced a checklist. The Secretary of State seems to think it is unreasonable for businesses to demand greater clarity or progress, but could he at least offer them some advice?

We have done a huge amount to engage with business. As I said in response to earlier questions, we will reveal more of our plans in the next few weeks and months, and as we do that, we will engage in more detail with businesses right across the country.

The UK Government have long used the fact of being in the EU as an excuse for not implementing the international code of marketing of breast-milk substitutes. Will the Government make it their policy to adopt that code after we leave the EU?

The hon. Lady has raised that point before in these questions. She will appreciate that that is not necessarily a question for this Department, but she points to an area in which the UK may have greater flexibility in the future, which we should welcome.

The Secretary of State listed a series of conventions and mandates that he wants to see respected in the Brexit process. I notice that he did not mention the mandate of the 62% of people in Scotland who voted to remain and the 20-year-old Sewel convention, which determines the relationship between this place and the Government in Scotland. Does he seriously think that ripping up the 20-year-old devolution settlement on this island is a price worth paying for a hard Tory Brexit?

As I have said, we are absolutely committed to the devolution settlement. The arrangements we have reached respect that devolution settlement. In a week in which we have seen a lot of debate about meaningful votes, it is a shame that the SNP colluded in a series of meaningless votes, three times voting on the same thing twice, which ate into the time available to debate these issues.

Galileo Programme

(Urgent Question): To ask the Secretary of State for Defence if he will make a statement on the UK’s future participation in the Galileo Public Regulated Service.

The Government have been clear that our preference is to contribute fully to Galileo as part of a deep security partnership with the European Union and that negotiations should be allowed to run their course. That includes UK involvement in the design and development of Galileo’s encrypted signal for use by Governments, the Public Regulated Service.

On 13 June at the European Space Agency Council, member states agreed to proceed with the procurement of the next phase of Galileo. UK companies are not eligible to bid for those contracts. By forcing through that vote while excluding UK companies from the contracts on security grounds, the European Commission has put all of this at risk. The Commission also published slides setting out the EU’s response to the UK’s technical note on Galileo published on 24 May, which explained our requirements for future participation in the programme. The EU proposal does not meet UK defence and industrial requirements, and we could not justify future participation in Galileo on that basis.

The UK has explained that without full, fair and open industrial involvement, guaranteed access to the signal and full understanding of the system’s technical characteristics, Galileo would not offer the UK value for money or meet our defence needs, and that we would be obliged to walk away, resulting in delays and additional costs to the programme that will run into the billions. The Government will need to consider the implications of the recent ESA vote, but we are looking at other options, including a UK global navigation satellite system.

The future of the UK’s relationship with Galileo is extremely important, and yesterday’s release from the Commission reveals the enormous gulf between the UK Government’s position and the Commission’s view. This matter must be dealt with urgently.

The strategic defence and security review highlighted the importance of Galileo for our armed forces, saying:

“we will enhance the resilience of military users and key domestic resilience responders using new technologies incorporating the European Galileo system.”

Having secure access to global positioning and navigation systems is vital for our armed forces, given the increasing threats to GPS integrity from cyber-attacks, jamming and spoofing. Will the Minister tell us what arrangements will be in place for the armed forces if the UK is excluded from the public regulated service, and what implications that will have for their ability to conduct planned operations?

The Commission’s latest release is clear that the UK outside the EU cannot have the same relationship with the programme as we would have as a member state, but it does say that access to the PRS is possible for third countries if a specific agreement is in place. Is that what the Government plan to do, and if so, what urgent steps is the Secretary of State taking to get such an agreement? How many times has the Secretary of State personally met or spoken to Federica Mogherini about the specific issue of Galileo?

We do not simply want to be third-party users of the EU Galileo systems; we want our industry to be at the heart of the design process. However, the Commission is insisting that working on the design and development of security-related and PRS elements is restricted to EU member states only. The UK space industry is worth nearly £15 billion annually to UK plc, with over 40,000 direct employees and 1,400 apprentices. What discussions has the Minister had with industry stakeholders about the impact of the UK dropping out of Galileo?

Finally, the Secretary of State and his Ministers have made repeated reference to a UK alternative to the Galileo system. Will the Minister tell us what steps they have taken to explore such an alternative, and what discussions about it they have had with key non-EU allies? We know that this would be an extremely expensive endeavour to undertake, so what contingency money has been set aside for the project and what advice has he received about a timeframe for delivery? Galileo and the PRS are of major importance to us, and I hope that the Minister will be able to provide us with some concrete answers.

I thank the hon. Lady for her questions. Indeed, it is important that we have a very strong cross-party view on this issue, because all Members of this House would find the idea that the UK is being excluded on security grounds to be completely unacceptable. The merest concept of the UK being considered a security risk should be challenged by all Members of this House, and I am sure the hon. Lady will join me in highlighting our disappointment that such a decision has been taken.

On the questions asked by the hon. Lady, at this point in time the PRS system under Galileo will not be in operation until the mid-2020s, and in the meantime we will be working under the current GPS system. The hon. Lady is absolutely right that the Ministry of Defence has made no secret of the fact that we consider the capability we will offer our military from Galileo to be increasingly important and crucial, and it is an issue of real concern that we will have to look at this in very great detail.

The hon. Lady asked whether the Secretary of State and Ministers are looking at this issue and talking to the industry. I assure her that the Secretary of State has had numerous meetings on this issue, and I have personally taken it up with every single counterpart from the European Union whom I have met over the past few months, including with the junior Defence Minister from Poland yesterday. The Department has communicated this very strongly to our counterparts, and we are disappointed that we have not as yet secured the agreement we need.

May I stress that the agreement we need is one that will be good for the security of Europe and for the security of the United Kingdom? I state again that the United Kingdom, in leaving the European Union, has made it very clear that we are not leaving our obligations to the security of Europe. Those obligations are unconditional and, frankly, we find it disappointing that the European Union has not taken those guarantees and assurances in the spirit in which they have been offered.

On discussions with the industry, I applaud the hon. Lady for acknowledging the strength of the UK industrial offer on space. Indeed, only recently when I spoke at the defence space conference, I highlighted the opportunities we see for the future of the space industry in the United Kingdom. We are now having to look extremely carefully at the possibility of developing our own options.

I stress again that this Government would prefer to remain involved with the Galileo project, but given the strength of this industrial sector and the strength of what we can offer the Galileo project, I think it is really a case of the European Union doing damage to itself, while we are in a position to move forward, building on the strength and expertise of the industry in the UK, to ensure that we meet the requirements of UK defence and the wider defence sector. I assure the hon. Lady that we will not allow any flight of expertise from the space sector as a result of the decision taken yesterday.

I can understand my right hon. Friend’s frustration, and I say again that I genuinely feel that the United Kingdom’s exclusion on the basis of what I consider to be a false security case is unacceptable, but this is not about getting even. It is about doing the right thing for the industry, the United Kingdom and our defence capabilities. I would prefer to get the right decision.

This is an extremely concerning situation and clearly demonstrates how shambolic the negotiations are. It is in the UK’s strategic defence interest to maintain a UK-EU security partnership. We will not build or maintain trust by taking a high-handed approach to the negotiations. Back in April 2017, I asked a series of written questions about our commitment to Galileo. The then Science Minister, the hon. Member for Orpington (Joseph Johnson), replied:

“it is too early to speculate on the UK’s future relationship with specific EU programmes”.

Is it still too early to speculate? When I asked

“what contingency he plans to put in place in the event the UK is unable to access the Galileo or GPS navigation systems after the UK leaves the EU”,

he responded:

“The UK’s arrangements to access the encrypted GPS signals will be unaffected by UK exit from the EU.”

What representations has the Under-Secretary made to the European Space Agency about future access to contracts and the encrypted signal? For the second time, I ask: what contingency plans are in place in the event the UK cannot access Galileo? No doubt we have the expertise here in the UK to develop our own system, but where does that leave UK-EU collaboration, which is critical to our future security?

I would again stress that it takes both sides to come together. The United Kingdom has been very clear that it wants to continue to be involved in and to contribute to Galileo, but those requests have been rebuffed. Clearly, we hope that this situation can be resolved and reversed, but the good will that the UK has shown has not resulted in similar good will from the European Commission, which is a significant concern.

On the question about ministerial discussions, I can stress that those discussions have been across ministerial responsibilities. Defence has been involved, but others have clearly also been involved. In many ways, the frustration for Ministers is that although the bilateral discussions with counterparts in Europe have invariably been positive, it seems that the Commission sees this as a negotiating tactic. The United Kingdom has been clear that it will never negotiate on the basis of our security concerns. That is a key point we are highlighting. From a security perspective, we have always been committed to the security of Europe. It is a shame that the Commission does not share our good will.

On our obligations to industry, I entirely agree with the hon. Lady that we have the capability and capacity to develop our own system in due course. The Galileo system will not be online until the mid-2020s. We have had deep and meaningful discussions with the defence industry on alternative options, and I stress again that, if need be, the United Kingdom will respond and develop its own system, but we would prefer to ensure that the Galileo system works for the security of the whole of Europe.

This is a classic example from the unelected Commission of cutting off one’s nose to spite one’s face. I encourage my hon. Friend to do all he can to resolve this matter, but if we cannot, I would say to him, without fear, that the other options he mentioned should be considered very strongly and that we should work with British industry to develop our own systems.

I agree with my hon. Friend that we do not want the European Union or the United Kingdom to cut off their nose to spite their face, but we will not take any risks with the security of our armed forces or the capabilities they need. Our space industry is responsible for 6.5% of the global market. We have an ambition to grow that to 10%. Be in no doubt: our discussions with the space sector show that, although it is very disappointed with the Commission’s decision, it is also very excited at the prospect of developing our own capability.

The European Commission’s approach in this matter is counterproductive and, in suggesting that the UK could suddenly become a security risk after we have left, frankly insulting. If the current position holds, does the Minister share the concern some have expressed that some manufacturing capacity on space and satellites, which is currently located in the UK, might move to the EU?

I thank the right hon. Gentleman for his very clear statement on the comments made about the UK being a security risk. I think that that is appreciated by all Members. Is there a concern about UK industry leaving as a result of this decision? Of course there would be concern, but the key point is to respond to those concerns. That is why various Government Departments, including the Ministry of Defence, have been in constant communication with the defence sector. Indeed, if it were not for this urgent question I would be on my way to meet companies involved in the space tech sector in Oxford at this very moment. I will still be visiting them, but after this urgent question. I can assure the right hon. Gentleman that the prospect of developing our own initiative is very much to ensure that the skills that are so crucial for the future economic prosperity of the United Kingdom are retained in the United Kingdom.

The Chancellor is reported to have said that if we fail to continue in the Galileo programme we will build our own GPS system. Does the Minister have any idea of the cost and the timescale?

I thank my right hon. Friend for her very pertinent question. It is the case that the Chancellor has been very clear and across Government we have been very clear on this, but it would be too early for us to highlight the actual cost involved. She should have no doubt about the fact that the cost involved would be no greater than our current contribution to the Galileo project, and I think the benefits to the UK could be even greater. I assure my right hon. Friend that the Chancellor’s support on this issue should be taken as a clear sign.

Surely the Minister understands the size—18 hugely expensive satellites and so many years of research and development—of the Galileo project? My contacts in Cambridge say it would be catastrophic for us to be excluded, not just because of security and defence but for international air travel and much else. He must not underestimate how damaging this is. It is a symptom of leaving Europe and European co-operation.

I agree entirely with the hon. Gentleman about the importance of this matter, which is why he should also address his concerns to the European Commission. This will be damaging both to our partners in Europe and to the United Kingdom. We have done everything in our power to highlight the fact that we want to continue to contribute fully to the programme. Those efforts have been rebuffed thus far. That is a great shame and it is a mistake on behalf of the European Commission that places all our security at risk. I stress that we will continue to invest in our capabilities if that has to be the situation.

I commend my hon. Friend for his response to the urgent question and for seeking to build cross-party consensus to condemn the reaction of the European Commission, which is clearly undertaking protectionist policies in part because it sees the strength of the space industry developing in this country. EU-based companies are currently considering relocating some of their space capability to various regions around the UK to take advantage of the skills we have here.

The Prime Minister has been very clear to the EU that defence and security matters should not be affected by Brexit, and that we wish to have a continuing strong partnership with our EU nations. Does the Prime Minister intend to bring this matter up at the EU Council or at the NATO summit in July to ensure that our partners in Europe recognise that we are making a very fulsome offer for continued security co-operation, including on the Galileo project?

I thank my hon. Friend and predecessor in this role for his question. I also thank him for his work highlighting the contribution of defence to UK prosperity. As part of that work, he highlighted the contribution that defence makes to the space sector in the United Kingdom. I would argue that our lead in the space sector in the European context is coveted by others. It is key that we again express our willingness to work with our partners in Europe, but if that is again rebuffed we should build on the skills and the developments of the industry in the United Kingdom and highlight the fact that we could still push this issue forward with our fantastic industry capability.

Can the Minister confirm that the possible threat to the Galileo project and the future of the British space industry was fully considered during the EU referendum debate?

Many and varied issues were discussed during the European referendum campaign. It is certainly the case that nobody, on either side of the campaign, took the view that the democratic decision of the British people would be met by a decision from the European Commission that would threaten the security of the whole of Europe. Nobody thought that such a response was likely.

It would be a shame if our defence and security services were not fully a part of the Galileo system, but we can get around that. We have a world-beating, world-class space technology industry in our country. Does the Minister agree that, if that industry were not involved in the Galileo project, the project would be the poorer for its non-involvement?

My hon. and gallant Friend strikes the nail on the head. He is absolutely right that this decision will be damaging for the capabilities of the whole of Europe. In view of the Prime Minister’s statement on our willingness to co-operate on security issues, the situation that we are now facing is genuinely disappointing. Again, he highlights the fact that we have the capability, skills and expertise to develop our own system if that is what we have to do.

I declare an interest as a trustee of the Royal Observatory in Edinburgh. The Government have said in response to a written question:

“In the long term, we believe that”

a British global navigation satellite

“system could be operated for around the same annual cost as the UK’s current contribution to the EU’s Galileo programme.”

Could the Minister tell us: what are the short-term costs?

The written answer highlights the fact that our current contribution is about £200 million a year. The total billed cost would be estimated at about £4 billion. So in the short term we still want to ensure that we have an involvement with Galileo: that is still our aim. The Prime Minister will take this issue up, and it is clearly important that she does so. It should be noted that, thus far, every single satellite utilised within the Galileo system has been built in the UK, so I wonder whether this urgent question should be taken in every other Parliament in Europe as a result of the decision taken yesterday.

A decision that would cut the UK out of Galileo would set very difficult precedents for our future ongoing partnership on security. Yesterday’s decision was made by the European Space Agency Council. May I join my hon. Friend the Member for Ludlow (Mr Dunne) in calling for this now to be raised at a higher level, such as through NATO or at this month’s European Council?

I hear my hon. Friend very clearly. I have no doubt that the Department will ensure that our representations are made to the Prime Minister, and I am absolutely confident that she will be raising these issues at the NATO conference and at further meetings with the European Union.

We know from the National Audit Office report that the funding gap in the Minister’s Department is about 20 billion quid. What will it be if he has to set up his own Galileo system?

I now feel as though I am back at Defence questions and having to explain that the National Audit Office report on the so-called black hole was based on the worst-case scenario occurring in every single project, with no efficiencies whatsoever being generated. The truth of the matter is that we are increasing defence spending. There is an important message here: the United Kingdom is currently one of the few countries in the European Union that is meeting its NATO obligations and that is willing to put taxpayer-funded money into its protection. I know that that type of issue upsets the hon. Gentleman, but the reality is that we take the defence and the security of Europe seriously. [Interruption.] On the question of how much, we have a large and increasing defence budget—increasing above inflation every year—and we will be able to do this if we need to.

Encrypted signals and encrypted signals intelligence are absolutely vital for our armed forces and other agencies to communicate safely and securely. Is not it the case that this flawed decision produces one beneficiary in national security terms, and that is Russia?

My hon. Friend makes a crucial intervention, and this decision will be welcomed in very few European capitals. However, the question depends on the unlikely situation of the United Kingdom not responding to the current situation by developing its own capability. My hon. Friend said that such capability is crucial for our armed forces, and I find it inconceivable that Parliament would allow such a situation to arise. I am sure there will be cross-party support for any decision we take to ensure that that capability is available to our armed forces.

This decision has immense implications for the security of our region, and it is frightening to think that our missile defence capability and our ISTAR capability could be damaged in this way. I commend the Minister for the tone in which he has responded to the debate this morning. It is imperative that that reasonable tone continues, as well as a recognition that Britain remains as committed as ever to NATO and the defence of Europe. This issue also has implications on further discussions that we will need on Permanent Structured Cooperation—PESCO—and the European Defence Fund. How does the Minister see our ability to let the Commission, and others across Europe, understand the grave implications for regional safety and security that this small-minded decision has led to?

I thank the hon. Lady for her kind words, and I commend her for her fantastic work on behalf of our armed forces and for her contribution to defence issues in this House. She rightly touches on the impact of this decision on the security of the whole of Europe, including the United Kingdom, and I hope that in bilateral discussions with colleagues in other countries, she will highlight the dangerous nature of this decision. She asked about the European Defence Fund. Bilateral discussions with my counterparts have indicated that they would like us still to be involved with that, and we have been clear that that is our intention. Does this decision throw doubt on that? I think the answer is yes. Will we carry on negotiating and discussing in a constructive manner because we believe strongly in the common defence of Europe? The answer to that is also yes and I hope the hon. Lady will continue to support us in our endeavours.

British intelligence agencies, including GCHQ in my constituency, make an enormous contribution to European security. In those circumstances, for Britain to be threatened with exclusion on the grounds of security is unreasonable, unfair and bordering on the insulting. Does my hon. Friend agree that the Prime Minister should make it crystal clear in June that, in forthcoming negotiations, security should remain inviolable and not a matter for negotiation?