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Membership of the European Economic Area

Volume 628: debated on Thursday 7 September 2017

1. What discussions he has had with Cabinet colleagues on plans for the House to vote on continued UK membership of the EEA. (900639)

The United Kingdom will no longer participate in the EEA agreement once we leave the European Union. The United Kingdom is a party to the EEA agreement in its capacity as an EU member state, so on exit day the EEA agreement will cease to operate in respect of the UK. It will no longer have any practical relevance to the United Kingdom. We are considering what steps, if any, we might need to take to confirm formally our withdrawal from the EEA agreement as a matter of international law.

I thank the Secretary of State for his answer, but I am afraid that article 127 of the EEA agreement, to which the United Kingdom has been a signatory since 1993, clearly states that any country wishing to leave the European economic area must give formal notice of at least one year. Will the Secretary of State therefore please confirm that such notice would have to be given to leave the EEA and that, given the fundamental constitutional, political, legal and economic importance of such a decision, the decision to leave the EEA would be subject to a debate and a vote?

There is actually agreement that when the UK ceases to be a member of the EU, the EEA agreement will no longer operate in respect of the United Kingdom. As such, the Government’s legal position is clear: article 127 does not need to be triggered for the agreement to cease to have effect, but we are looking at it just to make sure, for clarity purposes, that we meet its requirements.

Does my right hon. Friend agree that continued membership of the European single market, which some Opposition Members seem now to be advocating, would negate many of the advantages of leaving the European Union, while requiring us still to accept decisions that we could no longer influence? To that extent, it would actually be worse than continued membership as a full member.

Yes, my right hon. Friend is quite right. The simple truth is that membership of the European Free Trade Association, for example, which would be one way to retain EEA membership, would do exactly that: it would keep us within the acquis, and it would keep us within the requirements of free movement, albeit with some limitations, but none of those have worked so far. In many ways, it is the worst of all outcomes. We did consider it—I gave it some considerable thought, maybe as an interim measure—but it seemed to me to be more complicated, more difficult and less beneficial than other options.

The Secretary of State has given an equivocal answer on whether there might need to be a vote on the EEA. Will he consider whether we should also have a vote on the settlement bill and, indeed, on the cost of the Nissan deal set out in the rather heavily redacted letter I have here?

Well, the heavily redacted letter was not from me, so I am not entirely sure what the right hon. Gentleman is referring to, but the answer, generally, is no.

Does the Secretary of State agree that we have already had a vote, and that was on 23 June last year? The British people decided to leave the European Union. Does he agree that one of the things we can now look forward to is being able to do trade deals with a number of countries throughout the world, which we are now constrained from doing as members of the European Union?

My hon. Friend makes exactly the right point: we are able to make trade deals once we leave the European Union, and that will give us enormous benefits, because as the European Commission itself admits, 90% of world trade will be outside the EU, not within it, in the coming decades.

The Secretary of State set out his position on the EEA. On 15 August, he told the “Today” programme that transitional arrangements should be

“as close as possible to the current arrangements”.

Two days before that, the Chancellor and the International Trade Secretary said in a joint article that Britain would leave the customs union and leave the single market. Both positions cannot be right. Will the Secretary of State step up to the Dispatch Box and tell us what form of transitional arrangements the Government are seeking to negotiate?

I did that only a couple of days ago. I will come back to the point, but for the House’s interest, I will read a small part of a LabourList article—I read LabourList all the time, of course—by the hon. Member for Aberavon (Stephen Kinnock), who opened this question. He said:

“On Sunday Keir Starmer used an article in The Observer to call time on the ambiguity that had come to define Labour’s approach to Brexit since the referendum”—

the ambiguity, right? He said, “It was an approach”—this is the best bit—

“that…served us well on 8 June”.

What was that ambiguity? Tell leavers you want to leave; tell remainers you want to remain. That ambiguity, of course, could not last, and, as the hon. Gentleman said, it was never sustainable. That is the ambiguity of the right hon. and learned Gentleman who has just asked his question.

Now, our position is very clear. The transition arrangements will meet three different requirements: to provide time for the British Government, if need be, to create new regulatory agencies and so on; time for companies to make their arrangements to deal with new regulation; and time for other countries to make arrangements on, for example, new customs proposals. That is what will be required. That is why we need to be as close as we are to our current arrangements. It does not mean that, in the long run, we are in either the customs union or the single market.

There is plenty of material for colleagues to include in their Second Reading debate speeches if they so wish. The material might be better located there.

I asked the Secretary of State his position and he started with my position. If he wants to swap places—any time.

Given the progress to date, and knowing that we will go back to this answer, what prospects does the Secretary of State genuinely believe there are for bespoke transitional agreements being agreed, negotiated and implemented by March 2019? Knowing how anxiously businesses are looking at this, when does he anticipate being able to tell them what the arrangements will be, because they need to make arrangements?

That is a very legitimate and sensible question. I believe that the benefits of a transitional arrangement go both ways—they are symmetrical. They apply equally to France, Holland, Germany or Denmark as they do to us. That is some of the read-back we have been getting. I know that the right hon. and learned Gentleman has been travelling around Europe himself and he will no doubt have picked up that same read-back. We are finding that the Commission is open to discussion of transition. We have raised it only briefly at each of the last two meetings because it does not fit within the current four groups of negotiation, but I think there is a very good prospect.