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Regulatory Equivalence

Volume 635: debated on Thursday 1 February 2018

18. What comparative assessment he has made of the potential merits of regulatory (a) alignment with and (b) divergence from the EU. (903684)

We are fully focused on making the UK’s exit from the EU and our new trading relationship with the world a success. We have set out proposals for an ambitious future relationship with the EU that minimises regulatory barriers for goods and services. Our partnership should be underpinned by high standards, a practical approach to regulation, trust in one another’s institutions and a shared spirit of co-operation.

Does my hon. Friend agree that regulatory equivalence, as opposed to regulatory alignment, should be a red line in our negotiations with the EU if we want to do trade deals with other countries around the world?

Regulatory equivalence is about pursuing the same objectives, and as the Prime Minister outlined in her Florence speech, that could mean achieving the same goals by the same means or achieving the same goals by different means. It does not mean that we have to harmonise our rules with those of the EU. It is not a binary choice; we are proposing a bespoke, bold and ambitious free trade agreement between the UK and the EU, and we want to secure trade with Europe and with the wider world.

By more than 2:1, members of the Institute of Directors would prefer the UK to maintain regulatory alignment with the single market rules for goods and services, rather than actively seeking to diverge after Brexit. Is that the Government’s aim as well?

The Government have been talking to a wide range of industry groups and representative bodies of business, and we recognise that there are benefits in some areas of maintaining regulatory alignment and ensuring that we have the most frictionless access to European markets. Of course we are entering the negotiations on the future partnership, and we want to take the best opportunities to trade with Europe and the wider world.

Is it true that Michel Barnier has basically offered us the Canada model, agreement on which could be reached this year, thus negating the need for any transition period?

The Government’s policy is that we are pursuing a bespoke trade agreement, not an off-the-shelf model. We believe that it will be in the interests of both sides in this negotiation to secure an implementation period.

The European Union has clearly and firmly set out its views on the options for these negotiations. Ministers so far have signally failed to provide any coherent response because they cannot agree among one another, and the Minister’s answers today underline that—whether the answer is regulatory equivalence or something different, we just do not know. How long will it be before the British Government have a coherent position to set out in these negotiations?

The Prime Minister has repeatedly set out a coherent position with regard to the future partnership we seek with the European Union. There was the Florence speech. My Secretary of State has been making speeches and the Chancellor has been making speeches, clearly setting out the UK’s objectives for these negotiations, and we look forward to achieving those objectives in the months to come.

The Minister will know that legal text has now been looked at in terms of the progress report in December and that the issue of regulatory alignment came up with that document. Can we be assured that nothing will be put into legal text that prejudices our interpretation—the Government’s interpretation—in relation to regulatory alignment?

Absolutely; I can give that assurance. It is very important that we do secure the agreement based on the joint report and that that secures the position on the territorial integrity of the United Kingdom.