With permission, Mr Speaker, I would like to provide the House with an update on the progress of Brexit negotiations and the Government’s no deal contingency planning.
On Friday, I was in Brussels for the fourth time since I became Secretary of State for a further round of talks with Michel Barnier. We had an extended discussion covering outstanding withdrawal issues, internal and external security and our future economic partnership. We have injected some additional pace and intensity into the negotiations as we reach the final phases. The vast majority of the withdrawal agreement has been agreed. When signed, the agreement will safeguard the rights of EU citizens in the UK and UK nationals in the EU, so they can continue to live their lives broadly as they do now; provide for a time-limited implementation period, giving businesses and citizens the certainty they deserve until we reach the new partnership; and allow for the UK to make an orderly and smooth transition as we move towards a future deep and special partnership with the EU. During August, we made further progress across a range of the outstanding separation issues, including protection of data and information, the treatment of ongoing police and judicial co-operation in criminal matters, and ongoing Union judicial and administrative procedures after exit. So the scope and the contours of the withdrawal agreement are now clear, subject to some further technical detail that we will of course continue to work on.
At the same time, we continue to work to complete a backstop to deal with the position of Northern Ireland and Ireland, as we committed to do in the December joint report with the EU. As the Government have made clear, the EU proposals are unacceptable, because they would create a customs border down the Irish sea. We are determined to reach a solution that protects the Belfast agreement and avoids a hard border on the island of Ireland. We will not permit a customs border down the Irish sea, which would put at risk the constitutional and economic integrity of the United Kingdom. And, of course, this can be done without compromising the EU’s core principles. Importantly, we look to meet our commitments to the people of Northern Ireland through our future partnership, so that no backstop would ever need to come into effect.
The White Paper we published in July has served as the basis for constructive discussions on our future relationship with the EU. I, my right hon. Friend the Prime Minister and other Cabinet colleagues have made visits across Europe, explaining our proposals and making the case for what we have put forward for our future relationship. I can tell the House that since the publication of the White Paper, Ministers have had more than 60 ministerial engagements with their counterparts across Europe. I met the French Europe Minister in Paris recently, and saw the Swedish Europe Minister and the Irish Foreign Minister in London. I also met Guy Verhofstadt, the European Parliament’s Brexit co-ordinator, last week. We have received a wide range of positive and constructive feedback.
Equally, just as we have presented our proposals in a spirit of compromise, so, too, they have proved challenging in some respects for some in the EU. But our friends across Europe are engaging seriously with our proposals on the substance. As my right hon. Friend the Prime Minister set out, we are committed to delivering on the vision in the White Paper and delivering a future relationship that will see the United Kingdom leave the single market and the customs union, an end to freedom of movement so the UK controls its own borders, the end of the jurisdiction of the European Court, and the UK and the EU meeting their shared commitments to Northern Ireland and Ireland in the way that I have already described.
At the same time, we want to build up the foundations of a bright, strong and enduring new relationship for the future, with frictionless trade across our borders; continued close co-operation on law enforcement and other security matters; the UK free to develop its own independent trade policy; and broader UK-EU co-operation, from research to student exchanges, in many of the areas that we prize on both sides. We approach these talks with ambition, pragmatism and energy. If our EU friends match us, we will strike a deal that is in the clear and overwhelming interests of both sides.
I would also like to update the House on steps the Government have taken over the summer to prepare for the unlikely event that we do not reach a deal with the EU. While we expect to reach a deal with the EU, while it remains the most likely outcome and while it remains our top and, indeed, our overriding priority, as a responsible Government we have a duty to prepare for any eventuality. So on 23 August, we published 25 technical notices intended to inform people, businesses and stakeholders about steps they need to take in the event of a no deal scenario. They build on the steady and patient work that has taken place over the past two years to prepare this country for life outside the EU, irrespective of the outcome of the negotiations. That work has included passing key bits of legislation to ensure a smooth Brexit, including the European Union (Withdrawal) Act 2018; recruiting the staff in Whitehall and our operational agencies so we have the teams in place; and preparing our institutional capacity, from the Competition and Markets Authority to the Information Commissioner’s Office.
The technical notices continue that same responsible, practical approach to preparing our country for Brexit. Among the technical notices, there is advice for businesses on some of the new processes they would be expected to follow when moving goods between the EU and the UK in a no deal scenario. Our technical notice on workplace rights sets out how workers in the UK will continue to be entitled to the rights they have under UK law. We have set out how, in the event of no deal, we would recognise the testing and safety approvals of existing medicines if they have been carried out by an EU member state regulator, to minimise any disruption to the supplies of medicines or medical devices from the EU.
Those notices are proportionate and measured, and they prioritise stability for our citizens, businesses, public bodies and NGOs. The 25 notices published in August were the first in a series of updates that we will be publishing over the coming weeks to keep stakeholders informed about what action, if any, they need to take.
Our approach acknowledges that there are some risks to a no deal scenario and demonstrates that we are taking action to avoid, minimise and mitigate those potential risks, so that we are equipped to manage any short-term disruption. While it is not what we want, a no deal scenario would bring some countervailing opportunities. We would be able to lower tariffs and negotiate and bring into effect new free trade deals straightaway. There would be the immediate recovery of full legislative and regulatory control, including over immigration policy, and, while we are mindful of our legal obligations, a swifter end to our financial contributions to the EU.
I will continue to meet regularly with Michel Barnier, confident that a deal is within our grasp if the ambition and pragmatism that we have shown are matched by our EU friends. But this House and the British people can rest assured that the UK will be ready for Brexit, deal or no deal, and prepared, whatever the outcome, so that this country goes from strength to strength. I commend this statement to the House.
I thank the Secretary of State for early sight of his statement, but I am sorry to say that that statement is not going to reassure anyone.
I appreciate that the Secretary of State has to put a brave face on it, but there is no hiding the fact that the Government are in a real fix. There are two parts to that fix. The first is the reckless red lines set out by the Prime Minister two years ago, tearing us out of the customs union and single market with no European Court jurisdiction, which meant that a deal that safeguards our economy and avoids a hard border in Northern Ireland simply cannot be negotiated. The second part of the fix is the Chequers fudge, cobbled together nearly two years later. It satisfies no one and is being attacked from all quarters. It is obvious that something is going to have to give. The only question being asked up and down the country is, what is going to give?
Time is running out. The October summit is on 18 to 19 October. That is 44 days away. When the Secretary of State last updated the House in July, he said:
“Our expectation is to reach agreement in October.”—[Official Report, 24 July 2018; Vol. 645, c. 891.]
I note that he has not repeated that today. Can he account for that change? The reality, of course, is that no one now seriously expects the deal to be agreed by then, hence the talk of a special summit in November. The trouble with that is that even November only buys four extra weeks. It is impossible to see how the Chequers proposal could lead to a deal that would command a majority in Parliament in that time. Meanwhile, the confidence of businesses and working people in the Government’s ability to reach a deal sinks by the day.
Hence what we have seen is a summer of debate about no deal. There have been two sides to that debate. On one side is the Secretary of State talking up what he calls the “countervailing opportunities” of no deal—something he repeats today—and the Prime Minister saying that no deal would not be “the end of the world”, which is an interesting but hardly inspiring description. On the other hand, we have the Chancellor warning that there will be “large fiscal consequences” of no deal and the recently appointed Foreign Secretary saying it would be a
“mistake we would regret for generations”.
May I gently say to the Secretary of State that all his talk of no deal is not kidding anyone? Being told that we only need to stockpile medicines for six weeks and that there are no plans yet to deploy the Army to maintain food supplies has not reassured anyone.
There are obviously huge gaps in the Secretary of State’s no deal strategy, and there is no better example than Northern Ireland. I want to dwell on this for a moment, because once again the Secretary of State’s statement identifies the problem but offers no solution. The anxiety on both sides of the Irish border about the risk of no deal and the failure to agree a legally binding backstop is real. It is not a myth; it is shared by all communities. I have spoken to the Chief Constable of the Police Service of Northern Ireland, and I know how seriously he is taking this. For the former Foreign Secretary to say that this issue has been manipulated by the Irish and UK Governments is completely and, I am afraid to say, typically irresponsible, and I invite the Secretary of State to take this opportunity to dissociate himself from those remarks.
The technical notices that the Secretary of State mentioned—issued two weeks ago—are themselves revealing. When it comes to no deal and Northern Ireland, they say simply this:
“we stand ready to engage constructively”.
That is not a plan for no deal. The truth is that the Government have no idea how they will mitigate the impact of no deal when it comes to Northern Ireland. That is just not good enough. In December last year, the Government signed up to a solemn commitment to a backstop agreement in Northern Ireland. This House is entitled to know this afternoon how, in six weeks, the Secretary of State actually intends to keep that commitment.
The Brexit negotiations are in serious trouble. It appears from the Secretary of State’s statement that the Government’s strategy is simply to plough on regardless, to pretend everything is going to plan and to hope that, somehow, the dynamics of the negotiation and the arithmetic in this House will magically change. That is incredibly irresponsible. It will reassure no one. The Secretary of State is likely to face significant challenge from all sides this afternoon, and he knows it.
The Government must change course and put forward a credible plan that can break this impasse—one that can command the support of the House, protect jobs and the economy, and avoid a hard border in Northern Ireland. The Government have six weeks to get this right. More of the same will not do.
I thank the right hon. and learned Gentleman for his reply and some of the constructive tone in it. On timing, both I and Michel Barnier repeated on Friday that we were aiming for the October Council but recognised that there would be some margin of leeway, as is often the case with negotiations.
The right hon. and learned Gentleman has asked me at various points to comment on the newspaper commentary throughout the summer. Actually, I have been focused on the negotiation and getting the best deal for Britain.
On the negotiations themselves, may I just reassure the right hon. and learned Gentleman that progress is real on data sharing, criminal justice co-operation, passenger name record and Prüm data, and continuing fast-track extradition co-operation, which Michel Barnier and I talked about on Friday? Those are the areas one might think a former Director of Public Prosecutions would attach serious weight to, but there was not one mention of them at all.
On the outstanding separation issues, including data protection and cases going through administrative and judicial procedures when we leave, I would have thought that the right hon. and learned Gentleman might at least have paused to welcome some of the progress in those areas.
That is what the Government have been doing over the summer: making progress towards a deal that is within our sights. As for the right hon. and learned Gentleman, well, last week he said that Labour’s position is that a second referendum is “on the table”. I have to say that it is rare that I agree with the shadow Trade Secretary, who said that a second referendum would be “damaging” to the foundations of this country, but I think, in democratic terms, he is right about that.
I am afraid that that shows how frankly useless the Labour party would be, if it were ever in charge of Government, in terms of standing up for the United Kingdom in these negotiations. Nothing could be calibrated to weaken the UK’s negotiating position more than dangling the prospect of a second referendum, which would only invite the very worst terms.
On the technical notices, we are doing the responsible thing that any responsible Government would need to do: striving for the very best deal but preparing for all outcomes. The right hon. and learned Gentleman has not actually asked me a single question of substance about any one of the 25 notices that we have published.
In relation to Northern Ireland, he clearly has not read the technical notices, because they were referred to at various points where they are applicable and relevant to the individual sectoral notices. Again, I am afraid that the Labour party is demonstrating that it is not fit to govern. We have the leader of the Labour party admitting in an interview on LBC that he would accept any deal, however bad its terms, and the shadow Chancellor explaining that he would not set aside any money to deal with the worst-case scenario of a no deal Brexit. Yet again, I am afraid that the Labour party has shown that it would roll over in Brussels and fail to stand up for this country.
Will the Secretary of State confirm that the UK has absolutely no plans to impose new barriers and bureaucratic complications against German pharmaceuticals, French food and other such products in the event of us leaving and trading under World Trade Organisation terms?
I am grateful to the Secretary of State for his statement and for advance sight of it. We of course welcome those areas where progress has been made, but he must share our concern at the lack of progress, which is still too slow, and the still too many fundamental important areas where little or no progress has been made.
The Secretary of State’s statement runs to eight pages—1,297 words in the version received in advance—and yet certainly the first half of it tells us nothing, or next to nothing, that is new. There is a lot of repetition of the old mantras and the old wildly confident assertions, with little or no evidence to back any of them up. On citizens’ rights, there is nothing new; on Northern Ireland, there is nothing new; and on customs, there is nothing new, apart from the fact that Michel Barnier thinks that the customs element of the Chequers proposal is illegal and unworkable. The Prime Minister, in her pragmatic, constructive and helpful way, has said that the proposal is completely non-negotiable, so they can find common ground on that.
I assume that the positive and constructive feedback that the Secretary of State has received over the past few weeks does not include that from the plethora of former Ministers and former Secretaries of State, including the Prime Minister’s first choice for his job, who have been enthusiastically tweeting away with the hashtag #ChuckChequers. I would suggest that, before the Secretary of State starts to criticise Labour on its lack of unity on Brexit, it might help—although maybe he will not want to do this—if he cast a look behind him.
What analysis have the Government done of the costs to businesses, schools, colleges, universities and everyone else of taking the steps the Secretary of State is now advising us to take to prepare for a no deal Brexit? When will the Government publish their backstop to the Northern Ireland and Irish border question, which was promised nine months ago? Will the Secretary of State confirm that recognising and respecting Ireland’s sovereign decision to remain a full and integral part of the European Union means recognising that Ireland must and will respect EU legislation about the enforcement of its external border, whether it is deal or no deal?
Finally, instead of continuing to set unilateral, non-negotiable red lines, as happened before the negotiations had even started, will the Government finally accept that they got it wrong and that continued membership of the single market and the customs union will not only break the logjam in the negotiations and deliver the Brexit that the Vote Leave campaign promised people they would get if they voted to leave, but help to save at least some of the hundreds of thousands of jobs on these islands that are threatened by an ideologically driven hard Brexit?
I thank the hon. Gentleman for his questions and remarks. The Government have made it clear that we are leaving the single market. That is the only way we can faithfully give effect to the referendum in terms of taking back control of our laws, immigration policy and money.
In relation to my statement, the hon. Gentleman said that nothing had changed. I hope that tomorrow he will refer to Hansard and look at the areas of progress that I have described, because they are significant. They were described by me and Michel Barnier in Friday’s press conference and include the outstanding separation issues, some of which I accept are technical, such as the data protection regime and the administrative and judicial procedures, but we have made significant progress in those areas and we are making significant progress every week. If Members look at Michel Barnier’s comments —forget my own—in relation to data sharing, PNR, Prüm and Galileo, they will see that we have made progress in all those areas. I do not think it is quite right for the hon. Gentleman to suggest that nothing has changed. We make progress every week and a deal is within our sights.
There is currently a border between Northern Ireland and the Republic of Ireland: a currency border, a tax border, an excise border and, very importantly, a security border. That all works very satisfactorily with good co-operation and modern technology. Could the Secretary of State explain which areas of cross-border activity cannot be solved by a further extension of modern technologies?
I share my right hon. Friend’s conviction that we need to avoid any return to the hard border. All sorts of technical work is going on. We have seen the EU’s proposals and made it very clear that they are unacceptable because they would involve a customs border down the Irish sea. We continue to work through these issues, mindful of the commitment that we have made together to give effect to the joint report that was made in December.
Michel Barnier made it very clear to the Exiting the European Union Committee, when we met him yesterday in Brussels, that the Government’s proposal for a facilitated customs arrangement and a common rulebook is not acceptable to the European Union. Does that emphatic rejection of the central plank of the Chequers proposal concern the Secretary of State? If so, what alternative does he now propose to put forward to honour the promise that has been made to keep an open border in Northern Ireland and to ensure the continuation of friction-free trade in goods that is so important to the future of the British economy?
The right hon. Gentleman might have also, in quoting Michel Barnier, referred to his comments on 27 August, when he said:
“We are preparing to offer Britain a partnership such as there has never been with any other third country”.
The right hon. Gentleman is certainly right to raise those points when they are pushed back, but this is a negotiation. We continue to explain our proposals to Michel Barnier and to the other member states, and we are confident that we will make progress.
May I confirm what the Chairman of the Select Committee has just said? Mr Barnier said to us in Brussels yesterday that the Chequers proposal fundamentally undermines the single market and is unacceptable. He went on to say, however, that he was keen to negotiate a free trade agreement, with associated agreements in the other areas that the Secretary of State has described. Is not it now time, therefore, to abandon the flawed proposal that is not going to work, and instead try to achieve an agreement that delivers Brexit and preserves the fullest level of co-operation?
I always listen very carefully to my right hon. Friend’s advice. I do not think that, having presented our proposals, we are going to roll over for Brussels. We are going to explain them to Michel Barnier and answer the questions, practical and others, he has raised. We are confident that our proposals respect the key and core equities and core principles of the EU, but also resolve all the issues we need to see resolved around frictionless trade at the border, critically, in terms of our future relationship, avoiding any need for recourse to the Irish backstop.
Over the summer, it was reported that the UK Border Force has had to recruit hundreds of extra staff just to deal with existing delays at the border, that recruitment of additional Brexit staff has been paused, and that the Government are off-track to have anywhere near the number of additional UK Border Force officials they would need for immigration or customs checks in the event of no deal. Can the Secretary of State confirm that that is the case, that he also has no guarantee that we will continue to have access to the criminal database that gives our border officials crucial information about terror and criminal suspects coming from the EU, and that no deal would undermine our border security as well as our economic security?
On recruitment and border staff, when I published the technical notices and gave a speech on 23 August, I set out all the recruitment, including in relation to the border agency. I would be very happy to send a copy of the speech, which sets that out in detail. In relation to the no deal scenario, of course this is not what we want but, through the technical notices and the planning we are putting in place, we are making sure that we are in the best position to avoid the risks of short-term disruption, to make sure we can manage them, and, ultimately, to make sure we can get through any short-term disruption so Britain can go from strength to strength.
There is only one real overriding issue that requires urgent political decisions right now: the Northern Irish backstop. Given how close we are to the autumn summit, could my right hon. Friend say when he expects to produce a draft counter-proposal to the unacceptable EU proposal?
We have already put forward our proposals in this regard. Through our future relationship White Paper, we have set out the proposals for the facilitated customs arrangement and the broader approach, which have the objective and goal of not just achieving frictionless trade but dealing with the issue between Northern Ireland and the Republic of Ireland. What we are not going to do is accept the EU’s proposal through the protocol, because that would effectively draw a customs border down the Irish sea. That would threaten the constitutional and economic integrity of the UK, and we will not give in to that.
I sometimes wish that people would actually travel the road from Belfast to Dublin and Dublin to Belfast because people already pass camera infrastructure on the border. As the right hon. Member for North Shropshire (Mr Paterson), a former Secretary of State for Northern Ireland, said, there is already a currency, excise and other border between Northern Ireland and the Irish Republic.
The fact is that there are people in this House, the European Union and the Irish Republic who are using the issue of the Irish border—and, more despicably, the Irish peace process and political process—either to thwart Brexit or to mould it in their own way. The reality is that this House would never accept any kind of backstop that created regulatory or other differences between Northern Ireland and the rest of the United Kingdom because that would constitutionally break up the United Kingdom. Will the Secretary of State reassure the House that he will stick to that going forward?
I thank the right hon. Gentleman, who is of course absolutely right in his technical remarks and also, I fear, about the fact that some—not all, but some—are trying to politicise the issue. I do think that there are legitimate issues. We have committed to giving effect to the joint report that we agreed with the EU, but it is certainly true that some are trying to use the issue as leverage, and that will not work.
In his remarks on a no deal scenario, my right hon. Friend said that while we are mindful of our legal obligations, there would be a swifter end to our financial contributions to the EU. For my sins, I have spent the summer in my office trying to find more detail about the EU budgetary spend and what exactly the EU has been doing with taxpayers’ money. If we get into a position of no deal, could there be some degree of oversight? I am not prepared to write a cheque just because the EU says that we owe a certain amount if we are unaware of exactly how that money has been allocated and spent.
At the weekend, Michel Barnier said that after Brexit, European car makers would have to be careful not to use too many parts made in Britain if they wish to benefit from EU trade deals with third countries, such as South Korea. What is the Secretary of State’s response to those comments and what will the Government do to mitigate that devastating impact on our car industry?
In this negotiation, there are efforts—on both sides, in fairness: the EU side and UK side—to apply pressure. Honestly, I would not be listening to or referring to warnings or forecasts made by the other side in this negotiation; I would be showing a bit of mettle and standing up for this country.
On Sunday, the Prime Minister wrote that she would
“not be pushed into accepting compromises on the Chequers proposals that are not in our national interest”.
Are we to infer from that that the Government are prepared to consider compromise on the Chequers proposals? If so, what sort of proposals does my right hon. Friend consider would be in the national interest?
I congratulate my right hon. Friend on all the hard work that he has done to get us to this point, both ministerially and in the House, and on the no deal preparation. He is perhaps over-reading the Prime Minister’s words. We are very clear that we have set out a strong proposal that deals with all the outstanding issues on frictionless trade, but allows us to have an independent trade policy. It is good for the United Kingdom in those respects, but also good for the EU. We will be pressing for a resolution and swift conclusion of the negotiations in the coming months, around those proposals.
What a Tory Brexit shambles! Chequers is as dead as a dodo—the Secretary of State knows that, and so does everyone else in the House. It has been rejected by the Tory right and by the European Union. He knows that no deal would cause huge damage to British jobs and families. Is it not the truth that the only option left to him is the one that he advocated two years ago—to allow, after a pause for reflection, a final say on the deal?
I am afraid that the right hon. Gentleman is not correct on any of those points. We have a positive set of negotiations with our EU partners and friends—I have itemised some of those areas. It is often very difficult to get Brussels moving in August, but actually we have made assiduous progress in all those areas, and we will keep working on it. I will accept one thing though. We are not aiming for no deal; we are aiming for a good deal for the UK and the EU. The irresponsible thing to do is to make no preparations in case the negotiations do not reach the goal we are all seeking.
May I counsel my right hon. Friend against self-delusion? None of us who were present listening to Mr Barnier yesterday can be in any doubt that he understands perfectly what is involved in the Chequers arrangements, and he rejects, without qualification, the facilitated customs arrangements and the common rulebook. Why does my right hon. Friend not accept his get-out clause and chuck Chequers now?
I thank my hon. Friend, particularly for his counsel against self-delusion. He is right that the Commission and Michel Barnier have raised concerns about some aspects of the economic partnership, but equally we have had positive feedback from member states. We are confident as we work through these proposals that they provide an enduring solution to the challenges that we and the EU face, and that is what we are pursuing.
The Minister will know that with genuine co-operation and good will on all sides the issue of the border between the Irish Republic and Northern Ireland can be sorted. If it is sorted, which it should be, can we then think of the Canada-plus-plus-plus option?
The way we want to resolve the Northern Ireland-Republic of Ireland issue for the future and also deal with frictionless trade is through the economic partnership. Now, that does challenge some of the long- standing orthodoxies and dogmatic legalism of the EU —there is no doubt about that and no hiding from it. However, we have to find a way—in fairness the EU is at its best when it is the most innovative—to recognise the specific factors and circumstances around it and look for a win-win solution that caters for those risks while also freeing us up to do the other positive things we want to do, particularly around free trade.
In my experience of eight years of European negotiations, I often found different sides of the negotiating table rejecting each other’s positions at the beginning but actually finding over talks that they were not that far apart. So may I urge my right hon. Friend to keep talking and especially to find harmony on this issue and an outcome that respects the Good Friday agreement while also keeping the UK united?
My hon. Friend has a long track record of experience in this area and is absolutely right about negotiations. I am mildly surprised by some of the suggestions that at pushback from the EU we should immediately roll over. That is not what we are going to do; we are going to take a resolute and tenacious approach to these negotiations and work on our plan. Whether it is the Polish Foreign Minister, who says that our proposals are a good basis for discussion, or the Danish Finance Minister, who says they provide realistic proposals for good negotiations, we are confident we can make further progress.
According to the Treasury, all options for leaving the EU are bad for the UK’s economy. We know that it will mean borders, because the Government want to leave the single market and the customs union behind. As a result, the debate is now between damage to the economy of 8%, without a deal, and damage to the economy of 6%, with a deal. Whether deal or no deal, it is a scorched earth policy, and the Secretary of State knows that. It is one of the reasons Scotland will decide on its independence within the next year. Why has he thrown himself into the middle of a debate between “no deal” damage of 8% and “deal” damage of 6% to the UK economy? It is an invidious position for any UK Government to be in to be damaging people’s hopes in that way.
I think that economic forecasts ought to be treated with a measure of caution, given their track record. I note that the hon. Gentleman always reduces any matter relating to Brexit to the Scottish National party’s blinkered, narrow political obsession with a referendum on independence, but I think that every part of the United Kingdom wants to see us strive to get the best possible deal, which will work for all corners of the UK.
It is encouraging that agreement has been reached to ensure that UK and EU nationals will continue to live broadly as before. Will my right hon. Friend encourage our European friends to publicise that progress? It is important to give British nationals the reassurance that they seek.
My hon. Friend is absolutely right. We have talked about that, and we have encouraged it. Of course we want to ensure not just that EU nationals whom we value and whom we want to stay feel secure in their position here, but that British expats are given the same treatment abroad.
The Secretary of State said that the EU had raised some concerns about the Chequers proposals, but the fact of the matter is that they are completely and utterly dead in the water. What is the plan B? Is the Secretary of State now saying that the plan B should be Canada, and has he a full understanding of the impact that a Canada-style deal would have on, for example, our integrated supply chains?
I know that the hon. Gentleman has a considerable interest in the matter, but this is a negotiation. As was suggested by my hon. Friend the Member for Chelmsford (Vicky Ford), we do not roll over just because we get a bit of a pushback. We explain our arguments so that they are clearly understood, we try to resolve any concerns that the EU has, and we try to pursue the negotiations in a spirit of pragmatism. If that is matched on the other side—and I am confident that it will be—we will get a deal.
Is the Secretary of State aware that the most recent Welsh YouGov poll shows a clear majority in favour of staying in the European Union rather than risking a no deal exit? Does he not agree that that is a shift in public opinion, and that the most obvious pragmatic answer to the divisions over Brexit is to hold a people’s referendum?
The continued success of the UK automotive industry is important in my constituency and throughout the west midlands. In its report, the Business, Energy and Industrial Strategy Committee draw attention to the reliance of complex supply chains on the friction-free transfer of components between the UK and Europe. Can the Secretary of State reassure the House that that will be maintained? What is his assessment of the impact of a 10% tariff on cars, in the event of no deal, on a company such as Jaguar Land Rover?
My hon. Friend is right to raise the issue of “just in time” supplies for manufacturing purposes. That is precisely why we configured the White Paper proposals in the way that we did. It must be the case that in any scenario, on all sides, we try to avoid—and we do avoid—any erection of new trade barriers. Given the continental supply of cars to this country, it is clear that that would be harmful on both sides, but probably disproportionately on the other side.
Following discussions with the Secretary of State on Friday, Michel Barnier said that the backstop was critical to the conclusion of the negotiations, because without a backstop there would be no agreement. He has asked the Secretary of State and his team to provide his own team with the data that is needed for the work on the nature, location and modality of the controls that will be necessary on the Irish border. When will the Secretary of State be supplying that data to Michel Barnier, and will he also be making it available to the House?
I think that most of it is already in the public domain, but I will entertain any reasonable request that we receive from our EU partners in a constructive way. The hon. Lady should be under no illusions about the fact that Michel Barnier is seeking to make the case for regulatory checks along the Irish sea. We have made it very clear that we would need to be very careful about that, and that we will not countenance any customs border down the Irish sea.
This morning the Secretary of State’s permanent secretary was before the DExEU Committee. He was affable, fluent and spoke at great length, and, with panache, he did not answer any of the questions whatsoever. So can we try this on the Secretary of State? I recognise that he wants to do a deal with the EU, but there must be a moment in time when a decision has to be made that that cannot be achieved. Will he tell us what the date will be? Will it be October or November? It clearly cannot be 28 March.
My hon. Friend is absolutely right. It sounds like my permanent secretary was doing a rather good job earlier today, so I will go immediately back to the Department and praise him to the rooftops. On the timing, we need to aim for the October Council; there is a measure of leeway and we need to be mindful of the Brussels process and that there is some slippage, but I think we should be aiming for the October Council.
The hon. and learned Lady will know that our proposals are devised to make sure we have a strong deal with the EU that works for all quarters of the UK and respects the territorial and economic integrity of the UK—and, no, what she asks is not something we are willing to countenance.
Stirling University benefits from the Erasmus+ programme, as do many other universities, institutions and individuals in this country. The Government’s no deal guidance outlined our intention to arrange with the EU that the UK’s universities and individuals could continue to participate fully. What is the remaining barrier to reaching an agreement in this area?
My hon. Friend has read the technical notice and will see that we are keen to make sure that we can provide continuity for Erasmus. In some aspects of the technical notice, in order to avert some of the more significant disruptions we need some good will, collaboration and co-operation from the other side. We will work through that with the EU and will be encouraging it to make sure that in the worst-case scenario there is enough good will, notwithstanding the failure of the negotiations, to make sure that we do the right thing by UK citizens and EU citizens—and that includes our students.
Let us be clear: there is no majority in this House for crashing out of the European Union with no deal, given all the damage that will entail for communities in this country, but if no consensus can be reached in this House on how we leave the EU, how does the Secretary of State envisage resolving that issue if not by referring it back to the people? If he disagrees with me on that, does he at least accept that the Government may have to ask for an extension to the article 50 process so that a deal can be reached?
No, and I say to the hon. Gentleman, whom I hold in high regard and have debated this issue with during and since the referendum, that even bandying that around would almost invite the worst terms from our EU partners, which I know is not what he or I wish.
In December 2017 Michel Barnier said the UK would not have a bespoke deal, yet in August 2018 Michel Barnier said the deal given to the UK would be unlike that enjoyed by any other country. So may I urge my right hon. Friend not to listen to the voices opposite who encourage him to treat Michel Barnier as an intransigent person who is unwilling to negotiate and be flexible, but rather to treat him as a sensible pragmatic negotiating partner with whom we can and should negotiate the best deal for both the UK and the EU?
My hon. Friend is absolutely right. I pay respect to Michel Barnier and his team; they are very professional and I am confident that they are a team and Michel Barnier is an individual who we can do business with, and that, as my hon. Friend described, if the ambition and pragmatism that we have demonstrated in our proposals are matched, we will get a good deal—good for Britain and good for the EU.
The Secretary of State has given an assurance today that there will be no customs border between Northern Ireland and Great Britain down the Irish sea, but can he also give an assurance that there will be no regulatory border between Northern Ireland and Great Britain, especially since it is clear that that demand by the EU would lead to the disruption of trade between Northern Ireland and GB, would make Northern Ireland subject to EU law rather than UK law, would give a foot in the door for the European Court of Justice, and, as Michel Barnier has said only this week, might even result in Northern Ireland being in a different time zone from the rest of the United Kingdom?
I can say to the right hon. Gentleman that we will not allow anything to be done that would threaten either the territorial or the constitutional integrity of the United Kingdom. I continue to be keen to keep up the strong engagement with all the devolved Administrations and with all the parties across those Administrations.
It may well be that Chequers is in trouble, but can we please stop bandying about this idea that we can leave without any deal at all? Surely we need a series of deals, ranging from aviation onwards. For example, in my constituency many people work at Culham on nuclear fusion. Can the Secretary of State tell me what would happen if we were to leave with no deal? Would the British companies that have built up huge expertise in that area have access to the next stage of fusion, which is being built in France and of which we have membership as a member of the European Union? What would happen with no deal?
My right hon. Friend is absolutely right to say that no deal is not something that we would entertain lightly. It is not what we want and it is not our priority, but it takes two to tango in a negotiation, and if our ambition and pragmatism are not matched, we will need to ensure that we can give effect to the referendum. On the issue that he has described, if he peruses the technical notices at great length, he will find some of the answers that he is looking for. In relation to the technical notices and guidance that we are providing, we are now around a third of the way through to the final total that we will be putting out to provide reassurance to individuals, businesses, non-governmental organisations and public bodies.
I have tried to avoid most of the summer chatter involving a strange alliance between hard-core leavers and hard-core remainers who seem to want no deal. I think that the British public want a deal. Should the Secretary of State return to the House this autumn with a deal that is basically a divorce arrangement, will he confirm that that will not be the final deal? Will he confirm that it would contain the architecture, the structure and the principles, but that long after that, during the transition period, further deals will have to be made after we leave the European Union as part of our ongoing positive relationship with the EU?
The right hon. Lady is right in every aspect. In the closing stages of the negotiations, we should be striving to bridge the outstanding gaps and secure a good deal. She is also right to say that there will be two components—the withdrawal agreement and the framework for the future relationship—and it is right to say that during the implementation period we will need to turn that into a binding treaty. One of the areas in which we have made progress, which was not touched on by other Labour Members, is the agreement in principle that we are pursuing to have linkage so that the withdrawal agreement requires us all to proceed in good faith to that future relationship. That is important when we talk about not having a deal until we have the whole deal. Yes, there are different aspects of the package, but the deal has to be viewed in the round and in a balanced way.
The Prime Minister has made this very clear, and we are working across Whitehall to ensure that the laws are in place and that the money has been allocated, as the Chancellor did in the last Budget, as well as, crucially, ensuring that the regulatory and practical arrangements are in place. That is what these technical notices will help to achieve.
What passport queues will British citizens use from next April when they are entering European Union countries? What passport queues will EU citizens use when they arrive at Heathrow, Gatwick or any of our other airports? Will there be any special British passport queues?
I am going to leave the question of passport queues to the Home Secretary. I will say, however, that the hon. Gentleman is right to point out, in relation to the deal and no deal planning, that in order to get the right outcome we will need collaboration and goodwill, which I am confident we will get from the EU side. That is why we are continuing these negotiations. Even in a no deal scenario, in relation to the default arrangements that would apply, we would want to keep co-operating and communicating to ensure that we minimise any disruption.
As well as highlighting European Commission concerns over our trade and customs proposals, Michel Barnier made it clear in the meeting with the Exiting the European Union Committee yesterday that he also welcomed much of what was in the White Paper, and he emphasised above all that his mission, like that of the Secretary of State, is to achieve a deal. Given the uncertainties of the world in which we live, surely that is even more important than ever. Since the shadow Minister is so determined to avoid a no deal, a position which many of us would share, does my right hon. Friend share my belief that it is astonishing that the Labour party has not come out more fully in support of the Government’s attempts to achieve a successful end to the negotiations with the EU?
My hon. Friend is absolutely right. In fairness, it is not just that the Labour party has not come out in support of our proposals; it has not come out in support of any proposals. It is sitting on the fence trying to work out which way the wind is blowing.
As for Michel Barnier’s comments, on Friday he publicly reported good progress on the outstanding separation issues. On law enforcement co-operation, he said that
“we now have the elements to build a close and effective relationship between the European Union and the United Kingdom”.
On external security, he described
“a large convergence of views on… future cooperation”.
The Secretary of State says that he does not want a no deal outcome, but he also says that there are countervailing opportunities and used to say that we would thrive under a no deal scenario. Will he therefore explain to us whether he thinks the people of Northern Ireland and the Good Friday agreement will thrive under a no deal scenario?
We are absolutely clear that we want to ensure that we get a good deal for all quarters of the UK. I have been clear, and was again today, that a no deal scenario certainly has risks, which is why it is not our preferred outcome. Our overriding priority is a good deal for the UK and the EU, but we need to be prepared for all eventualities and to be able to manage the short-term disruption. Irrespective of the outcome of the negotiations, I am confident that Britain can go from strength to strength.
Eighty per cent. of the UK’s economy is services. Chequers of course does not deal with services, but it would at least buy time for a proper negotiation to achieve the Government’s plans, especially for financial services given the automatic loss of passporting rights if we leave without any interim arrangements. Has the Secretary of State quantified what the costs will be to the British financial services sector of leaving in a no deal scenario with the automatic loss of the passporting rights that allow British firms into the EU’s financial services market?
I understand my hon. Friend’s concerns. He will have seen the White Paper proposals on financial services, which pursue a building-up of the EU’s existing equivalence arrangements. We are confident that that will provide a good set of arrangements not just for the UK and our bankers and financial services providers but, critically, for the continental European economy, which is so dependent on it.
The Brexit Secretary naturally talks about the facilitated customs arrangement as central to the Chequers deal, and people have talked about Michel Barnier ruling that out. However, having accepted new clause 36 to the Taxation (Cross-border Trade) Bill, is it not the Government who have ridden a coach and horses through Chequers?
The Secretary of State rightly says that the proposals have been put forward in a spirit of compromise. Is he confident that there is nothing in the proposals for a mobility framework that would restrict our ability to take back control of our borders?
On whether there may be a slippery slope, the Prime Minister has been clear that we are standing firm and that there will be an end to free movement. The provisions in the White Paper relating to mobility make it clear that we want to enable top talent to be recruited into this country to service the UK economy and for businesses. We want to ensure that people can continue to travel for tourism or holidays, and we want to continue to allow students and young people to enjoy educational opportunities and the rich tapestry of cultural life across the continent, and that applies both to UK and EU students.
When the Exiting the European Union Committee met Mr Barnier yesterday what we got was not a bit of questioning or pushback, but an emphatic and clear rejection of both the customs proposals and the idea of a common rulebook restricted to goods alone. They are the two central pillars of the Chequers plan, and the plan is in tatters without them, so what is plan B?
The right hon. Gentleman is an experienced campaigner and knows a lot about such issues and about negotiations, so I am sure that he will recognise that he and others are going to be used in a pressure exercise on the UK Government in the final phase of the negotiations. We are in a direct negotiation with Michel Barnier and the EU as a whole, and we will continue to pursue the proposals that we set out in the White Paper. We are confident that we can get a good deal.
My hon. Friend is absolutely right that the nature of the financial settlement, as set out in the withdrawal agreement, is contingent upon us agreeing the deal as a whole, and it could not be guaranteed that we would provide the same amount of money if we left the EU without a deal. We will abide by our legal obligations, but I think my hon. Friend can safely say that that would be open for consideration.
Will the Secretary of State explain what will happen on medicines in the event of no deal? Over the summer, the Secretary of State for Health said that the public should not stockpile medicine, but industry has been told the opposite. Does the Secretary of State think that that is at all reassuring for people with chronic conditions who need their drugs?
We published a technical notice on medicines, and a letter was sent to some suppliers. It is right to say that they have been asked to provide an additional six weeks’ worth of medicines, but it is worth bearing in mind that the Government already partner with pharmaceutical suppliers to ensure that we have three months’ worth of buffer stock for over 200 medicines through the emergency medicine buffer stock scheme and that Public Health England already holds at least three months’ supply of vaccines for national immunisation programmes. Of course, this would be a different set of circumstances, but those are the kind of contingency plans that pharmaceutical companies are already used to making. If the hon. Lady had looked, she would have seen that the response of the industry association was to welcome the proposals in our technical notice.
Thank you, Mr Speaker. May I thank my right hon. Friend, his colleagues and their teams for the huge amount of work they have done over the past couple of months in making a great deal of progress, as was quite evident last week and, indeed, in the Exiting the European Union Committee’s meeting with Mr Barnier yesterday? However, while I understand that the idea of coming away from all this with no deal must be put out there, it cannot be contemplated with any degree of equanimity. It would be seen by the world as a failure on our part and that of the European Union. It is not acceptable.
I thank my hon. Friend for paying tribute to the excellent work being done at DExEU by our team of civil servants and across Whitehall. A huge amount of work is going on. I agree with his basic point that no deal would represent the worst-case scenario and the worst outcome from the negotiations. The best-case scenario and the optimum solution that we are aiming for is a good deal. I also agree that the approach to the Brexit negotiations will be defining both for the UK and the EU.
What action are the Government taking to mitigate the effects on British science of the disastrous move offshore of the European Medicines Agency? In the event of no deal, how many research jobs do the Government estimate will be lost during the scramble to set up a new statutory authorising body?
In that sector, as in all others, we want to ensure that we have the strongest possible relationship with our EU partners, and she will be familiar with the proposals in that area from the White Paper. Of course, as for no deal contingency planning, the technical notices will cover this area, as they do for many others, but we are striving for the strongest deal possible, and that ought to give her confidence about jobs, co-operation and all the other areas in which she takes a close interest.
The key thing in relation to the common rulebook is that it cannot be said that it would have no effect on our freedom and our latitude in free trade negotiations—that would not be an honest answer to my hon. Friend—but because, as a result of our proposals, we will have virtually full control over regulatory aspects of services and full control over tariffs, we will be in a strong position not just to continue the frictionless trade we want with our EU friends but to strike out around the world with the growth markets of the future from Latin America to Asia.
It is absolutely clear that the European Commission’s chief negotiator, Monsieur Barnier, does not support the Chequers proposal. I share the concern of Members on both sides of the House that we have no plan B, and I would like clarity on the feedback the Secretary of State has had from EU Heads of Government and Heads of State, who will ultimately decide on the deal that is brought to the European Council.
I worked in dispute resolution before entering politics and, in almost any negotiation, pushback will be heard from one interlocutor or another at various points that is ultimately not reflected in the final deal. It might be stating the obvious, but negotiation is about working through objections and resistance.
On support from member states, Angela Merkel said on 10 July that we have made good progress and that it is a good thing we have these proposals on the table. The Irish Taoiseach said:
“The Chequers statement is welcome. I believe it can input into the talks on the future relationship.”
We have also had the statements I described from the Latvian Foreign Minister, the Danish Finance Minister and the Polish Foreign Minister.
Whatever deal the Government are minded to agree will have significant implications for the operation of the proposed UK-wide framework arrangements that the Government want to set up with the devolved Administrations in a wide range of policy areas. May I ask the Secretary of State for a commitment that he will discuss the final proposals, whatever they are, with the devolved Administrations before agreeing them with the European Union and before bringing them to this House for agreement?
The hon. Gentleman makes an important point. We are absolutely committed to the devolved Administrations having the fullest possible consultation, engagement and influence on the negotiations as they proceed. We need to bear in mind the imperative of making sure that as much of that as possible takes place within the hard boundaries of the time pressure we are under, which of course results from article 50 rather than being a timetable of our choosing.
Many businesses in Colne Valley are concerned about the uncertainty of the outcome of Brexit negotiations. One constituent has contacted me with genuine worries about future staffing and recruitment of EU nationals. Should not the Government be putting the interests of local businesses and livelihoods above party divisions?
The hon. Lady is right to say that, as we enter the last phase of the negotiations, there are people who want to know more about the outcome, and who want to see a successful outcome. In relation to immigration, I would just say that the advantage of ending free movement and taking back control of our immigration policy is that we can strike the right balance between getting the full advantage for our economy of the undoubted benefits of immigration and taking a balanced approach in some of those areas where uncontrolled immigration causes stresses, pressures or costs. That is the responsible, balanced approach that this Government are taking.
The Secretary of State did not mention the two British overseas territories that border European Union states. What progress has been made in the negotiations relating to Gibraltar and to Anguilla, which borders France and the Kingdom of the Netherlands?
The hon. Gentleman has a long track record and long experience in this area. We have made sure that we are engaging not only with all the affected overseas territories but with the affected capitals, such as Madrid, to make sure that we have as much continuity and stability as possible for the people of this country and of our overseas territories.
The Secretary of State will be aware of the importance of fishing in the Brexit negotiations, particularly for the village of Portavogie in my constituency. He will also know about the attacks on British fishing fleets just last week. I have received information that boats from the Northern Ireland fishing fleet are heading to their legal fishing grounds. What discussions has he had with his European counterparts to ensure that fishing rights are protected in the Brexit negotiations?
My immediate concern is for the welfare of UK fishermen and women. There are intensive negotiations between London and other capitals to make sure that we have a responsible approach to those recent issues. On the Brexit negotiations, the hon. Gentleman will know that our White Paper proposals envisage us becoming an independent coastal state. We will want to continue co-operating with our EU partners in this sort of area, but we will have all the rights and advantages that come with being an independent coastal state under international law.
As I have made clear, our overriding priority is to get a good deal. That is our top priority, and we are overridingly focused on that. There will be risks in a no deal scenario, and I have set out the plans for managing those risks, but it is worth bearing in mind that there are some countervailing opportunities.
Ministers have implied in the past that the chemical industry can take comfort that good progress has been made on the future of the EU regulation concerning the registration, evaluation, authorisation and restriction of chemicals, which governs, among other things, the production and quality standards for chemicals. Can the Secretary of State give chemical companies on Teesside the assurance that REACH will apply and that there will be no other impediments to their business if we get a no deal Brexit?
As the hon. Gentleman will know, our White Paper includes proposals for continued co-operation and stability in this area. There is no deal until there is a whole deal, and although my thoughts and ambitions are with him and with his constituents on this point, I am afraid that I will not give out snippets from the negotiation room. The reality is that we need to present the package as a whole when we have negotiated it, so that people can see it in a balanced and rounded way.
I recently wrote to the Prime Minister asking what plans her Government have to ensure continuity of supplies of insulin for type 1 diabetics like her, like me and like 1 million other people in the UK, and I received a helpful answer saying that suppliers are being encouraged to stockpile important medicines. How is the stockpiling going? How much money has been allocated to supporting suppliers to stockpile important medicines, and from what budget has that money come?
The hon. Gentleman raises an important point, and there are other medicines for which, because of the temperature at which they need to be stored, the transport arrangements and the arrangements at the border will be very important. He will have read our technical notice, and he will know that, more generally, we already have three months’ worth of buffer stock of more than 200 medicines. He will be aware of the letter from the Department of Health and Social Care saying that we will be willing to entertain any requests in relation to any support that is needed for any of the practical arrangements on which we have advised. We are waiting for the reply to work out quite what that might be, whether it is reasonable and how we will approach it. Our door is open so we can make sure that we provide the stability that is required in this crucial sector.
In the event of a no deal scenario, there will inevitably be a huge increase in the number of customs declarations. Do the Government therefore have any plans to reverse their cuts to HMRC and to increase the number of HMRC workers instead?
As I explained in my statement, we are making sure that we have the teams in place, and HMRC will of course be among those teams, to ensure that we are prepared not just with the regulatory changes that are required but with the human resources to make sure we can give effect to Brexit.
We have learned this week that the European Medicines Agency has cancelled all its contracts with our highly regarded Medical and Healthcare Products Regulatory Agency. That is not theoretical; that is now. What assessment has the Secretary of State made of the impact on our life sciences sector? Is this an indication of how well it is all going?
I cannot talk about any specific individual contracts, but I can tell the hon. Gentleman that in life sciences, as across those other areas we prize highly, we have a set of proposals—he will know them from the White Paper, but if he does not, I urge him to look at them—that will make sure we continue our strong co-operation and regulatory co-operation in that regard. In the event of no deal—of course we cannot force the EU to sign a deal; it has to be consensual and something both sides agree—we will have the technical notices, so that the guidance, the regulation and the team are in place to make sure we have as smooth a Brexit as possible in the circumstances.
During the summer, I met people from a number of businesses based in my constituency, including one of the many IT companies based in Glasgow city centre. They were deeply concerned about what Brexit meant for freedom of movement, which allows these businesses to move staff to and from Europe as and when the need arises. They were even more concerned about detail that they are waiting for from this Government on a data adequacy agreement. Will the Secretary of State update us on that issue, because, without this, IT companies will simply not be able to function?
On data adequacy, we have made progress in the talks—that is one issue I covered in my opening statement and it has also been welcomed by Michel Barnier. On immigration and free movement, we want to make sure we have a balanced approach, within our control, so that we not only get the benefits that allow us to address shortages in the labour market, which the hon. Lady has described, but we can control the overall volume of immigration and the associated costs and pressures.
The Chequers proposal includes a migration framework that would endow EU and UK citizens with the rights to live, work and study in each other’s territories. Will the Secretary of State outline how that agreement would be fundamentally and tangibly different from the current rules on freedom of movement?
The hon. Gentleman has got the wrong end of the stick, as he will see if he looks at the proposals. We are ending free movement. We will take back control over our immigration policy and our border controls, but that does not mean we are advocating pulling up a drawbridge. In certain areas, whether allowing the recruitment of top talent to service business contracts, business trips, family holidays or student exchanges, we want to make sure movement from the UK to the EU and vice versa can be preserved and protected. That is not the kind of thing that erodes public confidence in our immigration system. But by taking back control over our immigration policy as a whole, we can take a balanced and responsible approach, and he should welcome that.