With your permission, Mr Speaker, I would like to update the House on the Government’s negotiations with the European Union on our future trading relationship and also the work of the UK/EU Joint Committee established under the withdrawal agreement.
First, on the talks on the new trade agreement, we had hoped to conclude a Canada-style free trade agreement before the transition period ends on 31 December this year but, as things stand, that will not now happen. We remain absolutely committed to securing a Canada-style FTA, but there does need to be a fundamental change in approach from the EU if the process is to get back on track. I have come to the House at the first available opportunity to explain why and how we have reached this point.
We have been clear since the summer that we saw 15 October—last Thursday—as the target date for reaching an agreement with the EU. The Prime Minister and the Commission President Ursula von der Leyen agreed on 3 October that our negotiating team should work intensively to bridge the remaining gaps between us, and we made it clear that we were willing to talk every day. But I have to report to the House that this intensification was not forthcoming. The EU was willing to conduct negotiations only on fewer than half the days available and would not engage on all of the outstanding issues. Moreover, the EU refused to discuss legal texts in any area, as it has done since the summer. Indeed, it is almost incredible to our negotiators that we have reached this point in the negotiations without any common legal texts of any kind.
On 15 October, the EU Heads of State and Government gathered for the European Council. The conclusions of that Council reaffirmed the EU’s original negotiating mandate. They dropped a reference to intensive talks that had been in the draft and they declared that all—all—future moves in the negotiation had to be made by the UK. Although some attempts were made to soften that message by some EU leaders, the European Council reaffirmed those conclusions as authoritative on Friday. That unfortunate sequence of events has, in effect, ended the trade negotiations because it leaves no basis on which we can actually find agreement. There is no point in negotiations proceeding as long as the EU sticks with that position. Such talks would be meaningless and would take us no nearer to finding a workable solution.
That is the situation we now face, and that is why the Prime Minister had to make it clear on 16 October that the EU had refused to negotiate seriously for much of the past month or so. The EU had now, at the European Council, explicitly ruled out a free trade agreement with us, like the one that it has with Canada, and therefore this country should get ready for 1 January 2021 with arrangements that are more like Australia’s, based on simple principles of global free trade.
Now, if the EU wants to change that situation—and I devoutly hope it will—it needs to make a fundamental change in its approach and make clear it has done so. It has to be serious about talking intensively on all issues and trying to reach a conclusion, and I hope it will. But it also needs to accept that it is dealing with an independent and sovereign country now. We have tried to be clear from the start that we would not be able to reach an agreement inconsistent with that status. I do not think that we could be accused of keeping that a secret. Yet the proposals that the EU has discussed with us in recent weeks, which it presents as compromises, are simply not consistent with our new sovereign status—certainly not yet.
While I do not doubt that many on the EU side are well intentioned, we cannot accept the negotiators’ proposals that would require us to provide full, permanent access to our fishing waters, with quotas substantially unchanged to those that were imposed by EU membership. We cannot operate a state aid system which is essentially the same as the EU’s, with great discretion given to the EU to retaliate against us if it thought that we were deviating from it. More broadly, we cannot accept an arrangement that means that we stay in step with laws that have been proposed and adopted by the EU across areas of critical national importance.
In a nutshell, we have been asking for no more than what has been offered in trade agreements to other global trading countries, such as Canada—terms that, of course, the EU said last year it had no difficulty offering to us. We are not even asking for special favours reflecting our 45 years as a member state—during which we paid in every day more than we took out—quite the reverse. But even if this new arrangement is impossible for the EU, I must inform the House that we will be leaving on 31 December on Australian-style terms and trading on the basis of WTO rules.
With just 10 weeks left until the end of the transition period, I have to emphasise that that is not my preferred outcome and nor is it the Prime Minister’s. We recognise that there will be some turbulence, but we have not come so far to falter now, when we are so close to reclaiming our sovereignty. We have to be in control of our own borders and our fishing grounds. We have to set our own laws. We have to be free to thrive as an independent free-trading nation, embracing the freedoms that flow as a result. So it is important that I turn to the preparations that we are now intensifying for the end of the transition period. These apply whether we have a free trade agreement or otherwise, of course.
I am not blithe or blasé about the challenges ahead, particularly given the additional problems that we have dealing with the covid-19 pandemic. However, leaving the EU on Australian terms is an outcome for which we are increasingly well prepared. Ever since the UK decided it would leave the single market and the customs union on 31 December, Government and businesses alike have been working hard to prepare for the new procedures that were the inevitable result. I congratulate businesses on the resourcefulness they have shown so far. We want to work with them so that they continue responding as energetically, flexibly and imaginatively as possible to the challenges of change. We also want to work with them to prepare for the opportunities ahead, including those stemming from our new free trade deals, such as the agreement with Japan struck by the Secretary of State for International Trade, which, of course, grants us far more favourable access to the world’s third biggest economy than we had as an EU member.
I would like to put on record my particular thanks to the road haulage industry, customs intermediaries and others for their constructive engagement with Government, including at our extensive roundtable last week.
This week, the Prime Minister and I will be speaking again to business leaders to discuss preparations for life outside the EU. We will continue to listen to their concerns, and we will redouble our efforts to help them to adjust and prosper. The XO Cabinet Committee—the EU Exit Operations Committee—meets daily and will intensify its operational focus on business readiness. We continue to work closely with our partners in the devolved Administrations because we want to ensure that every part of the UK is ready for the end of the transition period.
In these final 10 weeks, we are intensifying our public information campaign. Every firm will find the information it needs on new rules which govern trade between Britain and the EU at gov.uk/transition. Today, HMRC is writing to 200,000 traders that do business with the EU to reinforce their understanding of the new customs and tax rules. We are also putting in place IT systems to help goods flow across borders. We are giving business access to customs professionals to help with new ways of working and we have also planned how to fast-track vital goods in the first few weeks to get around EU bureaucracies. We have already published and indeed updated our border operating model. We have announced £705 million-worth of investment in jobs, infrastructure and technology at the border. We have also strengthened our maritime security to protect our fishing fleets and safeguard our seas.
In addition to the steps we are taking, we are also continuing our work with the EU in the Withdrawal Agreement Joint Committee. I would like to update the House on its latest meeting, which took place earlier this morning. Coming only three weeks after the last meeting, I am pleased to report that in this forum the approach from the EU is very constructive. There is a clear imperative on both sides to find solutions and we remain committed to working collaboratively with the EU through the Joint Committee process.
At our last meeting in Brussels I agreed with my co-chair, Vice-President Šefčovič, that we would intensify discussions to implement the withdrawal agreement, primarily around citizens’ rights and the Northern Ireland protocol. Our officials have since held numerous sessions and today in London I reiterated the UK’s commitment to upholding all our obligations under both the withdrawal agreement and the Belfast agreement. We agreed that we will publish a joint update on citizens’ rights and I am pleased to confirm that almost 4 million EU citizens in the UK have now received status under our scheme. We have also discussed our work to implement the Northern Ireland protocol. We are taking steps to implement new agrifood arrangements. We also acknowledge the EU’s concerns about appropriate monitoring of implementation. We now have a better understanding of its requests and the reasoning behind them. We have confirmed that the specialised committee will work intensively to ensure that we can make progress in this area, and with respect to Gibraltar and the sovereign base issues.
A lot remains to be resolved before the end of December, but we have made substantial progress on implementation. I look forward to further engagement with Vice-President Šefčovič in the weeks ahead. I want to put on record my personal appreciation for the constructive tone and the pragmatic spirit with which he and his team have approached our discussions.
In his statement on Friday, the Prime Minister looked ahead to 2021 as a year of recovery and renewal when this Government will be focused on tackling covid-19 and building back better. We are getting ready to do now what the British people asked of us: to forge our own path and not to acquiesce to anyone else’s agenda. On the negotiations, our door is not closed. It remains ajar, and I very much hope that the EU will fundamentally change its position, but, come what may, on 31 December, we will take back control. I commend this statement to the House.