UK-EU Future Relationship Negotiations and Transition Period

Commons Urgent Question

The following Answer to an Urgent Question was given in the House of Commons on Monday 7 December.

“I am grateful for this opportunity to update the House on the progress of our negotiations with the European Union.

Intensive talks continue. In fact, the United Kingdom’s negotiating team, led by Lord Frost, has been in talks with the EU almost every day since 22 October and is working tirelessly to get a deal on our future relationship. This also affords us in this place the opportunity to show our collective resolve to get a good deal, our expectations of what that needs to look like, and what we will not accept. While there has been some progress across many areas, familiar differences remain on the so-called level playing field, fisheries and governance. Of these, the level playing field issue is currently the most difficult.

On Friday, after an intensive week of talks in London, the respective chief negotiators, Lord Frost and Michel Barnier, issued a joint statement. This outlined that the conditions for an agreement had not been met, and that talks should pause briefly to allow the Prime Minister and the Commission President to discuss the state of play on Saturday. Following their telephone call, the Prime Minister and President von der Leyen issued a joint statement. It welcomed progress, but noted that an agreement would not be feasible if the issues on the level playing field, fisheries and governance were not resolved. They agreed that a further effort should be made by the UK and the EU to assess whether the outstanding differences can be resolved, and instructed the chief negotiators to reconvene in Brussels.

We are at a critical moment in the negotiations. Teams are negotiating as we speak, and the Prime Minister will call the Commission President later this afternoon to discuss progress again. My right honourable friend the Chancellor of the Duchy of Lancaster is in Brussels today, meeting the European Commission Vice-President; they are meeting in their capacity as co-chairs of the UK-EU Joint Committee under the withdrawal agreement.

We are all working to get a deal, but the only deal that is possible is one that is compatible with our sovereignty, and that takes back control of our laws, trade and waters. While an agreement is preferable, we are prepared to leave on so-called Australian-style terms if we cannot find compromises. As the Prime Minister has made clear, people and businesses must prepare for the changes that are coming on 31 December, most of which are related to our departure from the EU single market and customs union, and not the outcome of these talks.

Mr Speaker, we will continue to keep the House updated as we seek to secure a future relationship with our EU friends that respects our status as a sovereign, equal and independent country.”

My Lords, the NFU, Toyota, traders, patients, ports, shippers and, indeed, the national interest are all crying out for a deal; so, in effect, are the OBR’s analysis and the Government’s own reasonable worst-case scenario planning. In the light of this, does the Minister agree with Tobias Ellwood that it would be

“an abject failure of statecraft … to leave the EU without a deal”?—[Official Report, Commons, 7/12/20; col. 546.]

My Lords, we are all working to get a deal but the only deal that is possible is one that is compatible with our sovereignty and takes back control of our laws, trade and waters. Although an agreement is preferable, we are prepared to leave on so-called Australia-style terms. People and businesses must prepare for the changes that are coming on 31 December, most of which relate to our departure from the EU single market and customs union, not the outcome of the talks.

My Lords, references to Australia and Canada deny the geography, which is that we must retain close relations across the board with our neighbours whether we are in the EU or outside it. Does the Minister have a response to the remarks of the noble Lord, Lord Hague, in yesterday’s Daily Telegraph? He said that no deal with our European neighbours would

“create the biggest crisis in our relations for more than a century.”

I repeat: we are seeking a deal. As the Prime Minister said a few minutes ago, hope springs eternal. There are significant differences. I do not agree that there would be a crisis that could not be surmounted by the British people.

Will my noble friend ignore the pleas of those who want us to cave in and accept every demand of the European Union? Does he recall that Canada is even closer to the United States than we are to Europe? It has a perfectly normal trade agreement with the United States that does not require it to accept American laws and rules or give America its fish. Why should we be any different vis-à-vis the European Union from Canada vis-à-vis the United States?

My Lords, my noble friend makes a profound geographical point. I agree with him.

My Lords, with Covid having changed the context of the negotiations fundamentally, and given that any tariffs and disruption will add uncertainty to the UK, the EU and the wider international economy, would it not be sensible to support the most affected communities by presenting alongside any agreement or in the event of a no-deal outcome a realistic action plan that would benefit the economy at large, including by protecting services, manufacturing, fishing, jobs and new business opportunities?

My Lords, the continuing Covid emergency is obviously a problem, although I am sure that the noble Viscount will join me in welcoming the wonderful news of the first vaccination happening today. We continue to keep the impact of coronavirus on the delivery of the transition programme, as well as the potential for disruption, under review. We are considering, as we always do, what mitigations may be needed as the situation evolves.

My Lords, it is clear that, in any trade deal, there must be some compromise on sovereignty. The Government need to be clear with us where they are prepared to compromise. I hope that the Minister will press on the Prime Minister the importance of those regions where the economy relies on manufacturing. The north-east recovered from the closure of its basic industries—mining, steelworks and shipyards—by developing manufacturing, much of which has thrived through exports to the EU. It makes up a higher proportion of the economy in the north-east than it does anywhere else in this country. Companies do not know the rules or the price structure that they will have to work from in less than a month. Even at this late stage, can the Minister assure us that they are not forgotten and that manufacturing companies in the north-east will be able to continue to trade with the EU without massively increased bureaucracy or, indeed, increased costs that will drive them out of business?

My Lords, I underline totally the importance of a manufacturing sector to this country. It is absolutely central to this Government’s strategy and policy of levelling up. So far as the negotiations are concerned, a huge amount of progress has been made but the UK’s position has been absolutely clear from the outset. A negotiation needs each of the two partners to understand the position of the other.