UK-EU Future Relationship Negotiations and Transition Period

(Urgent Question): To ask the Minister for the Cabinet Office if he will make a statement on the progress of the negotiations on the UK’s future relationship with the EU and preparations for the end of the transition period.

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 hon. 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.

Last year, the Prime Minister said that to leave with no deal would be a “failure of statecraft”, so this Government must take responsibility for their failure if we leave without a deal. We will hold the Government to account for whatever they bring back—deal or no deal.

With just 24 days to go until the end of the transition period, let me ask a few basic questions about this Government’s and our country’s readiness. Trading on World Trade Organisation terms would mean tariffs on lamb exports of 40%, so what is the latest assessment of how many farms would go to the wall in the event of no deal? Tariffs on car exports would be 10%, so what is the viability of our great automotive industry if there is no deal on rules of origin?

The Office for Budget Responsibility said last week—I am surprised the Chancellor did not mention it at all in his spending review statement—that if we leave without a deal, GDP would fall by an additional 2% next year, unemployment would rise by an additional 1% and inflation would be up 1.5%. Those are not just numbers; this is about British industries and people’s jobs. The detail does matter, so will the Minister admit to the House how many of the 50,000 customs agents who the Government agreed are needed by the end of the year have actually been recruited?

Today, the Minister for the Middle East and North Africa claimed that the oven-ready deal had already been delivered. If that is the case, it must have been sent to the wrong address, because the whole country is still waiting for the comprehensive trade and security deal that was promised to the British people at the general election less than a year ago.

Mr Speaker, you will remember that the former International Trade Secretary, the right hon. Member for North Somerset (Dr Fox), once said that a trade deal with the EU would be the “easiest in human history”. Let me finish by asking the Minister: is that still the view of this Government?

I have some sympathy with Her Majesty’s Opposition today, because although I have been involved with various aspects of the negotiations and am vice-chair of the Joint Committee under the withdrawal agreement, I have not been in the room for these negotiations, and neither has any Member of this House. I understand that we have so much invested in getting a good result, for all the reasons the hon. Lady sets out. This is how it must have been for an expectant father waiting for news outside the delivery room. I can understand the tension and frustration many Members must be feeling at this critical moment.

We are all waiting for what we hope is good news, but we are not powerless in this. We are all active players and participants, and we should all be doing everything we can at this critical moment to ensure that our negotiating team are supported, and that we get the best result for this country. That means that we should provide clarity and resolve about what we want from a deal and what we are not prepared to accept, and show united support for our negotiating team. I hope that all Members of this House will join me in sending our resolve and good wishes to Lord Frost and his team as they continue to work on our behalf. We must also provide the necessary focus to get the negotiations over the line, which many Members of this House did by ensuring that we did not extend the transition period.

Sadly, the hon. Member for Leeds West (Rachel Reeves) and her colleagues on the Opposition Benches have failed to do any of those things to help us secure a good deal for this country. That is fair enough if Labour does not have a position on Brexit, but it might like to get one in the next few days.

All of us in this House must show support and resolve to get the deal that the hon. Lady articulates, and that we all want for citizens and businesses, not just within the UK but throughout the remainder of the EU. [Interruption.] I am turning to her questions; there were not that many. The tariff issues are published on gov.uk. I know that she has recently written to the Chancellor of the Duchy of Lancaster, who will reply to her in detail, as he always does.

I thank my right hon. Friend for the statement. I, for one, absolutely have confidence in Lord Frost and the Prime Minister, who are basing their negotiations on a manifesto that won us a huge majority at the last election. The British public voted for a sovereign departure—that is to say, that we would be a sovereign nation. She is right, therefore, and does she not agree that although this is entitled a trade discussion or a trade deal, the truth is that at the end of the day, as she said, this is essentially about sovereignty? To have continuing control of our laws, our territorial waters and, for that matter, our trade are matters of sovereign control, not just trade. Will she give that message back to our negotiators, and say that they have the Government side of the House completely behind them?

I thank my right hon. Friend for his comments, and for saving my breath in saying that again. He is absolutely right. I think it has been a difficulty on the EU side to come to terms with the fact that we are a sovereign equal in these negotiations. We have made this point time and again. I know that many Government Members have made that point many times, but that is the sticking point. I hope that the EU negotiators, and all member states, have heard his message loudly and clearly.

So here we are at the 59th minute of the eleventh hour, where we were arguably always going to be. What was supposed to be the easiest deal in history has become the biggest unconcluded disaster of modern times. The oven-ready deal was in fact a barely defrosted turkey. We still do not know if it is to be a low deal or a no deal. The chaos is due to commence in a few short weeks, and we still do not know the scale of the carnage that each sector will have to endure.

What we do know, I suppose, is that it will all be the fault of these Europeans. We know that even if it is a low deal it will cost every Scot £1,600 and Scotland’s GDP will fall by 6.1%, and we know, of course, that Scotland rejected this whole miserable project. Will the Minister concede that these negotiations have been nothing other than a shambles, that the Government simply do not care about the repercussions of no deal, and that the views of Scotland simply do not matter? If the Government do not care about the views of Scotland, why should Scotland endure this misery any longer?

The hon. Gentleman has surpassed himself today. As someone who has worked very hard with Mike Russell and other colleagues to ensure that their views and ideas are taken up by the negotiating team, I can tell the hon. Gentleman that throughout the course of the negotiations the position has evolved to take on board many aspects of what his colleagues have been asking for—for example, participation in programmes. The team changed their original position and have gone in to negotiate very hard on things that they have asked for. If we have good news in the coming days, I hope that he will give the UK Government the entire credit.

Will my right hon. Friend ensure that the Government point out to our European partners that under their own treaty there cannot be any kind of deliberate go-slow or disruption of UK exports to the continent, whether or not we have a free trade agreement, because under their own treaty they are obliged to pursue free and fair trade with their neighbours, and, under article 8(1), to pursue good neighbourliness? Both the UK and the European Union have also signed up to the trade facilitation agreement at the World Trade Organisation, which obliges us to ensure that trade flows and does not get blocked by people doing box-ticking exercises, which are basically unnecessary.

My hon. Friend makes an excellent point, and is absolutely right. If our European partners were to do such a thing, they would also be disadvantaging the businesses in their own member states.

We all wish the negotiators well, not least—as my hon. Friend the Member for Leeds West (Rachel Reeves) pointed out earlier—because of the assessment of the Office for Budget Responsibility that no agreement could reduce real GDP by a further 2% in 2021, on top of the adverse consequences that will come from Brexit anyway. Does the Minister agree with that assessment? If so, can she explain to the House why, in the middle of the worst economic crisis for 300 years, the Prime Minister still appears to believe that no deal would be a good outcome? British business certainly does not.

The right hon. Gentleman will hear no argument from me to say that no deal is going to be better than getting a deal, but everyone is working to get a deal; that is our objective. That is why Lord Frost, as I speak, is there with his team trying to secure that. I would say to the right hon. Gentleman that delaying a decision and extending the negotiations—[Interruption.] Well, I think that is what he is driving at, but the facts are not going to change. We have all the information and the positions are as they are. It is only by continuing those negotiations, and by us continuing to put the pressure on for those negotiations to be concluded, that we will, I hope, arrive at a deal.

We all want to see a deal, but the difficulties are not really about trade. Uniquely, we began these negotiations with an entire identity of regulations, of tariffs and of trade law, which is unprecedented in the history of trade negotiations and should have made this more straightforward. Does my right hon. Friend agree that this is not really about trade difficulties, but about EU politics? It is about ensuring that no country follows the United Kingdom in exercising their legal powers to leave the European Union, and about the desire of some in the EU to limit the competitive potential of post-Brexit Britain.

I agree with my right hon. Friend. It is not just the issues that I have set out in the UK’s position that should be focusing the minds of the EU’s negotiating team and the Commission; it is also what is in the interests of their member states. Britain’s position—the United Kingdom’s position—is that we want this outcome not just for our own benefit, but for the benefit of all member states, and the businesses and citizens within them.

According to the Cabinet Office’s leaked reasonable worst-case scenario document, in the event of a no-deal Brexit, the supply of medicines and medical devices could be reduced by up to 40%. In the spirit of doing all we can, can the Minister advise us of which products might be affected and whether my constituents, and indeed the constituents of every Member in this place, should start to stockpile them?