UK-Switzerland Enhanced Free Trade Agreement

With permission, Mr Speaker, I will update the House on the enhanced free trade agreement that was concluded yesterday between the United Kingdom and Switzerland. This is the sixth trade deal that the Government have secured over the last two years.

We already had an FTA with Switzerland, which was based on the 1972 EU-Switzerland agreement, but in keeping with many FTAs of that era, it was primarily focused on trade in goods. By contrast, this is the most significant trade agreement for services that the UK has concluded so far, and it includes the UK’s most ambitious digital chapter and most comprehensive business travel commitments in an FTA, along with high-ambition outcomes across services and investment. It especially plays to our strengths as a pre-eminent services superpower. It includes some of the strongest services commitments that we have ever secured, while creating opportunities in the eight core growth-driving sectors of our industrial strategy, including financial and professional services, life sciences and digital technologies.

Our trade strategy, published one year ago, underscored what everyone with an eye on trade already knew: that our

“services sectors are the most powerful engine of our growth and prosperity”,

and that it was high time to pull services trade out of the margins of trade discussions. Some 83% of UK workers are employed in services, including through regional employers such as Capital Law in Cardiff and the Edinburgh-founded Skyscanner; large firms with multiple offices across the UK, such as Julius Baer, which has a regional office in Newcastle, and KPMG, which has offices in Leeds and elsewhere; and thousands of smaller firms across the country. We have worked hard to ensure that this deal really works for them.

Switzerland is already the UK’s sixth largest services export market, and bilateral services trade was worth more than £30 billion last year. This agreement is estimated to increase UK services exports to Switzerland by £5.2 billion annually in the long run, while supporting jobs across the UK, including the 171,400 already supported by exports to Switzerland. On top of this, we know that Swiss-owned businesses employed around 150,000 people in the UK in 2024, and bilateral foreign direct investment stood at £87 billion at the end of 2024. The agreement we have reached ensures that job creation and investment will continue to grow as our bilateral trade grows.

The UK and Switzerland have agreed that future improvements to access in certain sectors are locked in—the first time that Switzerland has agreed to adopt this approach. It gives UK firms a more stable business environment, and greater confidence to plan and invest. The agreement permanently protects the rights of UK lawyers to advise on foreign and international law in Switzerland without requalifying. Additionally, it includes the most comprehensive digital chapter that Switzerland has agreed to in an FTA. Over 70% of UK-Swiss services trade is delivered digitally, so it was absolutely critical to us that we laid out provisions that supported the free flow of data while ensuring that privacy remained protected, and I am glad to say that we have been successful. Our digital chapter modernises the digital trading environment through commitments on electronic contracts, signatures and invoicing, prevents customs duties on electronic transmissions, and restricts unjustified data localisation requirements, all of which will make digital trade easier and more appealing for businesses, whether they are based in Birmingham or Berne.

I call the shadow Secretary of State.

I thank the Minister for advance sight of his statement.

We Conservatives warmly welcome this excellent agreement and congratulate the Ministers and officials who delivered it. I was pleased, when I was the City Minister, to have been part of the team behind the forerunner, the Berne—[Interruption.] Would the Minister listen for a moment? The Berne financial services agreement with Switzerland was signed by the then Chancellor, my right hon. Friend the Member for Godalming and Ash (Sir Jeremy Hunt). That was one of our first ever post-Brexit agreements based on mutual recognition of each country’s regimes, and Conservative Ministers, including my right hon. Friend the Member for North West Essex (Mrs Badenoch) and my hon. Friend the Member for Droitwich and Evesham (Nigel Huddleston), were involved in the commencement of the planning for the negotiation that we are discussing today. The benefits of this deal are what taking back control looks like in practice: British lawyers advising in Zurich without requalifying, British firms winning contracts that an EU customs union would have blocked, and British travellers enjoying e-gate access and lower roaming tariffs.

As the Minister said, this joins a growing number of such deals, including our accession to the CPTPP and agreements with Australia, New Zealand, the Gulf, India and the United States. This is Britain once again charting its way in the world, engaging directly with the leading or fastest-growing economies on the planet. Britain could strike this deal only because of our independent trade policy. Without that, the Government could never have launched the consultation this morning on deepening our trade relationships with Indonesia, the Philippines, the UAE and Uruguay—all countries with whom the UK should seek closer ties.

It is an enormous delight to put a smile on the hon. Gentleman’s face. It is such a rare outing to see a smile on his face that I feel my job is done—my work is done.

Your legacy!

My legacy will be a smile on the hon. Gentleman’s face. It was nice that he actually congratulated us. I think that is what he was doing. He said that was without any condition, but then he said it was really the Conservatives who started all of this business. It is exactly what he said about the GCC deal earlier this year, when he said that really all the work was done by them. But to be honest, it is not about where you start; it is about where you finish, and it is actually getting a deal over the line that is the difficult bit.

I was standing in Hyde Park at a Duran Duran concert, I think 10 days ago, when—[Interruption.] Wild boys, calm down! Frau Budliger rang me, and she wondered what was going on in the background. It was actually the Scissor Sisters, the act on beforehand. I was just thinking, “I don’t know whether we want to dance or not,” because we had not been able to get all of this deal over the line yet.

The truth of the matter is that the last two weeks are nearly always the most difficult bit. Sometimes it is a degree of negotiating between different Departments, and I am enormously grateful to all my other colleagues in the Government who have made it possible to get this to the place where we are now. Indeed, I do not want to exaggerate, Madam Deputy Speaker—

Really? [Laughter.]

I do not think you are meant to take part in the conversation, Madam Deputy Speaker.

Or deviate!

Or deviate. Or repeat!

I do not want to exaggerate, but this may be the most significant iconic moment for the UK and Switzerland since Sean Connery and Ursula Andress met one another in “Dr. No” back in 1962. [Interruption]—no exaggeration at all, of any kind.

I am worried about one thing the shadow Minister said, which is about how he would appoint ambassadors. I would just say that appointing ambassadors in unusual circumstances has not gone very well for this Government, and I would not urge him to do it himself.

I did not use the term “Brexit dividend.” It is factually accurate that we would not have been able to have had these negotiations if we were still in the European Union. Of course I am 100% up for exploiting every opportunity we have, and that is precisely what we are doing and we have a pretty good record. Most of the FTAs agreed by the previous Government were basically cut and paste from EU FTAs into UK legislation, whereas we are making agreements that are a bit more bespoke. It is great to see the European Union following suit—for instance, in India. The hon. Gentleman makes a very fair point about Mercosur. I would like us to be able to start that process fairly soon. I think that will be a matter for the new team, whoever they may be, in a week’s time.

I call the Chair of the Business and Trade Committee.

I congratulate the Minister on deal No. 6. A very warm thanks, on behalf of the Committee, to the hard-working officials in the Department for Business and Trade and to James Squire and the Foreign, Commonwealth and Development Office team on the ground in Berne. We very much look forward to scrutinising the deal on behalf of Parliament, with a debate that will no doubt be triggered in the Constitutional Reform and Governance Act period.

The Minister will know, though, that there has already been some controversy this morning, about which he could perhaps inform the House. This is, I think, the first free trade agreement to lock in exclusivity arrangements around intellectual property for pharmaceuticals. That is a precedent that the House should debate. Will he take this opportunity to put our minds at rest that the deal that he is commending to us today will not lead to higher NHS prices in future, and will not impair access to generic medicines?

I am very grateful to the Chair of the Select Committee; I look forward to seeing my right hon. Friend later today and then again tomorrow, in two different sessions. He is absolutely right that this is a very important deal. Of course, it is not just done by the politicians involved. The teams in our embassy in Switzerland and in our respective Departments—I include other Departments such as the Home Office, the Department for Energy Security and Net Zero, the Department for Environment, Food and Rural Affairs, and so on—are all part of the team that get a deal over the line.

My right hon. Friend makes an important point about intellectual property. Of course, that is frequently now a key part of any FTA, because we want to look at how we can ensure we are protecting UK IP. We are an IP superpower and that is a key part of any of our services negotiations, and certainly in digital trade as well. I can confirm that the deal will do no harm to the NHS—far from it. It will mean that our life sciences industry, working closely with the Swiss life sciences industry and pharmaceuticals, will be able to deliver groundbreaking new drugs and generics more quickly to NHS patients. I am not worried in any way, shape or form about the anxieties raised by some campaigning groups. I think they have abstracted from a couple of figures and ended up with the worst possible estimation of what might happen. That fear is misguided.

I call the Liberal Democrat spokesperson.

The Liberal Democrats want a closer, more sensible relationship with our European friends and neighbours, so there is plenty to welcome here. I congratulate the Minister and his team on being able to secure some of the things we see today. Scrapping mobile roaming charges—charges that had to be changed when we left the European Union—will significantly boost support for consumers and the small businesses who trade across Europe.

The Minister is aware that the European Union is our biggest single trading partner in services. Some 37% of our services trade is with the EU, so repairing our relationship with the EU is the biggest single thing we can do to boost trade in our financial and professional services. I know the Minister agrees: when he was in front of the Select Committee recently, he told colleagues that if he had the choice, he would rejoin the European Union. It is disappointing that the Government have not moved more on the European Union and followed the Liberal Democrats’ plan for a defence and growth partnership, cutting the red tape and barriers that British businesses face. According to TheCityUK, exports of financial services have declined by 5.9% since 2019, at least in part due to Brexit frictions.

I would like to ask the Minister a specific question in relation to e-gates. We welcome the news about the changes to e-gates but, given the serious risk of disruption with the entry and exit systems, will he tell the House when our constituents can expect the same clarity and certainty for airports across the European Union, so that we can really make a positive change?

Now, you see, the hon. Gentleman always has a smile on his face—every single day of the week. The hon. Member for Arundel and South Downs (Andrew Griffith) has managed to keep it going for at least half an hour now, so that is a good thing.

The honest truth is that we all want to achieve the same thing: to increase our trade in services and goods across the European Union. It is a shocking sadness, I think, that 16,000 businesses in the UK have stopped exporting to the European Union. The figures for last year are actually slightly different from the figures that the hon. Member for Maidenhead (Mr Reynolds) gave. Our services exports to the EU rose by 7%, but our goods exports to Europe fell. He, like many other Members, will have heard concerns expressed by people who export small goods and are suddenly facing an additional charge that they did not previously have to pay, because of the de minimis rules being changed. They are also being changed by the United States of America, of course.

I want to achieve trade with the EU that is as frictionless as possible, and I will strive to do so as fast as we possibly can. I do not have personal responsibility for e-gates across the whole of Europe, so I am afraid the hon. Gentleman cannot hold me to account on that particular issue. On Switzerland, it is not as simple in Switzerland as it might be in some other countries, because some of these issues lie with cantonal Governments. I have worked very closely with Frau Budliger. She has made a lot of headway in trying to get us to a place where British business folk and others will be able to use e-gates, both in and out, in the very near future.