European Union (Withdrawal) Act — House of Commons, 2019-01-14
Topic: Foreign Trade
George Iain Duncan Smith (Conservative, Centre-right): I recognise that time is short, so I will not go on for too long and I will not take too many interventions—but you never know, you might get lucky I appreciate the excellent speech of my right hon. Friend the Secretary of State, but, while I wanted to agree with it all, I have to tell him that I did not wholly agree with it, and I want to address a couple of points. I do not doubt for one moment his sincere desire to make sure that this country is able to strike trade deals around the world and thus make the greatest advantage from the big decision taken back in 2016. The question for me is: are we going to be able to do that, and what does this agreement do to help us—or does it help us Alignment is a very big and important issue in the agreement, and we have conceded too much to the EU, which will hamstring us in our future trade agreements. I think my right hon. Friend has actually said that elsewhere, and as he knows, the US ambassador also made that point clear recently. We may want to do financial services deals with other countries, but many other countries, including the United States of America, will want to do more on agricultural and mechanical exports. Agriculture is a big deal in the States and they would like to do that, but in our country there has been a rather supercilious and pointless debate about things like chlorinated chicken. We tend to get a bit arrogant and think that somehow we are fantastically superior—[Hon. Members: "We are."] Well, on the issue of so-called chlorinated chicken, America has a lower level of death and illness from campylobacter or salmonella than us here in the UK. That is because some of our chicken imports come from way outside the EU and are less than great. So we should not be so arrogant about thinking our standards are higher than everyone else’s. I want to make three main points about why I am concerned, and then I will conclude. The first concern is the backstop; the hon. Member for Brent North (Barry Gardiner) referred to it, and we have all referred to it. My concern about the backstop is twofold. First, if we go into the backstop it will trap us and take our ability to leave out of our own hands. It will be the first time that, as a sovereign nation, we will have agreed to let others decide whether we can stay in or leave an international agreement. We can leave NATO, we can leave the UN if we wish, and we can even leave the EU at our vote, but in this case we will not be able to leave; there will have to be a joint agreement about departure, and there is no time limit to it I was therefore very interested to see what the Prime Minister would come back with on the agreement. I see that the letter from President Tusk and President Juncker to her says, "It’s very, very good and important because it is in fact internationally legally binding," but they know and we know that that is not the same as being bound in by the terms of the agreement. The agreement overrides every other purpose. It was interesting that when the previous Prime Minister was negotiating, prior to the referendum, he claimed the same about his agreement, but again, it did not override European law. The letter from the European Union actually says: "As you know, we are not in a position to agree to anything that changes or is inconsistent with the Withdrawal Agreement" Even more important than that is what the Attorney General has said about this. There was a great moment here when the Prime Minister quite legitimately said that the Attorney General had spoken about the balance and said that we were now accepting that there was some kind of lock in legal terms, but what she did not do was read the last sentence of the paragraph in the Attorney General’s letter, which deals with the EU’s conclusions in relation to the withdrawal agreement, and states "albeit they do not alter the fundamental meaning of its provisions as I advised them to be on 13 November" That fundamental advice was simply this: "Therefore, despite statements in the Protocol that it is not intended to be permanent, and the clear intention of the parties that it should be replaced by alternative, permanent arrangements, in international law the Protocol would endure indefinitely until a superseding arrangement took its place, in whole or in part, as set out therein." That really reminds us that there is a fundamental flaw in this I do not fear us going into the backstop. My real problem is that, when it comes to negotiating our future trading arrangements, the European Union will have a very big stick to hold over us. President Macron made that clear recently when he talked about grabbing back some of the fishing rights that we may well have taken in the course of the early withdrawal agreement. He said that he would simply wait until we got closer to the backstop, because at that point we would do almost anything to avoid falling into it. I do not disagree with him. It would be appalling if we ended up in the backstop. The EU knows it and we know it, and that is the major problem That is in line with my right hon. Friend the Secretary of State’s earlier remarks, on which I have already complimented him—I have no doubt of his determination to drive these points through. Also, it is small wonder that my right hon. Friend the Member for Chelsea and Fulham (Greg Hands) said in an interesting intervention the other day that he had carefully read many interviews in German and that Mr Selmayr had made it clear that the European Union had got all its objectives for the withdrawal agreement happily sorted out. Clearly that must mean that we did not do so. That is the major problem. It is important not to be in the backstop, but the most important thing is that not falling into it is what changes the pattern of the political agreement and of how we negotiate the trade arrangements. Therefore, with respect to my right hon. Friend the Secretary of State, it is a major problem My second point is that we have agreed to pay £39 billion. I am not against us agreeing to pay the European Union in order to stand by further agreements, if they exist. After all, I believe that the EU said £100 billion to begin with, and we have now come down to £39 billion, which suggests that there were not quite so many absolutes in the set of things that we were supposed to be engaged in. I do not want to be mealy-mouthed about this, but £39 billion is a lot of money. One section of that relates to the two-year interregnum, which I accept would cost us money. That is a total of £22 billion over the two years that we would owe the EU—that is part of the budget. The rest is about the future arrangements My concern is that, according to this arrangement, the EU would get that money regardless of whether we reached a satisfactory agreement. That is quite an important feature. Back in December, I said on record that I thought the Government would be mistaken to agree to both the backstop and the money without having any idea of what the trade position would be. The Government said, "Don’t worry, we will come on to trade immediately and it will open the door." Well, it did not open the door, and we only got on to trade a few months before Christmas. We have given the EU the most important negotiating position we have, and it has left us with very little with which to drive the EU into the next element of this, which is the thing we really want—namely, trade I do not resile from the point that we want a trade deal with our nearest trading partner. Of course we do. We do not want to end up in some kind of spitting war with the EU; we want a decent, reasonable arrangement, but we also want other arrangements around the world. As it stands, the problem is that the £39 billion is hinged on nothing at all, and the EU will get it regardless. There is not much incentive for the EU to produce the sort of trade arrangement that we would want, and that is what worries me.