Leaving the EU: Economic Analysis

Debate between Steve Baker and Charlie Elphicke

Tuesday 30th January 2018 Commons Chamber

[Mr Baker]

The hon. Gentleman said that there is no such model; the truth is that my right hon. Friend the Member for New Forest West (Sir Desmond Swayne) referred to a model earlier. Economists for Free Trade are very clear about their modelling. Other models are available—at the time of the referendum, Open Europe did some modelling and found that the effect could be plus or minus 2%. The truth is that there are profound uncertainties facing not just the United Kingdom in this negotiation but all economies in the world. All face three big issues: the growth of technology; a new phase in globalisation; and, of course, the continuing aftermath of the financial crisis which, as the hon. Gentleman well knows, has left interest rates at levels the Governor of the Bank of England has described as extraordinary if not emergency. Those three issues mean that all economies are on highly uncertain paths. The Government will navigate their way through the future with confidence and boldness.

[Charlie Elphicke (Dover) (Ind)]

Is the Minister aware that in the past 40 years the European Union’s share of global GDP has fallen from 30% to just 15% and that 90% of future world economic growth is going to come from outside Europe? Does he agree that the future is not regional relative decline; the future is global?

[Mr Baker]

I do agree, and my hon. Friend makes an extremely good point. We need to make sure that this country is well positioned. He refers to the previous era of globalisation and particularly the emergence of China. The United Kingdom’s task is to take the right strategic decisions so that we can be plugged in not only to Asia but, I very much hope, to an emerging Africa, Latin America and the whole world, and so that we can participate on the basis of technologies that were unimaginable at the beginning of the EU’s life, not least the internet, inexpensive air travel and containerised shipping. Those three things have transformed our world for the better, and I hope and expect, as I am sure my hon. Friend does, that in future, over the course of our lifetimes, the world will improve in ways that we cannot yet imagine.

Leaving the EU

Debate between Steve Baker and Charlie Elphicke

Tuesday 24th October 2017 Commons Chamber

[The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Steve Baker)]

I congratulate my hon. Friend the Member for Dover (Charlie Elphicke) on securing this debate and the expertise that he demonstrated in leading it. I also put on record how pleased I am that my right hon. Friend the Secretary of State for Exiting the European Union is in the Chamber for this important debate.

In this House, and on the indispensable ConservativeHome website, my hon. Friend has shown that he is a great and true champion of Dover and, by extension, our country. No one is any doubt about the key strategic importance of the port of Dover, which he represents with such insight and determination. As I listened to his speech, I was reminded that his voice is that of a person who campaigned to remain, but has wholeheartedly accepted the democratic decision of the UK. He referred to recent polling, and I am in no doubt that he speaks for the majority of the British people who expect the Government to be ready on day one in all circumstances. With that in mind, I am glad to confirm that while we are working for a good deal—we are confident that we will obtain one—the Government are making extensive preparations to exit the EU even in the unlikely event that no agreement is reached between us.

The Government respect the vote of the people to leave the EU in a referendum authorised by our Parliament. The Government triggered article 50, and we are negotiating for a good outcome that works both for the people and businesses of the UK, and for those in the EU. The tone and assurance of the Prime Minister’s speech in Florence added new momentum to the negotiations. It made it clear that we are a nation that meets our financial commitments, and it reiterated our desire for a time-limited implementation period that is in the interests of both the UK and the EU. Both sides are agreed that subsequent discussions have been conducted with a new spirit and we are determined to work together to reach agreement. We are ambitious and positive for Britain’s future and for these negotiations but, as my right hon. Friend the Secretary of State made clear in the Queen’s Speech debate, the Government will be proceeding in the only responsible way possible: preparing plans for a range of possible outcomes.

I wholeheartedly agree with my hon. Friend that while it is in the mutual interests of the EU and UK to negotiate a deep and special partnership, we also have a duty to plan for a scenario in which we leave the EU without a deal. People should not be alarmed by our contingency planning, nor read into it any pessimism. Rather, I hope that the public will be reassured that we are taking the actions of a responsible Government who are determined to ensure a smooth exit under a range of scenarios. It is our ambition to continue and enhance our status as a great global trading nation that is respected around the world as a beacon of free trade.

I agree with my hon. Friend that being prepared for a smooth exit in all scenarios will ensure that we are in the best position to seize new opportunities as we leave the EU and begin to operate our own independent commercial policy within the framework of the WTO. We will be outside the customs union, at liberty to embrace free trade, and outside the European economic area. Our intention is to work with our EU partners as we lead the race to the top on global standards and pro-competitive regulation, driving up productivity and, with it, living standards.

I am happy to tell my hon. Friend that we have been working across Government for over a year on detailed delivery arrangements for a range of scenarios. Plans are well developed. Each Department has a clear understanding of how withdrawing from the EU may affect its existing policies and services under a wide range of outcomes. I agree with him that it is responsible to spend in preparation for that range of outcomes.

The Treasury has committed more than £250 million of new money to support Departments such as the Department for Environment, Food and Rural Affairs, the Home Office, Her Majesty’s Revenue and Customs, and the Department for Transport in this financial year for exit preparations, including under no deal. My Treasury colleagues are talking to all Departments about their funding requirements in 2018-19.

[Charlie Elphicke]

I thank my hon. Friend for his typically outstanding response to the debate. Does he agree that to rule out no deal in all circumstances, as the Labour party wishes to do, would be not only foolish and against the national interest, but would invite a truly appalling offer from across the channel?

[Mr Baker]

I am grateful to my hon. Friend for that invention, which gives me the opportunity to reiterate that we are, of course, striving with all our resolve to secure a mutually beneficial deal. He is absolutely right that on sitting down at the negotiation table, one must be willing to step up and walk away. Her Majesty’s loyal Opposition—ably represented by their one Member here, I am sure—have taken the view that they would accept any deal.

--- Later in debate ---

[Mr Baker]

I am grateful for the clarity with which my right hon. Friend makes his point, but I hope he will not mind if I say that, in the time available, I perhaps ought to leave that particular point for a debate on the negotiation, if such a thing were to arise.

In addition to the European Union (Withdrawal) Bill, which will ensure that we have a fully functioning statute book on the day we leave, the Government are already bringing forward other legislation as required. Our trade Bill will give the UK the foundation for an independent trade strategy. We will create a world-class international sanctions regime through the sanctions and anti-money laundering Bill. We will deliver an effective customs regime through the customs Bill. Our Nuclear Safeguards Bill will ensure that we can deliver a domestic nuclear safeguards regime. This legislation will support the future of the UK in a wide variety of outcomes, including one where we leave the EU without a negotiated outcome.

Alongside bringing forward necessary legislation, we will be procuring new systems and recruiting new staff when necessary to ensure that we deliver a smooth exit, regardless of the outcome of the negotiations. Secretaries of State have already begun to set out their plans to Parliament. For instance, in last week’s Transport questions, the Secretary of State for Transport explained that his priority was to seek

“new aviation arrangements—both with the EU and with those states where we currently rely on EU-negotiated arrangements for market access”.

He went on to say that he was seeing

“nothing but good will and constructive discussion between us and those countries in ensuring that there is no interruption in flying.”—[Official Report, 19 October 2017; Vol. 629, c. 976.]

We also understand that we need to prepare and deliver as a whole country. That is why we have been having positive and productive engagement with the devolved Administrations in Scotland, Wales and Northern Ireland, which is essential to our success as a country. We have been engaging with, and will continue to engage with, the devolved Administrations on issues where joint action is required across the UK to ensure that we are prepared for a smooth and orderly exit from the EU.

[Charlie Elphicke]

We all want a smooth and orderly exit from the EU. Will the Minister just address my point about trade facilitation and the requirement for the facilitation of trade under the WTO?

[Mr Baker]

I am grateful to my hon. Friend for drawing me on to that point of detail. I am happy to say that I am very proud of the UK’s customs authority, which already works hard to ensure that trade is as fast and frictionless as possible. We were ranked fifth globally in the World Bank’s 2016 logistics performance index on customs, and I know from my time serving on the Treasury Committee that our excellent officials are working to take us higher up that index.

My hon. Friend mentioned the WTO trade facilitation agreement. It might be going too far to expect our trading partners to be compelled to upgrade, but he is right to say that the agreement came into force on 22 February. It affects all contracting parties to the WTO, of which the EU is one.

In both his speech today and his report that we discussed in July, my hon. Friend rightly focused on the importance of having a functioning border on day one. We are confident that we will have the resources that we need to continue to run an effective borders and immigration system in the future, with or without a negotiated agreement on our future arrangements. We recognise that businesses want clarity, and we want to reduce uncertainty during the negotiation wherever we can. That was why we set out our thinking in papers over the summer, and it is why we stand ready to discuss our future relationship. We want to provide stability throughout the UK and for our partners in Europe to ensure that the economy, services and infrastructure are protected in a range of scenarios, for all parties. However, we are in a negotiation, and we will need to manage information carefully to protect the UK’s interests and secure the best possible outcome for UK businesses and citizens. The House has voted not to disclose material that could damage the United Kingdom’s position in its negotiations with the European Union.

We now look forward to the December European Council. The EU has agreed to start internal discussions on our future relationship and an implementation period. We look forward to progressing the negotiations in the mutual interest of both the UK and the EU. Preparing for a range of exit scenarios is an approach that has been endorsed by the Foreign Affairs Committee, which recently said that not preparing for all outcomes would be a “dereliction of duty”. The Government are rising to that duty, even as we approach the negotiations anticipating success. We do not want or expect a no-deal outcome, but we will be ready in any event.

Question put and agreed to.

Water Industry

Debate between Steve Baker and Charlie Elphicke

Tuesday 5th November 2013 Commons Chamber

[Charlie Elphicke]

Clearly, the billing system needs to be fair.

The issue about debt is that water companies are often leveraged to 100% and then say that they cannot fund infrastructure improvements. Many colleagues have concerns about the Thames tideway tunnel and how that is financed. I am sure that will be explored in due course.

We also need more appropriate investment. If real investment falls, where is the justification to increase bills? We need to ensure that real investment does not fall, that we maintain the investment we need and that it is funded in an appropriate way.

[Steve Baker (Wycombe) (Con)]

I am grateful to my hon. Friend for mentioning the tideway tunnel, because my constituents in Wycombe want to avoid having to pay for it, particularly given that Wycombe faces its own problems with its sewerage systems. I hope my hon. Friend will explain how he sees choice and competition liberating people from having to pay for inadequate services.

[Charlie Elphicke]

My hon. Friend makes a powerful point. Time denies me the opportunity to go into the issue in great detail, but I know that my hon. Friend the Member for South Swindon has been looking at it with considerable concern, because his constituency, like that of my hon. Friend the Member for Wycombe (Steve Baker), is in the Thames sewerage area.

We need to look at how we can beef up Ofwat and give it greater powers in the Water Bill to say, “There’s been a favourable adjustment, so we can adjust and revisit the settlement on an ongoing basis.” If it had those powers, it would be able to have a stronger conversation with the water industry. That is worth considering. It would also be worth looking at allowing Ofwat to give guidance to the water industry on appropriate and responsible corporate governance.