European Free Trade Association — [Mike Gapes in the Chair]

Part of the debate – in Westminster Hall at 10:08 am on 7th February 2018.

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Photo of Antoinette Sandbach Antoinette Sandbach Conservative, Eddisbury 10:08 am, 7th February 2018

It is the option that gives us the leeway to negotiate. It is an important staging post. Given the severe impacts that the WTO alternative would have, it is a safe harbour, if I can put it that way, with all the benefits that my hon. Friend the Member for Wimbledon has already outlined.

The reality is that if we do not take advantage of the opportunity that EFTA membership would give us, we are facing a cost of 8% growth in our GDP. That is a very significant cost that will have a significant impact on tax revenues and employment prospects in this country. By comparison, EEA membership through EFTA would allow us to recoup 6% of that lost growth, which is important for the Government to consider. I note that this month the UK Trade Policy Observatory has published an important briefing paper on the sectors most vulnerable to Brexit, looking at the different options. Perhaps those who are not convinced by the Treasury analysis can look at independent analysis—although I think the Treasury analysis is independent—published by a third source.

EFTA also allows the Government to meet their existing commitments, particularly around having no hard border between Northern Ireland and the Republic of Ireland. It seems to me, from the provisions in paragraphs 49 and 50 of the agreement made in December, that that is a crucial ambition that we need to step up and achieve. We need to examine whether EEA membership and continuing membership of the customs union is the only way to deliver that promise. Even if it is not, it gives us the time to look at what other options are available.

I listened with interest to the concerns expressed by the noble Lord Bridges in the debate on the European Union (Withdrawal) Bill last week that transition needed to be a bridge to the future, not a gangplank into thin air. EFTA offers that bridge: a graduated transition that sees us leaving the EU, regaining control of swathes of policy areas, but retaining the vital trading and economic links that have built up between the UK and Europe, until a better deal can be struck. I know that some Members are concerned that this is a route to allow mischievous remainers to get back into the EU, but that is not correct: it is not the intention. Leave won; some leavers still need to get used to that. Those who have fought for decades to secure our departure from the EU have far more to fear from a badly executed Brexit than they do from using EFTA to bridge any potential gaps.

Like my hon. Friend the Member for Wimbledon, I think that the long-term benefits of EFTA will become clear should we apply to rejoin, as I hope we will. He has already outlined the potential market access to more than 900 million people. From a sovereignty perspective, EFTA decisions require unanimity; we would still have the power of our veto. We would take back control of farming and fisheries. We would be rid of ever closer union and there would be no prospect of the single currency. EFTA would address a huge part of the public and political concern about the EU, while still allowing the UK to benefit from the single market.

I do not want to revisit the details I discussed a fortnight ago, but I do want to add two points. I have faith in the Prime Minister’s ability to strike a deal, but if we do not reach agreement with the EU regarding the Irish border, EFTA would allow us to extend the existing commitment we have made into the longer term. The breathing room that EFTA arrangements provided would strengthen the Prime Minister’s hand in negotiations. In the event of no deal, the UK faces significant detriment from WTO terms.

EFTA offers a route that will allow Ministers to respect the referendum result, our commitments on the Irish border and the needs of our economy. In a number of areas, it would allow considerably greater freedom of action than we currently enjoy. It would ensure that the most complex parts of our negotiation with Brussels—the issue of the Irish border—is resolved in the short term, and it would provide more time to create a bespoke solution. It allows us to minimise the risks of no deal and strengthen our hand in negotiations. If Ministers disagree so vehemently with the Treasury analysis, what are their own assessments of the impact of no deal? What deficiencies do they identify in not only the Treasury analysis, but much of the analysis by independent think-tanks that are external to the UK civil service?

EFTA constitutes the best arrangement for a plan B in the unlikely event that plan A fails. I believe that it is a good deal for Britain in the longer term, and ask that colleagues rethink this issue and recognise how EFTA can offer us a safer, more secure route out of the EU and into the world.