I start by congratulating my hon. Friend Stephen Hammond on securing this important debate on the European Free Trade Association, to which I am delighted to respond. I note that he beat our hon. Friend Antoinette Sandbach in securing this debate, but as my hon. Friend and colleague at DExEU, Mr Baker, said in the House on
Although we recognise the benefits of ensuring continuity in our relationships with the EFTA states, we do not plan to seek membership of EFTA, for four key reasons. First, EFTA membership in and of itself does not deliver any market access to the EU. As my hon. Friend the Member for Wimbledon pointed out, there are some misconceptions. It is important to delineate the difference between the EFTA agreement and the EEA. EFTA is a trading bloc between four European countries: Switzerland, Norway, Iceland and Liechtenstein. Three of them participate in the EU’s single market through the EEA agreement, while Switzerland participates in some areas through a series of bilateral arrangements with the EU. As such, joining EFTA does not say anything about our future economic partnership with the EU.
Those calling for us to join the EFTA need to be more specific, as my hon. Friend was, about whether they mean joining the EEA, or attempting to copy the Swiss agreement, or negotiating a different bespoke agreement. The Prime Minister has been clear that participation in the EEA agreement would not work for the UK because it would not deliver on the British people’s desire to have more direct control over the decisions that affect their daily lives, and it would mean accepting the continued free movement of people, which both the Conservative and Labour manifestos pledged to end at the last election. Switzerland, on the other hand, has a patchwork of agreements with the EU that fall short of the ambitious economic partnership we are seeking. Neither model strikes the balance of democratic control and mutual market access we want for our future partnership with the EU.
Secondly, our ambition as a global trading nation goes beyond the scope of EFTA’s existing free trade agreements with third countries. Leaving the EU offers us an opportunity to forge a new role for ourselves in the world, to negotiate our own trade agreements and to be a positive and powerful force for free trade. Alongside new FTAs, we are also committed to achieving continuity in our existing trade and investment relationships with third countries by transitioning the EU’s free trade agreements. It is worth noting that EFTA’s network of preferential trading arrangements falls short of our ambitions.
Thirdly, EFTA membership means accepting free movement between EFTA members—that principle is underpinned through the legal framework of the EFTA convention. While we do not regard the referendum result as a vote to pull up the drawbridge, it must be a priority to gain control of the numbers of people who come here from Europe.
Finally, while we want to maintain our deep and historic relationships with EFTA states, the UK is in many ways different from those countries, as the hon. Members for Greenwich and Woolwich (Matthew Pennycook) and for Glenrothes (Peter Grant) pointed out. Our population is around 65 million, while the EFTA states together make up roughly 14 million people. In 2015, the EFTA bloc’s collective GDP amounted to £710 billion as compared with the UK’s £1.9 trillion. The UK’s participation in EFTA would fundamentally change the nature of that group and would not be an appropriate model for our future relationship with the EU or those countries.