European Union (Withdrawal Agreement) Bill: 3rd reading

Gillian Keegan

I congratulate you on your re-election, Madam Deputy Speaker, and on becoming the first woman ever to be Chairman of Ways and Means—you make us all very proud.

It is a pleasure to follow the hon. Member for Brighton, Pavilion (Caroline Lucas). Something that she missed out of her speech—inadvertently, I am sure—was that the Prime Minister’s father led the way on landmark legislation. He led the habitats directive through the European Parliament, showing that Conservative leadership on the environment runs in the family.

I also congratulate my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) on his excellent maiden speech, showing not only that he understands in great detail the plight of refugees, including child refugees in particular, but that he has the experience and some of the solutions to make sure that we keep those people safe. We in the Conservative party always want to keep children—particularly refugee children—safe.

I am delighted that the Bill finally paves the way for the UK to build a relationship with the European Union that is based on a free trade agreement. After nearly three years of being stuck—effectively re-running the result of the referendum—this Parliament is free to take a significant, positive step forward. Once we pass the Bill, a horizon of opportunity is in front of us. The political declaration set out our aim to have no tariffs, no fees and no quotas in the economic relationship. I take this opportunity to thank the Secretary of State for Exiting the European Union and his ministerial team for their relentless determination to deliver on the referendum result. That is what we have been trying to do for the last three years, and I know that he has worked incredibly hard and taken hundreds of flights. It is very much appreciated by me and the British people.

As someone who has worked for decades in impacted industries, including car manufacturing, banking, fintech and travel tech, I am pleased that we will leave with a deal, in an orderly way. This Government’s ambition is to ensure that we not only maintain but build on our relationships with our partners across the channel. It is often said that trade negotiations take many years and that it is therefore overly ambitious to try to conclude an agreement by the end of the year, but there has never been a trade negotiation like this one in the history of the world. We start from a position of 100% alignment. We need to agree where it makes sense to stay aligned and how we do that, and where we want to diverge. It seems to me that this is a perfectly achievable objective, given good political will on both sides of the negotiating table.​

Regulatory alignment is a complex system of product standards, safety standards and type approval processes. I want to speak about that as I believe that some of the rhetoric on legislation has been unhelpful. We can all remember talk of bendy bananas, curved cucumbers and unhappy hoovers, but in reality, the vast majority of regulation facilitates trading safely and fairly, especially within the manufacturing sector, where international and EU standards have remained stable for many decades. The vast majority of them are driven not by Government or in Committee rooms but by industry. Most trading arrangements aim to optimise interoperability through the recognition of other parties’ standards and agreements on equivalence and adequacy. This is standard in global trading arrangements.

 

Intervention (Alan Brown)

If, as the hon. Lady says, all these regulations and agreements are actually driven by industry, what is there to be gained from leaving the EU? The Conservatives claim that the Government are taking back control, but according to her, industry drives all this regulation.

 

Gillian Keegan

Yes, but it drives standards. There are three global standards across the world—one from the EU, one from the US and one from China—and they do not always have to be the same. They largely do align, but there could be differences based on geography and specific things we want for our industries. As we move forward, we might want to diverge in some areas, particularly in emerging technologies. Yes, industry drives them, but industry will be talking to us here, probably encouraging us to align in areas where there is no reason to diverge, but in other areas there will be opportunities to diverge. I can think of some areas where we could enhance things in a way that the EU has not been able to do. [Hon. Members: “Where?”]

Rolls-Royce is based in Chichester. Like all car manufacturers, it relies on just-in-time supply chains, with parts and components moving across the channel from country to country several times during the manufacturing process. Such frictionless movement requires regulatory alignment or recognition of equivalent standards. This ensures quality, safety and environmental mitigation. It also avoids the need for car manufacturers to invest in large stock levels of critical components, which is important because it enables safe sustainable profit margins in a highly competitive market. We understand this. There is no need to go backwards and put barriers in the way of highly integrated UK-EU manufacturing, but we must work with the industry on both sides of the channel to put new IT systems in place to automate these new arrangements.

Despite my firm belief in recognising and standardising regulations, I recognise that they can stifle growth if they are not implemented carefully, particularly in fast-evolving sectors. Tech is a prime example—another area where I have spent many decades in my career. The UK has a significant advantage in tech and some of the world’s finest academic institutions—we now boast three of the top 10 universities worldwide—and our pool of top talent is world class. Developing and retaining employees with key skills is critical for our knowledge-based economy. We are home to many new businesses, with digital venture capital investment exceeding £6 billion in 2018 alone—the highest in Europe. The UK is one of the world’s largest technology ecosystems.​

To ensure that we keep our competitive advantage, I urge the Government to review TechUK’s recommendations on our future digital trade policy to ensure that we continue to lead in the global digital landscape. The UK is a global leader in fintech, biotech, environmental tech, which is sometimes referred to as green tech, and education tech—to name just a few fast-growing areas. We are the best country in Europe in which to start a technology business and must continue to be so. To prevent the rise of too many new barriers, we must adapt our regulatory frameworks as new and exciting technologies emerge and we change our interactions with them. That is the opportunity.

Simultaneously, we must be vigilant against the threats that new tech can bring. We must enable cross-border data flows in a way that protects our citizens’ data without impeding business growth. Here we must collaborate internationally, not just with the EU but with the OECD and the G20, and avoid digital protectionism. For example, the forced localisation of data—[Interruption.] Hon. Members asked for advantages, but they do not seem to be listening. I am giving an example of an area where we could improve. We must avoid the forced localisation of data, the imposition of tariffs and the enforced mandatory transfer of source codes, algorithms or encryption keys as conditions of market access. We must also acknowledge where the EU has got it right and co-operate with it. Some of us might have found the recent GDPR legislation a bit tricky in our personal lives, but it is an example of protecting citizens’ rights in the digital space.

In accepting that dynamic alignment in some sectors such as the automotive sector may be advantageous for the UK, I would argue in the same breath that greater divergence will be vital in future emerging technologies. For sectors focused on artificial intelligence, cyber-security, data mining or the internet of things, speed and time to market are key to enabling emerging technologies, and we will have the opportunity to build simpler processes that work for the UK market.

Opportunity awaits the UK, and only by passing this legislation can we get there. I hope that when we do, Members throughout the House will call for compromise, and will take an informed approach to regulation that protects existing industries while creating competitive advantage in emerging ones.

Finally, let me say this, as someone who voted to remain in the referendum of 2016 but has voted to support Brexit ever since—five times, and counting. The step that we are taking in leaving the EU is a major change, and with change comes some risk but also opportunity. We must all show leadership; we should not be scaremongering. The whole of the UK, including all its constituent parts, is a dynamic, agile and trusted global partner, and we are already a global leader in foreign direct business investment. We have so much to build on. I look forward to supporting the Government and colleagues across the House to make Brexit both a reality and an opportunity.