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Britain will agree tariff-free trade deal with EU, insists Chris Grayling

Published 23/10/2016

Transport Secretary Chris Grayling said the UK will not run into the same difficulties faced by Canada
Transport Secretary Chris Grayling said the UK will not run into the same difficulties faced by Canada

The European Union will agree a tariff-free trade deal with the UK - and it will not run into the same difficulties faced by the troubled Canadian pact, a Cabinet minister has insisted.

Transport Secretary Chris Grayling said the amount of trade done between the UK and EU puts it in a different category to the Canadian deal, which has been blocked by the Belgian regional parliament in Wallonia.

The prominent Brexit-backer played down the prospect of the Walloons forming a similar obstacle to the UK's negotiations with the EU because of the amount of produce their farmers sell to Britain.

Crisis talks have attempted to break the deadlock over the Walloon opposition to the EU-Canada CETA deal.

Mr Grayling told BBC One's Andrew Marr Show: "We want the Canadian deal to be done, it is in the interests of everyone on both sides of the Atlantic that that happens.

"But I think there is a very different question with our relationship with the European Union. We are their most important export market.

"If you look at the issue of Belgium this week, which has been at the heart of the debate over the Canadian deal, we are a huge market for Belgian agriculture.

"Nobody in continental Europe benefits from a reduction in the ability to trade with the United Kingdom."

Playing down the prospect of Walloon resistance, he said: "We buy a whole load of produce from Walloon farmers, so therefore it is not going to be in their interests to see tariffs imposed.

"This is why I have always been convinced that we will have tariff-free trade, we will have sensible trading arrangements, because it is in both of our interests that should happen."

Mr Grayling acknowledged that there would be political positioning and emotions involved in the UK-EU talks, but he insisted his dealings with continental counterparts had been "friendly".

Opposition closer to home could also throw a spanner into the works as the Government attempts to strike a deal with the EU, and Theresa May has called for a "grown-up" approach in the relationship with the devolved administrations in the UK.

The Scottish Government has demanded to be treated as an "equal partner" in the talks ahead of a meeting in London on Monday between Mrs May and the leaders of the devolved administrations.

Michael Russell, the Minister for UK Negotiations on Scotland's Place in Europe, said: "The UK Government needs to understand there is a triple mandate to maintain Scotland's relationship with, and place in, Europe.

"The clearly expressed views of the people of Scotland, the democratically elected Scottish Government and the Scottish Parliament all need to be respected.

"But four months on from the referendum, we have yet to see a proposal from the UK Government on how the views of people in Scotland will be taken into account.

"The Scottish Government is becoming increasingly concerned that the UK is heading for a hard Brexit with all the damage that will bring to the Scottish and UK economies.

"The Prime Minister has set the clock ticking and the UK Government must use the time before triggering Article 50 to engage properly with all the devolved administrations and show that they are willing and able to treat Scotland as an equal partner."

Nicola Sturgeon's administration has drawn up draft legislation for a second referendum on independence, with the First Minister suggesting Scots should have the ability to reconsider the issue in light of the vote for Brexit.

Downing Street has insisted that the Holyrood government has no mandate for a second referendum after independence was rejected in 2014 and the issue could cast a shadow over the talks on Monday.

Mrs May insisted that the UK will "achieve far more together than we ever could do apart" as she called for a mature relationship between the different administrations.

She said: "I want Monday's meeting to be the start of a new grown-up relationship between the devolved administrations and the UK Government - one in which we all work together to forge the future for everyone in the United Kingdom."

Brexit select committee chairman Hilary Benn suggested that the Government should seek a transitional arrangement for firms after Brexit if no trade deal can be thrashed out by the time the UK leaves the bloc.

"I think it is going to be very important for the Government to indicate that, if it is not possible within the two years provided for by Article 50 to negotiate both our withdrawal agreement and a new trading relationship - market access, including for services, 80% of our economy, a million jobs in financial services - it should tell the House of Commons that it will seek a transitional arrangement with the European Union," he told the Andrew Marr Show.

"The withdrawal process may be only the two years, because 27 other member states have to agree to prolong it, but I think the importance of a transitional arrangement is it would offer some confidence to business - and that's very important - pending the Government finally being able to negotiate a new arrangement with the rest of the European Union on trade and market access."

Labour MP Mr Benn said the Commons should be given a vote on the Government's negotiating strategy, rather than Article 50 itself.

Asked whether Mrs May would have to call a general election if MPs vetoed her negotiating plan, Mr Benn said: "It depends. The Government might need to come back and say 'all right, well we've had a think about it and we are going to change this or do that'."

An election was "in the hands of the Prime Minister, not in the hands of me or the select committee".

Liberal Democrat leader Tim Farron said his party's surge at the Witney by-election was partly down to anger at Mrs May's approach to Brexit.

" Democracy means that you don't impose a deal that none of us know what it looks like and as we are seeing day by day, could end up being potentially catastrophic for everybody in this country," he told Sky News' Murnaghan programme.

"You don't impose a deal on the British people without them having their say and I accept the referendum result, however narrow, in June gave the Government a mandate to negotiate our exit from the European Union. It did not give them a mandate to impose upon the British people something they didn't vote for.

"I came across many people in Witney who had voted Leave in June and voted Liberal Democrat last Thursday because they are very angry that Theresa May is imposing upon them an exit from the single market which will damage their jobs, their businesses, make their local shop prices and petrol prices go up and so on.

"That should not be imposed on them. What started with democracy in June should not end up with a stitch-up."

Shadow chancellor John McDonnell warned against "unfunded tax breaks" for firms following Brexit.

The Sunday Times reported that advisers to the Prime Minister were considering plans to slash corporation tax from 20% to 10% if Brussels blocks a free trade deal.

Such a move would encourage firms to remain in the UK and could draw companies seeking a low-tax environment to Britain.

But Mr McDonnell said: " Labour wants our country to work with our European neighbours to clamp down on tax avoidance and not engage in a race to the bottom in corporation tax rates, in order that we can raise the revenues we need to rebuild and transform Britain so no one and no community is left behind."

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