Afternoon summary
- Liam Fox, the international trade secretary, has said that the UK is unlikely to finalise a free trade deal with the EU before Brexit takes place in March 2019. In a Q&A after a speech on free trade (see 4.05pm), he said:
It would be nice to think we could get a full free trade agreement by the time we get to March 2019, but that would be an optimistic view of recent free trade agreements.
Only last week he said a UK-EU free trade deal should in theory by “one of the easiest in human history”.
- Fox has downplayed concerns about British consumers being sold chlorine-washed chicken after a future UK-US trade deal. (See 3.19pm.)
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Sadiq Khan, the mayor of London, has accused Volkswagen of showing “utter contempt” for Londoners after it refused to pay £2.5m compensation for its role in the dieselgate scandal.
That’s all from me for today.
Thanks for the comments.
Liam Fox's free trade speech - Summary
Here is the full text of Liam Fox’s free trade speech in Washington. And here are the key points.
- Fox, the international trade secretary, said free trade globally was under threat.
In April, the World Trade Organisation noted that in 2016 world trade in goods grew by only 1.3% - the first time since 2001 that trade grew more slowly than GDP.
This threat to growth and prosperity is going largely unrecognised. Countries across the world, including the nations of the G7 and the G20, are allowing trade restrictive practices to establish themselves, limiting access to these leading economies for developed and developing nations alike.
Research by the OECD that shows that protectionist practices have grown since the financial crisis of 2008. By 2010 G7 and G20 countries were estimated to be operating some 300 non-tariff barriers to trade – by 2015 this had mushroomed to over 1200.
This matters because the silting up of the global trading environment has implications beyond mere economics.
For the economic prosperity that a liberal trading system generates is a potent force for social stability.
- He described free trade as an unalloyed good.
This year marks two centuries since David Ricardo introduced his Theory of Comparative Advantage.
As everyone here will know, the theory states that, if nations are allowed to engage in free and open trade, specialising in the export of certain goods and the import of others to meet their needs, then there is a mutual increase in economic welfare between nations, making those countries richer as a result.
It is one of the most powerful concepts in economics, described by the economist Paul Samuelson as the only proposition in all the social sciences that is both true and non-trivial and remains, to this day, the most fundamental justification of the power of free trade.
Since 1817, the world has changed beyond all recognition, yet the experiences of globalisation, and of technological advances unimaginable in Ricardo’s time, have only served to validate his theory.
- He said he thought geographical trade blocs were becoming less relevant.
Conceptually, we need to re-evaluate some of our traditional institutional frameworks. In the face of the rapidly changing global economy, this means a re-assessment of the great 20th Century structure – the geographic bloc.
The concept of geographical blocs for the purposes of defence still make sense, although greater flexibility and wider, more diverse global alliances will be necessary to navigate the multiplicity of the security elements of the globalised economy.
For trade, however, the case is less clear. The more mature an economy becomes, and the more it diversifies into services rather than goods, then this offers new opportunities on top of those traditionally available through a geographically contiguous trade bloc.
For the most advanced economies like the United States, or the UK, where almost 80% of our economic activity is services-based, we can afford to seek closer partnerships with those whose demands complement our output, not necessarily those who are geographically proximate.
As I have often said, if Francis Fukuyama had called his book ‘the end of geography’ not ‘the end of history’ it would have been much closer to describing the world in which we now find ourselves.
(Fox is saying this because he is keen to challenge the idea that geography means the UK should be part of a European trade bloc. Economists who argue that the UK will suffer significant economic loss when it leaves the single market often rely on gravity modelling, which assumes distance is a key factor in trade.)
- He said that on Tuesday he would publish a report intended to show how important trade with the UK was to every congressional district in America.
Tomorrow, I will launch a report that details the UK’s trade and investment relationship with each of the 435 Congressional Districts within the United States.
The report will detail each district’s goods and services trade flows with the UK, identify how many jobs are supported by these investments, and detail the top UK companies in each district.
For the first time, each Member of the House of Representatives will have a snapshot of the importance of UK trade to their district. Equally, we will be able to see where the opportunities lie to strengthen our existing partnerships or forge ahead with new, mutually beneficial, ones.
Updated
Here is James McGrory, executive director of Open Britain, the group campaigning for a “soft” Brexit, on Liam Fox and chlorine-washed chicken. You can tell we’re into the silly season ....
If the international trade secretary wants the public to trust him, he needs to take the opportunity while he’s in the US and devour a chlorine-washed chicken live on camera. The choice of recipe is up to him, but one serving suggestion might be Chlorination Chicken.
The proof of the chicken is in the eating and if Dr Fox thinks it’s safe, he should put his money where his mouth is. If he doesn’t, he is just chicken.
Perhaps he nicked the joke from ID6219391 BTL.
Fox downplays concerns about British consumers being sold chlorine-washed chicken after UK-US trade deal
This is what Liam Fox said in the Q&A after his speech (see 2.40pm) when he was asked if he would feel comfortable eating chlorine-washed chicken.
In a debate which should be about how we make our contribution to global liberalisation and the increased prosperity of both the UK, the US and our trading partners, the complexities of those - the continuity agreements, the short-term gains that we may make, the opportunities we have and our ability to work jointly towards both a free-trade agreement and WTO liberalisation - the British media are obsessed with chlorine-washed chickens, a detail of the very end stage of one sector of a potential free trade agreement. I say no more than that.
Fox admits UK unlikely to finalise free trade deal with EU before Brexit
Liam Fox, the international trade secretary, has just finished his speech on trade in Washington. I will post a summary when I’ve seen the text.
From the extracts broadcast on Sky and BBC News, it seems that the speech did not mention chlorine-washed chickens. But a Telegraph journalist asked him about this afterwards. Fox does not seem to have appreciated the question.
Liam Fox withering on the "British media" as asked if he'd eat a chlorine washed chicken at US event - nb he didn't actually answer
— steve hawkes (@steve_hawkes) July 24, 2017
Liam Fox tells @nickallen789 that chlorinated chicken is just a "detail" of the wider US/UK post-Brexit free trade deal to be resolved
— Asa Bennett (@asabenn) July 24, 2017
Fox: "We work on premise that the British press corps in Washington never eats American beef or chicken because of their health concerns"
— Shawn Donnan (@sdonnan) July 24, 2017
- Fox downplays concerns about British consumers being sold chlorine-washed chicken after a UK-US trade deal.
Fox also admitted that the UK was unlikely to sign a free trade deal with the EU by the end of March 2019, the deadline for Brexit.
Liam Fox: It wld be nice to think we can get full free trade agreement with EU by the end of March 2019 but that would be optimistic #Brexit
— Steven Swinford (@Steven_Swinford) July 24, 2017
- Fox says Britain unlikely to agree free trade deal with EU before Brexit takes place. (This might seem like a statement of the obvious, but in the past pro-Brexit ministers have been reluctant to admit this.)
Updated
Lunchtime summary
- Carwyn Jones, the Welsh first minister, has highlighted the extent of Labour splits over Brexit by calling for the UK to effectively remain in the single market after leaving the EU. (See 10.14am.)
- Barry Gardiner, the shadow international trade secretary, has said remaining in the customs union after Brexit would be a disaster. His comments have been criticised by Labour MPs pushing for a “soft” Brexit like Chuka Umunna (see 11.01am) and Wes Streeting.
Where has this come from? We were told Customs Union still on the table. Even the Tories are keeping this option open. #HardBrexit https://t.co/iC8Z4rZbdT
— Wes Streeting MP (@wesstreeting) July 24, 2017
- No 10 is not ruling out lowering food standards, such as allowing chlorinated chicken from the US, to accommodate a wave of post-Brexit trade deals. The Labour MP Ben Bradshaw said:
This row about chlorine chicken is a direct result of the government’s decision to leave the single market. They are so desperate for new trade deals to make up for some of the losses that they seem ready to compromise on the safety of the food we eat.
The government must not water down rules that protect consumers, and neither should they follow any policy that undermines our own farmers.
If they want to boost our economy, they should do so by keeping Britain in the single market, rather than selling ourselves short in desperation for new trade deals.
- The committee on standards in public life has said that, as part of its inquiry into the intimidation of candidates, it will consider whether political parties are doing enough to stop the abuse. Publishing its call for evidence, it said one of the questions it wanted to examine was: “What role should political parties play in preventing the intimidation of Parliamentary candidates and encouraging constructive debate?”
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Transport secretary Chris Grayling has agreed to develop plans for an “affordable” Crossrail 2 scheme which could see London funding half of the project during its construction. As the Press Association reports, Grayling said he would work with London mayor Sadiq Khan to ensure the proposed north-south rail line running across London between Hertfordshire and Surrey was “fair to the UK taxpayer”. The capital has already shown it could foot the bill for half of the scheme over its life, but the pair said they want to see if London could do the same during the construction period.
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Jeremy Corbyn has declared receiving two free Glastonbury Festival tickets for his main stage appearance - three tickets fewer than his deputy Tom Watson. As the Press Association reports, the Labour leader, according to the latest register of MPs’ financial interests, said he gave the free passes to a family member.
They were donated by organisers Glastonbury Festivals Events Limited and worth a total of £476 - which equates to £238 per ticket, the basic rate for Glastonbury entry. Labour deputy leader Tom Watson, also shadow culture secretary, received “five tickets with hospitality” from entertainment giant Live Nation for the 2017 event. He said they were valued at £2,445, received on June 16 and accepted on June 22.
Here is the former Labour MP Michael Dugher, who was sacked from the shadow cabinet by Jeremy Corbyn, on the party’s Brexit stance.
I literally have no idea what Labour's position is on Brexit, single market, customs union, freedom of movement etc. Creative ambiguity?
— Michael Dugher (@MichaelDugher) July 24, 2017
The Conservative MP Michael Fabricant has welcomed Barry Gardiner’s comments on Brexit and a customs union. (See 10.39am.)
Glad to see unity between #Labour and #Conservatives over Customs Union (Single Market) if not unity within Labour over this.
— Michael Fabricant (@Mike_Fabricant) July 24, 2017
We must leave. https://t.co/1wpMEHZBbM
My colleague Anushka Asthana says the shadow cabinet is split over the issue of whether the UK should have a customs union with the EU after Brexit.
.@BarryGardiner, shadow trade sec, argument is that only way to maintain customs union "membership" is a Turkey-style customs agreement.
— Anushka Asthana (@GuardianAnushka) July 24, 2017
But he says Turkey has to liberalise markets to countries EU does deals w, but those countries don't have to for Turkey. So weaker position.
— Anushka Asthana (@GuardianAnushka) July 24, 2017
So he claims that we shouldn't go down that route. BUT shadow cabinet folk tell me the question of customs union is NOT agreed between them.
— Anushka Asthana (@GuardianAnushka) July 24, 2017
And suggest divide between @Keir_Starmer and Gardiner over this - as Keir has told colleagues we shd be gunning for better deal than Turkey.
— Anushka Asthana (@GuardianAnushka) July 24, 2017
No 10 lobby briefing - Summary
The Number 10 lobby briefing did not last long. Here are the main points.
- Number 10 refused to rule out agreeing to allow the importation of American chlorine-washed chicken as part of a future UK-US trade deal. Today the Daily Telegraph (paywall) says the cabinet is split over this issue. Gordon Rayner writes:
A cabinet split over whether to allow the import of controversial “chlorine washed” chicken could cause a major stumbling block in Liam Fox’s trade talks with the US today.
Dr Fox wants to allow the import of poultry treated with a chlorine wash process, which is currently banned under EU rules.
It is more than one-fifth cheaper than British chicken, and has been deemed safe by the European Food Safety Authority, despite the EU ban.
The American Farming Association has been clear that any free trade deal must include agriculture, and that chlorine-washed chicken, hormone-fed beef and genetically modified crops must be approved for export to the UK ...
But Michael Gove, the environment secretary, has insisted that British food standards will not be downgraded in any way, and Andrea Leadsom, the Leader of the House and former environment secretary, is opposed to the move, saying cheap, poor quality imports could damage British farming.
Asked if Theresa May were in favour of allowing chlorine-washed chicken into the country, the prime minister’s spokesman said that reporters were getting “way ahead” of events and that this was a hypothetical question. He went on:
Our position when it comes to food is that maintaining the safety and public confidence in the food we eat is of the highest priority. Any future trade deal must work for UK farmers, businesses and consumers.
The spokesman refused to elaborate further on this, suggesting the government’s position is unresolved. But what Number 10 said was not as firm as what Michael Gove, the environment secretary, told MPs on Thursday last week. When asked about farming, he said:
One thing is clear: I do not want to see, and we will not have, US-style farming in this country. The future for British farming is in quality and provenance, maintaining high environmental and animal welfare standards.
- Downing Street played down the significance of the IMF’s decision to downgrade its UK growth forecast. This was just “one of a number of forecasts”, the spokesman said. He said that, as a result of “years of hard work and sacrifice by the public, the UK economy was “in a strong position”.
Chuka Umunna, the Labour MP and a prominent campaigner for a “soft” Brexit, has criticised Barry Gardiner’s comments on the single market and the customs union. (See 10.39am.)
Taking Single Market and Customs Union membership off the table in the Brexit talks is the Tory position, it should not be Labour's
— Chuka Umunna (@ChukaUmunna) July 24, 2017
I’m off to the lobby briefing now. I will post again after 11.30am.
The Labour MP for Cardiff South, Stephen Doughty, has welcomed what Carwyn Jones said about staying in the single market after Brexit. (See 10.14am.)
Good to hear @AMCarwyn speaking up about importance of single market + customs union to #Wales on #r4today
— Stephen Doughty (@SDoughtyMP) July 24, 2017
As my colleague Kevin Rawlinson reports, a Conservative campaign group has argued that people who want to change their gender are suffering from a mental illness and encouraging them to do so is akin to affirming the belief of someone suffering from anorexia that they are fat.
Gardiner says having customs union with EU after Brexit would be 'a disaster'
Earlier I quoted what Barry Gardiner, the shadow international trade secretary, said about being opposed to staying in the European Economic Area (EEA) after Brexit because that would amount to the UK becoming a “vassal state”. (See 9.19am.)
In his interview on Radio 4’s Westminster Hour, Gardiner also said he was opposed to the UK forming a customs union with the EU after Brexit. He said:
I just want to point out the issues around the customs union. We leave the customs union because only member states of the European Union are members of the customs union.
Other countries like Turkey have a separate customs union agreement, but the trouble with that is that it gives you an asymmetrical relationship with the third party countries that the EU does a deal with.
So the EU could do a deal with another country - let’s say America - which we would be bound by in the UK. We would have to accept the liberalisation of our markets, we would have to accept their goods coming into our markets on the terms agreed by Europe which could be prejudicial to us but we would not have the same access into America’s markets. We would be bound to try and negotiate it but why would America give us that access when it’s got all the liberalisation of our market that it wants. It’s a disaster.
Carwyn Jones' Today interview - Summary
Here are the main points from Carwyn Jones’ Today interview.
- Jones highlighted the extent of Labour splits over Brexit by calling for the UK to effectively remain in the single market after leaving the EU. The Welsh first minister said the UK should follow Norway, which retains almost full access to the single market as a member of the European Economic Area (EEA) despite not being in the EU. (See 9.19am.) Jones said that he did not accept the argument (used by both Jeremy Corbyn and Theresa May) that the vote to leave the EU amounted to a vote to leave the single market. He told the programme:
All we know is that people voted to leave the EU and that that has to be delivered. There’s no question about that. How it’s done, nobody actually knows.
Jones accepted that adopting the Norway model would not involve the UK remaining a proper member of the single market.
You can’t be a member of the single market unless you are a member of the EU. In other words, you can’t have a say over the rules how the market operates unless you are a member. We can’t be a member because we would have to be a member of the EU to do it.
On this point Jones and Corbyn agree. But Corbyn has ruled out the Norway option (EEA membership). Jones is arguing for that. Defending it, he said:
We would not control the rules, but we would have full and unfettered access.
- Jones accused the government of pursuing “a nationalist Brexit”. He said:
Let’s have a Brexit that is sensible, not one that is driven by effectively nationalists in London.
When he made his comment, Jones seemed to be referring to the UK government, but - in the light of his comments about the Norway option - his phrase may have been aimed at the Labour leadership too.
- He said that Britain should follow Norway and enforce a “modified” version of free movement. Free movement rules were stricter in Norway than in Britain, he said, because the Norwegians enforced the existing EU rules more tightly.
What Norway have done is they’ve said, free movement, yes, you can move if you’ve got a job, there’s a three-month window either side to look for a job, otherwise you’ve got to leave. That is in keeping with the rules. It is just the way the UK has interpreted them [is different].
- He said leaving the EU with no deal would be “crazy”.
That would be an utter failure on the part of the British government. Ninety percent of our food and drink exports go into the European single market. For any rational, sane politician to suggest that tariffs are no problem, to make it more difficult for our farmers to sell in that market, is crazy. It’s one of the world’s biggest markets and it’s on our doorstep.
- He criticised Michael Gove, the new enviroment secretary, for refusing to meet his Welsh opposite number. Jones said Gove had cancelled meetings that were planned with environment ministers from the devolved administrations. And Gove had not even met Jones, or the Welsh environment minister, he said.
- Jones said the UK government should consult the devolved administrations over what happened to powers over agriculture repatriated from Brussels. At the moment Defra [department of environment, food and rural affairs] was just responsible for agriculture in England, he said.
It has to be done by partnerership. We cannot have a Defra [department of environment, food and rural affairs] minister negotiating on behalf of Welsh farming without the consent of Welsh farmers and their government. It’s a fundamental democratic principle ...
It has to be done in a way that is done by consent and not by imposition, otherwise it just replicates the European Commission in London and I’m not sure that’s what people voted for.
Photograph: Francois Lenoir/AFP/Getty Images
Updated
The Labour MP Ben Bradshaw, a strong pro-European, has welcomed Carwyn Jones’ intervention.
Good to hear @fmwales stating so clearly on @BBCr4today importance for jobs & prosperity of staying in Single Market, should #Brexit happen.
— Ben Bradshaw (@BenPBradshaw) July 24, 2017
Labour split over leaving single market highlighted as Welsh first minister backs Norway option
On the Andrew Marr Show yesterday Jeremy Corbyn was explicit; Labour supported leaving the single market, because the single market was “dependent on membership of the EU”. Instead it would push for tariff-free trade with the EU after Brexit.
Critics argued that Corbyn was ignoring the “Norway option”, which would amount to the softest form of Brexit available. Norway is outside the EU but, as a member of the European Economic Area (EEA), it is effectively a member of the single market. But on Radio 4’s Westminster Hour last night Barry Gardiner, the shadow international trade secretary, said following Norway would amount to the UK becoming a “vassal state”. He told the programme:
If you do what Norway does, what happens is the very reasons that most people who voted leave, voted to leave - namely to regain sovereignty, to regain control of our borders, not to pay money into the European budget - all are not achieved ...
To adopt the Norwegian situation would be to become a vassal state, because you actually end up paying money into the EU budget but you have less control over the regulations than you do now with a seat round the table.
But Corbyn and Gardiner have failed to persuade the Welsh first minister, Carwyn Jones. Jones is arguably the powerful Labour figure holding executive office in the UK and, on the Today programme this morning, he said Britain could, and should, effectively stay in the single market after Brexit. He told the programme:
If we were not in the single market, we would be having a debate about how to access it, not how to leave it. There is no need to leave the single market, even as we leave the EU.
He said he did not accept the argument, put by the UK government, and Corbyn, that Brexit had to mean leaving the single market. And he explicitly made the case for copying Norway.
I went to Norway in January, they are not members of the EU, but they have almost full access to the single market. You don’t have to leave the EU and leave one of the world’s biggest markets at the same time. That’s an interpretation that’s been put on the result by the current UK government and that makes no sense at all.
I will post more from his interview shortly.
Here is the agenda for the day.
11am: Number 10 lobby briefing.
11am: Greg Clark, the business secretary, gives a speech on industrial strategy. He will announce a £246m investment in developing battery technology in Britain.
12.30pm: Michael-James Clifton, chief of staff to the president of the court of justice of the European Free Trade Association, joins other experts speaking at an Institute for Government briefing on Brexit.
And Liam Fox, the international trade secretary, is on a visit to Washington.
As usual, I will be covering breaking political news as it happens, as well as bringing you the best reaction, comment and analysis from the web. I plan to publish a summary at lunchtime and another in the afternoon.
You can read all today’s Guardian politics stories here.
If you want to follow me or contact me on Twitter, I’m on @AndrewSparrow.
I try to monitor the comments BTL but normally I find it impossible to read them all. If you have a direct question, do include “Andrew” in it somewhere and I’m more likely to find it. I do try to answer direct questions, although sometimes I miss them or don’t have time. Alternatively you could post a question to me on Twitter.
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