Live Foreign Affairs Committee Select Committees

with David Davis. Collins coverage continues live on our website. We

will return to the Commons once the committee has finished.

Welcome to this afternoon session of the Foreign Affairs Committee on the

ongoing enquiry into Brexit process. The Secretary of State, you are very

welcome. I note this is your second meeting in two days and you told the

house of Lords EU scrutiny committee yesterday impeding in front of them

was a particular pleasure. -- appearing in front of them. Digital

Economy Bill I hope to be back today. Is that what you schedule a

meeting at that site of the building. It was not me who don't be

scheduling. The scheduling was theirs. You presumably make the

decision to go there first and that is the gentle book I want to take

into my question, to examine your assessment of the legal and

parliamentary implications of the Brexit process. Can you confirm

there is going to have to be an act of Parliament in order to leave the

EU? You there will have to be some

legislation, no doubt about it. There are various stages. Firstly,

legislation to deal with the European communities act 1972 and

the consequential legislation from back. -- on from that. There may

have to be parliamentary ratification under the relevant 2010

legislation. The so-called USO legislation. That is the absolute

minimum that I can see. -- Cragg legislation. So we cannot leave the

EU if that is not in place? Well, we can leave but what the legislation

does is put in place directives and various other pieces of law which

will still have effect if we did not. Whilst we require a treaty

change, we were in that sense still be reporting back to the European

Court in some respects. Digital Economy Bill what I am

seeking to establish if there are acts of parliament to be put in

place or repealed. So, that is perhaps why you were at

the other side of the building, my assessment is that there is a

majority in the House of Commons to support the Prime Minister in Brexit

means Brexit and despite the fact the number of conservatives were

campaigning to remain in the EU they have accepted the decision of the

electorate and will now support the Government in the process of leaving

the EU. However, it is my assessment you could not be as confident that

is the position down the other end of the building in the house of

Lords, would you agree? Well, you are wrong about the

calculation in that there was no calculation in terms of who I saw

first and second, I have not made an assessment of what the balance of

power or balance of interest or voting with the end of each house.

It is a bit early to do so for a start. Any legislative change would

be based at least in part where the negotiation had got to buy them and

whether or not individual members of each house approved. I do not know

where we will be. My hope and intention is we will have a majority

in both houses. Can I gently suggest the Government

could be reasonably confident that of a majority in the Commons in

order to carry out the decision of the British people, that is a rather

more open question about the attitudes of the house of Lords,

where the Government has a significant minority and there are a

number of conservatives who are appear to be determined to obstruct

the country's wrote to Brexit. If you were in that place, then

obstructing the Acts of Parliament that are required to enable Brexit

is something that will have to be overcome by the House of Commons

using the Parliament act. What I would suggest to you whether you

would agree if it was a sensible idea for the legislative process to

be commenced in sufficient time for it to be on the statute book having

overcome opposition in the house of Lords by the use of the Parliament

act so we can leave the EU by the early part of 2019.

The other Mac again, I will challenge the basis on which you

make your argument. The simple truth is what the Government is doing is

carving out the biggest ever mandate giving to the Government by the

British people -- carrying out. Nearly 17.5 million people. Had it

been in general election between two parties called Leave and Remain,

majority for Leave would be better than Tony Blair's majority 1997. --

the majority for leave would be bigger. It is a clear mandate and

the house of Lords would be unwise not to take that seriously. They

have a perfectly reasonable possession and challenging elements

of the negotiation but I would be very surprised if they were unwise

enough to go down the route or blocking it.

. It has been a review of this committee the Government was guilty

of gross negligence for not preparing for Brexit in advance. It

might -- it is also the view that it may amount to gross negligence if

you proceeded on the assumption all would-be hunky-dory and you would

get you legislation in good order because the house of Lords were

minded to upgrade instruction of the British people. Wouldn't it be

prudent to make sure your legislation was then placed

insufficient time to allow us to leave the EU? On a date of the

Government's choosing or at the conclusion of negotiations two years

after giving notice under article 50.

You are jumping to the conclusion of the committee report on a decision I

have yet to take. I suspect it is getting the committee ahead of

itself. I am clearly intending to get us to

a position of leaving the EU within the normal article 50 timetable. I

will make the legislative arrangements that are necessary to

get there. That is the simple case of the matter. I will not, I am

afraid, hypothesised with this committee or any other about the way

I got house will vote. That is buggy whips and the usual channels to do

and I will make decisions based on the advice. -- that is for the whips

to do. I will not air this any more public than outwards jeopardise

them. -- van with the jeopardise. I am grateful for Europe reply this

morning on my letter to the Attorney General of legal issues on leaving

the EU. I wrote to him and invited him to reply by the 13th of July and

I am delighted he finally replied on the 13th of September. Albeit from

me. I am very grateful. What I am less satisfied by is the terms of

your answers. I want to explore why you are unable to give answers to

some rather basic questions. The first question I put to the attorney

was can all be directly applicable regulations currently applied to the

UK be transposed into UK law in a single act of Parliament. That

struck me as a rather straightforward question and your

reply said you would appreciate the questions raised in your letter

touched on issues currently the subject of legal proceedings, to

which the Government is party. Areas raised by them watch it would

therefore not be appropriate for me to comment on. Please do explain how

this simple technical question about whether or not it is possible to use

the single act of Parliament impinges on at action being taken

against the Government about the operation of article 50. I can talk

about the issues relating to the act of Parliament. Let me do that here

and now. There are a number of ways you can put into effect such an act

of Parliament. One of them is to have a poor... Puts everything in

place at once. It would be huge and to come back to you earlier position

about timing on this, it would have to wait until very late on in the

process because we would need to know what we were doing with each

components of the exit from the EU. Even were it a simple exit with

almost no amendments to it and were we setting out in order to do all

the changes letter on it would still be complicated because, taking a

trivial example, when local government, under European law they

have to put the bed into the European system. That would deal

with all those tiny things either directly or with a spectacular Henry

VIII closes. That is one aspect. But you can do it rather more early

and have a whole series of successive pieces of legislation, so

there is a problem, which you can see... I am not sure I do. My

question was, how does the question you opposed in my letter to the

attorney excuse the reason you gave for not... No, your reason for not

answering the question was that it impinged on that and I don't

understand the connection. From memory, there was a reference to

that, to Article 50, was in there? No. It was good all the current

causes relating to the UK could be retained should Parliament wish

that? Your argument is this is currently the subject of legal

proceedings... That was an error because I thought it was a reference

to Article 50. There was not. I wonder if you could have another go

in a letter to the committee at answering that question. Of course

we can but we can also deal with the substantive issue right year, which

is the nature of the legislation we are likely to carry through. You can

either have very simple legislation which meets your requirements of

going earlier... What is the simplest? I suppose the position it

that is, you've got all this directly applicable regulations not

put through, so not in British law at the minute, we will leave the

European Union- do we try to make a judgment about whether the 6987

regulations that directly apply, that we go through them one by one

and decide which to keep on which to leave, when we leave, or will we

keep... Put all of them into line take our time to go through and

decide which ones we don't want? The decision we have to take is whether

one has a simple piece of legislation with a cascading set of

SIs following on from it and the House of Lords famously does not

like that, it does not like things that create lots of statutory rights

for ministers rather than going through primary legislation... Or

you could do it with a small piece of upfront legislation and then a

mixture of primary and secondary, or you could do a huge one that would

need to be linked because you would need to know what the changes were

before you started. Before you started the legislation. Right. It

is... No, I think what you have said in answer to the first question is

yes, which is obviously... I am grateful for an answer. Then there

are options beyond that... Let me be clear. I do not want you to take

this guidance from me. My hands at the first question was yes. What was

question one in this context? Can all the directly applicable

legislation is that apply currently in the UK be translated the EU

law... -- translated to the law. Yes. Am grateful for that. The

second question posted a to you, -- posted in the letter I posed. Let me

for the benefit of the record... The second question I asked you. On what

terms will the UK and EU trade at the end of the two-year negotiating

period mandated by article 50 of the Lisbon Treaty, if no deal has been

agreed between the UK and EU on the terms of the UK's exit from the EU,

or no deal has been agreed on the future relationship between the UK

the EU? Plot that posits is the rather obvious possibility that

there is either a blocking minority amongst the 27 who declined to come

to an agreement, or the European Parliament who has a majority

against whatever is negotiated between you and the 27. That strikes

me as a rather obvious possibility. The answer you gave to me and the

committee was, "Turning to trade, we are about to begin these

negotiations and it would be wrong to set out further unilateral

positions in advance." "As the Prime Minister has said, the UK will

strike a bespoke agreement that gets the best deal for people at home and

the right deal for Britain abroad." That is not in the gift of the Prime

Minister, is it? It will have to be an agreement between us and our 27

partners endorsed by a majority of the European Parliament? The Prime

Minister cannot make that statement. Yes, those are her games. Aims, yes,

but the fact is she cannot guarantee it -- those are her aims. She cannot

guarantee it and neither can you. Nobody can guarantee the

negotiations. The process we are about to embark on, there is no

agreement. That is... That as a possible outcome. One possible

outcome. But all I have done is asked you, or as the Attorney

General, and you were kind enough to send me a letter which... Has not in

my judgment entirely addressed the question, shall I say? That... I

think it is a rather straightforward and simple question. And I think

there is a very important reason you should answer it as soon as you are

in a position to do so, and that is it is a kind of technical question.

What happens if there is no agreement? That then addresses a

vast amount of the uncertainty that is out there, for example, you know,

in a memorandum from the Japanese, for example. People looking for

certainties as to what happens. If it is clear, if there is no

agreement in the negotiation, what the position is, then you address a

vast amount of the uncertainty out there with individual companies and

the rest, and they can then watch the negotiations and make their

commercial judgment according to how they perceive them as going given

whatever guidance you will be able to get, but then they will at least

know how bad it can get from their position, or how good it can get, if

there is no deal. There may be an opportunity for them if there is no

deal, but simply explaining what the technical position is going to be,

our terms of trade into the Single Market, in those circumstances, that

strikes me as firstly answerable and indeed necessary to answer. It

depends what you are after. If you want a factual statement of what the

outcome could be, I guess it is what is normally known as world trade

organisation rules, largely. That is I guess what the conclusion would be

if we are outside with no deal, but I would not anybody to think in my

view that was a likely outcome. I am not asking whether it is a likely

outcome or inviting you to put probability on it. I am inviting you

to get us tooks to an agreed understanding it is W -- World Trade

Organisation rules that will govern us into the Single Market... I think

that is a matter of commonly held fact. That is all I was seeking to

get the confirmation of because there have been people suggesting

there are complications about putting the World Trade Organisation

rules in position and if you are telling this committee that is a

matter of commonly held fact, and it is a fact, then that gives everybody

a bottom-line from which to work all the... And all the interests, which

as you know is a very large number... Except, and this is one of

the problems, we are dealing with negotiations which as I said

yesterday are extremely contributed. The World Trade Organisation rules

essentially apply just as Paris, but the nontariff barriers are one of

the primary barriers. -- applied just as tariffs. It is a simple

answer. Of course there is a complacency about how the nontariff

barriers are operated on the rest. But I think there is a very great

need for as much clarification of what can be reasonably clarified and

is part of the obvious bounds of which a negotiation can take place

and obviously one of those is no agreement, for that to be clearly

established and put out there. You're gone very great deal further

in answers to me than you, than the U probably signed off in some case

this morning when he realised it was outstanding. It was not outstanding

for me... Yes, and the Attorney General has not done this to mind

and I appreciate that, and I am grateful... No great deed ever goes

unpunished. LAUGHTER

I am very grateful for the detail you have now given. One further

question from me before moving on to Mr Gates. Max Orrin, -- sorry, but

who will you be negotiating with? First off, the commission has

appointed Mr Barnier, the Parliament has

appointed Mr Verhofstadt, and I went to Dublin and spoke to Mr Flannigan,

and... My question is, in a sense, who are you formally negotiating

with? We are formally negotiating with the council. And... There

appears to be some dispute between the council. If you will forgive me

that is not for me to resolve. We may return to the involvement of the

European Parliament later in questions. Awarded a little bit more

clarity on the question of the letter when you see it is possible

to have a position where we adopt all the 6800 EU laws... But I

thought he then went on to say that would be problematic and give the

example of the local authority having to publish all their

European... So it wouldn't be workable? You have to deal with that

by a series of follow-on legislation, something like that-

would through an SI, and it would not be confirmed to just that. It

would not be confirmed to the sort of minor problems like that - they

would be substantive changes, changes in immigration law, changes

in a whole series of matters currently to do with European Union,

some of which could be quite significant. So the problem there is

a generating a lot of secondary legislation and possibly some

primary legislation. It may not resolve the issue in the way your

chairman was saying earlier. If there is not time to get it through,

what happens? That is why it is difficult. And just on the timetable

and of course I completely understand you cannot give any

committee a running commentary on negotiations or positions the

Government would take, but could you at least see when you expect the

Government to agree a clear set of objectives for Brexit negotiation.

Do you have a target? That is one of them and probably the primary one is

the Prime Minister has said we will not trigger Article 50 until

sometime in the New Year, after the end of this year. Because we are

going through that process as it stands, and I can talk you through

that if you want to hear it. Assessing, negotiating aims,

negotiate and tactics, the legalities, the very things we have

been speaking about, the legalities of Article 50, and all those things

really have to be fairly clear before you start, so we will arrive

at that something in the New Year. So you will have all of your

objectives in place sometime in the New Year, so by January? I will not

guess on that, with the best will in the world. I have said before I

would rather go one month late and get it right and go a month early

and get it wrong. That has slightly flipped the phrase but it

characterises it. But early in the New Year? Your target? The Prime

Minister certainly one very public comment and one that was implicit I

figured what she said. Firstly, it will not be this year. Secondly, she

knows that British people expect us to be expeditious about it.

After reaching that position when will the Government set out your

objectives or will you not set them out at all? We will certainly set

out some objectives, the level of detail of the game is another matter

but the overall aim will be set out clearly. Apart from anything else,

you have got Parliament is having an interest in its and as I said

yesterday to the Lords committee we will meet that as far as we can

without jeopardising the overall aim. Also, we have, when rewriter

Donald Tusk under Article 50 we will write a letter and a sum that would

include a statement of our aims. So that would be early in the New Year?

I will not be drawn on dates. You said you would hold roundtable

debates with stakeholders. Can you explain in more detail how the

process will actually work? Will you publish open calls for evidence or

contributions from stakeholders will you and other departments select

those who you wish to hear from? A bit of both. Some of it is

self-selecting because anybody who is concerned about their own

industry will be wanting to have a round table so, for example, last

week a Citigroup had a roundtable chair by the Chancellor. -- a drip

from the City. I have one other retail this week. I have set in the

house I saw the TUC, they were the first people I saw. The fishermen's

organisations, you name it. The whole series will stop where we

think it is at issue and people who are concerned.

And that is how you ensure it is wide-ranging and representative?

Bear in mind... Sorry, I left out the section. Also bear in mind is we

put to one side the devolved administrations because they have

got a separate set of almost parallel operations going on, but

every single department is it's also been asked, was passed at the

beginning of the summer, -- was passed. Coming back with their

primary concerns and their client group. That is also happening. I

cannot think of any other way of making any more exhaustive comments.

And the Department is suitably resourced for this? More of the

resource is in the department that with us. My department is subject to

Solomon... My department is quite small but as Grand Rapids. -- has

expanded rapidly in the past month but is still only around 200 people.

What we are doing, the strategy we are taking is having a small number

of very high calibre civil servants of each of the main departments, not

trying to replicate the entire policy went off, let's say, the Home

Office. That makes it work better, more effective, we not duplicating,

there are no turf wars and it is a better way of doing it. How will it

work when you start negotiating? You are missing out this step. The step

between now and then, the negotiations starting, will involve

a degree of assessments of the size of the problem. For example,

somebody has said that the nontariff barriers are better than tariff

barriers and they have cited various ways so we will do a quantification

of natural before we start negotiating we will have an idea of

what is big or small and what matters and what does not. We will

not necessarily publish all that because that is a gift to the other

side that we will know it. Welcome, secretary of state. These

are complex negotiations at you do not want to compromise your

position, but many of us believe if access to the single market cannot

be gains on terms reasonable to both sides then certainly for those goods

subject to tariffs we should not be afraid to fall back on the WTO

rules. Is there any reason we should not do that?

I will not commit to any particular strategy at the moment, for obvious

reasons. Firstly, let me offer a philosophical approach. I think it

is a bad idea to go into negotiation feeling any outcomes. Because that

weakens you in one respect of another -- fearing any outcomes.

Speaking about the calculations that will go on and we will assess not

just what the costs of a given strategy is but also what the

policies that go with it. So, people might say it will cost this or that,

they have not necessarily taken on board how we might mitigate costs. I

see nothing to fear in any outcome. On immigration, mainly in the EU

Commission the early suggestions are linking immigration or free movement

with trade negotiations. Many of those who voted to leave, one of the

key reasons was we had a immigration system discriminatory against the

rest of the world outside the EU and what was wanted was fairness,

whatever the criteria that will guide the policy going forward it

must be fair so that is the discrimination. Is that the sense of

the position within the Government, as you see it?

My job is to get the power was back, that raggedy power back, respect the

will of the British people which I tend to think of... -- get those

powers back. To respect that as much as we can in negotiations. When we

get it back it is only Home Office to make decisions on how to use that

power. Whilst I have sympathy with your description of it, it is not me

who the decision. The decision on how we decide on the final policy.

Final question. The certainty of that position is if you endear to

the principle of fairness, whatever the criteria used, essentially

adhere to the principle there will be no discrimination, you

effectively divorce immigration and free movement from the trade

negotiations because you can offer nothing special to the EU as such.

You need to explain that begin to me. The subtlety of the principle of

fairness is not only that it is right, in that you will not

discriminate against one region of the world against another, but in

pursuing the principle of fairness you actually divorce in effect

immigration and free movement of labour from trade negotiations. I

did actually understand that the first time. For obvious reasons I

will not be drawn on it. Can you see nothing? Can I pressure on this? It

is a key plank of the campaign. The Prime Minister made it plain the

current system cannot be allowed to stand. She said we will not have

free movement as it now is. She talked about control borders so I do

not think there is any doubt about the priority that on this and I do

not think our European partners would doubt that either. And some of

them have commented publicly in disagreement with her, for example,

the Irish head commented over the weekends disagreeing with us but it

is plain this is a priority. You mentioned you have a meeting

with the TUC, which is very welcome and unusual for the Government in

recent years to have such an early meetings with ministers and the TUC.

You previously... I do have formed in this.

Perhaps then you can answer the question that you previously said

workers should not lose their rights as a result of Brexit. Is that your

personal view or is that because the view of the Government? It is a

personal view but I have not been disagreed with. So there has been no

discussion in Government yet about an erosion of workers' writes?

Not on that specific issue and what I have said two other members of the

committee is we will not get drawn into the policy elements of this.

Because it has implications that would... To put it another way, if

you lay a red lines you are negotiating opponent does is head

straight for that line and use it against you. I do not propose to

elaborate on the comments -- I do not propose to elaborate but the

comment stands. Yesterday you told the Lords select

committee you will ask businesses to give you a quantitative assessment

of the impacts of various scenarios on their sectors. How are you going

to assess that data, the validity of that paper? I was talking to Lord

Green and what I said what we would carry out these assessments and some

of the information will, from that but the same way you test any data

given to you, you look at how it is calculated. Will be businesses carry

out or will you. We will carry out some of our own. Earlier I sighted

people comparing effect of Paris and nontariff barriers on how you set it

-- Paris and nontariff. -- tariffs and nontariff. Usage of the

department does not date have the capacity says that they do. When do

you expect to have that capacity? The trite answer is before we need

it but the sequence of events is like this, at the moment we are

doing the round tables and bilateral discussions. We will then asked for

data and submissions from them, we will then begin assessment. That is

a little while away but I suspect the department will double again in

size. Will that be before or after article

50s triggered? Before. Slot and you will not

trigger article 50 until your department is at capacity to carry

out the functions. To carry out those functions. That is self

evident, I would have thought. And will you be drawing on the

competencies and documentation produced by ministers before the

referendum, the whole process went through when William Hague was

Foreign Secretary. Most of this is a new process. I

think when the committee... It is a very big process and there is a lot

of work going on and pretty much every department is involved and

they will be doing a fair amount of analysis themselves and then

challenging it. Final question. Given the clear reluctance you have

two states what you're negotiating position is going to be and not give

answers today or yesterday, how long do you think you can sustain this

position? Isn't the reality that it will become politically impossible

domestic calling, not just internationally and are therefore it

might be better that the Prime Minister and her new team actually

got a mandate from the British people before they trigger article

50? An early general election before article 50.

I am addicted to say that is above my pay grade but it puts the rest of

Europe questioning in context. -- I am tempted to says.

My questions are the kinds of questions people want answers to

your job is to answer them. My job is to make decisions on behalf of

the people. We have a mandate like no other. It is our job to deliver

on that mandate and our job to do it as best we can which means carrying

out the negotiation in an intelligent way, making the

decisions on the basis of the data we collect, analyse and make a

decision on that basis, not the other way round. It may be your

approach to save because we are asking the question you must tell us

the answer before you have out but that seems daft, to me. You have not

worked out the answers to any of these questions yet?

We have worked out some answers but not to the questions you have asked

and we have a major exercise under way and we will look at every single

sector industry, every single department of state has got the

workloads on less and they will come to intelligent conclusions and that

will drive the outcome, empirical outcome to this process, not

politically driven answers but allowing you to say should we have

an election. I think these questions have

established the level of negligence... As a not above my pay

grade... Yes, not responsible to, Secretary State. Goodies you back in

Government, Mr Davies. We are clear on the accentuation of the fact that

was preparatory work on the situation post Brexit, and it has

clearly been indicated the ball is in our court for triggering this.

Can I ask you, bearing in mind we have opted two years for this

renegotiation process, what are the delays in invoking Article 50 -- up

to two. The primary delay is doing the necessary preparations. It would

be quite difficult for any government to do the level of

analysis we are undertaking now. It is enormous. As I say, every

department is involved in it, pretty much. That is the first thing. It is

time consuming, it simply is time-consuming, first to collect the

data, to establish the nature of the... Let me give you another

example. The City of London, there has been a lot of concern about

passports and so on, and some companies have raised issues about

this. Some companies care about it and some do not. We need to

understand why some care and some don't and what the differences are,

we need to understand whether there needs to be a policy as do it or can

be fixed the problems themselves with brass plates around the place

and so on? There are a whole series of issues and that is just one

sector. And the ecosystem is not an industry which fits together like a

complex As many as are of the opinion, say 'aye'. To the contrary,

'no'. Tower so there are studies underway and some still to be

started which will take time to complete -- together like a complex

jenga tower. The only way to do this responsibly is to do the analysis

first, and clearly work out what the National priorities are, on the

basis of that, then designed a negotiating strategy around that.

That is why it takes time and I make no bones about it. I think the

British people want us to do this properly, not necessarily incredibly

fast. I understand obviously there is a huge amount of work to be done,

analytical work, and we want to be ready for those negotiations with

all the facts at our disposal. It is not an issue, though, however, on

lack of resources for your department, is it? Do you have

sufficient resources? There is a time constraint in the sense that

the department has come from scratch. It did not exist two months

ago, a little over two months ago. Most people around this table, you

know what Whitehall is like in August. The recruitment process is

not a straightforward as you might think. So it has taken time. There

is no way round it. It is not a shortage of money resource. It is

just a question of establishing the organisation in place. As I said to

the Lords' committee yesterday, at the moment it is mostly civil

servants, in fact entirely civil servants, and they are all quite

young, smart people, but they do not have experience in the City, in

industry, in various other areas, and the next phase is to bring in

some grey hair to bring in that experience. It is not resources in

the sense of money. There is no problem with that our European

partners have been I think very understanding, certainly in public,

about our delay. Obviously they are keen for us to invoke it as quickly

as possible. Do you envisage a time when they will start to say publicly

that they are concerned about the delay? Have you had any discussions

with them about that? I think I am right... What the Prime Minister has

been saying, and it may well have come up in those discussions, but I

don't think it is material. The French government have been saying

they wanted to be precipitated soon. I think one or two members of the

Commission, Mr Jean-Claude Juncker, he has said he would like to be

soon, but, you know, they are the other side of this negotiation. We

will not necessarily do everything they say when they want us to do it.

The counter to this is that they need some time as well. For example,

to give you the parallel to this, my opposite number within the

commission if you like, Michel Barnier, is just at the moment about

to establish his own Department of 25 people, not 200 or 400, but 25

for this instance so he can do his analysis, and they will need to work

out for themselves what the consequences of our negotiating

request questions are and they are also starting a process I do not

think it is wasted time. OK, thank you. I can say I am familiar with

some of the young talent supporting you in this room, obviously which

iss some of which I am aware of as a minister. But speaking about grey

hair, has approved rather more difficult to find experienced

servants to come and join your department? You see experienced

civil servants... And others... Union outsiders? Yes. This morning

we had on offer, and I probably should not mean the company, but we

had an offer of three senior partners from a very major law firm

in this area, so we have had other offers as well. So no, there is not

a shortage of interest in getting involved. For many of the companies

in the City, indeed, in business in Britain, there are strong interests,

shall we say? In providing us with good calibre people when they can.

Some of the interest groups, not companies, are doing their own

analyses as well, which we will incorporate and draw on as well. I

wouldn't worry... I mean, I will tell the committee if I run into a

constraint on this and I'm very happy to do so, but I am not at the

moment concerned about that. There is a natural limitation on how long

it takes to set up an organisation. I am setting up a battalion from

scratch, basically. To put it in words you would be familiar with.

You know, I am the recruiting Sergeant... Well, actually, it might

be a battalion! We will see what we get. It will be as big as it needs

to be. Good afternoon, Secretary of State. The people voted to leave the

European Union. They expect us to leave the European Union. And we

understand that it takes time to get these things right before we can

actually do it. But in the meantime can you reassure the public, can you

take actions, even small symbolic actions, to indicate that the

Government is absolutely serious, deadly serious, about doing this,

because there are jitters and there are people worried that this is not

actually going to happen in the way they thought? Well, at the beginning

of the summer, the Chancellor carried out the statement that we

would underpin spending, structural funds, CEP funds and so on. If you

wanted signal we wanted to reduce the jitters and say, we are

definitely doing this, that was one CAP. That was one decision.

CAP. Those argument is notwithstanding the be made over

again. There was a debate I think in Westminster Hall last, in fact last

Monday, on whether there should be a second referendum. The Prime

Minister has said time and time again, you know, no second

referendum, no reversals, nor avoidance. We are leaving the

European Union. As a transition between now and when we leave the

European Union, is there a possibility that we could

look at EFTA is a way of continuing the existing trade relations and

leaving the European Union much earlier by actually having that kind

of transition? No, I don't think so. I don't want to get into it and I

will not get into what arrangement we end up with when we leave. There

are people who argue that as an outcome. There are others who argue

instant departure, so I will not get into that but, no, I think this is

the case. The strategy of the Government is to depart the Union at

the end of the Article 50 process. Up until then, the Government will

all be absolutely the European Union law and will be a good European

Union citizen, that is the approach we are taking and we think it is the

best approach in terms of our responsibilities and also we think

it is the best negotiating approach -- the Government will absolutely

obey European law. We will not walk away from our responsible days. We

will take a stronger stance on European matters on defence,

security and a whole series of other things. This is a bit of an

indicator. But whether there are things we can do that would be

legally OK to do, that it sure are symbolically... One example is new

passports that will be issued from now on will go back to the

traditional blue British passport rather than the pink things we have

been using. You would need to ask the Home Secretary... Could we have

symbolic gestures such as that to show the British people we are

absolutely serious about leaving the EU? Attractive as the idea is, we're

not in the business, or at least I am not in the business, of

symbolism. I am in the business of delivering on this, and that is the

point. On that very point of delivering, in your deliberations

and negotiations and discussions about Britain's future, the United

Kingdom's future, with the EU, what assurance can you give your taking

into account the interests of Gibraltar and the British Overseas

Territories and Crown dependencies, but particularly Gibraltar that have

a huge amount of concerns about their position following Brexit?

Well, we are, and I am seeing the chief means the Minister of

Gibraltar almost after this meeting. -- the chief minister of Gibraltar.

Simon thank you very much. The Secretary of State seems reluctant

to go into specifics about exposing his negotiating hand but as you will

recall straight after the referendum there was huge uncertainty in

markets. The pound slumped, share prices down -- yes, thank you very

much. We were led to understand they would not be a rush to invoke

Article 50. To give some breathing space and the markets and many major

investors time to speculate, on which approach we will take. You

clearly do not want to be transparent about this but markets

want what businesses want -- one markets, businesses and inverses

want is to some degree transparency that the outcome will be something

they can live with. You made it quite plain that you are not sure an

EFTA model is for Britain, but do you have some arrangement you will

keep secret until the last minute and that at the end of tonight years

will be brought out like a rabbit out of the hat, that the

international community, and in particular the business community,

will be satisfied with, and in the meantime what damage do you think

that will do to our international standing in the markets and the

strength of the pound, and what is happening in investment in this

country? Let me take it apart from the beginning. Firstly the

description of the financial markets was just simply not true. The FTSE

100 and all the various indicators are good. The standing of the pound

is not in a poor place. Indeed the previous government I believe that

that is where it should be, so I am not in the business of speculative

on that but that description you have given is a little like

descriptions people were giving in August trying to blame things on

Brexit then of course all those things they were calling on Brexit

dissolved on wearing there, so... Let me finish. You ask the question

so I will answer. Firstly, your description of the economy is simple

and not the case. The first thing to say to you is a

big business decisions are not taken on the right thing of one

commentator in the Financial Times, they are taken over a period of time

and not taken off the back of the movement of the markets on one day

or another. You will see the foreign investment into this country after

the election of a Government that had undertaken the referendum was as

high as it has ever been. We sought investment in the country in a big

way. That night we saw investment. -- we saw investment. One business

said they were going to continue to invest. So I frankly do not accept

the premise but let's take the next step as well. That is what business

views as uncertainty. A business that wants to see a decision taken

on the basis of the facts, a Government doing representing the

national interest and that is what this Government is doing. If I were

still in business and worrying about whether to invest, I would not be

panicked by a Government taking its time but by the Government rushing

to do something in a tremendous hurry. The premise of your question

is flawed. You say that, I know you had discussions with the Japanese

ambassador so let me give you a short passage. What Japanese

businesses wish to avoid the situation in which they are unable

to play discern the rear brakes and negotiations are going and only

grasping the whole picture at the end. It is imperative to regain the

confidence of the world and ensure competitiveness by increasing the

predictability of the Brexit process. That is not just through a

Japanese company spot of companies around the world is wondering

whether or not to pull out of Britain -- but of countries around

the world. Because we will not have access. You said yourself, we may

not be in the single market when this process is finished. That I say

that? You are basing that on what evidence? Let me deal...

Secretary... Let me finish, secretary of state. You mention

investment but that is not companies like Nissan and a wholly owned by

building factories, it is a British company is taken over by a Japanese

company. It is not jobs and hard manufacturing. Let's not mix this

thing as equivalent to the big car investments made in this country.

You were the one another is the FTSE numbers. Many of the companies

listed on the FTSE foreign-owned and that is why the FTSE has not been

affected to the same degree. Where was the question at the end of that?

Let me deal with the Japanese point first. The simple way of dealing

with it is to go back to the Today programme on the first day of the G

21 Japanese ambassador said about how attractive Britain is and will

continue to be. There is an underlying issue to

grapple with. I think the memo on Brexit released by the Japanese

watch top of unpleasant surprises and you have this balance to manage

-- which talked of. Balance of avoiding economic uncertainty and

maintaining your negotiating hand. How do you propose to manage that

and do you simply... Well, your robot answer would suggest they

should trust us because we are responsible. No, that was not the

robust answer. Robustly delivered. Out will let you judge that in your

report. -- I will let you. There are a number of things. Firstly, what

will International companies look for? I assume you mean

internationally mobile companies that can move the capital. They will

be looking for where the Government's aims are, as you told

me at the beginning of this, we do not decide the outcome alone. It

will be negotiated. They will want to know where our aims are and at

this stage what the Prime Minister has done has made it clear what

priority she sees were inherent in the original referendum and also

said we want to do that maintaining the best possible trade

opportunities for both manufacturers and service industries. Now, how

much clearer you want to be I do not know. Once you get beyond that you

get down to industry specifics because that is a good outcome, if

we achieve it, for the whole economy. Then needed to industry

specifics and there is a whole exercise about round tables and

bilateral discussions and departmental conversations with

their client companies and client groups. That has a part to play

because they will learn we are taking their interests seriously and

assessing them as well as they can. And then we're going to create a

strategy which as best as possible, given it is a negotiation, will

deliver. Frankly, there are times when you are making business

decisions when you do not necessarily good for the outcome,

you look for direction of travel. Within that answer there is an

element of the answer to the memorandum from the Japanese

Minister of foreign affairs. What would be helpful is if you could

submit to us in effect be replied to that Japanese memorandum. And

address the point about uncertainty for investors in the UK. You have

given the guts of an outline of an answer but there is a lot of detail

any memorandum. You must bear in mind the memorandum was addressed to

the EU and the British Government. I think it would be... I would be

grateful if they are, through this committee, you could give a formal

answer to that memorandum. Briefly, do you take heart from the

fact that at the end of the actions speak louder than words when it

comes to business? It was big business that made the case for the

ERM and big business, swathes of the establishments that made the case

for the single currency and yet despite is going against that

consensus from their point of view, inward investment drove up words and

what it comes down to at the end of the day is how attractive the

country is to do business in relative to the alternatives and

when corporation tax is more here than in the continent and flexible

labour market practices, those are the key decisions when it comes to

business. Memorandum from Japanese companies and ambassadors, imported

though they are, -- important though they are, how we do business is the

most important. I speak as someone coming from the

commercial sector, for debt the different companies have different

interests. Large manufacturing corporations with multinational

sourcing and marketing have one viewpoint. It was some of those I

believe that favoured the euro because that took us the accounting

risk out of their balance sheet. But they assess it from their own point

of view, not from the country at a hall or the economic system as a

whole and that is often the case for businesses, they will look at their

own interests but does not have, or had a big impact elsewhere they are

not accountable for. That is one thing we will assess. It will not

just be an... Is this actually have a bigger impact on somebody else?

Sort that leads into the fact that of course businesses make mistakes

in some of these assessment and clue on the Europe of those companies

that wanted Britain to join the euro would probably have changed their

view today. Yesterday you promised them British

parliament would not be kept at an information disadvantage relative to

the EU Parliament. What practical measures can you to guarantee that?

Firstly we have to make sure know what is given to the European

Parliament. The information given to the European Parliament is... The

said some information will be limited because of confidentiality.

It doesn't enter institutional agreements. Framework agreement on

relations between the EU Parliament and European Commission. And annexed

to that agreement provides for the forwarding of confidential

information to the European Parliament to request the site of

confidential information. Will you replicate that arrangement? For

those items yes. They will not be replicating to them information

which is part of negotiating strategy but as far as I can yes, I

will, to the committee. You inform the house you want to

ensure the field of security and defence matters that despite the

Brexit we will continue to engage with our European partners on these

very important issues. How do you plan on doing that?

I don't quite understand the cost of the question. -- thrust of the

question. In terms of security and our standing on Nato and defence

matters, that will be a public stance. The Prime Minister has

already talked about it, as have I, and that was made clear. We also

will be having discussions, Justice and home affairs as part of the

negotiation and we will take European security as seriously as

our own security. We have, from time to time, provided assistance. They

are acutely conscious of that. There will be some, you are

obviously responsible for the negotiations in terms of Brexit and

pulling out of some of the mechanisms for joint defence and

foreign policy matters, I presume those will be part of your

discussions. Can you allude to anything further? What do you have

in mind? I am not sure but I personally am very concerned when

you see European leaders making an announcement together they intend to

move forward with the single European army. I see that it is huge

challenge and a threat to Nato which has secured peace in Europe for

decades. As part of the negotiations Jubal come across several other

European countries who have similar concerns -- come across. And will

you will you ensure you work with them to try to prevent this

happening because even though we are pulling out of the EU it is not in

our interest for this to happen. We will ensure we do not see Nato

undermined. That is a strategy. The European army as an argument going

on since you work in the Foreign Office, Mr Chairman. My view is not

the same. But you will remember the primary concern was the little

access to trips. -- needs or access to troops. We will work from that

position. -- Nato access to troops. You will acknowledge other countries

do not want to fall as part of the European army and given the strength

and size of a position and historic protection of Europe as an entity

over many generations we would want to play a part.

I am having to guess who you're talking about, but the simple truth

is we will not see the weakening of Nato. That is our strategy.

You don't make a pledge early on that ?350 million a week -- you did

make a players that would be spent on the NHS. When did you abandon

that? I made no such pledge. I'm sorry, but I made no such

pledge. By those arguing for Brexit... Some did, and if you want

them to argue the case you should invite the people here who made that

argument and you will find no speech of my made reference to that. That

is very interesting... I don't want to be rude to you at all. I am an

admirer, but the simple approach to this that I am taking is to try to

deliver this outcome in the national interest. That is a judgment that is

made not on the basis of somebody else's speech some other time. It is

made on the basis of hard data we are gathering right now. That is

what I am doing. No more, no less. Can I ask you then, until the UK

extracts itself from its obligations and the EU treaties, the policy of

freedom of movement remains unchanged, is that correct? That is

correct. Given the current shortfalls in health and social

services, it is very difficult for the NHS to retain staff, or to

recruit staff. Given the uncertainty over what will happen in future, how

are you going to protect people who work in the service? The Prime

Minister has made it clear. I think what you are alluding to is the

question of the position of existing European citizens here. Is that

where we are going with this question? And those who want to come

here. That is a different category, I think. Let me deal with the ones

here already. For the ones here already, the Prime Minister has made

clear that we would seek to give them as generous treatment in terms

of getting leave to remain and other such things as possible, subject,

and only subject to our own citizens abroad getting a similar sort of

treatment. The reason for that. I mean I heard people referring to

this as making a sort of bargaining chip out of people- it isn't. It is

making sure nobody gets turned into a bargaining chip. And it is aimed

for the best outcome for everybody, citizens abroad as well. One of the

thingss I would say as well, in the argument that took place in all

this, it is very important that people understand what the current

situation really is. You would have thought, listening to the argument,

that people were about to be deported. The simple thing is that

for people here already, and indeed the majority of European citizens

here, they already have or will have by the time they depart, leave to

remain under existing rules, and I think it is very important we do not

frighten people by the end, no, you're going to be... Most of them

will be, you know, and are perfectly safe position matter what the

Government does, and I believe... I find it very hard to believe other

European countries will misbehave. And under those circumstances they

will all be protected. Thank you. Just very quickly on that, Secretary

of State, obviously I engage with a lot of members of the Polish Dyas

brassieres, 900,000 strong, and they make a huge contribution to our

country, and there have been some reporting is of hate crime around

the country and I am a little concerned about how certain sections

of the media are trying to overplay some of those difficulties. Is there

any words of shoes you can give to the Polish community on this?

Firstly every member of this House, never mind just this Government,

would condemn every hate crime. What this is is frankly unspeakable

people making use of what they think is an excuse, and it is not. It is

unforgivable and will continue to be treated as fiercely as we have

always treated it in modern times, as we have always treated hate

crimes in this country. Thank you. Can I return us to deport until

issuers? First of all in your negotiations with the EU -- to

departmental issues. Reading the news, and from what we also hear,

there seems to be a bit of a separation between the commission

and elected politicians in the year. The commission perhaps wanting to

play a slightly hard-nosed game, the elected politicians conscious that

many EU countries, particularly France and Germany, I met exporters

to the UK, and there are domestic elections around the corner, and

they are worried about the implications of playing hard-nosed

when actually in relative terms, and I know there are losers and winners

of the situation, they could come off worse. Have you picked that up?

Yes. What will be your approach as regards that situation, giving you

have listed three or four possible opposite numbers... ? The first

thing to understand is the Commission in particular, there are

institutions in general, but the Commission in particular take the

viewpoint of this which reflects what they see as the interests of

the whole Union, or in a way of the whole project if you like, the

European Union project. For them, they do not want a country leaving

the Union to be better off out than it was in. Better off outside than

in, that is there a sort of, I guess, there raison d'etre in this.

The countries, quite properly, of course, as they are all democracies,

but broadly have taken an interest in what is the interest of their own

citizens, and you're quite right that the balance of trade, certainly

with manufacturing, the balance of trade tends to be to the advantage

of the manufacturers, such as -- soldiers threaten to promise an

element of British industry tends to carry with it a threat to their own

industries -- so to threaten. In terms of our approach, firstly, I

have argued and will continue to argue that... Which I did

elliptically sort of in the Chamber statement, that trade is actually a

mutual benefit. Nobody should have repay anybody else to trade them.

They should not be any sort of exchange for that. And we will make

that argument and it will become very explicitly apparent, I think,

to those countries, as their own industries and organisations argue

their case. I would expect the German car-makers, the French

farmers, and many others, the Polish manufacturers and so on, to make the

arguments to their governments, and actually reinforce the argument, and

I think it is no secret end our negotiating is that the strategy

that I will be using that line. Time as you say it is not just

politicians facing elections but the fact that many industrialists are

expressing concerns and have done so. The German CBI a few days before

the referendum -- yes, and as you say. Paris obviously hurt our net

exporters. -- tariffs. But does this influence the timing of things? If

the Commissioner will try to square the circle and go with that

ideological approach adopted by the commission, it may encourage them to

push the timetable out actually and not bring it forward? Without

getting into the minutiae of the red lines and everything, has that

happened? I don't think it can very easily. There have been people who

argue Article 50 favours, or dis- favours, somebody trying to leave,

to put it that way round... But I do not agree with that. In fact it it's

a discipline on everybody. But everybody does understand this is a

process which is quite quick, by trade negotiations standards. We

have some advantages in terms of existing commonalities. It is

moderately quick, so they know they do not have time to waste. The

endgame you described earlier, the sort of WTO endgame that the

chairman asked about, it is not helpful for them by comparison with

us, so I think it is not necessarily wise... There are other bigger

problems I think with the timetable than that. So I do not think that is

a big problem. Finally, from our point of view, I do not doubt you

think it is a good idea to create a department to support Brexit

negotiations. You are the Secretary of State sitting on the top of it so

I issue music does a good idea, but can you tell us what the budget is

for the Department? -- would assume you think it is a good idea. Do you

think the processes are working fast enough to recruit the expertise that

you require, putting to one side all the offers of voluntary help and so

forth? Are you happy with progress from that point of view, the nuts

and bolts? This is one of those strange departments were budget

comes second. What we will get is what we need, really. And, yes, so

far. I have been moderately surprised. Despite the rather

strange stories over the summer, my department almost by definition

stands on everybody's toes, because we have involvement on the lean back

in every department virtually, and actually we have had very little in

terms of sort of problematic response. -- involvement in every

department virtually. This was not my design but was that of my private

secretary and I read it but it is one of having a small unit -- I

agreed to it. Having a small unit inside the department liaising with

whatever policy department there is, let's say in the Home Office, the

DWP or whatever, and that approach actually has worked rather well.

With hindsight, it was a very wise approach. Not so smart on my part,

but, yes, not so far, no. I would tell you, as I said to the German,

if I thought I was running into difficulties, and I don't think so.

-- I said to the chairman. This stage, the stage, analysis later,

policy designed later, and so on, I don't think we are to have a

problem. The simple truth is that this... For Whitehall civil

servants, this is an incredibly attractive problem. It is a history

changing problem. It will alter whichever way our country goes,

whatever the outcome is. But also, frankly, for business, for lawyers,

and for pretty much every profession, this is their one chance

in a life them to alter the future of a country, so I don't think there

is a problem of attracting people in to start in terms of timing, I would

worry if we went any faster, in truth. Because it is the quality of

recruitment as much as the numbers that matter. It is the output, not

the input, I am worried about. So far everything I have seen shows

that the quality is good. And that we are getting the best and

brightest at Whitehall. Finally, briefly, reports in the media about

followeds between your department and others and all that sort of

thing. Nobody has organised a pyjama party yet! I suppose we will use it

for something, I'm not quite sure what yet. But, no, it was August...

I had the misfortune of working through August, so I was here to

read it, but I didn't recognise any of it. Secretary of State, you're

sort of Squadron group of 180 people... What sort of job are they

doing? Could you speak to us about that. A variety of things. Firstly

there is the central analysis with about 50 crosscutting sectors they

are actually working through, what will happen, what are the problems

of those industrial groups and so on... And that is both them and in

liaison with the Department. They are setting up... Someone is setting

up an engagement strategy at. We have not spoken about liaison with

the devolved administrations but that has been quite important as

well. That is a lot of processes, very so three type stuff. All the

commissions on things we will have -- very Sir Humphrey type stuff. How

it has been going on between Scotland, Northern Ireland, Wales

and ourselves. Legal issues. The issue the chairman started with, the

question of the legislation has taken some time, and that is

ongoing. Work of course on the international legislation as well,

WTO legislation as well as... There were other skier stories about WTO.

We are a full member of WTO so those sorts of things were going on --

scare stories. Similarly the Article 50 process itself, other trade

agreements, the Canadian trade agreement, those sorts of things. A

whole series of both legal, political and economic operations,

and that does not include... Just as an aside, I don't know whether it

was made clear to everyone, we have taken over the operation of the

General Affairs Council, it's normal day-to-day work. What sort of skill

sets are you looking for from outside the civil service? We are

not really working yet on that front but it will be specific industrial

skill sets. Some quantitative work. Not very much consultancy. Frankly,

anything that's helped us solve some of the problems I have listed. It is

likely in four weeks' time I want to scope out need another two or three

skill sets and then I would either go to departments or outside

sources. Thank you. You told the Lords committee yesterday the

mechanism for coordinating the work of Brexit would go to the Foreign

Secretary and the secretary of state for international trade. It was a

Cabinet committee chaired by the Prime Minister. How often does that

committee meets? So far, twice. That is across August. I would say at

least once a month. Is that sufficient? Yes, we talk to each

other as well and it also comes up in Cabinet. That is the super

committee. There are other internal committees but that is the primary

driver. From time to time we talk informally. Either bilateral or

trilateral or between ourselves or last week for example with the Prime

Minister. You do not to the National security Council. Why not? That is a

matter of my pay grade. Yesterday you told the Lords

committee you have taken separate responsibility for... Can you

confirm that means it now report exclusively to your department and

not the Foreign Office? Principally. If the bilateral matters then before

Foreign Office is involved. This is its Humphrey question. I do

not understand the problem with this. -- sir Humphrey. Does it also

report to the Foreign Secretary? I do not know. We can write to you on

that if you would like. You it would be helpful. At the moment this

committee is probably best placed to oversee your departmental plan and

budget and resources because of the close relationship with the Foreign

Office. Exactly how that works and on what the budget line it appears

would be very helpful. One thing I do not do is micromanage things like

who pays Uprec and so on. It must give you a concern because it goes

to a central challenge for our Government, the presentation of the

United Kingdom any post Brexit world. It is the opinion of this

committee the budget of the foreign operas will need to double or triple

to meet that challenge because we will have to get serious about

presenting the UK well and explaining our new role in the world

and establishing the depth of bilateral relationships. There is a

direct overlap between resources going into your department to

negotiate Brexit and this whole hole in promoting our wider role in

the Wells and that belongs to the Foreign Office -- in the world. In

the end of this and around three years' time the department well Gaul

and those members who are within the foreign operas will return to the

Foreign Office. That is why I am not sure. -- foreign operas. When you

presented your position in terms of your priority in establishing

capability that a certain lots the Foreign Office -- certainly not.

Neither am I a financial backing on behalf of the Foreign Office. I

would rather hope you would be. That would be one way of getting my

budget stopped right away, I would suspect. Can recall to what will

happen the next two years or so when we are still within the EU, given

that Uprec reporting to you, do you believe they have the capacity and

your department has the capacity to direct their work on matters not

directly related to the Brexit process? Yes. Do you think you need

extra staff and resources to cope with the additional work of Brexit.

No. Not at all? No. The reason I say that is the way it works is

secondment from other departments and I have no indication that is an

issue. In terms of the representation so it is rather like

for like. , policy development is primarily with us. In terms of

diplomatic and information they are very good as it stands. As I said to

the chairman... What about the individual hosts within the 27 EU

countries. Do we have enough people there to provide a relationship and

information we need is given there will be bilateral discussions here

as well as they are. I have no reason to think otherwise. The

Foreign Office itself is a very effective network and I see nothing

to indicate there is a problem. But then withdrawn or Talon, they resort

to the Foreign Secretary directly -- British representatives in Rome, for

example reportedly Foreign Office, but UKRep reports to you. One of my

daily duties is dealing with these telegrams and when they come to me.

We have asked you a series of questions here and would you mind if

I asked you what you see as the opportunities and pitfalls as far as

Europe are concerned with regard to the negotiations. Or to put it

another way, what are the questions we should have asked. What the

Americans say? I will take the fifth.

There are a lot of opportunities. You know my view on the upside of

Brexit although most of those forward then the Secretary of State

for trade purview. Lots of those I will not list them again but is the

committee will be conscious of them. In terms of risks, I am tempted to

know and no is an unknown unknowns, things we have not thought of yet.

But some of the things we're looking at, take Canadian treaty. The

Canadian treaty by the standards of the EU is a very good treaty but is

a mixed procedure which will take quite a long time. It requires all

36 parliaments in Europe to approve it. So one of the things we have to

look carefully at is how the endgame, what the decision-making

procedure is. Will be set around after the two years waiting for

approval? There are issues like that's. The obvious negotiating

risks, the risks of the commission's highlighters, wins the battle inside

Europe and you do not beat me, you know those already. My concern is to

make sure we do not fret over in unseen wires -- trip over unseen

wires. One of the things I violated was some of the legal issues. Can I

pressure you -- one of the things I highlighted. Can I ask about WTO one

trade? Can I bring you to the City of London and passport thing. We

have not touched upon that in this line of questioning. When I worked

in the city... What is your approach to this and what are the

opportunities and pitfalls there and do you understand the concerns or

are they overstating them? How will you proceed? One of the things to

say about passporting, it does represent a symbolically a number of

other problems because we get 180 degrees difference of opinion

depending who you talk to. Both in terms of how important it is to

them. Whether it is a retail bank or wholesale bank or investment bank,

different issue if the bank is a national or basis. -- National or

global basis. You then have argument relating to whether the mutual

recognition approach will work to protect them but also whether it's

stable and safe after we leave. I will not go any further into

details. We have been thinking and talking with some of the main

players and how we deal with those issues in turn. I accept you must

not reveal your red lines but the briefly, there was reasonable view

within the banks concerned about the passporting issue will stop the

employ a lot of people. What reassurance can you give because

confidence is important in the City, what reassurance can you give to the

issue of passporting? Is there anything more you can save rather

than what you have just said which does not necessarily reveal anything

more. Most of this will be ignored to the specialists in the city in so

nothing I will tell you will be new to them. -- most of this will be

known. We have some thoughts but forgive me but I will not get into

it. Partly because they may represent negotiations but also

because they are incomplete at this stage. In operational terms if you

take into account Brussels and London largely shut down in August,

we have been operating for four weeks and some of these things I

want the grounds are more closely than we have before talking openly

about them. We nearly ends. I am enjoying myself! We are near the end

of the session. I have had a helpful suggestion while we're sitting here

to invite me to ask you about the man's issued today described as, no

migrant control if you want access to the single market. I then checked

what this man actually said which is the position of the parliament is a

very clear, if the UK wants to remain part of the single market it

will have to accept the free movement of our citizens. I think

that, he... Who will be involved in these negotiations his use of

language is probably precise whilst obviously the question I had from

our college in the fourth estate models up the issue of access and

being in and do we not need to be clearer about our use of language

and the position that he has made clear is the common except the

position. We cannot be in the single market is or remain a part of it if

we are not prepared to concede one of the fool freedoms that underpin

it. Firstly, or... I will allow you to

draw your own conclusions, chairman. His comment is not new. He has been

saying this for some time. While I will not get drawn into what our

position on it is because all these options are being kept open, while

we calculate these things through, you are right in one respect that

the language used about the single market, access to the single market,

and membership of the single market, does get very confused. What we want

to see is the best trading capacity for British manufacturing and the

service industry. That could be any of those things. Is it not clear

that the baseline is we are leaving the European Union? That means we

will not be in the single market, not least because it is impossible

for us to concede that full freedom around the freedom of movement of

labour, and what is being negotiated the terms of our access to the

single market. Would it not be better to clear some of the

undergrowth about language and everything else, that that is what

we are talking about? Otherwise, Brexit will not mean Brexit. We will

clear the undergrowth when it is necessary. We look forward to that.

You have not asked in an article 50 Atul! What was your question again?

Will you have an election before you trigger it? I apologise. But can I

come back to giving further answer that? I did not mean to be rude. The

whole argument about article 50 is this, the government's position is

it is an exercise of Crown prerogative. Crown prerogative is

that the Crown represents the nation. This is the only time that I

am aware of in British history that the Crown prerogative has been

backed up by a mandate, in other words, it is the will of the British

people. When it comes to how you deal with that, it seems to me very

plain, you do not need a second referendum. When there was a second

referendum debate in the Commons last week, nobody spoke of the

second referendum. You do not need another election because we have had

the mandate directly. And you do not need a vote of Parliament either

because in the event that you had a vote of Parliament, either in favour

or against triggering article 50, that is the manifestation of the

referendum. Parliament will either support the referendum will refuse

it. Would it be Parliament versus the people? That is the key point. I

would not want you to walk away with me not answering the constitutional

question. But the Lords constitutional committee have

published a report today which directly contradicts what you said.

No, it is agreed with what I said. The simple truth is that a proposal

that could put Parliament in opposition to the people over

something as simple as this is extraordinary. If you look at the

wording... Where does that say advisory? The reason you have not

been asked about this is you made your position extremely clear in the

statement you go to the Commons last week. He is perfectly entitled to

challenge this. But I do not think the position of the government in

your position is in any doubt. I think it is fair. The point is, go

back to the debate, go back to Hansard. The Foreign Secretary said

this is a matter for decision by the British people. The government in

its manifesto said it would respect the result of this referendum.

People did not think they would being asked their opinion. Previous

Prime Minister did not resign because of the opinion. The

referendum did not say, we would trigger article 50 of the day after

the referendum. It was not the position in the referendum.

Similarly, it did not say would be done in March or May. It surely has

to be for Parliament to debate and decide when and under what

circumstances the trigger article 50. It is not for Parliament to

gainsay the view of the British people. Once article 50 is

triggered, would it be incorrect to believe that actually, given the

groundwork you're putting in now, while everybody is talking about two

years, actually, progress could be made over a much shorter period of

time? In theory yes but in practice unlikely. Two years is the limit, if

you are unanimous, an extension. My experience of European negotiations

is that decisions tend to get taken in the last second of the last

minute of the last day because that is how the negotiation works and

people try to use the time pressure on one side of the other. Let's

assume we are at that last minute. And we do not have the optimistic

outcome you envisaged and we do not agree acceptable terms. What do you

see happening? That would give it all away! I will not say what you

will see! Some sort of answer, Secretary of State. You can probably

guess what I am doing, you know me well enough! An article 50, I recall

a former Prime Minister saying he would make a decision immediately on

the Monday morning. That may have been the position of the government

formally as we went into the referendum. That is right, as did

the Leader of the opposition. And the fact that things change rather

rapidly after the decision of the British people, it is all yesterday.

You mentioned things we have not thought about yet. May I commend our

report on the 26th of April, looking at the implications of Brexit? I

trust that that will be... I have not read it since I have been a

minister. I formally want to say thank you very much for your

evidence. The exchange of correspondence... We happen put up

an alliance people can understand the exchange. On the subject of

courtesy and seeing that the charming courtesy was afforded to

you in the House of Lords, I do want to concur with the Lord's view the

oversight of Parliament can be and should be an asset to the

examination of the process you are doing and help you build a robust

negotiating hand on by half of people we represent. I want to

finish by saying thank you very much for the evidence you have given to

us and of course we wish you all the very best with conducting a

successful negotiation on behalf of the United Kingdom. Pleasure is all

mine, chairman. And now we return live to the House of Commons. But

more generally, the bill makes it easier for public organisations to

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