Thank you for your very kind introduction.
And it is a pleasure to be here this morning, with Europa who have built such a formidable reputation - not just here in Spain but across Europe - for facilitating constructive and engaging debate. And it’s very much in that tradition that I wish to join you this morning.
And to follow in the footsteps of Commissioner Vestagher who spoke here last year, and I congratulate her on her re-appointment.
My message this morning is clear, the UK wants a deal.
Time is short - there are just 42 days until we leave - but it is sufficient for a deal.
And in my private conversations with European counterparts, they tell me that they want to see a deal.
But any deal must acknowledge - and reflect the political reality in the UK.
Which means being something that can be accepted by my Parliamentary colleagues.
And simply, that means the backstop has to go.
You may ask, why?
The answer is four-fold.
A part of our country - Northern Ireland - would be governed by rules in which they have no say.
It is inconsistent with the Belfast / Good Friday Agreement - the very thing it claims to protect.
This is because the backstop has failed to achieve the consent of both communities in Northern Ireland.
The backstop risks being permanent - even though Article 50 legally requires it to be temporary - the UK Attorney General made this clear in his legal advice to the UK Parliament.
And finally, the EU would control whether we can leave the backstop, making it harder to leave the backstop than leaving the EU itself.
For all of these reasons the backstop will not be agreed to in the United Kingdom - it’s a politically impossible ask.
And indeed the UK Parliament has rejected it three times.
After over three years and two extensions, it remains the case that the only thing Parliament has supported is the deal minus the backstop.
But if those four reasons are not sufficient, then let me turn to the words just this week of one of the architects of peace in Northern Ireland, Lord Trimble who won the peace prize for the Belfast/Good Friday Agreement and he wrote this week that the backstop is “not in keeping with the spirit and letter of the (Belfast) Agreement” and that it is “riding roughshod over our agreement”.
So the question becomes - can the backstop be replaced.
We believe that it can, in ways that protect key EU interests - your interests, as well as address our concerns.
So the key test in front of us is whether we can seize this opportunity - and find a landing zone - in a creative and flexible way.
If you will indulge me, I will drive into the technical substance - but only briefly!
As the backstop involves regulatory alignment, which means no checks are necessary, seeking a purist, identical result means alternative arrangements would require such proposals to have no impact on the island of Ireland economy or North South trade.
This could only be achieved through never leaving parts of the Single Market and Customs Union, for any checks would fall foul of an alternative that involves no checks at all.
This is a false test.
The Commission themselves agreed that the solution should involve creativity and flexibility. They have agreed that alternative arrangements should be taken forward. They’ve agreed that the backstop is temporary.
That is inconsistent with now seeking the same result as one which relies on continued regulatory alignment.
Likewise we are told the UK must provide legally operative text by the 31st October.
Yet the alternative to the backstop is not necessary until the end of the Implementation Period in December 2020.
And this will be shaped by the future relationship - which is still to be determined.
In short why risk crystallising an undesirable result this November, when both sides can work together - until December 2020.
In summary, the EU risks continuing to insist on a test that the UK cannot meet and that the UK Parliament has rejected three times.
We risk being trapped in a zero sum game, which will lead to zero outcomes, which I do not want.
What we need now is a genuine negotiation with creative and flexible solutions from both sides.
European capitals — and I’ve been to many in recent weeks and will be going to more — say they’re happy to explore the details of alternative arrangements.
A rigid approach now - at this point - is no way to progress a deal - the responsibility sits with both sides to find a solution.
We are committed to carving out a landing zone - and we stand ready to share the relevant text.
But it must be in the spirit of negotiation - with flexibility, and with a negotiating partner that is willing to compromise.
As the Prime Minister has signalled on his comments on sanitary and phytosanitary measures on the island of Ireland, that the UK is willing to be creative and flexible. But the Commission needs to do so too.
The Prime Minister returned from talks with President Juncker in Luxembourg on Monday with assurances that negotiations will intensify. I also met with Michel Barnier at the same time and I will meet him again tomorrow. I was in Cyprus yesterday, and will be travelling across Europe next week. The Prime Minister’s Europe Advisor, David Frost, and his team have been in Brussels this week having further technical talks as part of that intensification of negotiations with their counterparts on Taskforce 50. The work continues at pace, because we are leaving the on the 31st October. If we do not leave on this date, then it would be nothing less than ignoring the biggest electoral mandate in my nation’s history.
That is not an option for this Government.
Now as a business audience, I am sure you recognise that in growing a business you’re required to take risk.
Those who refuse to take any risk with their business will not succeed.
Great political leaders have always respected the need to take risk.
Indeed It was General De Gaulle, who said “a true statesman is one who is willing to take risks”.
Yet a refusal by the Commission to accept any risk would be a failure of statecraft.
And put at risk the future relationship of the UK and the EU because of a lack of flexibility, creativity and indeed pragmatism.
Leadership requires more than remaining within a safety net.
So whilst we seek a deal, we recognise that we may not be able to agree a deal and in that instance we will leave with No Deal.
In the UK, senior ministers are meeting daily to prepare.
But I am surprised to hear the Commission claim that the EU is fully prepared. Fully prepared for no deal is what the Commission says.
Now there’s a difference in my view between having legislation in place and operational preparedness.
A major concern is that not all small or medium sized businesses across Europe - including here in Spain - may be as fully prepared as the Commission claim.
For example, even though the UK has adopted in full the EU aquis on data, the Commission position is businesses here in Spain will be restricted in what data they can share with the UK
That affects not just the tourism industry, not just the 45 million flights from the UK to Spain each year, that affects businesses much more widely, and I wonder within this audience how confident it is that small and medium sized businesses across Spain are fully prepared for that sort of change.
If delays occur at Calais - some in the UK media have suggested delays of up to two and a half days at Calais. That has a potential impact on lorries with lettuce, tomatoes, cucumbers and raspberries, those travelling from Spain, an industry valued at around half a billion pounds a year.
The EU has over 3,000 Geographical Indications, the UK, just 88. Spanish sherry, manchego cheese, cava, which will lose their protection in the event of no deal, and indeed face competition from any changes to UK procurement rules.
And a No Deal exit would bring changes of course to fishing as the UK becomes an independent coastal state, on which areas like Vigo would no doubt have an interest.
It is suggested sometimes that the UK would have to return to the negotiating table in the event of no deal from a position of weakness.
Yet I think this ignores firstly the wider, immediate impact of no deal - for example if I take Ireland, two thirds of Irish medicines come through Great Britain, 40% of its exports go through Dover. Its supermarkets are supplied from distribution centres in the Midlands. Yet this is presented as solely a UK challenge, it is a mutual challenge, because if indeed there were two and a half days of delays at Calais, then the impact of that would not solely be felt within the UK, it would be felt in Ireland and indeed in businesses here in Spain.
And secondly, I think it ignores the political reality. That we would then be leaving and having those conversations in the context of a general election campaign in the UK.
So the prize of a deal should focus the minds of both sides on the need for creativity and flexibility.
On receiving his Nobel Peace Prize, Lord Trimble warned that politicians should not aim for what he called “abstract perfection”.
He said “Heaven knows, in Ulster, what I have looked for is a peace within the realm, of the possible”.
He also said that “politics is not an exact science, but partakes of human nature within the contingent circumstances of the moment”. And I agree.
What he, Bertie Ahern, others negotiated, stood the test of time - and it was a leap of faith, with the strongest political will.
So now is not the time whether in Luxembourg for postures with podiums and protesters. Because the clock is ticking for us all.
So let’s work creatively to secure a deal.
A deal the UK is committed to getting.
A deal without a backstop.
A deal involving alternative arrangements.
A deal which gives our businesses and citizens the certainty they desperately need.
And a deal which indeed will pass both UK Parliament and European Parliament.
I think that is a prize that warrants creativity and flexibility, and we stand ready to work with you, as the business community, and with the Spanish Government, to ensure we do secure a deal which is in both sides’ mutual interest.
Thank you very much.