ANY QUOTES USED MUST BE ATTRIBUTED TO SOPHY RIDGE ON SUNDAY, SKY NEWS

SOPHY RIDGE: Well Europe is an issue set to dominate the week’s political agenda.  Within days the arguing in Parliament could be over and the negotiations could begin, if of course the government decides to trigger Article 50.  Well I’m joined now by one of the Cabinet’s key Brexiteers, the Secretary of State for International Trade, Liam Fox, thanks very much for being with us.  Well today we’ve got yourself, we’ve got Boris Johnson, we’ve got David Davis, the three Brexiteers, all out on the airwaves, you’re not let off the Downing Street leash very often so this is your big opportunity to be straight with people – are you going to trigger Article 50 this week?

LIAM FOX: Well I suppose it would be a world exclusive if I said it would be triggered …

SR: Go on!

LIAM FOX: … by the end of March because that’s what the Prime Minister has said.  We have of course got to get Royal assent for the Bill once it goes through, that’s assuming it is unamended and goes through this week, but we wait and see.  We’ll wait and see what Parliament does and then we’ll get Royal assent and then it’s up to the Prime Minister to determine the timing.

SR: So it could be this week then, should we be poised?

LIAM FOX: It will definitely be this week or next week or the week after.

SR: Okay, okay!  Of course a lot of this depends as you say on those amendments in the House of Lords, those pesky peers with their amendments to the Bill, although you of course do agree slightly with one of the amendments at least, about protecting the rights of EU citizens already in the UK because we can have a look now at what you said just before the referendum which is that “removing the element of fear would be a very positive thing.”  You agree with the Lords don’t you personally?

LIAM FOX:  I agree with the sentiment that we should remove uncertainty as quickly as possible both for economic reasons because a lot of businesses and those investing in Britain want to ensure that the workforce that they currently have is still able to be here …

SR: So why don’t you do it then?

LIAM FOX: Because it has to be a reciprocal arrangement, because we have nearly a million UK citizens living in other parts of the European Union.  What we have said is why don’t we take this off the table as quickly as possible because it’s not just a business sentiment, it is also a human issue here about friends and families and giving people peace of mind.  We have said very clearly, the Prime Minister has said very clearly let’s deal with it as soon as we can and let’s come to an agreement that protects the rights of those EU citizens already in the UK and the rights of UK citizens in other parts of the EU and I think it has to be a reciprocal agreement as a number of other European Prime Ministers have already said.  So perhaps once we get past the triggering of Article 50 the reticence by some of our partners to discuss this publicly will disappear …

SR: So it could be something which can happen very quickly?

LIAM FOX: I hope that even if we can’t, you know, make an absolute agreement in law we can set very clearly that we agree the principle of this because I think it’s the right thing to do but I think the Lords amendment is the wrong one because which is why I will be voting against it and urging my colleagues to vote against it.

SR: Of course hanging over all these negotiations is the threat of walking away with no deal.  Theresa May said that no deal is better than a bad deal but actually if you look at some of the reports from different departments, committees, there’s an increasing fear about what that means.  You’ve got this leaked Treasury report today saying it would cause a major economic shock, they’re not the only ones, the Foreign Affairs committee says you are actually putting the national interest at risk by not preparing for the fact that there might not be a deal.  If Theresa May doesn’t get a deal that would be disastrous wouldn’t it?

LIAM FOX: Well there are two different elements here: not getting a deal and preparing for not getting a deal.  In my own department, the Department for International Trade, we are setting up a committee specifically to look at no deal, what would that mean against a range of scenarios, the length of which is too great…

SR: So that planning is already going on?

LIAM FOX: And that planning across Whitehall is already taking place. I don’t think it is breaking any secrets to say that David Davis briefed the Cabinet about that and asked that across Whitehall we prepared that work, that’s ongoing and to an extent that has slightly overtaken where the Select Committee are in their report today.

SR: So they’re wrong basically?

LIAM FOX: No, they’re not wrong because when they looked at the issue I think they were right to make that point but the government has already taken that on board and moved ahead of that.  But your point, your substantive point about not having a deal of course would be bad but it would be bad not just for the UK, it’s bad for Europe as a whole. I was in Berlin last week talking to business leaders there and saying at a time when the global economy is not that strong, when global trade is not that strong, the idea of putting impediments to trade and investment in Europe would damage the whole of the European economy and by extension the global economy and I don't think that any of us have got a right to do that so it’s our responsibility to come to a deal. I think there are a number of reasons why that would happen, not least the fact that the European Union countries have a huge trade surplus with the United Kingdom and any barriers to trade would actually damage their businesses more than the UK.  That’s not in anybody’s interests which is why I understand why we need to plan for a no deal but I think it is unlikely to happen because economic reality is likely to get in the way.

SR: Of course one of the key parts of getting a deal is the divorce bill and it does feel that all the language coming from the EU is that if Britain wants to get a good deal then you’ve got to pay up, you’ve got to pay up to the tune of about €60 billion, is that right?

LIAM FOX: Well if I were at the beginning of a business negotiation with another partner I’d be wanting to set out a pretty hard line at the beginning so …

SR: So you say it’s the starting point, it’s not going to happen?

LIAM FOX: It’s a negotiation and it’s not Britain setting out exactly what we want and expecting to get 100% nor is it going to be the European Union setting out what it wants and getting 100%.  There is a very important point that I was making in Germany last week, we accept that we’re not staying in the single market and there is a price to be paid for not staying in the single market, it’s a political decision.  We know that we won’t have a European Commissioner, we accept that we won’t have MEPs, we accept that we won’t have a seat at the Council table determining the rules of the single market and we will have to live by those rules that are set elsewhere.  It’s not much different to what we face with the United States or Japan selling into their markets but that’s the price that we have to pay and the Prime Minister made very clear in her Lancaster House speech that we accepted that we would be outside.  What I think is not acceptable then is for the political class in Europe to punish ordinary European citizens economically for that political decision and worse, punish those well beyond Europe’s borders for that political decision.

SR: I want to talk about trade, of course, because you are International Trade Secretary.  Now once we leave the EU of course one of the big things that you’ve been talking about is trade with other Commonwealth countries but realistically are you just going for the easy option, is this Empire 2.0 and if you want to get real on trade you’ve got to go for those more controversial deals?  I mean Shanghai alone for example has got more people in it than the whole of Australia.

LIAM FOX: Well if you look at the value of trade deals that gives you an idea where you have to prioritise our work.  The first thing that my department is doing is to get our position in Geneva with the World Trade Organisation very clear and the point there being to say to countries around the world, as we leave the European Union we want there to be no interruption of global trade and we want to make sure that process is …

SR: And Empire 2.0 as your civil servants are reportedly calling it?

LIAM FOX: Well that is not a phrase I would ever allow them to use, it’s a phrase I find slightly offensively caricaturing so it is not a phrase I would use but does Britain have to have a proper global view?  Yes, we do.  If you look at the EU’s own website on trade it points out that 90% of growth in the global economy comes from outside Europe and that’s where we need to be focusing a lot of our effort.  It is not an idea of being a substitute for the European Union, it’s in addition to the European Union which is itself of course trading in the global market but we will have to prioritise. After we do the WTO we are also looking at what trade agreements does the EU already have with some of our important trading partners and how do we get them into UK law to again make sure we can’t have any disruption and after that, how do we look at new free trade agreements with countries that we don’t have any at all.

SR: Now I am keen to talk to you about the budget as well.  A big week of course for the Conservatives, lots of rows breaking out not least in your own party, about this idea that National Insurance should go up for the self-employed.  Have a look at what the Conservative party manifesto said which is “A Conservative government will not increase the rates of VAT, income tax or National Insurance in the next parliament”, you’ve broken that promise, why should anyone trust what you say?

LIAM FOX: Well you see if we had actually put up the rate of NIC across the board that would have been breaking a promise, even if we had done it across the board for the self-employed … let me finish – that would have been I think a more valid criticism.  What we’ve done is have a package of change within the self-employed, we’ve abolished the whole class, Class 2 National Insurance contributions …

SR: But it’s not just the policy, it’s the fact that it feels as though you are weasling out of what you said in your manifesto.

LIAM FOX: Well I don't think it is because we have a number of changes to the self-employed and what it does mean, because we’ve abolished one whole layer of National Insurance contributions for the self-employed – which doesn’t seem to have been much covered – and increased slightly the Clause Four, the Part Four, what it means is that if you are earning or making a profit of less than about £16,000 you’ll be paying less National Insurance. It’s a package and we will have a further package as we move into the autumn to see how we can help those who are self-employed but at the same time recognising that those who are self-employed who were paying lower NIC contributions before did so because they had a lower share of benefits in later life. Now we’ve got the new state pension and they have full rights, it’s fair that we make some changes within that. There will be a further package, we’re looking at parental rights for example for the self-employed, and when we get to the autumn and we have to legislate we’ll see what the whole package looks like.

SR: We you all briefed about the manifesto commitment?

LIAM FOX: We all get briefed in terms of the budget at the budget cabinet which happens early in the morning before the budget takes place and I was actually happy that there was a package there that when you look at the package as whole was a very fair one and I didn’t think that we had breached our manifesto commitments.

SR: Okay, I am also quite keen to put to you a tweet that you sent out earlier this week which did cause a bit of consternation.  You seem to have managed to upset some of the people that we’re going to be negotiating with, with the tweet that you said which is that ‘The UK is one of the few countries in the EU that doesn’t need to bury its 20th century history”.  Now we often talk about Boris Johnson and …

LIAM FOX: Number one, as a point of clarification, I didn’t sent out a tweet.  Number two, that was taken from a speech I gave about a year and a half ago and it was tweeted out I think by the Guardian and it was an incomplete reference in any case.  What I said was because Britain has always felt less emotionally attached to the European Union because given our history we had never felt the need to bury the 20th century in a pan-European project.  When you think about that as a whole it is a very different argument from a partial tweet put out by somebody else from something that was 18 months ago.

SR: But does this feed into the wider image of yourself, of course reportedly calling businessmen lazy as well in comments …

LIAM FOX: Again that is not what I said.  So I didn’t put out the tweet and I didn’t say that so yes, you’re right, it does fit into an image but it’s not an image set out by me but set out by Twitter who determine to do so.

SR: I am also very keen to ask you a final question Dr Fox because you are somebody who was educated at comprehensive, you grew up in a council house, your grandfather was a miner, your dad was a teacher, you used to work in the NHS – forgive me, this doesn’t seem like the profile of a right wing libertarian Conservative.  Are you like a secret Soviet agent or something, what’s going on?

LIAM FOX: I joined the Conservative party when Margaret Thatcher was the leader, she hadn’t actually been elected Prime Minister then, because I believed that the Conservative party was genuinely the meritocratic party and the sort of society the Conservative party was setting out, the sort of beliefs the Conservative party had said that it didn’t matter what your parents or grandparents did or the fact that you grew up in a particular type of housing or that you went to a comprehensive school or that you were Scottish or whatever, that if you believed in the things that the Conservative party believed you were, in the phrase, one of us and I still believe that the Conservative party is the party that says if you have ambition, if you believe what you believe for our country, then it doesn’t matter what background you have, it doesn’t matter your ethnicity, it doesn’t matter your gender, it doesn’t matter your religion, it doesn’t matter where you come from, it’s where you want to go to that matters.  That’s why I was a Conservative, that’s why I am a Conservative and why I am particularly happy to see Theresa May, a genuinely meritocratic leader …

SR: Is she the heir to Margaret Thatcher?

LIAM FOX: Theresa May is Theresa May and you know, one thing that irritates your family is when you say so-and-so looks like their aunty, we are all exactly our own individuals in politics and Theresa May I think is the most meritocratic Prime Minister we’ve had for a long time and long may she be there.

SR: Liam Fox, thank you.