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With permission, Mr Speaker, I will update the House on the enhanced free trade agreement that was concluded yesterday between the United Kingdom and Switzerland. This is the sixth trade deal that the Government have secured over the last two years.
We already had an FTA with Switzerland, which was based on the 1972 EU-Switzerland agreement, but in keeping with many FTAs of that era, it was primarily focused on trade in goods. By contrast, this is the most significant trade agreement for services that the UK has concluded so far, and it includes the UK’s most ambitious digital chapter and most comprehensive business travel commitments in an FTA, along with high-ambition outcomes across services and investment. It especially plays to our strengths as a pre-eminent services superpower. It includes some of the strongest services commitments that we have ever secured, while creating opportunities in the eight core growth-driving sectors of our industrial strategy, including financial and professional services, life sciences and digital technologies.
Our trade strategy, published one year ago, underscored what everyone with an eye on trade already knew: that our
“services sectors are the most powerful engine of our growth and prosperity”,
and that it was high time to pull services trade out of the margins of trade discussions. Some 83% of UK workers are employed in services, including through regional employers such as Capital Law in Cardiff and the Edinburgh-founded Skyscanner; large firms with multiple offices across the UK, such as Julius Baer, which has a regional office in Newcastle, and KPMG, which has offices in Leeds and elsewhere; and thousands of smaller firms across the country. We have worked hard to ensure that this deal really works for them.
Switzerland is already the UK’s sixth largest services export market, and bilateral services trade was worth more than £30 billion last year. This agreement is estimated to increase UK services exports to Switzerland by £5.2 billion annually in the long run, while supporting jobs across the UK, including the 171,400 already supported by exports to Switzerland. On top of this, we know that Swiss-owned businesses employed around 150,000 people in the UK in 2024, and bilateral foreign direct investment stood at £87 billion at the end of 2024. The agreement we have reached ensures that job creation and investment will continue to grow as our bilateral trade grows.
The UK and Switzerland have agreed that future improvements to access in certain sectors are locked in—the first time that Switzerland has agreed to adopt this approach. It gives UK firms a more stable business environment, and greater confidence to plan and invest. The agreement permanently protects the rights of UK lawyers to advise on foreign and international law in Switzerland without requalifying. Additionally, it includes the most comprehensive digital chapter that Switzerland has agreed to in an FTA. Over 70% of UK-Swiss services trade is delivered digitally, so it was absolutely critical to us that we laid out provisions that supported the free flow of data while ensuring that privacy remained protected, and I am glad to say that we have been successful. Our digital chapter modernises the digital trading environment through commitments on electronic contracts, signatures and invoicing, prevents customs duties on electronic transmissions, and restricts unjustified data localisation requirements, all of which will make digital trade easier and more appealing for businesses, whether they are based in Birmingham or Berne.
This FTA locks in the commitments of the UK-Swiss services mobility agreement, which was due to expire in 2029. That will protect an estimated £700 million in UK services exports, and allow British professionals to supply services in Switzerland for up to 90 days each year without a work permit. I should add that this is the first UK FTA to cover Gibraltar from day one, ensuring that Gibraltar’s businesspeople will continue to be able to supply services to Switzerland for up to 90 days a year without a permit.
Perhaps the real power in this agreement is the statement of intent for future co-operation between our two nations. For example, we know that the UK and Switzerland are global leaders in life sciences. It is in both our nations’ interests for our best and brightest to be able to work together, which is why we have included iron-clad intellectual property and data protection provisions. The outcomes of the deal will support the discovery and development of new medicines, and it does not change UK legislation or practice, maintaining the existing balance between supporting pharmaceutical innovation and the NHS’s access to lower-cost generic medicines. The generics and biosimilar industry supports this deal, saying that it safeguards the NHS’s access to affordable generic medicines.
The agreement establishes an innovation working group to bring together business, academia and the Government, with the goal of finding the biggest opportunities and challenges facing our generation. The group is designed to keep pace with emerging technologies and global conditions, which keeps our agreement focused on the future and helps both the UK and Switzerland to stay on the front foot in an ever-changing world. To that end, the agreement also strengthens our co-operation on climate change, development and gender equality.