British Exports

Petition - Universal Credit Roll Out – in the House of Commons at 7:09 pm on 20th November 2018.

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Motion made, and Question proposed, That this House do now adjourn.—(Amanda Milling.)

Photo of Andrea Jenkyns Andrea Jenkyns Conservative, Morley and Outwood 7:10 pm, 20th November 2018

I am proud of our great country. We have always been innovative global leaders. In Britain we have some excellent products, goods and services that the world wants to buy. The United States is the UK’s largest trading partner. The UK exported £112 billion of goods and services to the US in 2016, which is 18% of our total. That is slightly less than double the value of exports to Germany, which is the UK’s second largest export market, at £57 billion.

But it is the emerging economies where we are seeing the greatest growth. In 2017 the UK exported £22 billion of goods and services to China, making it the UK’s sixth largest export market. Trade with India has also increased, and India’s share of UK exports has increased from 0.9% to 1.7%. I hope to see that trade increase, and the British Government should be doing all they can to ensure that we can take advantage of our historical links with the Commonwealth, China and the USA.

The PricewaterhouseCoopers report “The World in 2050” looks at how the global economy is likely to change by 2050. Its key findings are that the world economy is due to double in size in just over 30 years, far outstripping the rate of population growth. Emerging markets in the E7 are expected to grow around twice as fast as the advanced developed nations of the G7. If that model is correct, current emerging economies are projected to be six of the world’s seven largest economies in 2050, led by China in first place, India in second and Indonesia in fourth.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

My constituency of Strangford has just secured a significant contract with China for dairy and milk products worth £250 million over five years. The Secretary of State for International Trade initiated the contract, with help from local people. Does the hon. Lady agree that China and the Pacific nations are markets where we can do more with agri-food? There is a lot of trade in that area on which we can build, and when we leave the EU we can do even better. We should look towards the good times when we leave the EU on 29 March 2019.

Photo of Andrea Jenkyns Andrea Jenkyns Conservative, Morley and Outwood

The hon. Gentleman and I are clearly on the same page about the opportunities for the UK when we finally leave the EU.

The US will be down to third place in the global GDP rankings in 2050, and the EU27’s share of world GDP could fall below 10%. According to this report, the UK could be down to 10th place, France will be out of the top 10 and Italy will be out of the top 20, as it is overtaken by faster-growing emerging economies such as Mexico, Turkey and Vietnam.

We are at a crossroads, and not just for our country and Brexit. There is a shift in global economic power from the west to the east. This cannot be stopped. It is right that a country with a population the size of India should have a higher GDP, which is good for tackling extreme poverty. It has also been shown that it is only through capitalism and trade that these countries will grow. The UK, as an outward-looking trading nation, has a chance to forge strong links with the economic powerhouses of tomorrow. We need to get in there first, take advantage of our position now and be able to sign free trade deals to fully maximise our opportunities.

Photo of Jack Lopresti Jack Lopresti Conservative, Filton and Bradley Stoke

I congratulate my hon. Friend on securing this debate and making a brilliant speech. Will she join me in paying tribute to a great British company called Rolls-Royce, which employs nearly 3,000 people in my constituency and 22,000 people across the UK? It is responsible for 2% of our nation’s exports and makes a £12.2 billion contribution to our economy, which represents 0.7% of our GDP. It is a fantastic company, with global outreach. It is ambitious and is driving the way forward. Does she agree that companies such as Rolls-Royce are going to lead the way in a post-Brexit Britain?

Photo of Andrea Jenkyns Andrea Jenkyns Conservative, Morley and Outwood

I thank my hon. Friend for his intervention. It is probably the only time I will ever give way to my husband. I thank him for his question and agree that Rolls-Royce is a fantastic company.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Treasury), Shadow SNP Spokesperson (Housing, Communities and Local Government)

The hon. Lady is making a good point about the trade deals with India and other countries, but does not she accept that there needs to be a re-examination of how the Home Office treats visa applications, too? There is a huge expectation in these countries that trade deals will come with a bargain in terms of people being able to visit and come to the UK.

Photo of Andrea Jenkyns Andrea Jenkyns Conservative, Morley and Outwood

I thank the hon. Lady for her question and I agree; I am a Brexiteer because I think our immigration and visa system should be a level playing field.

The UK, as an outward-looking trading nation, has the chance to forge strong links with the economic powerhouses of tomorrow. We need to get in there first, take advantage of our position now and be able to sign free trade deals to fully maximise our opportunities. Brexit gives the UK an amazing opportunity to become, as the Prime Minister has said, “a truly global Britain”. However, I am sceptical about any agreement that we sign with the EU that will not allow Britain to export its goods and services freely to the world. I was impressed with the Prime Minister’s Lancaster House speech. That vision for Britain was one that I know the country could get behind, as I certainly did. The British people and I voted to leave and take back control of our future. I am disappointed for the 17.4 million people who voted to leave that this vision is currently only looking like a fantasy.

As I said earlier, by 2050, the EU27’s share of GDP is likely to fall significantly. The EU is fundamentally protectionist in its economic outlook, whereas the UK and its people can see a bright future. Protectionism is bad for growth and for trade. In a future where Italy is out of the top 20 and overtaken by countries that only a decade ago it would have seemed unbelievable for it to be overtaken by, we need to look further than the EU’s borders of Latvia or Romania.

Photo of Alex Chalk Alex Chalk Conservative, Cheltenham

My hon. Friend is making a powerful speech. Do we not also need to look at ourselves as a country, because the world’s third biggest exporter is Germany and it is more productive than us? We need to become more productive and invest more in the wherewithal to create the goods that the world wants to buy.

Photo of Andrea Jenkyns Andrea Jenkyns Conservative, Morley and Outwood

I thank my hon. Friend for his question. This is why I am a keen Brexiteer; rather than sending money across to the EU, I would like to see it invested in our own industries, and in research and development, so that we can really have a bright future for this country.

Photo of Iain Duncan Smith Iain Duncan Smith Conservative, Chingford and Woodford Green

There are two elements to point out about that previous intervention. First, Germany has done significantly well, but a huge amount of that has been because its currency level at the moment is far lower than it would have been had it not been in the euro. Secondly, that has caused extraordinary damage to countries that were massive exporters, such as Italy and others, which are now literally finding themselves impoverished by the fact that so much of the Germans’ production is now dumped into their countries, at their expense. So we have to be careful when we recognise what Germany has achieved. There is much it has achieved. We need to recognise that we have to invest more and make sure we are more productive. There are plenty of ways to do that. We need to be careful when we extol the virtues of what has been going on in Europe.

Photo of Andrea Jenkyns Andrea Jenkyns Conservative, Morley and Outwood

I thank my right hon. Friend for his strong contribution. He is second to none in his commitment and passion for this, and I thank him for all the work he has done for decades.

There is near consensus among economists that free trade generates more wealth than any system that restricts cross-border exchange. The great exporting businesses in my constituency want us to be able to trade freely around the world, not just with the EU27. Protectionism benefits producers over consumers, favours big business over small businesses and hurts lower-income consumers more than higher-income consumers. Trade barriers are simply taxes on consumers and businesses that impede the global division of labour and the creation of wealth. That certainly does not match Conservative values.

I am lucky to have some incredible small and medium-sized enterprises and big companies in my constituency that already export around the world, but they would like to see lower tariffs and free trade opportunities further afield. Ties Planet exports to 190 countries around the world, and Associated Waste Management exports 170 tonnes of refuse-derived fuel around the world. The Coca-Cola plant in my constituency is the biggest soft drinks plant in Europe, and it manufactures and distributes more than 100 million cases of soft drinks a year. I am sure that Coca-Cola, too, would like to see low tariffs, not only in Europe but globally. The British people voted to take back control and Brexit should now be supporting British exporters.

One third of the world’s population currently lives in the Commonwealth. Our close relationship with this wonderful organisation and its respect for Britain could easily be tapped.

Photo of Iain Duncan Smith Iain Duncan Smith Conservative, Chingford and Woodford Green

My hon. Friend mentioned soft drinks. Given that the Scottish nationalists are on the Benches opposite, will she also recognise that Scotch whisky is exported to places such as India that charge huge tariffs on it? One great benefit for that soft drink would be that it could be exported much more, and many of us who enjoy that soft drink occasionally in the evening would see that we had done a huge amount of good for businesses, even in Scotland.

Photo of Andrea Jenkyns Andrea Jenkyns Conservative, Morley and Outwood

As somebody who gets tipsy on one glass of wine, I will leave the whisky drinking to my right hon. Friend and my husband.

Britain’s entry into the European Economic Community in 1973, and the EEC’s evolution into the European Union, has meant that it has been impossible for the UK to enter independently into negotiations with Commonwealth states to establish free trade agreements. However, after Britain’s decision on 23 June 2016 to leave the EU, and as article 50 of the EU’s Lisbon treaty has been invoked, Britain may be able to negotiate its own trade deals.

Photo of Chris Green Chris Green Conservative, Bolton West

Does my hon. Friend agree that around the world the direction of travel for trade has been towards bringing down barriers? When we joined the EEC in 1973, the barriers were much more substantial. The European Union ought to seek an opportunity to maintain, post Brexit, the zero barriers that we currently have.

Photo of Andrea Jenkyns Andrea Jenkyns Conservative, Morley and Outwood

I thank my hon. Friend, who is another committed Brexiteer and visionary for our country.

In the Commonwealth, English is usually spoken as the first or second language. Our common law system has been inherited by many Commonwealth countries, and foreign countries encourage their people to study law in Britain. Even accounting principles and practices are usually similar to our own in the UK. In 2016, the UK exported goods and services to the Commonwealth worth £48.5 billion, which is only 8.9% of all UK exports. As a country, we have neglected this vital resource for too long, and as a nation and Government we should be doing more to actively encourage exports to these exciting economies.

In recent years, there have been some good news stories from the Commonwealth. In my region, the number of exporters of goods in Yorkshire and the Humber that send products to Nigeria went up by 8.2%. Exports to India increased by 4.3% and exports to Australia increased by 1.8%. By contrast, the number of exporters to France has barely moved, at 0.2%, and the number of exporters to Italy fell by 0.4%, despite the drop in the value of the pound. Since the Canadian free trade deal with the EU, our exporters to Canada have increased by 9.9% compared with last year. That illustrates the benefits that new free trade agreements can have for the great exporters in Yorkshire and the Humber. Like them, I want to see more people exporting around the globe, and the Government play a large part in that ambition.

I fully agree with the Government’s industrial strategy. We need to back business and invest in skills, industries and infrastructure to ensure that we are ready for the 21st century. We need a geographically balanced economy; to encourage the UK to be the world’s most innovative economy; and to see greater earning power for all. We need continued investment and a strong business environment, guaranteeing that the UK is the best place in the world to start and grow a business.

As the Minister will confirm, research shows that companies that export have increased growth potential, are far more productive, and offer better-paid jobs. Last year, some £620 billion of goods and services exported by British companies accounted for 30% of our GDP, and UK exports are at a record high.

Photo of Hugh Gaffney Hugh Gaffney Labour, Coatbridge, Chryston and Bellshill

I am listening to the hon. Lady’s speech, and the thing that worries me about Brexit is what happens if Britain becomes isolated from the rest of the world? What if Europe can do it cheaper? Where will all our exports go? That is my biggest fear about Brexit.

Photo of Andrea Jenkyns Andrea Jenkyns Conservative, Morley and Outwood

I thank the hon. Gentleman for his question, but I, unlike him, have great belief in the British people and our businesses. I know and trust that we will continue to thrive and grow. There is no doubt that we will far outdo the performance of the EU—we will do far better, mark my words. I just wanted to put that on record.

The Department for International Trade estimates that 400,000 businesses believe that they could export but do not, and demand for British expertise and goods overseas is growing. I was pleased that the Secretary of State for International Trade recently set out ambitious plans to make Britain a 21st-century exporting powerhouse. This new export strategy aims to increase UK total exports as a proportion of GDP to 35%. We want SMEs to grow into the multinational corporations of tomorrow, and support from the Government can and will help.

I am glad that the Government are responding to a call from business. The export strategy outlines how the Government will produce smarter and more tailored support to UK companies. More support for companies selling overseas will be offered, encouraging and inspiring more businesses to export. The Government will assist businesses by providing information, advice and practical assistance on exporting, and they will connect UK businesses to overseas buyers and markets, and to each other. The policy sounds fantastic and I am sure that every hon. Member in this Chamber could get behind it—it is certainly one that I could get behind—but we need to address the elephant in the room of free trade agreements in the light of the restriction that the Prime Minister’s draft withdrawal agreement puts on our ability to be free and independent when we finally leave the EU.

Martin Howe, QC has analysed the Prime Minister’s draft agreement and has come to this conclusion:

“This customs union arrangement would kill stone dead the chances of the UK following an independent trade policy after Brexit. We would not be able to offer tariff concession to free trade partners, so they would have no incentive to offer us concessions on, say, services, which we would want to export to them. Further, it will render the theoretical right to negotiate third country trade agreements during the transition period totally meaningless. Since we will be unable to tell prospective free trade partners when we will be free to implement such an agreement, or indeed whether we will ever be free to do so at all, they will have no interest in spending time and effort on serious negotiations with us.”

It is a lose-lose situation for the UK and our future.

Let me repeat what Martin Howe says:

“This customs union arrangement would kill stone dead the chances of the UK following an independent trade policy after Brexit.”

That is directly at odds with the Prime Minister’s Lancaster House speech, in which she said:

“I want us to be a truly Global Britain—the best friend and neighbour to our European partners, but a country that reaches beyond the borders of Europe too. A country that goes out into the world to build relationships with old friends and new allies alike. I want Britain to be what we have the potential, talent and ambition to be. A great, global trading nation that is respected around the world and strong, confident and united at home.”

The Prime Minister’s draft agreement does not live up to her promises, and I will not support any agreement that does not allow the UK to take back control to export our goods freely around the globe. Only today, Global Britain and the European Research Group issued the joint publication “Exploding the myths of leaving the customs union”. Its foreword by Simon Boyd, the managing director of REIDsteel, rubbishes concerns that, when the UK leaves the EU single market and customs union, it will be harder to trade. Whether for imports or exports, his biggest criticism of the EU is the bureaucratic nature of the customs union, which is designed as a fortress to protect producers rather than to encourage free trade. Furthermore, he criticises an EU system that suits multinationals that have the means to lobby and to unfairly profit at the vast expense of the majority of UK businesses. We need to get as far away from this protectionist club as possible, which means that we should leave the customs union so that we support British small and medium-sized enterprises and exporters here at home.

I am a Conservative. We believe in liberalised trade, but we also believe in the determination and talent of British people and business. We believe in the benefits of a Government who support business and allow it to prosper. Some 200 years ago, Adam Smith argued in favour of free trade and against protectionism. That argument is as relevant and persuasive today as it was back then. Those arguing against free trade and for protectionism are arguing in favour of higher prices and fewer choices for the consumer, and therefore against a higher standard of living for the British public. I cannot support that. We need to be free of the EU’s protectionist bloc once and for all.

We have excellent exporters in my constituency, across Yorkshire and Humber, and throughout the UK. These are businesses that we should be proud of, and I am glad that the Government and the Secretary of State are working with businesses to support their needs and keeping exports high on the Department’s agenda. However, the Government’s draft agreement to keep the United Kingdom in the customs union with the EU will not help exporters in the medium to long term. Every day that we stay in the EU is another day when we are not able to take advantage of our historic ties with the world’s most exciting and fastest-growing economies.

Fears about our leaving the customs union have been greatly exaggerated. Brexit offers the opportunity to reduce red tape, to look beyond the bureaucratic nature of the customs union, and to establish our own free trade agreements with the rest of the world. Adam Smith may be about to be replaced on the £20 note, but that does not mean that we should forget his teachings about the importance of free markets. To echo the Prime Minister’s words, I want to see a truly global Britain, but we need to be out of the customs union to ensure that this happens. It is only when we are truly free, and we have control of our laws, our money and our borders, that Britain will be able to fulfil its destiny as the 21st-century exporting powerhouse that the Secretary of State himself wants the country to be.

Photo of Graham Stuart Graham Stuart Parliamentary Under-Secretary (Department for International Trade) 7:32 pm, 20th November 2018

I congratulate my hon. Friend Andrea Jenkyns on securing the debate, and on her passionate defence of, and advocacy for, the beneficial effects of free trade.

Between 2010 and 2017, exports from this country grew by £170 billion, and we are determined to grow them further. As the Minister for investment, I am pleased to say that we have retained our position as the No. 1 foreign direct investment destination in Europe, and we are third globally. Through foreign investment, 76,000 new jobs were created last year alone—1,500 in every single week. More than 3.3 million more people are in work today than when the Labour party left office in 2010, which means that more people are able to support themselves and their families. Quite simply, exports and investment are important because then UK needs to pay its way in the world. That is the fundamental difference between the Government and the Opposition—Labour forget that we have to earn our way. If we do not, we will end up as every single Labour Government in history always have—with more ordinary people on the dole queue at the end of their period in office than at the beginning.

The Institute of Economic Affairs recently published a report that found that, through an increased tax take, job creation and other factors, if the value of UK exports rose a further 10%—remember that exports from this country grew more than 10% in 2017 to nearly £620 billion—we could raise a further £20 billion in tax revenue, which would fund our schools, hospitals and other vital public services on which we all rely. I should say that those are not Government figures. Nevertheless, the IEA’s work highlights just how important exports are to the social and economic health of our country. That is one of the key reasons why we now have a dedicated international economic Department. Never before had there been a Department solely focused on exports, investment and bringing down trade barriers, but in the Department for International Trade, we now have exactly that.

It was also why in August, as my hon. Friend said, we launched the export strategy—a Government-led collaboration with business that was developed after extensive engagement with firms of various sizes in different sectors right across this United Kingdom. It aims to build on our existing exporting success by setting a UK export challenge to increase exports as a proportion of GDP from 30% to 35%, moving us towards the top of the G7. We will inform, connect with, encourage and finance UK businesses so that they realise their full exporting potential. The export strategy builds on the Government’s wider industrial strategy with the ambition of making exporting the norm, not the exception, for UK businesses, and of working with firms to give them the tools they need.

Photo of Graham Stuart Graham Stuart Parliamentary Under-Secretary (Department for International Trade)

I have very limited time, so if my right hon. Friend will forgive me, I will press on and put my remarks on the record.

We are taking a whole-of-government approach as we seek to enthuse Government Departments, the devolved Administrations, local government and industry bodies alike. Increased exports are not just a public good in themselves, but provide so much more.

Our strategy recognises the need to find better ways to talk to exporters, business organisations and private sector providers of export support. That was why we ran a nationwide system of consultation involving roundtables, meetings, workshops, user surveys and the like to make sure that we understood the barriers that businesses faced, and to ensure that we never go back to the low levels of exports that were bequeathed by the previous Government. Many businesses said that they did not have the expertise to export, or that they lacked knowledge about local business cultures, regulations or consumer needs. That is why the Government are taking steps to use their unique position to help companies to connect into local markets and to overcome barriers to export. That can include supporting the creation of consortiums for UK firms, thereby convening businesses from throughout a supply chain to present overseas buyers with a complete, and expert, UK offer. One such example is the Infrastructure Exports: UK consortium.

We are developing new digital services to help companies to report trade barriers so that our growing trade policy function can prioritise dealing with the obstacles that are most damaging to UK businesses. We are building up—most importantly, I think—a national network of export champions involving businesses that have successfully exported and can give their expertise, advice and mentoring support so that other firms can do the same. After all, Conservative Members never forget that it is business that does business, not Government. We are simply there to facilitate and support. We have successful pilots in the midlands engine and the northern powerhouse, which represents a time-efficient and trusted way to gain the information and skills for businesses to begin to export overseas.

The Department for International Trade is leveraging its extensive overseas network in 108 countries worldwide to help to attract potential local customers. This includes participation in large expos such as Dubai 2020, or the DIT-inspired Great British festival of innovation and creativity held in Hong Kong in March this year. We are supporting the Small Business Saturday movement, as well as our annual Export Week, which we are currently in, and which my right hon. Friend the Secretary of State promoted in Bristol last week. I am hosting a food and drink export event in my constituency, and I hope that colleagues on both sides of the House will consider doing the same.

We are supporting supplier fairs where foreign buyers can bring specific opportunities directly to UK businesses. Through the Prime Minister’s trade envoys, we have focused missions to highlight specific areas of expertise to overseas buyers. Giving UK business world-class support in overseas markets is why we have appointed Her Majesty’s trade commissioners in nine regions of the world. They have the experience and independence to tailor our export offer to their region and meet its unique challenges.

I will move swiftly on through my speech as I am aware of the limited time. My hon. Friend the Member for Morley and Outwood talked about opportunities outside Europe—she is absolutely right. The IMF originally said that 90% of global growth is expected to be outside Europe in the next 10 to 15 years, and it now predicts that even in the shorter term. The Commonwealth offers enormous opportunities as well, and we have a strong record there. In the year to June 2018, UK exports to the Commonwealth amounted to £56.5 billion—a 9.5% increase from the year to 2017—which resulted in a trade surplus of £4.3 billion.

We have a very positive future to look forward to. It is a shame that the only Member from the Labour party to turn up for this debate had only one thing to say, and that was to preach doom and gloom. We are proud of the exporting record of this Government, proud of the fact that we have provided record employment, and proud of the fact that we, not the Labour party, will continue in government—

House adjourned without Question put (Standing Order No. 9(7)).