UK Trade Performance

– in the House of Commons at 1:32 pm on 1 May 2024.

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Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities 1:32, 1 May 2024

With permission, I would like to make a statement on the UK’s trade performance.

When I am overseas, as Secretary of State for Business and Trade, other countries speak with nothing but admiration and respect for what we are achieving in Britain. As the chief executive officer of Nissan Global recently remarked:

“It is surprising to hear people asking why they should choose the UK”— because, in his words,

“we have both great people and great talent here.”

Certainly, in the firms that I have visited up and down this country, I am proud to see our employers and exporters firing on all cylinders. Yet, when I return to Westminster, some people seem unaware of the progress that we have made as an independent trading nation. Today, I want to put that right.

The latest trade data, published by the Office for National Statistics and also by the United Nations Conference on Trade and Development, should give everyone in this House cause for celebration and renewed pride in our country. They confirmed that the strategy the public voted for on 23 June 2016 is delivering. Leaving the European Union was a vote of confidence in the project of the United Kingdom, and we are seeing results. Since that referendum, the UK economy has grown faster than that of Germany, Italy and Japan, and contrary to gloomy predictions, our manufacturing productivity has grown more than that of Germany, France, Italy and the USA.

According to the latest UN statistics, the UK, outside the EU, became the world’s fourth biggest exporter in 2022, overtaking Japan, the Netherlands and France. The value of UK exports was £862 billion in the 12 months to February 2024. That builds on progress we have made in growing our exports outside the confines of the EU. Exports are now 2% above 2018 when adjusted for inflation. Services exports are at an all-time high. A summary of these figures, along with the most recent business and labour statistics, were published on gov.uk in April. Together, they definitively disprove the claims of those who prophesied a catastrophic economic collapse when we left the EU to become a sovereign nation.

Today, we are selling not only more services to EU countries than ever before, but record amounts of services to the rest of the world, too. We are the largest net exporter of financial and insurance services in the world. Far from an exodus of businesses out of the UK, European firms have doubled down on their commitments to the UK. In 2020, Unilever chose to headquarter exclusively in London over Rotterdam. Since 2022, Cadbury has brought more chocolate production back to the UK from Germany. In the same year, Shell moved its headquarters out of the Netherlands and into the UK.

We are tearing down the barriers to trade. Since the start of 2022, we have resolved barriers all over the world, estimated to be worth more than £15 billion to UK businesses over a five-year period. In 2023, this was equivalent to removing around £1 million-worth of trade barriers every single hour. British pork farmers are benefiting from newly agreed access to the Mexican market, which is worth £80 million over the same period. Our work on bottle labelling for UK gin and whisky has driven up exports to Chile by tonnes. We have ended the US ban on British beef and lamb.

We are working to deliver a strategy on a situation that faces the whole world, not just our friends and neighbours in Europe. This is crucial if we are to lock Britain into the future of where global growth will be. In 2022, the EU took more than 60% of UK goods exports. In 2023, this was 47%, because UK goods exports to the EU remained broadly flat, while exports to non-EU countries rose by around 70% in real terms.

We are going further to seize the benefits of an independent trade policy. We have deals with 73 countries around the world, with more to come under this Government, plus the most comprehensive trade deal to which the EU has ever agreed. Later this year, we will join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, one of the world’s biggest trading blocs. This will mean that more than 99% of UK goods will be eligible for zero tariffs in some of the Asia Pacific’s most dynamic economies. British business is set to benefit.

As well as service exports, where Britain excels, our top goods sales were in cars, mechanical-powered generators, medicines, pharmaceutical products and aircraft components. We have one of the world’s largest manufacturing sectors. Productivity in our manufacturing industry has grown faster than in every other G7 nation since 2010. Hundreds of businesses in steel, chemicals and other sectors stand to benefit from the newly introduced British industry supercharger, which is bringing energy costs down for key industries. Our £4.5 billion advanced manufacturing plan is opening new markets and removing obstacles to growth while helping to crowd in new funding for plants and factories throughout the UK. Every penny the UK Government spend on manufacturing is matched fivefold by the growth creators of the private sector. This pro-investment approach is working: the UK’s automotive sector attracted £3.7 billion-worth of greenfield foreign investment in 2022 alone.

The Labour party will remember Mr Alastair Campbell, who asserted during the referendum that if we leave the EU, Nissan will leave. Nissan is still here. The two new 100% electric models are set to be built at its Sunderland this year. More Minis are rolling off production lines in Oxfordshire today, thanks to a £600 million investment from BMW. These are firms that look for opportunities the world over and decide that the UK is the place to be. Listening to some of the remarks made in this House and elsewhere, people would think that our country was not worth investing in at all. Let us be clear: the British ingenuity and industry that made this country prosper in the past still exists today, and even if those on the Opposition Benches cannot see it, international investors certainly can.

The statistics published by my Department show that the UK’s inward FDI stock has reached more than £2 trillion. Our FDI stock is the highest in Europe—more than Germany, France and Italy combined. The most recent OECD data show that our employment rate is higher than that of the US, France and Italy.

The regulatory freedoms that we gained by leaving the EU have allowed our smarter regulation programme to cut the red tape that has been holding them back. We have already reformed the working time directive reporting requirements, saving businesses up to £1 billion per year. We recently announced that we will raise the thresholds that determine company size, reducing burdens on smaller businesses, and remove low-value and overlapping reporting requirements.

Those changes will make reporting simpler and deliver savings of around £150 million per year to UK companies, with small and medium-sized companies benefiting by around £145 million. It is no surprise that the most recent NatWest SME business activity index shows that output is increasing strongly, driven by renewed manufacturing sector expansion, and companies’ activity expectations remain upbeat. These things do not happen by accident, and I hope that hon. Members on both sides of the House will welcome those figures.

I have no doubt that this statement will disappoint some people, as it does not align with the story that they want to tell of a nation riven by injustice and economic stagnation, clinging to Europe for any hope for the future. That is not to say that everything is perfect—of course there is still more to do—but we are not alone in our problems. Ministers in other countries are quick to remind me about supply-chain issues affecting everything from getting car components to stocking supermarket shelves. They tell me about how they are coping with problems in the jobs market, as societies from Germany to Japan get older.

Only when I am back in the UK am I told that all these issues are down to Brexit. Far from it. Our plans are working, and Britain is thriving as an independent sovereign home of free enterprise and free trade. That is what the recent figures published by my Department, by the ONS, and by the UN tell me. It is what our businesses, exporters, employers and investors all tell me, and I hope that hon. Members present can see it too. I commend this statement to the House.

Photo of Gareth Thomas Gareth Thomas Shadow Minister (International Trade) 1:41, 1 May 2024

As usual, I am grateful to the Secretary of State for advance sight of her statement. I am always pleased to hear any positive news on trade and investment, but she appears, presumably inadvertently, to have missed out one or two facts and issues in her statement.

Under the Conservative party, business has suffered from endless U-turns and policy changes that undermine investment. There have been constant changes on policies, from net zero to corporate governance. The Government’s failure to address the big challenges facing business, such as skills shortages, infrastructure issues and net zero, have undermined business confidence. Foreign direct investment figures are down nearly 30% since 2016-17, according to the Government’s own figures. Without an industrial strategy, and with constant policy uncertainty, more businesses will not have the confidence to invest in the UK.

Specifically on trade, British exports in the past decade have grown slower than those of any other member of the G7 besides Japan. According to the Office for Budget Responsibility, since the Secretary of State was appointed, British exports have dropped and are expected to decline again this year, with at best anaemic growth in each of the next three years. Ministers have cut funding to help small businesses get to the international trade shows that they need to attend in order to find new export markets, and have cut funding to allow business groups to lead their own trade missions to win vital new orders for British business.

Farmers and Conservative members think that the Government’s record on trade negotiations is one of giving away far too much for far too little in return. Ministers delivered a poor trade deal with Europe that has put up barriers to trade, raised costs for businesses and helped to drive up prices, and there is no sign of any plan to use next year’s review of the trade and co-operation agreement to try to address at least some of those issues. Then there is the Conservatives’ failure to deliver on the promises in their manifesto at the last general election to have trade agreements in place with at least 80% of the world, and to have a trade deal with the United States. The target to deliver £1 trillion of exports has been moved many times, and will at best be delivered 15 years late.

Perhaps the right hon. Lady could answer the following questions. Last week, we heard about the impact that the Government’s constant flip-flopping is having on the automotive sector, with Stellantis airing serious warnings. What discussions has she had with the Transport Secretary to try to mitigate the impact of the Conservative party’s chaos? As the devastating news from south Wales continues to come, we have heard next to nothing from the Secretary of State on the damage that she has allowed to our steel industry. Does she still think that spending millions of pounds of taxpayers’ money to make thousands of people redundant and leave us as the first developed country with no primary steelmaking capacity was “a great deal”, as she said at the time?

Given that this House has repeatedly been promised an amazing trade deal with India, usually by Diwali, will the right hon. Lady update the House on the state of free trade agreement negotiations with India? Lastly, given the media reports at the weekend, which have caused concern, will she update the House on whether FTA negotiations with the Gulf Co-operation Council are still ongoing or have stalled?

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

I thank the hon. Gentleman for his questions. I could see that it was very difficult for him to find things to pick at in the statement, so I broadly welcome some of what he said, which implied that the good news is true.

The hon. Gentleman started with the OBR. He picked that statistic very selectively. Of course exports fell during covid; exports overall have grown. Many Opposition Members will say, “Oh, it’s just services.” That is because they do not understand the UK economy. The UK economy is 80% services, so it is good that services exports are going up. That is what we mainly do in this country.

The hon. Gentleman asked about Stellantis, and talked about U-turns. I remind him that the whole House voted for the net zero by 2050 target. It happened under a previous Conservative Government, but with the consent of the whole House. When business talks, we listen. The Opposition criticised us for making the changes that Stellantis asked for, so why is he now raising those comments? The Transport Secretary, the Prime Minister and I had a discussion—we do have discussions—and we extended the zero-emission vehicle mandate to ensure that we were not imposing undue costs on people if they were not ready to take up electric vehicles. We listen; the Opposition do not. Look at their plans for net zero. I assure the hon. Gentleman that businesses are absolutely terrified about what Labour would do with its new green deal, and all the measures that would just put costs on businesses and consumers.

The hon. Gentleman asked about steel. I am afraid that I need to correct several points. We saved jobs in Port Talbot—8,000 jobs were going to be lost, and we saved 5,000. If we want a net zero transition, we will have to move to electric arc furnaces, which require fewer staff. The Opposition cannot blame the Government for that while demanding a transition to net zero. We saved 5,000 jobs in Port Talbot. We invested £500 million out of a total £2 billion investment made with Tata. It is wrong to say that the Government are not saving steel; we are the only ones who have a plan for steel. The Opposition have no plan. We have a great plan, which will transform and regenerate south Wales.

The other thing that the hon. Gentleman said that was incorrect was about us having no primary steel production. We still have British Steel in Scunthorpe. There may be changes in Port Talbot around moving to electric arc furnaces, but he needs to remember that even the steel production that we have there relies on imports. We do not have iron ore here, so I recommend that he gets a briefing on exactly what is going on with steel production in the UK.

On India, the hon. Gentleman is right that a deal was promised by Diwali under a previous Prime Minister, but as soon as I became Trade Secretary, I said in this House over and over that it is about the deal, not the day. We do not sign trade deals that will not make businesses happy. We are keen to ensure that whatever we do will do right by our farmers. The Opposition laughed when I paused the FTA discussions with Canada. That was because what the Canadians were offering was not going to be good. The industry there is complaining that the UK got too good a deal from the CPTPP, but the Opposition do not talk about that. We are negotiating great deals for this country. I am very proud of the work that my Ministers and my Department are doing. I thank the hon. Gentleman for his questions.

Photo of John Redwood John Redwood Conservative, Wokingham

I am grateful for the statement. It is wonderful news on exports; it shows that all the pessimism at the time of the referendum was completely wrong. I fully support the approach of the Secretary of State in delaying the target for battery vehicles, because people are not buying them in enough quantities, but will she add to that by adopting the advice of Stellantis not to fine motor manufacturers here for producing good petrol and diesel cars before people are ready to buy electric ones, because that is putting off investors?

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

I understand the point that my right hon. Friend makes. This is something that we have heard from some bodies in industry. The auto sector is giving us two different messages. Some people want us to bring the mandate forward and make the change faster; others want us to delay it. It is a very tricky balance. We understand the concerns. We do not want to put additional burdens on business, so he is right to make that point. I have made representations to the Transport Secretary, but this is his policy area, and he will make the ultimate decision.

Photo of Alan Brown Alan Brown Scottish National Party, Kilmarnock and Loudoun

With these selective statistics, the Secretary of State would clearly make a good cherry-picker, while clutching at straws at the same time. The reality is that we still have a cost of living crisis, and I would welcome her to my constituency to tell people there how rosy things apparently are in the UK. Real GDP growth in the UK—growth since before the pandemic—is just 1%. That is one third of the EU average figure, and one eighth of US growth.

The here and now figures are even worse. The UK economy shrank in 2023, whereas there was significant growth in the G7 and the OECD average. Now is probably the only time in living history that the UK economy has been on a par with Germany’s—but sadly that is because Germany is also an international outlier in lacking economic growth. Volumes of UK goods imports and exports are 7.4% smaller than in 2018—the biggest five-year decline for which comparative records exist.

The Secretary of State is right that exports to the EU are up, but imports from the EU are also up, so the trading deficit with the EU has increased by more than 5%. Allianz Trade has estimated that the introduction yesterday of new customs and checks procedures on animal and plant products and goods entering the UK will cost British business £2 billion a year. UK Energy also estimates that energy bills are £1 billion a year higher due to post-Brexit trading arrangements.

Instead of talking up the minimal savings from what the Secretary of State calls “cutting red tape”, I wish she would tell the truth about the trading cost increases resulting from Brexit red tape for businesses in the UK, not to mention the impact of labour shortages. This Parliament is set to break a lot of records: we have the biggest drop in living standards, the longest decline in GDP per capita, the steepest five-year decline in volume of trade, and the stock market shrinking at its fastest pace in history. Which of these record-breaking achievements for broken Britain is she most proud of?

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

It was very interesting to hear the hon. Gentleman talk about his constituents. What he should tell them—certainly what I would, if I was there—is that under the seven-year Administration of First Minister Nicola Sturgeon, the SNP welfare economy grew at half the growth rate of England’s economy. If the SNP had achieved growth in line with England, it could have increased Scotland’s economy by £15 billion. Instead, that welfare economy means no growth, because of Scotland having the highest income tax rates in the UK, and higher wages in the public sector than in the private sector. The SNP’s policies are not helping.

The hon. Gentleman asks questions—[Interruption.] He does not want to hear the facts, but I will give him the facts. He talks about the real, pre-pandemic GDP figure. Of course the pandemic had an impact; we cannot stand here and pretend that it did not. Even the statistics I am quoting showed that covid had a far bigger impact than leaving the EU ever will, just as Russia’s war in Ukraine will have a far bigger impact than leaving the EU. He talks about international outliers, which shows that he is the one who is cherry-picking. We have to look at our peer countries, because we will not grow as quickly as developing countries. It is astonishing that he is also complaining that imports from the EU are up. That shows that, despite our leaving the European Union, trade is doing well and things are going well. If his Scottish Government took some lessons from the UK Government, they would see much better things happening for their constituents.

Photo of Mark Logan Mark Logan Conservative, Bolton North East

I welcome the Secretary of State’s statement, and especially the fact that Japan was mentioned on, I think, five or six occasions. The latest statistics show there has been a £777 million increase in total trade between our two countries, which works out at an increase of 2.9%. I would also welcome her to an event that we are hosting with Baker McKenzie in the first week of June, launching Baker McKenzie’s UK Japan Connect, which seeks to foster business and trade between our countries.

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

I thank my hon. Friend for the question; I will check my diary to see if I am available for the event, but I am glad that he raises the issue of trade with Japan. We signed an upgraded FTA with Japan after leaving the EU, so these roll-over deals are no longer roll-over deals, because we are adding more into them, especially the digital trade chapters. These are deals fit for the 21st century—the age we live in—rather than the 20th century.

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (First Deputy Chairman of Ways and Means)

I call the Chair of the Business and Trade Committee.

Photo of Liam Byrne Liam Byrne Chair, Business and Trade Committee, Chair, Business and Trade Committee, Chair, Business and Trade Sub-Committee on National Security and Investment, Chair, Business and Trade Sub-Committee on National Security and Investment

It is good to see the Secretary of State in the House again. I know she has a difference of opinion sometimes with the Office for Budget Responsibility, but can she confirm that the OBR’s figures for March 2024 show that the UK has the lowest trade intensity in the G7? There was important progress, as she has reported today, but much of it rests on progress in our services trade, which provokes the question of why we are not pursuing services-only trade agreements in a more expansive way, not least as the Minister for Trade Policy was unable to confirm whether any comprehensive free trade deals would be signed before the election when he came before the Committee yesterday. He said that services-only deals were not allowed under World Trade Organisation rules, which of course is flat-out wrong.

The question I want to put to the Secretary of State is about our goods trade. The Office for National Statistics figures show that our goods exports have fallen by about £31 billion over a year. The risk is that that number will be hit even harder by the chaos at the border. The new border operating model involves data that is submitted by traders, but then not shared with ports; sometimes two hours’ notice is needed for a journey that only takes 90 minutes; there is no standardisation of inspection charges; and British Chambers of Commerce says that many businesses will be hit by thousands of pounds-worth of customs bills that they did not know they were on the hook for.

The question is this: did the Secretary of State warn her colleagues in Cabinet that there would be complete chaos, and that the EU checks that we are introducing would be a disaster? That is what small business is saying to me, and I know it is what small business is saying to her.

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

I thank the right hon. Gentleman for his questions. He asks why we are not pursuing services-only deals. We have done two of those: one with Singapore and one with Ukraine about digital trade exclusively. However, it is an area where we need both sides to agree, and most countries still want a goods deal; for many of the countries that we are negotiating with, goods are still the larger part of their economy. We have to bear that in mind, because trade deals are not a one-way story.

I am glad that the right hon. Gentleman welcomes my statement. He will of course know that I am not somebody who pretends that everything is perfect and nothing could be better. I do think things could be improved, but one thing we have to acknowledge, in reference to his comments about the border operating model, is that the people voted to leave the European Union. There will be opportunities and there will be costs. Farmers regularly tell us that they want better food standard checks and other checks at the border. That will impose a cost. We have done everything we can to minimise those costs—we have even found cost savings in doing so. I have heard many scare stories about what businesses will see at the border, but not all of them will apply. We are doing everything we can to minimise the burden, but the fact is that the EU imposed the same measures on the other side, and we need to give our producers a level playing field.

Photo of Julie Marson Julie Marson Conservative, Hertford and Stortford

It is a pleasure to follow the Chairman of the Business and Trade Committee. I am a relatively new member of the Committee; I joined this year. I recall my first meeting, at which we heard that the UK has had the third-highest foreign direct investment over the past years; we are behind only the US and China. This week, at our meeting with the Minister for Trade Policy, we heard about our trade deals with over 70 countries, including the landmark CPTPP. Does my right hon. Friend the Secretary of State agree that that track record of success contrasts starkly with Labour’s track record? Under Labour, the UK’s share of global trade declined. Does she agree that, just perhaps, aside from the Chairman of the Select Committee, there is not a single Labour Back Bencher in the Chamber who wants to hear about that track record of success, because they do not have a leg to stand on?

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

He is shaking his head. In answer to my hon. Friend’s question, we were often told that we would never be able to get those 73 trade deals—we were mocked—and that nobody would sign any deals with the UK that were like what we had in the EU. We got 73 done, and many of them we have actually improved on. We in this House must remind people that we have done much good; they may forget. People live in the moment, and we have to remind them of our record—and this is a record we should be proud of.

Photo of Paul Girvan Paul Girvan Shadow DUP Spokesperson (Education), Liberal Democrat Lords Spokesperson (Transport), Shadow DUP Spokesperson (Transport)

As much as we welcome the good figures that have been produced, Northern Ireland still suffers from not having full access to the trade deals that the United Kingdom has struck throughout the world with 70 countries. What measures would ensure that we can take advantage of those deals and get rid of the injustice of the protocol and the difficulties that it causes businesses in Northern Ireland?

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

We have been doing a lot in Northern Ireland to increase investment and make up for any shortfall, whether through our trade deals or otherwise. The Windsor framework, for example, is one thing that the Prime Minister has worked on to iron out some of those issues. We are looking at where Northern Ireland can exploit the benefits of being part of both the EU single market and the UK single market, which is a unique position. We know that there are some areas in which things are not exactly the same as in GB, but we can look individually in specific trade deals at what we can do. In services, for example, that should not be an issue; we really see the difference in goods. We can do a lot more and we continue to work on that.

Photo of Julian Lewis Julian Lewis Chair, Intelligence and Security Committee of Parliament

Does the Secretary of State agree that, if we cast our minds back to the time of covid, when we were spending hundreds of billions of pounds just to keep the country functioning, none of us could have imagined sets of statistics as positive as those that she has given us? May I re-emphasise a point that has already been made in slightly different terms? There appear to be eight times as many people sitting on the Conservative Front Bench as there are on the entirety of the Labour Back Benches. Does she take that as a vote of confidence in the Government’s positive message?

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

My right hon. Friend is absolutely right. It is clear that Labour does not like good news. As soon as there is any, Labour Members exit the Chamber unless they absolutely have to be here. It is disgraceful that there is not a single Back-Bench Labour Member, other than the Chair of the Business and Trade Committee, Liam Byrne. The shadow Minister, Rushanara Ali, is blushing because she knows that it is true. That is one reason why it is important for us not to assume that people see these statistics. If we do not talk about them, nobody else will. Enough people out there—certainly on the Labour Benches—will tell us how terrible everything is, but we need to remind people about the good that is happening.

Photo of Wera Hobhouse Wera Hobhouse Liberal Democrat Spokesperson (Transport), Liberal Democrat Shadow Leader of the House of Commons, Liberal Democrat Spokesperson (Energy and Climate Change)

In complete contrast to the rosy picture that the Government are trying to paint, there are some inconvenient truths that have been left out. From this week, new checks on food imports from the EU will see costs for importers rise by 60%, which will have a severe impact on small businesses and consumers alike. Will the Secretary of State take this opportunity to lay out how consumers and small businesses will be protected from those severe new costs?

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

I seem to remember a time when some Liberal Democrats were complaining that we did not have any checks at the border, and that that showed that standards in this country were low. If we do something, they immediately make the opposite argument—there is no consistency whatsoever. I explained in response to an earlier question why we are doing this and how it is of benefit. It is about maintaining standards. The other thing that the hon. Lady should realise is that we have been able to reduce tariffs on loads of products—thousands of products—from across the world, which also helps to reduce prices and tackle inflation.

Photo of Theo Clarke Theo Clarke Chair, International Development Sub-Committee on the Work of the Independent Commission for Aid Impact, Chair, International Development Sub-Committee on the Work of the Independent Commission for Aid Impact

I welcome this statement on the Government’s progress on business and trade. It is fantastic news to hear that the UK has been the fourth biggest exporter in the world. As the Prime Minister’s trade envoy to Kenya, I have been meeting British businesses regularly to better understand how the Government can help them to export to that key market. During my most recent visit to Nairobi, I have been focused on delivering the UK’s flagship projects, including Nairobi Railway City and the High Grand Falls dam. Will my right hon. Friend continue to remove barriers for British businesses to ensure that they can grow their exports to key markets such as Kenya?

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

First, I thank my hon. Friend for all her work as the Prime Minister’s trade envoy to Kenya. She will know that officials have been engaging with their Kenyan counterparts to progress work on market access barriers, including working closely with UK industry and Kenya’s Anti-Counterfeit Authority to address the issues facing British exporters. We are doing a lot of work to deepen collaboration between the UK and Kenya, which wants our expertise, especially in important sectors such as healthcare and financial services. I hope that I will be able to work further with my hon. Friend to deliver more trade between the two countries.

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

I thank the Secretary of State very much for her positivity, which is encouraging for the House, for the country and for this United Kingdom of Great Britain and Northern Ireland, and I ask this question constructively. Figures have shown that from 2021 to 2023 there was a slight decrease in the number of new jobs created in the United Kingdom. What discussions has she had with the Department for the Economy, and the NI Assembly, about Northern Ireland’s contribution to creating new employment in 2024-25, so that the figures can remain on the increase, as they did in the years prior to 2021?

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

I think the point that the hon. Gentleman is making is that we cannot be complacent about what is happening in either country. Even as we talk about good news, we need to continue working to ensure that those things do not disappear. He is right that we should do as much as we can with the Department for the Economy. Now that a Minister is in place, it will be a lot easier for us to co-ordinate and see how we can work together to increase employment and improve wages and productivity in both regions.

Photo of Martin Vickers Martin Vickers Conservative, Cleethorpes

I welcome the Secretary of State’s statement. It was particularly encouraging to hear the news about the manufacturing sector. However, as she will be aware, if growth in that sector is to be maintained, continued Government support will be needed. Will it be forthcoming?

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

We have put in place a £4.5 billion advanced manufacturing plan for the manufacturing sector. Firms will need to ensure that they qualify for that funding. We are also doing what we can to bring in investment—especially foreign investment—which will help to drive productivity. It is good to see that business and investors globally want to invest all across the UK, not just in London, and not just in financial services but in manufacturing, certainly, and in our green industries of offshore and renewables. There is so much that we can do that will create industries and companies fit for the future.

Photo of Rob Butler Rob Butler Conservative, Aylesbury

I congratulate my right hon. Friend on ensuring that these superb trade figures are brought to the attention of Parliament. Trade between the UK and Morocco has grown consistently since the entry into force of the UK-Morocco association agreement just last month. A UK consortium won the tender to design the Casablanca stadium for the 2030 World cup, which will be the second largest stadium in the world by seating capacity. Does she agree that it is thanks to Brexit that we can forge such one-to-one trade agreements that are of real benefit to British businesses, and does she share my view, as the Prime Minister’s trade envoy to Morocco, that we should continue to prioritise work with Morocco, which is a dynamic and growing trade partner?

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

My hon. Friend is absolutely right. We should continue to prioritise trade with Morocco and countries like it. I remember that when we had a tomato shortage in western Europe, Morocco was one of the countries that had cheaper supplies, and we can drop tariffs on such products when shortages are affecting all of western Europe, not just the UK. So much flexibility comes of being able to have our own independent trade policy. I pay tribute to him for his work as trade envoy to Morocco, as I should have done to my hon. Friend Martin Vickers for his work as trade envoy to the western Balkans. There are so many trade envoys in the Chamber today, and I am grateful for all their work to support our Department and deliver the good news stories that we are talking about today.

Photo of Lia Nici Lia Nici Conservative, Great Grimsby

I welcome my right hon. Friend’s statement, particularly with regards to growth in manufacturing and exporting. Great Grimsby has a huge amount of opportunity in carbon capture and storage, as well as in our UK seafood processing industry, which is the biggest such cluster in the country. Does she attribute some of the developing growth to UK freeports, one of which is in Grimsby? I look forward to welcoming her very soon.

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

Yes, freeports are another policy that has come about from our ability to leave the European Union. We are doing everything we can to bring in that investment. Carbon capture and storage is one area in which we think the UK can lead. We have the expertise and a lot of the talent and skills. Many of the people who want to understand that technology are coming to the UK. I hope that we can do more for my hon. Friend and her constituents in Great Grimsby, and I will look into what we can do to ensure that I or another Minister comes to see the good work taking place there.

Photo of James Davies James Davies Conservative, Vale of Clwyd

I hugely welcome the upbeat nature of this statement and the Secretary of State’s reference to Britain joining CPTPP. Snowdonia Cheese, which is based in my constituency, also looks forward to the UK’s accession to CPTPP and the generous, tariff-free access to the Canadian and Mexican markets that it will bring. It is understood that that access may be available as soon as later this year, so would my right hon. Friend kindly ask one of her officials to get in touch with that company to keep it updated on progress?

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

I am very happy to do so. My hon. Friend is right that our accession to CPTPP is carrying on: as he knows, we have ratified the Bill in Parliament, and three of the CPTPP countries have completed their own processes—there are only a handful to go—so I do think this is something that will be possible. I will arrange for officials to meet representatives of the business in my hon. Friend’s constituency to have that conversation.

Photo of Richard Fuller Richard Fuller Conservative, North East Bedfordshire

We are in the Chamber to talk about the progress of British business, so it is telling that Labour MPs have not bothered to show up. If today’s Financial Times is to be believed, that is because they are desperately trying to find businesses to talk about the latest reversal of Labour party policy, which is on Labour’s very damaging approach to the labour market. Its approach would place additional laws on business that would stifle enterprise and hand out more bungs to its paymasters in the trade unions, so does my right hon. Friend agree that the right way to back British business is to get the right regulation, not the stifling legislation that the Labour party would put in place?

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

I absolutely agree with my hon. Friend. We are doing so much to get our regulatory environment right, and I thank my hon. Friend for all the work he has done in this area. I know it is something that he cares about, and I thank him for many of the suggestions and much of the advice that he has provided to me.

The right regulatory environment can and will deliver growth. I am terrified by some of the things that I see the Labour party putting forward, and businesses do not like them either. Those flexible rights from day one would mean that if a business employs someone and they do not turn up to work on their first day, that business could not sack them, which would be a disaster. We have done so much on labour rights, but it is not the area that is going to deliver growth, certainly not with the policies that Labour is putting forward.

Photo of Jonathan Gullis Jonathan Gullis Deputy Chair, Conservative Party

I warmly welcome the Secretary of State’s statement, particularly when it comes to manufacturing and exports. I thank her personally for the time she took yesterday to meet Johnson Tiles, Churchill China and Steelite—great manufacturers of ceramics in Stoke-on-Trent North, Kidsgrove and Talke—as well as Rob Flello, the chief executive officer of Ceramics UK. Despite what has been a very challenging time for the industry, particularly due to the rise in energy prices sparked by Vladimir Putin’s illegal and immoral war in Ukraine, can the Secretary of State assure me that the ceramics industry will be able to take part fully and play a big role in ensuring that we export the very best of Britain around the world, particularly through future free trade agreements with countries such as India?

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

Yes, that is right. With our FTAs, we are trying to ensure that we deliver for businesses; if businesses are not happy, those FTAs will not work. The FTAs are going to be used by businesses, not by politicians—it is not about the photos that are taken.

I thank my hon. Friend for the meeting he organised yesterday with representatives of the ceramics industry and ceramics producers in his constituency. We understand the difficulties that they face, with energy costs having risen following the war in Ukraine, and we are doing everything we can; I talked about the supercharger, which should help to deliver for those who are electricity users. We understand the changes and burdens that net zero is placing on those businesses, and are doing everything we can to mitigate them as we try to deliver that target.

Photo of Miriam Cates Miriam Cates Conservative, Penistone and Stocksbridge

Like all of my colleagues, I warmly welcome my right hon. Friend’s statement, and very much welcome her focus on the balance of trade. We do not talk enough about that; we forget that until 1997, this country had a broadly neutral or positive balance of trade, but between 1997 and 2010, that balance went very negative. We have struggled to restore that balance, which has made us dependent on foreign debt and our economy fragile, so I very much welcome these figures—it looks like we are turning the tide.

I also welcome my right hon. Friend’s focus on manufacturing, which has a very important part to play in our balance of trade, but we must not forget about the small manufacturers. She has rightly focused on the larger ones, but nearly 6,000 jobs in my constituency are dependent on export. What help is available from the Government to help smaller manufacturers, which often face more barriers to exporting, to also be part of this excellent recovery?

Photo of Kemi Badenoch Kemi Badenoch Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister for Women and Equalities, Secretary of State for Business and Trade, President of the Board of Trade, Minister for Women and Equalities

My hon. Friend makes a very good point. Through our export strategy, we are doing a lot to provide support for businesses that may not be familiar with exporting or that need additional help. We do that work with our trade commissioners in every region around the world, as well as with international posts.

One thing we have said in the Department for Business and Trade is that this is the year of the small and medium-sized enterprise. Quite a lot of the time, the news that we give is about the big billions for the FTSE 100 companies, but most people who work in this country work for small and medium-sized businesses. That is one reason why we want to reduce the threshold at which they count for the purposes of corporate reporting and regulations, which should make their lives easier and give them fewer barriers to trade. It will help them to improve their exports, as well.