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Business: Exports - Question

– in the House of Lords at 11:13 am on 6th July 2017.

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Photo of Lord Empey Lord Empey UUP 11:13 am, 6th July 2017

To ask Her Majesty’s Government, whether they are planning to provide tax incentives to businesses to encourage their staff to obtain recognised qualifications in exporting skills.

Photo of Lord Bates Lord Bates The Minister of State, Department for International Development

My Lords, the Government are committed to supporting businesses to export. Businesses can currently deduct the costs of staff training from their taxable profits. The Government keep all tax policy under review, and any proposed additional relief must be assessed for its effectiveness, ability to stand up against abuse and cost to the Exchequer.

Photo of Lord Empey Lord Empey UUP

My Lords, the Minister will be aware that we have just been talking about Brexit—of course, in this House we do little else. I draw to his attention the fact that more and more emphasis needs to be placed on our ability to trade and provide services internationally; there are certain skillsets that people need in order to achieve that. The apprenticeship levy will apply only to England and not to other parts of the UK, and it would good for Her Majesty’s Government to send a signal to companies to encourage them to export and to upskill their people so that they could use the costs incurred by that qualification to offset against corporation tax. Surely that would send a signal to business that we are now focused on exporting, because it is going to be our lifeblood in the years ahead.

Photo of Lord Bates Lord Bates The Minister of State, Department for International Development

The noble Lord is absolutely right to point to the tremendous opportunities that are going to open up to the UK in global markets for exporting. We are very mindful of that. We also recognise, of course, that significant investment needs to be made in understanding the complexities of trade. I pay tribute to the work of the Export Institute, of which the noble Lord is a member. The apprenticeship levy is available across the United Kingdom. In England it is for companies to determine how that is spent and offset against budgets; it is for devolved Administrations to determine how it is spent, but I would have thought that any investment in training our young people in the opportunities in trade, in particular, would be money well spent.

Photo of Baroness Kramer Baroness Kramer Liberal Democrat Lords Spokesperson (Treasury and Economy)

My Lords, this House will know that yesterday the EU and Japan agreed a free trade deal. Will the Minister tell us the cost to UK SME exporters and supply chain of exclusion from this deal?

Photo of Lord Bates Lord Bates The Minister of State, Department for International Development

The EU agreed that deal with great support from the United Kingdom. We have made it very clear that we want to replicate such deals and potentially get even better terms for our markets. We have seen a tremendous increase in the value of exports over the past year—up by 5.8%, and up by 34.8% since 2010. We believe that we can do better than that outside the European Union.

Photo of Lord Flight Lord Flight Conservative

My Lords, will the Government look at arrangements for the financing of exports in comparison to both the US and France? This country is much less helpful and, post-ECGD being privatised, quite a few businesses still find it difficult to get exports financed.

Photo of Lord Bates Lord Bates The Minister of State, Department for International Development

My noble friend will be aware, of course, that the export finance levels were doubled by the Chancellor in the Autumn Statement last year. That will be a significant increase. Some 279 companies had access to export finance and more than 70% of those were small and medium-sized enterprises—precisely the sorts of organisations that we need to encourage to do more.

Photo of Lord Tunnicliffe Lord Tunnicliffe Opposition Deputy Chief Whip (Lords), Shadow Spokesperson (Defence), Shadow Spokesperson (Treasury)

My Lords, ONS figures show that Britain is currently the worst performing major economy in the world right now, so upskilling our workforce is vital. However, the LGA has recently stated that skills and employment funding is confusing, fragmented, untargeted and ineffective in its current form, where it is run by eight different government departments or agencies. How do the Government intend to better co-ordinate their haphazard approach to skills?

Photo of Lord Bates Lord Bates The Minister of State, Department for International Development

I simply do not recognise this pessimistic view about the UK. We are the fifth largest economy in the world, according to IMF rankings; we were the fastest growing among the major economies last year; and this year we will be the second fastest growing among the major economies. Our exports are on the rise, our employment is at record levels and the United Kingdom is a fantastic place to do business. We produce some fantastic products that will be in demand—increasing demand, in my view—around the world.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

My Lords, the House is deeply grateful to the noble Lord, Lord Empey, for drawing our attention to these qualifications in exporting skills. Does the Minister not agree that it would even more useful if Liam Fox and some of his Ministers had these qualifications? Could he arrange for them to go on one of these courses?

Photo of Lord Bates Lord Bates The Minister of State, Department for International Development

There is a factual answer to that—I am not sure whether it will play right into the noble Lord’s hands—which is that the Export Institute is an accredited training provider to the Department for International Trade. It is actually doing that already. The reality is that the future is going to be about exports, and exports outside the European Union: the fastest growing economies in the world are all outside the European Union. We need to broaden our horizons and take advantage of the opportunities. That is going to be the future of business, for which we need to train, and be encouraged and inspired about.

Photo of Lord West of Spithead Lord West of Spithead Labour

My Lords, as regards advice to exporters, what advice are the Government giving to exporters and indeed UK citizens who are dealing with South Korea—a very big market for us—bearing in mind that there is, I am afraid, an inexorable march towards a war within that peninsula? What advice are we giving to our people and our companies there?

Photo of Lord Bates Lord Bates The Minister of State, Department for International Development

These are very complex matters, which are being dealt with at the Security Council. They are on the agenda for the G20 and the Foreign Secretary has made statements about them today. We are taking these matters very seriously indeed. We recognise that the Republic of Korea is a major trading partner for the UK and we want to maintain those relationships and maintain peace and stability on the Korean peninsula.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Liberal Democrat

My Lords, given the statements by a number of ambassadors from the United Arab Emirates that they may be asking their trading partners to choose whether they wish to trade with Qatar or with the rest of the GCC, do the British Government yet have a position on whether they will focus on future trade with Qatar, from which we take a third of our liquid gas imports, or with the rest of the GCC, with which we have, happily, a very substantial trade surplus?

Photo of Lord Bates Lord Bates The Minister of State, Department for International Development

We do not recognise that we will be in a position where we will have to choose. We recognise that these are very important trading partners. The Secretary of State for International Trade was in the Gulf recently and announced an increase in the export finance available for companies exporting into that region. Again, we recognise that that needs to be built on peace and stability, and we very much hope that the situation will be resolved as soon as possible.