I thank noble Lords for their response to the Secretary of State’s Statement in the other place. I am very happy to take the points raised, but I must say that I feel we are living in a slightly parallel universe. Let me try to persuade noble Lords that we are in a very privileged position here in the UK. We are the sixth-largest economy in the world and the fourth largest in the G7. We have just moved to being the fourth-largest exporter in the world, after the US, China and Germany. We are the second-largest exporter of services in the world and we have just moved to be the seventh-largest manufacturer in the world.

Our economy is 80% services and 20% goods. That is where our people work: 80% of our employment is in services; 80% of our exports are in services; 20% of our workers work in manufactured goods, yet 45% of our exports are in manufactured goods. What does that tell you? Our goods are very good. They go around the world and people want to buy British goods. Our manufacturing sector has never been in better health. Everywhere I go, every country I visit, they want to buy British goods. There is a clear understanding now about services, so 55% of our exports are in services and the direction of travel will be that this country will be two-thirds services and one-third goods. What is great about services? We do not need to transport them; they can move digitally. They are usually in sectors that pay higher wages and that is why the workforce in the UK is now skilling up into services and getting higher wages.

Take the OECD numbers that were mentioned and let us just remind ourselves what the OECD said in its 2016 report about Europe, indicating that when we joined what was then the Common Market, Europe accounted for one-third of global trade. In 2019, when we left, it was 16% of global trade and by 2050 it will be 9% of global trade. Therefore, putting aside geography and culture, the British people made a very savvy business decision to tilt to where the trade is. The trade is in the Indo-Pacific. We have just joined this thing called the CPTPP, the trans-Pacific partnership. Last time I looked at the map, the UK was not anywhere near the Pacific Ocean. We could not have got into that deal when we were in the EU: that is 15% of GDP and 40% of the world’s middle-class consumers. It feels like a good place to be.

The OECD report looking forward to 2050 says that the three mega economies will, obviously, be the US, China and India. It sounds as if the CPTPP will be a very interesting fourth bloc to be part of, and we are part of it. Coming out of Brexit, we must remember that that was actually a trade deal. We did a tariff-free trade deal with the EU 27 and now, 41% of our exports go to the EU 27. If we include the Europe 34, it is 49% of our exports. It is still our biggest market, with which we are trading very strongly across both goods and services. The US is 20% of our pie chart, while 30% is the rest of the world, and that is where the growth is. We are tilting to where the growth is, while still being able to trade very successfully with Europe.

Looking at the numbers themselves, our exports are worth £862 billion today. We now have numbers we can actually look at, from 2018 to the end of 2023, so that takes in the most difficult five years we have had in the economy in the post-war era. A number of disruptions happened in that period. We had Brexit, Covid, the war in Ukraine, a massive spike in energy prices, a massive spike in inflation, and massive disruption to supply chains, probably the biggest we have seen since the Second World War.

Let us look into the numbers on an inflation-adjusted basis. From 2018 to 2023 our exports were up 26%, but if we take out inflation, they were up 2%. Basically, that means that we are now just ahead of where we were before this massive five-year disruption happened. Our manufactured goods are down 13%, inflation-adjusted, and our services are up 15%. Thank goodness we are a service economy and that we are able to rely on our services. Manufactured goods are down the world over.

The most interesting stat in the whole pack looks at manufactured goods to the EU 27 versus manufactured goods to the rest of the world. Manufactured goods to the EU 27 in this five-year period were down 13%, inflation-adjusted, and manufactured goods to the rest of the world in the same period were down 13%. There is no difference. There is no difference between our trading of manufactured goods to the EU 27 and to the rest of world. However, our services are up 8% to the EU and up 19% to the non-EU—the rest of the world. We have a pie chart of £860 billion, and 24% of that is manufactured goods to the EU 27. That is the only bit that the Financial Times and the BBC will report on. I am here to tell you that the other 76% is going—we have used the word in this Chamber before—gangbusters, so that must mean that the Government are doing something right to drive the economic agenda forward. Therefore, I can clearly refute the idea that we are in a difficult place. We are actually undergoing a massive recovery post Brexit and post Covid.

We have talked about the trade deals. On our EU exit, we immediately had 65 trade deals that we rolled over from the EU. We have now got that up to 73. What is interesting about the new deals? They are the most progressive in the world. Let us take the Australian trade deal. The EU did not really bother with services; it was fixated on manufactured goods. Now, the Australian trade deal has chapters on services, digital, innovation and digital trade. We have just passed the Electronic Trade Documents Act; we can now send goods around the world without paperwork. We have just sent a bunch of valves from Burnley to Singapore without any paperwork. We are bringing in a single trade window in 2025; instead of filling out 28 forms, you fill one out once and it cascades down through the system. We are putting in place a digital border, which will be the most progressive in the world. It will give us the value of £3 billion over the next five years. Yes, there will be some costs along the way, and yes, we need our borders to be protected, particularly from an SPS point of view. Our farmers think it is an unfair playing field right now and that imports versus exports in agri is not a level playing field. We are putting that in place, and in a very light-touch, careful manner.

Wherever I look in my portfolio, I see good news. If we are talking about world trade, we have these 73 trade deals; that covers 60% of world trade. Our target was 80% of world trade; well, the missing 20% is the USA, which is not doing trade deals with anybody right now, so it is not personal. We are trading very well with the US right now; in fact, our exports to the USA are at record amounts, both services and goods, and it may well be that that is good to continue as is.

Eight MoUs were signed with eight states. If you talk to Andy Burnham, recently re-elected as a Labour mayor, about the MoU with North Carolina and what the northern powerhouse is doing direct with North Carolina, he loves it; he is not talking it down, and he is not complaining about there not being an FTA with the USA. Right now, you can see that what they want in Manchester is a direct link to North Carolina based on mutual recognition of qualifications; it is to do with digital and the direct links he can make between his northern powerhouse and North Carolina. What we are hearing back is, “What a clever thing the UK has done”; we are dealing with individual states rather than getting bogged down in Washington.

If we take that as the missing 20%, we effectively have free trade with 80% of the world’s trade. We are in a very strong position when it comes to business investment; we do not need to go through all the numbers. We know that Alastair Campbell was on record saying that, following Brexit, Nissan will leave. What has it done? It has invested all the more—another £4 billion in its plant in the north-east. Some £2 billion of government investment has been matched by £24 billion from the private sector. Is that not the point of government? The Government are a pump-primer. The Government do not do business; the Government should not be doing business. The Government should be an enabler and facilitator for the private sector to do business. So, £2 billion of pump-priming results in £24 billion of investment; that is a pretty good deal.

India is clearly a big market. Right now, it is only 2% of our exports, but it will be a very big market for us to deal with. We have done 95% of that deal. Guess what? In any negotiation, the last 5% is the most difficult. Right now, India has an election on, so that has stalled at the moment—stalled is the wrong word, so please do not quote me on that; it is awaiting them to come out of purdah. But we have closed 13 rounds and 26 chapters on a whole range of issues with India, which does not really do free trade. What we are doing with India is groundbreaking.

When it comes to steel, we have net zero targets. We all agree on net zero targets, do we not? We must move to the new way of creating steel—electric arc furnaces. We must remind ourselves that we do not have iron ore here in the UK, so in Port Talbot 8,000 jobs are at risk. We have done a deal to save 5,000 and put in place a £500 million package for the other 3,000. I come from Clydeside, where we shut down the shipyards, and we did not have that deal; there was no furlough scheme. Here, a deal is being done with government to work on an industry going through transition—meeting our net zero targets, moving to electric arc furnaces, and saying that we cannot save every job, but we will invest in 5,000 of the 8,000 and work out a plan to help with the 3,000 redundancies. That is a pretty good deal.

I think I have covered most of the points. At the end of the day, the UK economy is the fourth largest in the G7. Our numbers are good, and our forecasts for growth are good. In November 2022, the OBR expected a year-long recession and GDP to fall; in fact, the economy grew in 2023 and inflation has more than halved and is falling fast. That is good for business. We should remind ourselves that, at the end of the day, GDP is a meaningless measure, except for economists. You cannot eat your GDP; GDP is an output. I have yet to meet a business that say when they get up in the morning that they are going to increase their GDP today. I have never met a household that says, “How is your GDP doing today, in terms of your budget?”

We should deal with the fact that, in 2023, people’s real incomes were £1,200 higher than the OBR expected in its March forecast. Real household disposable income per capita is higher today than it was in 2019, when we came out of the EU. In terms of our workforce, 33 million people in our population of 66 million work and produce a tax revenue of over £1 trillion. By increasing the national minimum wage and upskilling our workforce, the number of workers in our economy who are on what was called low hourly pay is now 8.9%. In 2010, that was 21%. Benefits in 2010 were the largest source of income for the poorest working-age households, whereas under the Conservatives their wages are now the highest contribution. Is that not what matters?

What matters is how we put food on the table. We are upskilling our economy. We are a service, modern, post-industrial economy. Where our manufacturing is world-class, it has been protected by this Government and invested in by the private sector. In the meantime, our service economy is going gangbusters, our workers are being upskilled and our SMEs are exporting and becoming exemplars in their local communities. Our economy is doing very well and I commend the Secretary of State’s Statement to the House .