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International Trade

Volume 638: debated on Thursday 29 March 2018

The Secretary of State was asked—

Brexit (Food and Drink Exports)

1. What assessment he has made of the effect of the UK leaving the EU on food and drink exports. (904655)

In 2017 the UK exported more than £22 billion-worth of food and drink products to the world, an increase of almost 10% on the previous year. When we leave the European Union, as we will exactly one year today, we will free UK farmers from the constraints of the common agricultural policy and provide huge opportunities for Scottish businesses in emerging markets, where demand for quality produce is high.

Despite the brave words of the Secretary of State, he knows as well as we all do that the Scottish fresh food industry is in crisis because there is nobody to pick the fruit—his Government’s policies are deterring people from coming to Scotland to work. Can he give us just one example of a country anywhere in the world that has given a guarantee that, after we leave the European Union, Scottish food exports will be treated in exactly the same way as they are in the European Union’s market of half a billion people? Just one example, please.

For produce such as salmon, our exports are almost exactly 50% European Union and 50% non-European Union. Salmon exports to Japan, Taiwan and Vietnam are up 63% in the past year.

Weetabix, the great British breakfast cereal made in Burton Latimer near Kettering, gets all its wheat from farmers within a 50-mile radius. It was a famous British brand even before we joined the EU, and it will remain a famous British brand after we leave the EU. Will not the prospects for exporting more Weetabix be enhanced once we leave?

Our exports are largely determined by the growth of markets, and the International Monetary Fund says that 90% of global growth in the next 10 to 15 years will be outside the European continent. That is where the big possibilities for UK exporters are, including in food and drink.

The Minister’s colleagues are fond of talking about pork markets in China, but I urge him to pay attention to the potential pulses market there. The British Edible Pulses Association is keen to export faba beans to China, but the Department for International Trade is not talking to the BEPA at the moment. The Chinese want these beans, but there are some technical obstacles. I urge the Minister to respond to the correspondence and let us get this pulses market moving.

I am keen to ensure that that market is fully exploited. If the hon. Lady wants the representatives to speak directly to one of our Ministers, we would be happy to speak to them to see whether there are any technical impediments that can be swept away.

To get more people around the world to understand that high-quality British produce is a world beater.

Brexit (Creative Industries)

2. If he will hold discussions with the Secretary of State for Digital, Culture, Media and Sport and representatives of the creative industries on trade in that sector with EU countries after the UK leaves the EU. [R] (904656)

Yesterday the Government announced the creative industries sector deal. With a strategy and new money committed to boost our creative industries, trade and investment is a key part of that deal. Exports are booming in the sector, with £9.6 billion in services and £2.7 billion in goods in 2015, making this country a global leader.

I refer the House to my entry in the Register of Members’ Financial Interests.

I thank the Minister for his answer, but the clock is ticking. Representatives of the live performance part of the creative industries tell me of their worries, based on current experience of touring theatre, dance and music outside the EU. Will he, like the DCMS Minister, the hon. Member for Stourbridge (Margot James), agree to meet representatives of the creative industries to discuss those significant challenges so that this massive growth sector of our economy can continue post-Brexit?

My colleagues and I are always happy to meet representatives of the sector. The sector’s export growth, and its activity both in the European Union and beyond, is actually growing. Only 34% of the sector’s total global exports are to the EU. A huge amount is already being done outside the EU and, when it comes to things like music, DIT has committed to make about £3 million of grant support available to help music small and medium-sized enterprises to be able to export up to 2020.

One of the biggest growth markets is in the film and creative industries: one of the biggest areas now, apart from Hollywood, is Bollywood in India. What relations has my right hon. Friend established to build that market up so that we can exploit opportunities with our good friends from India?

My hon. Friend, who has impeccable trade connections with India, makes a strong point. Film, TV and broadcasting as a sector in the UK grew by 6.6% last year, and a large part of that is in co-operation with India. Total spend in the UK on film production reached a 20-year high, and global UK-qualifying films enjoyed 21% of global box office success, including a lot of success in India.

British audiovisual exports are worth £7.4 billion a year, with more than £3 billion of that coming from trade with the EU. The industry has raised major concerns that its ability to export into the European market will be undermined, unless there is frictionless access for broadcasters and creative industries. Will the Minister reassure the sector and the House that this will be the case—or is this yet another area where the Government are failing to listen to British businesses?

I will take no lectures from the hon. Lady on listening to British businesses, on which this Government have an impeccable record. We are seeking frictionless trade—as frictionless as possible—with the EU. We are seeking a free trade agreement of much greater scope than any before, and it will cover services—including creative industries, which are such a key part of our export offer.

SMEs (Exports)

3. What steps his Department is taking to support small and medium-sized businesses to export. (904658)

Helping SMEs to export is a high priority for the Department, and we are working through our overseas network, through online services on, which has had more than 3 million visitors, through our international trade advisers and through export finance. Last year, 79% of companies supported by UK Export Finance were SMEs. Mr Speaker, if, like Roger Federer, I can press on—albeit without the same grace—I would say that exports from the west midlands increased in value by more than 80% between 2010 and 2016.

It is great news about the west midlands, but a constituent of mine who has a small business providing services around the world came to tell me about the challenges he faces in getting appropriate banking facilities and about the need to minimise losses on currency transfers. What steps is the Department taking to make sure that UK banks provide the facilities, support and advice that SMEs need in order to export?

As my hon. Friend will know from running a business, and as I do from my experience, this is a challenge and a work in progress. But we have established strategic relationships with the five leading UK banks. UK Export Finance launched a partnership with those banks in October 2017 to help not only exporters, but those who supply exporters, to easily access Government-backed financial support.

The Minister wants to talk about his experience; I recall that when he worked for a living he certainly did not work in the manufacturing sector, and nor did the Secretary of State, who worked in the health sector. I worked in the manufacturing sector, and I can tell the Minister that up and down the country SMEs are struggling to export, given that they are going to be blocked off from a 600 million market and left with a 60 million one.

This is a truly grim and sad time for those who want to see our departure from the EU lead to a collapse in investment and exports, as instead we have seen the exact opposite. We had record levels of foreign direct investment in this country. We have an improving climate for that and we have record numbers of exports from the hon. Gentleman’s area—from Yorkshire. It is about time he put the gloom away, because the facts keep defying him.

Actually, it is £500 million less in the automotive sector. On supporting SMEs, will the Minister explain what the Government are going to do to help those businesses export to China and India? He will be aware that Germany, within the EU, exports twice as much to India as we do and four times as much within the EU as we do.

I am afraid the right hon. Gentleman is a member of the same club. I hate to share this with the House, but exports to China were up by 30% last year.

Order. There is something of an internal Scottish National party competition. I do not know whether one of them is thought to have greater seniority, but not in my mind. I call Kirsty Blackman.

Many of our small and medium-sized enterprises are involved in premium manufacturing and other forms of high-value production. Will the Minister ensure that, in discussions with the EU, those things are taken into account when negotiators are discussing origin and the calculation of origin?

All such issues are taken into account. Of course, the Department for Exiting the European Union leads on the negotiations on our exit from the EU.

Future Trade Agreements

The Government believe strongly that Parliament has a vital role to play in the scrutiny of future free trade agreements, as it always has in the past. The Government are currently in the process of designing our future trade agreement policy. No decisions have yet been taken, as stakeholder consultations are ongoing.

When there is a new EU trade treaty, the European Scrutiny Committee can review it and the European Parliament can veto it; when there is a new UK treaty, all this House can do is delay its ratification by 21 days. Far from taking back control, does the Minister agree with the Commons Library that post-Brexit Britain

“may be seen as diminishing democratic accountability in relation to trade treaties”?

Will he fix that by supporting the inclusion of new clause 3 in the Trade Bill?

I will take no lessons from the Liberal Democrats in this regard. The hon. Lady voted against the Second Reading of the Trade Bill, which will allow this country to transition its 40 or more existing EU trade agreements into UK law. Those agreements have already been scrutinised in Parliament. As I say, future trade agreements will be a matter for future proposals.

Is it not the case that, under current plans, the British Government will be able to sign off UK-wide trade deals without the consent of the devolved Parliaments, meaning that the Belgian region of Wallonia will have more power over EU trade deals than Wales, Scotland and Northern Ireland will have over UK trade deals?

I think the hon. Gentleman is confused. Existing trade deals have been scrutinised in this Parliament, with input from the Welsh Government in the usual way—more than 40 EU trade deals have already been scrutinised in this Parliament. He has confused those with future trade deals. We will, of course, work closely with Parliament and the devolved Administrations to make sure that their voice is heard on those future trade deals.

It is important that the Minister tries to clarify this issue. Brexit is supposed to be about regaining sovereignty and taking back control, so what is actually going to happen? Are this House and the devolved Assemblies simply going to be consulted, or are they going to have to consent to new trade deals?

Again, I think the hon. Gentleman is confusing existing trade deals, which are what the Trade Bill is all about, with the prospects for future trade deals. We have been absolutely clear on future trade deals. Trade policy is of course a reserved matter, but Ministers have engaged with the Scottish and Welsh Governments frequently, including at official level, and we recently did a deep dive with the devolved Administrations on what future trade policy might look like.

Education Exports

The latest statistics, released earlier this year, estimate total UK education exports and transnational education activity to have been £19.3 billion in 2015. That is an increase of 3% on the previous year and of 22% since 2010, in current prices. The Government continue to support education providers in this vital sector.

Many small businesses in and around my constituency either need help to begin to export or are already exporting in education and other goods and services. For example, a constituent of mine, Mr John Bowers, owns the company Bowers & Freeman, an SME that specialises in groundbreaking and innovative fasteners for the aerospace industry. What is the Department doing to ensure that SMEs such as Bowers & Freeman get the help that they need, whether in education or other goods and services sectors?

UK Export Finance offers competitive finance and insurance to SMEs of all sorts that want to export. My hon. Friend mentions one company in his constituency; I am pleased to say that UKEF recently provided bond support to another, Ram Universal, to help it to export its high-quality valves to India. The Government’s export strategy will look at SMEs’ need and design information and services appropriate to them.

Torbay’s language schools provide a valuable source of educational exports by encouraging students from across the world to learn here. What work is the Minister’s Department doing to assist them in securing trade from growing economies in Asia, as the Devon School of English recently did in Taiwan?

The Department for International Trade’s dedicated education teams are focused on developing a pipeline of overseas opportunities that are then matched with UK providers. That is enhanced by the DIT-led English language working group, which brings representatives together from across the sector. I look forward to seeking further export opportunities in Taiwan when I visit there in a couple of weeks.

Further to the reports that education exports are worth some £19 billion annually, does the Minister have an indication of how that figure will grow as we attempt to move our eyes away from only Europe towards a greater global vision?

I am delighted to say, as has been discussed so often today, that exports are up—not least in the education area. As my right hon. Friend the Secretary of State has said, 90% of global growth is expected to be outside the EU. We will have a close and extremely important partnership with the EU, but the opportunities are out there, which is why he and other colleagues in this Department are so dedicated to building economic international opportunities for the country in the future.

Tech Sector Exports

Technology is at the heart of the Government’s industrial strategy, placing the UK at the forefront of the artificial intelligence and data revolutions. Exports of telecommunication, computer and information services increased from £17.8 billion in 2015 to £19 billion in 2016. Digital goods and services overall contributed £116.5 billion to the UK’s economy in 2016.

“Total War” is the phenomenally successful computer game produced by Creative Assembly in my Horsham constituency and exported to 98% of all the countries on earth. Creative Assembly is brilliant at nurturing domestic talent, but it also employs workers from 34 different countries. What reassurance can the Minister give that it will continue to be able to recruit the brightest and the best?

Like my hon. Friend, I am enthusiastic about the development of mathematics and digital and technical education. Some £406 million extra was announced in the industrial strategy to help address a shortage in science, technology, engineering and maths skills. The creative industries sector deal was published on Tuesday, and that highlighted the Government’s determination to ensure that we have the right digital skills for the future.

Section 232 Tariffs

7. What assurances he has received from his counterparts in the US Administration that the section 232 tariffs imposed by that country on steel and aluminium imports will not apply to UK exports. (904662)

Although we welcome the United States granting an EU-wide exemption from the tariffs applied under section 232 for a limited time period, we continue to argue that this is not an appropriate mechanism to deal with justifiable concerns in relation to the overcapacity of steel worldwide.

Some 15% of UK steel goes to America, and, quite frankly, a pause on the imposition of tariffs is simply not good enough. What steps is the Secretary of State taking to make sure that that pause becomes permanent?

We are working with the European Union to ensure a permanent exemption, and I spoke to Commissioner Malmström yesterday. On the specific case of the United Kingdom, the UK is responsible for only 1% of American steel imports. Much of that is high quality steel, which the United States does not manufacture itself. Some of our steel goes to American defence projects, which means that it would be quite absurd to exclude the United Kingdom, or to apply tariffs to the United Kingdom, on the basis of national security.

13. I welcome the assurance that section 232 tariffs will not apply to UK exports, but, ultimately, any tariffs will have a significant impact on prices here and could have a knock-on effect on those working in the steel industry, including in Tata Steel at Port Talbot, which neighbours my constituency. If those tariffs are implemented, what additional support will the Government provide for the industry to help deal with the damaging tariffs imposed on workers? (904669)

The hon. Gentleman is right: there will be a knock-on price effect and there is also likely to be a displacement effect in the global steel market, for which we may have to look at imposing safeguard measures; along with the European Union, we would do so. He is also right that there would be a knock-on price effect in the United States, too. It does not make any sense to protect 140,000 steel jobs in the United States and see prices rise for the 6.5 million US workers who are dependent on steel.

I thank the Secretary of State for meeting steel MPs this week. Will he say a bit more about the safeguards that he will try to ensure are in place against diversionary dumping as a result of this action by the United States?

I am grateful to the hon. Gentleman for his comments. As he knows, our aim, along with our European Union partners, is for the tariffs not to be applied in the first place. We argue that section 232 is not an appropriate means of doing so. If we want to deal with the over- production of steel—particularly Chinese overproduction —the best way to do so is through the G7 steel forum, where there are 28 outstanding recommendations to which we are still awaiting a Chinese response.

UK steel faces a very real threat from dumping as a result of these US tariffs, but the Conservatives in the European Parliament led the group of MEPs that consistently blocked EU action against dumping. As the Manufacturing Trade Remedies Alliance says, in the Trade Bill—which has mysteriously disappeared—the Secretary of State is proposing the weakest trade remedies system in the world. It is simply not good enough. When is he going to stand up for the UK steel industry and for UK steel jobs?

It is hard to know where to start when there are so many wrong facts in a single question. Let us leave aside the European Parliament. It was the Labour party in this Parliament that voted against the customs Bill and the Trade Bill, stopping us creating a trade remedies authority in the first place. The Trade Bill itself only sets up the trade remedies authority; it does not set up the regime.

Order. We are running late, but I am not having Cleethorpes and Redditch missing out. I call Martin Vickers.

Brexit (Trade Agreements)

8. What assessment he has made of the potential economic benefits to UK businesses and consumers of securing trade agreements with non-EU countries after the UK has left the EU. (904663)

12. What assessment he has made of the potential economic benefits to UK businesses and consumers of securing trade agreements with non-EU countries after the UK has left the EU. (904668)

As part of its preparations for future trade negotiations, the Department for International Trade has established 14 trade working groups and high-level dialogues with key trade partners beyond the EU to explore the best ways of progressing our trade and investment relationships.

Many businesses in my constituency, particularly in the seafood sector, are reliant on the free flow of supplies. Does the Minister share my confidence that new arrangements can be made to ensure that, particularly in the seafood sector, supplies are maintained without any undue delay?

My hon. Friend is a passionate advocate for the fish and seafood sector in his constituency. Those sectors already contribute £1.3 billion to the UK economy. I am concerned about reports of problems at Five Star Fish in Grimsby, next door to his constituency, but I can tell him that leaving the common fisheries policy presents the opportunities to boost exports, expertise and fish-related services.

Last week I visited the innovative company, Mission Resources, in Abbots Morton. It has invented the home energy resources unit, which generates energy from household waste to reduce fuel consumption, furthering climate change reduction and the Government’s clean growth strategy. Given that the company is looking to expand to powerhouses such as China and India, what assurances can the Secretary of State give to my constituent about the opportunities for trade with non-EU countries?

Over the last seven years, this Government have made significant resource investments into clean energy and renewable technologies. We have put in a huge amount of effort to ensure that those capabilities are now exportable. The UK has the world’s largest offshore wind sector and quite a significant sector in resources such as solar. We need to take advantage of export opportunities, and that is where the Department for International Trade plays its role.

Topical Questions

My Department is responsible for foreign and outward direct investment, establishing an independent trade policy on export promotion. Yesterday I chaired the 10th UK-Brazil Joint Economic and Trade Committee, where we signed memorandums of understanding on infrastructure, innovation and trade facilitation.

The Chinese Government recently turned the tap on exports of waste plastic to China. That has made a fantastic and very disturbing difference in the chemical market in Britain. If the Chinese Government did the same in higher education, what would be the impact? Has the Secretary of State done any analysis of that?

I had discussions in China only last week about exporting UK educational expertise. There is a huge appetite for that around the world, because there is an increasing acceptance that it is the gold standard. In fact, UK exports of education last year outstripped the City of London’s insurance business and continue to grow with Government support.

T2. Will the Secretary of State reassure my constituent, Simon Bainbridge, who is one of the finest producers of Northumbrian lamb, that lamb sales will not be forgotten in the new free trade agreements? (904672)

Far from being forgotten, advocating further exports of high-quality UK produce is at the top of the Government’s agenda. I can tell my hon. Friend the good news that the latest international market to open up to British lamb is Saudi Arabia, with enormous potential.

GKN has total sales of £10.4 billion, £9 billion of which are outside the UK. Profits from its operations in 30 countries around the world are repatriated to the UK. It will not be much of a global Britain if the Secretary of State’s approach is to stand idly by while a business like GKN that is so vital to our international trade is allowed to be subject to a hostile takeover that can lead only to its break-up and sale. Why has he stayed so silent on such a crucial issue for our trading prospects?

The allegation that anybody has stood idly by is utter rot. On Monday—perhaps the hon. Gentleman has not been following the news—my right hon. Friend the Business Secretary issued an open letter to Melrose, the company that is doing the bidding, to request certain safeguards for employees, and so on, if the bid was successful. Melrose has responded, agreeing to give those very assurances. We took action on this days ago. He needs to keep up with the news.

T4. SMEs are the backbone of our economy. As a Minister, I tried to help SMEs in the security sector to export. Food and farming businesses in Lincolnshire would like to do the same, but they need encouragement, advice and support. Will the Secretary of State meet me and a small group of others to see how we can help to feed the world and make it safe too? (904674)

I am grateful for my right hon. Friend’s question. I would of course be delighted to meet him and colleagues to discuss food and drink, which is so important both to his constituency and mine. I am delighted to say that last year food and drink exports went up by £2 billion to £22 billion, and that, for the first time ever, we have a Department of State whose only role is to focus on the international economic interests of this nation. I will be delighted to meet him to discuss how we can do more.

T3. The dumping of steel from states including China has had a detrimental impact on the steel industry in the UK. Ahead of the further dumping that is anticipated when the US tariffs come into force, Canada has announced that it will be offering extra powers for border security checks to crack down on cheap steel. What assessment has the Secretary of State made of this policy? (904673)

I rather feel that I answered this question earlier. The EU will look to see whether we need to introduce safeguarding measures as a consequence of any diversion. We are working closely with our European partners to assess what the potential may be and what the joint EU response would need to be consequently.

T6. The Secretary of State has recently returned from Hong Kong and mainland China. Now that we are leaving the EU customs union and single market, what more trade can we do with these countries to ensure that our businesses are not left worse off? (904676)

I am happy to tell my hon. Friend that at the festival of innovation last week we had 284 UK businesses and seven universities with us, all of which were able to discuss future partnerships and sponsorships. There was a very warm welcome, and we actually began the initial discussions with the Government of Hong Kong about entering into a future trade agreement on services.

T5. Given the less than successful outcome of the recent negotiations on behalf of UK fishermen, what hope and reassurances can the Secretary of State provide for farmers such as those in my constituency that future negotiations will make them better off outside the EU? (904675)

The best hope for British farmers is to be set free from the constraints of the common agricultural policy and to start to produce for export markets. There is a huge demand out there for UK food produce. The high standards that we have in this country, which we will maintain, are in themselves a kitemark for British produce.

At a recent Public Accounts Committee hearing, the permanent secretary at the Department for International Trade confirmed that although there are eight regional offices for the Department in England, there are none in Scotland. Will my right hon. Friend meet me to discuss adequate resourcing for the DIT in Scotland?

I met our DIT staff in Glasgow relatively recently. The point is that the Department for International Trade is a UK Department. It is there to help the trading interests, export interests and inward investment interests of the whole of the United Kingdom. Trade is a reserved matter.

T7. The north-east is a net gainer from the EU, and 60% of our exports are to EU countries, but the region is set to be worst off after Brexit. How will the Department make sure we do not lose out as part of the Government’s global north vision? (904677)

As my right hon. Friend the Secretary of State just said, we are working for all parts of the United Kingdom, by working with DExEU on our future trading relationships with the European Union and, as importantly, making sure that we open up trading possibilities beyond the EU. I mentioned earlier that we have 14 trade working groups working with major markets, and exports from the north-east will be right at the centre of that work.

The liquid gold that is Scotch whisky is a major export good for our economy, but so far in the EU negotiations we are still not getting clarity on geographical indications, which many other drinks benefit from as well. When will we get clarity on GI for Scotch whisky and other drinks that we enjoy?

It always comes round to whisky at some point in these discussions on a Thursday morning. As the hon. Gentleman will know, the Government accepted that we would roll over the EU treaties that exist at the present time, including those on GIs. It is a pity that he voted against that in the House of Commons.

The ceramics industry stands ready to play its part in helping to boost global exports from the UK, but the reciprocal arrangement we need for that is protection from Chinese dumping of tiles and tableware. Will the Secretary of State ask his Cabinet colleagues to look favourably on the amendments that I have tabled to the customs Bill, which would ensure that the protections we currently have in Europe were written into British law?

The hon. Gentleman is right about his amendments, but his party voted against setting up the trade remedies authority that would implement them. He cannot have it both ways.

The African continental free trade area agreement was recently signed. Will the Secretary of State assure me that economic development and fair trade will be at the heart of the free trade agreements he looks for?

I am grateful to the hon. Lady for her question. It is very important that we tie together better than we have in the past our trade policy and our development policy. The Secretary of State for International Development and I will be making some announcements on exactly how we can do that, and we will be discussing at the Commonwealth Heads of Government meeting with some of the relevant trade partners exactly how we can make that happen.

The EU has around 60 trade agreements with third countries. How many trade agreements with those countries does the Secretary of State estimate will have been agreed by December 2020?

We hope all of them, but that means we have to transition them into UK law, which of course the hon. Lady voted against.