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UK Exports to the EU

Volume 699: debated on Thursday 15 July 2021

Latest monthly figures for UK goods exports to the EU show that in May 2021 exports were £14 billion, up by 8% on the previous month. This is the highest monthly figure, as mentioned by the Under-Secretary, my hon. Friend the Member for Beverley and Holderness (Graham Stuart), since October 2019, and it is £2 billion higher than the monthly average for 2020 and just £0.2 billion lower than the monthly average for 2019. Latest quarterly figures for UK services exports to the EU show exports for the first quarter up by 2% on the previous quarter of last year, but still 2% below the 2020 quarterly average and still some 20% below the 2019 quarterly average.

Well, there are lies, damned lies and statistics, and I do hesitate to criticise and rain on the Jackanory story we are hearing from those on the Government Benches, but let us look at some facts from the Office for National Statistics. Comparing quarter 1 of this year with 2019, UK-EU trade is down by 27%. Some of that is accounted for by covid; much of it is accounted for by Brexit. Make UK reports that 96% of its members are having problems with the new trading regime. These are facts. What is the Minister’s secret? How does he maintain his Panglossian optimism for the future while ignoring such pain and hurt in the here and now?

I was quite deliberate in the use of those statistics. We do need to take care with monthly statistics. None the less, the first quarter data is already two months out of date. The hon. Gentleman is right that there was a dip in January, but that was due to the closure of the border at that time due to the prevalence of the alpha variant in this country. Since then, there has been a very significant recovery. The latest data from May shows £14 billion of exports, up by 8% on the previous month, and only just lower than the monthly average from before the pandemic. He can quote the ONS, but perhaps he might want to look at the latest data, refresh his briefing, and ask his questions according to the latest available data.

Three weeks ago, Lord Frost rejected the EU’s offer of a veterinary agreement, saying:

“We are very ambitious about CPTPP membership… That is the problem.”

Since we cannot ask Lord Frost himself, can the Minister perhaps tell us why the UK’s accession to the comprehensive and progressive agreement for trans-Pacific partnership is incompatible with reaching an agreement with Europe on food standards? From which of our current food standards do the Government wish to diverge?

I think the hon. Gentleman is confusing a number of different things, but let me start by saying that the UK proposed an equivalence agreement on sanitary and phytosanitary rules in negotiations—that was proposed by Lord Frost—but the EU refused. The EU does have agreements with, for example, New Zealand and others that still respect regulatory autonomy. We are very happy to discuss with Brussels an agreement on SPS rules so long as it respects UK regulatory autonomy and we do not sign up to dynamic regulatory autonomy. That is the read-across to other trade agreements; it allows us to have an independent trade policy while maintaining the high-quality trade deal that we have with the European Union.

The Minister can defend his Government’s Brexit bourach all he likes, but EU-UK trade fell by 27% in quarter 1, with Scotland punished even further. He cannot blame covid, as the fall was over three times worse than the global comparison. Official statistics show that for every £245 that Brexit cost in lost trade, even if the Government were to agree multiple free trade agreements, it will bring in only around £18 in return. The UK is virtually alone in facing this kamikaze blow to its exports. Scotland voted against this trade catastrophe. When will the UK Government renegotiate this disaster—or do they intend to continue to be anti-trade?

I take that with a bucket of salt from the SNP about being anti-trade. As we have heard so often in this House, the SNP has failed to support any trade agreement negotiated either by Brussels or by us in Westminster. I do not think there is a single party in this House that is more anti-trade than the Scottish National party. I urge the hon. Gentleman to have a look at the latest data. Trade with the EU is recovering—it may not yet be fully recovered, but it is recovering—and the latest data, in May, shows a very significant 8% improvement on the previous quarter. I refer him to last Friday’s data.

Mr Speaker, you can see why we do not support any trade deals from this Government—because they always sell Scotland out. Let us hear what industry is saying. Fishing representative bodies continue to say that the Prime Minister has betrayed them and that they have been sold out. Individual losses of tens of thousands of pounds are commonplace due to export delays. A perfect storm of red tape, driver shortages and other Brexit issues are destroying businesses across the board, but especially in food and drink. According to the Road Haulage Association, almost a third of UK hauliers say they are having to avoid working with the food and drink industry due to increased checks and admin. Costs are up everywhere on materials, admin and transport—20% in distilleries. What compensation is planned for those affected—or, when the Prime Minister said “eff business”, was that an instruction?

There was a lot in that further supplementary. May I just remind the hon. Gentleman that most of the trade deals that he and his party have not supported are actually the EU’s trade deals? His party’s policy is to re-join the EU. The SNP was against the EU-Japan deal in the European Parliament and abstained here; it was against the Canada deal; it was against the Singapore deal; it abstained on South Africa, and it abstained on Korea.

When it comes to fisheries, I refer the hon. Gentleman back to what the ONS said, not this past Friday but in relation to February’s data—he is so out of date. This is what the ONS said in April:

“The disruptions to food exports in January 2021 appear to have largely been overcome and may have only had short-term impacts on trade.”

That is what it said in April, yet he is still not up to date. On hauliers, we are discussing all the time with the Department for Transport what extra action needs to be taken.

Finally, the hon. Gentleman asks for compensation. Perhaps he can come to this House and account for the £180 million given by this Government to the Scottish Government for dealing with the consequences and the impact of Brexit at the end of the transition period, because we are not at all sure where that money has gone.

The reality on the ground is quite different from what the Minister may be claiming. I recently met many manufacturers and businesses in Warwick and Leamington, such as Bravissimo, Vitsoe and young British designers, and they are desperate. Their concerns are underlined by surveys by the Federation of Small Businesses, the Institute of Directors and Make UK showing the serious and lasting damage being done to UK firms trying to maintain their trade with Europe in the face of the inadequacies of the Government’s Brexit deal. Can I ask the Minister of State whether he thinks Lord Frost has the bandwidth to fix those problems, on top of the Northern Ireland protocol, or do we need someone else in Government to get a grip?

The Government have full bandwidth on all these aspects. We are satisfied with the trade and co-operation agreement. It is an agreement that is working well. In terms of adding support to exporters, that is the role of this Department and other Departments. We have helplines in place. We have the Brexit business taskforce. We have the DIT internationalisation fund. The Department for Environment, Food and Rural Affairs has a £23 million seafood disruption fund. We have recently opened trade hubs in Edinburgh and Darlington, and we will open hubs soon in Cardiff and Belfast. We have a refreshed export strategy coming later this year. The Government are fully engaged on assisting exporters to get their goods and services into the European Union.