(10 months ago)
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Patrick Grady (Glasgow North) (SNP)
The Secretary of State for Business and Trade (Kemi Badenoch)
I regularly discuss with my Cabinet colleagues promoting trade in Scotland as well as the United Kingdom as a whole. Just this week I chaired a meeting of the Board of Trade that focused on trade promotion across the nations, and held discussions, alongside the Secretary of State for Scotland, on ensuring that the Department’s work delivers for the whole UK.
Patrick Grady
That sounds just wonderful, but I would like to know how the Secretary of State thinks ending freedom of movement has helped to promote Scottish trade and culture overseas. Does she think it is a good thing that musicians in Glasgow North now find it much more difficult to tour in Europe—one of the most important markets for traditional Scottish music nowadays —and that their merchandise can no longer be manufactured in Scotland but must be manufactured in the countries to which they are travelling because the customs costs have become so prohibitive?
Kemi Badenoch
I welcome the hon. Gentleman’s early-morning snarkiness as he asks about what we are doing for Scotland. We understand that there are issues that people have across borders, and my Department works closely with musicians and with all those who trade across borders to see what we can do to resolve those issues. If there are specific cases in the hon. Gentleman’s constituency, the Department is well placed to help his constituents with the issues he has described.
Nick Thomas-Symonds (Torfaen) (Lab)
Scotch whisky is an iconic Scottish export, and it is also hugely important strategically to the whole UK. Had Ministers completed the free trade agreement with India by Diwali last year, as was promised, the 150% tariff that producers of Scotch face when exporting to India could have been eliminated. Given that the 10th round of talks has recently ended, with an 11th planned soon, can the Secretary of State tell us whether the free trade agreement will be completed by Diwali this year?
Kemi Badenoch
I have said repeatedly that it is about the deal and not the day. Every single trade agreement that we negotiate is bespoke to the specific country and tailored to its economy, to ensure that it benefits both the UK and the counterpart country. I am happy to say that the Scotch Whisky Association is very pleased with what it has been hearing about negotiations from its Indian counterparts, and we are working hard to make sure that the industry is successful.
Richard Thomson (Gordon) (SNP)
The Scottish seafood industry has been hit with an estimated 50% increase in the cost of packaging owing to the requirement—thanks to the form of Brexit chosen by this Government—for export health certificates with every consignment. Does the Secretary of State accept that the form of Brexit that was chosen, and in particular the failure to align in respect of sanitary and phytosanitary matters, is adding costs to Scotland’s iconic seafood sector at a time when it can barely afford to absorb such costs?
Kemi Badenoch
No, I do not accept that at all. If anything, what is increasing the costs is what the Scottish Government have been doing in relation to the deposit return scheme. While complaining about our divergence between here and the EU, they are trying to split the UK single market, and we are not going to let them do that.
Stephen Kinnock (Aberavon) (Lab)
The Minister for Industry and Economic Security (Ms Nusrat Ghani)
The Paris agreement made clear that the steel industry needs to cut emissions by 93% by 2050, and the Government recognise the vital role that the steel sector plays in our economy. The 2021 net zero strategy sets out our aim to make the transition to a low-carbon economy, and reaffirms our commitment to continuing to work with the steel industry on decarbonisation.
Stephen Kinnock
Hundreds of steelworkers gathered in Westminster yesterday to make absolutely clear their feeling that the Government are not doing enough, particularly in comparison with competitor nations, when it comes to investment in the transition to decarbonised steel. The numbers do not lie. The Government are also worryingly slow in introducing a carbon border adjustment mechanism. UK Steel has estimated that nearly 23 million tonnes of non-EU steel could flood the UK market if the UK fails to introduce its own carbon border adjustment mechanism at the same time as the EU in 2026. When will we see the Government stepping up and investing in green steel as is being done in competitor countries, and when can we expect the introduction of a British CBAM?
Ms Ghani
We have been supporting the steel industry, with more than £1 billion available in grants to help decarbonise the sector and the provision of more than £730 million to cover energy costs since 2013. The CBAM is clearly an issue for many countries, not just ours. We have just finished one consultation, and will produce a response in due course. A transitional reporting phase is due to start in October, with full introduction in 2026. The EU is still developing details about CBAM implementation, and has a consultation open on proposed reporting requirements until 11 July. I know that the hon. Member chairs the all-party parliamentary group for steel and metal related industries, and I urge him to ensure that all businesses express their views as strongly as possible. I think we are meeting on Monday to make sure that we can provide a substantial response.
Bill Esterson (Sefton Central) (Lab)
The Minister said that she recognises the vital role that steel plays in this country, but the UK is the only country in the G20 where steel production is falling. It is also the only G7 country whose Government do not insist on using domestically produced steel in defence contracts. Meanwhile, UK steel producers pay 62% more than their German counterparts for electricity. Labour’s £3 billion green steel plan will give our industry the bright future that other countries are offering their steel sectors. Labour believes in our steel; why do this Government not?
Ms Ghani
I am not sure where Labour Members will get the money to fund that programme of work. I have not even got to the end of reading this paper but they will probably U-turn by the time I do, so I am not sure how sensible it is going to be. We have provided more than £1 billion for decarbonisation, unprecedented support to help with energy costs, and just recently, there was fantastic news from Celsa, when it was able to repay a Government loan of £30 million that we provided to them, sensibly spending taxpayers’ money. There is and always has been support available. When it comes to procurement, it is absolutely right that we do everything we can to make sure that we have UK firms procuring UK steel.
Martyn Day (Linlithgow and East Falkirk) (SNP)
The Minister for International Trade (Nigel Huddleston)
We recognise the important role that trade can play in improving food security. That is why our trade policy aims to help people to access good-quality and good-value food. Our free trade agreements help to remove market access barriers, supporting our importers and exporters. The new developing countries trading scheme, for example, reduces tariffs on nearly £1.4 billion-worth of agriculture goods, and we work with international partners, including at the World Trade Organisation, to remove trade barriers and strengthen the UK’s global food supply.
Martyn Day
I am grateful to the Minister for his answer, but Melissa Leach, the director of the Institute of Development Studies, has spoken about the need to increase access to affordable, nutritious food. She said:
“Over the last decade, charities have stepped in to plug the gaps left by the state but this is not an acceptable or sustainable way to address the growing prevalence of hunger”.
Does the Minister accept that his Government’s commitment to Brexit has led to increasing prices of food that is imported and has contributed to food poverty in the UK?
Nigel Huddleston
The hon. Gentleman will be well aware that food price inflation is not unique to the UK; it is a global phenomenon that we all face. Actually, food price inflation peaked at 19.2% in the EU and at 19.2% in the UK, so we are facing the same problems. However, we have provided more than £94 billion-worth of support precisely to help the most vulnerable in society.
Greg Smith (Buckingham) (Con)
There are many factors impacting food inflation, not least increasing global input costs, but surely the most important thing that my hon. Friend’s Department can do to shore up British agriculture and have a positive impact on food prices is to carry on, full speed ahead, getting the new trade deals that will see British first-class produce sold as a premium product worldwide.
Nigel Huddleston
My hon. Friend is absolutely correct. It is really important that we have support across the House for these important trade deals. They are good for the British economy, particularly good for British farmers, and good for prices in the UK. I hope, at some point, to see the Opposition parties supporting one of these important deals, which are transparently in the interests of British consumers in every nation and region of the United Kingdom.
Gareth Thomas (Harrow West) (Lab/Co-op)
Since 2019, food prices in the UK have rocketed by 26%, a figure that is among the highest in the G7, yet the Prime Minister’s plans for new border checks on highly perishable food from Europe could push prices up again. A veterinary agreement would cut the cost of bringing food into Britain from Europe. Given that many families are already struggling to put enough food on the table and that every significant business organisation supports a veterinary agreement with the EU, why will the Secretary of State not take the sensible and pragmatic step of starting negotiations for such an agreement?
Nigel Huddleston
The hon. Gentleman will be aware that discussions are happening on an ongoing basis with the Foreign, Commonwealth and Development Office about the trade and co-operation agreement and other matters. We have very constructive dialogue with our EU partners. In fact, the Secretary of State and I had a meeting with the EU ambassadors just yesterday.
As for our achievements since leaving the EU, it is important to stress one thing: we have been laser-focused on making sure that the benefits are for the British consumers. We have got rid of thousands and thousands of tariffs. We have liberalised tariffs, reduced them or eliminated them altogether. For example, to compare us with the EU, 27% of the EU’s current external tariffs are zero-rated, whereas the proportion for the UK is 47%. We are significantly reducing tariffs, which is in the best interests of the British consumer, as a result of leaving the European Union.
Mr Laurence Robertson (Tewkesbury) (Con)
The Minister for International Trade (Nigel Huddleston)
To increase and grow trade with Africa, we are using our nine trade agreements, covering 18 African nations. In April 2024, the Prime Minister will host the second UK-Africa investment summit to showcase investment opportunities and advance two-way trade. Just this month, we launched the developing countries trading scheme, which covers 65 countries, including 37 African countries.
Mr Robertson
That is all good news, particularly the developing countries trading scheme. I was recently in Ethiopia for a trade visit. Can the Minister tell me how the developing countries trading scheme, in particular, will help Ethiopia?
Nigel Huddleston
I thank my hon. Friend and constituency neighbour for the work he does as the Prime Minister’s trade envoy to Ethiopia and many other countries. I was also in Ethiopia recently, and many people were praising my hon. Friend and his work. He is right that the developing countries trading scheme will reduce tariffs, which is a win-win both for developing countries, making it easier and cheaper for them to export to the UK, and for UK consumers because it will reduce prices. It is not just a matter of having the deal; we are laser-focused on making sure the benefits of the deal are realised, with more than 100 Department for Business and Trade officials working in Africa to make sure we get the full benefit of these deals.
Tim Farron (Westmorland and Lonsdale) (LD)
As the Government rightly consider new trade deals with other countries, what lessons will they learn from the hideous mistakes made in the New Zealand and Australia trade deals? The right hon. Member for Camborne and Redruth (George Eustice), a former Secretary of State for Environment, Food and Rural Affairs, rightly said that they are bad deals for Britain. Given that British farmers are so angry with this Government, having been thrown under the bus on animal welfare and on environmental and cost issues, will he learn lessons from those mistakes and make sure British farmers are protected, and that environmental and animal welfare standards are protected, too?
Nigel Huddleston
I am, quite frankly, astounded by the hon. Gentleman’s comments. He is well aware, as I have said repeatedly and is widely acknowledged, that the trade deals we have developed, including with Australia and New Zealand, are economically beneficial right across the UK, including in his constituency. If he does not wish to support policies that are in the best economic interests of his constituency, that is something his constituents probably need to recognise come the next election.
Nicola Richards (West Bromwich East) (Con)
The Minister for International Trade (Nigel Huddleston)
We are continuing to make progress towards an upgraded UK-Israel free trade agreement, focused on services, procurement and innovation, and we concluded the second round of negotiations on 17 May. As two service-driven economies, this negotiation is an excellent opportunity to build on our existing goods-focused agreement, particularly to boost trade in services with an innovative, high-tech nation such as Israel.
Nicola Richards
The UK’s trade with Israel increased by 42% in 2022 compared with 2021, and it is valued at £7.2 billion. Israel is a key trade and security partner in the region, and it is a world leader in many areas. Can the Minister update the House on the Department’s progress on the trade aims outlined in the 2030 road map for UK-Israel bilateral relations, namely the establishment of a UK-Israel free trade agreement, the Britain-Israel Investment Group and a UK-Israel innovation and investment summit?
Nigel Huddleston
My hon. Friend is all over the numbers, which saves me from repeating them. The benefits of the trade agreement are obvious, and we continue to strengthen our trade relationship with Israel, which is a valued friend and ally. As outlined in the 2030 road map for UK-Israel relations, a service-based free trade agreement between our two nations will act as a cornerstone of this relationship in years to come. As such, we are pleased to have successfully concluded the second round of negotiations in London just last month, and we look forward to holding further talks in due course.
Jim Shannon (Strangford) (DUP)
I thank the Minister for that very positive response. We in Northern Ireland are keen to ensure that the bilateral trade agreements benefit our companies as well. Some people and councils across this great United Kingdom of Great Britain and Northern Ireland wish to downgrade Israel’s goods. I know that the Minister and our Government want to do the very opposite. Will the Minister tell the House what he is prepared to do to ensure that Israeli goods are promoted right across this great United Kingdom of Great Britain and Northern Ireland?
Nigel Huddleston
Absolutely. Israel is already a really important trading partner, right across the UK, and it will continue to be so. As we negotiate this deal, it is important that we focus on the areas of greatest opportunity. Once the deal is done—of course, this is an upgrade—we will be actively working to make sure that the communications about the benefits of the deal are understood by everybody. We will be working with various bodies and groups, including the devolved Administrations and bodies, to make sure that we take full benefit from these deals. Signing the deal is one thing, but taking and making the best of the opportunities is another—we will be working on that as well.
Richard Graham (Gloucester) (Con)
The Secretary of State for Business and Trade (Kemi Badenoch)
The CPTPP will be benefiting every nation and region of our country. In particular, UK firms will enjoy enhanced access to Malaysia for the first time, including a reduction on tariffs on whisky sales to Malaysia of 80% within 10 years, improving prospects for trade and opening up opportunities in an economy worth £330 billion.
Richard Graham
We should all congratulate the Secretary of State and her team on concluding the CPTPP negotiations, and it should be ratified any time now in New Zealand. Of course the most important new element of the trans-Pacific partnership is this first ever free trade agreement with our long-term friend and ally, Malaysia. Whether in cars, cyber, chocolates, vaccines or legal and other services, the opportunities for British exporters are considerable and, of course, the dividends from our investment there, such as the new Smith & Nephew plant, will also help our balance of payments. Does my right hon. Friend therefore agree that there is a great opportunity for us and Malaysia to work together on spreading the word, through our regional offices, the UK-ASEAN Business Council and every other means possible, to make sure that businesses in both countries are absolutely aware of the opportunities that the deal offers?
Kemi Badenoch
I thank my hon. Friend for his question. He will be pleased to know that Ministers in the Department met their counterpart, the Malaysian export Minister, this very week. A lot is going on between our two countries. The Department works closely with the UK-ASEAN Business Council, and our first bilateral joint economic trade committee with Malaysia is expected later this year. It will help promote the bilateral trade and investment and economic co-operation that he rightly champions as the trade envoy to that country. He will know that I will be signing the CPTPP agreement next month in New Zealand.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Clearly, it is vital that British businesses that want to export can access the benefits of trade deals. However, the Government admitted to me in a written answer that they have not modelled the benefits of the CPTPP for our hard-pressed manufacturing businesses, so will the Minister tell me how many UK manufacturers will benefit from the rules of origin requirements under the CPTPP?
Kemi Badenoch
The hon. Lady will know that we do not count the number of companies specifically in our modelling. The modelling happens at a very high level—it is macro-level modelling. What she should know is that rules of origin will benefit people who export to that region, particularly auto manufacturers, who are very pleased about the deal.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Andy McDonald (Middlesbrough) (Lab)
Nadia Whittome (Nottingham East) (Lab)
The Minister for International Trade (Nigel Huddleston)
The UK’s position on settlements is clear: they are illegal under international law, present an obstacle to peace and threaten the physical viability of a two-state solution, as set out in the UN Security Council resolution 2334 and restated recently by the UNSC presidential statement in February 2023. We repeatedly call on Israel to abide by its obligations under international law and have a regular dialogue with Israel on legal issues relating to the occupation.
Alan Brown
The Minister is clearly aware then that resolution 2334 states that countries must
“distinguish, in their relevant dealings, between the territory of the State of Israel and the territories occupied since 1967.”
I welcome his comments confirming that the Government’s belief is that the settlements are illegal under international law. How will the Government ensure that goods and services from these illegal settlements—in effect, stolen land—are excluded from the benefits of a free trade agreement?
Nigel Huddleston
Under our existing agreement, Israeli goods from the state of Israel receive tariff preferences under the UK-Israel partnership agreement. Palestinian goods, from the Occupied Palestinian Territories, benefit from trade preferences in the interim UK-Palestinian Authority bilateral agreement. To be clear, only goods originating from the state of Israel are covered by our current FTA, and that will not change in the upgraded FTA.
Andy McDonald
Last week, it was reported by The Jerusalem Post that Israel’s National Security Minister Ben-Gvir, who just 15 years ago was convicted of inciting racism and supporting a terrorist organisation, had told settlers in the illegal west bank outpost of Evyatar:
“The Land of Israel must be settled and at the same time as the settlement of the Land a military operation must be launched.”
He then spoke of demolitions and the killing of “thousands” of Palestinians, in order to “fulfil our great mission.” Will the Minister condemn those genocidal remarks about Palestinians, and ensure that any trade deal with Israel explicitly bans UK trade with those illegal settlements and makes binding regulations for companies to uphold human rights standards?
Nigel Huddleston
The hon. Gentleman will be aware that the UK is a leading advocate of human rights around the world. We have very frank conversations with our allies and we have frank and honest discussions across Government. In answer to the trade element of his question, as I said previously, only goods originating in the state of Israel are covered by our current FTA, and that will not change under the upgraded FTA.
Nadia Whittome
I welcome the Minister’s restatement of Government policy in his previous answer, but if the UK signs a trade deal without a territorial clause defining the border between Israel and Palestine, it will be seen in legal terms as equivalent to letting Israel decide by default to include its settlements in the Occupied Palestinian Territories as part of Israel. Is the Minister aware that that risks a situation where, in effect, the UK recognises illegal settlements in the west bank as part of Israel, which is counter to the Government’s stated policy?
Nigel Huddleston
I refer the hon. Lady to the answer I gave a moment ago, but I wish to reiterate that it is long-standing UK foreign policy that Israeli settlements beyond the 1967 boundaries are illegal.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)
The Minister for Industry and Economic Security (Ms Nusrat Ghani)
Having regained our regulatory sovereignty now that we have left the European Union, we are now able to ensure that our regulation is tailored to the UK economy, supports our businesses and protects our consumers. Having left the single market, we can focus on UK trade with the world, where total trade is up 24%, so the answer to his question is that the effect is that total trade is up.
Neale Hanvey
Resilient and effective routes to market are essential for trade. The congestion that is currently being experienced at Dover is a significant barrier to effective trade. We can add to that the HGV miles from Scotland to the south-east and the impact on the quantities carried, on perishables and on costs, never mind the environmental impact. Will the Minister meet me to discuss how we reintroduce direct links from Scotland to mainland Europe and ensure trade is friction-free from Scotland?
Ms Ghani
I do not think the hon. Member heard my answer: trade is up. The reality is that this scaremongering just has to stop. The scaremongering is basically a cover for petty nationalism, and I would ask him to be passionate about the market that matters, which is between Scotland and England.
Luke Hall (Thornbury and Yate) (Con)
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
I thank my hon. Friend for being the foremost parliamentary champion for this important cause. The Neonatal Care (Leave and Pay) Act 2023 will give eligible employed parents up to 12 weeks of extra paid leave if their new baby is admitted to neonatal care, providing extra support at a very worrying time. We are keen to introduce the new entitlements as quickly as possible.
Luke Hall
I thank the Minister for that answer and his Department for its work on delivering the Neonatal Care (Leave and Pay) Act. It is fantastic news for so many parents across the country. We all want to see this entitlement delivered as quickly as possible. It really should be possible for the Department to deliver it for April next year, as there is time to deliver the required statutory instruments and guidance. There are examples of where His Majesty’s Revenue and Customs has been able to move forward quickly to deliver such changes. Will the Minister update the House on his work to drive through this important change, so that parents do not have to wait a second longer than necessary for this entitlement, which will support them during the most difficult and dark times in their life?
Kevin Hollinrake
My hon. Friend is absolutely right to press us on this. We need to do this as quickly as possible and we are keen, as I have said, to do that. Similar work does require updating HMRC IT systems and parliamentary consideration is, of course, required for secondary legislation. There are seven pieces of secondary legislation, and support is needed for employers and payroll providers to implement the changes. We cannot introduce this mid-year; it has to be at the start of the year. I therefore think it very unlikely that we will be able to do that before April 2025.
Ian Levy (Blyth Valley) (Con)
The Secretary of State for Business and Trade (Kemi Badenoch)
I recently visited Williams Advanced Engineering, an excellent example of British engineers working at the cutting edge of battery technology, including on projects benefiting from the Faraday battery challenge. The Government’s £541 million Faraday battery challenge has supported more than 140 organisations working across the UK, attracting over £400 million in co-investment, and enabled 500 researchers across more than 25 universities to improve and develop battery technologies.
Ian Levy
We know that the United Kingdom needs more battery production facilities in order to achieve net zero and build an automotive industry that is fit for the future. On the Blyth estuary, we have the best site in the UK for high-volume battery manufacturing, with green power supplies, a deep-water port, and a talented and willing workforce. Does the Minister agree that it is vital that this Government grasp the opportunity and do all that they can to bring much-needed new green jobs to south-east Northumberland?
Kemi Badenoch
Yes, of course, I do agree with my hon. Friend. I know that Blyth has an excellent location for a gigafactory. I just want him to know, as he represents that constituency, that we continue to work closely with the local authority to secure the best outcome for that site.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Will the Secretary of State be slightly cautious about a battery-driven future? I recently visited JCB, which has developed a hydrogen combustion engine that is working well with heavy vehicles. Hydrogen is moving very fast indeed. Will she encourage the production of hydrogen and visit JCB just to see the really innovative work that it is doing? Will she stop the Transport Minister in the House of Lords dissing hydrogen as ineffective?
Kemi Badenoch
Far be it from me to stop our noble Friends in the other place from doing what they think is right. None the less, I do agree with the hon. Gentleman. My view is, let a thousand flowers bloom. Hydrogen is one of the viable ways of helping us to get to net zero, and the Government are looking at all possible options to make sure that we support the cutting-edge technology that will get us to our green transition.
Mr Philip Hollobone (Kettering) (Con)
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
The value of UK exports, measured in current prices, to the EU—including goods and services—was £247 billion in 2016, £298 billion in 2019, and £340 billion in 2022. The EU remains the UK’s largest export market, receiving 42% of UK exports in 2022.
Mr Hollobone
That is all very interesting, because, during the Brexit referendum, “Project Fear” told us that if we left the EU, millions of people would lose their jobs, our exports would collapse, and the economy would go into freefall. Here in 2023, with us outside the European Union, employment is at record highs and unemployment at record lows, the eurozone is in recession and we are not, and our exports to the EU are at record levels. Is it not now demonstrably true that we are always going to be better off out?
Kevin Hollinrake
As Churchill once said, the pessimist sees a crisis in every opportunity, but the optimist, which my hon. Friend is, sees an opportunity in every crisis. The UK’s total exports have recovered to pre-pandemic levels measured against 2018. In 2022 UK exports were £815 billion, up 21% in current prices and up 0.5% once adjusted for inflation. There is no doubt that UK exports are excelling and will continue to do so.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
The truth is that in the year stated, exports to the EU fell as a proportion of total trade. Last month it was not inflation that halved, but exports of fruit to the EU. The British Chambers of Commerce has reported that more small and medium-sized enterprises are seeing exports falling than rising, and Britain has the lowest export rates in the G7. When a business tells me that it used to take three days for its products to reach shelves in Germany and now it takes 30, is it not fair to conclude that the Government have failed on the economy, have no plan to make Brexit work and are making businesses pay the price?
Kevin Hollinrake
That backs up my comment on pessimism; the hon. Lady is cherry-picking the worst possible figures she can find. In my conversations this week at the OECD conference on SMEs, nations around the world were crying out to do business with the UK, and indeed are doing so. Of course we are trying to tackle market barriers where they exist. We are leading a whole-of-Government effort to remove a hit list of 100 market access barriers, including those arising in Europe, to open up opportunity to UK exporters worth more than £20 billion. The most recent statistics, for the year ending March 2023, show that 45 barriers were resolved in Europe in that year, compared with 41 in the previous year.
Amy Callaghan (East Dunbartonshire) (SNP)
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
On a similar theme to my previous answer, the UK’s total exports have recovered to pre-pandemic levels measured against 2018. In 2022, UK exports were £815 billion, up 21% in current prices and by 0.5% once adjusted for inflation.
Amy Callaghan
I thank the Minister for that answer. However, since the UK left the European Union its trade surplus with the rest of the world has declined from £46 billion to £5 billion. Was it this Government’s goal to wipe out the UK’s trade surplus when they committed to leaving the European Union?
Kevin Hollinrake
I say again that UK trade with the EU has recovered to pre-pandemic levels when measured in current prices, worth £772 billion in 2022, 14% higher in current prices than in 2018. We are making significant progress, not just with the European Union but with the rest of the world. We see our place in the world as being able to trade with the entire world, not just focusing entirely on the EU.
Jessica Morden (Newport East) (Lab)
The Minister for Industry and Economic Security (Ms Nusrat Ghani)
The Government are actively engaging with the steel industry for a sustainable future, and my right hon. Friend the Business Secretary recently visited Tata and British Steel to see work that is under way. Since 2020 the Government have provided some £35 million in direct funding to support steel producers, on top of the hundreds of millions of pounds in energy price relief for the sector since 2013.
Jessica Morden
I echo the earlier comments of my hon. Friend the Member for Aberavon (Stephen Kinnock) on the greater need for support to help our steel sector decarbonise. Steelworkers from my constituency rallied in Parliament Square yesterday, calling for the Government to support our steel sector, yet they will have heard the Prime Minister’s poor response to my hon. Friend the Member for Ogmore (Chris Elmore) at Prime Minister’s questions, when he merely referred to pre-existing packages of support and funding that was not exclusive to steel in the first place. When will the Government accept the scale of the challenge and commit to helping?
Ms Ghani
We accept the scale of the challenge; it is a global challenge to decarbonise the sector and many countries are feeling it. However, a potential £1 billion in support is not a small measure—it is a large measure. Dealing with the procurement process to ensure that we have UK contractors securing UK steel in their programmes of work is not a small task, nor is dealing with energy prices. We have provided more than £730 million. When the sector needs support and we know it is a valid use of taxpayers’ money, we have stepped in, such as with the more than £30 million in Government loans to Celsa Steel in 2020. That secured 1,800 jobs, and the money has been returned to the taxpayer. We are more than happy to work with the hon. Lady and all Members who have steel firms in their constituencies, but we are going to provide steady support for the long term.
Mrs Sheryll Murray (South East Cornwall) (Con)
The Minister for Industry and Economic Security (Ms Nusrat Ghani)
We are targeting a global hit list of barriers whose removal will deliver massive new opportunities for UK businesses throughout the country, including in Cornwall. It is estimated that that will be worth more than £20 billion over five years. The Government are working to open up new markets, including for Cornish farmers. British lamb is now being exported to America for the first time in over 20 years, and British beef is being sent to the Philippines.
Mrs Murray
Many of the businesses in my constituency pay an additional tax by way of a toll to cross the Tamar, which can run into many thousands of pounds for them. What representations has the Department made to the Department for Transport to have that additional tax, which can make it harder to compete with firms in the rest of the UK, removed?
Ms Ghani
I thank my hon. Friend for bringing that to my attention. She is such a powerful voice for Cornwall. I am surprised that the Department for Transport has not yet buckled, because I know what a champion she is for her constituency and the region. I will ask my team to engage on this matter with their counterparts at the DFT and the Department for Levelling Up, Housing and Communities. I know that she will not stop until she gets what she deserves for her constituents, so I am more than happy to give the strength to her elbow.
Dr Luke Evans (Bosworth) (Con)
The Secretary of State for Business and Trade (Kemi Badenoch)
We have secured trade deals with 70 countries, including the EU, since 2019—partners that accounted for £1.1 trillion of UK bilateral trade in 2022. As I mentioned earlier, in March we concluded negotiations with the comprehensive and progressive agreement for trans-Pacific partnership, the UK’s biggest trade deal since Brexit. In addition, we have signed five new comprehensive trade deals tailored to the UK—those with Japan, Australia and New Zealand; a groundbreaking digital economy agreement with Singapore, and a digital trade agreement with Ukraine—as well as the programme of 63 non-EU continuity agreements.
Dr Evans
The post-Brexit developing countries trading scheme, which was alluded to in earlier questions, covers 65 developing countries and 3.3 billion people. Will my right hon. Friend spell out exactly what the benefits are for businesses and consumers in Hinckley and Bosworth, and the UK, and can she confirm that that is a more generous scheme than the EU scheme that we left?
Kemi Badenoch
I can confirm that our offer is now more generous than what the EU offers in terms of market access—for example, we allow the least developed countries to source raw materials from other markets and still import goods tariff-free. Overall, my hon. Friend’s constituents will be pleased to know that the trade preferences in the developing countries trading scheme reduce import costs by more than £770 million a year. That is key because it helps to reduce prices and increase choice for UK businesses and consumers, and to tackle inflation, particularly for the highest-sold items such as clothes and food.
Jeff Smith (Manchester, Withington) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
Europe remains a vital export destination for British businesses, with exports of £401 billion in 2022, an increase of 26% on the previous year in current prices. Only this week, I attended the OECD small and medium-sized enterprise conference, which dealt largely with international barriers to trade. We are determined to remove market barriers to make it easier, particularly for SMEs, to trade across borders.
Jeff Smith
On the subject of barriers to trade, not only is our world-leading cultural sector valuable in itself for our soft power, but it is an important part of our export trade. But our musicians face unnecessary red tape when trying to tour Europe. We need an EU-wide visa waiver for touring artists. The Secretary of State said earlier that her Department “works closely with musicians”, so what is it actually doing to resolve this problem?
Kevin Hollinrake
I know that my colleagues at the Department for Culture, Media and Sport are working hard with our European counterparts to try to ease the difficulties in that area—we recognise it as a problem. Many positive things are happening in current trade with the EU. Indeed, in 2022, the north-west—the hon. Gentleman’s region—exported £33 billion-worth of goods and £24.5 billion-worth of services, which is the area he is referring to. The north-west is the third largest area in the country for services exported to the EU.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
The Secretary of State for Business and Trade (Kemi Badenoch)
As part of the Atlantic declaration, we launched negotiations on a critical minerals agreement with the US, which will secure market access for a strategically important sector of the UK economy. My Department has secured tariff-free imports of UK steel and aluminium into the US, supporting 80,000 jobs in UK supply chains. We have removed the 25-year US ban on UK lamb, opening the market to 300 million US customers, and have signed five trade and economic development memorandums of understanding with individual US states, which imported £4.6 billion-worth of goods from the UK in 2022, most recently last week with Utah.
Mr Dhesi
In their 2019 election manifesto, the Conservatives declared to the British people:
“Our goals for British trade are… ambitious. We aim to have 80 per cent of UK trade covered by free trade agreements within the next three years, starting with the USA”.
However, there has been abject failure, with a free trade agreement nowhere in sight, and instead of coming clean on their incompetence, laughingly, Tories are now lining up to blame the Biden Administration for the lack of progress. Will the Secretary of State concede that the Government’s failure to negotiate an FTA with the USA has potentially locked out British businesses from vital new markets created by the US Inflation Reduction Act?
Kemi Badenoch
I am afraid that is not the case at all. If the hon. Gentleman looks at the detail of the Atlantic declaration, he will see that we are co-operating very closely with the US. On his point about our 2019 manifesto, we did say that that was what we were going to do, because the Administration at the time were willing. This Administration are not. It has nothing to do with the UK. They are not negotiating any FTAs with any countries. That is what the US trade representative has said to me in many meetings, and they have said that to EU counterparts.
If what the hon. Gentleman suggests is true, he is basically saying that every Government should be bound by their predecessor, in which case, should anything happen, he is saying that he agrees with everything this Government are doing and nothing should change. What we have negotiated with the Atlantic declaration is a success, and he should be praising this Government for achieving something so monumental.
Sir Conor Burns (Bournemouth West) (Con)
I draw the House’s attention to my interest as the Prime Minister’s trade envoy to the United States for regional trade and investment. Our programme of MOUs with states in the United States is a major driver of improving market access and trade between the UK and the US. As I embark on a visit to Florida to advance our objectives there, will my right hon. Friend use this opportunity to reaffirm not just that we want to enter into multiple MOUs with states in the United States, but that we want British businesses to step up to the opportunities they create and we want to create the mechanisms to allow business-to-business delivery?
Kemi Badenoch
Absolutely, I can affirm that. My right hon. Friend makes a very good point about the MOUs. The Opposition would like to present a false story about us not getting along with our US counterparts. The fact that so many states, knowing that their Federal Government are not negotiating an FTA, have decided to step up and negotiate MOUs with us shows that this country is still attracting a large amount of investment and co-operation from our international partners. We want British businesses to be able to take part in that, and we are doing everything we can to help them use the MOUs.
Nadia Whittome (Nottingham East) (Lab)
The Secretary of State for Business and Trade (Kemi Badenoch)
Last week, I was pleased to lead discussions with international partners and businesses at the Ukraine recovery conference and welcomed the Prime Minister of Ukraine and First Deputy Prime Minister to Mansion House, alongside over 150 companies, showcasing how UK companies in our private sector can use their ingenuity and expertise to support the reconstruction of Ukraine.
I was very proud to announce that the UK Government have backed a £26.3 million equivalent loan, which is an unprecedented transaction; the Business Bridge Ukraine platform, matching Ukrainian businesses with complementary partners; the UK-Ukraine tech bridge, to bring together UK and Ukrainian tech businesses to harness opportunities for innovation and collaboration; and the London conference framework on war risk insurance.
Nadia Whittome
Recent research by a former chief competition economist to the European Commission—shared with me by Unite the union—estimates that average UK mobile phone bills could rise by up to £300 a year in the case of a merger between Three and Vodafone. Is the Secretary of State aware of that risk, and will her Department be taking any action to prevent such a merger, which would be disastrous for competition in the mobile network operator sector?
Kemi Badenoch
The hon. Lady will know that we have an independent regulator, the Competition and Markets Authority, which would look at cases such as the one she raises and make a call on whether it would be harmful or beneficial to the UK economy. I trust the CMA—it has been doing a good job so far—and I look forward to seeing its read-outs on forthcoming mergers and proposals by large businesses in our country.
Mr Laurence Robertson (Tewkesbury) (Con)
The Minister for International Trade (Nigel Huddleston)
The UK is absolutely committed to enhancing trade with Morocco. In 2022 we did about £3.1 billion-worth of bilateral trade—up nearly 50% on 2021—and we are using our association agreement with Morocco to boost that even further. In February I visited Morocco and met my counterpart to discuss how we can maximise trade, including by tackling barriers in priority areas such as education, renewable energy and infrastructure. We are also supporting British businesses to take advantage of the significant opportunities in Morocco, including through £4.5 billion of available finance through the excellent UK Export Finance.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
It is now over 12 months since the audit reform Bill was promised in what was then the Queen’s Speech, and it is over two years since the Business Department’s final consultation on these matters closed. There is widespread agreement on the need for reform, which began following the devastating collapse of Carillion five years ago, yet the draft Bill has not even been published, despite Parliament regularly rising early due to the Government’s light agenda. Does the Secretary of State support reform, and does she accept the recommendations of the Kingman review, the Brydon review and the CMA market study? If she does, when will we finally see some action?
Mr Speaker
Can I say to the Front Benchers that a lot of Members are standing? These are topical questions, which are meant to be short. If you want a long question, come in early, please. Help me to help our Back Benchers.
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
We do support reform and are keen to take forward primary legislation when parliamentary time allows. In the meantime, there are measures that we can take through secondary legislation, which we are taking forward. We are also looking to take forward insolvency reform, which is something else that we committed to do.
Greg Smith (Buckingham) (Con)
Nigel Huddleston
Through our road map, the UK and Israel reaffirmed the historical significance of the Abraham accords—which have the potential to bring about advancements to security, co-existence, peace and prosperity for the region—and our commitment to work together to deepen and expand those developments, building on the progress of the Negev summit in March 2022. Through the Britain-Israeli investment group, we will also combine UK and Israeli expertise to help solve regional technology and sustainability issues right across the world.
Richard Thomson (Gordon) (SNP)
This week, the European Council adopted the EU’s free trade agreement with New Zealand, which includes dedicated sustainable food systems chapters, a dedicated trade and gender equality article, and a provision on trade and fossil fuel subsidies reforms. Can the Secretary of State explain why our trade deal with New Zealand, if it is so good, fell so far short on those issues?
Kemi Badenoch
I think the hon. Gentleman will find that, actually, the trade deal we negotiated with New Zealand makes things cheaper for our consumers, not more expensive, it is less protectionist and it is helping to improve relations between us and New Zealand. I disagree with his assessment of the EU-New Zealand free trade agreement: we looked at it and were actually quite pleased with what we got.
Siobhan Baillie (Stroud) (Con)
I am concerned that the UK is being left behind on hydrogen internal combustion engines. The EU and the USA are now recognising hydrogen combustion engines as zero emission, but the UK is refusing, which means that the automotive transformation fund for industrialising the technology is not available. I am working with brilliant companies such as BorgWarner in Stonehouse and the Renewable Hydrogen Alliance to raise this issue. I have spoken to the Secretary of State for Transport and I am raising it with the Prime Minister; I hope that my right hon. Friend the Secretary of State for Business and Trade will use her brilliant brains on this matter too.
The Minister for Industry and Economic Security (Ms Nusrat Ghani)
I hope that my hon. Friend will allow me to use my brain to help unlock this with the Department for Transport. We have the automotive transformation fund and the Advanced Propulsion Centre, so we are doing a huge amount of work in this space to ensure that we are not only on the cutting edge of electric zero-emission vehicles, but looking at what the opportunities are for hydrogen. We do not want to be left behind anywhere in this space, but we do need to align ourselves with the rest of our Departments, and I will do so.
Marion Fellows (Motherwell and Wishaw) (SNP)
Nigel Huddleston
It should be transparently clear that the UK is conducting trade deals that are in the UK’s economic interests. That is the criterion: we would not do them if they were not in the UK’s interests. We are therefore working really hard, with a particular focus on opportunities for SMEs to trade not only with the EU but right around the world, where there are immense opportunities for further trade. We will continue to pursue opportunities in south Asia, Africa and South America—all over the world—where we have not taken full advantage of those opportunities. This will benefit many SMEs, including food and beverage producers, in the long term.
Richard Graham (Gloucester) (Con)
Over a third of the value of every Airbus sold in the world comes from the United Kingdom’s aerospace manufacturing—whether it is wings, engines, landing gear or other avionics—but all of the Airbus sales are recorded in international statistics as exports from France because the final take-off is from Toulouse. What can the Department do to try to make sure that the value of these exports, especially to the fast-growing Asia-Pacific region, is recognised as being partly from the UK?
Ms Ghani
This is a great opportunity to talk about Airbus’s 500-plane deal with Indian airline IndiGo. It is the largest aviation deal in history, and it has been done on our watch. We are providing the certainty that businesses need in order to go out and confidently secure such contracts. A lot of the jobs will be in the UK, but I will take away what my hon. Friend said, because we want to be able to show precisely the level of investment in the UK and the number of jobs that are created by this deal.
Mr Speaker
Order. I remind Ministers that they should be speaking to me, not to the Back Benches.
Chris Stephens (Glasgow South West) (SNP)
Kevin Hollinrake
We are taking forward a number of reforms, as the hon. Member is aware. There is a private Member’s Bill, the Employment Relations (Flexible Working) Bill, which includes a day-one right to request flexible working, as well as the right to request predictable terms and conditions, which is one of the recommendations of the Taylor review. I think he should welcome those kinds of measures.
Mr Philip Hollobone (Kettering) (Con)
Kettering is the beating heart of the east midlands economy, especially in bespoke gentlemen’s footwear, with superb firms such as Loake, Cheaney, and Gaziano & Girling. Will the Government confirm that their free trade agreements and their efforts to reduce international trade barriers will help the local shoe industry in Kettering get on the front foot and take great strides forward?
Kevin Hollinrake
I was delighted to attend my hon. Friend’s business conference in north Northamptonshire. As part of that, we passed the Loake shop in Kettering, which is a world leader in shoes—in fact, I am wearing a pair today—and he offered to try to get me a pair at a discounted price, which I very much look forward to. There are great export opportunities through that.
Darren Jones (Bristol North West) (Lab)
Last year it was the energy companies; this year it is the water companies. The sectors have changed but the taxpayers are still on the hook. So will the Secretary of State commit to undertaking a review of the financial resilience of all companies in each regulated sector and to present her findings to the House?
Kemi Badenoch
The hon. Gentleman raises a very good point. He is right that we need to make sure there is resilience across the sector, and I think our regulators are best placed to do that. They are carrying out a number of reviews at the moment, and I and colleagues across Government are working closely with them.
Patrick Grady (Glasgow North) (SNP)
The Secretary of State earlier told my hon. Friend the Member for Gordon (Richard Thomson) that she did not accept that Brexit was having a negative impact on the Scottish seafood industry. It is a bit like saying she does not accept that the earth is round—although, admittedly, sometimes people on her Back Benches need to be persuaded of that. If she does not think that Brexit is having a negative impact on the Scottish seafood industry, does she think it has been positive, or does she think there has not been any change at all?
Kemi Badenoch
The hon. Gentleman is entitled to his opinion, as I am entitled to mine. He has done absolutely nothing except try to re-litigate Brexit over and over again. The fact is that we are not going back into the EU. We are using our independent trade policy, negotiating with countries around the world and delivering more for the UK as well as for Scotland. Scottish businesses are happy with what we are doing, and in particular they are happy that the grown-ups in Westminster have stopped them making the catastrophic decisions that are destroying the internal market.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Is the Secretary of State aware of just how much influence the Chinese Government and Chinese companies have on our economy? Is she aware that many times I have asked for an audit of how big that influence is? Does she share the concern of many businesses in our country that the Chinese Government are using subterfuge and espionage to further their interests?
Kemi Badenoch
I do not think we need an audit. China is our fourth largest export market, and we are aware of the economic challenge that it poses across the world. We work with countries across the world, but we have a pragmatic relationship with China. We need to use our influence to help them get to a better place, but I take the hon. Gentleman’s point.
Tim Farron (Westmorland and Lonsdale) (LD)
How does it help UK Steel to decarbonise, or help the UK to reclaim its position of global leadership in reducing climate emissions, to support the opening of a sure-to-be-doomed new coalmine in west Cumbria?
Ms Ghani
I do not think the hon. Gentleman has ever had a positive story to tell about his region, let alone his constituency. We have a positive story on steel, and we have the same challenges as most countries in trying to deal with decarbonisation. We have issues around energy costs that we have been providing all our advanced manufacturing sectors with, and we want to ensure that we diversify our access to different forms of energy.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Going back to Brexit, can the Secretary of State name one Scottish sheep farmer who is happy with the Brexit deal, or any seafood producers and exporters that she spoke to who are happy with Brexit? Can she name any Scottish farming sectors that are happy with Brexit?
Kemi Badenoch
It is not my job to memorise names of Scottish businesses, and just as I said in response to a previous question, SNP Members are not serious. Perhaps if they stood up and actually represented their businesses in trying to make use of all the opportunities we have, they would be in a better place.
Jim Shannon (Strangford) (DUP)
When it comes to increasing trade with African countries, what steps are being taken to ensure that increased trade is carried out with companies that take human rights seriously and are ethically aware in the treatment of their workers?
Nigel Huddleston
We are an advocate around the world for human rights. That is something that the Government take seriously and discuss across Government, including with trading partners with whom, as I said, we can have frank conversations. Through other bodies and institutions, including the work done by the Commonwealth, we continue to have those frank conversations.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)
On a point of order, Mr Speaker. During Question Time this morning, the Minister for Industry and Economic Security, the hon. Member for Wealden (Ms Ghani), appears to have been confused about the nature of oral questions. I asked a supplementary question, which was ostensibly a polite request to meet the Minister to discuss matters of importance to my constituents. In her response, she chose to use a pejorative insult—clearly intended to be an insult—and that does not reflect well on the Government. I am a Member of this Parliament, just as any other Member, and I deserve to be able to ask questions about the interests of my constituency without that kind of harassment. She accused me of nationalism, but I suggest that the only nationalism on display is from those Benches—
Mr Speaker
Order. I do not know whether the Minister wants to respond.
Mr Speaker
If not, there was nothing disorderly, and I cannot continue the debate. What I can say is that the hon. Member has certainly put his view on the record.