Exports: Africa and the Commonwealth

Lord Popat Excerpts

Monday 27th November 2017 Lords Chamber

Asked by

[Lord Popat]

To ask Her Majesty’s Government what progress they are making in increasing the export of goods and services to Africa and the Commonwealth.

[Lord Popat (Con)]

My Lords, it is a privilege to open today’s debate on what is my biggest political passion and a subject of great importance. I am grateful to all noble Lords who are bringing their expertise and opinions to today’s debate, and on behalf of all of us I welcome my noble friend Lady Fairhead to the Front Bench. She brings with her decades of private sector experience, as well as a background as a business ambassador for the then UKTI and her time at the BBC. She is a very welcome addition to our ministerial team, and I have no doubt that she will rise to the challenge of making her maiden speech today while responding for the first time to a debate as a Minister.

Before I delve into the economic potential of Africa and the Commonwealth, I will briefly explain why this debate is so important. Britain has run a balance of payments deficit for decades. Quite simply, we do not export enough to pay for our imports. This is neither desirable nor sustainable, yet it receives very little attention or coverage outside of your Lordships’ House. Last year, Britain voted to leave the European Union. While I supported remaining at the time, I have come to see that decision as an invaluable moment for our country; it has, I hope, allowed us to wake up and reassess many aspects of our economic set-up, including how pitiful we have become at exporting, especially exporting outside the European Union. Our EU membership has resulted in a form of paralysis; far from making us free-trading global entrepreneurs, it has—with a few exceptions—made our businesses insular, complacent and risk-averse.

Possibly the greatest victim of our insular approach has been the great continent of Africa. Only a few decades ago, Britain could boast of having 25% of total trade with Africa; now it is barely 4%. It continues even now, as we sit idly by, as our leading brands like British Airways and Barclays Bank depart Africa to focus elsewhere. We often speak of emerging markets in this House, and given that I was born in Uganda I may be biased, but I believe that Africa is the emerging continent. Democracy is becoming more firmly established across the continent; six of the 10 fastest-growing economies in the world are there; it has some of the most innovative and largest cities, 52 of which now have a population of over 1 million; and Africa is home to a third of the world’s natural resources.

Africa is a continent with a wonderfully bright future, yet we hear so little of that in Britain. Perhaps we have some form of post-colonial guilt that prevents us seeing the rising success in Africa, or perhaps the images of Band Aid are still too prevalent in our minds. Whatever the reason, not only are we failing to recognise the amazing improvements that have helped Africa develop, but we are also failing to wake up to the commercial opportunities that are there for British firms.

Last week, I led a delegation of 16 businesses in the oil and gas sector to Uganda. Two of the British companies, Fluor and CB&I, have been shortlisted to build a major oil pipeline to the value of just over $2 billion. This week, the Ugandan Parliament will approve a loan of £315 million for a British company, Colas Ltd, to build an international airport in Uganda. This is the largest UK Export Finance loan to Africa. Those examples show the tremendous opportunities there are in Africa if only we spread our wings.

I should now like to touch briefly on the Commonwealth. Again, it is clear to me in hindsight that our membership of the European Union was detrimental to the Commonwealth. This amazing group of nations that has been so brilliantly led and held together by Her Majesty the Queen has not been a central part of our foreign policy for decades. Similarly, the Commonwealth itself has lacked a real purpose. Perhaps it is difficult for those born in this country to understand quite how powerful the Commonwealth is. The sense of identity that it gives those of us born in other member nations and the strength of the ties that bind us together are things that perhaps only others can appreciate. However, the Commonwealth remains a vital part of Britain’s soft power. As my noble friend Lord Howell has often said, the Commonwealth is our family.

These unique nations are getting together in London next year for a Commonwealth Heads of Government Meeting. Our Prime Minister has spoken of Britain becoming a leading advocate for free trade, and I urge the Government and the Commonwealth Secretariat to take their lead from her comments and to put trade at the heart of next year’s proceedings. It is the one subject in which all the nations have an interest and a desire to see improvements. Another summit that revolves around human rights or the Commonwealth charter will, predictably, end up in disagreement, so let us try a different approach and make the Commonwealth of the 21st century the champion of trade. I am pleased to say that my noble friend Lord Marland made a great start earlier this year by leading a brilliant initiative—the Commonwealth Trade Ministers’ meeting. I hope that he will continue that momentum during the CHOGM meeting.

I will come in a moment to a few suggestions on what we need to do to increase our exports to Africa and the Commonwealth, but I want to make one additional Brexit-related comment. As I intimated earlier, I believe that Brexit is an opportunity to remould our economic make-up into something more global, export orientated and, ultimately, more prosperous. Making a success of Brexit is as much about realising where we have been going wrong for the past 30 years and acting on those realisations as it is about maintaining the bits of EU membership that we liked. However, there is an additional reason why I think that today’s debate is timely and it is a factor that I do not think has previously been present—namely, the political will to make Britain a nation of global entrepreneurs again. We need to put more energy into making this happen.

Previous Governments have been happy to let our global ties slip in favour of a more European and domestic-focused economy, yet this current Government seem to grasp the argument that I, and many others, have been making—that the real economic prosperity is elsewhere. The creation of the Department for International Trade is perhaps the best political decision taken in this country in decades. It is a clarion call that demands action and an acknowledgement that we need to be better at creating the right conditions and relationships to foster trade. Similarly, the appointment of trade envoys to a diverse range of markets is very welcome. Those things, together with the huge increase in support for UK Export Finance that the Chancellor set out last year, all point towards a Government who realise that we need to get back in the game.

In the brief time that I have remaining, I would like to set out a few areas where I feel that the Government need to act to improve our competitive strengths in the world market. First, we need a national mission to encourage more businesses, particularly our SMEs, to export more. We cannot rely on those companies that already export to send more abroad; we need new exporters and lots of them.

Secondly, we need to build the infrastructure so that we can deliver our goods to foreign markets. Our aviation policy is the first place to start. It is a national embarrassment that we still have no additional runways at Heathrow or Gatwick. How can we build links with emerging markets in Africa if we cannot even arrange direct flights from our capital city?

Thirdly, to help us meet this huge appetite for new infrastructure investment in the Commonwealth, I would like to propose what I have mentioned in your Lordships’ House before: the introduction of a Commonwealth bank that would demonstrate our commitment to our family, showing that Britain is still an outward-looking trading nation. We already have a World Bank and a European bank, so why not a Commonwealth bank—something like the Asian Infrastructure Investment Bank, of which Britain is a founding member? Will the Minister commit to exploring the idea before next year’s Commonwealth Heads of Government Meeting?

Finally, we need a commitment from all the main political parties to make exporting a central part of their time in government. At the moment, we are lucky to have an outstanding Secretary of State for International Trade, Dr Liam Fox, in post, who has an evangelical belief in the power and importance of trade, but too few politicians share his zeal and we cannot risk the good work of one Government or Minister being undermined by their replacements.

I end by saying that this debate speaks to the greatest challenge of our age and to what kind of country post-Brexit Britain will be. I look forward to hearing noble Lords’ contributions and, of course, the Minister’s maiden speech.