UK Export Finance: Ukraine
Anne-Marie Trevelyan Excerpts(2 years, 4 months ago)
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The Secretary of State for International Trade (Anne-Marie Trevelyan)
The UK enjoys a strong relationship with Ukraine and is committed to supporting its security and economic prosperity. UK Export Finance (UKEF) has recently committed most of its market risk appetite for Ukraine to support a programme led by UK suppliers to upgrade the country’s naval capability. To ensure that UKEF can continue to support UK exporters to assist Ukraine with improvements to its national infrastructure, and in line with wider HM Government objectives, the Government have concluded that it is in the national interest to increase UKEF’s market risk appetite for Ukraine to £3.5 billion and have instructed UKEF to make appropriate arrangements. This will leave around £1.2 billion available for UKEF to support further priority projects, supporting skilled UK jobs and enabling additional UK exports to Ukraine.
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Export Control Regime
Anne-Marie Trevelyan Excerpts(2 years, 4 months ago)
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The Secretary of State for International Trade (Anne-Marie Trevelyan)
HM Government are committed to a robust and transparent export control regime for military, dual-use and other sensitive goods and technologies. The purpose of these controls is to promote global security and facilitate responsible exports. They help ensure that goods exported from the United Kingdom do not contribute to the proliferation of weapons of mass destruction (WMD) or a destabilising accumulation of conventional weapons. They protect the United Kingdom’s security and our expertise by restricting who has access to sensitive technologies and capabilities. Export controls also help ensure that controlled items are not used for internal repression or in the commission of serious violations of international humanitarian law. They are one of the means by which we implement a range of international legal commitments, including the arms trade treaty.
The controls also support the UK’s defence and security industry. The legitimate international trade in military equipment and technology, as well as in dual-use items, enables Governments to protect ordinary citizens, to preserve law and order against terrorists and criminals, and to defend against external threats. The Government therefore remain committed to supporting the UK’s defence and security industry and to promoting the legitimate trade in items controlled for strategic reasons.
We keep our controls under regular review to ensure that they continue to properly address the threats we face, keep pace with new technologies, and adapt to changing circumstances such as our exit from the EU, while providing an efficient service which does not impose an unworkable administrative burden on the defence and security industry.
That is why today I am announcing a package of measures to update the export control regime.
First, I am laying before Parliament a revised version of the licensing criteria for strategic export controls, to be known as the strategic export licensing criteria, as set out at the end of this statement.
These criteria will be applied with immediate effect to all licence decisions—including decisions on appeals—for export, transfer, trade (brokering) and transit/transhipment of goods, software and technology subject to control for strategic reasons—referred to collectively as “items”; and to the extent that the following activities are subject to control, the provision of technical assistance or other services related to those items. Certain of the criteria may also be applied to MOD Form 680 applications alongside other considerations and assessment of proposals to gift controlled equipment to other nations’ Governments.
As before, they will not be applied mechanistically but on a case-by-case basis, taking into account all relevant information available at the time the licence application is assessed. While the Government recognise that there are situations where transfers must not take place, as set out in the following criteria, we will not refuse a licence on the grounds of a purely theoretical risk of a breach of one or more of those criteria. In making licensing decisions, I will continue to take into account advice received from FCDO, MoD and other Government Departments and agencies as appropriate.
The application of these criteria will be without prejudice to the application to specific cases of specific measures, as may be announced to Parliament from time to time. This statement does not impact upon existing specific measures which remain extant until revoked.
Secondly, the Government will be taking steps to enhance the military end-use control. Currently, the control can only be applied to the export of otherwise non-controlled items which are intended for use as components in, or production equipment for, military equipment in an embargoed destination. This does not allow us to fully address threats to national security, international peace and security, and human rights arising from the use of non-listed items by the military, police or security forces, or entities acting on their behalf, in an embargoed destination.
We will therefore be amending the definition of “military end-use” to remove this limitation. The control would only be applied where the Government inform the exporter that the proposed export is or may be intended for a military end-use in an embargoed destination. To minimise the impact on legitimate trade, there will be exemptions for medical supplies and equipment, food, clothing and other consumer goods.
The review also concluded that there were anomalies and inconsistencies within the UK’s export control regime. As a result of this review, China will be added to the list of those destinations subject to military end-use controls.
Taken together, these changes will also strengthen our ability to prevent exports that might be used directly or indirectly to facilitate human rights violations in all destinations subject to military end-use controls. It also completes the export control review announced to Parliament on 12 January 2021 by the then Foreign Secretary.
Both of these changes concerning military end-use controls require amendments to the Export Control Order 2008. We intend to lay the secondary legislation to implement these changes in the spring of 2022.
The Strategic Export Licensing Criteria
This statement of the criteria is guidance given under section 9 of the Export Control Act 2002. It replaces the consolidated EU and national arms export licensing criteria announced to Parliament on 25 March 2014.
Criterion One
Respect for the UK’s international obligations and relevant commitments, in particular sanctions adopted by the UN Security Council, agreements on non-proliferation and other subjects, as well as other international obligations.
The Government will not grant a licence if to do so would be inconsistent with, inter alia:
the UK’s obligations and its commitments to enforce United Nations and organisation for security and co-operation in Europe (OSCE) sanctions, as well as national sanctions observed by the UK and other relevant commitments regarding the application of strategic export controls;
the UK’s obligations under the United Nations Arms Trade Treaty;
the UK’s obligations under the Nuclear Non-Proliferation Treaty, the Biological and Toxin Weapons Convention and the Chemical Weapons Convention;
the UK’s obligations under the United Nations Convention on Certain Conventional Weapons, the Convention on Cluster Munitions (the Oslo convention), the Cluster Munitions (Prohibitions) Act 2010, and the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on their Destruction (the Ottawa convention) and the Land Mines Act 1998;
the UK’s commitments in the framework of the Australia Group, the Missile Technology Control Regime, the Zangger Committee, the Nuclear Suppliers Group, and the Wassenaar Arrangement;
the OSCE principles governing conventional arms transfers.
Criterion Two
Respect for human rights and fundamental freedoms in the country of final destination as well as respect by that country for international humanitarian law.
Having assessed the recipient country’s attitude towards relevant principles established by international human rights instruments, the Government will:
Not grant a licence if they determine there is a clear risk that the items might be used to commit or facilitate internal repression;
Internal repression includes, inter alia, torture and other cruel, inhuman and degrading treatment or punishment; summary or arbitrary executions; disappearances; arbitrary detentions; and other serious violations of human rights and fundamental freedoms as set out in relevant international human rights instruments, including the universal declaration on human rights and the international covenant on civil and political rights.
For these purposes, items which might be used for internal repression will include, inter alia, items where there is evidence of the use of these or similar items for internal repression by the proposed end-user, or where there is reason to believe that the items will be diverted from their stated end-use or end-user and used for internal repression. The nature of the items to be transferred will be considered carefully, particularly if they are intended for internal security purposes.
Exercise special caution and vigilance in granting licences, on a case-by-case basis and taking account of the nature of the equipment, to countries where serious violations of human rights have been established by the competent bodies of the UN or the Council of Europe.
Having assessed the recipient country’s attitude towards relevant principles established by instruments of international humanitarian law, the Government will:
Not grant a licence if they determine there is a clear risk that the items might be used to commit or facilitate a serious violation of international humanitarian law.
In considering the risk that items might be used to commit or facilitate internal repression, or to commit or facilitate a serious violation of international humanitarian law, the Government will also take account of the risk that the items might be used to commit or facilitate gender-based violence or serious acts of violence against women or children.
Criterion Three
Preservation of internal peace and security
The Government will not grant a licence if, having assessed the potential that the items would either contribute to or undermine internal peace and security, they determine there is a clear risk that the items would, overall, undermine internal peace and security.
When assessing the potential that the items would contribute to or undermine internal peace and security, the Government will take into account, inter alia and where relevant:
Whether the grant of the licence would provoke or prolong armed conflicts;
Whether the items are likely to be used other than for the legitimate national security or defence of the recipient;
Whether the items would be likely to cause, avert, increase or decrease conflict or instability in the country of final destination, taking into account (inter alia):
the balance of forces between states or actors concerned;
the potential for the equipment to have a significant impact on the effectiveness of existing capabilities or force projection;
humanitarian purposes or impacts;
the nature of the conflict, including the conduct of all states or actors involved, and any involvement by the UK and allied states;
border stability and legitimate national security interests of the recipient.
Whether the items might be used to commit or facilitate gender-based violence or serious acts of violence against women or children.
Criterion Four
Preservation of peace and security
The Government will not grant a licence if, having assessed the potential that the items would either contribute to or undermine peace and security, they determine there is a clear risk that the items would, overall, undermine peace and security.
When assessing the potential that the items would contribute to or undermine peace and security, the Government will take into account, inter alia and where relevant:
The existence or likelihood of armed conflict in which the recipient would take part;
Whether the recipient has in the past tried or threatened to pursue, by means of force, a claim against the territory of another country;
The likelihood that the items would be used in the territory of another country other than for legitimate purposes including national or collective self-defence;
Whether the items would be likely to cause, avert, increase or decrease conflict or instability in the region, taking into account (inter alia):
the balance of forces between the states or actors in the region concerned;
their approach to expenditure on defence;
the potential for the equipment to have a significant impact on the effectiveness of existing capabilities or force projection;
humanitarian purposes or impacts;
the nature of the conflict, including the conduct of all states or actors involved, and any involvement by the UK and allied states;
border stability and legitimate national security interests of the recipient.
Whether the items might be used to commit or facilitate gender-based violence or serious acts of violence against women or children.
Criterion Five
The national security of the UK and territories whose external relations are the UK’s responsibility, as well as that of friendly and allied countries.
The Government will take into account:
the risk of the items undermining or damaging the UK’s national security or those of other territories and countries as described above;
the risk of the items being used against UK forces or against those of other territories and countries as described above;
the need to protect classified information and capabilities.
Criterion Six
The behaviour of the buyer country with regard to the international community, as regards in particular its attitude to terrorism and transnational organised crime, the nature of its alliances and respect for international law.
Having assessed the potential that the items could be used to commit or facilitate an act constituting an offence under international conventions or protocols to which the UK is a party relating to terrorism or transnational organised crime, the Government will not grant a licence if it determines there is a clear risk that the items could be used to commit or facilitate such an act.
In making this assessment, the Government will also take account of the risk that the items might be used to commit or facilitate gender-based violence or serious acts of violence against women or children.
The Government will also take into account, inter alia, the record of the buyer country with regard to:
its compliance with relevant international obligations, in particular on the non-use of force, including under international humanitarian law applicable to international and non-international conflicts;
its commitment to non-proliferation and other areas of arms control and disarmament, in particular the signature, ratification and implementation of relevant arms control and disarmament instruments referred to in Criterion One.
Criterion Seven
The existence of a risk that the items will be diverted to an undesirable end-user or for an undesirable end-use
In assessing the risk that the items might be diverted to an undesirable end-user or for an undesirable end-use, the Government will take into account:
the legitimate defence and domestic security interests of the recipient country, including any involvement in United Nations or other humanitarian or peace-keeping activity;
the technical capability of the recipient country to use the items;
the capability of the recipient country to exert effective export controls;
the risk of re-export to undesirable destinations;
the risk of diversion to terrorist organisations, individual terrorists or to transnational organised crime;
the risk of reverse engineering or unintended technology transfer;
the risk of an undesirable end-use either by the stated end-user or another party.
Criterion Eight
The compatibility of the transfer with the technical and economic capacity of the recipient country, taking into account the desirability that states should achieve their legitimate needs of security and defence with the least diversion for armaments of human and economic resources.
The Government will take into account, in the light of information from relevant sources such as United Nations Development Programme, World Bank, IMF and Organisation for Economic Co-operation and Development reports, whether the proposed transfer would seriously undermine the economy or seriously hamper the sustainable development of the recipient country.
The Government will consider in this context, amongst other factors, the recipient country’s relative levels of military and social expenditure, taking into account also any bilateral or multilateral aid, and its public finances, balance of payments, external debt, economic and social development and any IMF or World Bank-sponsored economic reform programme.
Other Factors
In exceptional circumstances the Government may decide not to grant a licence for reasons other than those set out in criteria one to eight where the items may have a significant negative impact on the UK’s international relations.
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Oral Answers to Questions
Anne-Marie Trevelyan Excerpts(2 years, 5 months ago)
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Scott Benton (Blackpool South) (Con)
The Secretary of State for International Trade (Anne-Marie Trevelyan)
I welcome the right hon. Member for Torfaen (Nick Thomas-Symonds) to his place. It is a pleasure to be working with him, and I look forward to discussing some of the many exciting things that will be going on in the Department for International Trade in the months ahead.
As my hon. Friend the Member for Blackpool South (Scott Benton) is aware, on Monday the Prime Minister announced plans to enhance our trade and investment relationship with Israel. Last week, I held productive talks with the Israeli ambassador on the matter, and I look forward to strengthening that important trading relationship.
Scott Benton
As the Prime Minister rightly said on Monday, our close co-operation with Israel on security, science and technology benefits not only our two respective nations, but the entire world. Does my right hon. Friend agree that the new strategic agreement signed between the UK and Israel will further enhance those ties over the next decade, and will she update the House on when we can expect the consultation period for the new bilateral free trade deal to begin?
Anne-Marie Trevelyan
The strategic agreement signed with Israel is the starting post for a series of activities that will deepen our trading relationship. We will be opening a public consultation on our enhanced bilateral free trade agreement in January, and we look forward to hearing the views of businesses and stakeholders across the UK on their priorities for that deal. We will also be hosting a joint innovation summit with our Israeli friends in March next year, in order to support new technology ideas.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Is the Secretary of State aware of the huge dynamic in Israeli universities? Will she make every effort, including with resources, to encourage partnerships between UK and Israeli universities, in terms of research, development and innovation?
Anne-Marie Trevelyan
As I said, we will be hosting a joint innovation summit in March with our Israeli friends in those areas of research and development, as mentioned by the hon. Gentleman. How we can work together between our universities is very much on our list of priorities, and I am also working closely with the Secretary of State for Education to ensure that we link in the international relationships that we want to grow with Israel.
Mr Philip Hollobone (Kettering) (Con)
Lee Anderson (Ashfield) (Con)
The Secretary of State for International Trade (Anne-Marie Trevelyan)
Last week my Board of Trade published our “Digital Trade” report, which demonstrates how we can boost exports, turbocharge economic growth for the whole UK and create high-paying jobs across all four of our family of nations using digital tools. Because geography is now history, digital tools ensure that services can be delivered from anywhere.
We export more than £200 billion of digitally delivered services. With investment and the right planning, I want to make sure the UK improves on its already pretty impressive second place in global digital trade to get to the top of that chart. I have negotiated a world-first set of digital trade principles with our G7 partners and will be continuing to deliver these through our trade deals in the months ahead.
Lee Anderson
Boneham & Turner in Ashfield has been around for more than 100 years and, post Brexit, it is thriving, like many other businesses in Ashfield. Its boss, Charlie Boneham, tells me that the US is a big part of its business. Will my right hon. Friend please advise me on where we are with a possible trade deal with the US?
Anne-Marie Trevelyan
The US is currently reviewing progress on all the free trade agreement negotiations under the previous Administration. We welcome the opportunity to feed into that review. We have always been clear that a good deal is better than a quick deal, and we are here when the US is ready to continue those discussions.
A deal with the US will benefit not just manufacturers like Boneham & Turner in my hon. Friend’s constituency but the other 30,000 small and medium-sized enterprises that also export goods to the US by removing tariffs, simplifying customs procedures and therefore making it easier to export. We already have £200 billion of bilateral trade with the US, and we continue to encourage those businesses that want to do more to come to the export support service, which the Under-Secretary of State for International Trade, my hon. Friend the Member for Finchley and Golders Green (Mike Freer), discussed earlier, to ensure they have all the tools they need to maximise their trade with the USA.
Gareth Thomas (Harrow West) (Lab/Co-op)
The emergence of the omicron variant surely underlines that, if we are to protect our citizens from covid, we need to help to accelerate vaccination programmes in developing countries. With Norway the latest country to agree that, in these exceptional circumstances, a temporary waiver on patent rules to help boost vaccine production is needed, why is the Secretary of State so intent on blocking any progress on such a deal?
Anne-Marie Trevelyan
We have been world leading throughout the pandemic in our negotiations with AstraZeneca on ensuring that vaccines are produced at cost. When I was Secretary of State for International Development, I made sure we invested in COVAX so that we led the way and brought other countries forward to ensure that as much vaccine as can be made gets to those who need it the most. Countries are continuing to work with the smallest and most vulnerable developing countries so they get the vaccines they need. We continue to have discussions on a waiver to the World Trade Organisation agreement on trade-related aspects of intellectual property rights, although those discussions were postponed this week due to the complexity of omicron and movement. We will pick up those discussions in the new year.
Alexander Stafford (Rother Valley) (Con)
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I thank the Secretary of State for the support that she has given in the past to the development of tidal stream renewable energy generation. Now that we have the very welcome ring-fenced pot for tidal stream energy, will she charge her Department with the development of a strategy to ensure that we can export that expertise as we move towards commercialisation?
Anne-Marie Trevelyan
The right hon. Gentleman will be as pleased as I am to see that the Department for Business, Energy and Industrial Strategy and the Treasury were able to find a way to make sure that the contract for difference, now published, will be able to provide that ring-fenced support for tidal stream. As he knows, I visited earlier in the year to see the work for myself and to talk to those who have been developing this technology. As part of the work that the Department for International Trade will be doing on green trade across the world, we want to ensure that, as that potentially becomes commercially viable, such firms are absolutely at the forefront of the package of tools that other countries will also be able to use to help them to decarbonise their energy sectors. We will work very closely with those firms. The Under-Secretary of State for International Trade, my hon. Friend the Member for Finchley and Golders Green, who is overseeing the export service, will make sure that they are included and supported as they think about where those markets might be.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
Will the Secretary of State update the House on trade discussions with India? She will know that any reduction in the punitive tariffs that apply to Scotch whisky would be an enormous boost for the industry.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
COP26 was an important step towards meeting our international climate commitments, but that must be carried through into all aspects of Government policy. What steps are the Government taking to ensure that the environmental impact of trade, through both imports and exports, is mitigated as far as possible?
Anne-Marie Trevelyan
UK leadership through COP26 has been world respected and renowned. The Department for International Trade is now able to continue the extraordinary leadership shown by my right hon. Friend the Member for Reading West (Alok Sharma) as COP26 President to ensure that the technologies that the UK is developing, has developed and will continue to develop will be at the forefront of all matters environmental in order to help every part of the world meet its decarbonisation challenge.
Jim Shannon (Strangford) (DUP)
What discussions have taken place with the Foreign, Commonwealth and Development Office and the Home Office to place Afghan refugees in work in places such as Mash Direct and Willowbrook Foods in my constituency of Strangford, and across the agrifood sector in Northern Ireland, which is in need of migrant workers to fill the vacancies that presently exist?
Jason McCartney (Colne Valley) (Con)
As the co-chair of the all-party parliamentary group for Fairtrade, I have been heartened by how many British people have been looking to support Fairtrade products, including bananas, coffee and chocolate, and to support Fairtrade producers and farmers around the world. Will the Minister continue to put fair trade at the heart of new trade deals so that we can continue to support these Fairtrade producers and farmers around the world?
Anne-Marie Trevelyan
As the Minister for Trade Policy, my right hon. Friend the Member for Portsmouth North (Penny Mordaunt), mentioned earlier, now that we are a sovereign independent nation and can make trade deals in our own right, we want to ensure that we use trade for good and that the UK brings that leadership. Next year, we will be working closely with our African colleagues in particular to think about how we can boost trading relations and the support that we can provide to encourage the value chain to sit with those developing countries, which have the opportunity to grow their trade balance and ensure that they see the benefits of trade too.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
I wonder what the Minister makes of the report in the Financial Times that far less than a trade deal, America will lift its steel tariffs if the UK violates article 16. Does she welcome America keeping control?
UK Export Strategy
Anne-Marie Trevelyan Excerpts(2 years, 5 months ago)
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The Secretary of State for International Trade (Anne-Marie Trevelyan)
On our inaugural International Trade Week, we have today launched our export strategy—“Made in the UK, Sold to the World”. This is the first export strategy since the UK became a sovereign trading nation.
Some businesses, particularly small and medium-sized enterprises, can face a range of barriers to exporting, with costs, lack of knowledge, constraints in capacity and networks among the most often cited. This Government are committed to working hand in hand with business to help them to succeed in the global marketplace through a first-class export support framework.
As part of the “Race to £1 trillion” we are setting an ambition and a challenge to boost exports—unleashing the potential of businesses across the UK and building our reputation as a global exporting powerhouse.
Research estimates that exports supported 6.5 million jobs across the UK in 2016, 74% of which were outside of London. Separate survey analysis has found that fewer than one in 10 businesses in the UK exported, and these businesses are not evenly distributed across the country. Trade through exports means jobs, and investment into local communities and our public services, including police, the NHS and schools. Evidence also shows exporters are more productive and pay higher wages. Our strategy will set out tangible ways in which we can support businesses to take advantage of existing and new markets, while levelling up the country.
The strategy highlights a range of measures to support businesses including:
Launching the “Made in the UK, Sold to the World” campaign, championing the UK’s priority sectors through an innovative, localised marketing campaign that will promote the best of British goods and services in our towns and cities.
The Export Support Service provides a single point of contact for exporters to Europe. Since launching in October the new export hotline and online service has helped hundreds of businesses to get exporting.
UK Export Academy expansion to offer SMEs in all parts of the UK, including Scotland, Wales and Northern Ireland, the chance to learn how to navigate the technicalities of exporting and how to find new opportunities in overseas markets.
A new UK Tradeshow Programme will be bigger and better targeted to give UK companies, especially SMEs, a leg-up to exhibit their first-class products at the world’s biggest tradeshows.
UK Export Finance—our world-leading export credit agency—will expand its offer with new products and a wider delivery network that will make it easier for UK exporters to secure business from overseas buyers.
Export Champions, ensuring businesses can build and learn from exporting successes through business-to-business networking and peer-to-peer learning.
Internationalisation Fund, open to SMEs in England, will aim to grow international sales, and has facilitated £4 million of support to SMEs attending trade fairs.
As part of International Trade Week, through our trade hubs and army of expert advisers dotted around the UK, over 2,500 business have signed up to over 100 events and workshops—which will support and encourage businesses to sell globally—from webinars on key global markets (e.g. doing business in Singapore) through to free trade agreement (FTA) workshops, with events being run by both Government and businesses, there is something for every business.
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Trade Remedies Authority: Call-in Powers
Anne-Marie Trevelyan Excerpts(2 years, 6 months ago)
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The Secretary of State for International Trade (Anne-Marie Trevelyan)
The Government are today announcing that they intend to make new powers to enable the Secretary of State for International Trade to call in certain investigations conducted by the Trade Remedies Authority (TRA).
These powers will ensure that the Secretary of State for International Trade has oversight for, and may direct, transition review investigations where she considers it is needed. The call-in power only applies to transition reviews and reconsiderations of transition reviews, and does not apply to new investigations. Where the call-in power is exercised, the Secretary of State for International Trade will set out her reasons for doing so in a statement to the House of Commons.
One of the advantages of being an independent trading nation is that we can adapt our domestic rules to UK economic circumstances.
The Government will always do everything in their power to defend UK industry and jobs and to allow our world-leading companies to compete on an equal footing.
The UK has always been a strong supporter of free trade. But free trade does not mean trade without rules. Rather than restricting free trade, trade remedies can help ensure that free trade is also fair trade. All major trading nations have a trade remedies system in place and many of these allow for greater ministerial involvement in decision making than the UK currently allows.
As announced on 30 June 2021, the Government will continue to consider whether wider changes might need to be made to the trade remedies framework to ensure it can consistently defend UK industry. DIT will continue to work collaboratively with the TRA on this process and in the application of the call-in power where the Secretary of State decides it is needed.
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Response to Trade and Agriculture Commission Report and Launch of New TAC
Anne-Marie Trevelyan Excerpts(2 years, 6 months ago)
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The Secretary of State for International Trade (Anne-Marie Trevelyan)
In July 2020 the Government established a Trade and Agriculture Commission (TAC) to advise the Government on trade policies that will secure opportunities for UK farmers while ensuring the sector remains competitive and making sure that animal welfare and environmental standards in food production are not undermined. The TAC fulfilled its remit and reported in March 2021. Today, the Government have published a response to the TAC’s advisory report, having carefully considered the recommendations detailed within it.
The Government recognise the key principles behind these recommendations which have been instrumental in establishing an ambitious framework for our trade policy development. Our bold approach will deliver world-class trade deals while protecting our domestic interests.
The response outlines a commitment to maintaining high animal welfare and environmental standards for future trade agreements. The UK will continue to use its influence in the international sphere to push for improved environmental and animal welfare, food safety, human rights and labour standards.
The Government’s response builds on the steps already taken to deliver for UK farmers, food producers and consumers as an independent trading nation. Earlier this year, the highly successful Open Doors campaign was launched to help the industry seize new opportunities through trade agreements with priority markets.
The Government are also pleased to announce the launch of the new Trade and Agriculture Commission, chaired by Professor Lorand Bartels. As an international trade lawyer and academic, Professor Bartels will bring a wealth of expertise and experience to the role. The new commission will fulfil a different purpose to that of the original TAC, in line with the provisions debated and agreed by Parliament during the passage of the Trade Act 2021. The new TAC will bring together experts in a number of relevant fields such as animal and plant health, animal welfare, the environment and trade policy. It will scrutinise the UK’s new free trade agreements and assess whether they are consistent with the maintenance of UK levels of statutory protection in relation to: animal and plant health; animal welfare; and the environment. Its reports will be published and will make a vital contribution to Parliament’s understanding of the UK’s new trade agreements, helping to ensure effective scrutiny and demonstrating the Government’s commitment to transparency.
A copy of the Government’s response to the original Trade and Agriculture Commission report has been placed in the Libraries of both Houses and has been published on gov.uk.
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Free Trade Agreement: New Zealand
Anne-Marie Trevelyan Excerpts(2 years, 6 months ago)
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The Secretary of State for International Trade (Anne-Marie Trevelyan)
Let me first thank the right hon. Member for Islington South and Finsbury (Emily Thornberry) for what I am sure were, as always, wise words in her point of order, and for the opportunity to set out to the House some of the key issues that we will be discussing. I take absolute note of the points that have been raised.
With permission, Madam Deputy Speaker, I would like to make a statement on the new agreement in principle between the UK and New Zealand on our free trade agreement, which we are working towards delivering.
Yesterday, the UK agreed in principle the main details of a trade deal. A UK-New Zealand free trade agreement will be another major trade deal, like our agreement with Australia. This marks a significant step towards the UK’s aim to join the £8.4 trillion comprehensive and progressive agreement for trans-Pacific partnership free trade area. The UK-New Zealand trade relationship was worth £2.3 billion last year and is set to grow under the deal. Both Prime Ministers have heralded the new partnership, which will take on some of the biggest global challenges, from climate change to gender equality, respect for indigenous communities and the future of digital trade.
This deal is part of the Government’s commitment to building back better, bringing the benefits of trade to level up all parts of the country. Our shared history with New Zealand, common values and commitment to free trade is matched by a dedication to high standards and the rule of law. It makes complete sense to do a trade deal with New Zealand, and it will continue to strengthen our long-standing relationships as key allies and friends.
We have laid out the core benefits of a deal as per the agreement in principle. A comprehensive trade agreement with New Zealand will slash red tape and deepen access for our advanced tech and services companies, while making it easier for smaller businesses to break into the New Zealand market. UK workers will benefit from better business travel arrangements to New Zealand, and UK professionals such as lawyers and architects will be able to work in New Zealand more easily, allowing UK companies to set up shop in New Zealand and bring the best British talent with them.
High-quality New Zealand products that British consumers love will become more affordable, from Marlborough sauvignon blanc to manuka honey and kiwi fruit. The new agreement in principle means that existing tariffs as high as 10% will be removed on a huge range of UK goods, from shoes to ships and from buses to bulldozers, giving British exporters an advantage over international rivals in the New Zealand import market, which is expected to grow by 30% by 2030.
Throughout negotiations, we have remained in close contact with businesses, farmers and other stakeholders. We will back British farmers in opening up new export opportunities, such as to the CPTPP markets, which are expected to account for a quarter of global import demand for meat by 2030. The agreement in principle adds momentum for accession to CPTPP, of which New Zealand is a key member. CPTPP had a joint GDP of £8.4 trillion in 2020 and includes some of the biggest economies of the present and the future, from Japan and Mexico to Malaysia and Singapore. By 2030, two thirds of the world’s middle classes will be in Asia, creating unparalleled opportunities for UK businesses. Britain needs to be positioned in the coming decades to trade freely with these high-growth parts of the world.
The Governments of New Zealand and the United Kingdom now intend to finalise the free trade agreement text before signature and subsequent entry into force of the deal. Once signed, the deal will be presented to Parliament and published on gov.uk, alongside an independently scrutinised impact assessment. There will be full and robust scrutiny of the deal, including time for the relevant parliamentary Committees to produce a report on the deal before it is ratified. In addition, the new Trade and Agriculture Commission, chaired by Professor Lorand Bartels, will provide expert and independent advice to the Government and Parliament once the deal has reached signature stage. The new commission will look specifically at how the deal is consistent with relevant domestic statutory protections, ensuring that world-leading British agricultural standards are upheld. This agreement will strengthen ties between two nations committed to free and fair trade, delivering strategic and economic benefits to the United Kingdom.
This agreement in principle on a free trade deal is a win-win for two natural trading partners. It is tailored to the UK’s strengths, slashes tariffs on our exports and deepens access for British businesses. Our like-minded democracies will now unite to take on great global challenges such as climate change while harnessing opportunities such as digital trade. A UK-New Zealand free trade agreement will show what global Britain can achieve as a sovereign trading nation.
This agreement in principle is just one part of our ambitious strategy to deepen trade ties with like-minded partners and ensure that these alliances create a more predictable, free and fair framework for British businesses. Free trade is not something to be frightened of or to run away from. We want to be working with allies to influence the rules of the game and, in today’s world, FTAs are the vehicles by which those rules are shaped.
This deal will be a modern partnership for the 21st century: two staunch democracies working together to meet global challenges from climate change to the future of digital trade. Together we will embrace the opportunities of the global marketplace to support jobs, enterprise and wealth creation. We will fuel our recovery from the covid crisis through free trade and demonstrate that it is part of the solution to the greatest challenges of our time. That is what this agreement in principle represents, and I commend this statement to the House.
Emily Thornberry (Islington South and Finsbury) (Lab)
I thank the Secretary of State for advance sight of her statement. While there is much to digest from last night’s agreement, I hope she will forgive me if, in the short time that I have, I focus on the impact of the deal on our farming communities.
As I have already mentioned today, according to the Government’s own forecasts, this deal will lead to reductions in growth and jobs in the UK’s farming sector because, as the scoping paper says,
“New Zealand producers may be able to supply UK retailers and UK producers at lower cost relative to domestic producers.”
In those circumstances, any other Government would normally keep in place quotas to stop their farmers from being undercut, but, just like with the Australia deal, our Government have set those quotas so high as to be utterly meaningless. In year 1 of this new deal, New Zealand can export four times as much lamb as it did last year before any tariffs kick in; it can export more butter to Britain than it has done in the past six years put together before facing a single tariff; and it can export 25 times more beef, entirely tariff-free, as it can right now with a 20% tariff. For all practical purposes, this deal therefore gives us unlimited, tariff-free trade from New Zealand to go with unlimited, tariff-free trade already agreed with Australia, confirming this as the precedent that every other major exporter will now expect to follow. Not just that, but we are eliminating the tariffs on dozens of products from Australia and New Zealand that fall well short of our domestic welfare standards. This includes our domestic restrictions on antibiotics, whose production is doing huge damage to the environment.
These are bad deals for our farming industry. They will undermine the competitiveness of our farmers and the standards that they are required to maintain. In other words, these deals are exactly what the Trade and Agriculture Commission was established to prevent. That brings me to the appointment of the new TAC members confirmed by the Secretary of State earlier and to the written ministerial statement, which the House has just received, containing her response to the TAC report, seven and a half months after it was submitted.
There are two crucial issues at stake in those announcements, and they are inextricably linked to the deals with Australia and New Zealand. The first concerns the TAC’s recommendations to establish a national framework of standards covering food safety, animal welfare and the environment, and to use that framework to determine which imports from Australia and New Zealand should benefit from the elimination of tariffs. We know that that recommendation is entirely feasible and entirely practical, because DEFRA Ministers are currently consulting on applying exactly the same principle when it comes to labelling food products for their impact on animal welfare. Their consultation proposes a clear distinction between
“baseline UK welfare regulations which UK farmers are required to meet”
and “imports of lower welfare” that are undercutting our farmers.
May I ask the Secretary of State three questions? Why has she rejected the recommendation on the use of a standards framework to determine the scope of tariff reductions? Can she confirm that, as a result, a number of products described by DEFRA as “imports of lower welfare” will have their tariffs reduced under the deals with Australia and New Zealand? Can she explain why it is possible to differentiate on standards when it comes to labels placed on imports, but not on the tariffs they face?
The second fundamental issue is around the role of the TAC in relation to Australia and New Zealand. Members of Parliament, the media, the public and, most of all, our farming communities were repeatedly promised last November that the new TAC would provide Parliament with an assessment of every trade deal for how it would affect the competitiveness of UK farmers and whether it would undercut the standards they are required to meet. No matter how that role was defined in statute, we all know what we were promised. If the new TAC is not going to assess these two trade deals in that way, not only is that utterly shameful, but it will turn the TAC into a total waste of time.
I hope the Secretary of State will honour those promises, because if we ever needed a better illustration of why we need the TAC to perform that role, we have it in the deals agreed with New Zealand and Australia. That is why it is more vital and more urgent than ever that the new TAC should be able to do the job that the House was promised and act as the voice of the farmer when it comes to passing verdict on these two new deals. I ask the Secretary of State again: will she let the TAC do its job?
Anne-Marie Trevelyan
I will do my best to answer the right hon. Lady’s questions. We are really pleased. The deal is really balanced and brings lots of exciting opportunities for our businesses and our consumers. We will see customs duties on 100% of tariff lines for originating products removed. The UK will eliminate tariffs on 96.7% of tariff lines on the day the FTA comes into force, and New Zealand will eliminate 100% on the day the FTA comes into force.
On beef, the UK will remove duties after 10 years, and the quota volume will increase in equal annual instalments to ensure that the markets can stabilise and grow as required. To the right hon. Lady’s point about the increase in sheepmeat capacity, the interesting thing with New Zealand is that it already has a much larger World Trade Organisation quota that it does not use with the UK because, as we discussed earlier, it has the opportunity to sell many of its meat products into the Asian markets, where it gets high prices. We are therefore not expecting New Zealand to use these quotas in these early years, but we look to the opportunity for us to work for mutual benefit. For butter, full liberalisation will be over a five-year period, and it is similar for cheese.
This is a really exciting deal, and not only for the food and agriculture sector. There is a huge amount of opportunity for our businesses, looking at the digital space in particular and service provision. I reiterate—we will keep saying it until the Opposition are willing to be comfortable with it, if required—that we will never compromise standards for food coming into the UK. I had an interesting conversation with a farmer just last week, who was perhaps more forward-thinking than some Opposition Members. As we have different pests and different soil types, the sorts of products used in other countries may be different, but that does not mean that the quality, standard or welfare is lower. We will always be clear that we will not accept the lowering of standards. We appreciate that different countries have to manage their climatic and environmental situations in different ways, so that will continue to be the case.
I am pleased that the right hon. Lady has seen the written ministerial statement just put out by the Department on the TAC response and the launch of the new Trade and Agriculture Commission, which will be independent. It will have the opportunity to scrutinise all those free trade deals as they come forward, including, in the first instance, the New Zealand and Australia deals, once we have brought them to a full signed conclusion.
Martin Vickers (Cleethorpes) (Con)
I welcome my right hon. Friend’s statement, in particular her reference to encouraging small businesses and the opportunities that the deal provides for them. Will she ensure that her Department focuses on small and medium-sized businesses and encourages them to enter the export market? On a wider point, prior to our misguided decision to join the European Community, we had good trading relationships with New Zealand, Australia and the wider Commonwealth. Will she assure that House that she will do everything possible to extend deals with our Commonwealth friends?
Anne-Marie Trevelyan
I thank my hon. Friend for his encouragement of the work that we are doing. In order to support and assist small and medium-sized enterprises, we want to champion their great products and services more widely than in the UK. Only a small proportion of businesses that could export, do so, and we are keen to ramp that up and give them support.
The export support service that was launched on 1 October supports businesses that are thinking about or are already exporting to the EU. We look to grow that as the service embeds. We also have the Open Doors campaign, which is an opportunity to help champion some of the fantastic UK goods and services that exist. We will continue to grow that too.
I charge all Members to come and talk to us about businesses in their constituencies and issues that they want us to champion as we go around the world and have the opportunity. In Commonwealth countries, there is much potential for mutual bilateral trade, so Members should help us to make sure that we are opening those doors for them.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I have looked hard to try to find something to welcome, so let me start with a positive: we welcome the promotion of trade in environmental goods and services, although naturally the detail will need to be reviewed.
The UK Government’s assessment shows that an FTA with New Zealand would bring zero benefit and, indeed, could lead to a contraction in GDP. The Under-Secretary of State for International Trade, the hon. Member for Finchley and Golders Green (Mike Freer) talked earlier about timescales and giving it time, so can the Secretary of State tell us how long it will take for this deal to make up even 0.5% of the 14% drop in Scottish food and drink exports to the EU ?
Ministers have clearly shown that they need help in understanding Scotland’s trade, so will the Secretary of State ensure that the Scottish Government are involved in the detail of the agreement? Bilateral trade has important impacts and implications for services, so given the sector’s importance to Scotland, it is vital that the Scottish Government are also involved in those details.
The deal, as it stands, provides protections for meat imports only by phasing reductions to zero, which is opposed by the National Farmers Union. Will the Secretary of State look to build further protections into the agreement, such as tonnage quota systems and percentage controls? According to the Government’s figures, the deal will cut employment in our farming communities, but for what—possibly about £112 million? That is about half the cost of the Prime Minister’s new yacht. Is that really a good deal?
Anne-Marie Trevelyan
Some of our most fantastic brands and products come out of Scottish businesses and all the trade deals that we are putting together and negotiating have some of those at the top of our call list. We want to make sure that that continues by opening up more markets, which will provide opportunities for fantastic Scottish whisky, amazing Scottish beef and many other products, many of which are green products that are helping to solve some of the climate challenges that we all face. We want to make sure that those businesses can export not only to our EU partners but more widely, and we want to see that grow.
Built into the New Zealand agreement in principle are a clear set of quotas that grow over a number of years to ensure, on the hon. Gentleman’s point, that we can see those changes in imports work well with our own commerce. As I make new trade deals, I want to ensure that our farmers are finding new markets for their products. We are seeing, as I mentioned in my statement, a growth in markets across Asia, where the call for high-quality produce is growing by the year, and we want to make sure that our farmers and our businesses are part of that success.
Robbie Moore (Keighley) (Con)
May I use this opportunity to welcome my right hon. Friend to her place? I wish her all success, and I welcome this statement. Many of my constituents are deeply concerned about climate change. Could the Secretary of State outline how this new free trade agreement will promote our efforts to tackle climate change as well as growing our respective economies?
Anne-Marie Trevelyan
As I said earlier, it is absolutely critical to this Government that, as we find ways to grow our businesses and grow our economic growth, we also, right alongside, continue to champion, as we are with the presidency of COP26, the solutions that we all need to find to meet that climate challenge. This is a really exciting free trade agreement in which there is a very strong environment and climate change chapter, where we set out very clearly our mutual commitment to the Paris agreement and all that goes with that, and the challenge of keeping 1.5° C alive. For all our constituents, we should have confidence that that mutual support for meeting that challenge is absolutely embedded in this deal. We will have the opportunity, as our innovators and our businesses come up with new solutions, to take those goods and services to New Zealand with no tariff limitations.
Daniel Zeichner (Cambridge) (Lab)
Cambridge people care deeply about the quality of their food, and they will want to know that anything imported is produced to our high standards. I listened closely to the Secretary of State’s response to my right hon. Friend the Member for Islington South and Finsbury (Emily Thornberry), and she did not address the question of the framework standards suggested by the previous Trade and Agriculture Commission. So can I ask her again: will the Government be adopting that framework or not?
Anne-Marie Trevelyan
As I have said, we recognise the importance that both countries attach to high welfare standards. New Zealand and the UK have committed together to a specific chapter on animal welfare reaffirming those key points about food production. Indeed, to the hon. Gentleman’s point, we will absolutely ensure always that goods coming into the UK do not fall below the standards that we set and that we want to ensure for the safety of our constituents.
Craig Mackinlay (South Thanet) (Con)
I congratulate my right hon. Friend on achieving this agreement in principle. Can I assume that it follows very similar lines to the agreement with Australia, so that we can have full triangulation for the UK with Australia and New Zealand, between whom there is already a unique relationship in their trade? Could she explain how this will assist and help in an even further expansion of free trade for this country through the CPTPP accession negotiations?
Anne-Marie Trevelyan
My hon. Friend raises a really important point. We have submitted our application to become a member of the CPTPP, which is a group of 11 countries that work together with a free trade agreement. We are the first new member to apply, and we are presently going through what I can only describe as an exam process as our legislative requirements are tested against its framework. It is incredibly important. New Zealand and Australia are two key partners within the CPTPP, and in having these two first free trade agreements with them, we are setting out very clearly what is important to us. As I say, with this New Zealand agreement today, we are setting out all the areas that are really critical to us and indeed to our businesses. It shows the importance that we will continue to give to what free and fair trade means. It is ensuring that our businesses are working in a fair and competitive environment so that they can sell their fantastic produce. I have the fantastic challenge and joy of being able to share that across the world. I am making sure that, as we look to that CPTPP market, through these first two trade deals we are setting out our important and, indeed, great offer.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Taking a piecemeal approach to trade agreements is having an impact in many sectors, but especially for farmers. What assessment have the Government made of the cumulative effect of all these free trade agreements on sectors such as farming?
Anne-Marie Trevelyan
The cumulative effect of more and more free trade deals is the opportunity for our fantastic businesses that provide goods and services to reach many more markets. The huge growth in population, and wealthier communities across Asia in particular, are markets that we want our businesses to have every opportunity to access, because we believe that our products are some of the best in the world.
Saqib Bhatti (Meriden) (Con)
I congratulate the Department and the Secretary of State on this announcement. I chair the all-party group for small and micro business, so will the Secretary of State set out what the trade deal means for small and microbusinesses, which are the backbone of our country, including in my constituency of Meriden?
Anne-Marie Trevelyan
Our small and medium-sized businesses, and indeed our micro, small and medium-sized businesses—known as MSMEs if said quickly—make up 95% of the backbone of our businesses. At the G20 trade talks last week, we discussed that area in some detail, because all nations across the G20 know that a business might be a microbusiness this year, but in 10 years’ time it could be a major business in any of those economies. As we build these trade deals, we want to ensure that things such as reductions in tariffs and the opening up of digital trade, mean opportunities for our small businesses today, so that they have the opportunity to become great trading businesses of the future.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Secretary of State has a beautiful north-east constituency, and she knows that, like many of my constituents, I take great pleasure in the gorgeous north-east landscape with its wild hills and beautiful coastline. That is a consequence of small-scale farming, with high standards of animal protection, environmental protection, and sustainability. What does she say to north-east farmers who are facing huge levels of unfair competition from massive increases in New Zealand imports to this country? Will she guarantee that not one north-east farmer will fail as a consequence of this agreement?
Anne-Marie Trevelyan
The hon. Lady and I agree that Northumbrian lamb is, without a doubt, best in the world, and I am happy to say that to any New Zealander who wants to take me on and challenge me. We have meat imports from the EU that are much greater than those we now receive from New Zealand, and they will continue to be. As I have said, New Zealand has not taken up its quotas already, and I am not at all concerned that the high quality produce made by Northumbrian farmers, or indeed in any other part of our wonderful UK, will be put at risk. We are selling some of the best quality produce in the world, and that will continue to be the case. As we make new free trade deals, we will open up more markets for farmers to use.
Andy Carter (Warrington South) (Con)
I congratulate the Secretary of State on the agreement reached with New Zealand. She will know that Warrington has some of the finest gin production anywhere in the world. What will this agreement mean for small spirit producers in Warrington?
Anne-Marie Trevelyan
I did not know that Warrington was the centre of gin, but now I have discovered that I will have to go and visit as soon as possible. The trade deal strips away tariffs on all goods with rules of origin, and clearly a producer of Warrington gin, which absolutely is a Warrington gin, will have the opportunity to take their goods to market in New Zealand without tariffs. I look forward to championing Warrington gin, and all other forms of British gin.
Jim Shannon (Strangford) (DUP)
I have not tasted gin-soaked lamb recently, so I am not quite sure what it tastes like, but that is by the way. What discussions have taken place with Ministers in the Department for Agriculture, Environment and Rural Affairs at the Northern Ireland Assembly to assess the impact on and benefits for Northern Ireland agriculture from this new deal? What protections are in place for our farming sector, to ensure that it continues to produce the high quality, ethically raised food that our Northern Ireland farmers within the United Kingdom produce on a daily basis?
Anne-Marie Trevelyan
My ministerial colleagues and I have regular discussions with our counterparts in all the devolved nations, and I know that such conversations went on with Ministers yesterday to really get a sense of, and to encourage, the exciting opportunities that now exist with the agreement in principle. As we move from this stage to finalisation—this is where it gets complicated, with pages and pages of legal text, and lawyers are required—there will be refinement to ensure that all those nations have their concerns and, indeed, the important issues that they want raised, crystallised into the final deal.
Holly Mumby-Croft (Scunthorpe) (Con)
I thank my right hon. Friend for her work on the agreement, and for the particularly good news about sauvignon blanc. Will she please say a little more about the effect on manufacturing businesses and jobs, particularly in the north of England? What support may be available for those businesses that want to take advantage of the agreement and export to New Zealand?
Anne-Marie Trevelyan
I think many of us will be excited at the reduced price, potentially, of our glass of New Zealand wine of an evening. This goes in both directions. We will want to champion the opportunities for small businesses across our constituencies, and the Department is there to support and guide. We now have not only trade and investment hubs here in the UK but both trade commissioners and great trade envoys. I know that they will help us to champion the great businesses we have here to ensure that they are known and loved, and become part of the landscape of New Zealand’s markets.
Deidre Brock (Edinburgh North and Leith) (SNP)
The National Farmers Union of Scotland has just released a statement expressing great anger over this latest trade deal, describing it as
“merely a slow journey to allow New Zealand…unfettered access to food and drink UK markets.”
The Government keep saying that high food and environmental standards in the UK will continue for UK-produced goods, apparently failing to recognise, if I am being generous, that farmers will be forced to reduce those standards when they are competing against tariff-free goods produced to lower standards in countries such as Australia, New Zealand and, as those trade deals have set a precedent, all the other countries to follow. The National Farmers Union of Scotland sees that very clearly. Will the Secretary of State at least acknowledge its concerns and recognise that as a possibility?
Anne-Marie Trevelyan
The UK has some of the finest standards in the world, and indeed some of the finest produce, which is exported with great success across the world. As our landmark Environment Bill comes through and work continues to set out the new frameworks to support our farming communities since we have left the common agricultural policy, we will be working hand in glove with all our farming communities to ensure that they have the support and the drive to be successful 21st century farming businesses that are able to take up the opportunities that all the free trade deals—not only those with Australia and New Zealand but all those to come—will bring to take their great products into markets across the world.
Ben Lake (Ceredigion) (PC)
Diolch, Madam Deputy Speaker. I am sure that the Secretary of State will be aware of similar concerns expressed by the agricultural unions in Wales overnight and this morning in the light of the agreement in principle. Given that the Government’s own analysis suggests that the number of people working in agriculture may be negatively impacted by this deal, I think those concerns are well founded. May I ask her, quite simply: how will Ceredigion farmers benefit from this deal?
Anne-Marie Trevelyan
Farmers will have the opportunity to reach out and share their wares more widely; that continues to be the case. I continue to proffer reassurance that New Zealand already has an enormous WTO quota, which it does not use with the UK because it exports a lot of its sheepmeat to Asian markets. Indeed, much of the EU imports that come into the UK are balanced easily by the fantastic British produce that comes from our Northumbrian and Welsh farmers—and, indeed, any other of our farmers, but we have a very strong voice for those two farming communities in particular. I reassure hon. Members that giving our farmers opportunities to reach out and build new relationships and new trading routes is our great passion, and we will continue to do that in the Department.
Oral Answers to Questions
Anne-Marie Trevelyan Excerpts(2 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Cat Smith (Lancaster and Fleetwood) (Lab)
The Secretary of State for International Trade (Anne-Marie Trevelyan)
I and my whole team would like to associate ourselves with the tributes to Sir David Amess that have been made this week. He was listed on the Order Paper for today’s oral questions and I have no doubt that he would have championed the export opportunities for Southend, our newest city.
The Government are clear that more trade will not come at the expense of human rights. The UK will continue to show global leadership in encouraging all states to uphold international rights obligations and to hold to account those who violate those rights. By having stronger economic relationships with partners, we have the opportunity to open discussions on a range of issues.
Cat Smith
I associate myself with the Secretary of State’s comments about our friend, Sir David. I welcome the Secretary of State to and congratulate her on her new position.
I note that the recent trade deal with New Zealand refers to indigenous people. Does the Secretary of State share my concern that when it comes to human rights it is important that we protect freedom of religion? Will she meet me to discuss further how UK trade deals can promote human rights and religious freedoms globally?
Anne-Marie Trevelyan
The hon. Lady is right: as we reach out, with our new ability to do free trade deals with our friends and allies, it is important to us to consider such important issues. For New Zealand, a chapter on indigenous peoples and their part in their nation’s future progress, in respect of both economic and wider issues, was very important and we were happy to work with New Zealand to include it. I would be happy to meet the hon. Lady to discuss more fully the particular area of freedom of religion, which I agree is extremely important and which the UK continues to champion around the world.
Mr Peter Bone (Wellingborough) (Con)
I welcome the excellent Secretary of State to the Dispatch Box. Does she agree that free trade agreements enable us to influence the supply chain in the countries with which we trade freely? When I chaired the all-party parliamentary group against human trafficking, the improvement of supply chains was very much appreciated and reduced the amount of human trafficking.
Anne-Marie Trevelyan
My hon. Friend, who has done a great deal of work in this policy space, is absolutely right. It is important that we make sure not only that we use the power of trade to build relationships, as I said, but to give our businesses that want to work globally through supply chains the best tools and protections that they might need to ensure that they have authority with countries where the improvement of the position of the supply-chain workforce and, indeed, the protection of other human rights is critical.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
With the Government’s own data showing that the vast majority of the UK public would not support a trade deal with Saudi Arabia, will the Government confirm that they will not be seeking trade agreements with countries with poor human rights records?
Anne-Marie Trevelyan
As I have said, we have been clear that trade never comes at the expense of human rights, but we will always make use of the many relationships we have, including a very strong and long-standing relationship with Saudi Arabia, to work with partners not only to get mutual trading benefit but to help to make improvements on the issues that we consider to be important.
Dr Neil Hudson (Penrith and The Border) (Con)
David Duguid (Banff and Buchan) (Con)
The Secretary of State for International Trade (Anne-Marie Trevelyan)
Our trade agreements are lowering tariffs and unlocking new opportunities for food exporters and the farmers that supply them. The Department for International Trade supports such businesses to capitalise on those opportunities, expand into new markets and sell fantastic British produce overseas.
Dr Hudson
Our fantastic farmers in Cumbria and the wider UK produce world-class food with the highest animal welfare and environmental standards. We should be very proud of that—we can be a beacon to the rest of the world. What reassurances can my right hon. Friend give to the farmers in Penrith and The Border and throughout the UK that those high standards will be upheld in future trade deals, and that meaningful parliamentary scrutiny will be possible, not least through the urgent establishment of the new Trade and Agriculture Commission?
Anne-Marie Trevelyan
Just as the Cumbrian farmers are doing well, may I say how proud I am of my Northumbrian farmers who, just across the way, are similarly producing some of the finest food in the world? My hon. Friend is quite right: the new Trade and Agriculture Commission will play an important role in scrutinising trade agreements after signature. Applications are being considered and we hope to be able to announce the membership and the details very shortly. The commission will be in place to scrutinise, first of all, the free trade agreement with Australia when we sign it.
Simon Baynes
Export markets are increasing for Welsh farmers as we look to the US market for lamb opening up once more. There is also the export success of farms in my constituency of Clwyd South, such as Knolton farmhouse cheese and the increased beef exports by the Rhug estate. Will my right hon. Friend redouble her efforts to ensure that future trade deals open up even more global markets for Welsh and UK farmers?
Anne-Marie Trevelyan
Wales produces some of the UK’s most iconic food products and we have already unlocked new markets to increase opportunities—for example, gaining access for UK lamb, poultry and beef to Japan. We want to unlock even more opportunities for Welsh farmers and exporters and we will be working closely with the Welsh farming industry as we seek to do so.
David Duguid
On behalf of my constituent, Irene Fowlie, may I thank the Department, along with the Department for Environment, Food and Rural Affairs, for its help in facilitating the export of high-quality pedigree Essie Suffolk sheep to Georgia earlier this year? May I ask my right hon. Friend, whom I welcome to her new role, how we can improve access to new export routes for other high-quality agricultural produce, particularly from Scotland?
Anne-Marie Trevelyan
My hon. Friend is a great champion of all the wonderful produce coming out of Scotland and I thank him for his continued efforts. He will be pleased to know that we launched the export support service on 1 October, which will be there to help existing and potentially new exporters with some of those new markets. We have also established a new team in Edinburgh, which is building great networks, and we are committed to enhancing our support for businesses across Scotland to help us showcase the amazing goods and services from every corner of that nation.
Daniel Zeichner (Cambridge) (Lab)
The House will be aware of the problems facing UK pig farmers; pigs are sadly being culled on farms, partly because of a shortage of labour, but also because of the closure of markets to China. Other European countries have managed to reopen those markets, but the UK has signally failed to do so. What is the Secretary of State doing to address that diplomatic failure?
Anne-Marie Trevelyan
I will happily pick that up and make sure that the team from the Department for Environment, Food and Rural Affairs gives the hon. Gentleman the most up-to-date information on those pork markets, but we continue to work with all our farmers to make sure that they are able to move their goods to new markets.
Emily Thornberry (Islington South and Finsbury) (Lab)
Let me begin by welcoming the Secretary of State to her new role. May I associate myself with the remarks that she made about the late David Amess. He was an enthusiastic and lively participant in International Trade questions, as he was with everything that he turned his mind to.
I also look forward to studying the Secretary of State’s response to the Trade and Agriculture Commission report, which I have just learned will be released with a written ministerial statement later today.
On page 54 of the International Trade Department’s June 2020 paper on the strategic approach to free trade with New Zealand, it forecast that an agreement along the lines that I understand the Government announced last night will cause
“a reduction in output and employment…in the UK agriculture sector.”
Does that remain the Secretary of State’s forecast for the impact of last night’s deal?
Anne-Marie Trevelyan
I will be making an oral statement to the House shortly and I am sure that we all look forward to discussing this issue in more detail. I am very confident that the deal that we struck will provide the opportunity for our wonderful food producers to continue to sell their goods across the world, and, as we make more trade deals, create new markets for them.
Emily Thornberry
I thank the Secretary of State for her answer, but it does rather illustrate why we need a new Trade and Agriculture Commission to provide an independent assessment. After all, last November, the previous Secretary of State told the National Farmers’ Union in Wales:
“We have no intention of ever striking a deal that doesn’t benefit farmers, but we have provided checks and balances in the form of the Trade and Agriculture Commission.”
Can the Secretary of State confirm that the new TAC will be asked to examine the proposed deals with Australia and New Zealand and tell us simply whether these deals benefit our farmers?
Anne-Marie Trevelyan
The new TAC will be charged with some very clear direction, and given independence for it to be able to scrutinise both the Australian and New Zealand trade deals and all the other trade deals that we are looking to strike in the months and years ahead.
Alexander Stafford (Rother Valley) (Con)
Stephen Morgan (Portsmouth South) (Lab)
The Secretary of State for International Trade (Anne-Marie Trevelyan)
The UK is seeking ambitious environmental provisions in all future trade deals, including those which preserve our high levels of environmental protection and ensure our trade and environment policies are mutually supportive. Negotiations, including with both Australia and New Zealand, are progressing and the UK is also preparing for the next phase of negotiations, including with India, Mexico and Canada.
Stephen Morgan (Portsmouth South) (Lab)
Last week, a leaked document drawn up by departmental officials revealed that it was the Government’s policy to prioritise economic growth over climate protection in the UK’s trade deals. If the Minister says that is not a true reflection of the Department’s negotiating priorities, can she explain why it was written by departmental officials and distributed across Whitehall just days ago?
Anne-Marie Trevelyan
Our ambitious trade deal with Australia, for instance, includes a substantive article that affirms both parties’ commitments to address climate change, making clear our commitments mutually to the United Nations framework convention on climate change, the Paris agreement and the achievement of all those goals. We will continue to have that and more detail as we make new trade deals.
Bill Esterson (Sefton Central) (Lab)
I add my welcome to the Secretary of State. She was asked in the previous question about a leaked document, which suggests that economic growth is a higher priority for this Government in trade negotiations than climate protection. I know that must be embarrassing for her, given that the Government are supposed to be showing leadership in addressing the climate crisis ahead of COP26, but she can confirm the Government’s priority once and for all by making a definitive statement now about whether the Government and her Department will rule out trade deals with countries such as Brazil and Malaysia so long as they continue to destroy their rainforests. Will she make that commitment today?
Anne-Marie Trevelyan
Economic growth and the UK’s world-leading commitment to the climate challenges that the planet faces are not mutually exclusive; they go hand in hand. The environment and climate change will continue to be a key priority for the UK. Our ambition and leadership in that and helping our UK businesses that are driving the green agenda and providing the clean technologies of the future will be a critical part of making sure that our trade deals are very good for those British producers.
Felicity Buchan (Kensington) (Con)
Shaun Bailey (West Bromwich West) (Con)
The Secretary of State for International Trade (Anne-Marie Trevelyan)
I met my Indian counterpart, Minister Goyal, at the G20 in Italy last week to discuss final preparations for the launch of negotiations before the end of this year. My officials have concluded a series of bilateral working groups with Indian colleagues, and we will publish our negotiating aims, the response to the public consultation and an economic assessment of the FTA in the coming weeks.
Bob Blackman
I congratulate my right hon. Friend on her new job. The EU has been trying, unsuccessfully, to do a trade deal with India for 24 years, but we have an advantage. India is the third biggest investor in the UK, and we used to be the third biggest investor in India, but we have slipped down the league table. Does my right hon. Friend agree with me that, now that we are free from the shackles of Brussels, we have the ideal opportunity to negotiate a free trade deal, which would be good for our two great countries?
Anne-Marie Trevelyan
I thank my hon. Friend for his passionate presentation. I know about his relationship with India, and I hope very much that we will be able to harness all his knowledge and passion as we pull this together. We are in the final phase of preparations for the launch of negotiations very shortly, and I look forward to updating the House on our negotiating aims very soon.
Shaun Bailey
Businesses in Wednesbury, Oldbury and Tipton are excited about the prospect of a trade deal with India. Can I ask my right hon. Friend what work she is doing with businesses with existing links to India to ensure that we can really leverage those connections and make sure that areas such as the Black Country—which I know my right hon. Friend is going to visit very soon to see some of those businesses—make the most out of a trade deal with India?
Anne-Marie Trevelyan
I thank my hon. Friend, and I am always happy to stop in and meet some of the amazing businesses in his constituency, for which he is such a great champion. All UK sectors and regions stand to benefit from a trade deal with India, improving access to one of the fastest growing and most dynamic markets in the world. Its GDP is predicted to grow by 8.5% next year and imports into the UK by 8.2%. I want to make sure that, as the trade deal comes together, we are providing both the tools and the liberalising opportunities for all our great businesses.
Nick Smith (Blaenau Gwent) (Lab)
India, like many other countries, is lagging on vaccination—fewer than half there have had their first jab—so does the Secretary of State support her US counterpart’s call for a temporary waiver of the patents on covid vaccines?
Anne-Marie Trevelyan
The hon. Member’s question is timely. The G7 trade talks will be taking place tomorrow here in London, and that question and many of the issues—we will be discussing those questions at the WTO in December—will be raised. I am sure he will be pleased to see the communiqué outcomes.
Jim Shannon (Strangford) (DUP)
May I welcome the Secretary of State to her place and wish her well? I endorse the need for a trade agreement with India, but, as the hon. Member for Lancaster and Fleetwood (Cat Smith) said earlier, I caution, in relation to any trade agreement, about the rights of those of a different religious persuasion, including those of a Christian persuasion. I met the high commissioner for India in Northern Ireland some four weeks ago, and pushed the point with her about how important it is, within a trade agreement, to have freedom of religious belief for all. Unfortunately, that does not happen in India. When the Secretary of State has talks with the Indian Government about a trade agreement will she ensure that it benefits those with different religious beliefs and other persecuted minorities?
Anne-Marie Trevelyan
As I said to the hon. Member for Lancaster and Fleetwood (Cat Smith), I am happy to discuss that area. As colleagues will be aware, the FCDO is always at the forefront of such discussions, ensuring that where we have lines of communication we are robust and firm friends on issues that we consider to be values, and that we continue to trade with others and have good relationships. We will continue to work in that area.
Duncan Baker (North Norfolk) (Con)
The Secretary of State for International Trade (Anne-Marie Trevelyan)
The Department for International Trade is pursuing a range of objectives to put climate and environment at the centre of our departmental ambitions, and we are committed to maximising the economic value of the net zero transition. In addition, UK Export Finance recently published its climate change strategy, setting out its support for green exports and its commitment to net zero greenhouse gas emissions by 2050.
Duncan Baker
Climate change continues to be the dominant issue that affects people and Governments all over the world, and COP26 needs to show that it has co-ordinated efforts with countries that can help. Would my right hon. Friend ever consider trade sanctions against countries that wilfully ignore their responsibilities, and would a carbon border adjustment be a mechanism she would consider?
Anne-Marie Trevelyan
As hosts of COP26 and the G7 this year we are determined to promote transformational actions to deliver on the Paris agreement. The UK is building international consensus for ambitious collective action on mitigating those emissions, and promoting policies such as carbon pricing to ensure that private sector incentives are aligned with our goals for an ambitious outcome at COP26. From a trade perspective, any policy option we pursue should be market oriented, World Trade Organisation compliant, evidence based, proportionate, and forward looking.
Topical Questions
Rachael Maskell (York Central) (Lab/Co-op)
The Secretary of State for International Trade (Anne-Marie Trevelyan)
Last week I attended the G20 trade and investment ministerial meeting, where I made the case for fair and open markets, ahead of the upcoming meeting of the World Trade Organisation. Tomorrow I will be hosting the G7 trade Ministers meeting, where I will make that case again. This week the UK hosted the first global investment summit, where £9.7 billion of investment was secured. Those deals will support green growth and create more than 30,000 jobs across the country. That will deliver for families, workers and businesses across Britain, and set the stage for greater co-operation between the UK Government and businesses around the world on global challenges such as digital trade and climate change. Last night we secured our agreement in principle with New Zealand for our free trade agreement. Trade is a vital part of our plan to level up our country, slashing costs and red tape for exporters, building new trade routes for our services companies, and refocusing Britain on the dynamic economies of Asia-Pacific. With COP26 fast approaching, I will continue to drive forward the Prime Minister’s 10-point plan, using our global networks to drive up green business ambitions, and attracting investment to the UK’s green sectors.
Rachael Maskell
Every mile that every product travels grows its carbon footprint, and the Secretary of State has not denied her Department’s leaked document that states that it prioritises economic growth over climate protection. How will she make representation at COP26 when we hear that we are way off our 1.5 °C target, and place the climate emergency—and it is an emergency—at the top of her priorities, as opposed to being something she does not really believe in?
Anne-Marie Trevelyan
As I said earlier, economic growth and tackling the challenge of climate change go hand in hand. Finding solutions to those polluting methods of travel is a key area where the UK is leading with innovative businesses, and coming up with solutions regarding aviation fuel, or looking at clean shipping. We have brought international aviation and shipping challenges into carbon budget 6, and we are leading the way in ensuring that, economically as well as being part of the planet’s requirements, we find solutions that mean we can continue to trade, ensuing that those journeys involve clean energy users.
Sally-Ann Hart (Hastings and Rye) (Con)
Anne-Marie Trevelyan
Our fantastic beef and lamb are world renowned for high welfare and environmental standards, and indeed for excellent flavour. The cross-Government GREAT Britain and Northern Ireland campaign gives global brand recognition to the UK’s offer, including our world-class food and drink, which we are proud to promote around the world. Our agricultural food and drink Open Doors campaign, launched earlier this year, is helping UK agribusinesses seize the opportunities presented by our new trade agreements.
Chris Elmore (Ogmore) (Lab)
Saqib Bhatti (Meriden) (Con)
May I first welcome the new ministerial team and of course the new parliamentary private secretaries, who I am sure will do as good a job as the previous ones? [Laughter.] I welcome the announcement today of an agreement in principle on the free trade deal with New Zealand. Can my right hon. Friend please confirm that the new free trade deals, such as the one that has been agreed today, are good for consumers and also open up export markets for our farmers?
Anne-Marie Trevelyan
I thank my hon. Friend for his efforts when he was a PPS, sitting behind the previous team, and I know that he will continue to champion all that is good and exciting and the future benefit for our businesses as we look forward to future trade deals. The opportunities to slash tariffs, create new markets and build preferential relationships with our friends and allies through new trade deals will continue to be something that we see our businesses champion and come to talk to us about. I challenge all colleagues to share with us, as the team, the areas of interest for their businesses and constituencies, so that we know that we are pushing in all those areas— many of which we have discussed today—that are important to our great UK businesses.
Kerry McCarthy (Bristol East) (Lab)
Sir David Amess was due to ask a question today and I suspect that, as chair of the all-party British-Maldives parliamentary group, he would have reiterated previous questions about support for the very sustainable fishing industry there. As part of the all-party group on small island developing states, which includes the Maldives, I therefore feel honour-bound to pursue that cause on his behalf. Why are we requiring 20% import tariffs on tuna from the Maldives? It is a highly sustainable sector and other SIDS do not have the same tariffs. What progress is being made on negotiating an economic partnership agreement or finding some other way to remove this unfair barrier?
Duncan Baker (North Norfolk) (Con)
With nearly 70 free trade deals now signed and the fact that the British people voted to leave political union with the European Union, does the Secretary of State agree that Opposition Members would have kept us in the single market and in the customs union, and we would not have been able to negotiate the free trade deals that we now have around the country, including the one announced with New Zealand? This now puts us in pole position to be the global leader that we are.
Alex Cunningham (Stockton North) (Lab)
As we have heard, human rights are too often forgotten in our trade deals. I believe that the Foreign Secretary is now courting Saudi Arabia even more, to name just one of the countries that has a dubious record. When will the Government start getting serious about human rights and make it clear to countries around the world that until they get their human rights records sorted out, they are not going to get trade deals with the UK?
Sally-Ann Hart (Hastings and Rye) (Con)
The UK is already one of the most attractive investment destinations in the world and this investment is vital to levelling up the country, particularly investment in new technologies and green innovation. Will the Secretary of State confirm that she is working to encourage this type of investment to help us to progress to net zero emissions and deliver on the Prime Minister’s excellent 10-point plan?
Anne-Marie Trevelyan
Absolutely. The Global Investment Summit, which we hosted earlier this week in London, saw 200 of the world’s most important investors coming to London to hear how they could be part of the UK’s world leadership in green technologies; £6 billion of investment was committed to offshore wind and millions to many, many different new technologies. We had the opportunity to showcase many of the UK’s leading future solutions to our green challenge and we look forward to continuing to increase that inward investment to help us to deliver them.
Stephen Morgan (Portsmouth South) (Lab)
Will the Department agree to consider evidence gathered by the Environmental Audit Committee’s inquiry into carbon border taxes or, better still, initiate an inquiry of its own?
Anne-Marie Trevelyan
This is an important area of policy. I would be very happy to sit down and discuss the Committee’s findings. It will continue to be a key area post COP26 as through the UNFCCC system we try to find something that can work across the planet, to make sure that we can be as effective as possible in using carbon pricing to help drive the green solutions that we all need.
Andy Carter (Warrington South) (Con)
I congratulate my right hon. Friend on the news that she has begun discussions on a new export and investment partnership between the UK and Italy. Does she agree that enhancing our bilateral relationship with Italy will boost export opportunities and investment promotion for our businesses?
Anne-Marie Trevelyan
I thank my hon. Friend for highlighting an important G20 discussion that I had last week with the Italian Trade Minister. We launched a UK-Italy dialogue, which will be an opportunity to continue to grow the already substantial £14 billion in exports that we have with Italy and the £30 billion in overall bilateral trade so that we can build those relationships with one of our close European allies. We look to do more in bilateral relationships with many of our European neighbours.
Geothermal Energy
Anne-Marie Trevelyan Excerpts(2 years, 7 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
Let me begin by congratulating the hon. Member for Midlothian (Owen Thompson) on securing this very important debate. It is so important that we focus on making the best use of all our renewable resources in the enormous challenge of achieving net zero by 2050. That is our contribution to the global challenge of reducing the climate change shocks that are affecting not only the most vulnerable countries around the world, but all of us in our own communities.
The Government are committed to decarbonising our energy system, while supporting our economic recovery from covid-19, with investment in existing, emerging and new low-carbon technologies and the creation of new green jobs. We have made significant progress on decarbonising electricity, and we continue to take action to decarbonise our transportation need. However, as highlighted by the Climate Change Committee, decarbonising our heat requirements is a significant challenge ahead of us.
With that in mind, we are supporting the development of low-carbon heat networks and looking at the best ways to harness low-carbon heat through developing capacity and capabilities in new sources, one of which could be geothermal energy—although, as the hon. Member for Southampton, Test (Dr Whitehead) said, geothermal energy is not new and is already proving its worth in Southampton. That said, the UK has limited access at the moment to the large naturally occurring geothermal resources that other countries, like Iceland, have tapped into much more intensively in order to decarbonise. There are challenges to overcome to exploit our geothermal energy to the degree that some other countries have.
Opportunities in the UK are perhaps more local and regional in nature. I thank the hon. Member for Southampton, as ever, for the science lesson. I enjoyed the geology lesson. That is new in our repartee over the last few months, so I thank him for that. It is a really important point: there are very clear regional and geological areas in which geothermal could be considered as one of a range of technologies that we might deploy to meet our climate change targets. A number of hon. Members have, of course, set out how that might be achieved in their own areas.
The Government support the development of geothermal projects, provided that it can be done at an acceptable cost and, of course, in an environmentally appropriate manner. It is always very helpful for me to understand where the best opportunities are to realise that potential and what creative things the industry might be doing to tackle the barriers and be innovative in the right environment.
One of the main barriers to deploying deep geothermal, of course, is the high capital cost needed to drill safely. There are also uncertainties around costs and revenues because of the inherent geological risk. As a result, many of the UK’s geothermal projects have so far had difficulty securing competitive financing, because investors lack experience of UK geothermal energy. The projects are therefore often seen as high risk compared to other technologies that are more established in the UK. This is a similar challenge to that seen with other technologies, such as solar energy or offshore wind, in their earlier years, so perhaps that should give succour and comfort to those championing this area of potential development.
My officials in the Department for Business, Energy and Industrial Strategy are engaging very closely with industry leaders to assess what options there are for reducing deep drilling and development costs and the methods of reducing and allocating risks so as to make best use of this energy source. Based on our experience of supporting local authorities to develop heat networks, through our heat network delivery unit, and on advice from the British Geological Survey and the Coal Authority, there is clear evidence that geothermal has really good potential as a renewable heat source for heat networks in many parts of the country.
Geothermal heating schemes are, however, all different. As we have heard this afternoon, they extract heat from rocks or water at different depths and hence different temperatures. This is not an entirely straightforward industry. It is not a uniform system; it is not a wind turbine or a solar panel. There are two broad approaches: deep geothermal schemes, where water is sent down to be heated by hot layers of rock before being extracted at high enough temperatures for use in district heating systems directly; and shallow geothermal, where the temperature of the water extracted needs to be boosted by a heat pump before it can be used for heating. Given the different nature of the technologies, there is no one-size-fits-all solution to bringing this technology forward, which is why my officials are working closely with industry partners.
The Government must balance their support for renewable heat sources with the reality that not all of these schemes will be economically viable with the technology available at the moment, given that the quantity and temperature of the extracted water can vary considerably from scheme to scheme, and there may be alternative renewable heat sources that are better suited to a specific community’s needs. Having said that, I recognise the potential role in supporting our heat decarbonisation objectives, and that is why geothermal heat projects are eligible for the Government’s heat network support.
The heat networks investment project has already supported two shallow geothermal projects in Gateshead and County Durham, with a total of £9.7 million of funding. These schemes will use geothermal heat from mine water to heat homes and non-domestic buildings. Geothermal power projects are also eligible to apply under the newly launched auction round four of our contracts for difference scheme for generation, which will open in December this year.
The Government have also invested £31 million in UK Geoenergy Observatories, which will provide a world-class infrastructure for a wide range of geoenergy-related research. Publicly run, owned and funded, each observatory will contribute to world-class science that puts the UK at the forefront of delivering clean energy at the scale required to help us achieve the net zero target that we have set ourselves by 2050.
I thank all Members who have spoken today and who continue to bring their enthusiasm and passion to the debate. Stoke-on-Trent is extremely well represented by amazing advocates in my hon. Friends the Members for Stoke-on-Trent North (Jonathan Gullis) and for Stoke-on-Trent Central (Jo Gideon)—the latter is a fantastic saleswoman who sees Stoke as the potential centre for the new geothermal revolution that is coming. We were hard-pressed not to know her passion, and I thank her for that.
I also want to thank the hon. Member for Strangford (Jim Shannon). It is always a pleasure to hear him in a debate. It was lovely to discover him in an arena where he is not as knowledgeable as many others in the room, but his longevity in the House usually gives him an advantage. I hope that he goes away with the challenge set by the hon. Member for Southampton, Test to see how he too can take up and champion geothermal across Northern Ireland and bring the opportunities there as we look to invest in them.
In answer to the question from my hon. Friend the Member for Stoke-on-Trent Central, geothermal heat projects are expected to be in scope for the £270 million green heat network fund that will open in April next year. I hope that that helps those who are looking to bid in that space to get going now.
The debate has been really helpful. I find potential solutions exciting, and my officials are working hard to see how we can progress. It is always incredibly helpful to hear from colleagues. The enthusiasm of colleagues this afternoon in making a strong and passionate case for the future progress of the technology is inspiring. I look forward to working with them all in the weeks and months to come.
Protecting Britain’s Steel Industry
Anne-Marie Trevelyan Excerpts(2 years, 10 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I thank everyone who has spoken on this important topic this evening. We have heard some passionate speeches, not least just now from the right hon. Member for Doncaster North (Edward Miliband), and I recognise the significant concern being expressed by all colleagues on behalf of UK steel producers.
Hon. Members heard the Under-Secretary of State for International Trade, my hon. Friend the Member for North East Hampshire (Mr Jayawardena), clearly set out the role of the Trade Remedies Authority, which is sponsored by the Department for International Trade, and how its recommendation process works. The world has changed since 2018 when these powers were put in place, so my Department is very supportive of the Trade Secretary’s desire to review the domestic toolkit, given the challenges of global trade. At the same time, my ministerial colleagues in BEIS and I will continue to devote our focus to the future of this important sector. Although the global economic context is challenging, hon. Members will recall that the Secretary of State said when giving oral evidence to the BEIS Committee’s inquiry into the future of steel that the UK industry will continue to need high-quality steel and British steel is among the best in the world. Making sure our steel industry has the right conditions to thrive is a key part of our efforts to reach net zero and level up across our country.
There should be no doubt that this Government are committed to UK steel making, as the Secretary of State has affirmed, both at that session and on a number of recent occasions. We are already working to protect jobs and we are straining every sinew to ensure that the industry succeeds at securing a sustainable future. Our unprecedented package of covid-19 support over the past year is still available to the sector, to protect jobs and to ensure that producers have the right support during what has been and continues to be a challenging time.
My hon. Friends the Members for Scunthorpe (Holly Mumby-Croft), for Penistone and Stocksbridge (Miriam Cates) and for Redcar (Jacob Young), whom I know have all met the Business Secretary today to discuss the best way forward for the industry, will, I hope, be reassured about our commitment to our UK steel sector. As many hon. Members with close links to steel will know, the Government are working closely with industry and trade unions to understand how we can, together, create a sustainable future for the steel sector in the UK. We recognise absolutely that industrial users in the UK pay higher electricity costs than European competitors, which is why since 2013 we have provided more than £500 million in relief to help steel producers with electricity costs, and we are currently consulting steel companies on the future of such schemes.
As my hon. Friend the Member for Darlington (Peter Gibson) highlighted, the Government’s £350 million industrial energy transformation fund will support businesses with high energy use to cut their bills and reduce carbon emissions. It is a fact that to reach our ambitious net zero target the UK steel sector does need to decarbonise, as my hon. Friend the Member for Waveney (Peter Aldous) set out so eloquently. Our new industrial decarbonisation strategy, which is the first net zero-aligned strategy from a major economy, sets out, for the first time, the Government’s comprehensive assessment of how industry, including the steel sector, can decarbonise in line with net zero in a way that supports competitiveness and clean growth. As my hon. Friend the Member for West Bromwich East (Nicola Richards) highlighted, this is an important journey for the industry.
The strategy includes a commitment to work with the UK Steel Council, which the Business Secretary re-formed on 5 March and provides a forum to work in partnership with industry and the unions to develop a plan to support the sector’s transition to a competitive, sustainable and low-carbon future. In particular, we are working with the UK Steel Council to examine the implications of the recommendations of the Committee on Climate Change to set targets for steelmaking to reach net zero emissions by 2035. In 2019, we announced the £250 million clean steel fund to support the sector to transition to low-carbon iron and steel production through new technologies and processes, so I can reassure the right hon. Member for Islington South and Finsbury (Emily Thornberry) that we have indeed got the steel industry’s back. This fund is currently in development and we need to take the time to design this policy. Complex decarbonisation projects have long lead-in times and the steel sector has indicated that its preference is for the fund to be launched in 2023.
All that strong steel action is aligned with our prioritisation of science and innovation. We recognise the equally strong economic benefits of public investment in science and innovation, and in its capacity to leverage private investment. Because of that, we will increase public research and development investment to £22 billion per year from 2024-25. We also plan to establish a net zero hydrogen fund, with £240 million of capital co-investment out to 2024-25. This will support at-scale hydrogen production projects, allowing steel producers the potential to access supplies of low-cost hydrogen.
Decarbonisation is one top priority. Another one is resolving procurement challenges that the industry faces, as my hon. Friend the Member for Bridgend (Dr Wallis) highlighted. We are working hard to ensure that UK steel producers have the best possible chance of competing for and winning contracts for all Government projects, including those like ships identified by my hon. Friend the Member for Ashfield (Lee Anderson), with his now famous colour. We have established a BEIS industry-led steel procurement taskforce co-chaired by the Minister for investment to explore what Government and industry can do to address the challenges the sector has reported when competing for public contracts.
More broadly, we recently consulted on an ambitious package of procurement reform with the aim of creating a simpler and more flexible regime that works much better for British businesses. The Cabinet Office has now published both the national procurement policy statement and a new procurement policy note on taking account of carbon reduction plans in major projects. BEIS continues to publish our annual steel pipeline, along with data from the previous financial year on levels of steel procured by Departments, origin where known, and compliance with the guidance on procuring steel.
This House should be in no doubt that the Government are working closely with the steel industry and have put our optimism for the future of our steel industry into action.
Mr Perkins
The Minister is saying that this Government have the industry’s back, but the letter by UK Steel read out by my right hon. Friend the Member for Doncaster North (Edward Miliband) made it absolutely clear that it believes that if the Government vote against the motion and do not put in place alternatives, it will be catastrophic for our industry. Why should we believe that the Minister knows better than the very people running the UK steel industry?
Anne-Marie Trevelyan
I thank the hon. Gentleman, but I refer back to the comments made by the Under-Secretary of State for International Trade, my hon. Friend the Member for North East Hampshire. The tools available to us relating to anti-dumping measures continue to be ones that remain at the forefront of the Secretary of State’s toolkit, as I mentioned. I know she will be focusing on that very closely in the days and weeks ahead. There should be no doubt that we absolutely have the future of our steel industry at the centre. It is a strategic industry and remains so, as so many colleagues have mentioned this evening. Speaking as the Minister challenged with delivering net zero, I can say that the offshore wind industry and the nuclear industry, and so many other critical parts of our infrastructure within the net zero part of this Government’s and this country’s commitment over the next 30 years, will require high quality and hopefully very much British-made steel. We are fully cognisant of the international situation that the industry and all its communities face, so we continue to work to protect jobs and to ensure that the industry succeeds in securing its sustainable future. I firmly believe that we will and know that the Secretary of State will continue to update the House in the days ahead.
Question put.