Future of the Commonwealth

Julia Lopez Excerpts

Wednesday 21st March 2018 Westminster Hall

[Richard Graham]

My right hon. Friend is absolutely right; he will be very welcome here. The changes in southern Africa, both in Zimbabwe and South Africa itself, give us all hope that the direction of southern Africa is on a positive trend, in the sense that in both cases the changes have been done bloodlessly. I very much hope that South Africa will be a keen part of the Commonwealth again, and that perhaps next year we will be able to welcome Zimbabwe back into the Commonwealth family, which I am sure my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames) would welcome, too.

Although the Department for International Trade wants to see, precisely as both hon. Members have mentioned, the benefits of intra-Commonwealth trade spreading more widely across the Commonwealth and reaching forward to a world where free trade agreements could be more possible and practical, the biggest challenge to the ease of doing business is in the non-tariff barriers. At some point we must try to do more about the practical challenges to benefiting from cross-border trade in the way that Malaysia and Singapore, two far east Commonwealth countries, trade together over each other’s borders.

It is amazing that we have not yet made more progress—by “we”, I mean the Commonwealth in this context. I first started working on these issues with the then Minister for the Commonwealth, Lord Howe, a great champion of the Commonwealth since its birth. With Lord Marland leading the charge at the reinvigorated Commonwealth and Enterprise Investment Council—my right hon. Friend the Member for East Devon (Sir Hugo Swire) is part of that team—we have the opportunity to help steer the Commonwealth in a more business-friendly direction that will advocate free trade.

The potential for our own free trade agreements in the United Kingdom means that during our period of leadership of the Commonwealth over the next four years, there is no excuse for not seeing a sea change in the number of free trade agreements and direct bilateral business being done throughout the Commonwealth.

[Julia Lopez (Hornchurch and Upminster) (Con)]

I thank my hon. Friend for his interesting and timely speech. I fully agree that the Commonwealth is unlikely to form some kind of new trading bloc, but does he agree that it is an important framework for intergovernmental co-operation in improving the investment environment? That is the way that it will help to aid trade: by working together on things such as infrastructure, the business environment, the rule of law and governance. All those things will help to improve our trading relationships in the long term.

[Richard Graham]

My hon. Friend is absolutely right, and I know that her experience in the International Trade Committee bears on that. Those non-tariff barriers: the ease of doing business, infrastructure issues, blockages at ports, and bureaucracy and paperwork involved are all things on which we and the Commonwealth as a whole can make huge progress. She is quite right; it would make a big difference.

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[Gillian Keegan (Chichester) (Con)]

I congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing this debate and on his excellent speech, particularly his focus on the United Nations sustainable development goals.

The UK’s trading future on the international stage is promising, and nowhere more so than within the Commonwealth. As a group of 54 nations, we are part of a collective comprised of 2.4 billion people—a third of the global population—and occupying about a quarter of the world’s land mass. By building on our relationships within the Commonwealth, we will further the goal, set out by my right hon. Friend the Prime Minister, of becoming a truly global Britain.

The Commonwealth has strong foundations rooted in seven decades of collaboration. It has helped support smaller nations develop, strengthening economies and democratic institutions. Our collective economic strength is significant: a shared gross national income of more than $10 trillion, and internal Commonwealth trade is expected to grow to $1 trillion by 2020. As we seek to develop new opportunities further, we do so from a platform of shared histories. In many cases we have a common language and a common legal structure. We should therefore in theory have fewer barriers to overcome in reaching agreements. Already, 80% of Commonwealth countries benefit from preferential access to the UK’s market. Furthermore, the Royal Commonwealth Society has highlighted the fact that there are already significant trade advantages within the bloc. In a recent study it found that transaction costs between two Commonwealth partners are 19% less than they are between non-Commonwealth nations: that is driven largely by language and legal systems.

When we consider bolstering our trading relations internationally, we need to do it strategically. I am pleased that the Department for International Trade is working with many of our partners to lay down the basis for future trade agreements. However, we are limited by our capacity to broker deals. Free trade agreements are clearly an ambition, and rightly. However, they do not always meet expectations. In most cases deals are designed around goods, but if we are to capitalise on our competitive advantages they will need to include service markets. The reality is that for businesses that trade internationally there are several non-tariff barriers that free trade agreements often do not address, such as licensing agreements, capital controls and ownership rules. The British Chambers of Commerce identified non-tariff barriers as the most important area of concern for business in non-EU third-party agreements.

[Julia Lopez]

One of the difficulties that businesses have faced in recent years, particularly in trading with such places as Australia and New Zealand, is the movement of personnel. Because we have had such free and easy migration arrangements with Europe, it has been a problem to try to get movement from those other countries. Does my hon. Friend agree that an interesting idea to consider is something like a realm visa, which would give easy access to people from countries where the Queen is the Head of State, such as Australia, New Zealand and Canada?

[Gillian Keegan]

Yes, I do agree. As we design an immigration system to meet the needs of the country, we will not have either artificial numbers or systems that do not meet the needs of businesses or our skills agenda.

Today the EU has, or is negotiating, trade deals with more than 80% of Commonwealth countries, in part thanks to the efforts of UK Governments, so we must ensure that we develop bilateral agreements to replace them. Bespoke deals could do just that. Singapore, for example, is a tech business hub for its region and could be a potential gateway to other Asian countries for British businesses. Like finance, technology consolidates in hubs, around talent and investment. We already enjoy a prominent position in the sector, with 18% of global data flows passing through the UK, so there is opportunity to grow. Singapore is currently finalising a deal with the EU.

We therefore hopefully have a foundation from which to work, with the potential for it to be more tailored to our national interests. Canada, too, has a basis from which to work, with the EU-Canada comprehensive economic and trade agreement. Furthermore, we are Canada’s largest export market within the EU, and therefore there is a great mutual benefit to striking a deal.

In 2015 UK Commonwealth exports were £47.4 billion, with five larger economies—Australia, Canada, India, Singapore and South Africa—accounting for 70% of our Commonwealth exports and 65% of imports. There is therefore scope to expand our working relationships with the smaller developing Commonwealth nations. Technology, regulation, standards and skills training can act as a gateway to greater investment and openness in developing economies and provide career opportunities for large numbers of young people.

The Commonwealth provides the UK with a great opportunity for the further development of economic, diplomatic and cultural ties with nations that already have much in common with us. As the Prime Minister said last year, we face new and unprecedented joint challenges, and we all have a responsibility to work together as partners to ensure that the Commonwealth has the institutional strength to face them. Our trading relationships, if executed strategically, will drive prosperity both here and throughout the Commonwealth.

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[Peter Grant]

That is absolutely correct and a very valid point. We must ask ourselves where this new trade will come from. The list of countries with which the European Union—and therefore the UK—has a trade deal or will have one by the time we leave, already includes a lot of the Commonwealth’s economic powerhouses, such as South Africa, Canada, Singapore and the large but unequal economy of India. We are effectively looking for trade deals with poor countries full of poor people. Are we saying that we will start having trade deals that benefit those people, rather than ourselves? I hope so.

[Julia Lopez]

Will the hon. Gentleman give way?

[Peter Grant]

I do not have time to take too many interventions—I apologise.

I have a deep interest in the Commonwealth. My mum was from a very large family, and a lot of her younger sisters took the £10 single ticket to Australia. As happened in those days, they all changed their name when they got married, so none of them bears my grandad’s name. However, I am delighted that the descendants of the “Mighty Quinn”, a humble plumber from Newarthill in Lanarkshire, now run into the hundreds and contribute to the economic and social wealth of the great country of Australia. When I was putting my notes together, I actually forgot that my wife is the daughter of an Asian Commonwealth immigrant—perhaps that is what happens when we think of people as who they are, rather than where they came from and what colour their skin is.

As I said, Commonwealth countries collectively comprise some of the poorest citizens in the world. If we want to keep our entitlement to talk about the Commonwealth, we must do something to make it a bit more common to all. Some of the suggestions about the way that trade can be used are beneficial, but we should be careful about some of the others. One thing that most Commonwealth countries have in common is that their people were once exploited for the benefit of Great Britain. We cannot and must not allow that to happen again. If we want to contribute to the future of the Commonwealth, we must talk honestly and openly about its history. Some parts of that history do not make Britain or its constituent nations look particularly good, and I include Scotland in that, because the role that it played in the oppression and exploitation of citizens in other countries is something that none of us can be too proud of.

My hon. Friend the Member for Glasgow North mentioned the close links with Malawi—an example of how the new relationships can be made more positive. I am happy to place on record the extraordinary contribution to that link that was made by Jack McConnell, the then Labour First Minister of Scotland. His drive and determination created what is now probably the closest and best-developed bilateral link between any two nations on the planet. An astonishing 46% of people in Scotland know somebody with direct personal involvement in Malawi. Much of that is due to the fact that Malawians are eternally grateful for the part played by David Livingstone in abolishing the slave trade in their part of Africa and in helping to lead to its abolition elsewhere.

I cannot mention Malawi without singing the praises of the astonishing Mary’s Meals organisation. If hon. Members have not heard of it, they should hear about it. From literally nothing a few short years ago, it is now feeding over 1 million starving children every day—an extraordinary achievement by some extraordinary people. I hope that is the kind of spirit that can lead to the Commonwealth going from strength to strength.

The Commonwealth is not particularly a trading organisation, and I do not think it ever should be. It is not just about the Commonwealth games, but if the only thing the Commonwealth did was the Commonwealth games, it would still be worth celebrating. As I have mentioned, I was delighted when the games came to visit the city of my birth.

Leaving aside seeing the team from Niue, one of the things that we sometimes forget about the Commonwealth games is that it is not just 53 countries that take part, but 71. The Commonwealth Games Federation recognises the status of countries that are not officially countries according to the United Nations or the International Olympic Federation. For example, Jersey, Guernsey and the Isle of Man can compete in their own colours. The Commonwealth games are the only major competition in the calendar where world-class track or field athletes from England can compete in the colours of England. I think that is great.

The spirit of the Commonwealth games was best demonstrated by the lad from England who finished 10th in the marathon—didn’t he get a medal? His doctor said to him 18 months earlier, “You’re 6 stone overweight. Exercise or die.” So he exercised and exercised and exercised, and finished up the best-placed competitor for his country in the marathon in that great city. If the Commonwealth and our membership of it can inspire us all to put that amount of dedication into contributing something, whether to the Commonwealth games, the Commonwealth Heads of Government summit or Commonwealth-based organisations, the Commonwealth very much has a future ahead of it. I am proud to stand here as a citizen of the Commonwealth, and I hope to remain a citizen of the Commonwealth for the rest of my days.