Oral Answers to Questions

Liam Fox Excerpts

Thursday 25th April 2019 Commons Chamber

[Mr Philip Dunne (Ludlow) (Con)]

9. If he will ensure that future free trade agreements do not (a) lower standards in and (b) lead to the privatisation of the NHS.

[The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)]

As we leave the European Union, the Government will ensure that all future trade agreements continue to protect the UK’s right to regulate public services, including the NHS. I have been clear on a number of occasions that more trade should not come at the expense of the high levels of quality and protection enjoyed in the UK.

[Diana Johnson]

I am pleased that the Secretary of State has made those comments, and I am sure we can all agree that, whatever happens with Brexit, our country must not be held to ransom by multinational corporate interests over the future of the NHS and other public services, so can the Secretary of State give a watertight guarantee that we will not see any trade deals that would drive up the costs of medicines and allow foreign firms to sue the UK over improvements in public health and standards in healthcare generally?

[Dr Fox]

As I have made clear in questions and in debate in this House, if we look at trade agreements that we have already entered into—for example, in chapter 9 of the EU-Canada comprehensive economic and trade agreement, the cross-border trade and services chapter, article 9.2 makes it very clear we see that the Government retain the right to regulate in public services. Any changes in the NHS should be a matter for domestic policy debate in the United Kingdom, and not anywhere else.

[Mark Menzies]

The UK is a world leader in healthcare provision, founded on the core values of the NHS. What steps is the Department taking to promote British expertise in this sector and sell those skills abroad?

[Dr Fox]

There is not only enormous interest but enormous demand for UK expertise in healthcare, and we are committed to sharing that expertise and knowledge with the rest of the world. Research commissioned by Healthcare UK recently identified £3 billion to £7 billion of potential contracts for UK health organisations annually over the next 10 years. That is a lot of jobs.

[Mr Speaker]

Mr Philip Dunne—not here. Where is the fella? I hope he is not indisposed. We will have to proceed.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Free trade agreements are, of course, needed, and the EU has some very good ones, which is why the United Kingdom Government are copying them. But trading on World Trade Organisation terms is very expensive. What is the Secretary of State doing to dispel the notion that is abroad, particularly in his own party, that leaving the EU and trading on WTO terms is a good idea? If it was, every country would be walking out of their trade blocs and every country would be ripping up trade agreements. It is a very silly and very dangerous idea, and I hope he is doing his best to combat it.

[Dr Fox]

I am not quite sure how that relates to the question on healthcare, but it is an important point that the WTO rules provide a baseline, and the way in which countries get preferential treatment beyond that baseline is very often through a free trade agreement. That is why we want to see free trade agreements beyond what we have today.

[Judith Cummins (Bradford South) (Lab)]

I welcome the assurances that the Secretary of State has given to the House here today, but can he confirm that the principal protections for public services related to the comprehensive economic and trade agreement are in fact to be found in the joint interpretative instrument, which does not have the same legal force as the treaty? Crucially, it cannot alter or override it. If we are to have confidence in the protections for our public services and the NHS in future trade agreements, these must be written into the text of the treaties. Does he agree?

[Dr Fox]

However we get the assurances, that is what we need to do. In CETA, for example, they are contained in chapters 9 and 28, as well as annexe 2 and the additional national reservation in annexe 2. It is up to this House how we carry out public policy. For example, in the four years from 2006, Labour outsourced 0.5% of the NHS budget to the private sector each year, which of course fell to only half that level under the coalition Government. If Labour wants to increase to its previous levels of outsourcing, it should be able to do so under a policy protection given under the treaties.

[Michael Fabricant (Lichfield) (Con)]

2. What steps he is taking to enable service businesses to access overseas markets; and if he will make a statement.

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[The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)]

The Government’s intention, as provided for in the political declaration, is to secure a tariff-free trading relationship with our European partners, alongside an ambitious independent trade policy with the rest of the world. A customs union would prevent the UK from varying its tariffs and could leave the UK subject, without representation, to the policy of an entity over which MPs had no democratic control.

[Mr Hollobone]

If we were to be part of the EU customs union after Brexit, the United Kingdom, as the world’s fifth biggest economy, could kiss goodbye to any realistic chance of an independent trade policy. For this very good reason, being a member of the customs union was ruled out in the last Conservative party manifesto. Were this to become Government policy, would not the Secretary of State and his entire ministerial team be honour bound to resign?

[Dr Fox]

It is very clear that we do not want to see a customs union being put in place for one of the reasons that my hon. Friend has already given, which is that, with us as a third country, the EU would be able to negotiate access to the UK market—the world’s fifth biggest market—without any due consideration of the impact on the United Kingdom. We would find ourselves in a totally new trading position in that access to our market would be traded for us.

[Martin Vickers]

One of the principal benefits of Brexit is of course the ability to set our own trade policies, and many businesses in my constituency—it includes Immingham, the largest port in the country—want to take advantage of the freedoms that will be forthcoming. What additional support will the Secretary of State’s Department offer those businesses?

[Dr Fox]

I know that my hon. Friend has taken a very close interest in free ports. We are close to finalising a report on their potential benefits, and he will be one of the first with whom I will share that information.

[Nick Smith (Blaenau Gwent) (Lab)]

Some 9,000 people work in the Welsh steel industry, so can I ask the Secretary of State to think again, and support a permanent customs union and commit to a common external tariff on steel imports to support steel jobs in south Wales?

[Dr Fox]

No, I will not commit to that. I have set out the reasons why I believe the application of a common external tariff will be limiting on the UK’s ability to carry out an independent trade policy. What I would say is that we already have the Trade Remedies Authority up and running, and that is the best way to deal with any disputes over steel through WTO rules.[Official Report, 30 April 2019, Vol. 659, c. 2MC.]

[Tom Brake (Carshalton and Wallington) (LD)]

Does the Secretary of State accept that even outside the European Union, some other countries will seek to restrict their trade? For instance, has not the United States said about its negotiating objectives that it will seek to restrict the trading ability of any country that seeks to trade with China?

[Dr Fox]

The United States is perfectly entitled to set out trade objectives, as are we. We believe that trade is best operated through the rules-based international system based on the WTO. Countries can have their own opinions, but that is still the safest, best and most predictable way to carry out global trade.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

We know the benefit of a permanent customs union, particularly for the integrated supply chains on which so much of our manufacturing success is based. What assessment has the Secretary of State made of the net economic benefit of an independent trade policy in the short, medium and long term?

[Dr Fox]

We believe it is possible to get the benefits of a customs union—no tariffs, no quotas and no rules of origin checks—through the mechanism set out in the Government’s proposal on our future relationship with the European Union. The ability to access growing markets will depend on our ability to create trade agreements with those markets. A report by the United Nations Conference on Trade and Development suggested that by 2030 the Asian proportion of trade will be above 50% for the first time since the 19th century, and we must be in a position to take advantage of that.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

5. What steps the Government are taking to protect intellectual property rights in international trade agreements.

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[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)]

My Department is responsible for foreign and outward direct investment, establishing an independent trade policy and export promotion. I can announce to the House that UK Export Finance will support an Airbus Defence and Space UK contract worth nearly $500 million to manufacture and deliver two satellites and a ground station for Türksat, Turkey’s communications satellite operator.

May I also, with your indulgence Mr Speaker, thank two civil servants who are leaving my Department? My principal private secretary, Oliver Christian, has been an outstanding civil servant and I congratulate him on his promotion. I also thank Amy Tinley, my outgoing special adviser, who has been a force of nature in my Department and will be widely missed across the whole of the civil service.

[Gavin Newlands]

I congratulate the civil servants on getting out of Dodge while they can.

Scottish Enterprise told the Scottish Affairs Committee that the success of Scotland’s financial industry was based on accessing and servicing all customers in the EU, which it does currently under the free trade non-tariff EU passport system. Does that not highlight once again the vital importance of freedom of movement to Scotland, and that the Secretary of State’s Government simply do not care about Scottish interests or Scotland’s vote to remain?

[Dr Fox]

I will ignore the hon. Gentleman’s lack of grace in his first comment.

What that shows is the importance to Scotland of services and of access to the single market in the United Kingdom. Financial services are one of the country’s greatest and strongest exports, and Scotland benefits hugely from being part of the United Kingdom’s infrastructure.

[Andrew Rosindell (Romford) (Con)]

T2. I congratulate the Government on the GREAT campaign but, in this week of St George’s Day, as we celebrate all things English, will the Secretary of State confirm that we are going to promote not only everything British but the component parts of the United Kingdom, including England, Scotland, Northern Ireland and Wales, and indeed our cherished Crown dependencies and overseas territories?

[Dr Fox]

My hon. Friend, in his usual way, makes an excellent point. It is not just the fact that we have those very important constituent parts of the United Kingdom to celebrate—we also celebrate our commonality and our unity as expressed through the Union.

[Barry Gardiner (Brent North) (Lab)]

The world was shocked by the two crashes of Boeing 737 Max 8s that saw the tragic loss of 346 lives. That is, of course, a matter for the European Aviation Safety Agency to investigate, but it is for the Secretary of State to investigate whether the export capacity of Airbus was unfairly affected by Boeing’s failure to be transparent about the pitch instability of the aircraft, or to provide specific safety training on the MCAS system, which was supposed to counter that instability. He will know that in one 12-month period the concealment of those issues helped Boeing to increase its sales against the Airbus A320neo aircraft by 768 planes, while Airbus sales dropped by 748 in the same period. What support, if any, does his Department currently provide to Boeing? Does he consider that its ethical failure has had an adverse impact on Airbus’s sales? What discussions has he had about Boeing with the Directorate-General for Competition and the Directorate-General for Trade in the European Union to protect Airbus’s export capacity from unfair and potentially illegal practices by its competitors?

[Dr Fox]

Let me associate myself immediately with the hon. Gentleman’s sentiments about the loss of lives as a result of the tragic crashes of the 737 Max aircraft. Safety issues are, of course, the responsibility of the Department for Transport but, in the context of international competition, as he is well aware, there have been two recent cases at the World Trade Organisation relating to Washington’s state subsidies for Boeing and European subsidies for Airbus. As far as I am concerned, the issues relating to Airbus have been solved. I think that we would all benefit from a clear set of international rules on aircraft subsidy so that we could be assured that there is a genuine international level playing field, not least because of the rise of the Chinese aircraft industry and its entry into the market.

[Bob Blackman (Harrow East) (Con)]

T6. This afternoon the Confederation of Indian Industry will host a major conference to allow the regions of the United Kingdom to pitch to the states of India for future international trade. What action is my hon. Friend taking to encourage the regions to pitch for business in India?

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

T3. Because of the shambles over Brexit, UK manufacturing currently has the highest-ever level of stockpiling in the G7. The latest survey conducted by the North East chamber of commerce shows low levels of cash and, as a consequence, a sharp downturn in export activity. Cash is king: it is the lifeblood of business. Will the Secretary of State speak to his colleagues in the Department for Business, Energy and Industrial Strategy and the Treasury and, as a matter of urgency, provide financial support for UK manufacturers to deal with this Brexit chaos?

[Dr Fox]

The entire premise of that question is wrong. There has not been a depression in export activity. In fact, in the first quarter of this year, exports rose by 3.1%, which was an acceleration of the trend in the fourth quarter of 2018.

[Vicky Ford (Chelmsford) (Con)]

T7. Britain is also great at green tech, and a leader in areas such as offshore wind technology. What opportunities are being exploited for us to export our expertise in clean technology to other parts of the world?

[Dr Fox]

It is important that we take climate issues seriously. Whether or not individuals accept the current scientific consensus on the causes of climate change, it is sensible for everyone to use finite resources in a responsible way. The United Kingdom was the first country to establish legally binding emission targets, through the Climate Change Act 2008, and we have reduced emissions faster than any other G7 country. We are leaders in clean energy production, and it is estimated that $11.5 trillion is likely to be invested globally in clean energy between now and 2050. That represents an enormous opportunity and the potential for more jobs in the United Kingdom, which, as I have said, is already a global leader in terms of both practice and exports.

[John Spellar (Warley) (Lab)]

T4. May I ask the Secretary of State to welcome Anzac day, and our long-standing friendship with Australia and New Zealand? May I also ask whether he recognises what every major economy understands—that in order to export, firms need a strong domestic market, including public sector contracts? Rather than believing that we are the only ones in step and lecturing other countries about changing their ways, should we not face reality? Will the Secretary of State urge his Cabinet colleagues to put British firms and British workers first and, in public sector contracts, to put Britain first?

[Dr Fox]

There is also the small matter of putting British taxpayers first, and ensuring that they are getting value for money from any contracts that we award. However, I entirely agree with what the right hon. Gentleman said about Anzac day. In fact, may I take the opportunity to invite colleagues to join me and others at the wreath-laying ceremony that will take place at the Cenotaph at 10.30 this morning, and the service at Westminster Abbey that will follow it?

[Mr Philip Dunne (Ludlow) (Con)]

I welcome my right hon. Friend’s comments earlier on trade agreements and the NHS. As a former clinician, can he confirm categorically that future trade agreements will not impact adversely on the values, standards or funding model of the NHS?

[Dr Fox]

As I said, it is very important that NHS policy and management are decided by British political debate, not from outside. We have had considerable success in utilising the private sector to augment the NHS. As Andy Burnham said, the previous Labour Government worked with the private sector to bring down NHS waiting lists, and they came right down. I would hope that any future Labour Government would have exactly the same freedoms to use the same policies.

[Mr Stephen Hepburn (Jarrow) (Lab)]

T5. Donald Trump is an “America first” US President, so does that mean that in any future trade deals with the US we will be “Britain second”, to our disadvantage?

[Dr Fox]

Obviously not.

[Tom Pursglove (Corby) (Con)]

Is there any opportunity to further promote UK steel exports through the GREAT campaign in the year ahead, not least because it is the best steel in the world?