Exiting the European Union and Global Trade

Richard Graham Excerpts

Thursday 6th July 2017 Commons Chamber

[Richard Graham (Gloucester) (Con)]

It is a pleasure to follow the hon. Member for Lincoln (Ms Lee). I congratulate her on her passionate maiden speech. Many of us will also remember her predecessor fondly.

This debate is at the heart of the challenge for us all in this Parliament, for although leaving the EU is by no means the only task before us—many of our constituents may have a clearer focus on seeing their local school and hospital well-funded, and their own standard of living gradually increasing—if we lose our access and tariff-free trade with the EU and fail to grow our global business enough to compensate, much else is at risk, because business generates, directly and indirectly, 75% of the total tax revenue that funds vital services. That also means that there is a particular responsibility on all of us here who voted against leaving the EU not to sit back in our chairs and say, “I told you it would be a disaster”, but rather to do our best in making sure that the process works and succeeds because jobs, the economy and, ultimately, the lives of our constituents are at stake. But if I ask remainers to be pragmatic in seeking the opportunities and not overplaying the risks, I would also ask leavers to be pragmatic in their approach. Let me give one example.

The Prime Minister did not commit us in her Lancaster House speech to a position on the customs union. She said that

“I want Britain to be able to negotiate its own trade agreements. But I also want tariff-free trade with Europe…Whether that means we must reach a completely new customs agreement, become an associate member…or remain a signatory to some elements…I have an open mind…It is not the means that matter, but the ends.”

So the Secretary of State was right earlier to focus on prosperity as his guiding light. What works best for business is what will be best for us, because it is business that has delivered the 2.9 million new jobs since 2010—more than all the other 27 EU nations put together.

Today we should all rejoice that exports are up sharply and inward investment is at record highs from 2016’s results. It is a far cry from the prediction made by some of 800,000 unemployed, a deep recession, and real economic hardship by now. But nor should we be complacent, for the figures show a strong surplus of exports and services but a continued deficit in traded goods. In a year of significant currency depreciation, that means we have to do much more. This implies success in retaining the more than 40% of our trade with the EU, and success, too, in exporting to high-growth markets.

As chairman of the all-party parliamentary group on China, let me touch on China, and south-east Asia.

[James Duddridge]

I compliment my hon. Friend on his work as chair of the all-party group and in facilitating greater knowledge of Hong Kong. I urge him to touch on the trading relationships between mainland China and Hong Kong, and how the latter can be seen as setting the pace for the former.

[Richard Graham]

I thank my hon. Friend for his comments. I am not going to talk too much today about the differences between, and indeed the closeness of, Hong Kong and China.

Our exports to China doubled between 2010 and 2016, but they are very dependent on the success of a handful of companies, especially Jaguar Land Rover. What holds us back, and where we have to make much greater progress, is market access. With an excellent new director general of trade and investment in Beijing, recruited from industry, I hope that Ministers will drive real progress in this strategic partnership to deliver greater access for British services, in particular.

[Catherine West (Hornsey and Wood Green) (Lab)]

Does the hon. Gentleman accept that we should be focusing on the role of innovation, universities, science and technology in the context of Brexit?

[Richard Graham]

Yes. The hon. Lady is absolutely right in general. I was going to touch on the importance of education as one of our high-growth exports, and that has to be innovation-led. FinTech, but also lots of other techs, is an area where we can do much more. She is right on that.

Meanwhile, in ASEAN—the Association of Southeast Asian Nations—total exports in the last year for which for we have complete figures were up by 4%. Exports to two of my markets—Indonesia and the Philippines—were up strongly, while Malaysian exports dropped slightly, but from a much higher starting point. Goods exports in the past six months rose by 8.3%, demonstrating that this progress was not just a flash in the wok. We have real success, particularly with business services and insurance, but also with FinTech, MedTech, and even EdTech—not to be confused with EdStone. It is worth noting that we now sell more in education than in insurance. Our partnerships on education in Malaysia are a strong example of what can be done. It remains a strong goal for us as a nation, but also a dream of mine, to establish a British university in the Philippines and in Indonesia.

This matters, because one of the joys of being in business in Asia in general is that long relationships and trust drive business as much as the quality of the product and the transaction itself, and those relationships start early, at schools and universities. In the long term, our education presence and links will enable us to catch up with our main European competitors—Germany and France—in exports of goods, while retaining our advantages in services. This is why we should not include students in our immigration figures, as it leaves an impression of not welcoming foreign students. Moreover, our universities’ growth in foreign student numbers has been well below the growth realised by other Anglo-Saxon countries such as the US, Canada and Australia. This is an opportunity that we can seize, and I hope that the Minister will refer to it.

The prosperity fund will play a key role in growing our bilateral business opportunities. I encourage Ministers to ask that trade envoys be involved at an early stage of any proposal. The Minister knows that not long ago we had three trade envoys in ASEAN, but now only myself. I hope he will encourage the Prime Minister to consider appointing additional bilateral trade envoys to ASEAN nations, which, in turn, can help take forward the bilateral trade relationships by including the business of business in the annual high-level Government-to-Government meetings.

In recent years, British businesses have made great strides in ASEAN markets. For example, we partner with Indonesians to win airport refuelling contracts. We have developed a biogas bus service in Bali from recycled cooking oil. We provide teacher training in Borneo. We advise on air traffic management, engineering consultancy services, rail projects, and public-private partnership structures for hospitals. We equip their airlines with engines and supply most of the exciting parts of their Airbus aircraft, and we are setting up a toothpaste factory and emergency power generation, as well as a new velodrome, and much more besides, to help make the 2018 Jakarta-based Asian games a great success. From museums to marine energy, there is much that we are doing in the world’s fifth largest country. It has been described by The Guardian as the “Biggest invisible thing on earth”, but it is not remotely unknown to us.

What we do in Indonesia is one example of realising the great opportunities in Asia and in ASEAN in its 50th anniversary year. It is a region where the GREAT campaign is well recognised and the Union Jack a strong brand, and London is the best showcase for its international growth and aspirations. As I have indicated, we can do much more, but we build on strong foundations. Let us not be shy to tell our story and do more.