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Jake Berry (Rossendale and Darwen) (Con)
I beg to move,
That this House has considered promoting trade with the Commonwealth.
May I say what a pleasure it is to serve under your chairmanship, Mr Davies?
“Brexit means that Britain is back. The country that gave the world the English language, common law and the Mother of Parliaments is once more to seize its destiny as a global leader. This is an exciting time for Britain and an exhilarating one for the countless millions elsewhere who appreciate Britain’s… contribution to western civilisation.”
Those are not my words, but the words of the hon. Tony Abbott MP, the 28th Prime Minister of Australia, in the foreword to a report produced earlier this year by the Free Enterprise Group called “Reconnecting with the Commonwealth”. He was reflecting a new feeling of optimism about global Britain following our vote to leave the European Union last year.
On 23 June the British people sent a powerful message to all politicians that they wanted Britain to be a strong, independent trading nation facing the globe, not merely the EU. It is worth noting that if Vote Leave had been a political party and the referendum a general election, that party would hold over 400 seats—a bigger majority than Tony Blair had in 1997 and a powerful mandate that all of us in Westminster would do well to heed.
Much of the talk since the referendum has, for understandable reasons, been focused on when, where and how Britain will trigger article 50. Although that has not been exactly finalised—the legislation is going through the other place—it seems that the matter will be settled and article 50 will be triggered in March. It is now time to move on to discussing the future of global Britain—I hope that today’s debate is an opportunity to do so—and what the country that our children and grandchildren will inherit from those of us who are now in Parliament will look like.
Mark Field (Cities of London and Westminster) (Con)
Although I share my hon. Friend’s positive, buccaneering hope and optimism, it is also worth saying that this country has never given up on having a global role. Notwithstanding our 44-year membership of the European Union, we should not forget that in the Commonwealth and beyond, we have been and will remain a strong global player diplomatically and in terms of trade and all the cultural elements to which I am sure he will refer.
Jake Berry
It is undoubtedly the case that Britain ceded to Europe control of trade negotiations and the ability to go out in the world and create free trade agreements. That is now over, and following the vote to leave the European Union, it is time for us to decide whether Britain will be a sad shadow of its former self, beset by recession, or a globally outward-facing nation, which I believe can be a beacon of free trade—I hope we can debate that today. It is not just me saying that. The Prime Minister acknowledged it and set up the Department for International Trade, which is hugely positive for our nation. In a speech in Davos earlier this year, she correctly talked about not only wanting a strong European Union, which is vital for Britain to succeed, but creating a Britain that looks beyond the confines of Europe for its future trading relationships.
Richard Graham (Gloucester) (Con)
I join others in saluting my hon. Friend for securing the debate. Does he agree that the opportunity is not either for trade with Europe or with the rest of the world, but to do both better in a new context? Does he also agree that next month’s meeting of the Commonwealth Trade Ministers in London offers a great opportunity to get a coalition of the willing for a Commonwealth trade and investment agreement moving?
Jake Berry
I will come to that point. We cannot offer enough plaudits to my right hon. Friend the Member for East Devon (Sir Hugo Swire)—he is sitting here on my right—and our noble Friend Lord Marland for all the work that they have done to ensure that that first Commonwealth Trade Ministers meeting takes place next month.
In 2010 when I became a Member of Parliament, I was given a fantastic opportunity by the Commonwealth Parliamentary Association to visit the Commonwealth parliamentary conference in Nairobi. I was delighted to attend, largely because I have always been a supporter of the Commonwealth, which is a unique family of nations, and all that it stands for and represents. In that meeting in Kenya, I was struck by an overwhelming message from parliamentarians from other Commonwealth countries: they had begun to believe that the Commonwealth did not matter to Britain anymore and that it had become of dwindling importance since Britain joined the EU. Notwithstanding the comments made by my right hon. Friend the Member for Cities of London and Westminster (Mark Field), successive Governments of all political hues have neglected the Commonwealth and its tremendous potential.
Despite the neglect, it is at the time of our greatest national need that these countries have stood shoulder to shoulder with Britain. They have stood by us when, as a nation, we have faced our darkest hours. Commonwealth soldiers have left home to fight and die alongside British troops on far-flung battlefields half a world away from their home, in Europe, Africa, the middle east and south-east Asia. They have not forgotten our bond of shared culture and history that binds the Commonwealth together. It is now time for Britain to remember its old alliances. We must celebrate the Commonwealth and all that it represents.
Deidre Brock (Edinburgh North and Leith) (SNP)
Does the hon. Gentleman agree that one of the best ways to tackle poverty in Commonwealth countries is through renegotiating the many exploitative trade treaties that were signed in the bad old days of colonial rule, as advocated by my hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin)?
Jake Berry
The best way for us to tackle poverty in the Commonwealth is for us to start trading freely and to make every single citizen of the Commonwealth richer. In truth, that is the best way of tackling it, along with other measures to which she referred.
I pay tribute to my right hon. Friend the Member for East Devon and our noble Friend Lord Marland. Together with the Maltese and the Commonwealth Enterprise and Investment Council, they have driven the issue of Commonwealth trade by organising the first ever Commonwealth heads of trade meeting, which takes place in London next month. That meeting has the sole purpose of increasing co-operation and trade between Commonwealth Governments and businesses. I hope it will put Commonwealth trade at the top of our Government’s agenda. Not only is it an exceptional meeting of Trade Ministers, but it is the perfect springboard for a successful meeting of Commonwealth Heads of Government meeting next year. I hope the Minister discusses next month’s meeting in his contribution to this debate, and takes the opportunity to put on record his commitment and that of our Government and his Department to expanding trade with our Commonwealth partners.
Andrew Rosindell (Romford) (Con)
I congratulate my hon. Friend on securing this very important debate at this time, as we leave the European Union. It is fantastic that he speaks passionately about the Commonwealth, but does he also include the overseas territories and the Crown dependencies? There are 21 of them and they are not members of the Commonwealth in their own right. Does he agree that we must include them in any discussions about trade and co-operation in future?
Jake Berry
I agree absolutely. I was in touch only this week with the Falkland Islands Government, who are watching this debate to see what is said about the Crown dependencies and overseas territories. I will come to how we must absolutely ensure that they are not left behind in any new Commonwealth trade deals.
Doing business in the Commonwealth makes sound economic sense for Britain. This is not a throwback to a sepia-tinted view of the Commonwealth; it is about ensuring that Britain’s economy grows. The facts speak for themselves. The Commonwealth is a market that comprises 52 largely English-speaking countries with a combined population of 2.6 billion, covering a third of the globe. Some 60% of its citizens are under 30, and half of the top 20 global emerging cities are in it. It should be noted that, although the UK has a trade deficit with the EU, it has a trade surplus with the Commonwealth that stood at £1.9 billion in 2015. The Commonwealth contains mature and open economies such as Canada, Singapore, Malaysia, New Zealand and Australia, exciting new emerging markets such as India, and developing economies in Africa, the Caribbean and the Pacific. It has a combined GDP of more than $10 trillion. It includes five G20 countries, with trade projected to surpass $1 trillion by 2020.
Mr John Spellar (Warley) (Lab)
Among the mature economies and G20 countries that the hon. Gentleman mentions is Canada, and I hope he joins me in welcoming the House’s decision on 8 February to endorse the EU-Canada trade deal. In parallel with that deal, should not we look into a trade deal with Canada to take place shortly after we have left the EU? After all, if we cannot do a deal with Canada, where many of us have relations and with which we have strong links and a strong strategic and security alliance, who the hell can we do a deal with?
Jake Berry
I believe we can do a trade deal with Canada. The whole country was recently united in shouting “Where on earth is Wallonia?” That shows that the European approach to negotiating trade deals is wrong—I will come on to how the Government can set out a better approach than the EU-Canada trade deal. Canada has indicated that it wants a trade deal with Britain.
The Commonwealth’s GDP does not match the EU’s, which is some $16 trillion. However, the EU’s growth rate has averaged only 1.7%, while the Commonwealth’s is currently more than 4%. As Britain prepares to leave the European Union, it is with the Commonwealth—our extraordinary family of nations—that we should seek to strike trade deals. A recent report on the Commonwealth states that on average it is 19% cheaper for businesses in the Commonwealth to do trade, because of our common legal systems, language and culture. The Commonwealth and its nations represent a growing and increasingly important market for Britain; Britain, in turn, represents the fifth largest economy in the world and a gateway into Europe for Commonwealth nations.
When it comes to trade deals, we in this country have a lot to learn from our Commonwealth partners, which are blazing a trail for free trade among themselves. Australia already has a free trade agreement with New Zealand and is negotiating a free trade deal with India, and both Australia and New Zealand are parties to the Association of Southeast Asian Nations deal. Britain should seek to emulate such trade deals. Unlike the EU, Australia and other Commonwealth partners have not made the perfect the enemy of the good. In many cases, they have opted for a sectoral approach. They are prepared to sign multiple trade deals—the one between Australia and Singapore is an example—and when areas of co-operation are agreed, they sign a trade deal about those areas and put the more divisive areas to one side. We should compare that with the eight years that it has taken the EU to negotiate with Canada.
I hope that at the Commonwealth Trade Ministers meeting next month the Minister and his Department will seek to start negotiations with Canada, Singapore, Australia, Malaysia and New Zealand, which are large, open economies.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
I congratulate my hon. Friend on securing the debate. Does he agree that we should also consider trade deals in southern Africa, which is very much dependent on agricultural economies, and specifically in Malawi, which is dependent on tobacco, to deliver cheaper food for our constituents?
Jake Berry
The issue of agriculture and Commonwealth trade is quite tricky to tackle. South Africa has said that it would like to sign a trade deal with Britain the day after Brexit—it is unfortunate that it cannot be signed the day before, but the day after would be very welcome.
I hope that the Minister will initiate talks with the large, open economies. They should be a key negotiating priority for Britain; indeed, several of them have already indicated an interest in exploring trade deals. New Zealand has reportedly even offered to help Britain by providing trade negotiators to assist the Minister and his Department.
We also need to open trade deal talks with India. That will be a huge challenge for the Minister and his Department, but we will be helped significantly by the Indian diaspora of 1.4 million people, which creates strong cultural ties between our nations, and by the fact that India is currently the UK’s largest export market in the Commonwealth. A recent Commonwealth study estimated that a UK-India free trade agreement would increase two-way trade by 26% and predicted that UK exports to India could increase by 50% every year. I hope that all hon. Members can see that that would be a huge prize, not only for Britain but for India. The Government must make it a priority next month.
John Howell (Henley) (Con)
My hon. Friend speaks about the benefit of such trade deals to the UK. Does he agree they would also provide the ability to bring stability, because of what we could do as a result to help countries in regions that are often quite troubled?
Jake Berry
Yes, I agree that they are a good way of bringing stability. Sometimes Commonwealth countries have been frustrated that rather than talking to them about trade, the Government have simply talked about development, democracy and human rights while entering into trade deals, agreements and contracts with China. One of the best ways to instil stability, democracy and human rights is to have a good trading nation that makes its population richer.
Next month we must also ensure that we do not leave behind Africa, the Caribbean, the Pacific states and the Crown dependencies. We should offer tariff-free and quota-free deals with access to the UK market, and we should pursue deals with South Africa, CARICOM—the Caribbean Community—and the east and west African groupings. Achieving those deals will be complicated and time-consuming—we have seen and heard that trade deals take several years to agree—but the time to start the negotiations is at the Commonwealth Trade Ministers meeting next month, not in 2019 as the Minister’s Department has indicated.
Other practical steps that we need to take include looking at departmental reform to eliminate silos. Trade Ministers should be able to move freely between the Department for International Development, the Foreign and Commonwealth Office, the Department for International Trade and the Home Office. To strike trade deals, we will need to tackle issues such as visa reform, aid and the FCO’s use of soft power; we will also need to use our influence to promote the Commonwealth and all its benefits and trade deals.
Mr Gregory Campbell (East Londonderry) (DUP)
I commend the hon. Gentleman for securing the debate. On the subject of the Commonwealth Trade Ministers meeting next month, does he agree that although the EU has been quite insistent on its restrictions on when it will begin discussions and negotiations, no such inhibitions apply to Commonwealth nation states? We should quickly get down to trying to negotiate with our willing partners the type of deals that he has outlined.
Jake Berry
I agree wholeheartedly, and I hope the Minister will confirm that approach. The Government said in response to a parliamentary question that we would have to wait until 2019, but I hope that that is not the case. If we are leaving the EU, we should be negotiating with the Commonwealth and should not be as worried about what the EU has to say about it.
The issue of visas is a tricky one. I am sure the Minister is aware that 40 Conservative MPs signed a letter that was published in last week’s Sunday Telegraph asking for simple changes at our border to extend the hand of friendship to the Commonwealth nations. We are not calling for changes in visa restrictions; we are simply asking that border officials acknowledge the importance of the Commonwealth when people arrive here.
Finally, I call on the Minister to consider whether he could publish a White Paper on trade, and specifically on Commonwealth free trade, following the meeting in March. The Government published the last White Paper on trade in 2011. Clearly that was before Brexit, and it was produced under the coalition Government. A new White Paper on Commonwealth trade could set out a road map for Britain’s new relationship with our Commonwealth partners and, crucially, could focus bilateral meetings at CHOGM next year on trade and co-operation.
I hope that such a White Paper can cover, among other issues, what steps the Minister will take to increase the number of trade envoys deployed to Commonwealth countries; which Commonwealth countries the Department has prioritised for trade agreements; which Commonwealth nations have come forward seeking trade agreements post-Brexit; how many Departments’ new trade audits have been set up with Commonwealth countries; and what steps he is taking to improve exports to Commonwealth destinations.
As we have heard, the task is legion, but next month’s meeting is an important rallying call to the Minister and his Department. If Britain is truly back, it is time to demonstrate that the Government accept that the Commonwealth is a key trading partner for this country and that the distance between our nations is no barrier but a natural highway, over which we will see international trade flourish.
Philip Davies (in the Chair)
I must get to the Front-Bench spokesmen as close to 3.30 pm as possible. There are around 10 colleagues seeking to catch my eye, so I must impose a time limit. The most generous time limit to get everyone in equally is four minutes, but I must add that if people take interventions that will reduce the time left for people further down the line. However, if everyone sticks to four minutes without intervention, we should be okay.
Simon Danczuk (Rochdale) (Ind)
It is a real pleasure to serve under your chairmanship, Mr Davies.
I thank the hon. Member for Rossendale and Darwen (Jake Berry) for securing what is a very timely debate. In a way, it kills two birds with one stone: where can we find trading opportunities after we leave the EU, and the age-old question, “What is the purpose of the Commonwealth?”
In November 2012, a Foreign Affairs Committee report highlighted concerns that Commonwealth member states were not making the most of the economic and trading opportunities offered by the Commonwealth. However, the same report concluded:
“It is clear that the creation of a free trade area with Commonwealth countries would require a fundamental and potentially risky change in the UK’s relationship with the European Union, and the benefits may not outweigh the disadvantages.”
That “change” is now going to happen, and while increasing trade with the Commonwealth might not be the silver bullet to ease all of our country’s economic uncertainties, it is common sense.
We have historical ties to Commonwealth countries, and while much of our colonial history is shameful, close ties still exist, such as the English language and a similar administrative and legal system, which break down communication barriers between our businesses and foreign traders, as the hon. Member for Rossendale and Darwen has pointed out.
Simon Danczuk
I will not give way; I will try to make progress.
We also have dynamic diaspora communities here in the UK. In Rochdale, for example, we have vibrant Bangladeshi, Kashmiri and Pakistani communities, which all make a real contribution. Such communities can play a bigger role in driving trade between the UK and the Commonwealth, and in increasing investment. Members of those communities speak not only English but their native language and regional dialects which are unfamiliar to many Brits. They often know Commonwealth countries better than any of us sitting here in Westminster: they know local customs, traditions and tastes. Such communities can act as a valuable bridge to new markets.
There is huge scope to enhance trade with our Commonwealth partners, but that cannot be at the expense of our values. An open Britain that enjoys the benefits of free trade cannot mean that we pursue a crude transactional foreign policy. For all its flaws, the EU was a great democratising force. To join the EU club and gain access to its economic perks, countries have to uphold basic liberal values. We saw that in the late 1990s and early 2000s, when countries that had formerly been suppressed behind the iron curtain were encouraged by the EU to embrace free trade and a liberal, democratic political system.
I worry that in the coming years Britain will turn a blind eye to police brutality in Kashmir in order to secure a free trade deal with India; or that Awami League Government attacks on political and press freedoms in Bangladesh will be ignored as Britain increases economic ties with that country; or that—as the hon. Member for Rhondda (Chris Bryant) highlighted yesterday—promoting British businesses in African republics will be at the expense of promoting lesbian, gay, bisexual and transgender rights across the continent.
If we turn a blind eye to injustices and human rights abuses in such countries to secure trade deals, it would be a damning indictment of our country and would completely hollow out the Commonwealth. By all means let us promote trade with the Commonwealth, but while we do so we must remember that it is our values that make both the Commonwealth and Britain great.
Sir Hugo Swire (East Devon) (Con)
I join colleagues in congratulating my hon. Friend the Member for Rossendale and Darwen (Jake Berry) on securing such an important debate. I also draw attention to my entry in the Register of Members’ Financial Interests, as I am the deputy chairman of the Commonwealth Enterprise and Investment Council.
No one cares more passionately about the Commonwealth than I do. I ceased being Minister for the Commonwealth in July 2016, after just over four years in the post, and I am absolutely delighted to have joined the board of the CWEIC, which designed the meeting on 9 and 10 March at Lancaster House and is also hosting it.
That meeting is incredibly important. It will be an opportunity to discuss the significance of Brexit for international trade, and we will cover six themes: financial services; ease of doing business; technology and innovation; business and sustainability; creating an export economy; and attracting investment. Also, there will be roundtables on the second day, each one designed to identify areas where Commonwealth countries can co-operate, to promote the agenda for growth and to help achieve the $1 trillion intra-Commonwealth trade target.
I will not reheat some of the arguments put forward so eloquently by my colleagues, but we need to be aware of the Commonwealth advantage: when bilateral partners are Commonwealth members, they tend to trade 20% more and generate 10% more in foreign direct investment flows than when one or both are non-Commonwealth nations.
Commonwealth trade and investment flows of all kinds are now growing noticeably faster than overall world trends, and currently account for some 15% of total world exports. The Commonwealth has a combined GDP of $8.4 trillion and an annual growth rate of 3.7%.
However, we do not need to get hung up on this idea of free trade deals; they are not the be-all and end-all. The CWEIC is also encouraging exporting, which is absolutely critical, especially exporting by UK small and medium-sized enterprises. Our Commonwealth First programme aims to help 100 companies to trade and invest across the Commonwealth over the next three years.
Currently, the UK exports around £220 billion-worth of goods and services to the EU, and as a result it has withdrawn from a lot of the Commonwealth countries over time, so the opportunities of Commonwealth trade are absolutely huge.
It is also worth bearing in mind the fact that the UK is the largest EU goods export destination for numerous Commonwealth countries, including Australia, Canada, India, New Zealand, South Africa, Pakistan, Sri Lanka and Jamaica. I believe that this meeting in March will be critically important.
I will therefore ask the Minister some questions. Given that we hope to follow up the meeting with a business forum, as we had in Sri Lanka and then in Malta, can he tell us today when the date and location for CHOGM will be announced? Also, can he confirm that the Commonwealth Heads of Government have been notified of that proposed date and that it has been discussed with them? Will he take the opportunity today to reaffirm the Government’s commitment to the Commonwealth, and to congratulate the CWEIC on the initiative that it has shown in setting up this meeting in March? Will he clearly state on record today the Government’s commitment to the Trade Ministers meeting, to the work that the CWEIC is doing and to the idea that CHOGM in 2018 should largely be focused on trade and business and that the Government will support a business forum at that time?
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Rossendale and Darwen (Jake Berry) on securing the debate. With all the focus on Brexit—we are all looking towards that—and import and export issues to the fore, we must remember that there is a wider market to explore. The aim of $1 trillion of Commonwealth trade by 2020 is a goal we must all work hard to achieve. That should be the focus of Ministers and Members of Parliament, in proud partnership with the Commonwealth.
I can always remember watching the Commonwealth games and being amazed by the number of countries that made up the Commonwealth. I was proud that they were happy to respect and be tied with the Queen and this great nation. There is a natural bond there, which the hon. Gentleman referred to in his introduction. It should be strongly explored and enhanced for the benefit of all those involved. We are all winners from enhanced trade and economic co-operation, but it will take time and effort to build it up.
Plenty of facts about trade are available, and other Members have mentioned them. In 2015, UK exports of goods and services to the Commonwealth were worth £47.4 billion, while imports from the Commonwealth were worth £45.5 billion. That gives an idea of the stats. It is clear that great work is being done, but there is massive potential for more to be done. The UK’s trade is heavily focused on a small number of the 51 Commonwealth countries. In 2015, Australia, Canada, India, Singapore and South Africa accounted for 70% of UK exports to Commonwealth countries and 65% of UK imports from the Commonwealth.
This is not a debate on Brexit, but it would be remiss of me not to point out the opportunity in the Brexit negotiations to enhance trade with our Commonwealth brothers and sisters. The Government have intimated that intention through the response of the Under-Secretary of State for International Trade, the hon. Member for Wyre Forest (Mark Garnier), to a written parliamentary question, in which he stated:
“We cannot negotiate and conclude trade agreements while we are a member of the EU, but we can have discussions on our future trading relationships. We have already announced working groups and dialogues on our future trading relationships with seven markets: Australia, China, India, New Zealand, Norway, South Korea and the Gulf Cooperation Council, which comprises six countries.”
My belief is that negotiations must range more widely to make the most of all avenues and ports of call within Commonwealth countries. That will help to develop those countries and will benefit our own. There should be a mutually beneficial system that allows small businesses and local economies to have access to the global network.
Andrew Rosindell
Does the hon. Gentleman agree that this is also a great opportunity to encourage the Republic of Ireland to join the Commonwealth and to include it in any possible arrangements for free trade across the world? There is an opportunity for the British Isles. Does he agree with that?
Jim Shannon
Of course I do; I wholeheartedly agree with that. Indeed, I would go the further mile and make it happen. It would be great to have the United Kingdom of Great Britain and Ireland, and not just Northern Ireland, together as one. That would be special, but I will settle for it being in the Commonwealth.
It is clear that deals with countries such as Australia, Canada and New Zealand will be important. They can open up big areas of new trade. It all depends on the terms we decide we will abide by in coming out of Europe, but we must ensure that we reach further. The initial talks with New Zealand have indicated the position that we will be seeking to establish post-Brexit: a foundation of respect and a hope to see winners in all areas. If we can do that across the Commonwealth and the United Kingdom, we should.
For too long we have had to labour under trade rules that did not allow for the foundations of the Commonwealth to be explored. Now is the time to seize the opportunities and to enjoy the benefits of the ties to our Queen and her aims, which we all hold dear in this place and further afield.
I will conclude, as I am conscious that I got an extra minute for taking an intervention. One Commonwealth charter principle is that
“international peace and security, sustainable economic growth and development and the rule of law are essential to the progress and prosperity of all.”
Let us enhance our links, so that we pay more than mere lip service to that charter principle. Let us start the planning right now.
Mr Shailesh Vara (North West Cambridgeshire) (Con)
It is a pleasure to serve under your chairmanship, as always, Mr Davies. I commend my hon. Friend the Member for Rossendale and Darwen (Jake Berry) on securing this important debate. To the extent that it is relevant, I declare that I am co-chairman of the Conservative Friends of India group.
Our existing trade with the Commonwealth is not insignificant. In 2015, our exports to the Commonwealth totalled £47.4 billion, and our imports from the Commonwealth totalled £45.5 billion. The Commonwealth is comprised of 53 member states, representing a quarter of the world’s landmass and 2.2 billion people. Some 60% of the Commonwealth’s population is under the age of 30. There can be no doubt about the massive opportunities that lie ahead for our country. Forecasts by PwC suggest that India will be the world’s third largest economy in 2030, behind China and the USA. That is hardly surprising—according to the most recent United Nations global population estimates in 2015, people aged under 35 comprised 64% of the population of India.
Some say we should concentrate on only a handful of Commonwealth countries. UK trade is heavily focused on a small number of countries. For example, in 2015, Australia, Canada, India, Singapore and South Africa accounted for 70% of UK exports to Commonwealth countries and 65% of UK imports from the Commonwealth countries. It is important to remember that, as members of the European Union, we did not simply concentrate our efforts on Germany, France and Italy, but also made efforts with the smaller nations. Likewise, it is important that we do not just concentrate on the larger nations of the Commonwealth, big though they may be.
Oliver Colvile
Will my hon. Friend consider that America could be invited to join the Commonwealth, thereby allowing for a trade deal to be done much more simply, as with other Commonwealth countries?
Mr Vara
My hon. Friend makes a valid point, but I hope he will appreciate that it is not for us to invite countries to join the Commonwealth.
We are equal partners, and it is important to remember that, in the Commonwealth, we should not pick favourites. We should give the smaller nations equal treatment, particularly given that our aim is to increase trade. There is the potential to increase trade with those smaller countries, too. I will not abuse the extra minute I have received by virtue of that intervention and will make hasty progress.
Britain remains a popular destination for Commonwealth citizens, both for business and non-business purposes. It is right and proper that the Government take seriously the suggestion of my hon. Friend the Member for Rossendale and Darwen on making things easier at our airports. It would send a powerful message to the rest of our Commonwealth partners. Next month’s Trade Ministers meeting seems an appropriate place. I hope the Minister will not say that it is logistically not possible because we are only days away from the meeting. It is perfectly feasible to make the announcement at the Ministers meeting and say it will take effect in three months, six months or whenever we have gone through the logistical procedures.
The Prime Minister has said that we want to build a
“truly global Britain… one of the firmest advocates for free trade anywhere in the world.”
At the Commonwealth Trade Ministers meeting next month, we have the perfect opportunity to make a powerful statement to our Commonwealth partners by doing just that.
Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)
It is a pleasure to serve under your chairship, Mr Davies. I congratulate the hon. Member for Rossendale and Darwen (Jake Berry). It is good to see so many of his colleagues here after his shameless promotion of the debate yesterday in Foreign and Commonwealth Office questions. I also welcome the many Government Members who want to promote trade with Commonwealth countries, the overwhelming majority of which have become independent from the UK.
On an unrelated note, Scotland is a proud trading nation. Supporting Scottish business to export and attract direct foreign investment is good for Scottish business, for our economy and most importantly for the people of Scotland. Three out of Scotland’s top 20 export destinations in 2015 were Commonwealth nations: Australia in 15th place, Singapore in 16th and Canada in 18th. Scottish Development International has eight offices in multiple locations around the Commonwealth to assist companies looking for opportunities in Scotland. SDI’s support has helped businesses settle and invest in Scotland. For example, around 50 Canadian companies located in Scotland support more than 5,000 Scottish jobs, and Indian companies have made investments of around £700 million in the past five years, providing around 2,500 Scottish jobs.
Scotland’s international exports were worth £28.7 billion in 2015, excluding oil and gas, which represents a 17.3% increase from 2010. Under the SNP Scottish Government from 2007 to 2015, the value of international exports has increased by nearly 40% from £20.4 billion to £28.7 billion.
In two days’ time we will celebrate four years since Scotland became a fair trade nation. On Monday, we will mark the start of Fairtrade fortnight, which will run from 27 February to 12 March. Fair trade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions and securing the rights of marginalised producers and workers. I urge the Government to bear those important factors in mind when embarking on Commonwealth trade deals.
I am sure the House will join me in welcoming today’s launch of the Scotland Malawi Partnership’s “Buy Malawian” campaign, which encourages people to buy ethically produced, fairly traded Malawian products in Scotland and is a great way to support farmers, entrepreneurs and small businesses in Malawi. That supports the creation and sustainability of livelihoods for people right across the supply chain, from smallholder farmers in rural Malawi to local fair trade retailers in Scotland. Malawi is, of course, a country of the Commonwealth and one with which Scotland has close ties as a result of Dr David Livingstone. Through his travels, Dr Livingstone fought against the slave trade and looked to open new trade routes into Africa to support its economic development. More than 150 years later, the Scotland Malawi Partnership has continued that mission and is hoping to cement Livingstone’s birthday on 19 March as an annual “Buy Malawian” day to promote Malawian produce and sustainable economic development.
The sustainable development goals can influence trade with the Commonwealth. As a supporter of the HeForShe campaign, sustainable development goal 5 on gender equality is very important to me. Future trade deals must recognise the rights of women and the economic gains of gender equality and an empowered female population. That applies both to the UK and to the countries that it seeks deals with.
I firmly believe that promotion of the SDGs must play a major role in any future trade deal and hope the Government respond positively.
John Howell (Henley) (Con)
It is a great pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for Rossendale and Darwen (Jake Berry) on securing the debate. I want to use the example of one country to illustrate some of the points that he and other Members have made. The country is Nigeria, where I am the Prime Minister’s trade envoy. [Hon. Members: “Hear, hear!”] I thank hon. Members for that endorsement of my role. My appointment was a pre-Brexit one, although admittedly it has relevance in a post-Brexit world, which goes to show how much this country values the relationship it would like to have with Nigeria. Trade is of mutual benefit—it benefits not just one but both of the countries concerned. We can do enormous good when we operate in a country if, as well as ensuring that our own markets are fulfilled there, we ensure that that country’s markets are also developed.
Nigeria’s size is significant in that respect—with 170 million people it is, I think, the most populous Commonwealth country in Africa—but it also has enormous regional importance. At a dinner organised for me in Lagos recently, the common theme around the table of Nigerian and British businessmen was that it was impossible to see sub-Saharan Africa taking off without the development of Nigeria. Anything we can do to help Nigeria to develop will bring stability to that part of the world. We need to show that we are doing that, as a good member of the Commonwealth family. It is an important part of the message we want to give.
I am trying to do something about the status of our trade relations with Nigeria, which are currently abysmal because they are based on one factor—oil and gas—that has seen an enormous drop. We and the President of Nigeria are determined to diversify the economy to ensure that British companies across the board have a role to play in the Nigerian market.
In terms of the way of doing business, there is a tremendous amount of low-hanging fruit. I am happy to gather that low-hanging fruit as I go, but I am more interested in the long-term business relationships that will cement the UK-Nigerian way forward.
John Howell
I will not. We are too pressured for time.
I know from my experience in central and eastern Europe that those business relationships take a tremendous amount of management time to get right.
There is a way of doing business that depends on getting people together to hunt as a pack, to ensure that all views are known and that we do not act for just one company. I have gathered those companies together in an advisory group that I have set up, with PwC as the secretariat. That group is just about to have its first meeting, and will take forward the approach of operating as a UK group in Nigeria, as our French and German colleagues do with their companies.
I echo the comments made about the diaspora. We have the second largest Nigerian diaspora in the world in this country and I recommend that we make the best use of that.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Rossendale and Darwen (Jake Berry) on securing this important debate. I am sure it will be the first of many debates as we seek to develop business with the Commonwealth.
I come to the debate wearing two hats. First, I am a vice-chair of the Commonwealth Parliamentary Association, and through that association I want us to develop closer ties with the Commonwealth. Secondly, I am chair of the all-party parliamentary university group and want to promote our universities. I want to stress to the Minister how important a business sector the higher education field is. It delivers about £73 billion to our economy and supports more than 800,000 jobs. In international standing, it is second only to the US. International students are a significant source of finance, not just to universities but to the wider UK economy, and non-EU students, many of whom are from Commonwealth countries, contribute about £3.2 billion in tuition fees to UK universities. Overall, their contribution is more than £7 billion to the UK economy, and that could grow.
Our Commonwealth partners are already doing that. As the Minister will know, universities compete in an increasingly globalised economy. It is a growing economy, where there is a great deal of competition. Australia wants to grow its international student numbers by 2025 and is doing that by putting in substantial funding and post-study employment opportunities. Since 2004, the number of international students in Australia has grown by 50%. Canada is doing the same.
I notice that the priorities for the Department for International Trade include “negotiating plurilateral trade deals”, focused on specific sectors, and
“providing operational support for exports and facilitating inward and outward investment”.
It seems to me that the higher education sector would benefit from being promoted through the new Department and that Ministers in that Department will do what they can to make it easier for international students, particularly those from Commonwealth countries, to come to the UK. That means looking at whether the visa system can make it easier for students to come here, and ensuring that students are taken out of net migration figures.
Unfortunately, the message that has been given to international students is that they are not welcome here. In the post-Brexit era, universities need to be able to grow their international offer—not only in respect of students coming here, but in respect of universities operating more easily in Commonwealth countries, and developing educational opportunities and business start-ups from which UK companies can benefit. There could be a win-win for the higher education sector and for the Government if they encourage growth in that sector with Commonwealth countries.
Stephen Hammond (Wimbledon) (Con)
I apologise to the Front-Bench spokespeople that I have to leave the Chamber to deal with a statutory instrument in a few minutes.
I congratulate my hon. Friend the Member for Rossendale and Darwen (Jake Berry). He was right in his exposition to point out that we already trade with the Commonwealth. I have some brief remarks on how we can facilitate greater trade within the Commonwealth to our mutual benefit, and extend the partnership of equals that it must be.
Notwithstanding my hon. Friend’s remarks about trading with all nations in the Commonwealth, a priority for us must be to start with looking at the most developed Commonwealth countries right away. My right hon. Friend the Member for East Devon (Sir Hugo Swire) was right that that does not need to be free trade agreements, although we want those to come. We want to start trading and exporting, and exporting more. One thing we can do before any free trade agreement is look at the certification regimes and non-tariff barriers, which are burdensome in regulation and do not need to be there.
Secondly, there is an opportunity for our services sector, especially in emerging markets where we see the middle class growing. There is a demand for banking, accountancy, insurance, cyber-technology and all that goes with that. We have expertise in those areas, and can export and grow it to mutual benefit. Services are affected far more than goods by factors such as language and legal differences, so harnessing our ties with the Commonwealth in those areas, combined with our already world-leading services sector and the growing demand in most of those countries, makes that an obvious area for immediate post-Brexit opportunity. It is therefore clearly essential that we join the Trade in Services Agreement as soon as possible.
Several speakers have talked about the Commonwealth trade advantage. Recent study has shown that factors such as geography and regional trade blocs mean that Commonwealth counties trade among themselves more than they do with other parts of the world. It is therefore key that we do everything we can to build the capacity for trade. Several hon. Members have pointed out that the ministerial meeting happening next month is a big opportunity for us to start building on the Commonwealth trade advantage. It is not a trade organisation as such at the moment, but over the years to come, a greater role, exposition and commitment from Ministers to trade will see opportunities for economic growth for everyone across the Commonwealth.
I am interested in what the infrastructure sector can do with trade across the Commonwealth more immediately. Some deals struck by other countries in the last decade are beginning to unwind, in all sorts of areas of physical infrastructure such as roads, ports and airports. Across the Commonwealth, there are opportunities for British firms, particularly with high-end contracting skills, to make a contribution to improving and streamlining those projects, and to look at customs procedures between members. Building a trading infrastructure as well as a physical infrastructure will lead to opportunities in the world for financial services. Embedding skills that we have into capital markets, a number of which are growing rapidly across Commonwealth countries, would be a huge benefit not only to the United Kingdom but to the whole Commonwealth.
Sir Paul Beresford (Mole Valley) (Con)
I am delighted to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for Rossendale and Darwen (Jake Berry) on securing this debate.
We talk freely about free trade and opening barriers. I have a couple of declarations to make. First, I belong to the National Farmers Union in this country. Secondly, as hon. Members can tell from my accent, I have a dual nationality: New Zealand and the UK. When we went into the Common Market, New Zealand’s trade with this country teetered from 90% to 50%. After an agreement by Holyoake, the Tory Prime Minister, it dwindled to 5%. Later, a New Zealand Prime Minister called Muldoon, whose politics were really Labour even though he was a Tory, built up barriers right across the country. He was a very difficult man and was renowned for the statement—I apologise to our antipodean colleague, the hon. Member for Edinburgh North and Leith (Deidre Brock)—that any New Zealander moving to Australia increases the IQ of both countries at a stroke. The barriers he introduced crippled the economy. We then had a Labour Government, who introduced what we in New Zealand called Rogernomics. They tore down barriers and told the whole of the agriculture industry, “No ties, no restrictions, no subsidies.”
I think of that when I look round my farms. We have a dairy farm in my area that is supposed to be big—it has 350 cows. We have sheep farms with perhaps 1,000 sheep, and some of those farms get 90% of their income from subsidies. If we are going for free trade, I think we are going to have to wake up. We are going to have to give our farmers—I am concentrating on farmers—the opportunity to wake up and do something before the avalanche arrives.
On the North Island of New Zealand, there are square miles of vineyards. I have the biggest vineyard in Europe in my constituency—it is going to have to wake up. We have got dairy farms, but they are nothing compared with the dairy farms I know of in New Zealand, where 1,500 to 2,500 cows are milked twice a day. The farm I came off in the middle of the South Island had 1,000 head of cattle, 1,000 head of deer and 23,000 lambing ewes—when they lambed we had 50,000 sheep. There is nothing to compete with that here. The size and power of that industry in New Zealand could shatter us because we are not ready.
I know we are keeping subsidies till 2020, but we need to be aware that while we are welcoming people in, we need to be braced for what is going to hit us. I hope that our NFU is going to wake up. It wished us to stay, but my farmers voted to leave. They are going to have to wake up, organise and be expeditiously more efficient than they are at the moment. I welcome the potential deals, but we must be warned.
Sir Henry Bellingham (North West Norfolk) (Con)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for Rossendale and Darwen (Jake Berry) on securing this debate. I declare my interests: I am chairman of the all-party group for the Commonwealth, and I am the former Foreign and Commonwealth Office Minister for the Commonwealth in the Commons, although I was reporting to the right hon. Lord Howell of Guildford at the time.
It is a pleasure to follow my hon. Friend the Member for Mole Valley (Sir Paul Beresford). His expertise on New Zealand is greatly appreciated. I think our total bilateral trade with New Zealand is about £6 billion. With the Republic of Ireland, it is about £32 billion, so there is a lot of ground to be made up.
There has been much discussion about the Commonwealth Enterprise and Investment Council meeting on 15 March. I congratulate my right hon. Friend the Member for East Devon (Sir Hugo Swire) on the work he has done on that superb council and initiative. It is going to be co-hosted by the UK and Malta, and I think it really gives us an opportunity to look at where we go post-Brexit. We can—I hope the Minister will confirm this—start the pre-negotiations with many of these countries. We obviously cannot negotiate trade deals with Commonwealth countries until we actually exit the EU, but surely we can do a lot of the background work. I would be grateful if he could confirm that.
I recently met up with a number of Commonwealth high commissioners, who really want to be fully engaged in this process. They are the key link personnel in London, and they have a vital role to play. May I suggest that before the summit on the 15 March, the Minister has a pre-meeting with the Commonwealth high commissioners in London? I think that would be a really good initiative.
The hon. Member for City of Durham (Dr Blackman-Woods) made an excellent point about Commonwealth migration. I, too, would take student numbers out of migration figures. When we get control of our borders, we need to be sensible and ensure we have the right talent when people come to this country to work. For example, Russell Group universities have on average twice as many non-EU students as EU students. When EU students finish their studies they can do a postgraduate course or work here, whereas many of the non-EU students cannot work and have to go back to their country, as in many cases they find it very difficult to get a work permit or a visa. I think that industry and business need the advantages that will come from our being able to pick the brightest and best without any discrimination in favour of one country or another.
I absolutely agree with what my hon. Friend the Member for North West Cambridgeshire (Mr Vara) said a moment ago about border controls. How we treat Commonwealth citizens is going to be really important in the future, and what clearer and more emphatic innovative signal can we send than changing our border arrival arrangements? I suggest that, post-Brexit, we should have one queue for UK citizens, including citizens of the overseas territories and citizens of the realm—the Commonwealth countries that chose to keep Her Majesty as Head of State—another queue for Commonwealth citizens, or perhaps Commonwealth and EU together, and another for the rest of the world. That would show our trading partners where our loyalties and interests lie. After all, the people side of trade—the services side, and the exchange of people and ideas—is incredibly important.
Andrew Rosindell
On that very point, does my hon. Friend agree that the Commonwealth realms have been neglected? The constitutional link that they have with the United Kingdom in sharing Her Majesty the Queen as the Head of State should be cherished. Their citizens should be given preferential treatment not only when they arrive at Heathrow and enter this country, but in other ways. We should build a closer relationship based on sharing Her Majesty the Queen.
Sir Henry Bellingham
My hon. Friend is absolutely indefatigable on that issue. Of course he is absolutely right. I hope the Minister will take notice of that point and respond to it.
There are huge opportunities out there. It is incumbent on this country and the Government to seize them now.
Philip Davies (in the Chair)
We now come to the Front Benchers. Our new finishing time is 4.14 pm, so if each of the Front Benchers speaks for eight or nine minutes we might even have a few seconds at the end for Mr Berry to wind up the debate.
Kirsty Blackman (Aberdeen North) (SNP)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Rossendale and Darwen (Jake Berry) on securing this really important debate. I hope we can continue the debate over the next two years in the main Chamber of the House of Commons, because it is really important, particularly in the light of statements that were made in advance of the EU referendum about how strong our links with the Commonwealth are going to be.
Coming to debates on any issue surrounding Brexit, it is particularly interesting to hear about the wonderful fantasy world in which some people live. I obviously campaigned for remain, and I believe we are economically, as well as culturally, better off as part of the European Union. I do not believe in the wonderful land of milk and honey and beautiful free trade arrangements that is being proffered to us for a number of really good reasons. The European Union has free trade agreements with 32 of 51 Commonwealth countries, so we are going to have to renegotiate those 32 trade agreements. It is not as though we will be suddenly free to negotiate with the Commonwealth; we will lose those trade agreements when we leave the EU. Why would those countries choose to give a better deal to the UK, which has a population of 65 million, than they give to the EU, which has a population of 500 million?
We will also be negotiating under time constraints, because we will be desperate to ensure we can export. We will have a time imperative that the EU did not have when it was negotiating its deals, so for us to get a good deal will be more difficult .
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
I voted the same way as the hon. Lady in the referendum, but I am sure she accepts that the EU sometimes made trade deals with Commonwealth countries on terms that were not always favourable to the United Kingdom, such as on the free movement of medical professionals. For example, medical professionals from Australia and New Zealand, nurses in particular, were prevented from coming to the UK by prohibitory EU rules on training requirements. There will be advantages to Britain being able to negotiate its own trade agreements with some countries.
Kirsty Blackman
I absolutely agree that some small areas for some industries in some sectors have been disadvantaged by some of those EU trade deals. Some companies talk about how disadvantaged they have been, such as Tate & Lyle because it imports cane sugar, but it is important to note that in any trade deal with another country we might still have to cede some of our sovereignty, because that is how trade deals work—we have to concede some things and to compromise when we make a trade deal. That is what such deals are about—a level of compromise—so we will lose some of the ability to make our own decisions, because it will be wrapped up in the trade deals.
I tried to intervene on the hon. Member for Henley (John Howell) to mention this, but I have a huge Nigerian population in my constituency because so many people have come to Aberdeen North to get involved in the oil and gas industry. If the Government are truly keen to create better links with such Commonwealth countries, however, they need to have better relationships now, because in 2015, the most recent year for which figures are available, the UK Government refused 33% of visitor visas from Nigeria. If the UK Government want better relationships, they need to up such numbers—they only approved 57% of visitor visa applications from Ghana and 50% from Pakistan. Members were talking about special Commonwealth lines at airports and so on, but we need to change the high levels of visitor visa refusals, which are continuing and getting worse, if we want to have a better relationship with those countries and eventually to make free trade agreements with them.
The other point about free trade agreements was mentioned by my hon. Friend the Member for Edinburgh North and Leith (Deidre Brock) and was in connection with the private Member’s Bill promoted by my hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin). The Double Taxation Treaties (Developing Countries) Bill sought to look at the tax treaties we have historically signed with countries to their disadvantage. A number of Commonwealth countries are affected. If we want to pave the way for smooth, positive trade deals, we need to look at the ways in which we have created disadvantage for those countries. A good way to generate some positive feeling would be for the UK Government to look at things such as tax treaties, because that would encourage those countries and increase the likelihood of a favourable trade deal.
The World Trade Organisation has requirements for what should be included in a free trade arrangement in order for it to be a free trade arrangement and not simply something that falls into the most favoured nation category. A free trade arrangement cannot be made for only one type of good or service—that is not acceptable to the WTO—but needs to be much wider. We will not easily be able to make agreements with New Zealand on lamb, for example, or on any such specific; we will need to make much more wide-ranging free trade agreements in order for them to be acceptable and not challenged in the WTO. Furthermore, the WTO is not dissimilar to the European Union in that, for schedules to be approved and so on, the WTO members need to agree them. The WTO road is not smooth, but bumpy, and a huge number of problems will be in our way, not least the cliff edge we are likely to fall off.
Finally, I want to talk about the historical links with the Commonwealth. For people my age or younger, in many ways our only link with the Commonwealth is the Commonwealth games. That is pretty much the only thing. I do not know whether this is generational, but some people believe that the empire was a sort of wonderful, historical panacea and an amazing relationship, but people of my age do not think that. We do not hark back to those days of empire; we look back to the subjugation that we—
Sir Hugo Swire
The hon. Lady must know enough to know that some countries in the Commonwealth were never part of the British empire.
Kirsty Blackman
That is the case, but most countries in the Commonwealth were. My point is that we will be trying to make trade deals with countries with which we have not necessarily always had a positive relationship. Fair enough, we have the Queen as a figurehead, but that is not necessarily enough for us to give them a positive trade deal, or for them to give us one, and it is not enough for the WTO to agree that we should give preferential agreements to each of those countries. The WTO will not agree to that unless we have given them to all countries.
Barry Gardiner (Brent North) (Lab)
Your firm guidance and chairmanship, Mr Davies, are always much appreciated by Members.
This has been an excellent debate. I pay tribute to my hon. Friend the Member for City of Durham (Dr Blackman-Woods) and to the hon. Member for North West Norfolk (Sir Henry Bellingham), both of whom spoke very powerfully about the importance of education and visas connected with education. I especially want to draw out the remarks of the hon. Member for Mole Valley (Sir Paul Beresford), who spoke with great knowledge and understanding of the dangers that exist for our farmers.
I pay tribute, too, to the hon. Member for Rossendale and Darwen (Jake Berry) for initiating the debate. I thought it could have been subtitled “The importance of old friends”, because long before the Common Market became a twinkle in Edward Heath’s eye we had the Commonwealth. At a time when we are loosening the bonds with our nearest friends after a 40-year partnership in the EU, we have come to realise the value of those old friends. We seek to strengthen our ties with India, Canada, New Zealand, Jamaica, Australia, Pakistan, Bangladesh, South Africa, Kenya, Nigeria and all 52 Commonwealth members.
Trade is one of the most effective means of creating shared prosperity and decent jobs. Opposition Members understand the power of fair and open trade. We share the dream of the vast majority of people around the world who want to see closer ties between countries. We want to build trade links, not protectionist walls. We are therefore emphatic in our support for promoting trade with the Commonwealth and in welcoming the Commonwealth Trade Ministers conference to London next month. In that regard, I pay tribute to the work of the right hon. Member for East Devon (Sir Hugo Swire).
[Albert Owen in the Chair]
It would be foolish, however, to think that we in the UK may simply pick up where we left off before we joined the EU. The world has changed, the power balance has changed and the nature of global trade has been transformed beyond recognition. Yesterday, His Excellency Y. K. Sinha, the new high commissioner for India in London, made that absolutely clear at a conference in East Anglia. He said that the key to a post-Brexit free trade agreement would be to resolve the issue of workers’ mobility—how familiar does that sound from our Brexit debate? He made it clear that, for India, it is essential to ensure that its financial services and IT professionals could come to and go from the UK freely. He said:
“For India mobility is key”
and went on to point out that a recent study suggested that a free trade agreement could increase UK-India trade by 25%—I use that figure, but the hon. Member for Rossendale and Darwen said 26%. That would boost UK exports by only 0.4% of total exports. The hon. Gentleman spoke of the “huge prize” that that would be, but let us be clear and do the maths: none of the UK’s top 10 export partners is a Commonwealth country. Indeed, in respect of those Commonwealth countries for which the Government have announced trade working groups and dialogues, the volume of exports from the UK is extremely low. India accounts for 1.7% of our exports, Australia 1.7%, Canada 1.2% and New Zealand approximately 0.2%. Let us add Singapore, given the Secretary of State’s recent visit—that accounts for an additional 1.2%.
Barry Gardiner
Because of the time, I will not.
The Conservative Free Enterprise Group think-tank identified those countries as the priority target for trade agreements. It also recognised that the 10 largest Commonwealth export markets for the UK account for no more than 8% of our total exports but almost three quarters of our exports to the Commonwealth. Clearly, any shift away from the EU would require a substantial uplift in our export growth to make up for the potential loss from the European Union.
It has properly been said that trade between Commonwealth countries is enhanced and facilitated by the context of shared languages, cultural familiarity and particularly common legal and regulatory frameworks. The various communities in the UK from Commonwealth countries, including those in my borough, Brent, are our very best trade advantage. It is estimated that the so-called Commonwealth effect reduces overhead costs for businesses trading between markets by up to 15%.
However, there has been a move to greater regional co-operation through formalised partnerships and institutions very like the European Union, and the increased regulatory harmonisation that goes with that, which has unlocked similar benefits for those Commonwealth countries. It can be no coincidence that the countries mentioned by the hon. Member for Rossendale and Darwen are all members of the Trans-Pacific Partnership agreement. That drive to regional partnerships is significant. We must consider that, although the United Kingdom has determined that it will withdraw from the EU, many Commonwealth countries seek precisely to strengthen their own participation in such regional agreements, and not to recreate the Commonwealth’s old links with the UK. Two Commonwealth countries—Malta and Cyprus—remain members of the EU and will find themselves similarly restricted from pursuing the trade agreements that the UK now seeks.
I will try to move to a close in the next couple of minutes, Mr Owen, as I was asked to. That means leaving out a great deal, but let me pick up one essential thing. By withdrawing from the European Union, we will leave the EU’s generalised system of preferences, which allows developing countries favourable market access through generous tariff reductions, which essentially remove tariffs on approximately two thirds of imports from those countries.
I want to ask the Minister about the GSP-plus enhanced preference scheme for countries that have ratified and implemented core international conventions relating to human and labour rights, the environment and good governance, and the “Everything but Arms” arrangement for least developed countries, which grants duty-free and quota-free access to all products from those countries except arms and ammunition. Will he give us a strong reassurance that, when the UK leaves the EU, those very poorest countries, many of which are Commonwealth countries, will not see their exports to the UK effectively fall off a cliff edge? Will he assure us that the Government will continue the generalised system of preferences arrangements after the UK leaves the EU?
Albert Owen (in the Chair)
I call the Minister to respond to the debate and perhaps allow Mr Berry a minute at the end to wind up.
The Minister for Trade and Investment (Greg Hands)
It is a great pleasure to serve under your chairmanship for the first time, Mr Owen. I congratulate my hon. Friend the Member for Rossendale and Darwen (Jake Berry) on securing this debate about our current and future trading relationships with the Commonwealth, which has truly been remarkable, uplifting and enormously encouraging. It is testimony to the popularity of the debate that I counted some 26 Back Benchers in the Chamber, most of whom stayed for the duration despite the Division. That shows the strength of interest in this subject.
In an uncertain and increasingly challenging world, the Commonwealth is more important than ever. It is an enormous market, but it is more than just a market. The Commonwealth charter has prosperity at its very centre. Members are
“committed to an effective, equitable, rules-based multilateral trading system”
and
“the freest possible flow of multilateral trade”.
I will try in the limited time available to answer the many questions and points that were made, but I am happy to meet or write to Members if I miss anything. My hon. Friend made a strong and compelling speech and presented a comprehensive vision of our future trading relations with the Commonwealth. He began by referencing the Commonwealth Parliamentary Association, which was most appropriate here in the mother of Parliaments. We should recognise the importance of parliamentary diplomacy. Like many Members in the Chamber, I am a long-standing supporter of the Commonwealth Parliamentary Association. My hon. Friend mentioned a recent CPA conference. I went to the one in New Delhi in 2007, which was quite an experience, and have also participated in CPA visits to Nigeria, Sierra Leone and Sri Lanka.
My hon. Friend mentioned that we have stood shoulder to shoulder in conflict with the Commonwealth countries on our side. I am reminded whenever I go to a Commonwealth country that there are sometimes war memorials to our common endeavours in different conflicts in small and surprising places. I remember seeing a memorial in the town of Kumasi in Ghana to the important service of Ghanaian forces in the small and in many ways forgotten—it is probably not forgotten in Ghana—conflict with German-occupied Togo. That is not to mention the millions of people from Australia, New Zealand, Canada, India, Pakistan and other countries who have participated on our side in conflicts.
My hon. Friend mentioned the kind offers from New Zealand and other countries to help prepare our Department for negotiating free trade agreements. We took up New Zealand’s offer, and a senior official from New Zealand was seconded to the Department. I expect that we would look favourably on further such offers, including from Australia and Canada.
My hon. Friend mentioned that trade deals can take several years. That is not necessarily the case. He mentioned the Comprehensive Economic and Trade Agreement with Canada, which I will come back to, but the North American Free Trade Agreement, which is pretty comprehensive, took only 14 months to negotiate. That is not necessarily the model for where we go from here, but it indicates the potential spread of dates.
My hon. Friend also asked whether we should wait until 2019. I say to him clearly that we will not. We are already out there. We have working groups on trade with Australia, New Zealand and India. Notably, the Prime Minister made her first bilateral trade mission to a Commonwealth country—India. The Secretary of State and I accompanied her on that mission. We have also made ministerial visits to Australia, New Zealand, India, Singapore, Malaysia and so on. We have six Commonwealth trade envoys—one spoke in the debate and at least one other was present. My hon. Friend the Member for Gloucester (Richard Graham) rightly referred to the inaugural meeting of Commonwealth Trade Ministers.
The hon. Member for Rochdale (Simon Danczuk) made important points about the importance of human rights in trade talks. The UK has always been at the forefront of ensuring that important issues such as human rights, the environment and consumer protection are at the heart of such deals.
My right hon. Friend the Member for East Devon (Sir Hugo Swire) has in many ways been the very embodiment of the Commonwealth in Her Majesty’s Government for the last four years. He and I had several interactions during that time in all kinds of roles. He is quite right about the importance of the coming meeting of Commonwealth Trade Ministers. I expect that all four trade Ministers will play a role in support of the Secretary of State. No. 10 will come to a decision about the date and location of next year’s CHOGM in due course, but I am sure other Commonwealth leaders will be consulted. After all, we want them to come, so it stands to reason that we will check that date as far as we reasonably can to ensure that we maximise their attendance.
Businesses will of course be involved. At the very centre of trade is commerce and at the very centre of commerce is business and businesses. How they will be involved at CHOGM will be a matter for ongoing engagement. The Secretary of State and I meet businesses on a regular basis.
The hon. Member for Strangford (Jim Shannon) and my hon. Friend the Member for North West Cambridgeshire (Mr Vara) mentioned the importance of smaller countries. Some 80% of Commonwealth countries benefit from preferential access to the UK via the general scheme of preferences, economic partnership agreements, market access regulation and so on. That is an important part of it.
My hon. Friend also mentioned the Commonwealth immigration channel. I am keenly aware of a recent letter to the Home Secretary. I understand that a meeting with my hon. Friend the Immigration Minister is coming up for the people who wrote that letter. Immigration queues are a matter for the Home Office, with input from the Foreign Office and the Department for International Trade. We in the Department for International Trade are always interested in how we can make business travel easier so that those people we depend on for the free flow of trade between the UK and other nations are not unfairly penalised when entering the country.
The hon. Member for West Aberdeenshire and Kincardine (Stuart Blair Donaldson) said that trade was good for Scotland, and I totally agree. That is exactly the point I was making earlier today in front of a Scottish Parliament Committee on the European Union. What I have to say to the Scottish National party is this: the most important market for Scottish exports is the rest of the United Kingdom. Some 64% of goods and services leaving Scotland go to the rest of the United Kingdom, compared with just 15% to the European Union. Moreover, the rate of growth in trade with the rest of the UK has been almost 10 times as fast as that with the European Union over the past nine years.
My hon. Friend the Member for Henley (John Howell), who is a trade envoy to Nigeria, made an important point about trade with Nigeria. Within that was an incredibly important point about the importance of the diasporas to trade. That is a key UK unique selling point in terms of our ability to trade with the Commonwealth, whether those are from Nigeria, India, Pakistan, Bangladesh, the Caribbean or so on.
The hon. Member for City of Durham (Dr Blackman-Woods) mentioned the importance of higher education—trade and business is incredibly dependent on access to the best talent—and of ensuring that universities are a key part of the UK offer in attracting foreign direct investment.
My hon. Friend the Member for Wimbledon (Stephen Hammond) talked about the importance of services. Some 80% of our economy is in services and we need to ensure that the UK is playing an active role in the Trade in Services Agreement, which we are.
My hon. Friend the Member for Mole Valley (Sir Paul Beresford) mentioned the importance of New Zealand. We have no better friend in the world when it comes to trade than New Zealand. I mentioned earlier the support it has been providing, and the recent visit of the New Zealand Trade Minister was a strong sign as well.
My hon. Friend the Member for North West Norfolk (Sir Henry Bellingham) is another person who has taken a strong interest in the Commonwealth in recent years as head of the all-party parliamentary group for the Commonwealth. I will take back his idea of a pre-meet with Commonwealth high commissioners in advance of the trade meeting and discuss that with the Secretary of State to see whether it is practical in the time available.
I did not get a chance to address the main issues, but hopefully I have got across the importance of the Commonwealth to the Government. In the limited time I have left, I do have to say to the official Opposition that they must sort themselves out. We heard from the right hon. Member for Warley (Mr Spellar) in an intervention. He has said that, if we cannot do a trade deal with Justin Trudeau-led Canada, with whom can we do one?
The incredible sight last week of the official Opposition and the nationalists on Monday deciding that they supported CETA, changing their minds on Tuesday and calling a deferred Division, and then on Wednesday voting against that very matter, was amazing to behold. I am sure that was noted widely not only in the European Union but in Canada and across the Commonwealth.
Albert Owen (in the Chair)
Order. The Minister has taken his allocated time.
Motion lapsed (Standing Order No. 10(6)).