Free Trade Agreement: New Zealand

Lord Mackinlay of Richborough Excerpts

Thursday 21st October 2021 Commons Chamber

[Anne-Marie Trevelyan]

As I have said, we recognise the importance that both countries attach to high welfare standards. New Zealand and the UK have committed together to a specific chapter on animal welfare reaffirming those key points about food production. Indeed, to the hon. Gentleman’s point, we will absolutely ensure always that goods coming into the UK do not fall below the standards that we set and that we want to ensure for the safety of our constituents.

[Craig Mackinlay (South Thanet) (Con)]

I congratulate my right hon. Friend on achieving this agreement in principle. Can I assume that it follows very similar lines to the agreement with Australia, so that we can have full triangulation for the UK with Australia and New Zealand, between whom there is already a unique relationship in their trade? Could she explain how this will assist and help in an even further expansion of free trade for this country through the CPTPP accession negotiations?

[Anne-Marie Trevelyan]

My hon. Friend raises a really important point. We have submitted our application to become a member of the CPTPP, which is a group of 11 countries that work together with a free trade agreement. We are the first new member to apply, and we are presently going through what I can only describe as an exam process as our legislative requirements are tested against its framework. It is incredibly important. New Zealand and Australia are two key partners within the CPTPP, and in having these two first free trade agreements with them, we are setting out very clearly what is important to us. As I say, with this New Zealand agreement today, we are setting out all the areas that are really critical to us and indeed to our businesses. It shows the importance that we will continue to give to what free and fair trade means. It is ensuring that our businesses are working in a fair and competitive environment so that they can sell their fantastic produce. I have the fantastic challenge and joy of being able to share that across the world. I am making sure that, as we look to that CPTPP market, through these first two trade deals we are setting out our important and, indeed, great offer.

NHS and Future Trade Deals

Lord Mackinlay of Richborough Excerpts

Monday 22nd July 2019 Westminster Hall

[Craig Mackinlay (South Thanet) (Con)]

It seems to me that we are debating that old chestnut, “public good, private bad.” We must take into consideration the fact that 7.6% of all NHS spending goes on what we might call private-type enterprises. They are not all for-profit enterprises; many are in the not-for-profit sector, such as community interest companies and charities. This issue is often portrayed as uniquely Conservative, with the suggestion that we want somehow to privatise the NHS, but all the facts, including the additional expenditure on the NHS in the past few years, demonstrate completely the opposite. In 2010, when the Labour Government left office, 4.4% of NHS spending went on the alternative, non-public sector. That figure is now 7.6%. The rate of growth has been exactly the same since 2010 as it was under the Labour Government.

I am sure that what underlies the petition is the petitioners’ fear of what might happen in future trade deals. One deal did not come to pass—the old TTIP, which the rest of Europe has decided not to pursue. I for one would very much welcome a future US trade deal, and I am sure we will be in a better place to negotiate one, given the rather sluggish way the EU seems to approach international trade deals. I pay tribute to the hon. Member for Hartlepool (Mike Hill) for acknowledging that international trade deals generally are for the good; they expand investment and much more besides in terms of international relations. At the time of TTIP, the same fears emerged, with people asking, “Will our NHS be up for sale?” Love her or loathe her, Cecilia Malmström, the EU’s then Trade Commissioner, made it very clear that national health services were not on the agenda in the UK or anywhere else in the EU.

We saw something similar with the comprehensive economic and trade agreement with Canada, which is deemed to be what we might call best in class. It is seen as a good free trade arrangement, which, obviously, I would like the UK to have with the EU in the future. CETA is an advanced trade deal that allows for the sort of good things that happy, friendly trading nations can achieve, such as reciprocation on many qualifications, but that deal has always contained a specific exemption for Government-procured public services

“supplied in the exercise of governmental authority.”

I can only envisage that we would do the same in any trade deals the UK might make as an independent country. That is in our hands. That is for this place to decide.

This country has always been open for business. I do not know the figures, but we have very few restrictions on foreign ownership of our companies. I do not know whether I use them myself, but frankly, I do not much care if an outsourced Indonesian company provides blood testing. I want the service to be provided at the best possible price and the best quality to the taxpayer. I am sure there are many services paid for by the NHS that are owned by foreign companies—American, French, German, Swiss, Swedish and so on. I really do not care too much, because what is important about the NHS is that it is free at the point of delivery. I am sure that in very many hospitals we enjoy equipment that is made overseas. We have the World Trade Organisation pharmaceutical tariff elimination agreement, so there are very few tariffs between any of the major countries on pharmaceutical products. We should take a wider view in these discussions than just, “public good, private bad”. We need some common sense.

Remarkably—this needs to be put on the table—many Opposition Members seem to want a customs union that goes on forever, and perhaps single market rules that go on forever. However, we would not have a seat at the table as the EU negotiated future trade deals around the world. We would be caught on the coat-tails of a customs union, just as Turkey has to suffer. We could find our NHS on the table in trade negotiations between the EU and the rest of the world on deals that, as customs union members, we would just have to follow. We would be completely powerless. To me, that would be the worst of all worlds. At the moment, our Parliament—Opposition Members and Government Members—will be in control of what is on offer.

[Mike Amesbury]

Will the hon. Gentleman clarify how many trade deals the Government have negotiated that include aspects of healthcare?

[Craig Mackinlay]

To date, obviously none, because we are not able to, but many roll-over agreements are coming to fruition. The biggest, which the Department for International Trade concluded just a few weeks ago, is with Switzerland, which is a major provider of both pharmaceuticals and high-level industrial equipment, which is often used in manufacturing and in our hospitals.

Agreements are rolling over gradually, but I want us to be more ambitious. I want us to have international trade deals that open up greater transparency and friendship and boost trade. If that means we start having zero tariffs on fantastic products from Japan or elsewhere, what is the problem with that? I want the health service in this country to be the best in class and free at the point of delivery. If UK companies are able to provide services internationally, that has to be a good thing too. But the decision on procurement and whether to open up the NHS to competition from America, Australia or anywhere else should be taken in this place. We should not be caught on the coat-tails of perpetual customs union membership, which would give us no decision-making power whatsoever. In the future, this should be a decision for us—for this Parliament, in consultation with the public and indeed the very good people who put their name to the petition.

Small Business Exports

Lord Mackinlay of Richborough Excerpts

Wednesday 20th March 2019 Commons Chamber

[Jack Brereton]

I thank my parliamentary neighbour for making that point. He is absolutely right about Staffordshire chamber of commerce, which offers some incredible, fantastic services for local businesses in Stoke-on-Trent and Staffordshire more widely. Many businesses would not be able to go without those services.

The strategy to which I just referred is subtitled “supporting and connecting businesses to grow on the world stage”. I am confident that that is the right ambition, and one challenge for us all in this House will be to ensure that our local businesses are connected to it. The Government promise that they will

“encourage and inspire businesses that can export but have not started or are just beginning; placing a particular focus on peer-to-peer learning…inform businesses by providing information, advice and practical assistance on exporting…connect UK businesses to overseas buyers, markets and each other, using our sector expertise and our networks in the UK and overseas”

and, finally,

“place finance at the heart of our offer”.

That is a positive statement to read, and it is in that spirit of positive engagement that I want to raise generally the remaining barriers to small-business exports.

[Craig Mackinlay (South Thanet) (Con)]

My hon. Friend talks about a spirit of working together; has he considered whether the good plan for the future that the Department for International Trade is pursuing should include the opportunity for increased exports to our close Commonwealth friends and neighbours? That trade can work both ways. Those countries are growing markets with a third of the world’s population, and they are where Britain should be looking for reciprocal trade.

[Jack Brereton]

My hon. Friend is absolutely right that we need to strengthen those links with Commonwealth countries around the world. It is important that we support those strong growing markets, in which we can trade more of the fantastic products that we make right up and down this country, especially those products made in cities like Stoke-on-Trent.

As a city we are proud of the world-class goods that we make, most famously in the ceramics industry, of course, but also in many other areas of contemporary manufacturing, from the traditional toffees of Walker’s Nonsuch in my constituency, to the cutting-edge technology of Goodwin International. They are UK export success stories. I know from Walker’s that the increase in the capital allowance to £1 million has been vital to the affordability of investment in its factory and in the latest industrial capital goods that it wants to produce.

Let me turn to the small businesses that are not engaged either in exporting or in the programmes available to encourage and help them. The Federation of Small Businesses has on its website an eye-opening article, “Breaking New Ground”, which explores what is holding back potential exporters and, crucially, what they are missing out on. It quotes a report by WorldFirst that found that the typical UK small business exporter generates more than £287,000 per year from exports. It further notes research by the Chartered Institute of Marketing and PricewaterhouseCoopers that found that of those small firms currently exporting, 70% expect to increase exports over the next three years.

Despite the evident value in exporting, less than a fifth of British small firms export anything. Why? According to the CIM and PWC study, 33% lack the confidence to approach new markets, while many see it as too great a challenge. Sixty-nine per cent. of small companies reported significant hurdles to exporting in the 2017 Hitachi Capital British business barometer. The key barriers identified in the FSB article are: insufficient resources, whether staff, time, cash or product; unfamiliar local customs, culture and language; shipping issues; handling, clearing and agency charges; exchange rate fluctuations; legislative difficulties overseas; opaque international tax rules; uncertain immigration employment laws; certificates of origin; and other red-tape issues. As Peter Sewell, regional director at Crown World Mobility, puts it:

“Understanding it all takes more than a Google search.”

It is easy to see how, for sole traders and small partnerships, exporting might be daunting even to consider. Larger companies have the capacity to employ staff in export markets, and if based in the region, they can better overcome many of the challenges I have listed. For smaller companies, though, that is often just not possible and would amount to a significant proportion of their revenues.

I wish to highlight some specific issues that were raised with me on visits to local businesses in Stoke-on-Trent. I have already mentioned Staffordshire chamber of commerce, the local exports team of which, under Rob Lawley, does a great job, and Stoke-on-Trent is one of the cities that is on the up. When it comes to exports, however, the city continues to underperform against midlands cities of comparable size, such as Coventry. That is, I think, a product of Stoke-on-Trent’s business base being far more reliant on small enterprises, and it means that the local team needs more resources to keep the momentum up and fully realise our potential.

We also have unique and specialist sectors, most importantly our ceramics industry. The British Ceramic Confederation is very keen to see a Department for International Trade ceramics expert based in Stoke-on-Trent to meet the very specific needs of the industry. Preferably, they would be based at the new ceramic research park that we hope to see developed as part of the sector deal that the ceramics industry is pursuing with the Department for Business, Energy and Industrial Strategy.

I know that the Department is well versed in the issues facing the ceramics industry after Brexit and the need to continue combating unfair trade practices from countries that do not respect the rules-based international trade system. Indeed, the Minister of State for Trade Policy was a very welcome guest to a roundtable that I hosted recently with local ceramics firms at Valentine Clays in Stoke-on-Trent South. I am also pleased to report that Heraldic Pottery, which he also visited on his trip to Stoke-on-Trent, has expanded further by buying the significant and historic Duchess China Works in Longton in a supply-chain takeover.

Ceramics is undergoing a hugely welcome renaissance in its authentic home of the Potteries, and the export success for businesses large and small will add to the mood of economic optimism in the city. The touring exports hub that joined the Minister on his visit to Valentine Clays is an important part of the engagement that business needs.

I am delighted that the Department has listened to the concerns that I and others have raised about the need to continue anti-dumping measures post Brexit. Most recently, the Secretary of State confirmed that measures to prevent unfair dumping practices that threaten our ceramics industry from artificially cheap imports would be rolled over when we leave the EU. It is also incredibly reassuring for the industry that, under a no-deal Brexit, tariffs would continue to apply to certain ceramic products.

It is essential that, as a Government, we continue to champion measures that support smaller businesses to create more job opportunities, particularly more skilled jobs, which attract a higher salary. In January, the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Rochester and Strood (Kelly Tolhurst), joined me on a visit to Park Hall Business Village. The village, which has expanded in phases, currently now houses more than 100 small businesses, employs more than 1,000 people and occupies over 250,000 square feet of commercial space. It verifies the growing economic success that has been seen and has increased the demand for additional commercial space. There we met: Deck Joint Ltd, which engineers and manufactures “leave in place” formwork for the construction industry; Eden Holistic Pet Foods, a rapidly growing business that supplies grain and gluten-free pet foods; and Fifteen Group, which provides IT services. We have many other smaller businesses that are expanding and have huge potential to export more of their products and services.

One of the issues that is raised most often with me locally is the need to widen awareness of the export finance that is available. Far too few have a good awareness of the support available to finance growing exports or enter new markets. It can sometimes come as a pleasant surprise to small businesses when they find out quite how supportive the Government are in de-risking the considerable financial outlay for first-time exporters—though, of course, more resources, more reliefs and so on will always be welcome in persuading small businesses to take that final step into being an export supplier, especially of goods and services, which are more complicated in their logistics than putting a parcel in the mail after an order on the internet.

Plenty of advice and information is available to small businesses that are looking to export. A great deal of it is free of charge or comes in premium form with membership of one of the trade groups or small business forums that do such excellent work. What I ask of the Government is that the exports strategy be fully resourced to maximise its positive effect. Global Britain’s success will be built on the success of local businesses, many of which have never exported before. Crucially, we need to have increased expert support in export markets to allow small businesses to penetrate those markets. I hope that those small businesses in particular will be the focus of the Government’s efforts to support and connect businesses to grow on the world stage.

EU-Japan Economic Partnership Agreement

Lord Mackinlay of Richborough Excerpts

Tuesday 26th June 2018 Commons Chamber

[Barry Gardiner]

The Government have not published any serious analysis as to the potential outcomes of the EU-Japan EPA on the car industry beyond the basic econometric analysis in their impact assessment. It cannot be right to allow the Government to proceed with fast-tracking approval of this trade deal when we have not had answers to the critical questions posed by the hon. Member for Stone and his Committee, based on a proper analysis of what the likely impacts might be.

[Craig Mackinlay (South Thanet) (Con)]

Will the hon. Gentleman give way?

--- Later in debate ---

[Craig Mackinlay (South Thanet) (Con)]

I support any measures that reduce tariffs, accept others’ standards and reduce non-tariff barriers. Sadly, the EU, in its usual way, has agreed to accept only international standards and has refused to accept good-quality domestic standards in Japan and elsewhere.

The economic partnership agreement is an EU-only agreement. We are discussing it today with the help of my hon. Friend the Member for Stone (Sir William Cash), but it does not really matter to us. I tried to assist the hon. Member for Brent North (Barry Gardiner) in making that point. He may have problems with the deal, but in the world in which he might like to live in future, we would not be discussing the deal at all because we would be held up on the tails of a future customs union or the customs union.

It is sad that it has taken seven years to get to where we are—the agreement will not come into force for another year. That timeline shows the sclerotic nature of EU negotiations. I very much look forward to the time when our Government can negotiate such deals with Japan and others as an independent sovereign nation.

Whatever grumbles I have about how we got here, the benefits of the agreement are clear. Japan is the third-largest global economy. Given the size of our economies—Britain is the fifth or sixth-largest, depending on what measure we prefer—trade between us is very much under-weighted. We export more to Sweden, which is an economy of just 10 million people. We export more to Qatar, which is an economy of just 2.5 million people. We import more from Norway, which has just 5 million people, than we import from Japan, which has 127 million people.

The economic partnership agreement will increase that trade, which is currently virtually in balance at about £14 billion either way. Estimates show that the agreement will increase bilateral trade—UK trade to Japan—by up to £5 billion. I believe that to be an underestimation of what can be achieved.

I welcome the deal as a step forward in liberalising global trade, but the deals I want our Secretary of State to do over the coming years are with developing nations. I want our consumer pound to be spent helping developing countries to trade towards prosperity, and I want our consumers to benefit from low global prices, free of protectionist EU tariffs.

I support the agreement and look forward to more as we take control of our tariff schedules and become a global force for free trade. The world is sadly in danger of descending back into protectionism, whether directly through tariffs or through non-tariff barriers. I tried to intervene on the hon. Member for Brent North. I need to impress upon him and others that this deal and others like it, and any rollover deals or future beneficial deals around the world, will not be achievable if we stay in a customs union or the customs union. We need to be free of that and to behave like a normal independent country again. I look forward to the Secretary of State making future excellent deals for the benefit of our nation.

Royal Yacht Britannia: International Trade

Lord Mackinlay of Richborough Excerpts

Tuesday 11th October 2016 Westminster Hall

[Mrs Flick Drummond (Portsmouth South) (Con)]

I congratulate my hon. Friend the Member for Rossendale and Darwen (Jake Berry) on securing this interesting debate.

Her Majesty’s Yacht Britannia was based in Portsmouth dockyard and for decades was a familiar sight to my constituents and visitors. She was based at South Railway jetty, the traditional dock for royalty and distinguished visitors travelling by sea. From there she could be seen by every ship coming and going from Portsmouth when she was alongside. There was therefore considerable sadness when Britannia was removed from service without the prospect of a replacement. Portsmouth expects, should Britannia be replaced, that we will be her home again.

[Craig Mackinlay (South Thanet) (Con)]

Does my hon. Friend agree that actually the only true home for the new royal yacht Britannia should be the country’s only royal harbour—Ramsgate, in my constituency?

[Mrs Drummond]

That might be one of the cinque ports, but I still think that Portsmouth will be the best place.

There is an excellent case for renewing the role of Britannia as a floating base for UK diplomacy. The royal family are a formidable and hard-working element of the UK’s soft power mission, and a ship equipped with conferencing and hospitality facilities offers them a great base. However, Britannia was not just a floating hotel, but a symbol in her own right of the prestige and reputation of the UK. Many of the deals done by UK exporters aboard Britannia were won without the presence of the royal family, but with the aura of “Great Britain” very much present. It is worth noting that our competitors recognise the usefulness of ships employed in that way, as my hon. Friend the Member for Rossendale and Darwen said. Many nations operate training ships that actually serve to promote their national interests. The Chinese Government, for instance, have just commissioned a new one.

The motion refers to reintroducing the Britannia but, like other hon. Members, I hope that we will be looking to build a modern replacement for her. Whether this is done by reactivation or replacement, there are some basic principles that the Government should adhere to. First, her home, like Britannia’s, should be Portsmouth. Secondly, as a vessel operated and supported by the Royal Navy, she must not be an excessive burden in terms of either manpower or budget. A good argument for replacing Britannia is that her systems are somewhat outdated and labour-intensive compared with those of modern vessels. She is a steam-age ship in a digital world, with a relatively short range compared with equivalent modern vessels. She could showcase outstanding products from the UK marine sector in her design and build. If the ship exists partly to promote British trade, it follows that not all the burden of paying for her should fall on the MOD budget or, indeed, the taxpayer. Thirdly, her operational use must be as wide as possible. By all means title her a “royal yacht”, but she should be capable of adapting as need requires.

Britannia was designed to operate as a hospital ship in times of crisis, but that happened only once, during a humanitarian crisis in Aden. Alternatively, this ship could be used more intensively than Britannia was, as a mobile educational facility around the UK. We are a country dependent on the sea for our past security and future prosperity, yet we are increasingly “sea-blind”. Air travel is the long-distance mode of transport that dominates our everyday thoughts, but it is not actually the most important: 80% of all world trade is seaborne and more than 90% of Britain’s trade, by volume and value, travels by sea; we still rely on sea trade for much of our food.

In Portsmouth, the museums and ships in our historic dockyard are a permanent reminder of the importance of the Royal Navy and the seas to our national story. Britannia could be a mobile showcase for the importance of the maritime industry to people around the UK. The overwhelming majority of space in our dockyard is engaged in maintaining a Royal Navy that is at the leading edge of technology and is supported by a defence sector that drives a great deal of innovation in the civil as well as the naval and military fields.

The sea-blindness that I referred to is hard to understand, given the importance of the sea and the maritime sector to our lives. We know from the maritime growth study, published a year ago, that the maritime industries sector contributes more than £11 billion a year to our economy. It is bigger than aerospace and on a par with our world-leading pharmaceutical sector. It may represent only 5% of our employment base, but it is a vital part of our manufacturing and service sectors.

A revived Britannia could tell that story and promote the skills and technology of the sea at home as well as abroad. I hope that the Government will look carefully at the options for renewing the capability that Britannia provided, by whatever means, and will recognise that it could give us a competitive edge in world trade and diplomacy.