UK Trade and Investment Strategy

Debate between Graham Stuart and Bill Esterson

Tuesday 23rd July 2019 Westminster Hall

[Bill Esterson]

I am glad that the Minister mentioned numbers and outcomes. Let us look at some. Jobs saved through investment fell, from 2016 when they were 28,000, to just 6,000 in 2019. That is an 80% fall. Those are numbers. They are not exactly encouraging, are they? They are not exactly a sign of the Government’s success. Meanwhile, 13% of Asian investors have reduced their investment and 14% have put activity on hold, and there are similar figures for north America—slightly lower for western Europe. How is that a record of success on the numbers?

[Graham Stuart]

I am grateful to the shadow Minister for that intervention. The danger is in selectively seeking those things. On every possible measure, we see the UK—[Interruption.] I hope the hon. Gentleman will stop barracking; he knows what is coming. Even though he pretends not to, he must have seen the UNCTAD numbers—the official UN numbers—for 2018. What did they show? They showed that in 2018, according to the UN, the global stock of foreign direct investment—the yearly amount of total flows—fell.

[Bill Esterson]

What, by 80%?

[Graham Stuart]

The overall stock fell. The hon. Gentleman is talking about flows; he should try and get to grips with this. Maybe this will be a useful seminar for him to do so.

If the hon. Gentleman looks at the stock line for Europe, which is the accumulated level—not at the flow line, as flows go up and down year by year and are essentially volatile; they always have been and I project they always will be—he will find that it fell in Europe too. The net amount fell; there was net disinvestment in Europe and in the world. What happened in the UK? It went up again, but not quite as quickly as it did before. It is the global context. By every possible measure—flow, stock, greenfield, mergers and acquisitions—we lead Europe.

We have strengthened our position in Europe. Why has that happened? It is because of the business-friendly policies that we have put in place. As the shadow Minister is feeling so aggressive, I put it to him: in what possible parallel universe in which there is increasing competition for mobile global investment, with the massive number of jobs and the prosperity that brings, would jacking up corporation tax rates lead to more jobs, more opportunities and more prosperity for people in this country? That is the trade and investment strategy of Labour.

We do not need to think just about what Labour’s current policies will do; we can look back at every previous Labour Government. By the end of the 2000s, France was just about overtaking the UK; now we have more than twice as much as France. Just think of the hundreds and hundreds of thousands of jobs—I am most interested in that number. While the hon. Gentleman and his party play politics, we deliver the investments that lead to prosperity and jobs. If he is interested in going further into the subject, he should look at Ernst & Young and the pattern over the last few years. What have we seen? We have seen an increase in investments outside London and the south-east, and an increase in the share of the FDI going into manufacturing, which has been maintained and strengthened in this country.

That is the exact opposite of the picture that the hon. Gentleman tried to lay out. It is there in every figure—from the OECD, UNCTAD, the Economist Intelligence Unit, Deloitte and fDi Markets. That is a fascinating one. Some people say, “If you include mergers and acquisitions, and you include intra-company transfers, that is not real FDI. We should look at greenfield and new start-ups, not someone buying a factory. What difference does that make? What about creating a new one? Let’s look at that.” Who looks at that? That would be fDi Markets. What did it show last year? From memory, it showed that the UK got 1,268 projects, that France temporarily overtook Germany, with 580 projects—well done President Macron, who has put a lot of work into that—and that Germany had 560 projects. In other words, despite Brexit uncertainty, in 2018 the UK had more greenfield investment projects than Germany and France combined. On what basis would anyone other than the most devout and misguided socialist try to suggest that those figures are not good?

[Graham Stuart]

My hon. Friend is a particular champion of industries in his area, not least ceramics in Stoke. I thank him for speaking in my constituency last Friday and talking about the success that has come from the effort put into that local economy to help to turn it around and strengthen it.

Since 2010, we have been working to turn around the toxic economy legacy bequeathed by the last Labour Government and to support the pioneering, innovative, entrepreneurial brilliance of British business once again. Success has come from policies designed to promote the dynamism, openness and flexibility of our economy. A further important step was taken by the Prime Minister when she established a dedicated trade Department for the first time in British political history. The Department for International Trade has just celebrated its third birthday and is crucial to the delivery of trade and investment success.

Given that this could be a valedictory performance by me, as we get a new Prime Minister later, I pay tribute to the Secretary of State for International Trade and President of the Board of Trade, my right hon. Friend the Member for North Somerset (Dr Fox), for the brilliant work he has done leading and establishing this Department of State. Its work will become even more vital after we leave the European Union. We must build a global, outward-looking Britain that is a dynamic and independent champion of free, fair, rules-based international trade.

Our trade and investment strategy seeks three basic things: higher exports, greater foreign and outward investment, and reduced trade barriers. Contrary to what we have heard, exports are booming. Total UK exports now stand at a record high of £647 billion, bearing out exactly what my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) just said. They are up in real terms—[Interruption.] Maybe the shadow Minister only looks at numbers that suit his narrative? They are up 25% in real terms.

In 2017-18 alone, the Department for International Trade helped UK businesses to export goods and services worth around £30.5 billion, which is a year-on-year increase of 4%. We are proud of our work in encouraging more companies to export, as my hon. Friend the Member for Hornchurch and Upminster said in her excellent opening speech. A lot of the difficulty is in overcoming the timidity and the concerns that companies have in exporting. Nearly 111,000 firms exported goods in the first quarter of 2019, which is 5,000 more than in the same period last year.

I have talked about the foreign direct investment numbers, but the latest figures from UNCTAD show that the UK hit a record high of almost £1.5 trillion in FDI stock by the end of last year, which is more than Germany and France combined, creating 76,000 new jobs and safeguarding 15,000 more. That was in one year and in marked contrast to 2010, when France was close to overtaking us.

To put the FDI numbers into further context, UNCTAD’s figures show that FDI flows—flows not stocks; I hope the hon. Member for Sefton Central (Bill Esterson) knows the difference—fell by 19% globally in 2018. [Interruption.] I am now talking about flows as opposed to stocks, so it is repetition, but about a different aspect of something that I hope the hon. Gentleman would take an interest in. FDI flows fell by 19% globally and by 73% in continental Europe. What happened to FDI into the UK? The flows increased by 20%. So much for the negative effects of Brexit uncertainty.[Official Report, 3 September 2019, Vol. 664, c. 2MC.]

The pace of change in the global economy is increasing but, for the agile, opportunities abound. The Department for International Trade provides the platform to give the UK a unique trade advantage, by locating export promotion, trade finance, trade remedies, export licensing and international negotiations all in a single Government Department.

I want to respond to some points made by my hon. Friend the Member for Hornchurch and Upminster. She asked about the 100 days. We will continue to prepare for no deal to be the outcome, which is not the avowed intent of either of the leadership contenders for the Conservative party. We prepared and were in a good position ahead of 29 March, and we are working with the Department for Business, Energy and Industrial Strategy to be able to meet questions coming in from businesses. We are ready to meet any surge in demand at that level.

My hon. Friend asked about state-level engagement with the US. The Secretary of State and I met with Senators from Florida and Texas the other day. As we expand and strengthen the Department’s reach, we recognise that it is not all about working at the national and federal level, whether in the US or elsewhere, such as in Brazil. I was pleased to meet the Governor of São Paulo, which itself has more than 30% of the GDP of Brazil. There is a lot more to be done at that more granular level in order to identify barriers and overcome them.

My hon. Friend made an interesting point about language. Given our national weaknesses on foreign languages, I hope that officials may be able to follow up on that point. She also touched on the DIT working more closely with the FCO and DFID. We are absolutely trying to do that. I am delighted that we are becoming an official development assistance Department. We have to bring trade and development together. That is how people get out of poverty. This involves so many countries. There is now the Ghana Beyond Aid initiative; I visited Ghana’s investment conference in London last year. These countries do not want to be seen primarily as aid recipients. They want to be seen as countries with great entrepreneurs, great technology and great capability. That is why, after the Prime Minister’s speech last year in Cape Town, I am helping to organise the Africa investment summit on 20 January 2020. It is precisely to ensure that, cross-Government, we are able to support increased investment in Africa and take advantage of the opportunities there.

My hon. Friend touched on the subject of regulators. Whether further changes are required in their missions as defined by Government is something that I will leave for others to wrestle with, but I can say that our regulators really are stepping up to the mark. The Financial Conduct Authority, with whose representatives I have met, is making a major difference. People can look at our FinTech bridges. We lead the world on FinTech—financial technology. It is enormously valuable, and we are creating FinTech bridges with a number of other countries. For instance, we are deepening our engagement with Hong Kong and Australia. In both cases, the FCA has been a fundamental part of the team as we try to ensure that start-ups there can more easily come to the UK, and vice versa. It is precisely that kind of opening up of markets that is so important.

I am not sure that I have ever given a speech from my iPad before. When the screen goes blank—

[Bill Esterson]

Your mind goes blank.

[Graham Stuart]

It is better to have your screen go blank than your mind go blank, as may have happened to the hon. Gentleman when he started to talk about FDI, on which we are doing so well.

Last year we launched a new export strategy to encourage, inform, connect and finance businesses of all sizes, with the goal of increasing our exports from 30% to 35% of GDP, which would move us to the top of the G7. We are committed to working with the devolved Administrations in doing that. I will follow up on any suggestions. I hope that, if there are problems, we can immediately sort them out. It is certainly not this Government’s policy in any way to inhibit the effectiveness of the devolved Administrations in trying to promote business in their areas. We work together hand in glove. I remember that at MIPIM, the world’s largest property conference, last year, I launched the Scottish capital investment portfolio. We worked closely together on doing so, and we can do so again. That is very important, particularly in the Scottish context, because, if my numbers are still correct, exports as a percentage of GDP in Scotland are only around 20%, whereas for the United Kingdom as a whole the figure is 30%. That shows the importance of helping the Scottish Government to do a better job in promoting Scottish exports, because there is huge capacity there.

I am proud of what we have done with UK Export Finance. We have doubled its appetite since 2010 and we have revolutionised its performance as a world-leading export credit agency. It now has a capacity of £50 billion and its offer has been extended; it is now available in 62 international currencies, so when support is provided, that can be done in the local currency, thereby reducing risk. That has helped too. We have run it at no cost to the taxpayer, lowered its cost ratio since 2010 and ensured that no UK export fails for lack of finance or insurance. Earlier this year we went further. Now, companies that are not exporters themselves but are part of the supply chain of companies that do export can access UKEF finance too.

We have convened the Board of Trade for the first time in 150 years to promote a culture of exporting and investing, spreading the benefits and prosperity of international trade to every corner of our United Kingdom. Whether I have been in Stirling or Belfast with the Board of Trade, I have been delighted to see the local response and people’s enthusiasm for what we are doing at the DIT to promote trade from those areas.

Time has passed, and you would probably like me to bring my remarks to a close, Mr Davies. If I may, I shall continue just briefly. We have created an overseas network of Her Majesty’s trade commissioners, the most recent one being for Australasia. There are 10 of them and they have been selected for their expertise in particular markets. They are building our regional export plans and working to secure market access across the globe.

Whether it is on promoting exports with our export strategy or promoting foreign direct investment—for which we remain the No. 1 destination in Europe, well ahead of our competitors; in fact, we are third in the world, behind only the United States and China/Hong Kong—we are determined to go further. And of course in the area of trade policy, there is not only the issue of free trade agreements; my hon. Friend the Member for Hornchurch and Upminster was right to say that we should not fetishise them. As our second permanent secretary and chief negotiator has noted, for every one person working on FTAs, we want three or four working on market access.

Therefore, whether it involves opening up Taiwan’s pork market, cosmetics in China or lowering duties on Scotch whisky going into Latin American countries, we are, across the piece, upping our game. Having a dedicated trade Department—this might be my last speech while a member of it—was a significant and important step forward, particularly given the growing importance of trade and investment to the prosperity of this country and the world. The Department—with or without me—will continue to be an advocate for an open, rules-based, liberal trading system. It will continue to work to reverse the negative impacts on manufacturing and so much of our other trade and investment performance that happened inevitably—it happened in almost all cases—under the last Labour Government. We must ensure that Labour never comes into government again, and that this Government can go out there and continue to strengthen the DIT and strengthen our prosperity in the world. I thank my hon. Friend the Member for Hornchurch and Upminster very much for securing the debate today.

Oral Answers to Questions

Debate between Graham Stuart and Bill Esterson

Thursday 11th July 2019 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

The Society of Maritime Industries says that export finance support in the UK lags behind what is available in other countries. It is calling for a much-needed follow-up detailing the specifics of the export strategy. If the Government are serious about the UK being a zero-carbon economy, where is the detail, the coherent plan and the investment into exports of our world-leading renewables sector? Labour believes in the industry; when will the Government start to?

[Graham Stuart]

I shall try to give a straight answer to a not entirely straight question. As I said, we have the sector deal. We have the export strategy and we are putting enormous effort into that. I am pleased to say, Mr Speaker, that in this 100th centenary year of UK Export Finance, it has, under this dedicated trade Department, been rated the best export credit agency in the world.

Future Free Trade Agreements

Debate between Graham Stuart and Bill Esterson

Thursday 21st February 2019 Commons Chamber

[Bill Esterson]

My hon. Friend makes much the same point that my hon. Friend the Member for Brent North and I made when the Trade Bill was in Committee last year about the importance of full scrutiny and a thorough process that goes way beyond the Henry VIII powers that the Secretary of State has been so keen to confer upon himself for the scrutiny of such agreements. My hon. Friend the Member for Stroud (Dr Drew) makes an interesting point about the SIs and the completely inadequate no-deal planning, but that is a discussion for another time, although I share his concern about the pressure being put on Members to vote for the Prime Minister’s bad deal, as my hon. Friend the Member for Brent North described it earlier.

My hon. Friend the Member for Hornsey and Wood Green (Catherine West) spoke of the frequency of the legal action being taken by Canadian companies, which was also mentioned by the hon. Member for Dundee East. She also advocated greater regional and national engagement in scrutiny and said we should learn from international good practice, and I agree. My hon. Friend the Member for Warwick and Leamington (Matt Western) also said that we should learn from other countries. When our own Government say that they cannot give us information because it is confidential and would affect delicate negotiations, it is odd that we can find out what is going on from the other countries involved. He also mentioned the importance of looking after our own street first and referred to prioritising a trade deal with the EU before looking for deals on the other side of the world.

My hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) spoke about landscape, cars and the environment, describing the contrast between agriculture in the UK and the US and the difficulties facing our farmers in surviving and competing in the trade world that the Secretary of State envisages. She made a good point about sustainability and the importance of the rural environment, and she was right to cite the desire of much of industry, across sectors, for a customs union to support frictionless trade.

We have a trade deal, which represents 48% of our trade, on our doorstep. The deal ensures frictionless trade and access to the single market, as well as access to 11% of the rest of our trade through deals with 70 or so further countries, but as the written ministerial statement shows, only six new trade deals have been signed so far, and we leave the EU at the end of March.

I was startled to find out that neither the Defence Secretary nor the International Trade Secretary has learned the basics of diplomacy. Domestic sabre rattling on China, which we assume is part of the Defence Secretary’s leadership campaign, has jeopardised talks with China, while the International Trade Secretary has managed to insult the Japanese. [Interruption.] Excuse me. I think the International Trade Secretary had something to say to me there.

[Graham Stuart]

He was just obliging you.

[Bill Esterson]

Was he? That is very kind of him.

In 2017, a number of Australian academics warned of the danger that

“Australia’s interests get caught up in the possibly unrealistic worldview of the Brexiteers and thus Australia becomes collateral damage of…British politics.”

Why might they say that with this Secretary of State in charge?

In the real world, my constituents who put their goods on a ship at the port of Liverpool today do not know whether the ship will be able to dock in Tokyo on 30 March and what arrangements will be in place. They want the Government to show that they understand diplomacy, and they want them to avoid causing offence in delicate trade negotiations.

This week, in Swindon, we have seen what is happening in the real world: real workers’ jobs going—3,500 of them—and real communities affected. We are party to a trade agreement with Japan through our membership of the European Union, and the deal has not prevented the disinvestment of Japanese companies such as Honda and Nissan.

“The idea that Brexit uncertainty is irrelevant to this is fanciful. How are Honda supposed to calculate the costs and benefits of staying in the UK in the overall global context against such lack of clarity on the future terms of trade?”

Those are not my words but the words of Sir David Warren, the former UK ambassador to Japan.

Oral Answers to Questions

Debate between Graham Stuart and Bill Esterson

Thursday 11th January 2018 Commons Chamber

[Graham Stuart]

The hon. Lady is quite right to highlight and champion exports from Scotland, and she will know that the greatest export market for Scottish businesses is the rest of the United Kingdom. I can tell her that this Government will stay committed to promoting trade within the United Kingdom, with our neighbours in Europe and with the rest of the world to boot.

[Bill Esterson (Sefton Central) (Lab)]

I, too, welcome the Minister to his place. I enjoyed serving with him on the Education Committee, and I look forward to debating these important matters with him.

Evidence to the former Business, Innovation and Skills Committee showed a budget of £23.6 million for the trade access partnership in 2013-14, which fell to £11.05 million in 2014-15 and to just £8 million the following year. We are now in the final quarter of this financial year and, just as last year, the Government still have not said what the current budget is. When are they going to end the uncertainty for business, and tell us how much money they are giving to support exporters who want to go to trade shows to promote exports for business and the economy?

[Graham Stuart]

As usual, I am afraid, Opposition Front Benchers are confusing inputs with outputs and outcomes. We are focused on promoting exports. We are doing that successfully, building on the position in 2010, and that is why we are seeing a record level of the manufacturing and other exports on which the hon. Gentleman’s constituents depend.