UK Trade Performance

Debate between Lord Davies of Brixton and Lord Offord of Garvel

Tuesday 7th May 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank my noble friend, and I am delighted that he is a trade envoy. It has been a very worthwhile initiative. All the embassies and high commissions I go to are delighted with how that is working. Of course, we can do more. Companies themselves feel that they are getting a lot of support and have a direct line to government through the trade envoys.

The balance of trade is something that economists love to talk about. At the end of the day, do not forget that we import to export. The modern British economy is not so much a primary manufacturer as a designer, assembler and manufacturer of added value to goods. For example, with a number of our pharmaceuticals, 80% of the input is imported. Therefore, that balance of trade belies the fact that we enhance, improve and sell back out what we are taking in.

The direction of travel is to increase our exports and, ultimately, that is what our free trade agreements will do. We talk to our companies about the CPTPP and the fact that you can go to Mexico, Canada, Peru, Chile, Singapore, Malaysia, Brunei, Vietnam, Australia, Japan and New Zealand—then add all the others that want to come in. They now have new markets to go to.

One of the SMEs at breakfast this morning was a manufacturer of women’s sporting apparel. When it was doing its business plan, it was selling only to Europe and could not sell to Australia. Now, since we have done the Australian free trade agreement and taken the tariffs off, margins have improved by 12% to 14%. We passed the Electronic Trade Documents Act, which now means it can get its goods made in the UK into Australia within 48 hours. That business is booming on the back of the Australia free trade agreement. That is the opportunity we have now to boost exports across our economy.

[Lord Davies of Brixton (Lab)]

My Lords, is the Minister satisfied with this country’s current position in terms of its balance of payments? Those of us with longer memories will recall times when Governments fell over the issue of balance of payments, but it appears to be a metric that is not given enough attention now. I think the current figures show a substantial deficit, in the billions. Is the Minister satisfied with that?

[Lord Offord of Garvel (Con)]

I think that takes us into a whole technical area. We will come back to that another time, thank you very much.