Continuity Trade Agreements: Parliamentary Scrutiny

Angus Brendan MacNeil Excerpts

Tuesday 17th November 2020 Commons Chamber

[Mr Speaker]

We are heading to Scotland with the Chair of the Select Committee.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP) [V]]

The International Trade Committee first reported on the roll-over of trade deals in 2018. Hon. Members probably remember that we were told then that all the agreements would be signed about a minute after midnight on 29 March 2019. It is a huge concern that we still have not done 15 of those deals—indeed, with 44 days to go, the biggest trade deal with the EU is still uncertain. Is it not the truth that jobs, businesses and communities need to be better served by the Government in their work associated with Brexit and these incomplete trade deals? It is time for the Government to get their act together, and quick.

[Greg Hands]

I thank the hon. Gentleman for that question. I remember appearing before his Select Committee during that inquiry in 2018, which I know he will remember well, too. The fact of the matter is that we have done roll-over deals with 52 countries. That is a very strong achievement and represents some 74% of the value of trade with non-EU countries that we set out to secure agreement with at the start of the trade continuity programme, which was when he did his inquiry. We are working flat out at the moment. He will know that just in recent weeks we have signed deals with Ukraine on 8 October, Côte d’Ivoire on 15 October and Japan on 23 October, and we signed an agreement in principle with Kenya on 3 November.

Oral Answers to Questions

Angus Brendan MacNeil Excerpts

Thursday 8th October 2020 Commons Chamber

[Mr Speaker]

Let us calm it down a little with the Chair of the International Trade Committee, Angus Brendan MacNeil. There is no more calming influence than Brendan.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP) [V]]

Tapadh leibh, Mr Speaker, and a nice calm morning in the Hebrides it is too.

In 2014, the then Prime Minister, David Cameron, promised Scotland that the choice was between independence and all options of devolution, and all indeed were possible—as well, of course, as guaranteed EU membership. Leaving that aside, the United Kingdom Internal Market Bill is expected to do the opposite of that on devolution. Given that the USA has differences across its states, can the Secretary of State guarantee that no attempt will be made to grab powers from the devolved nations to present the entire UK on an easily consumable platter for USA negotiators when it comes to a UK-USA trade deal?

[Elizabeth Truss]

I can absolutely say that we are not grabbing powers; we are using the powers that were previously in the hands of the European Union to create a strong internal market across the United Kingdom. That it is vital, because Scottish farmers need to be able to sell their lamb and beef into England, Wales and Northern Ireland without impediment.

Japan Free Trade Agreement

Angus Brendan MacNeil Excerpts

Monday 14th September 2020 Commons Chamber

[Mr Speaker]

We are now heading up to Scotland to Angus Brendan MacNeil, Chair of the Select Committee.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP) [V]]

Tapadh leibh; feasgar math, Mr Speaker. First, the Secretary of State made very welcome mention indeed of Stornoway black pudding. She then went on to say that she is delighted about the deal, described it as a major moment and said that she feels this UK-Japan FTA is ambitious. However, the GDP figures show it is worth a seventieth of the deal with the EU—a seventieth of the cost of Brexit—so is getting a deal with the EU not 70 times more important than this admittedly very welcome UK-Japan comprehensive economic partnership agreement? Will the Secretary of State also clarify whether any of this is dependent on EU co-operation or deals, especially on cumulation?

[Elizabeth Truss]

I am pleased to hear the hon. Gentleman’s welcoming the increased protection for Stornoway black pudding in the Japan market. He will note that a number of other indicators have been given access to that market, which is important. There are also, of course, huge benefits for Scottish lamb and beef farmers in terms of reduction in their tariffs.

On the hon. Gentleman’s point about the EU, this is not an either/or choice. Global Britain wants to have a good trading relationship with the EU and a good trading relationship with Japan and CPTPP. That is all possible, but what it will take is for the EU to give us a deal in the way that it has given Canada a deal.

Oral Answers to Questions

Angus Brendan MacNeil Excerpts

Thursday 3rd September 2020 Commons Chamber

[Mr Speaker]

We are now going up to see the spokesperson for the SNP, Angus Brendan MacNeil.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Chairman of the Select Committee, Mr Speaker.

We are either facing a hard Brexit or a no-deal Brexit and, as a result, food and farming have taken on really great importance. It is an issue that has caused near meltdown for the new and already failing Tory leaders in Scotland, with the National Farmers Union, Scotland, giving them the yellow card for being misleading and leaving farmers fuming. Will the Secretary of State take this opportunity to ease farmers’ anger and consumers’ anxiety and state categorically that there will be no changing of food standards or any compromise whatsoever in any trade deal on the high standards of the food that now goes on our supermarket shelves?

[Elizabeth Truss]

I can absolutely give the hon. Gentleman that assurance, and I point out that NFU Scotland sits as part of our Trade and Agriculture Commission, looking at future trade policy.

Oral Answers to Questions

Angus Brendan MacNeil Excerpts

Thursday 18th June 2020 Commons Chamber

[Mr Speaker]

Richard Holden—another one not here. Oh my word. We now go virtual—to Angus Brendan MacNeil.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP) [V]]

Tapadh leibh, Mr Speaker. We hope to see the Secretary of State at the International Trade Committee next week, as requested by Committee members for a number of weeks. At yesterday’s Committee hearing, the NFU, the CBI and the TUC all coalesced around the figure that Brexit would cost the UK about 4.9% of GDP and an American trade deal would benefit it by around 0.16% of GDP—a thirtieth of what is being lost by Brexit. They said that gains from the Japan deal would be a lot less than the paltry lot from the US deal, so can any Minister furnish the House with the figure for what would be gained as a percentage of GDP from a Japan-UK trade deal?

[Elizabeth Truss]

First of all, I am extremely happy to appear in front of the hon. Gentleman’s Committee, and I will ask my office to immediately set that up in the diary. I am very keen to communicate with the Committee about the various trade deals we are negotiating.

We published figures for the scoping study on the Japan free trade agreement, but this is not an either/or. We want to get a good trade deal with the EU. We want to get a good trade deal with the US. We also want to get access to CPTPP, which is a very fast-growing part of the world. That is what we want. We want global Britain to sit at the heart of a network of free trade agreements.

Trade Bill

Angus Brendan MacNeil Excerpts

2nd reading & 2nd reading: House of Commons & Money resolution & Money resolution: House of Commons & Programme motion & Programme motion: House of Commons
Wednesday 20th May 2020 Commons Chamber

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP) [V]]

As we all know, this is a reheated Trade Bill. Sometimes a meal can be all the better for the reheating—it can be better the following day—but sadly, despite all the advice and help that was given on the Trade Bill in the last Parliament, that has not come to be this time. It remains much a dog’s breakfast, with great criticism attached to it and much under-delivery on what is required.

The Bill essentially has two strands to it: the roll-over of free trade agreements and the creation of the TRA. Before we go too far on the roll-over, we almost have to take a step back. If we are indeed looking to roll over EU trade agreements that currently affect us, are we not just admitting that the EU has done quite a good job of arranging trade agreements—so much so that we want to copy them to the letter?

In fact, when we go to copy some of the trade agreements, we find we cannot replicate them. I remember raising in Committee the trade agreement with South Korea, which states that, in the automotive sector, if motor vehicles have 55% local content, the tariff can be exported. Alas, the UK alone cannot do that. The EU can do that—it has a 500 million-odd population and consumers, and the parts come from all parts of its manufacturing base—but the UK cannot take advantage of a rolled-over EU-Korea deal the way it is written at the moment. There are many things lacking at that stage.

On the Trade Remedies Authority, again, much advice has been given about what could happen and what is not happening, and it is a shame that the Government are not listening and refuse to listen to many people. There are many concerns, particularly in the ceramics trade. The TRA was set going on a wing and a prayer. We could have had Brexit long ago, and the reality is that the UK was not prepared. It still is not prepared.

We do not have the scrutiny in place. We do not have the scrutiny that my Committee called for in the last Parliament for the devolved Parliaments, but even if we take a Westminster-centric view of this, we do not have the scrutiny for parliamentarians at Westminster either. Again, the Government have missed the opportunity to get this right, and that is a huge pity. It could have been enshrined in the legislation. It is not enshrined. The opportunity has been missed.

There was an opportunity to avoid the pitfalls of the Transatlantic Trade and Investment Partnership. The European Union and many others have learned that trade negotiations conducted in secret do not get very far and that the population will eventually rebel, as was seen with TTIP. People have learned, but sadly it seems that the UK Government have not learned from that or, indeed, from the passage of their own Bill, which fell at the last parliamentary election, back in December.

NHS procurement should be taken care of. Wearing my constituency hat, a lot of constituents have written to me with concerns about the NHS—about making sure that there are NHS-specific carve-outs, that there is no negative listing affecting the NHS, that there are no standstill clauses, that the NHS is immune from the investor-state dispute settlement possibilities, and that there is no Americanisation of our drug situation in the United Kingdom. Particularly at this point, when the NHS is fighting coronavirus, but at all times in fact, it is incumbent on Parliament and the Government to back the NHS and make sure it is safe and protected.

The Secretary of State mentioned the USA trade deal. We have to take a step back and look at exactly what has been achieved, or the Government have tried to achieve. The USA trade deal will add only about 0.2% to the UK’s GDP, compared with the 6% that will probably be lost after Brexit—about one thirtieth of that. Given that America represents a quarter of the world’s GDP, even a trade deal with every country in the world will not make up the huge gap left by Brexit.

Finally, the Secretary of State began by saying she would do whatever it took to keep Britain trading, as she put it. Surely, at this point, “doing whatever it takes” would include staying away from this disastrously ruinous Brexit, or, at the very least, having the humility to postpone it during the pandemic. This hell-for-leather approach of going for the cliff edge this December is not what business needs at this time, or what the population needs. It is not what any of us needs at this time. If the Government are still too proud to realise that Brexit is a mistake, they should at least delay it, perhaps for one or two centuries.

Oral Answers to Questions

Angus Brendan MacNeil Excerpts

Tuesday 12th May 2020 Commons Chamber

[Mr Speaker]

The Secretary of State really needs to think about the other Members who need to get in, so if she could shorten her answers, it would be helpful to all the Members who are waiting. [Interruption.] It is very good, actually.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP) [V]]

Business and trade are all about the bottom line and numbers, and we know from the Treasury estimate that Brexit will cost about 6% of GDP. An American trade deal—and remember that the USA is a quarter of the global economy—will only give an average lift of about 0.2% to GDP, or a thirtieth of what Brexit will cost. Is there any prospect of that number improving? What are the GDP lifts for the deals with Australia, New Zealand and Japan and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership? We need to get to the numbers at the bottom of Brexit.

[Elizabeth Truss]

I thank the hon. Gentleman for his question. He will be aware that there is a projected benefit to Scotland from a US trade deal of over half a billion pounds on gross value added, which is a significant figure. In fact, Scotland is one of the parts of the UK likely to benefit most from a US deal. We will shortly publish the economics behind the Japan, Australia and New Zealand deals when we launch the respective trade negotiations.

Oral Answers to Questions

Angus Brendan MacNeil Excerpts

Thursday 17th October 2019 Commons Chamber

[Conor Burns]

We remain absolutely committed to ensuring a level playing field. The United Kingdom has been one of the leading international advocates of a rules-based order. As my right hon. Friend the Secretary of State said, we are committed to playing our full part in the WTO, and we are absolutely committed to having a trade resolution body up and running and formally underpinned by statute. This is the boring bit—the continuity bit. The exciting bit comes when we leave the European Union and we can strike out with new, comprehensive free trade agreements around the world.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Despite the existing architecture, despite not needing to reinvent the wheel, despite not starting from zero—we could just follow the work the European Union has done—and despite the promise to do this by one minute after midnight, the slow progress in these trade agreements surely does not bode well for any of the future trade agreements that the Government talk about ad nauseam. Meanwhile, the UK Government are endangering the trading potential of companies in the UK. When will the other 24 be done?

[Conor Burns]

We are working aggressively to continue the roll-overs, and many are very close to being completed. Despite the hon. Gentleman’s distinguished position as Chair of the International Trade Committee, if optimism were a disease, he would be immune.

Future International Trade Opportunities

Angus Brendan MacNeil Excerpts

Wednesday 1st May 2019 Westminster Hall

[Craig Tracey]

I do not. I have spoken to a wide range of stakeholders, including the London Market Group, Lloyd’s and the Association of British Insurers. I will make the point later that from their perspective, even free trade agreements are not necessarily the way forward.

Returning to the trend of the loss of global market share by UK commercial insurance, it is particularly important that the Government and industry consider the measures that can be introduced to reverse that trend, to encourage more trade and opportunities and, crucially, to promote the industry. It has long been argued in the insurance sector, and is something I have raised many times in this House, that our regulators should have a dual role—they should promote on the international stage. That would mirror what many of our competitors around the world already do, particularly in emerging areas.

We need domestic reform just to put us on a level footing with our competitors. UK regulators should have a regard for our international competitiveness. That means they would have to consider the impact of their decisions on the ability of UK-based financial services to compete on the international stage that we want to have access to. The sector has repeatedly made the point that progress does not necessarily rely on agreeing formal free trade agreements—they are not the be-all and end-all. The Government can make substantial progress now using some of the existing tools available to them such as financial and economic dialogues, which offer real benefits in shorter time frames. There would be an opportunity to turn them into bilateral agreements in future—the ABI highlighted that in relation to China and India in particular.

To remain internationally competitive, a future regulatory framework needs to be outcome-based. There is a view that trade should not be prevented by technical divergence between the UK and third countries if the outcome of the regulation is the same. So that we are not overtaken, it is important that Government, in partnership with organisations such as the LMG or the ABI, promote the unique benefit of access to our commercial insurance markets, given the significant economic and social benefits of expanding insurance provision and the growing protection gap challenge that many countries face.

I would like to draw the Minister’s attention to the London Makes it Possible campaign, run by the London Market Group. It is designed to promote London and the UK as the world’s pre-eminent insurance hub. It reminds countries around the world of the business range of risks we cover and is something that Government could get behind, to promote us. It has a fantastic website, where it is interesting to see some of the world-leading risks that we cover, and how our market is so different.

The expertise in this country enables us to place highly complex risks. The question is: where should we consider targeting? There are opportunities to grow the insurance trade in a number of developed and emerging markets. The ABI has identified 11 priority markets for future international trade, including China, India, Japan, South Korea, Canada, Switzerland and the United States. In addition, the LMG has identified its own target markets: the US again and the markets of the Association of Southeast Asian Nations, which have huge cyber-insurance opportunities. Latin America has one of the lowest insurance penetrations in the world, largely due to measures to shield those countries from international insurance markets. Although it is understandable why they may want to do that, those measures limit the pooling of risk and make the insurance of large-scale natural disasters next to impossible. Importantly, that puts up costs for consumers and reduces take-up.

I visited the US last year with the British-American parliamentary group, to discuss financial services post-Brexit. We went to Washington and New York to see at first hand how important our insurance industry is there. The US continues to be the London Market Group’s single biggest source of business. In 2017, Lloyd’s under- writers wrote approximately £13.5 billion of US business, contributing to a total of approximately £20 billion of London Market Group premiums. The US spend on cyber-insurance alone is expected to reach $6.2 billion by 2020. It also faces a growing need to strengthen resilience against natural disaster and to bolster federal and state insurance programmes. The three hurricanes in 2017 caused more than $217 billion-worth of damage, of which only $92 billion was covered by insurance.

The Government have already made important progress in negotiating and signing the UK-US covered agreement for reinsurance, which removes some collateral requirements and encourages regulatory dialogue between the UK and US. That is a very welcome step to developing a new post-Brexit trading relationship between the two countries. The UK is ready to take advantages of those opportunities. World-leading insurance expertise is already based in this country so it will be a critical industry for us.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Leaving the European Union with the deal that the Prime Minister hopes to get would do 6% damage to GDP. Leaving with no deal would do 8% damage. An American trade agreement would boost GDP by about 0.2%, which is a thirtieth or a fortieth of that, depending on the scenario. That means we would need about 30 or 40 US-style agreements to make up for the economic damage that Brexit will do.

[Craig Tracey]

I believe it is not just about US agreements; I mentioned many other countries where there could be an opportunity for future agreements. It is interesting to hear that remark from a member of the SNP, which is looking to leave the UK, where 60% of Scotland’s exports come from.

[Angus Brendan MacNeil]

Will the hon. Gentleman give way?

[Craig Tracey]

I am sure the hon. Gentleman will be able to intervene later, as I want to wind up my remarks.

I began by saying that leaving the EU brings a unique opportunity to the UK. In order to make the most of leaving, we need to rethink our strategy. The creation of our own UK regulatory framework can play a big part in that. I want to make it clear that the insurance industry is not looking for standards to be reduced or diluted. It is committed to maintaining standards, but it needs to be able to compete on the global stage. We should be under no illusions: regulation is a key factor in businesses deciding to invest here and to send their people here. It is really important that the Minister has at the forefront of his mind the need to retain proportionate regulation so we are not put at a disadvantage.

In March, following his spring statement, the Chancellor announced that the Government would review the UK’s future regulatory framework for financial services to

“maintain world-leading financial services regulatory standards, remain open to international markets, and realise new trading opportunities.”

An international competitiveness duty should be a priority for that review. As I said, I think there are exciting opportunities ahead. Those of us who believe in the potential for our trading future were heartened by the International Trade Secretary’s comment that we will

“break down the barriers to trade wherever we find them.”—[Official Report, 16 July 2018; Vol. 645, c. 43.]

That needs to be our mantra as we move forward. I look forward to hearing what the Minister has to say about how we can continue our progress.

--- Later in debate ---

[Gareth Thomas (Harrow West) (Lab/Co-op)]

I congratulate the hon. Member for North Warwickshire (Craig Tracey) on what so far has been an interesting debate. I gently remind the House of the promise that the International Trade Secretary made to have signed some 43 trade deals by the end of March 2019. Not surprisingly, that has not been achieved, and we are some way from seeing those 40 so-called roll-over EU trade agreements signed. That is an indication of the complexity of trade. While, as the hon. Member for Hornchurch and Upminster (Julia Lopez) alluded to, many things can affect future trading opportunities for British businesses, the instability of not having sorted out proper trade agreements with both the European Union and other key markets is likely to inhibit the international trading opportunities for British businesses.

I raise in particular concerns about trade in services, because the vast majority of the jobs done by my constituents that directly involve international trade are related to services. The few bits of detailed thinking from independent trade experts about the impact of Brexit on trade in services highlight the huge significance of such trade between the UK and the EU, and therefore what is at risk, in terms of scale, for the UK economy from any inhibitions of trade in services.

In 2017, according to the Centre for European Reform, services accounted for some 45% of total UK exports, or almost £300 billion. The EU received 40% of those exports, the highest proportion of any UK trading partner. Research by the Centre for European Reform suggests that if Britain leaves the single market and trades services under the provisions of an ambitious free trade agreement, on an annual basis UK exports to the EU of financial services will none the less be 60% lower, UK exports of insurance and pension services will be almost 20% lower, and exports of other business services, including law, accountancy and professional services, will be 10% lower. Those are all sectors in which Britain has a significant comparative advantage, so jobs, investment and tax revenues are all at risk in the case of withdrawal from the single market.

[Angus Brendan MacNeil]

I am grateful to the hon. Gentleman for giving way on that point, which leads me to the point raised by the hon. Member for North Warwickshire (Craig Tracey). The stats he just gave lead to the 6% damage there would be to GDP. When I pointed out that we would need 30 or 40 America-style agreements, he said we can find more countries and more deals. The only problem is that the USA is a quarter of the world’s GDP, so we would need seven to 10 planets to make up for the damage the UK is inflicting on itself with Brexit.

[Gareth Thomas]

I agree; the hon. Gentleman makes a good point. Without dwelling on that point, the CER report helpfully points out that it is significantly more difficult to open services markets than goods markets to trade, because many barriers to trade are regulatory in nature. The quality and safety of a service is difficult to decide at the border.

As I pointed out in my intervention on the hon. Member for North Warwickshire, no group of countries has gone further than the European Union in making it easier to sell services produced in one country in another in a bloc, yet still barriers remain. Therefore, pulling out of the single market and negotiating a free trade agreement, however ambitious it ultimately is, would inevitably throw up new barriers to trade, particularly if we withdraw from the EU’s collective rulebook, shared institutions and cross-border enforcement regimes, as it appears the Prime Minister wants. Some of the impact of withdrawal from the single market for services could be offset with, for example, significant mutual recognition of qualifications and—more controversially—the temporary movement of people.

It is not fashionable to worry about the future of financial services—the case for further regulatory reform of the industry can easily be made—but it remains one of the few world-class industries we have in the UK, and it is clearly set to be damaged significantly, putting jobs in my constituency at risk. For that reason, I urge the House to vote for us to stay in the single market as part of a soft Brexit deal, put back to the British people in a public vote with the option, nevertheless, to remain in the EU.

--- Later in debate ---

[Stewart Hosie (Dundee East) (SNP)]

I shall be brief; I love these one-hour debates, but we are now seeing the limitations of them.

I agree with the hon. Member for North Warwickshire (Craig Tracey) in one or two regards: we will most certainly face stiff competition, there will be substantial growth outwith the EU, and there is a range of opportunities. Where I disagree with him is that I do not believe we are ready. In terms of the opportunities that exist—as I will explain later, and as my hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), who is Chair of the Select Committee, said—I do not believe that they will fill the gap we are about to create.

Along with many Members, including the hon. Member for North Warwickshire, I am keen to talk about services in this regard; they have been ignored so far in the debate over customs, tariffs and checks at the border. They are the largest part of our economy and they are a substantial minority of our total exports, but the starting point about services does not fill me with confidence. If one looks at the Swiss deal, the House of Lords report said:

“Most trade in services, which make up 52 per cent of all UK-Swiss trade, is not covered by the deal.”

Lord Boswell went on to say that the deal with Switzerland

“in many aspects differs significantly from the EU-Swiss agreements it replaces.”

Likewise, after the deal with Norway was announced it was confirmed that it did not cover service trade or technical regulations for food, animals or plants. If we cannot replicate in the continuity agreements what we already have with friendly trading partners, it does not augur well for cutting new and innovative deals. I hope the Minister will say a word or two about how he intends to get around that obstacle when we start negotiating in earnest.

[Angus Brendan MacNeil]

My hon. Friend was very kind, when he started his speech, in agreeing with the hon. Member for North Warwickshire (Craig Tracey). I am sure there is much to agree with, but I would like to pull the hon. Member for North Warwickshire up on the point he made about Scottish independence and the SNP. Scotland is not talking about walking out of trade blocs or ripping up trade agreements; it is talking about completing the process of political devolution, which would be independence. A country that has done that already and devolved from the UK—namely Ireland—is now in a trading bloc that represents about 22% of global GDP and it has an equal voice, while Scotland is stuck as a hostage in a little place that represents only 4% of global GDP.

[Stewart Hosie]

My hon. Friend makes his point himself; I will not spend time agreeing with him, although I do entirely.

The Swiss and Norway continuity agreements demonstrate what happens when negotiations take place from a position of weakness. In the EU-US negotiations we have seen the US adamant that agriculture would be included in any deal, but the EU trade commissioner Cecilia Malmström told the US trade representative that they could not negotiate on agriculture. She has been quoted as saying:

“We have made very clear agriculture will not be included.”

She can do that from a position of strength. My great concern is that the UK is negotiating from a position of profound weakness, as evidenced by the failure of the continuity agreements, meaning that we may well face all the downsides of the US and others seeking an agricultural deal that will weaken food, hygiene and environmental standards. How does the Minister respond to that? It would be useful to know.

I finish by making a key point that was mentioned by my hon. Friend the Member for Na h-Eileanan an Iar when he talked about export figures. The National Institute of Economic and Social Research suggested that any Brexit would see a loss of around 20% in total UK trade. Cutting a deal with the main English-speaking economies would see an increase of 2% to 3% and cutting a deal with the BRIC countries would see an increase of 2% to 3%. If we lose 20% of our total trade, the best we can do with the biggest economies in the world is to claw back maybe 5% or 6%. It is a pretty bad starting point. How does the Minister intend to ensure that there is a real focus on filling the gap and making sure that no part of the country, no part of the economy and no workforce is sacrificed on the altar of Brexit ideology?

--- Later in debate ---

[The Minister for Trade Policy (George Hollingbery)]

I thank my hon. Friend the Member for North Warwickshire (Craig Tracey) for introducing this important debate, and thank hon. Members from across the House for the many informed contributions, which I will return to before I have finished.

This debate is important because trade really matters to the UK. At £634 billion last year—equivalent to 30% of GDP—exports are not some separate add-on to our economy; they are integral to it. That is before we even get to our record £1.3 trillion of foreign direct investment, which last year alone created 76,000 new jobs, or the benefit of imports in giving us a wider choice of more affordable goods.

That is not the high-water mark, however: there are more opportunities to come. The patterns of world trade are shifting. We are entering a Pacific century after four Atlantic ones. The latest World Bank figures show China adding an economy the size of Portugal’s to its GDP ever four months—a pretty astonishing statistic. The UK will be one of the few developed countries to stay in the top 10. We can take advantage of that shift if we act now. That is why the Government have consulted on new trade agreements with the USA, Australia and New Zealand, and on potential accession to the catchily named Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a cross-Pacific agreement that covers 11 nations and already 13% of the world’s GDP, including many of the growing markets to which my hon. Friend referred in his speech.

The nature of trade is also shifting. McKinsey estimates that digital trade flows contribute more to the world economy than the entire trade in goods. Services are becoming ever more international. The UK is well placed to take advantage of those trends, too. We have a flourishing digital sector, with Europe’s largest e-commerce market. We are the second largest service exporter and, as my hon. Friend mentioned, we have particular strengths in areas such as insurance, where Lloyd’s is the world leader in maritime risk and specialist insurance and reinsurance.

That is why, in December, we submitted our WTO service schedules, to give continuity for our service exporters, and why, once we represent ourselves at the World Trade Organisation, we will be pushing for further liberalisation and further reform within the rules-based, consent-based, multilateral framework it provides. That also means looking beyond traditional trade agreements, which is why my Department has secured market access for everything from energy trading in China, to beef and lamb in Japan.

My hon. Friend mentioned a report by the London Market Group. As a specific response to that report, we have set up a new workstream with LMG to promote insurers in Association of Southeast Asian Nations countries. I saw that at first hand when I visited Singapore not long ago and met Prudential, which is working with Babylon. Amazingly, Prudential has a subsidiary in Malaysia that is nearly 100 years old and another in Singapore that is 85 years old. It has subsidiaries in Vietnam and in Indonesia and business throughout the ASEAN region, and I was very impressed by its attitude. It understood the power of data and of digital to allow it to insure more properly.

Colleagues have raised a number of issues, and I would like to deal with one or two of those. We have published a Command Paper on scrutiny and have made it absolutely clear that we wish to be transparent in how trade deals are dealt with in the House of Commons. The House of Commons, and indeed the House of Lords, should have full and proper scrutiny and we are pursuing those models. We are coming to a conclusion about the way in which we wish to do that and no doubt we will in due course negotiate with various parties in the House.

The hon. Members for Harrow West (Gareth Thomas) and for Dundee East (Stewart Hosie) both noted that services are at the centre of the UK’s agenda. Barriers to trade in services are generally behind the border, and with free trade agreements we deal with those issues through joint economic forums and multilateral interactions.

An independent trade policy is an opportunity for the UK. I understand the issue of the weight of 600 million people, but that also means that our trade policy is compromised. It is compromised in a good way—do not get me wrong—but it is designed to fit 28 nations. With a UK-based trade policy, we, with the sixth largest economy—or the fifth largest, depending on how it is measured—will have a tailored free-trade policy, which will be for the UK alone, and there will plainly be advantages in that.

The hon. Members for Swansea West (Geraint Davies), for Harrow West and for Na h-Eileanan an Iar (Angus Brendan MacNeil) made plain that what they want is no Brexit at all. We all have starting points on that question. I would describe myself as a democrat first and a remainer second, and the British people, while they did not speak with an absolutely unified voice on this issue, have told us that we should leave the EU. The hon. Members’ proposition simply does not deliver Brexit.

On continuity agreements, most Members will agree that there are all sorts of different motivations among our partners.

[Angus Brendan MacNeil]

Will the Minister give way?

[George Hollingbery]

If the hon. Gentleman looks at the clock, he will see that I cannot give way. Actually, rather than finishing my speech, I ought to give my hon. Friend the Member for North Warwickshire space to sum up. I thank all hon. Members.

Oral Answers to Questions

Angus Brendan MacNeil Excerpts

Thursday 25th April 2019 Commons Chamber

[Mr Speaker]

Mr Philip Dunne—not here. Where is the fella? I hope he is not indisposed. We will have to proceed.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Free trade agreements are, of course, needed, and the EU has some very good ones, which is why the United Kingdom Government are copying them. But trading on World Trade Organisation terms is very expensive. What is the Secretary of State doing to dispel the notion that is abroad, particularly in his own party, that leaving the EU and trading on WTO terms is a good idea? If it was, every country would be walking out of their trade blocs and every country would be ripping up trade agreements. It is a very silly and very dangerous idea, and I hope he is doing his best to combat it.

[Dr Fox]

I am not quite sure how that relates to the question on healthcare, but it is an important point that the WTO rules provide a baseline, and the way in which countries get preferential treatment beyond that baseline is very often through a free trade agreement. That is why we want to see free trade agreements beyond what we have today.