UK Trade Performance

Baroness Bennett of Manor Castle Excerpts

Tuesday 7th May 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

When it comes to stock market listings and the operation of stock markets, that is, by definition, capitalism in the private sector, and the Government should not get involved in that particular exchange. However, the previous lord mayor led a very interesting initiative which identified that our pension funds are not investing enough in UK equities, so there is now an interesting scheme going on whereby we can see whether we can get 5% of UK pension funds invested in UK equities, which I think is a very worthwhile initiative.

When it comes to headquarters, et cetera, a number of studies have been put out recently by PwC, EY and Boston Consulting Group which have done surveys with CEOs who indicate that they still believe that the UK is one of the best places to locate their head office in Europe. Therefore, we do not see any diminution in that. Foreign direct investment into the UK now is greater than into France, Germany and Italy combined. The market, the money, talks. The money is coming in—my noble friend Lord Johnson is doing a sterling job on that. We have a strong, good economy. Foreign investment is coming in. There is dislocation of stock markets, but initiatives are being taken to alleviate that concern.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I am glad that the Minister agrees with the Green Party about GDP growth being an extremely inaccurate measure of progress in a society. The question I want to ask is specifically about the situation of small and medium-sized enterprises exporting to the EU. Importers are having many difficulties. The noble Viscount, Lord Waverley, referred to florists, and horticulturists are reaching out to me regularly. On exporters, British Chambers of Commerce figures for the fourth quarter of 2023 show that 50% of SMEs have had no change in overseas sales while 24% have seen a decrease and that exports from SMEs to the EU are consistently underperforming domestic sales. The head of trade policy at the BCC has said

“firms continue to express huge frustration with the complexity and cost involved”,

referring to exporting to the EU. Are the Government going to do more to help in what is clearly a deeply damaging situation for SMEs?

[Lord Offord of Garvel (Con)]

I just wish the noble Baroness had been at breakfast this morning at No. 10 Downing Street, where my noble friend Lord Petitgas and I hosted 16 SMEs which are exporters to Europe and elsewhere. They reported on how their businesses are trading up and that they now have the opportunity to trade around the world beyond Europe. I have been through the numbers; they do not lie. The numbers say that in terms of our manufacturing there has been no difference between Europe and the rest of the world. There are of course individual circumstances and individual companies where there have been ups and downs. That is business, but, overall, we are very clear that our SMEs have a great appetite to export. We need to get more of them exporting—as I said, 300,000 out of 2.5 million VAT-registered companies do so; I personally feel that we should push that up to half a million. We can do that, especially with the new digital industries coming through. Certainly, I would be very happy to introduce the noble Baroness to a number of the export champions today. Some of them are actually bringing manufacturing back—onshoring manufacturing —to the UK following Brexit. That is a very pleasing development.