International Trade and Geopolitics

Baroness Laing of Elderslie Excerpts

Thursday 20th April 2023 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I apologise, Madam Deputy Speaker. I was not going to engage in the debate, but I was passing and heard a reference to me—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. I would normally chastise the right hon. Gentleman for attempting to speak in a debate when he has not been present, but I happened to notice that he was in the Chamber although not in his normal place. Given that we are not under enormous time constraints this afternoon, I will be much more lax than I normally am.

[John McDonnell]

As generous and wise as ever, Madam Deputy Speaker.

To reinforce what the hon. Member for North East Bedfordshire (Richard Fuller) said, we did that piece of work because we wanted to review every tax relief. In opposition, that is impossible to do, but we would have done it in government. The reason was that we were discovering tax reliefs that had been introduced decades earlier that the Treasury had never reviewed to see whether the original purpose had been achieved or whether they should be amended. Example after example was found, and it was clear that the tax relief system was not working effectively or as it was originally planned.

--- Later in debate ---

[Richard Thomson (Gordon) (SNP)]

It is a pleasure to speak in such a wide-ranging and comprehensive debate. I congratulate the hon. Member for Bristol North West (Darren Jones) on the knowledgeable and expert way in which he opened the debate that he secured. It is extremely important that we are discussing the various intersections of this subject, as geopolitics is about our interaction with the world not only through our conventional power but through our soft power and trade. The hon. Member for Liverpool, Walton (Dan Carden) rightly alluded to the soft power we exert and the benefits we offer to the rest of the world through our leading education opportunities.

The Government made a statement on CPTPP earlier this week and, as Members might expect, I questioned the value of that deal relative to how much the Government have lauded what they see as its benefits. Clearly I touched a bit of a nerve with the Secretary of State for Business and Trade, because not content with chastising me in her immediate response, she then took the opportunity in her responses to the right hon. Member for New Forest East (Sir Julian Lewis) and the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) to have a second and a third go at me. I am tempted to say that that might betray a bit of a snowflake tendency, which seems to run slightly at odds with the carefully curated political persona. None of the overhet assertions to the contrary that were handed out to all Members who questioned the CPTPP did anything to dispel my fear that it represents an agreement that will drive down standards, that lacks adequate safeguards for domestic regulation and that represents a poor substitute for all the other trade deals that we have been forced to leave behind through exiting the European Union.

I am sorry to say that that trade and geopolitical picture is not an especially happy one at the moment. UK goods exports are the lowest in the G7 following Brexit and they have not shown much sign of recovery, even since covid. It turns out that putting up trade barriers to our largest export market, and our closest one geographically, carries hefty economic consequences—who could have guessed that? Business investment is not forecast to return to 2019 levels until mid-2025, and the UK is forecast to have the worst economic record of any G20 country in 2023, including, astonishingly, sanctions- hit Russia, according to the International Monetary Fund’s latest forecasts. Its “World Economic Outlook” estimates that UK GDP will contract this year. All of that is compounded by the 4% hit to GDP that we know has come from Brexit. I am left wondering whether there are sufficient trade deals around the world yet to be concluded to ever adequately fill that gap.

This manifestation of the UK Government’s trade policy, a bit like the Australia and New Zealand trade deal, might appear to put some political chalk on the board for the Government, which they would find convenient, but these deals potentially come at the expense of domestic producers and of our sovereignty, through the investor-state dispute settlement clauses, with all the implications they carry. They also threaten to make a mockery of the Government’s oft-stated sustainable trade goals.

I am forced to pose the question: how could matters that we are told are so important to this Government, such as sovereignty, economic growth, domestic production, domestic standards and global environmental and human rights concerns, end up being compromised by the deals the Government then go out to negotiate? Sadly, there is no way to avoid the conclusion that outcomes from those deals will end up being contradictory to the public statements and publicly stated policy objectives, simply because the Government do not appear to have any kind of trade strategy written down anywhere.

In her foreword to “The UK government’s strategy for international development”, a document published last May, the then Secretary of State for Foreign, Commonwealth and Development Affairs, the right hon. Member for South West Norfolk (Elizabeth Truss), stated that

“in the world we face today our development work must form an increasingly key part of a coherent UK foreign policy.”

There are quite a few reasons why I could take issue with that statement on its own terms, but it is bizarre, is it not, that the Government have a document setting out how they seek to link aid to foreign policy but not one that links their trade policy to their domestic and international objectives? The UK Government certainly do not have a published document to that effect. If they have an internal one, it is clearly not working. This really does matter, not just because of its domestic impacts but because of the negative effect it will have on the international impact that the Government might hope to have.

Let us consider the facts. As it stands, the UK Government are negotiating trade deals on behalf of the UK, the four nations that make up the UK and the devolved Administrations without having a comprehensive trade strategy in place—or at least one that any of us can measure them against. That means that harmful concessions are much more likely in the process of engaging in the wider world, as has already happened, particularly with regard to the agrifood sector. This comes at a time when many countries, including even the United States of America, recognise that trade policies need fundamental transformation to support a step change to a sustainable green economy based on workers’ rights and shared prosperity. However, the UK Government are pursuing a policy of free trade deals, seemingly at any cost, without that framework in place to guide them.

In contrast to the UK Government, the Scottish Government do have a published written trade strategy. It sets out five principles that underpin the Scottish Government’s trade decisions and relationship, which are based around pillars of inclusive growth; wellbeing; sustainability; net zero; and good governance. It positions trade within a framework of a wider economic, social and environmental context and considers the strategic role of trade in contributing to those wider governmental ambitions. The Scottish Government are using all the powers and influence available to them to make tangible progress on delivering on that in support of Scotland’s national strategy for economic transformation. Where powers are currently reserved to Westminster, the Scottish Government are seeking to engage as best as they can with the UK Government to act in a way that acknowledges the interests of Scotland and supports our economy and our people, and the planet.

We saw some news break this week that the Foreign Secretary has written to UK ambassadors and high commissioners around the world to try to get them to ensure that there is a “strengthened approach” to dealing with Scottish ministerial visits, to make sure that the Scottish Government are kept firmly in their box and do not get any ideas above their station in their international engagements. There is a supreme irony here: a Scottish Government who do have a trade strategy are to be chaperoned around the world so that Ministers are kept in their place by officials representing a Government who do not have a trade strategy.

Food security is a matter of key concern, and we have seen its impacts in the bare supermarket shelves, the shortages of certain vegetables and the rotten meat scandal. Clearly, climate change and conflict pay an enormous part in disrupting supply chains, but there is no doubt that leaving the EU has not helped either. It has left us at the end of those strained supply chains and hampered our domestic food production and our ability to acquire food on the open market. So, sadly, we are hit the first and the hardest when those supply chains break.

The integrated review update from a few weeks back said that the UK Government are worried enough that they will be assessing vulnerability in our food system and supply chains. Frankly, it is incredible that that has not happened already. We desperately need a food security resilience plan that looks at that intersection of trade and domestic food production.

The issue of food security has not suddenly crept up on us and we could look at many other areas of the economy too. One key lesson we should have taken from the pandemic is surely that no matter how much we can be ideologically committed to free trade and open markets, there is a fallacy in assuming that this country will always be able to buy whatever is needed at any point on the open market and, consequently, that it is possible or desirable to run down domestic production. Our approach to trade in food should reflect our need to be self-sufficient where that is possible, and it should reflect our values. Food should be produced in ways that keep us and the animals in the food system healthy and safe; it should seek to reduce our global environmental footprint; and it should support high-standards producers at home and abroad who are pioneering the farming and land stewardship methods that will get us to net zero.

In this vacuum, there is a real opportunity to start matching industrial strategy to trade strategy in a way that does not happen at present. There is perhaps no better example of an opportunity in that area than when it comes to technology and the environment, and that is of particular interest to me not just as a Scottish MP, but as a Member of Parliament representing a constituency right at the heart of the energy economy in the north-east of Scotland.

Scotland has the potential to be a green energy powerhouse, creating up to 385,000 jobs, boosting our economy by up to £34 billion a year by 2050, permanently lowering energy bills and embedding energy security by being a reliable energy partner from the resources around our shores and on our landmass. The Government’s own net zero tsar has written about the former Department for International Trade in his most recent report. He notes that

“there is a missed opportunity to further trade in environmental goods which could expand UK exports in these goods.”

He goes on to say:

“Promoting environmental goods and services should be a top priority for the Government…In order to maximise the potential of free trade agreements to make a positive difference for the net zero transition to remove the barriers to trade in climate change products and services, the Government should be establishing a minimum threshold for the environmental provisions which all new FTAs should adhere to.”

I would very much like to start seeing evidence that that is happening.

Finally, I wish to touch on the matter of aid. In November 2022, the current UK Minister for International Development said:

“We used to be a foreign aid superpower, but our reputation has declined.”

Aid cuts are clearly a huge part of that reputationally. My party will once again take this opportunity to reiterate our calls for the 0.7% of GNI spent on international aid—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. I hesitate to interrupt the hon. Gentleman, but I was very lenient earlier in the debate about the length of speeches, because I appreciated that there was plenty of time this afternoon, and I am sorry to say to him that, having been lenient, the plenty of time has run out. Normally, I would have asked him to speak for something like six or seven minutes. I did not do so, because I was not aware that we had run out of time, but I hope that he will help by concluding quite soon.

[Richard Thomson]

I am grateful for your guidance, Madam Deputy Speaker, and I will endeavour to bring my remarks to a controlled and orderly stop very soon.

Having made my point about aid, that seems like a good cue to finish by recalling the words of the NATO General Secretary, Jens Stoltenberg, from last year, when he said:

“Our economic choices have consequences for our security. Freedom is more important than free trade. The protection of our values is more important than profit.”

I am certain that no one in this House disagrees with that, but, in the absence of a clear, coherent trade strategy aligned with a clear, coherent domestic policy, it is impossible for the Government to say that they are acting in the interests of upholding freedom, prosperity, quality of life, quality of environment, social justice or human rights around the world, and that urgently needs to be addressed.