Future Free Trade Agreements

Graham Stuart Excerpts

Thursday 21st February 2019 Commons Chamber

[Chi Onwurah]

I thank my hon. Friend for that excellent point. The competitiveness of the sector means that margins are narrow, so any such factor—Brexit and access to markets are significant factors—will place us at a continued disadvantage. The Society of Motor Manufacturers and Traders says that no deal could cost the car industry up to £4.5 billion in tariffs.

[The Parliamentary Under-Secretary of State for International Trade (Graham Stuart)]

The hon. Lady makes the powerful case against no deal, which is why the Society of Motor Manufacturers and Traders, and practically the whole of business, is urging her and her colleagues to vote for the Government’s deal. Why will she not do so? Why does she put so many jobs at risk? Why is she peddling the myth that investment is falling, when overall the latest figures suggest that Britain continues to lead Europe on investment?

[Chi Onwurah]

I thank the Minister for that intervention and for giving me the opportunity to reiterate that, as my hon. Friend the Member for Brent North (Barry Gardiner), the shadow Secretary of State said, the false choice between the Government’s bad deal and no deal is in effect an act of economic blackmail. Industry sectors have said they would prefer the Government’s deal to no deal, but they also said that it is a bad deal. It is a bad deal for British industry. It pushes the key decisions out two years into the future. In two years’ time, we will be facing, with less leverage, exactly the same challenges under his deal.

[Graham Stuart]

Which business organisations have said that they think this is a bad deal?

[Chi Onwurah]

The Minister knows very well that the business organisations that have said that to me—I speak to them extensively as a shadow Minister—do not wish their names to be given. [Interruption.] They have said it. They do not wish to be named in Parliament, because they fear the negative reaction of Ministers such as himself.

--- Later in debate ---

[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.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for International Trade (Graham Stuart)]

I hear urgings from Opposition Members, not least the Chairman of the Select Committee, the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil). It is a pleasure to conclude this debate about future trade agreements, in which we have heard interesting contributions, ranging from the profound to, more recently, the bizarre. Nearly all have been interesting and I wish to thank everyone who has taken part. I particularly want to thank the Chairman of the Select Committee and its members for their thoughtful and well-informed contributions.

Today’s debate is just one way in which the Government are seeking to ensure that the House of Commons, the House of Lords, the devolved Administrations and wider society are engaged in, consulted on and fully briefed about future trade agreements. It is the Secretary of State’s profound belief that only a transparent and inclusive approach is appropriate as the UK sets out on its exciting journey towards a fully independent trade policy. Ninety per cent. of global growth over the next few years is expected to occur in areas of the world outside the EU—90%. That is why we should remember that there is a world beyond Europe, and I promise that there will be a time beyond Brexit. The purpose of this debate was to enable Parliament’s voice to be heard on the potential agreements, prior to the UK’s negotiating objectives being formed.

Although international trade policy is reserved, we have committed to holding formal and regular inter-governmental ministerial forums with Ministers from the devolved Administrations to consider future trade agreements. We ran public consultations on the four potential agreements that we are debating. They lasted 14 weeks, as has been said, and closed on 26 October last year. In addition, we held 12 events throughout the UK’s nations and regions to engage business and civil society alike. So, we are not just talking about unprecedented engagement, we are seeking to deliver it. In total, we received a remarkable 600,000 submissions in response to the four consultations. We are analysing those responses to ensure that they can help to shape our approach to the negotiations. Notwithstanding the understandable frustration about wanting that to speed up, I am sure that Members from all parties understand why we should try to get it right. We will publish our response to all four consultations before any negotiations begin.

[Emma Little Pengelly]

rose—

[Graham Stuart]

As I am talking about consultation and engagement, I shall give way to the hon. Lady.

[Emma Little Pengelly]

One of the positive things about this debate has been the many voices from across the UK, the devolved regions and the other regions throughout England. As we go through the immediate period, there will be concerns from businesses, particularly in Northern Ireland where we do not have a devolved Assembly so cannot participate formally. Will the Minister have an open-door policy in his Department, and encourage his ministerial colleagues to do the same, so that businesses and organisations from across the regions and right across the UK can articulate concerns and genuinely be listened to? That way, we can make sure that this is a truly global UK agenda moving forward.

[Graham Stuart]

As ever, the hon. Lady speaks powerfully on behalf of her constituency and, indeed, Northern Ireland. That is a really important point for us to take note of. As I have said, we are led by the Secretary of State in our determination to make sure that we get this right and fully engage people. One of the well-informed Opposition Members said earlier that some of the concerns about TTIP were asinine but, the allegation was, badly politically mishandled. By engaging all parts of the United Kingdom, as I have set out, we are absolutely determined to try to make sure that asinine, false issues do not blind us to the real ones. There are genuine trade-offs to be had in trade agreements, and we should look at and understand them. We need to make sure that we are not spending our time dealing with issues that are not in fact real and are just peddled, often by groups, for political purposes.

[Stewart Hosie]

I agree with the Minister that it is better to take one’s time to analyse the responses to the consultation, but does he or the Secretary of State intend to go back out for further public negotiation once the negotiating mandate for the deals is agreed?

[Graham Stuart]

First, I should say that parliamentarians will continue to be able to inform the negotiations. Parliament will be updated regularly as the negotiations progress, and it will be Parliament, through the process set out in the Constitutional Reform and Governance Act 2010, which was passed by the Labour party, that will ultimately play its role in the ratification of any new FTA.

[Barry Gardiner]

Will the Minister give way?

[Graham Stuart]

I will not.

Both Houses will be fully involved as we balance meaningful scrutiny with the security necessary to protect sensitive negotiating positions and market-sensitive data. Having reflected on the contributions in this debate, including those of the hon. Member for Dundee East (Stewart Hosie), we will return with more detailed proposals shortly, ahead of the next stage of the Trade Bill.

As I said, we have had interesting contributions from Government and Opposition Members. I shall pick on some. The right hon. Member for Warley (John Spellar) noted in an intervention that he fully accepts that there is no threat to the NHS from the potential trade deals. He has accepted that we are not going to let that happen. I hope that Opposition Members, who have, like me, heard the concerns of many constituents on that front, can not only bring those concerns to the House but help to allay them. If there is a genuine issue, it is worth looking at it, but if there is not, we do not want false fears. There are enough real challenges facing us without spectral ones being introduced as well.

The issue of developing countries and what more we can do was touched on by Members on both sides of the House. One Opposition Member—I cannot remember who it was—sounded rather sceptical, saying that we might go backwards in that regard. I think that there is a real opportunity to go forward. As the Secretary of State has said, bringing trade and development together is really important if we are to help people out of poverty. Ultimately, trade, not aid is the way out of poverty. Therefore, the issues that have been raised here, not least about coffee and other such products, are about making sure that poorer countries can add value in their country and then sell into the UK. That is the kind of forward-looking policy that we have in mind.

Market access was also touched on. While we are talking about these big flagship trade deals, more advantage could well be had by targeting smaller market access issues. We heard about the pork industry earlier, and we could mention the opening up of Taiwan and China to pork. It has made an enormous difference to the pork industry in this country. There is an opportunity to do much more in many other areas, not least in the new digital and data-related areas as well.

The hon. Member for Swansea West (Geraint Davies) did his usual gloom routine. I really do not understand how such a dynamic and forward-looking area as Swansea can be represented by someone who is so down on this country and its future prospects. I really hope that, at some point, he will cheer up and recognise that there is an upside, and that every cloud does have a silver lining.

The hon. Member for Brent North (Barry Gardiner) mentioned differences between the EU mandate and our own. We will set out our plans and a scoping document in due course. As I have said, we really are committed to making sure that this House and, as broadly as possible, civil society and certainly the devolved Administrations can be included, and we will be having that inter-ministerial forum as well.

[Barry Gardiner]

rose—

[Graham Stuart]

I will give way to the shadow Secretary of State.

[Barry Gardiner]

I just wanted to say thank you.

[Graham Stuart]

Excellent. That is delightful.

I have been speaking for eight minutes so far, and will seek to stay within the time. My hon. Friend the Member for Mole Valley (Sir Paul Beresford) was informative, fascinating and interesting when he talked about the scale of farms. Agriculture was raised in the debate. There is a balancing act to be done between looking after consumers and making sure that we look after the beautiful countryside, not least in the north-east of England, but in the rest of the country as well. If there are to be any changes—liberalisation, for example—they need to be done in a sensible way that maximises the potential upsides and minimises any downsides to any losers.

The Chairman of the Select Committee, the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), said that we needed to carry Parliament with us, and he is absolutely right. In talking about winners and losers, he mentioned compensation for areas that lose out. By having a central Treasury, this country makes sure that we provide a counterbalance between those areas that do less well and those areas that do better. I point to the behaviour of the Department for International Trade. As the Minister responsible for investment, my job is to lead the investment team. [Interruption.] Well, the shadow Minister, the hon. Member for Sefton Central (Bill Esterson), seems to invent facts rather than actually access them. If he looks at the latest numbers from the United Nations Conference on Trade and Development, probably the most respected ones globally, he will see that they suggest that, while global foreign direct investment fell markedly last year, that in the EU fell even more, and the UK—despite that—went up by 20%. So there is little truth in the suggestion, which we hear so often from the Opposition, that somehow things are going downhill. We have more people in work than ever before, more disabled people in work than ever before, rising wages and lower inflation. The truth is that we have fewer unemployed young people than at any time in our history. This is good news. Trying to talk the country down about both its future and its present may be a standard Opposition tactic, but, in the current circumstances, it is, frankly, disingenuous.

[Angus Brendan MacNeil]

Other than spending consequentials in this centralised UK state, there are no fiscal transfers from the south to the north of England—for example, when the north of England got damaged by the air transport policy that the UK ran for about 40 years. I just caution the Minister against being too complacent. The UK is not doing what it should to offset the bias of the sterling zone and the UK centralised Government towards the south-east of England.

[Graham Stuart]

We have seen investment spreading out from London and the south-east. If the Chair of the Select Committee looks at the EY report, he will find that there has been a big change in the amount of investment going into the regions and nations of the country—away from London—over the last number of years. I recommend that report to him. In addition, it points out that there has been an increase in the share going to manufacturing.

The Opposition are again peddling the falsehood that we are somehow seeing a loss of manufacturing. On the contrary, manufacturing is becoming more efficient and competitive. It is competitiveness that will ultimately lead to higher living standards and it is competitiveness that this Government understand. The Opposition too often want to be on the side of protection, rather than enhancing competition while managing it, and that is why almost every Labour Government in history have ended with higher unemployment at the end than at the beginning, and it is why the Conservative party and this Government have a proud record of creating more employment.

I hope that these limited responses have been helpful to hon. Members. As I have said, we are listening closely to the views expressed in this debate and will reflect seriously on them before laying our outline approaches to our first negotiations before the House—and we will do that.

The United Kingdom’s exit from the European Union provides us with a golden opportunity to negotiate, sign and ratify new free trade agreements as an independent free trading nation for the first time in more than 40 years, and it is an opportunity that this Government and this party are determined to seize.

Question put and agreed to.

Resolved,

That this House has considered potential future free trade agreements: Australia, New Zealand, US and a comprehensive and progressive agreement for Trans-Pacific Partnership.