British Exports

Hugh Gaffney Excerpts

Tuesday 20th November 2018 Commons Chamber

[Andrea Jenkyns]

I thank my hon. Friend, who is another committed Brexiteer and visionary for our country.

In the Commonwealth, English is usually spoken as the first or second language. Our common law system has been inherited by many Commonwealth countries, and foreign countries encourage their people to study law in Britain. Even accounting principles and practices are usually similar to our own in the UK. In 2016, the UK exported goods and services to the Commonwealth worth £48.5 billion, which is only 8.9% of all UK exports. As a country, we have neglected this vital resource for too long, and as a nation and Government we should be doing more to actively encourage exports to these exciting economies.

In recent years, there have been some good-news stories from the Commonwealth. In my region, the number of exporters of goods in Yorkshire and the Humber that send products to Nigeria went up by 8.2%. Exports to India increased by 4.3% and exports to Australia by 1.8%. By contrast, the number of exporters to France has barely moved, at 0.2%, and the number of exporters to Italy fell by 0.4%, despite the drop in the value of the pound. Since the Canadian free trade deal with the EU, our export to Canada have increased by 9.9% compared with last year. That illustrates the benefits that new free trade agreements can have for the great exporters in Yorkshire and the Humber. Like them, I want to see more people exporting around the globe, and the Government play a large part in that ambition.

I fully agree with the Government’s industrial strategy. We need to back business and invest in skills, industries and infrastructure to ensure that we are ready for the 21st century. We need a geographically balanced economy; to encourage the UK to be the world’s most innovative economy; and to see greater earning power for all. We need continued investment and a strong business environment, guaranteeing that the UK is the best place in the world to start and grow a business.

As the Minister will confirm, research shows that companies that export have increased growth potential, are far more productive, and offer better-paid jobs. Last year, some £620 billion of goods and services exported by British companies accounted for 30% of our GDP, and UK exports are at a record high.

[Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)]

I am listening to the hon. Lady’s speech, and the thing that worries me about Brexit is what happens if Britain becomes isolated from the rest of the world. What if Europe can do it cheaper? Where will all our exports go? That is my biggest fear about Brexit.

[Andrea Jenkyns]

I thank the hon. Gentleman for his question, but I, unlike him, have great belief in the British people and our businesses. I know and trust that we will continue to thrive and grow. There is no doubt that we will far outdo the performance of the EU—we will do far better, mark my words. I just wanted to put that on record.

The Department for International Trade estimates that 400,000 businesses believe that they could export but do not, and demand for British expertise and goods overseas is growing. I was pleased that the Secretary of State for International Trade recently set out ambitious plans to make Britain a 21st-century exporting powerhouse. This new export strategy aims to increase UK total exports as a proportion of GDP to 35%. We want SMEs to grow into the multinational corporations of tomorrow, and support from the Government can and will help.

I am glad that the Government are responding to a call from business. The export strategy outlines how the Government will produce smarter and more tailored support to UK companies. More support for companies selling overseas will be offered, encouraging and inspiring more businesses to export. The Government will assist businesses by providing information, advice and practical assistance on exporting, and they will connect UK businesses to overseas buyers and markets, and to each other. The policy sounds fantastic and I am sure that every hon. Member in this Chamber could get behind it—it is certainly one that I could get behind—but we need to address the elephant in the room of free trade agreements in the light of the restriction that the Prime Minister’s draft withdrawal agreement puts on our ability to be free and independent when we finally leave the EU.

Martin Howe QC has analysed the Prime Minister’s draft agreement and has come to this conclusion:

“This customs union arrangement would kill stone dead the chances of the UK following an independent trade policy after Brexit. We would not be able to offer tariff concession to free trade partners, so they would have no incentive to offer us concessions on, say, services, which we would want to export to them. Further, it will render the theoretical right to negotiate third country trade agreements during the transition period totally meaningless. Since we will be unable to tell prospective free trade partners when we will be free to implement such an agreement, or indeed whether we will ever be free to do so at all, they will have no interest in spending time and effort on serious negotiations with us.”

It is a lose-lose situation for the UK and our future.

Let me repeat what Martin Howe says:

“This customs union arrangement would kill stone dead the chances of the UK following an independent trade policy after Brexit.”

That is directly at odds with the Prime Minister’s Lancaster House speech, in which she said:

“I want us to be a truly Global Britain—the best friend and neighbour to our European partners, but a country that reaches beyond the borders of Europe too. A country that goes out into the world to build relationships with old friends and new allies alike. I want Britain to be what we have the potential, talent and ambition to be. A great, global trading nation that is respected around the world and strong, confident and united at home.”

The Prime Minister’s draft agreement does not live up to her promises, and I will not support any agreement that does not allow the UK to take back control to export our goods freely around the globe. Only today, Global Britain and the European Research Group issued the joint publication “Exploding the myths of leaving the customs union”. Its foreword by Simon Boyd, the managing director of REIDsteel, rubbishes concerns that, when the UK leaves the EU single market and customs union, it will be harder to trade. Whether for imports or exports, his biggest criticism of the EU is the bureaucratic nature of the customs union, which is designed as a fortress to protect producers rather than to encourage free trade. Furthermore, he criticises an EU system that suits multinationals that have the means to lobby and to unfairly profit at the vast expense of the majority of UK businesses. We need to get as far away from this protectionist club as possible, which means that we should leave the customs union so that we support British small and medium-sized enterprises and exporters here at home.

I am a Conservative. We believe in liberalised trade, but we also believe in the determination and talent of British people and business. We believe in the benefits of a Government who support business and allow it to prosper. Some 200 years ago, Adam Smith argued in favour of free trade and against protectionism. That argument is as relevant and persuasive today as it was back then. Those arguing against free trade and for protectionism are arguing in favour of higher prices and fewer choices for the consumer, and therefore against a higher standard of living for the British public. I cannot support that. We need to be free of the EU’s protectionist bloc once and for all.

We have excellent exporters in my constituency, across Yorkshire and Humber, and throughout the UK. These are businesses that we should be proud of, and I am glad that the Government and the Secretary of State are working with businesses to support their needs and keeping exports high on the Department’s agenda. However, the Government’s draft agreement to keep the United Kingdom in the customs union with the EU will not help exporters in the medium to long term. Every day that we stay in the EU is another day when we are not able to take advantage of our historic ties with the world’s most exciting and fastest-growing economies.

Fears about our leaving the customs union have been greatly exaggerated. Brexit offers the opportunity to reduce red tape, to look beyond the bureaucratic nature of the customs union, and to establish our own free trade agreements with the rest of the world. Adam Smith may be about to be replaced on the £20 note, but that does not mean that we should forget his teachings about the importance of free markets. To echo the Prime Minister’s words, I want to see a truly global Britain, but we need to be out of the customs union to ensure that this happens. It is only when we are truly free, and we have control of our laws, our money and our borders, that Britain will be able to fulfil its destiny as the 21st-century exporting powerhouse that the Secretary of State himself wants the country to be.