UK-China Relations

Iain Duncan Smith Excerpts

Wednesday 26th March 2025 Westminster Hall

[Gregory Stafford]

I will come on to slave labour almost immediately, but to answer the hon. Member directly, I think the security concerns are too great. I welcome safeguards to remove slave labour, but there are still concerns beyond that that we should be looking at.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

Of course, that is a wish, not a reality. We have no way of ascertaining whether suppliers are buying from slave labour, and there is no punishment available should they be doing so. The situation is quite the opposite in the United States, which sanctions companies that have been using slave labour. That has made a big difference. The Government have to get their head around this, otherwise we are just going to get slave labour-made products all over.

[Gregory Stafford]

My right hon. Friend, who has considerable and lengthy experience of dealing with China, makes a crucial point. There is no point in having a wish list if there is no sanction or enforcement to back it up.

Trade with China is tainted by human rights abuses. I will give an example. Over 1 million Uyghur Muslims are imprisoned in a vast network of forced labour camps in Xinjiang; it is the largest mass arbitrary detention since the second world war. Despite China’s denials, we know that UK industries, from textiles to electronics, remain dependent on materials from that region. Xinjiang produces between 20% and 25% of the world’s cotton and polysilicon, which is a critical component in solar panels. That is why Lord Alton’s amendment 18 to the Great British Energy Bill, which secured cross-party support, was so significant in ensuring that our supply chains align with human rights standards.

On 25 March 1807, the Abolition of the Slave Trade Act received Royal Assent, yet 218 years later, Labour MPs blocked a ban on buying solar panels from China.

[Sir Iain Duncan Smith]

My hon. Friend is making a very good speech, but this is not just about human rights abuses. There is a reason that China uses slave labour—and it came from nowhere 10 or 12 years ago to now be the dominant player in the business. It is because it does not pay salaries, which makes the arrays cheaper. British companies go rushing over to get them because they are cheaper, and the Government do not mind too much because they do not have to pay so much. The key is that it has to be proper and functional.

[Gregory Stafford]

I entirely agree with my right hon. Friend. I will make similar remarks later in my speech, but that is key. Not only is it the use of slave labour, which should be enough to get the Government to start thinking seriously, but it is a complete undercutting of our market.

--- Later in debate ---

[Gregory Stafford]

I fear that the hon. Member is dancing on the head of a pin there. To be frank, I do not agree with him on that. I think the Government should be really clear about what they are actually going to do to—

[Sir Iain Duncan Smith]

Will my hon. Friend give way?

[Gregory Stafford]

Yes, but then I will make some progress.

[Sir Iain Duncan Smith]

I need to deal with this point through my hon. Friend. The reality is that the Government already accept something on which I worked with them when they were in opposition, which is to get to exactly the same position as in the Health and Care Act 2022. The NHS is not allowed to buy anything made by slave labour—it encompasses everything. The amendment to the Great British Energy Bill would have done the same. To those who say, “It’s too narrow because it’s only one sector of the economy,” I say that we have already done it with health and care, and Labour voted for that at the time. I was rather proud of that.

[Gregory Stafford]

My right hon. Friend should be very proud of that and everything that he has done to stand up to Chinese aggression, on trade and on a number of the other issues that we will touch on during the debate.

Let me move on to the security and rule of law elements that I have concerns about. Economic interdependence is only one dimension of our vulnerability. The UK must also confront China’s growing efforts to exert influence and repress dissidents on British soil. The proposed Chinese mega-embassy at Royal Mint Court epitomises that threat. Despite being firmly opposed by the previous Conservative Government, it is now likely to proceed, apparently due to lobbying by the Home Secretary, the Foreign Secretary and even the Prime Minister. Housing 700 diplomatic staff, the complex could become a hub for transnational repression and espionage, putting at risk Hongkongers, Tibetans, Uyghurs and Taiwanese individuals who have sought refuge in the UK. The brutal 2022 assault on Hong Kong protester Bob Chan in Manchester, perpetrated by Chinese diplomats who escaped justice under diplomatic immunity, should serve as a stark warning to us all.

Beyond our borders, China continues its assault on democracy and human rights. Some 2,000 political prisoners remain in arbitrary detention under Hong Kong’s draconian national security law. One such prisoner, with whom I am sure we are all familiar—Jimmy Lai, a British citizen—has spent more than 1,500 days in solitary confinement without access to British consular support. The Government’s failure to assist him speaks of a broader pattern of weakness in standing up to the Chinese regime.

I therefore support the Bill promoted by the hon. Member for East Renfrewshire (Blair McDougall), which would legally enforce stronger consular protections for British journalists detained abroad. I hope that the Government will start to support it as well.

--- Later in debate ---

[Chris McDonald (Stockton North) (Lab)]

It is a great pleasure to serve under your chairmanship, Ms Lewell. I thank the hon. Member for Farnham and Bordon (Gregory Stafford) for securing the debate. It is a pleasure to follow him, because I want to expand on some of the points he made about the dependence of our industry and economy on China.

I have worked in China and have friends there. I am certainly no Sinophobe, but I do think we need to be clear-eyed about the fact that we are in economic competition with China. The hon. Member for Farnham and Bordon described it as a relationship of dependency, and I fear that that is the position. An inter-dependent relationship would be fine, but we are in more of a dependent relationship.

I remember being in China in 2015, at the launch of the 13th five-year plan. I was shocked at what I saw as a big competitive threat to the UK. At that time, President Xi was in London—we had done a bit of a swap—and was meeting the Prime Minister here. The Prime Minister said he was enthused by President Xi’s plan for the belt and road initiative, and he directed the City of London to fund it. From where I was sitting, that seemed like an extremely bad idea.

I was talking to British engineering companies that had been told they would get three contracts in China. In the first contract they would deliver a machine, in the second contract they would deliver the drawing, and in the third contract they would supervise the Chinese company that would do the installation on their behalf. Many of those companies no longer exist because they have been competed out of the market by China.

It is the job of the UK Government to make sure that we site jobs in south Wales rather than Wuhan, and in Teesside rather than Tianjin. I fear that over the past couple of decades we have been too keen to pursue lower-cost goods rather than invest in our own industries.

The industry that I know best is materials. Some of the critical raw materials we need for our future are gallium, germanium and neodymium—I apologise to Hansard reporters for sounding like a Tom Lehrer song. Those are incredibly serious minerals that are essential for our future. For most of them, China either dominates the mining or has the materials processing capability for about 90% of the global market. It is important for us to consider how we can secure materials processing in future.

Just this week Richard Holtum, the chief executive of Trafigura, the world’s biggest private metals trading company, recommended that Governments nationalise their metals-processing industries in order to compete with China.

[Sir Iain Duncan Smith]

The hon. Member is talking about a critical area for us all. Those minerals are best described as the oil of the 21st century: who controls them controls the way we live our lives. Surely we cannot consider that China is benign in this market. Quite recently—about two years ago—China blocked Japan from access to the market, so Japan then set up its own position. That attitude shows us what the Chinese intend to use this for if they have to deal with countries like the UK. If they blocked us off, it would cause us chaos.

[Chris McDonald]

The right hon. Gentleman is exactly right. We heard the Chancellor of the Exchequer say a few hours ago that economic security was national security. The two cannot be divided. Because of our belief in the free market, we thought that as long as we have a trading partner we can buy goods from, we are left in a secure position. But we must why—why does China choose to dominate these markets? Because it is an extension of Chinese foreign policy. The same is true of trade. The Chinese belt and road initiative seems to me to be a deliberate policy to bypass the traditional trading ports of Goa, Aden and Hong Kong, where the UK has historically had a strong foothold, to ensure that China dominates trade routes.

The real question is what we do about this. The mindset we need to have is that China has the first-mover advantage in this new industrial revolution. We had the first-mover advantage in the last industrial revolution. How could a country have competed with us in the late 19th century? That mindset means investing in our own industries, and using our own market to do so. We can learn from China in this sense: we can use our own public procurement and invest in our industries. We have a great nickel producer at Clydach; the Chinese tried to copy that process but were unable to do so. Our Lochaber aluminium plant was set up to serve the nation in the late 1920s, and it still exists and is worthy of further investment. The UK also has one of the six cobalt refineries in Europe.

But what of copper? We cannot achieve anything without copper, yet we have no copper-refining capacity in the UK, despite being the fifth largest exporter of copper in the world. These are the issues that we need to take seriously to ensure that we can have an independent economic policy and an independent foreign policy when it comes to China. That is important for our industries and our foreign policy, but it is also important for the communities like the one I represent, where people have relied on good jobs in these industries. We should prize those jobs being in the UK.