Trade Bill

Iain Stewart Excerpts

Tuesday 9th January 2018 Commons Chamber

[Hannah Bardell]

I do not want to be a “doomsday-scenarioist” but the reality is that these things are happening now. The European Medicines Agency is off to the Netherlands, which is a significant loss to the UK and diminishes its role in regulating medicines, taking away 900 great jobs and a serious amount of influence.

As for my constituency of Livingston, which is at the heart of West Lothian, around 4,500 to 5,000 jobs are sustained by exports to the EU. Members from across the Chamber will have been contacted with the numbers that their constituencies could lose. Owing to its relatively strong manufacturing base, the proportion of West Lothian’s international trade with its EU partners is estimated to be higher than the Scottish average, so I have real and grave concerns as a constituency MP. Many of the business people I have spoken to have expressed deep worries about the lack of experience in the Brexit and International Trade Departments. I pay tribute to the staff in those Departments, but those are real concerns that have been raised with me none the less. The Secretary of State for International Trade admitted in an interview last year that

“Britain has turned down countries wishing to strike free-trade deals after Brexit because the government does not have the capacity to negotiate them”.

That somewhat contradicts his previous comment that securing a post-Brexit trade deal with the European Union should be the “easiest in human history”, but it is not so easy if the Departments do not have any staff.

The potential impacts are significant, ranging from planes being grounded the day after Brexit to fresh Scottish produce rotting in a protracted customs process, to prohibitive tariffs and diminished access to labour. Let us look airlines for example. As the London Market Group explained to me, a broad range of EU-based businesses, often undertaking activities critical to the EU economy, require specialist cover from the London insurance market, including airlines. Currently, the UK insurance market is the only location with the specialist aviation insurance knowledge and financial capacity to provide the full coverage for all risks faced by an airline. If airlines cannot get that insurance when we leave the EU, there is a risk that planes could be grounded at the end of March 2019.

I raised that on the Floor of the House on 11 September, and I was laughed at from across the Chamber, but lo and behold that very risk was raised almost a month later when the Chancellor became the first Cabinet Minister to admit that no deal could ground all flights. It took so long because, as we know, the Government had not done a proper assessment of the economic consequences. Without contractual certainty, which is the fear following Brexit, there could be market disruption and dislocation in a range of sectors.

[Iain Stewart (Milton Keynes South) (Con)]

The hon. Lady has repeated the scare that flights will somehow be grounded on the day the UK leaves the EU. May I suggest that she look at the transcript of the Transport Committee evidence session when the heads of major airlines and airports said that such a fear was completely groundless?

[Hannah Bardell]

I thank the hon. Gentleman for his intervention, but not all of them have said that. I am quoting directly from someone who has brought that information to me, but I appreciate that there are different views and different takes.

--- Later in debate ---

[Iain Stewart (Milton Keynes South) (Con)]

It is always a pleasure to follow the Chairman of the International Trade Committee, although I suspect that the only part of his speech with which I will agree is his praise for you, Madam Deputy Speaker. The rest of it, I suspect, we will disagree about.

I am grateful for the opportunity to speak in favour of the Bill. Many of the contributions we have heard in the debate confirm my fear that too many people want to re-fight the referendum and quite possibly deny the democratically expressed will of the British people to leave the European Union. As we heard from the right hon. Member for Birkenhead (Frank Field), who is no longer in the Chamber, the vast majority of fair-minded people, however they voted in the referendum, want us to get on with it and stop trying to re-fight the battles of 2016. That is what the Bill is about. It is not about re-fighting old battles or trying to shape future trade agreements; it is an important, practical, common-sense set of measures that will form part of the framework in which we can negotiate further agreements. The Bill is about giving continuity to our traders and investors, particularly companies with an interest in countries with which we have an existing trade agreement through the EU.

Several hon. Members have mentioned Scotch whisky. I declare an interest—I do my best to keep that industry going. However, the fear that the powers in the Bill will allow the agreements with third countries that we have through the EU somehow to disadvantage the Scotch whisky industry are completely wide of the mark, because this is about the continuity of existing arrangements. If there was a substantial rewriting of the basis of an agreement, that would be a new trade agreement, and would therefore not be covered by the principles of the Bill. It is important that we have the Bill, because doing nothing is not a credible option. Our agreements with countries that we have through the EU would simply come to an end if we did not have these measures in place. Whatever shape our future UK-EU trade arrangements take, the Bill gives us the flexibility to mirror those important third-party agreements in our domestic law.

I welcome all the provisions in the Bill, but in the time available, I wish to focus on part 3, which relates to trade information. It is clear to me from my previous work in the Department for International Trade that for too many years this country has underperformed its potential for exports and overseas investment. As we try to remedy that, it is critical that we obtain complete data on our exports and overseas investment. It is important, too, that we have more clarity about what constitutes exports and overseas investment, because many services that UK-based companies provide overseas, particularly with the advent of modern technology, might not be captured in the export data. For example, if a professional services company gives a software upgrade to one of its subsidiaries overseas, that might not be counted as an export.

If such data is available, it will allow both the Department and private companies better to support those who wish to expand their export activities. The Secretary of State’s Department has already made an important start in boosting our export performance through the new digital platform to provide enhanced and affordable insurance cover, which may be used where there is a political risk in the country to which the exports are destined, and the ongoing appointment of new trade commissioners, which will better reflect where our export markets are. My hon. Friend the Member for Hertford and Stortford (Mr Prisk) made the point that the traditional capital-centric model and distribution of our trade proponents does not necessarily reflect where the growth markets are. It is critical that we have flexibility and such additional resource. In addition, we need to work with banks, insurance companies, legal firms and other professional services, so that we can tap into their knowledge of export markets. It is critical that the Government, working with these bodies, are allowed to better provide export assistance.

We also need to go further and, like the Germans, use our chamber of commerce network better to support our exports. There is much that we can still be doing to learn from that. Not having an independent trade policy for 40 years has left us sluggish. We are starting to catch up, but there is much more to do. The Bill is an important part of that process.

Let me conclude by referring to an article that the Secretary of State published last week—his new year message. He hit the nail on the head when he said that one of his most frustrating experiences last year was returning from a very positive and optimistic overseas trade visit only to encounter waves of negativism at home. There is huge interest in British products, services and investment, yet too often we have self-defeating pessimism here.

My right hon. Friend the Secretary of State gets accused of not having a job and of not yet signing new trade agreements. Well, of course he cannot at the moment, because that is prohibited under our current membership, but he is doing a lot of preparatory work to ensure that, on the day we leave, we will be in the front seat to get these new agreements, whether they are complete free trade agreements or some other form of bilateral co-operation. That is the work that is going on. As we enter the new year, I hope that an important positivity—a can-do attitude—can prevail, instead of the self-defeating pessimism that so many seek to ply.