UK-Israel Trade

Iain Stewart Excerpts

Tuesday 3rd July 2018 Westminster Hall

[Chris Green]

I agree entirely; my right hon. Friend is absolutely right. That highlights the connectivity and relationships that underpin so much of high tech, culture and the arts.

The necessity of adapting and developing solutions to the challenges Israel faces is a key part of its impressive start-up ecosystem. The culture of entrepreneurship and striving to achieve is reflected in the fact that there have been 12 Israeli Nobel prize winners in the fields of peace, literature, physics, chemistry, medicines and economics; I think that is a 100% record across all the different fields in which they could achieve Nobel recognition. Israelis will be the first to tell you that the Israeli autonomous driving company Mobileye was sold to Intel for a remarkable £12.5 billion and is just one of many success stories, including Waze, the USB storage device and internet firewalls.

As we debate here, dozens of Israeli scale-up founders are in London sharing their experience as part of Innovate Israel 2018. The event, co-ordinated by UK Israel Business, has become a major event in the UK high-tech calendar and is another example of how British and Israeli businesspeople work together every day.

Israel’s cultural exports are no less significant. Netta famously captured the hearts of a continent this year when she won the Eurovision song contest. Hers was an amazing performance that delighted all those who watched it on the evening and on YouTube or other sources afterwards.

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

Will my hon. Friend demonstrate that performance?

[Chris Green]

I have been practising, but I understand that there is a convention against singing during debates.

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[Chris Green]

I will move on from this particular point; hon. Members from both sides of the House have had an opportunity to explore it.

I understand that the existing EU-Israel association agreement will form the basis of a future trade deal, but that there are great opportunities for further collaboration, particularly in the agriculture sector, in which Israel excels.

[Iain Stewart]

The House will shortly consider the remaining stages of the Trade Bill, which seeks to convert from EU law into UK law all the EU’s existing third-country trade deals. That will apply to the EU-Israel deal, which, as my hon. Friend says, will give businesses both continuity and the flexibility to enact the changes that he refers to.

[Chris Green]

I agree. We need in our ongoing relationships a sense of bringing down barriers, enhancing agreements that we already have and creating new and much more comprehensive agreements. Is the Minister able to clarify whether the association agreement will indeed form the basis of a future trade deal with Israel, and is he able to provide an update on discussions regarding agricultural trade?

I had a particular interest in science and industry before my election to Parliament, and I have a particular interest in Israel’s relationship with Horizon 2020. It was the first non-European country to have such a relationship, and in that sense the United Kingdom has something to look up to, to respect and to admire in Israel’s collaboration with European scientists on Horizon 2020. As we look forward to the opportunities presented by our leaving the European Union, we may look forward to framework programme 9—the successor to Horizon 2020—and wish to participate in that. Israel, by already having that kind of relationship, shows us what could happen.

When we look to the United States of America, we get a sense that the world is creating new barriers against trade and people. We ought, especially when looking at the European Union, to have the sense that right across Europe, the United States and the wider world, we are trying to bring down those barriers. In particular, we ought not to be promoting or increasing barriers with the state of Israel. We need to create ever stronger cultural, academic and social ties and, with trade being so important, to have the freedom to trade with countries around the world. We may wish to buy oranges from Spain or other countries, but I look forward to buying my first Jaffa orange post Brexit.

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

It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Bolton West (Chris Green) on securing the debate. I, too, was part of the recent trade delegation to Israel, and I draw attention to my entry in the Register of Members’ Financial Interests.

For many years Israel has had a reputation for developing the technology solutions to many of the world’s challenges. For many years it has had an effective irrigation system to water a very dry part of the world. That technology is exported, particularly to developing countries that face similar challenges—if this heatwave continues, we might want to deploy that technology here. That technology was developed many years ago. Today Israel is addressing some of the new challenges in the world. We visited Gigawatt Global, which is providing solar energy solutions to many developing countries around the world and making their communities energy-sustainable.

As other colleagues have mentioned, research into cyber technology and security is now a key part of the Israeli economy, and we spotted many opportunities for deepening trade links between the United Kingdom and Israel. I will give three brief examples to illustrate the point. We visited a start-up company called CommonSense Robotics, which is innovating with a very efficient packing system for food distribution within a particular factory or unit, but at the moment it uses traditional delivery methods. There are companies in the United Kingdom piloting robotic delivery systems. In my constituency we have the Starship delivery robot, which is a fancy robot that goes around the streets delivering packages to people’s homes. I have put the two companies in contact with each other, as they potentially have a synergy of interests.

We also visited the Israeli aerospace industries. One of the most exciting ideas that they are developing is an autonomous electric taxiing system at airports, so that aircraft can move from the stand to the runway without having to switch on their engines. Cumulatively, that will save a considerable amount of emissions at airports, which is very pertinent to current debates on air quality.

My final point is more general. We discovered a sophisticated ecosystem in the new technology space where academic and commercial bodies and the Israeli Defence Force could combine their knowledge for innovative new solutions. They have developed a powerful ecosystem of co-operation, which is something that this country, and indeed all countries, will have to take notice of. Individual sectors on their own will not deliver the solutions we need. Israel is already having that cross-fertilisation of ideas and solutions. I chair the all-party group on the Oxford-Milton Keynes-Cambridge corridor, and our ambition is to have the United Kingdom’s creative centre. I am already putting different bodies in touch with their Israeli counterparts to see what lessons we can learn from them. Israel has a long tradition of providing solutions and will do so in future. I very much hope that will be part of a deepening of UK-Israel relationships.

Oral Answers to Questions

Iain Stewart Excerpts

Thursday 28th June 2018 Commons Chamber

[Graham Stuart]

The truth is that the Department is growing. It is less than two years old and it is building its capacity. Today I announced the appointment of a new director general for investment, we recently announced the appointment of a director general for exports, and, of course, we are soon to complete the appointments of eight HM trade commissioners around the world, who will deploy our resources to best effect.

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

2. What assessment he has made of the effect of UK trade deals with developing countries on the economies of those countries.

[The Minister for Trade Policy (George Hollingbery)]

Freeing up trade is a proven driver of prosperity for developing countries. As we leave the EU, our priority will be to seek to deliver continuity in our trading arrangements, including continuity for developing countries.

[Iain Stewart]

Let me first warmly welcome my hon. Friend to the Dispatch Box.

The EU acts as a protectionist bloc against the trading interests of developing economies. Can my hon. Friend assure me that, once we leave the EU, arranging trade deals with developing economies will be a central part of our post-Brexit arrangements?

[George Hollingbery]

I certainly can. The Department’s White Paper “Preparing for our future trade policy” sets out the scale of the Government’s desire to help developing countries to break down the barriers to trade, and we will give them the tools with which to trade their way out of poverty.

Draft EU-Canada Trade Agreement Order

Iain Stewart Excerpts

Tuesday 26th June 2018 Commons Chamber

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

I shall keep my remarks very brief to allow others in.

On issues such as this, I like to ask what the opportunity cost is of not proceeding. It is very easy to find reasons not to do something; perhaps as a country, we do that too often. If we were to take the advice of the hon. Member for Brent North (Barry Gardiner), go down the contortions of his suggested route and not ratify this treaty, what opportunities will be lost? What investments will not be made, what deals would not be done and what jobs will not be created? We already have strong links between Canada and the United Kingdom. There is a huge appetite among Canadian investors to invest in the critical national infrastructure projects we want delivered in this country. They might be imperilled if we do not ratify this agreement. This is a good deal, paving the way for an even better post-Brexit bilateral deal. Let us get on with it.

EU-Japan Economic Partnership Agreement

Iain Stewart Excerpts

Tuesday 26th June 2018 Commons Chamber

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

I add my warm congratulations to my hon. Friend the Minister for Trade Policy, on his new position. Next week, as chairman of the all-party group on smart cities, I will make a keynote speech at a smart technology event, hosted jointly by the Department for International Trade, the embassy of Japan, the Japan Bank for International Co-operation and the Japan External Trade Organisation. This conference will explore the new investment and trade opportunities in the field of smart cities and smart technology—a field in which the United Kingdom is one of the world leaders.

I mention that because, in addition to the existing strong trade and investment links between the UK and Japan that many Members have referenced, this new technology, which will generate much of the wealth that we will need in the future, offers an enormous new level of co-operation between our two countries. The EPA that we are debating will provide a very strong platform from which to develop these new trading and investment links. As I said in the CETA debate, I wonder what is the opportunity cost to this country of not ratifying the agreement—what investment will be lost, what jobs will not be created and what deals will not be done? We must ratify the agreement to make it clear that the UK is an outward-facing, liberal, free trade-supporting country. I support the motion.

United States Tariffs: Steel and Aluminium

Iain Stewart Excerpts

Report stage: House of Commons
Monday 12th March 2018 Commons Chamber

[Dr Fox]

We will work with our partners in the European Union because we are under a duty of sincere co-operation and because it makes sense to do so, but many other countries that are not members of the European Union are affected, and they will also make their voices known.

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

My right hon. Friend has rightly mentioned that many of the UK’s exports are very high value and specialised and that many of the supplies go to the United States military. Does he have an opinion at this stage whether the product exemption or the country exemption route offers the best hope for gaining an advantage for the United Kingdom?

[Dr Fox]

My hon. Friend asks a very good question, but it is difficult to answer until we can explore in greater detail with the US authorities exactly what the details will mean. In any case, whichever routes are the best to gain exemptions for the United Kingdom and the European Union are the ones that we want to follow.

Trade Bill (Fifth sitting)

Iain Stewart Excerpts

Committee Debate: 5th sitting: House of Commons
Tuesday 30th January 2018 Public Bill Committees

[Judith Cummins]

I absolutely agree. The sustainable development goals include the capacity to increase significantly the exports of developing countries, with a view to doubling the least developed countries’ share of global exports by 2020. The SDGs can also allow for timely and lasting duty-free and quota-free market access for the least developed countries, consistent with WTO decisions, including by ensuring that preferential rules of origin applicable to imports from the least developed countries are transparent, simple and contribute to facilitating market access.

The Labour party made a manifesto commitment to guaranteeing the world’s least developed countries continued duty-free and quota-free access to the UK market, post-Brexit. I am pleased that the Government agreed to match that pledge, but we need to go considerably further if we are to ensure that our trade policies really contribute to the realisation of the sustainable development goals. That is why this is such an important part of the amendment, and one that I am sure the Government will support.

One of the most powerful ways to ensure that international trade leads to poverty reduction and enhanced life chances is to ensure that working people benefit fully from the opportunities it offers. To that end, we wish to ensure that all new trade agreements are fully consistent with the UK obligations on workers’ rights and labour standards, starting with the International Labour Organisation’s declaration of fundamental rights at work, and its eight core conventions covering freedom of association, forced labour, child labour and discrimination. However, simply linking to those conventions is far from sufficient, as has been seen in so many cases where trade agreements have led to an undermining of other labour rights. We require a deeper commitment to principles and rights at work that are inherent in the UK’s membership of the ILO, to ensure that there can be no race to the bottom in labour standards as a result of the UK’s new international trade agreements.

Again, I have no doubt that the Government will share our desire to keep labour standards high. The Secretary of State for International Trade, who has not always been known as a champion of workers’ rights, made the case in a debate on exiting the European Union and global trade in the House on 6 July last year. I should be pleased to quote him at length, which is not something that I find myself doing too often:

“There are those who would make the case for a Britain with lower regulatory standards and fewer protections in place across the economy for the environment, for workers and for consumers. Let me tell the House that Britain will not put itself at the low-cost, low-quality end of the spectrum, as it would make no sense for this country economically to do so, nor morally would it give us the leadership we seek. I believe there is no place for bargain-basement Britain.”—[Official Report, 6 July 2017; Vol. 626, c. 1365.]

Encouraged by the Secretary of State’s new-found identity as a defender of high standards and workers’ rights, the Government will, I am sure, have no trouble in supporting this part of the amendment.

Equally, all new trade agreements must be consistent with women’s rights, not least because it has often been women workers who have suffered most in the international trading system.

Integration into global supply chains promised much to women workers in countries where they had not previously enjoyed other economic opportunities. In Bangladesh, for instance, formal employment in the export-oriented garment industry has provided millions of women workers with a regular source of independent income, which has in turn allowed them to enhance their social status and political participation. When done properly, trade can be a source of empowerment, yet many of those working women have found themselves trapped in dead-end jobs characterised by poverty wages and dangerous working conditions. That is a particular threat to workers at the bottom of global value chains producing goods for distant retailers that have ultimate power and control over the conditions under which their suppliers operate. The ILO has noted that all too often trade via global supply chains

“tends to generate economic benefits… (in terms of high productivity), but not necessarily for workers”.

For far too many women in the global economy, the promise of empowerment is eclipsed by the grim realities of exploitation. Trade agreements must be consistent with children’s rights, with the UK’s environmental obligations, and with the provisions of other international treaties ratified by the United Kingdom. Surely the Government will agree with us on these points. They must respect CITES—the convention on international trade in endangered species of wild fauna and flora—as well as the convention on biological diversity. None of these are idle concerns. The European Commission’s official impact assessment for the Transatlantic Trade and Investment Partnership recognises that under every potential outcome, the proposed EU-US agreement would create what it called dangers for natural resources and for the preservation of biodiversity.

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

The hon. Lady refers to TTIP and new trade deals; I am sorry for pressing this point, but they are not the point of this Bill. I agree with her on all the standards that she wishes to see in place, and I do not want Britain to race to the bottom, but that is not the point of the Bill; it is for future Bills. Please could we stick to the roll-over agreements that we are talking about in this Bill?

[The Chair]

Order. I remind the hon. Gentleman that it is for me to guide hon. Members on whether they are in scope.

[Judith Cummins]

I remind the hon. Member for Milton Keynes South that the opening line of the Bill says that its aim is to

“Make provision about the implementation of international trade agreements”

per se. It is about principle, and about the fact that the Bill is a legal entity in itself.

[Iain Stewart]

It is not.

[Judith Cummins]

It is the Trade Bill. These principles, including on human rights, should be held dear; if they are not held dear by Government Members, they are at least by Opposition Members. Environmental degradation has just been dismissed as collateral damage when it comes to international trade agreements. That is no basis on which to construct a new trade policy for a United Kingdom.

Oral Answers to Questions

Iain Stewart Excerpts

Thursday 11th January 2018 Commons Chamber

[Dr Fox]

The hon. Gentleman is right, and when I am having those discussions I often describe corruption as a supply-side constraint in many of those economies. If we are able to get trade agreements and good legal agreements, and if we make transparency a key element of that, we will be contributing to success on both sides.

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

4. What steps his Department is taking to support exports by small and medium-sized businesses.

[James Morris (Halesowen and Rowley Regis) (Con)]

8. What steps his Department is taking to support exports by small and medium-sized businesses.

[The Minister for Trade Policy (Greg Hands)]

We have three main ways to support exports by SMEs. First, the great.gov.uk website offers digital tools, and has had more than 2.7 million visitors; secondly, international trade advisers based across England are supporting businesses; and thirdly, UK Export Finance has provided £3 billion in support. Last year it helped 221 UK companies, 79% of which were SMEs.

[Iain Stewart]

I am grateful for that answer. An additional hurdle faced by many SMEs in growing their exports is obtaining affordable political risk insurance. What steps can the Minister’s Department take to help in that matter?

[Greg Hands]

My hon. Friend asks a good and pertinent question, and that is why UK Export Finance is working to ensure that SMEs can access the insurance that they need to export and invest overseas with confidence. Last year we launched an enhanced overseas investment insurance product to protect UK businesses against political risk when investing abroad, and I strongly recommend that product to companies in my hon. Friend’s Milton Keynes constituency.

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.

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[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.