Royal Yacht Britannia: International Trade

Karl McCartney Excerpts

Tuesday 11th October 2016 Westminster Hall

[Barry Gardiner]

If nothing else, the hon. Gentleman and I are agreed on our admiration for Sir Thomas Cochrane. Of course, he was not readmitted to the Royal Navy until 1832 and, in 1806—he later admitted—he bribed the electors of Honiton by paying each 10 guineas so that he could enter this place, so perhaps he was not always a model that we should aspire to follow.

Here we are once again debating the recommissioning of a yacht that was launched some 63 years ago, as if it were the missing part of the Government’s international trade plan. Unfortunately, it is not. What is most troubling is that it seems to be, if not the only part, certainly one of the more credible parts. When it comes to international trade negotiations, the Government are not very able seamen, who have found themselves drifting rudderless into uncharted waters. A decommissioned boat, however, is not the ideal vessel to pilot their way out.

The recent EU referendum has presented significant challenges about what our future trading relations will look like and how we can go about ensuring that Britain and the British people can benefit. British businesses have relied on access to the single market since it came into force in 1993. Before that, they relied on the reduced tariffs of the customs union that preceded it. Few British businesses, and even fewer British business leaders, will recall just what difficulties were encountered when attempting international trade before that.

Furthermore, our participation in the European project and our membership of the customs union and the subsequent single market made the UK an extremely attractive destination for foreign investment. I do not doubt that that was enhanced by our strong international network, our respect for the rule of law and the dominance of English as an international language, but it is equally foolish to identify our success as having stemmed exclusively from our attributes and not from the access that we enjoy to the world’s largest consumer market. Our trading capacity is a manifestation of our attributes combined with our access to and capacity to influence the regulations of that wider market. Chance and good fortune also played their part, because our capacity to engage in and lead international trade is greatly magnified by virtue of our geography, location and time zone.

A combination of those elements has enabled us to play a leading role in international affairs and trade throughout history, and is why we have been able to continue to attract business investment and promote British exports overseas. It takes time to develop markets, and requires thorough analysis. It take confidence on the part of investors and trust on the part of trading partners.

Today, I am wearing the tie of Polska Zegluga Morska, the Polish steamship company. I put it on quite deliberately this morning, not because the royal yacht was built as a steamship, but because in 1989, before the Berlin wall came down, I began my first trade mission to Poland. Over the next five years, I took delegations from Maritime London, and put on conferences and trade missions in Poland, Ukraine and Russia to open up the market for our marine services industry—our lawyers, insurance brokers, protection and indemnity clubs, engineers and marine surveyors. I know what it is to export into new markets, and I inform the House that it is not about a flash yacht. It comes through diligent market research, understanding the regulatory structures and identifying the gaps that a team or product can fill. That is not doom-mongering or “Project Fear”; it is a reasoned assessment of the factors that feed into successful exports.

The Brexit vote threatens our trading capacity because it makes the questions about regulatory structures and market gaps impossible to answer. Businesses have no idea at the moment which markets they will be able to do business in, nor at what cost. They have no idea about the regulatory framework they will face or which non-tariff barriers they will encounter. They do not know whether they will be able to retain foreign staff or fill recruitment gaps from overseas if they need to.

Investors now see the decision to invoke article 50 as soon as possible as prejudicing the very possibility of a stable transition whereby the answers to those questions can be methodically worked through. We cannot know the extent of the investment decisions that are being suspended or cancelled.

[Karl MᶜCartney (Lincoln) (Con)]

Will the hon. Gentleman give way?

[Barry Gardiner]

Because of the time, I will not.

Certain things are literally incalculable, but that does not make them less certain. Such investment decisions are being made, and they will have a long-tail liability—a liability that might only crystallise over years to come.

The idea that we could relaunch an ancient yacht as a beacon of British innovation and enterprise is entirely symptomatic of the nostalgic nonsense that has infected the Government’s approach to the new trading relationship that we must develop in a post-referendum world once the UK leaves the EU. We face the biggest constitutional and commercial challenge of our lifetimes, and we are here today to discuss relaunching a long-retired yacht. The Germans and the French must be quaking—not in their boots, but with laughter. The Chinese and the Americans, who are looking on in astonishment, must be wondering why we are incapable of seeing the gravity of our own situation.

It greatly concerns me that this debate sends a signal to the rest of the world that we still see the best of Britain as being behind us. We are a world leader in financial and legal services, the automotive and engineering sectors, pharmaceuticals, biosciences, business, energy, construction, fashion, art and music. But at this precise moment—when the fashion and textiles industry is asking where it will get linkers from in a post-Brexit world, when Nissan and Jaguar Land Rover are suspending future investment decisions until they have clarity on market access, and when the pharmaceutical sector is at its wits’ end over losing the European Medicines Agency from the UK—the best that this Government can come up with, as they studiously avoid giving us a running commentary, is to bring us here today to debate the recommissioning of Her Majesty’s yacht Britannia.

Government is not about playing with toy boats as virility symbols. The Government should be engaging with British business and setting out strategic proposals on an industry-by-industry basis, to promote Britain and our exports overseas. They need to tell the financial services industry—our biggest export sector—how they propose to protect the passporting regime that has allowed British financial institutions to transact business across the EU. That facility has been material to our capacity to attract foreign banks to establish their European operations throughout the UK. Those banks are now openly discussing and actively investigating relocations to Dublin, Paris, Frankfurt or Luxembourg.

Given how many trade missions the royal yacht Britannia undertook on behalf of the British Invisible Exports Council, perhaps the Back Benchers who signed the letter supporting the motion might better spend their time exploring the threats to the financial services industry in the UK. How much would it cost to refit a yacht of that size and bring it up to modern technological standards? How much would it cost to crew and maintain the vessel? How many Royal Navy staff would be taken away from active service elsewhere to crew the yacht? What security and counter-terrorism measures would need to be undertaken to ensure that the yacht would not be a sitting duck terrorist target?