Oral Answers to Questions

Kemi Badenoch Excerpts

Thursday 29th June 2023 Commons Chamber

[Patrick Grady (Glasgow North) (SNP)]

1. What discussions she has had with (a) Cabinet colleagues and (b) the Scottish Government on promoting Scottish trade and culture overseas.

[The Secretary of State for Business and Trade (Kemi Badenoch)]

I regularly discuss with my Cabinet colleagues promoting trade in Scotland as well as the United Kingdom as a whole. Just this week I chaired a meeting of the Board of Trade that focused on trade promotion across the nations, and held discussions, alongside the Secretary of State for Scotland, on ensuring that the Department’s work delivers for the whole UK.

[Patrick Grady]

That sounds just wonderful, but I would like to know how the Secretary of State thinks ending freedom of movement has helped to promote Scottish trade and culture overseas. Does she think it is a good thing that musicians in Glasgow North now find it much more difficult to tour in Europe—one of the most important markets for traditional Scottish music nowadays —and that their merchandise can no longer be manufactured in Scotland but must be manufactured in the countries to which they are travelling because the customs costs have become so prohibitive?

[Kemi Badenoch]

I welcome the hon. Gentleman’s early-morning snarkiness as he asks about what we are doing for Scotland. We understand that there are issues that people have across borders, and my Department works closely with musicians and with all those who trade across borders to see what we can do to resolve those issues. If there are specific cases in the hon. Gentleman’s constituency, the Department is well placed to help his constituents with the issues he has described.

[Mr Speaker]

I call the shadow Secretary of State.

[Nick Thomas-Symonds (Torfaen) (Lab)]

Scotch whisky is an iconic Scottish export, and it is also hugely important strategically to the whole UK. Had Ministers completed the free trade agreement with India by Diwali last year, as was promised, the 150% tariff that producers of Scotch face when exporting to India could have been eliminated. Given that the 10th round of talks has recently ended, with an 11th planned soon, can the Secretary of State tell us whether the free trade agreement will be completed by Diwali this year?

[Kemi Badenoch]

I have said repeatedly that it is about the deal and not the day. Every single trade agreement that we negotiate is bespoke to the specific country and tailored to its economy, to ensure that it benefits both the UK and the counterpart country. I am happy to say that the Scotch Whisky Association is very pleased with what it has been hearing about negotiations from its Indian counterparts, and we are working hard to make sure that the industry is successful.

[Mr Speaker]

I call the Scottish National party spokesperson.

[Richard Thomson (Gordon) (SNP)]

The Scottish seafood industry has been hit with an estimated 50% increase in the cost of packaging owing to the requirement—thanks to the form of Brexit chosen by this Government—for export health certificates with every consignment. Does the Secretary of State accept that the form of Brexit that was chosen, and in particular the failure to align in respect of sanitary and phytosanitary matters, is adding costs to Scotland’s iconic seafood sector at a time when it can barely afford to absorb such costs?

[Kemi Badenoch]

No, I do not accept that at all. If anything, what is increasing the costs is what the Scottish Government have been doing in relation to the deposit return scheme. While complaining about our divergence between here and the EU, they are trying to split the UK single market, and we are not going to let them do that.

[Stephen Kinnock (Aberavon) (Lab)]

2. What steps she is taking to help the steel industry to decarbonise.

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[The Secretary of State for Business and Trade (Kemi Badenoch)]

The CPTPP will be benefiting every nation and region of our country. In particular, UK firms will enjoy enhanced access to Malaysia for the first time, including a reduction on tariffs on whisky sales to Malaysia of 80% within 10 years, improving prospects for trade and opening up opportunities in an economy worth £330 billion.

[Richard Graham]

We should all congratulate the Secretary of State and her team on concluding the CPTPP negotiations, and it should be ratified any time now in New Zealand. Of course the most important new element of the trans-Pacific partnership is this first ever free trade agreement with our long-term friend and ally, Malaysia. Whether in cars, cyber, chocolates, vaccines or legal and other services, the opportunities for British exporters are considerable and, of course, the dividends from our investment there, such as the new Smith & Nephew plant, will also help our balance of payments. Does my right hon. Friend therefore agree that there is a great opportunity for us and Malaysia to work together on spreading the word, through our regional offices, the UK-ASEAN Business Council and every other means possible, to make sure that businesses in both countries are absolutely aware of the opportunities that the deal offers?

[Kemi Badenoch]

I thank my hon. Friend for his question. He will be pleased to know that Ministers in the Department met their counterpart, the Malaysian export Minister, this very week. A lot is going on between our two countries. The Department works closely with the UK-ASEAN Business Council, and our first bilateral joint economic trade committee with Malaysia is expected later this year. It will help promote the bilateral trade and investment and economic co-operation that he rightly champions as the trade envoy to that country. He will know that I will be signing the CPTPP agreement next month in New Zealand.

[Mr Speaker]

I call the shadow Minister.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

Clearly, it is vital that British businesses that want to export can access the benefits of trade deals. However, the Government admitted to me in a written answer that they have not modelled the benefits of the CPTPP for our hard-pressed manufacturing businesses, so will the Minister tell me how many UK manufacturers will benefit from the rules of origin requirements under the CPTPP?

[Kemi Badenoch]

The hon. Lady will know that we do not count the number of companies specifically in our modelling. The modelling happens at a very high level—it is macro-level modelling. What she should know is that rules of origin will benefit people who export to that region, particularly auto manufacturers, who are very pleased about the deal.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

7. What steps her Department has taken to ensure that the free trade agreement with Israel complies with the UK’s obligations in section 5 of United Nations Security Council resolution 2334.

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[Ian Levy (Blyth Valley) (Con)]

10. What steps her Department is taking to support the battery sector.

[The Secretary of State for Business and Trade (Kemi Badenoch)]

I recently visited Williams Advanced Engineering, an excellent example of British engineers working at the cutting edge of battery technology, including on projects benefiting from the Faraday battery challenge. The Government’s £541 million Faraday battery challenge has supported more than 140 organisations working across the UK, attracting over £400 million in co-investment, and enabled 500 researchers across more than 25 universities to improve and develop battery technologies.

[Ian Levy]

We know that the United Kingdom needs more battery production facilities in order to achieve net zero and build an automotive industry that is fit for the future. On the Blyth estuary, we have the best site in the UK for high-volume battery manufacturing, with green power supplies, a deep-water port, and a talented and willing workforce. Does the Minister agree that it is vital that this Government grasp the opportunity and do all that they can to bring much-needed new green jobs to south-east Northumberland?

[Kemi Badenoch]

Yes, of course, I do agree with my hon. Friend. I know that Blyth has an excellent location for a gigafactory. I just want him to know, as he represents that constituency, that we continue to work closely with the local authority to secure the best outcome for that site.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Will the Secretary of State be slightly cautious about a battery-driven future? I recently visited JCB, which has developed a hydrogen combustion engine that is working well with heavy vehicles. Hydrogen is moving very fast indeed. Will she encourage the production of hydrogen and visit JCB just to see the really innovative work that it is doing? Will she stop the Transport Minister in the House of Lords dissing hydrogen as ineffective?

[Kemi Badenoch]

Far be it from me to stop our noble Friends in the other place from doing what they think is right. None the less, I do agree with the hon. Gentleman. My view is, let a thousand flowers bloom. Hydrogen is one of the viable ways of helping us to get to net zero, and the Government are looking at all possible options to make sure that we support the cutting-edge technology that will get us to our green transition.

[Mr Philip Hollobone (Kettering) (Con)]

11. What the value of exports to the EU was in (a) 2016, (b) 2019 and (c) the last year for which data is available.

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[The Secretary of State for Business and Trade (Kemi Badenoch)]

We have secured trade deals with 70 countries, including the EU, since 2019—partners that accounted for £1.1 trillion of UK bilateral trade in 2022. As I mentioned earlier, in March we concluded negotiations with the comprehensive and progressive agreement for trans-Pacific partnership, the UK’s biggest trade deal since Brexit. In addition, we have signed five new comprehensive trade deals tailored to the UK—those with Japan, Australia and New Zealand; a groundbreaking digital economy agreement with Singapore, and a digital trade agreement with Ukraine—as well as the programme of 63 non-EU continuity agreements.

[Dr Evans]

The post-Brexit developing countries trading scheme, which was alluded to in earlier questions, covers 65 developing countries and 3.3 billion people. Will my right hon. Friend spell out exactly what the benefits are for businesses and consumers in Hinckley and Bosworth, and the UK, and can she confirm that that is a more generous scheme than the EU scheme that we left?

[Kemi Badenoch]

I can confirm that our offer is now more generous than what the EU offers in terms of market access—for example, we allow the least developed countries to source raw materials from other markets and still import goods tariff-free. Overall, my hon. Friend’s constituents will be pleased to know that the trade preferences in the developing countries trading scheme reduce import costs by more than £770 million a year. That is key because it helps to reduce prices and increase choice for UK businesses and consumers, and to tackle inflation, particularly for the highest-sold items such as clothes and food.

[Jeff Smith (Manchester, Withington) (Lab)]

18. What steps she is taking to increase trade with European countries.

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[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

19. What progress she has made on improving market access to the US.

[The Secretary of State for Business and Trade (Kemi Badenoch)]

As part of the Atlantic declaration, we launched negotiations on a critical minerals agreement with the US, which will secure market access for a strategically important sector of the UK economy. My Department has secured tariff-free imports of UK steel and aluminium into the US, supporting 80,000 jobs in UK supply chains. We have removed the 25-year US ban on UK lamb, opening the market to 300 million US customers, and have signed five trade and economic development memorandums of understanding with individual US states, which imported £4.6 billion-worth of goods from the UK in 2022, most recently last week with Utah.

[Mr Dhesi]

In their 2019 election manifesto, the Conservatives declared to the British people:

“Our goals for British trade are… ambitious. We aim to have 80 per cent of UK trade covered by free trade agreements within the next three years, starting with the USA”.

However, there has been abject failure, with a free trade agreement nowhere in sight, and instead of coming clean on their incompetence, laughingly, Tories are now lining up to blame the Biden Administration for the lack of progress. Will the Secretary of State concede that the Government’s failure to negotiate an FTA with the USA has potentially locked out British businesses from vital new markets created by the US Inflation Reduction Act?

[Kemi Badenoch]

I am afraid that is not the case at all. If the hon. Gentleman looks at the detail of the Atlantic declaration, he will see that we are co-operating very closely with the US. On his point about our 2019 manifesto, we did say that that was what we were going to do, because the Administration at the time were willing. This Administration are not. It has nothing to do with the UK. They are not negotiating any FTAs with any countries. That is what the US trade representative has said to me in many meetings, and they have said that to EU counterparts.

If what the hon. Gentleman suggests is true, he is basically saying that every Government should be bound by their predecessor, in which case, should anything happen, he is saying that he agrees with everything this Government are doing and nothing should change. What we have negotiated with the Atlantic declaration is a success, and he should be praising this Government for achieving something so monumental.

[Sir Conor Burns (Bournemouth West) (Con)]

I draw the House’s attention to my interest as the Prime Minister’s trade envoy to the United States for regional trade and investment. Our programme of MOUs with states in the United States is a major driver of improving market access and trade between the UK and the US. As I embark on a visit to Florida to advance our objectives there, will my right hon. Friend use this opportunity to reaffirm not just that we want to enter into multiple MOUs with states in the United States, but that we want British businesses to step up to the opportunities they create and we want to create the mechanisms to allow business-to-business delivery?

[Kemi Badenoch]

Absolutely, I can affirm that. My right hon. Friend makes a very good point about the MOUs. The Opposition would like to present a false story about us not getting along with our US counterparts. The fact that so many states, knowing that their Federal Government are not negotiating an FTA, have decided to step up and negotiate MOUs with us shows that this country is still attracting a large amount of investment and co-operation from our international partners. We want British businesses to be able to take part in that, and we are doing everything we can to help them use the MOUs.

[Nadia Whittome (Nottingham East) (Lab)]

T1. If she will make a statement on her departmental responsibilities.

[The Secretary of State for Business and Trade (Kemi Badenoch)]

Last week, I was pleased to lead discussions with international partners and businesses at the Ukraine recovery conference and welcomed the Prime Minister of Ukraine and First Deputy Prime Minister to Mansion House, alongside over 150 companies, showcasing how UK companies in our private sector can use their ingenuity and expertise to support the reconstruction of Ukraine.

I was very proud to announce that the UK Government have backed a £26.3 million equivalent loan, which is an unprecedented transaction; the Business Bridge Ukraine platform, matching Ukrainian businesses with complementary partners; the UK-Ukraine tech bridge, to bring together UK and Ukrainian tech businesses to harness opportunities for innovation and collaboration; and the London conference framework on war risk insurance.

[Nadia Whittome]

Recent research by a former chief competition economist to the European Commission—shared with me by Unite the union—estimates that average UK mobile phone bills could rise by up to £300 a year in the case of a merger between Three and Vodafone. Is the Secretary of State aware of that risk, and will her Department be taking any action to prevent such a merger, which would be disastrous for competition in the mobile network operator sector?

[Kemi Badenoch]

The hon. Lady will know that we have an independent regulator, the Competition and Markets Authority, which would look at cases such as the one she raises and make a call on whether it would be harmful or beneficial to the UK economy. I trust the CMA—it has been doing a good job so far—and I look forward to seeing its read-outs on forthcoming mergers and proposals by large businesses in our country.

[Mr Laurence Robertson (Tewkesbury) (Con)]

T3. Morocco is very much looking to do more trade and business with the United Kingdom. What are the Government doing to enable that country to do so?

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[Richard Thomson (Gordon) (SNP)]

This week, the European Council adopted the EU’s free trade agreement with New Zealand, which includes dedicated sustainable food systems chapters, a dedicated trade and gender equality article, and a provision on trade and fossil fuel subsidies reforms. Can the Secretary of State explain why our trade deal with New Zealand, if it is so good, fell so far short on those issues?

[Kemi Badenoch]

I think the hon. Gentleman will find that, actually, the trade deal we negotiated with New Zealand makes things cheaper for our consumers, not more expensive, it is less protectionist and it is helping to improve relations between us and New Zealand. I disagree with his assessment of the EU-New Zealand free trade agreement: we looked at it and were actually quite pleased with what we got.

[Siobhan Baillie (Stroud) (Con)]

I am concerned that the UK is being left behind on hydrogen internal combustion engines. The EU and the USA are now recognising hydrogen combustion engines as zero emission, but the UK is refusing, which means that the automotive transformation fund for industrialising the technology is not available. I am working with brilliant companies such as BorgWarner in Stonehouse and the Renewable Hydrogen Alliance to raise this issue. I have spoken to the Secretary of State for Transport and I am raising it with the Prime Minister; I hope that my right hon. Friend the Secretary of State for Business and Trade will use her brilliant brains on this matter too.

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[Kemi Badenoch]

The hon. Gentleman raises a very good point. He is right that we need to make sure there is resilience across the sector, and I think our regulators are best placed to do that. They are carrying out a number of reviews at the moment, and I and colleagues across Government are working closely with them.

[Patrick Grady (Glasgow North) (SNP)]

The Secretary of State earlier told my hon. Friend the Member for Gordon (Richard Thomson) that she did not accept that Brexit was having a negative impact on the Scottish seafood industry. It is a bit like saying she does not accept that the earth is round—although, admittedly, sometimes people on her Back Benches need to be persuaded of that. If she does not think that Brexit is having a negative impact on the Scottish seafood industry, does she think it has been positive, or does she think there has not been any change at all?

[Kemi Badenoch]

The hon. Gentleman is entitled to his opinion, as I am entitled to mine. He has done absolutely nothing except try to re-litigate Brexit over and over again. The fact is that we are not going back into the EU. We are using our independent trade policy, negotiating with countries around the world and delivering more for the UK as well as for Scotland. Scottish businesses are happy with what we are doing, and in particular they are happy that the grown-ups in Westminster have stopped them making the catastrophic decisions that are destroying the internal market.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Is the Secretary of State aware of just how much influence the Chinese Government and Chinese companies have on our economy? Is she aware that many times I have asked for an audit of how big that influence is? Does she share the concern of many businesses in our country that the Chinese Government are using subterfuge and espionage to further their interests?

[Mr Speaker]

That’s three questions—pick whichever one.

[Kemi Badenoch]

I do not think we need an audit. China is our fourth largest export market, and we are aware of the economic challenge that it poses across the world. We work with countries across the world, but we have a pragmatic relationship with China. We need to use our influence to help them get to a better place, but I take the hon. Gentleman’s point.

[Tim Farron (Westmorland and Lonsdale) (LD)]

How does it help UK Steel to decarbonise, or help the UK to reclaim its position of global leadership in reducing climate emissions, to support the opening of a sure-to-be-doomed new coalmine in west Cumbria?

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Going back to Brexit, can the Secretary of State name one Scottish sheep farmer who is happy with the Brexit deal, or any seafood producers and exporters that she spoke to who are happy with Brexit? Can she name any Scottish farming sectors that are happy with Brexit?

[Kemi Badenoch]

It is not my job to memorise names of Scottish businesses, and just as I said in response to a previous question, SNP Members are not serious. Perhaps if they stood up and actually represented their businesses in trying to make use of all the opportunities we have, they would be in a better place.

[Jim Shannon (Strangford) (DUP)]

When it comes to increasing trade with African countries, what steps are being taken to ensure that increased trade is carried out with companies that take human rights seriously and are ethically aware in the treatment of their workers?