UK Export Performance

Kevin Hollinrake Excerpts

Monday 18th September 2023 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

It is always a pleasure to follow the hon. Member for Newcastle-under-Lyme (Aaron Bell). I am not sure that I can be quite as animated as he was during his speech, but I will do my best.

The issue was clearly laid out by the shadow Minister, the hon. Member for Harrow West (Gareth Thomas), with the stats on exports. The Government are incredibly positive about how wonderful exports are, but the reality is, when we are compared to G7 partners, the stats tell a very sorry tale.

Of course, we are the only country in the world dealing with the hangover from covid—no, wait, that is not right. We are the only country in the world dealing with the impact of the war in Ukraine—no, that is not right, either. We are the only country in the world dealing with demographic challenges—no, that is not right, either. The thing is, we are the only country in the world dealing with removing ourselves from our largest trading partner. That is the differential. That is why we are not seeing the growth in trade.

The Minister talked about the fact that there are agreements in place with 73 countries. Fabulous. We left the EU, which has agreements in place with 72 countries. So with all that work and all the running around that Government Ministers have been doing, we currently have one more country with which we have a trade agreement in place than the EU. It almost seems as if the immense amount of uncertainty that everybody—individuals and businesses—has been put through was not really worth it after all.

We could go back to 2016 and make different decisions about how to make Brexit work—six different leaders of Labour and Conservative colours have spoken about it—and how to make the best future for the economy, the wellbeing of people throughout these isles. What the Government should have done was ask, “What do we export the most? What is our trading relationship with the EU?” We exported a lot of services to the EU before Brexit. So, if it had been me taking decisions on this, I would have done everything I could to try to protect those services. I would also have done everything I could to protect those communities that would be decimated by the loss of something, such as fish processing—and whisky, which the Minister mentioned a moment ago. The Government should have been focusing on those things. Instead, they put forward that their No. 1 priority in negotiating Brexit was to end freedom of movement. They have had to suffer the economic losses that go along with that. So they have sacrificed the beneficial position we were in before Brexit, affecting a number of businesses and individuals as a result, not just because of the decision not to prioritise services but for the loss of freedom of movement. That has meant that our farmers, for example, are struggling to find people to work on their farms. It is the same issue in food processing and across some of our most rural communities, which are being decimated as a result of how much harder it is for people to come and live and work in the United Kingdom.

In the automotive debate, we heard comments about the rules of origin. I first raised the rules of origin in relation to the automotive industry in this House five or six years ago, and the problem has not been solved. That level of uncertainty has been hanging over the automotive industry since then, and there is no clear answer. The clock is ticking; there is a very short period of time before this kicks in, and decisions need to be made. At that point, I spoke about diagonal cumulation. We need to ensure that there is certainty or we will continue to see those large manufacturing companies with bases all over the world choosing to invest in improving their factories in European countries rather than those in the United Kingdom. It has been decimating for our manufacturing.

I was glad that the hon. Member for Newcastle-under-Lyme mentioned the numbers—£3 billion—in relation to the Australia and New Zealand trade deals. The Office for Budget Responsibility estimates that we will lose £100 billion as a result of Brexit—£3 billion does not touch the sides of that number and the 4% drop in GDP that we see as a result. Whenever trade deals like these are signed, we might see an improvement in exports. In fact, after the Japan trade deal was signed, we saw a reduction in exports to Japan, so the jury is out on whether they work. However, regardless of whether there is an increase in exports, throwing beef and lamb farmers under the bus is not the way to go.

According to the OBR, there is likely to be a 15% reduction in trade intensity. The OBR has those figures as a result of the Government’s economic plans, the deals signed and the proposals in place. Our food processors and producers, who are producing the best food in the world—as a Scottish MP, hon. Members would expect me to say that—are being massively undercut because the Government have the wrong priorities when signing trade deals. We have already seen beef exports go down by 22% since the deal was signed. The price of producing lamb in Australia has reduced again, which will undercut our farmers and make us less likely to become a nation self-sufficient in food production, because it will cost us more to rear the lamb. That is a problem. The Government have prioritised the wrong things.

The Government have missed the opportunity of renewables, and not just in terms of capitalising economically on climate change and the move towards a just transition. In fact, they have missed the opportunity to invest in amazing innovations in renewable technologies and to export them around the world. During the oil and gas boom, Aberdeen in north-east Scotland became known for exports. My constituency was top for the number of patents per head of population. There is an amazing amount of research and development as a result of the oil and gas industry. We are seeing declining amounts of oil and gas and an increase in the number of countries looking to capitalise on and use renewable technologies. Because we are not seeing investment in things such as carbon capture, utilisation and storage, we are not able to stay ahead of the curve and use that tech to assist other countries around the world in the way that we were able to do with oil and gas.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

I am slightly confused about the hon. Lady’s policies and those of her party. I think she said that oil and gas production was coming down. Is it not her party’s policy to prevent any new exploration of oil and gas in Scottish fields? Is her own policy in disagreement with that of her party? I am very confused on that matter.

[Kirsty Blackman]

The party’s policy is that every new oil and gas licence should go through a rigorous environmental assessment. As much as the Conservatives try to paint it as something else, that is the party’s policy. The vast majority of my constituents who contact me would like no new licences to be granted. Far more constituents contacted me to tell me that Cambo was a disaster and should not go ahead. I have a large university in my constituency, and a huge number of people from all around the world, who are massively concerned about the impacts of climate change. I urge the Minister to come and spend some time in my constituency, to see the passion on the ground for a just transition.

My constituents really like having jobs. Most people do. It is great to be able to take a salary home. My constituents, in the main, are not terribly fussed if the job that pays them lots of money is in oil and gas or in the renewables sector. When I talk to people, they tell me that they would like a good job. Those people in the oil and gas industry ask for their tickets to be transferable so that they can go to offshore wind just as easily as they can go to oil and gas platforms. The UK Government have failed to capitalise on that. They failed to invest in CCUS. In fact, back in 2015 the then Chancellor pulled the plug on CCUS without even telling the industry. He stood at that Dispatch Box during the Budget and did that.

The UK Government have failed to prioritise improving our food exports. If they were serious about supporting our farmers, they would do everything they could to ensure them access to the labour that they need to pick the fruit, butcher the pork and export all that wonderful produce. If the UK Government were serious about supporting people and businesses in Scotland, they would have come forward far quicker with the decision on Horizon. They would have prioritised ensuring that our world-leading scientists across these islands, and particularly in my constituency, continue to have access to those research grants. They would have ensured that they could continue to work closely with European counterparts to develop the really cool tech of the future and to develop drugs for Alzheimer’s and heart disease in my constituency. All those things would have been prioritised by the UK Government if they cared about supporting individuals and businesses. They would have taken these things seriously, and they would have prioritised those industries rather than simply prioritising the removal of freedom of movement.

A number of Members have mentioned making Brexit work. It is not possible to make Brexit work. We cannot make Brexit work, because Brexit does not work. Various Conservative leaders have stood there saying, “Make Brexit work.” The Labour party has stood there saying “Make Brexit work.” It cannot work. It is not the positive economic future that we want. The Scottish National party will continue to stand for being in the single market. We will continue to support being members of that single market and, yes, having freedom of movement. Freedom of movement is great for economic benefit. In nine out of the last 10 years—and eight years running—Scotland has had the highest levels of foreign direct investment of any area, country or region in the United Kingdom other than London. That is because the Scottish Government are doing everything they can to ensure that we continue to trade and export, and continue to have a great relationship with as many countries in the world as we possibly can.

The UK Government do not even have a published trade strategy document that pulls everything together. If they had an internal trade strategy document, it would be great if they would publish it, so that we can all see their strategy. Conservative Members say that there are missed opportunities in international trade because they are not prioritising work on selling renewables around the world. Clearly, something is missing. It would be great to see that strategy so that we can provide the appropriate scrutiny. If they continue to hide it, no one can scrutinise it. We do not know what they are trying to do because they are not willing to tell us and share the strategy with us, if they have one.

The only way to ensure that trade with the EU continues to go up and to bring back freedom of movement is for Scotland to free itself from Westminster and take its own decisions on immigration and trade, ensuring we have as close a relationship with the EU as possible, not by making Brexit work but by being back as a member of the EU and the single market. That will protect our economy and our freedom of movement, and ensure our scientists have the best possible access to collaboration. That will ensure our farmers have a level of protection they do not currently have in being able to export food without whatever is going to happen with the Windsor framework, which could be disastrous for our farmers. The United Kingdom Internal Market Act 2020 continues to go over the top of what the Scottish Government would like for our future, our farmers and our food producers. I recommend that everybody looks very closely at the SNP’s next manifesto, in which we will lay out those policies even more clearly than I have this evening.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

It is a pleasure to respond to this important debate. I thank all the Members who have contributed.

Obviously, the House is united on the importance of exports to our economy, but it differs somewhat on how we go about it. I was interested in the remarks of the shadow Minister, the hon. Member for Harrow West (Gareth Thomas). He talked about 13 years of economic failure. He can choose his own opinions, but he cannot choose his own facts. May I give him some facts? We are now the eighth largest manufacturer in the world; we have moved from ninth. We have just overtaken France, which is a bit of a double-win. We are the fifth largest global trader in the world, up from sixth in 2021. We are the third fastest growing economy in the G7 since the pandemic. Since 2016, we have grown faster than Germany and France and, since 2010, we have grown the third fastest in the G7. The only countries ahead of us since the pandemic are the US and Canada. Of all the major economies in the European Union, we have a great story on growth. Those are three things we have achieved on growth. Those are the facts.

The hon. Gentleman may want to depress the nation. I have met many pessimists in my life. I have never yet met a happy pessimist or a successful pessimist. The same goes when trying to get elected. The public want a dealer in hope, not these Jeremiahs who are determined to talk this country down. That is deeply unhelpful and deeply incorrect.

I have some more facts. The hon. Gentleman talks about export performance since 2010—he said there have been 13 years of failure—but it is 31% up in real terms. How is that a failure? I have a great deal of time for him away from the knockabout of politics, but his quotes were all about goods. He never touched on services. He will recognise that 80% of our economy is not goods but services, which is hugely important. It is why our export performance, in real terms, is growing.

The hon. Gentleman said that exports are down this year. In the 12 months to July 2023—these are facts, not projections—there were £849 billion of exports, up 16% on the previous year. In this debate, we should focus on the facts.

[Kirsty Blackman]

The UN figures are actually for goods and services, so the UK is sixth in the G7, at 6% growth, behind Canada, the US, Italy, France and Germany, on 22%. Those are UN figures on goods and services.

--- Later in debate ---

[Kevin Hollinrake]

Again, the hon. Lady is picking out certain figures. May I give her a figure? Does she know the UK’s largest export in the food and drink sector? It is whisky, at £6.3 billion. Fifty-three bottles of whisky are exported every single second. It is a huge success story and one that we are determined to mirror across the economy, and this is the strategy we are employing to do it.

As the Minister for International Trade so eloquently laid out, we are pursuing a trade policy that is unrelentingly focused on growth. I am proud that this Government have such high ambitions in this area but, to borrow an analogy from the Secretary of State, free trade agreements are like motorways—they work only if we get cars driving up and down them. That is why our Department is focusing on how to create the environment that exporters need to succeed. We must also ensure that the right support is in place.

I have seen at first hand the appetite for export growth in the UK, both in my work before I entered Parliament and today as Minister for enterprise, markets and small business. That is why the Department for Business and Trade has established a dedicated free trade agreement utilisation team to help to improve FTA awareness and take-up. The team’s first major project has been to develop new business guidance resources for the UK-Australia FTA, working with businesses and business representative organisations to ensure it captures everything businesses want and need to know, and in business-friendly language. Similar work is under way to prepare for the entry into force of the comprehensive and progressive agreement for trans-Pacific partnership—TPP is far snappier—to ensure that businesses are equipped with the knowledge they need on fast-growing markets and the benefits of that deal for them.

We understand that taking a business global can be a daunting prospect—if you’ve never exported before, where do you start? You start where Wold Top Brewery, in my constituency, started. It is run by the wonderful Mellor family, a farming family from near Hunmanby. They started making their own beer because they had grain on their farm and an artesian well. They make some fantastic beer, including Wold Gold, which I heartily recommend. It has been in the Strangers Bar and I will tell you when it will be again, Mr Deputy Speaker. They used our trade advisers to start exporting to Italy very early on in their business growth—they did not wait until they had conquered the UK market—and they have been hugely successful, so much so that they are expanding now into Filey Bay whisky, a wonderful whisky, which, again, is exported around the world. That is the kind of export strategy we want and it is supported by the Government’s export strategy, “Made in the UK, Sold to the World”, which is built around a 12-point plan to give firms of any size the support they need on their exporting journey, be it practical, promotional or financial.

Our newly expanded Export Support Service is a one-stop shop for exporting advice. As well as an online library of resources available 24/7, our expert trade advisers are on hand with free and impartial advice. Since April 2022, they have handled 9,600 market inquiries. They work closely with our network of in-market specialists across 100 countries globally to share market insights, identify opportunities and connect businesses with buyers. We have also rolled out our export academy across the country, offering SMEs a programme of masterclasses, roundtables and networking events.

A special mention must go to our fantastic community of export champions for all they do. I have had the great pleasure of meeting some of them in person, such as those from Briggs Automotive Company, in Liverpool, and we are very grateful for all they do. As the Minister for International Trade mentioned, this is all underpinned by the important work of the Government’s award-winning export credit agency, UK Export Finance, which provided £6.5 billion to support 532 UK companies win exports and trade internationally. Eighty-four per cent of those companies were SMEs, and 82% were based in constituencies such as mine and yours, Mr Deputy Speaker. Of course, the Government have also backed the British Business Bank to provide more than £12.2 billion of finance to more than 96,000 small businesses, including more than 100,000 start-up loans since 2012.

I wish briefly to pick up on some of the points made in the debate. The shadow Minister, the hon. Member for Harrow West, said, “Why not enter into a veterinary agreement?” If he wants to become a rule taker again, he can do that, but it would rule out things such as gene editing, which was a fantastic opportunity for this nation. That is what he has to try to square the circle of, rather than just playing both ends against the middle.

As for the difficulties of trading with the EU, there is no doubt that those are abating. Eurotunnel said earlier this year that trade between the EU and the UK is back to where it was pre-Brexit in terms of the speed of processing lorries. Of course this is not all within our gift and the EU negotiates in its interests. Apparently, he is going to take a completely new approach. He says they are not going to join the single market or the customs union, yet he is going to wave a magic wand and all these problems will disappear. As my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell) pointed out beautifully, the Labour party’s approach is to see which way the wind is blowing. First, the Leader of the Opposition was a remainer, then he wanted a second referendum, then he made the case for free movement of people, and now he wants a complete renegotiation of the trade and co-operation agreement, even though earlier he said he did not.

The approach is simply all over the place—all at sea—despite the fact that we have made huge progress since the trade and co-operation agreement, not least because of the Windsor framework. I understand the concerns raised by the hon. Member for Strangford (Jim Shannon) about that, but it is a good basis for co-operation in future and it is very popular with businesses. There have been other steps forward, including the inclusion of the UK in the Horizon programme. There are a variety of issues that we need to work through and the Department is working hard on those. In terms of the trade agreement with India, we are very keen, but it is about the deal, not the date, as we have said many times, and getting that deal right. We have just completed the 12th round of negotiations, so I hope there will soon be some positive news about getting that deal together.

The hon. Member for Aberdeen North (Kirsty Blackman) made some interesting points. She made a point about the EU agreement and how wonderful it was, and then talked about services. Well, the EU agreement did not even cover services, or not to any extent, and the Swiss-EU deal did not cover services at all—a 50-year-old agreement. The UK is 80% services, so it is important to look at the issue in the round and do what is right for the UK, not what is right for Germany. Such a deal might suit Germany but it does not suit the UK—we stand up for what is right for the UK.

The hon. Lady talked about oil and gas as a failing industry, and then would not commit to any new licences, which seems very strange. She talked about farming and said people would be better off inside the EU, but when we discussed the potential for Brexit, that was not the perspective of my farmers. She completely ignored fishing. Is the SNP’s perspective that we should rejoin the common fisheries policy? That would be highly unpopular with the fishing industry in Scotland.

Our export strategy is working. We hit £815 billion of exports in 2022 and we plan to go further this year. Our ranking as second in the world for exports of services in 2022 highlights that further. We want businesses to be ambitious in their exporting. The strategy laid a challenge for businesses and Government to “race to a trillion” exports per year by 2030. We need the support of all types of businesses, in all parts of the UK, to make that happen. Unlocking the UK’s exporting potential will help to level up the country and boost the UK’s economy, and I look forward to seeing how much further we can go.

Question put and agreed to.

Resolved,

That this House has considered UK export performance.