Oral Answers to Questions

Liam Fox Excerpts

Thursday 3rd November 2016 Commons Chamber

[Tom Pursglove (Corby) (Con)]

2. What discussions he has had with his international counterparts on the development of bilateral trade deals between the UK and other countries.

[The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)]

While we remain members of the European Union, discussions we have are limited by our considerations of the common commercial policy and our duties of sincere co-operation. We cannot negotiate and conclude trade agreements while we are a member of the European Union, but we can have discussions on our future trading relationships. The UK will continue to be a champion for free trade, and back the EU’s current and ongoing negotiations.

[Tom Pursglove]

I am very grateful to the Secretary of State for that answer. Does he agree that the decision to leave the European Union presents this country with an enormous opportunity to re-engage with our Commonwealth friends and to forge proper trading links with them once more?

[Dr Fox]

Yes, we are keen to seize all the opportunities that leaving the EU presents, and so, too, are many of our international partners, who recognise the attractiveness of doing business with the UK. I will be accompanying the Prime Minister on a trip next week to India to take forward some of those opportunities.

[Barry Gardiner (Brent North) (Lab)]

Does the Secretary of State see any irony or contradiction in his development of these new free trade and investment agreements, which involve the harmonisation of rules and standards with other countries—even obedience to supranational commercial courts—and the referendum instruction from the British people that we should leave membership of the largest free-trade agreement in the world so that we can set our own rules and take back our sovereignty?

[Dr Fox]

No, because the European Union is not simply a trading organisation. Were it simply a trading, and not a political, organisation, the referendum result may have been different. One of the major problems with the European Union, and one of the reasons why the public voted to leave, was that there is such a strong supranational imposition on the United Kingdom.

[Mr Peter Bone (Wellingborough) (Con)]

As we are leaving the EU, and everybody knows it, why do we not just get on and start negotiating trade deals? After all, the EU can hardly punish us in the future.

[Dr Fox]

It is not a question of punishment; it is a question of what we have signed up to and our duty to fulfil the obligations we have entered freely into.

[Kirsty Blackman (Aberdeen North) (SNP)]

Has the UK managed to get the World Trade Organisation’s 160-plus members to agree that we will be a continuing member, rather than a new member, of the WTO? If the UK is not able to have negotiations just now, how will it get that agreement?

[Dr Fox]

We are a founding and full member of the WTO—there is no dispute about that. I think what the hon. Lady is referring to are the trading schedules under which we operate under the WTO, and, obviously, we will be in full discussions on those.

[Michael Fabricant (Lichfield) (Con)]

As my right hon. Friend has already said, to do a bilateral trade deal we need to be out of the European Union. Does he therefore deplore, as I do, the High Court’s decision this morning to rule against the Government and say that the will of the people in the EU referendum on 23 June is still subject to parliamentary approval?

[Dr Fox]

The Government are disappointed by the Court’s judgment. The country voted to leave the European Union in a referendum approved by Act of Parliament. The Government are determined to respect the result of the referendum. This judgment raises important and complex matters of law, and it is right that we consider it carefully before deciding how to proceed.

[Kevin Brennan (Cardiff West) (Lab)]

Will the Government respect the ruling of the Court in this matter, and also respect Parliament? If they want to get on with these trade deals, should they not accept that Parliament should have its say, as the Court has ruled?

[Dr Fox]

I have nothing to add, other than to reiterate that it is right that the Government will consider carefully before deciding how to proceed following the judgment.

[Thangam Debbonaire (Bristol West) (Lab)]

3. What discussions he has had with the Leader of the House on Parliament debating and voting on the outcome of trade negotiations before they are signed.

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[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

4. What assessment he has made of the international trade opportunities available to the UK in the event of the UK leaving the EU customs union.

[The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)]

The people of Britain voted to leave the European Union and that is what we will do. It is the job of this Department to maximise the UK’s trade opportunities, whatever the relationship with the EU that the Government ultimately adopt. The Prime Minister has made it clear that the UK’s agreement with the EU will get the best deal for Britain at home and abroad.

[Jonathan Edwards]

Via our membership of the customs union the UK has access to more than 50 international trade deals, which according to a parliamentary answer I received accounts for 15% of UK exports. In the event of Brexit outside the customs union, what estimate has the Secretary of State made of the length of time it will require to renegotiate those deals, bearing in mind that he will not be able to begin his negotiations until after exit in March 2019?

[Dr Fox]

There are a number of errors in what the hon. Gentleman has said. The EU currently has 36 free trade agreements covering more than 50 countries. It is entirely possible for us to be able to transition those into UK agreements and we are free to discuss them with countries while we are still a member of the European Union. Our aim will be to have minimum disruption of trade and no gap in market access for British companies.

[Richard Fuller (Bedford) (Con)]

Although I welcome the Canadian-EU trade agreement, does my right hon. Friend share my concerns at the elements of protectionism that have emerged in this agreement? Do they not indicate that there are advantages to the United Kingdom outside the customs union in negotiating its own deals more rapidly, in defence of free trade?

[Dr Fox]

In recent history, most of the trade deals done in the world have been bilateral, because it is clearly easier to get country-to-country agreement. One of the reasons why the European Union does not have an agreement with the United States, China, Japan, India or the Gulf is that it is rather difficult to negotiate with 28 different partners, especially if they retain a veto.

[Ian C. Lucas (Wrexham) (Lab)]

The creative industries are some of Britain’s most competitive and successful industries, and they depend on worldwide access and negotiation with many multinational organisations. How, post-Brexit, will the UK maintain relationships with multinational organisations such as the EU and worldwide broadcasting organisations?

[Dr Fox]

The hon. Gentleman is absolutely right. The creative industries are incredibly important, and one of the jobs of the Department for International Trade is to promote them. When we take trade delegations abroad and when we make representations to other Governments, we will fully take those industries into account. Where we have got areas of excellence in our economy, we need to promote them—sometimes more than we have done in the past.

[Richard Graham (Gloucester) (Con)]

The Secretary of State knows about the growing opportunities for trade and investment, in both directions, with the countries of south-east Asia. Does he agree that next year’s 50th anniversary of the Association of Southeast Asian Nations offers a great chance for the UK to demonstrate what a superb international platform we can be for all those countries’ exports and investment in both directions? Will he commit to DIT offering some finance to help this great session to go well?

[Dr Fox]

I will certainly offer a great deal of help and goodwill. Mindful of the forthcoming autumn statement, I am not going to offer any sort of finance in advance of the Chancellor’s permission being granted.

May I say what a great job my hon. Friend the Member for Gloucester (Richard Graham) does as one of our trade envoys? Our trade envoys have contributed hugely to our recent export gains. He makes the important point that trade has to operate in both directions, both in exports and imports and in outward and inward investment. It is very important that we maintain a balance if we are to have a chance of reducing our current account deficit.

[Mr Alan Mak (Havant) (Con)]

5. What steps his Department is taking to help businesses take advantage of future trading opportunities abroad.

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[Amanda Milling (Cannock Chase) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)]

The Department for International Trade has three tasks: promoting UK exports to support a growing economy that serves the whole country; maximising opportunities for wealth creation, including through overseas direct investment to support the current account; and negotiating the best international trading framework for the UK outside the EU. Like the UK, my Department is open for business. Following my statement at our previous session of departmental questions, we received 111 applicants, in an international competition, for the post of permanent secretary, and we will shortly announce the successful candidate.

[Amanda Milling]

As a country, we need to export more. There are a lot of barriers to overcome to get businesses to start exporting or even to consider exporting, but we have a real opportunity to get existing exporters to export to more markets. Will my right hon. Friend outline the measures that the Government are taking to encourage and support small and medium-sized businesses to expand the number of markets to which they export?

[Mr Speaker]

Order. We must not expand the length of questions, I am afraid. I am sure it is a very important point, but let us have the answer.

[Dr Fox]

I apologise for taking longer than usual to get to the Dispatch Box, Mr Speaker—the last time I take my own advice about going to the gym to get fit. It is important to get more small and medium-sized enterprises exporting. If we look at the UK’s performance we see that only 27% of our GDP is accounted for by exports, whereas for Germany it is 48%. A lot of that difference is accounted for by a lack of SME exports. We will be announcing a range of measures soon, and there will be a pack setting out those measures available for all Members of Parliament so that we can all help the SMEs in our own constituencies.

[Barry Gardiner (Brent North) (Lab)]

The Government Front-Bench team has tried to suggest that the High Court decision that Parliament should have a vote before triggering article 50 is in some way antidemocratic or thwarts the referendum result. Will the Secretary of State acknowledge that the vast majority of Members in this House are now committed to honouring the decision to leave the EU, but that democracy demands that the terms of our leaving must be subject to the proper advance scrutiny and consent of this democratically elected House, and not negotiated in secret and smuggled through without the support of this sovereign Parliament?

[Dr Fox]

There will be numerous opportunities for the House to examine and discuss what the Government are negotiating. When we are clear about the position we will adopt, article 50 will be triggered, but given the nature of the judgment this morning we will now have to await the Government’s appeal to the Supreme Court.

[Mrs Theresa Villiers (Chipping Barnet) (Con)]

T3. Will the Secretary of State let us know whether, in his discussions with countries that have trade agreements with the EU, those countries have indicated their interest in continuing such arrangements with the UK when we leave?

[Dr Fox]

As I said earlier, the EU has some 36 free trade agreements, which cover more than 50 countries. A very large number of those have already made representations to the United Kingdom to say that they would like those agreements to continue. We will explore and discuss that, because, as I have said, our aim is to have no break in access to markets and to achieve the transition as smoothly as possible, with minimal disruption to the international trading environment.

[Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)]

T2. The EU trade deal with South Korea has reduced the tariff on scotch whisky to zero, while whisky imported to Korea from elsewhere faces a tariff of 20%. Does the Minister agree with the Foreign Secretary’s new adviser, David Frost—a former chief executive of the Scotch Whisky Association—who has said that we are much more likely to get such deals“with the weight of the whole of the EU behind us than we are in a negotiation nationally”?

[Dr Fox]

I take an intense personal interest in this area, from long experience. I am delighted to see David Frost in his new position—he was so pleased with our policy he joined the company. It is very important that we get reductions in tariffs. One issue I will be raising in India next week is the very high level of tariff against scotch whisky there, to see whether we can make major reductions.

[Jeremy Lefroy (Stafford) (Con)]

T4. Business in my constituency has praised the work of UK Export Finance but expressed some concerns about the bureaucracy and the length of documentation required to seal those deals. Will the Secretary of State please look into that?

[Dr Fox]

May I first praise the work of UKEF? As a Government export credit agency it is the world leader and its practices are second to none. However, we are always trying to streamline and improve, and in fact have appointed a new chairman for UKEF, who will be announced shortly. When they are in place they will certainly be shaking up the organisation.

[Mr Ben Bradshaw (Exeter) (Lab)]

Some 80% of the fish caught around our coastline in the south-west goes straight for export to the rest of the European Union, and there is huge concern in the industry about the impact of tariffs if we leave the single market. Given that concern, and the excellent news from the High Court, would it not be wise of the Government not to invoke article 50 as early as March?

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[Daniel Zeichner (Cambridge) (Lab)]

The Minister repeated the mantra that he wants the best possible deal for the life sciences sector, but does he agree with industry leaders that we need to be part of a European-wide regulatory system? A simple yes or no will suffice.

[Dr Fox]

No.

[Andrew Rosindell (Romford) (Con)]

T6. Will the Secretary of State give us a progress report on new arrangements to be put in place with Gibraltar to ensure not only that there is a common market between the UK and Gibraltar post-Brexit, but that it has uninterrupted access to financial services for its financial market?

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[Mr Speaker]

Not least we will bear in mind the importance of referring to international trade in responding to the right hon. Lady.

[Dr Fox]

As this is now an ongoing court case, I have nothing further to add to the comments I made earlier.

[Several hon. Members rose—]