Oral Answers to Questions

Liam Fox Excerpts

Thursday 15th December 2016 Commons Chamber

[Callum McCaig (Aberdeen South) (SNP)]

2. What discussions he has had with the World Trade Organisation on the approval of new schedules for the UK after the UK has left the EU.

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

I have had a number of constructive discussions with the director-general of the World Trade Organisation, Roberto Azevêdo. We have made clear to the WTO membership the UK’s intention to replicate as far as possible our current obligations in order to avoid disrupting our trading relationships or those of our trading partners across the world. The UK will need its own schedules in the WTO regardless of the nature of our future trading relationship with the EU.

[Callum McCaig]

Given that the list of countries offended by the Foreign Secretary grows longer by the day, what contingencies are being put in place should there be some opposition to the renegotiation of the UK schedule?

[Dr Fox]

The contingency that the hon. Gentleman asks for is in place, because until new schedules are negotiated and agreed, current schedules will apply. It is worth noting that the European Union itself, having failed to negotiate EU28 schedules, is still operating successfully under the EU15 of 1995.

[Philip Davies (Shipley) (Con)]

Civitas has estimated that if we were to go to World Trade Organisation terms with the EU, EU businesses would have to pay £12 billion to access the UK market, and UK businesses will have to pay £5 billion to access the EU market. Does the Secretary of State accept those figures? If the Government do not accept them, will he tell us what the Government’s figures are?

[Dr Fox]

Whatever the actual figures are, there is one point that is more important—the introduction of any impediments to trade and investment in intra-European trade would be disadvantageous to producers and consumers alike. Of course, the Government have made it very clear that we will try to get maximum access to European markets in order to avoid a disruption of trade.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Are not these WTO schedules of concessions just one of many examples of the mammoth bureaucratic task that has to be conducted, and should we not be thanking our ambassador to the European Union for the reality check he has given about the decade-long period it will take to extricate ourselves from this process? Does the Secretary of State agree we should not be rushing so headlong into this timetable?

[Dr Fox]

Yes, we face a number of bureaucratic challenges, but the people we should be thanking are the British people for giving us such clear instructions to leave the EU.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The UK has high standards in the workplace and for its products and animal welfare. Does the Secretary of State agree that a free trade deal with zero tariffs with countries that have much lower standards could have a significant commercial disadvantage for many of our companies?

[Dr Fox]

The whole point of reaching an agreement is because it is beneficial to both parties, otherwise an agreement would not be reached, and regulatory and compliance standards will always be an important part of that.

[Mr Dominic Raab (Esher and Walton) (Con)]

3. What steps he is taking to expand UK global trade.

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

With the current slowdown in the growth of global trade, the UK must be a world leader in championing free trade worldwide and banging a drum for British business. Our measures to support UK business trading globally include a network of advisers in 109 markets, online advice at GREAT.gov.uk and support through UK Export Finance. Both myself and ministerial colleagues have continued to meet businesses in the UK and abroad, including 50 ministerial visits to 34 markets overseas.

[Mr Raab]

I thank the Secretary of State for that answer. Professor Patrick Minford has estimated that UK trade liberalisation would cut consumer prices by 8%. Does the Secretary of State agree that forging our own free trade arrangements outside the EU presents huge opportunities to ease the cost of living for low-income families?

[Dr Fox]

I am grateful to my hon. Friend for that question, and he is right to highlight the potential of free trade to reduce the cost of living in this country. Free trade ensures that more people can access more goods at better value, making their incomes go further, whereas protectionism tends to hurt the poorest the most.

[Kerry McCarthy (Bristol East) (Lab)]

It has been two years since the then Environment Secretary announced with great fanfare plans to sell pigs’ trotters to China. As my written question this week revealed, we are still no closer to signing the pigs’ trotters protocol. If it takes this long to reach an agreement to sell pigs’ trotters, what does that say about our ability to make all the other trade deals we need in the wake of Brexit?

[Dr Fox]

I am very intent that our agricultural exports continue apace. I shall continue to push pigs’ trotters as fast as they can possibly go.

[Mr Mark Prisk (Hertford and Stortford) (Con)]

Many countries are using non-tariff barriers to block global trade. However, as the Secretary of State is well aware, in countries such as Brazil we are now seeing real progress in the removal of local content regulations. What more can be done to encourage other countries to follow this example?

[Dr Fox]

I thank my hon. Friend for his work as our trade envoy to Brazil. I was extremely impressed in the meetings I had last week in that country that we are now seeing major attempts not only to open up markets, but to deal with endemic corruption. That corruption is one of the biggest single barriers to trade, and, as the World Bank has made clear, improved governance is a major improvement in the potential for trade.

[Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)]

The Secretary of State recently reaffirmed the Government’s target to double exports by 2020, but at the autumn statement the Office for Budget Responsibility contradicted this, stating that it expects UK trade to reduce as a result of the UK leaving the EU and the single market. So who is right: does he accept the assessment of the experts of the OBR, yes or no?

[Dr Fox]

I am tempted to ask the hon. Lady if she would like Santa to bring her a dictionary, because expectations and targets are not the same thing.

[Mr Steve Baker (Wycombe) (Con)]

Will my right hon. Friend seek to unblock the global trading system by adopting a new open anti-distortions agreement that can deliver free trade and self-government, fight crony capitalism at home and defend against predatory practice abroad, like the one proposed by the Legatum Institute special trade commission?

[Dr Fox]

I do not think I need to explain to my hon. Friend that I and my fellow Ministers have set out the case for free trade on a number of occasions. We are seeing a slowdown in the rate of global trade growth at present, which is a threat to the prosperity of people across the globe. We must have more open trade, fewer tariffs and fewer non-tariff barriers if we are to succeed in that task.

[Barry Gardiner (Brent North) (Lab)]

rose—

[Barry Gardiner]

One of the steps that the Government are taking to expand UK trade is through arms sales, particularly to the middle east. In July, the Committees on Arms Export Controls heard evidence that there was an imbalance in arms sales, with promotion coming at the expense of regulation

“such that in UK practice those things are at odds.”

Does the Secretary of State recognise that imbalance? If he does, what does he propose to do about it? If he does not, has he chastised the White House for the remarks this week that “systemic, endemic” problems in Saudi Arabia’s targeting of civilians in Yemen drove the US decision to halt a future weapons sale, which has the Secretary of State and British policy in this area looking callous and threadbare?

[Dr Fox]

I thank the hon. Gentleman; this is the first time in my life that I have been grateful for being colour blind. [Laughter.] This country has one of the world’s strictest arms control regimes. It is both robust and transparent, and decisions are scrutinised intensely. I simply do not accept the picture that he paints of the UK’s attitude.

[Mr Speaker]

I am going to play the role of tie referee and say that the tie of the hon. Member for Brent North (Barry Gardiner) is absolutely beautiful. It is tasteful and interesting, not boring like all too many ties. Now, let us hear from the fellow from Gloucester.

[Richard Graham (Gloucester) (Con)]

The UK has an excellent tradition of hosting major international sports events—most recently the Olympics, the Commonwealth games, and the Rugby World cup—and other countries hosting such events can benefit from our expertise. In 2018, Indonesia will host the Asian games, which is a great opportunity to highlight the improvements it has made in infrastructure development. Should my right hon. Friend have the chance to visit south-east Asia in the new year, will he highlight British expertise and the help that we can give Indonesia to deliver a magnificent Asian games?

[Dr Fox]

Yet again, I am able to thank an hon. Friend for working as a trade envoy—this time to Indonesia. My hon. Friend’s specific point applies more generally: the United Kingdom can provide great service sector skills to many countries, which not only helps them to mature their economies, but provides them with the ability to grow their markets, offering an export opportunity for the United Kingdom.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Newcastle international airport plays a vital role in the north-east’s economy, by facilitating over £300 million-worth of exports every year. Like other English regional airports, however, it faces unfair competition on tax as air passenger duty is devolved to Scotland. The Government have failed to commit to mitigate that. What discussions will the Department have with the Treasury to ensure that airports such as Newcastle can continue to play a vital role in international trade?

[Dr Fox]

Such imbalances are an inevitable consequence of devolution, for which the hon. Lady’s party campaigned. I also have a regional airport in my constituency, and I can assure her that the ongoing discussions with the Treasury will be not just general but personal.

[Mr Speaker]

I call Julie Elliott. Not here.

--- Later in debate ---

[Sir Desmond Swayne (New Forest West) (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 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.

[Sir Desmond Swayne]

Will my right hon. Friend shed some light on the difference between our trade deficit with the EU and our trade deficit with the USA?

[Dr Fox]

I am pleased to say that we do not have a trade deficit with the US; we have a trade surplus with the US. In fact, we send £100 billion of exports to the US a year, which is 20% of our total, with a £40 billion surplus. The US is responsible for 26% of all our inward investment, and we are responsible for 23% of outward investment to the US. It is a very, very interdependent relationship.

[Barry Gardiner (Brent North) (Lab)]

By insulting my wife’s taste in ties, the Secretary of State must await her reprimand, but she must wait in line because there are others who wish to reprimand him. The European Scrutiny Committee told off the Secretary of State for going to Brussels and agreeing the comprehensive economic trade agreement between the EU and Canada without first bringing it to the UK Parliament for scrutiny. He undertook to the Committee that he would bring CETA for debate in this House by the end of November, a deadline that he missed. The Committee then set a more generous deadline, but that deadline expired two days ago, on 13 December. Will he tell us whether he actually believes in taking back sovereignty from Brussels—does he or does he not? If he does, repeatedly denying the UK Parliament the right to properly scrutinise such an important trade agreement is a very odd way to go about it. Will he now commit to bring a debate and a vote to the Floor of the House before the European Parliament finally votes on CETA on 2 February?

[Mr Speaker]

May I very gently say to the hon. Member for Brent North (Barry Gardiner), whom I hold in the highest esteem, that I hope, in due course, his PhD thesis will be published?

[Dr Fox]

I am grateful to the hon. Gentleman for giving way before Christmas. We did not go against procedure. Owing to parliamentary timetable constraints, we could not offer a debate in the House before signalling political agreement on 18 October. We have committed, and continue to commit, to holding a full parliamentary debate on CETA as soon as possible, and we are working with business managers to arrange it. The European Parliament has now changed the date of the expected vote on the agreement to 2 February 2017, and we hope to have a debate well within that timetable.

[James Berry (Kingston and Surbiton) (Con)]

T2. Over the past five years, South Korea has been our second fastest growing trading partner. Does my right hon. Friend agree that we should seek to boost trade with South Korea further still until we leave the EU and, after we leave the EU, enter a prompt bilateral trade deal with South Korea, which its Government would welcome?

--- Later in debate ---

[Louise Haigh (Sheffield, Heeley) (Lab)]

T3. Recently, the hon. Member for North East Somerset (Mr Rees-Mogg) said in relation to emissions standards that what is good enough for India is good enough for us. May we have a firm assurance that no emissions standards will be watered down as part of any free trade deal?

[Dr Fox]

The Government take very seriously their environmental obligations and will continue to do so.

[Bob Blackman (Harrow East) (Con)]

T4. On Monday, I was delighted to hear my right hon. Friend the Prime Minister announce that she wanted to take the trade relationship with Israel to the next level—our key ally in the middle east and strong trading partner. Can my right hon. Friend set out the steps that he is taking to ensure that we put in place a new trade deal with Israel, so that we can cement that commitment by the Prime Minister?

[Helen Goodman (Bishop Auckland) (Lab)]

I am sure that the Secretary of State is delighted to be back in the Cabinet, but does he agree that the 1 million jobs that will be put at risk if we leave the customs union matter more than his own career?

[Dr Fox]

I repeat that the Government have made no decision yet in relation to the discussions and negotiations that we will have with the European Union. We have made no decision yet on the customs union. That will be part of the ongoing discussion and the Government will make decisions based on evidence.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

T5. What action is my right hon. Friend taking to promote our world-class science base around the globe? Will he confirm that he recognises that face-to-face collaboration is an important part of that continued success, and that we need to attract the best and the brightest to do their research here?

--- Later in debate ---

[Douglas Chapman (Dunfermline and West Fife) (SNP)]

A recent parliamentary question revealed that the involvement of Scottish companies in the recent trade visit by the Prime Minister to India was very limited. What extra effort can the Secretary of State make to ensure that Scottish companies are better represented by the UK to support them in exporting into new international markets?

[Dr Fox]

We have repeatedly said that this Department is open to all businesses in the United Kingdom when it comes to seeking our support for exports, and I hope that the Scottish Government will encourage businesses in Scotland to work with the Department for International Trade, so that we can maximise that. We have made that offer, and we hope that they will take it up.

[Henry Smith (Crawley) (Con)]

T7. What steps is my right hon. Friend taking to promote a global free trade agenda?

[Dr Fox]

We have repeatedly set out our worries about the slowdown in the growth of global trade. That has implications across the globe. It is worth making the general point that we need more free trade because it increases global prosperity. Increasing global prosperity leads to greater political stability, and greater political stability leads to greater global security. It is not possible to disaggregate those different elements.

[Dr Fox]

I bow to no one in this House in terms of my credentials as a Unionist, and I want to see prosperity spread to every part of the United Kingdom. I hope that the Scottish Government’s economic policies will help to contribute to that.