Oral Answers to Questions

Liam Fox Excerpts

Thursday 12th October 2017 Commons Chamber

[Mr Jim Cunningham (Coventry South) (Lab)]

1. What plans he has to publish a White Paper on trade.

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

Since he is a conscientious and committed Member of the House of Commons, the hon. Gentleman will know that the Government published a trade White Paper on Monday 9 October 2017. The trade White Paper establishes the principles that will guide future UK trade policy and sets out the preparatory steps that we are taking. The paper can be found in the Libraries of both Houses and on the gov.uk website.

[Mr Cunningham]

What transitional plans does the Secretary of State have for the transitional period if he cannot necessarily do the trade deals that he wants to do?

[Dr Fox]

If the hon. Gentleman is referring to the transitional adoption of existing EU agreements, I can tell him that we have had a very positive response from other Governments, who, like us, want to ensure that there is no disruption of trade at the point of departure from the European Union. We will want to get as many of those in place as we can. That depends partly on the willingness of partners to get that ready on time; there are obviously contingency measures available to us under the World Trade Organisation to ensure continued market access in any case.

[Sir Desmond Swayne (New Forest West) (Con)]

Can we just declare for free trade?

[Dr Fox]

This Government constantly declares for free trade. In fact, as we leave the European Union and take up our independent seat on the World Trade Organisation, this country intends to champion the cause of global free trade, especially at a time when the growth in trade has been slowing down in recent years.

[Tony Lloyd (Rochdale) (Lab)]

Does the International Trade Secretary recognise that people fear that in the event of, for example, a very right-wing, ideological Government, we could see the erosion of social standards through our trade agreements or even the erosion of our ability to protect our national health service with the wrong type of trade treaty? Will he guarantee parliamentary scrutiny of every trade deal done?

[Dr Fox]

I would like the Government to be judged by their actions. Therefore, as I indicated to the hon. Member for Coventry South (Mr Cunningham), as we want to transition the already agreed EU free trade agreements into UK law—which will include, for example, workers’ rights and environmental standards—I hope that we will get the full support of the Opposition in doing that and in getting the legislation available to give us the powers to do so.

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

The White Paper sets out a strong case for free trade: it is good for growth, and it is good for jobs—but occasionally other countries will act in unfair ways, such as through the dumping of goods. Will the Secretary of State therefore confirm that it will always be the Government’s approach to respond to that in a proportionate, carefully targeted and time-limited fashion?

[Dr Fox]

The Government will bring forward legislation that sets out our plans for a trade remedies authority to ensure that the protections that UK business currently has—and that the UK workforce currently enjoy—are continued when we leave the European Union.

[Hannah Bardell (Livingston) (SNP)]

White Papers are all good and well, but yesterday the Scottish Government published a report showing what is at stake for business as the UK edges closer to the Brexit cliff edge. We know that the Secretary of State has consulted the business community to find out how it will be affected, but will he commit today to publishing the findings, as called for by a range of MPs across the House, even if they show that business wants to stay in the single market and customs union? At what point will this Government stop governing in secret and publish the reality of the impact of Brexit?

[Dr Fox]

The Government are of course extremely concerned about any perceptions of instability. We will consult widely, particularly when it comes to new free trade agreements, but of course the greatest threat to stability, particularly in Scotland, is the insistence of the Scottish Government on threatening a second referendum on independence.

[Chris Williamson (Derby North) (Lab)]

2. What plans he has to facilitate exports from car manufacturers after the UK leaves the EU.

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

I am very happy for the Minister to go around the world selling Britain, but will he come to see the real economy in, for instance, Huddersfield, where we have a strong manufacturing sector, or Leeds, where we have a financial sector? Not one person I meet in those sectors wants us to continue with this folly of Brexit. [Interruption.]

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

What about the voters?

[Mark Garnier]

Yes, what about all those voters throughout the UK, 52% of whom voted for Brexit? I was a remainer, but we have to uphold the fundamental principle of democracy in this country, and it is the job of all of us in the Government to do our level best to embrace the opportunities—the optimistic opportunities—that Brexit presents.

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[Kerry McCarthy (Bristol East) (Lab)]

6. What recent discussions he has had with the World Trade Organisation and his US counterpart on the division of WTO tariff rate quotas between the UK and the EU after the UK leaves the EU.

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

I discussed the UK’s independent membership of the WTO with the US trade representative Robert Lighthizer when I visited the US in July, and I have had several productive conversations with the WTO director general Roberto Azevêdo, most recently on my visit to Geneva in July.

[Kerry McCarthy]

I understand that Britain and the EU have now formally informed WTO members of how they would like quotas to be split after Brexit, but the Trump Administration and seven WTO members have already rejected the proposals. What will the Secretary of State do to ensure that a deal on quotas is achieved?

[Dr Fox]

I am grateful to the hon. Lady for giving me the chance to explain our methodology. We decided to split the quotas that we have up to now shared with the EU on a market basis. In other words, we would not divide by 28 or by 15, but by the UK’s share of a market. We did that to avoid disadvantaging exporters from other countries, as well as our own producers or consumers. That is the best route to avoid disputes in Switzerland.

[Mr Peter Bone (Wellingborough) (Con)]

As we are talking about the WTO, if this country cannot reach a deal with the EU, what are the Department’s plans if we do not get an agreement on quotas?

[Dr Fox]

As I have said, we first have to get our trading schedules agreed and then we have to agree free trade agreements with third countries, which involves the division of quotas. We are making good progress on that. We want a comprehensive agreement, because that is in the interests of all concerned. However, the Government are preparing contingencies should there be no agreement, which is the only responsible thing for a Government to do.

[Barry Gardiner (Brent North) (Lab)]

The Secretary of State knows full well that a technical rectification would disadvantage other members, which is why seven member states of the WTO have written to Azevêdo specifically setting out that that is unacceptable to them. On 6 July, the Secretary of State said that he was confident that a technical rectification of WTO schedules would be

“smooth and fully understood by our trading partners.”—[Official Report, 6 July 2017; Vol. 626, c. 1364.]

Well, it is not. What is he going to do about that? What assessment has he made of the delays and of the impact on our businesses that will result from that?

[Dr Fox]

I do not anticipate that that will happen. The hon. Gentleman clearly does not understand what the process is, or what a negotiation is. It is quite clear that our first offer is not the final thing that we expect to be accepted. For example, we have no agreement yet on what will happen with unused quotas or aggregate measures of support. Those issues will be dealt with during the negotiation—[Interruption.] I know that the hon. Gentleman likes to multitask, but being able to speak and listen simultaneously is not among his abilities.

[Henry Smith (Crawley) (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 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; and negotiating the best international trading framework for the UK outside the EU.

I welcome Crawford Falconer to the Department as chief trade negotiation adviser—he brings a wealth of knowledge—and I can announce the convening of the Board of Trade today, which will ensure that the benefits of trade and investment are spread across the whole UK.

[Henry Smith]

The EU Commission seems hellbent on damaging the economies of the remaining member states through its Brexit negotiations, so will my right hon. Friend say what preparations are being made for no deal?

[Dr Fox]

The best thing for the whole of Europe is for us to reach a deep and comprehensive agreement on trade. We are committed to doing so, and we hope that our European partners will commit to move on to the second stage of negotiations as soon as possible, not least to remove any uncertainty to businesses and workers across Europe. However, if we are unable to do so, the Government have already undertaken a wide range of contingency plans.

[Wera Hobhouse (Bath) (LD)]

Following the Bombardier tariff crisis, can the Secretary of State guarantee that Airbus in Bristol, which employs many people in my constituency, will not have new tariffs to pay once Britain leaves the EU?

[Dr Fox]

There are two elements to that. Of course we want to maintain a completely tariff-free trading environment in Europe, and that is what we should be able to do, given that it is the starting point—that, of course, is unique in any trade negotiation. On the Bombardier case, we have made our views very clear to the United States. I spoke to Wilbur Ross, the Secretary of Commerce, only last week.

[Sir Edward Leigh (Gainsborough) (Con)]

T2. The Government’s approach, based on the Florence speech, is entirely sensible and pragmatic. Of course we want a free trade deal, but it takes two to tango. May I press the Secretary of State further on earlier questions relating to what happens if there is no deal and we leave the single market at the end of March 2019? Is the Treasury giving him all the resources he needs to prepare for no deal—for schedules and making deals with other countries? That is absolutely vital.

[Dr Fox]

I do not really wish to trumpet this to other Departments, but our Department has a unique agreement with the Treasury: we are able to increase staffing levels when that relates to Brexit issues, and we will continue to do so. As I said, we want to ensure that we get a good deal. There is no difference between the Chancellor and me. The Chancellor says that we need to spend money only as necessary. I think that that is correct, but we also need to ensure that we spend money on all areas where contingency plans are necessary.

[Mr Speaker]

I call Barry Gardiner—[Interruption.] The hon. Gentleman looks perplexed.

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[Neil Parish (Tiverton and Honiton) (Con)]

T3. Sheep farming in this country is good for the countryside, food and farming. It is important that we combine making sure that we control quotas of New Zealand lamb with maintaining exports to France. How is the Secretary of State getting on with disaggregating the EU quotas on New Zealand lamb meat?

[Dr Fox]

We will take the same approach to New Zealand lamb as we do to all other tariff-rate quotas: allocate them on the basis of usage. As I have already explained, that will keep the market stable and mean that we are not disadvantaging New Zealand exporters or our domestic market. That is not only the fairest thing to do, but the best way to prevent the UK from being taken to dispute at the WTO, which is again to our mutual advantage.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

If the EU27 do not give the two-year extension that the Prime Minister begged for in Florence, trade barriers will rise between the UK and how many other countries? Does the Department have a number?

[James Cleverly (Braintree) (Con)]

T4. The all-party parliamentary group on trade out of poverty, which I chair, is initiating an investigation into the role that the Commonwealth can play to help developing nations to trade out of poverty. We hope that that agenda will be taken up at the Commonwealth Heads of Government meeting in April. We have a potential leadership role, so will the Secretary of State communicate with the Commonwealth secretariat to ensure that that agenda item is taken up?

[Dr Fox]

We have made it clear that we see our trade policy and our developmental policy as going hand in hand. We want countries to have the power to trade their way out of poverty. That will be one of our key themes at CHOGM and we will be setting out processes by which we think that can be made more possible in the future.

[David Hanson (Delyn) (Lab)]

Many businesses in my constituency, particularly sheep and dairy farmers, are signing contracts early in the new year for exports in 2019. What certainty can the Secretary of State give them about pricing for 2019?

[Dr Fox]

As I have said, our aim is to maintain market stability, but of course the good news is that the UK is continuing to export extremely well—we had an increase of about 15% in our exports in the 12 months to August 2017. We want to encourage that and to ensure that we get bigger market penetration, irrespective of what deal we get with the EU.

[Mr Speaker]

I call Richard Graham. Where is the feller? He is not here.

[Mr Peter Bone (Wellingborough) (Con)]

T6. Will the Secretary of State publish the Department’s plans for a no-deal situation before Christmas?

[Dr Fox]

Across the Government we will make our contingency plans, but we continue to hope that the EU will come forward with a proper commitment to entering into the second part of the trade deal, as we think that is in our mutual interest.

The Minister for Women and Equalities was asked—