Consultation on UK Export Finance's Foreign Content Policy: Response
Liam Fox Excerpts(5 years, 4 months ago)
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The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
The Government will today publish the response to the consultation on UK Export Finance’s (UKEF) Foreign Content policy. It sets out the approach UKEF will take to determine the level of non-UK goods, services and intangible assets in transaction supported by UKEF.
The purpose of the new approach is to ensure that UKEF’s support is flexible and meets the needs of UK exporters to help them win business overseas, fulfilling UKEF’s mission to ensure that no viable UK export fails for lack of finance or insurance from the private sector, while operating at no net cost to the taxpayer.
The consultation, published in April 2019, was part of UKEF’s commitment in the Government’s export strategy to review its products and policies to ensure they reflect the full breadth of its capability and the needs of business. The consultation received 28 responses, which were largely supportive of the approach proposed by Government in the consultation and reinforced the need for its foreign content policy to adapt to increasingly globalised supply chains.
The new policy ensures that UKEF will implement a principles-based approach to foreign content, recognising the full contribution of the UK supply chain. This approach will supplement UKEF’s current UK content requirement, making it easier for UKEF to consider support for scenarios which are outside of a specific export contract, but which nevertheless are conducive to supporting and developing UK exports.
This approach will broaden the availability of UKEF support for all sectors including those to which it has not traditionally provided support. To align with this expectation, UKEF will be updating its definitions to clarify UKEF’s ability to support intangible assets.
A copy of the consultation response will be placed in the Libraries of both House.
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Consultation on Future Free Trade Agreements: Summary of Responses
Liam Fox Excerpts(5 years, 4 months ago)
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The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
Last summer, we launched four 14-week long public consultations providing citizens and businesses across the UK and overseas with the opportunity to give their views on potential future free trade agreement (FTA) negotiations with the United States, Australia, New Zealand and on the UK potentially seeking accession to the comprehensive and progressive agreement for trans-Pacific partnership (CPTPP).
Today, I will place a summary of responses received for each consultation exercise in the Library of the House. I will also publish these online on gov.uk.
The public consultations attracted significant interest with 601,121 responses received across all four consultations. In view of the need to ensure that due consideration is given to each submission, we will publish the Government response at a later date but before any formal trade negotiations begin, alongside an outline approach which sets out our high-level negotiation objectives and will explain how these have been informed by the consultation responses.
The Government are committed to ensuring a transparent and inclusive trade policy, which supports the interests of consumers and businesses across the whole of the UK. The Government will continue to engage with the public, businesses and other stakeholders in order to understand their views and to help develop UK trade policy.
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Prime Minister’s Trade Envoys
Liam Fox Excerpts(5 years, 4 months ago)
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The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
The Prime Minister has today approved two new appointments to the trade envoy programme. The hon Member for Dudley North (Ian Austin) has been appointed as the Prime Minister’s trade envoy to Israel, and Lord Risby as Prime Minister’s trade envoy to Lebanon (this is in addition to his current role as PM’s trade envoy to Algeria) These new appointments take the total number of trade envoys to 27 parliamentarians covering 58 markets. The Prime Minister’s trade envoy programme is an unpaid and voluntary cross-party network, which supports the UK’s ambitious trade and investment agenda in global markets.
[HCWS1760]
Oral Answers to Questions
Liam Fox Excerpts(5 years, 4 months ago)
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Robert Courts (Witney) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
This weekend, it will be three years since my Department was formed, and in that time the UK has worked with partners to ensure that the World Trade Organisation is equipped with the tools needed to tackle present challenges and address 21st-century trade issues at a time of significant global headwinds. I emphasised the urgent need for WTO reform in discussions with my counterparts at the G20 trade and digital economy ministerial meeting in Japan a few weeks ago.
Andrew Lewer
Can the Secretary of State please explain why some nations, such as Canada, are refusing to roll over their existing EU free trade agreements, while many others, such as Switzerland, have happily done so?
Dr Fox
Continuity of existing trade terms is in everybody’s interests. I have to say that when the House of Commons gives mixed signals about the possibility of a no-deal exit, quite understandably some of our trading partners wonder whether it is worth investing in getting those continuity agreements. What I would say to those trading partners is that a no-deal exit is not entirely within the control of the United Kingdom; we might end up with a no-deal exit from the European Union. It is in everybody’s interests to have those safety nets in place.
Robert Courts
Free trade has the ability to spread the blessings of prosperity and to bring nations closer together. What is my right hon. Friend doing to spread free trade, particularly with our friends in the Commonwealth and the Anglophone countries?
Dr Fox
I would go further than my hon. Friend and say that free trade is beneficial for prosperity, stability and security, in the United Kingdom and beyond. The creation of Her Majesty’s trade commissioners is one of the most important elements of the Department for International Trade, and I am passionate about increasing the size of the DIT’s overseas network, including in the Commonwealth. Therefore, this morning I am proud to announce the creation of a new HM trade commissioner for Australasia. The post will be a senior civil service 2 director role and will be externally advertised later this year, to attract the best and brightest talent.
Kerry McCarthy (Bristol East) (Lab)
To return to the subject of continuity agreements, a number have been put in place but they do not apply to some of our biggest trading partners. Does the Secretary of State really think that by the end of October we will have a significant number of agreements in place with those countries with which we do the most trade?
Dr Fox
Well, 10.7% of our trade is done under EU trade agreements with third countries. In fact, the largest of those, with Switzerland, and some of the other largest—for example, with the European economic area and South Korea—have already been concluded or signed, and I expect further agreements to be reached.
Helen Goodman (Bishop Auckland) (Lab)
I do not know whether the Secretary of State saw the alarming report in yesterday’s Financial Times on the impact on the Amazonian rain forest of the EU-Mercosur trade deal. Of course free trade is a good thing, but not if the cost is climate change. Does he agree?
Dr Fox
This Government have been very consistent in our approach to this matter. In fact, next week I will be setting out, at a slightly lesser level, moves that the Department for International Trade intends to take to mitigate our own international travel. We all have a responsibility, at international, national and personal level, to take climate change absolutely seriously. In international agreements, the environmental impacts are very much looked at. Of course, that agreement has not yet been finally concluded.
Mr Nigel Evans (Ribble Valley) (Con)
I congratulate the Secretary of State and his Department on the latest export figures, which have reached another new high, but there is clearly potential for further growth, particularly post Brexit. What plans does he have to ensure that we have sufficient staff and personnel in high commissions and embassies throughout the world looking for those opportunities and feeding them back to British firms?
Dr Fox
For Britain to be able to sell abroad, we need to be able to do two things simultaneously: understand what Britain has to sell abroad and understand the markets we are selling into. That is why my Department is bringing in a major change to rotate our staff from our international posts through our sectors in the UK, so that they can understand what the UK can do in terms of services and goods in a real-time way as well as understand the markets. It is not just about how many people we have in the market, but about how well they understand what is happening in the UK. I hope that this innovation will lead to an increased capability for the UK and improve our competitiveness vis-à-vis other exporting countries.
Stewart Hosie (Dundee East) (SNP)
We recognise the need to reform the WTO, not least in the area of speeding up dispute resolution. We also recognise the benefits of regional trade agreements and bilateral agreements that can be WTO-compliant. However, it remains essential that we have a fully functioning WTO implementing globally agreed trade rules, so may I ask the Secretary of State to take on board and to agree with me that in these negotiations on reform he should reject some of the approach of the United States, which is to suggest that it will walk away from the WTO if it does not get its own way?
Dr Fox
I absolutely agree that we need an international rules-based system based on the WTO. It does require reform, but the fact that it needs reform is not an excuse to leave—it is an excuse to be more engaged in those reforms. It is worth pointing out that the United States has done very well, winning around 90% of the cases it has taken to dispute at the WTO. I hope that we all understand that the alternative to a rules-based system is a deals-based system, and the biggest casualties of that will be developing countries.
Chris Elmore (Ogmore) (Lab)
Trudy Harrison (Copeland) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
Re-establishing the Board of Trade has been one of this Department’s major achievements over the past three years, and it will continue to meet in all UK nations and regions. Included as advisers to the board are the Secretaries of State for Northern Ireland, for Scotland and for Wales, and it has representation from business advisers from across the UK. We will make sure that all parts of the UK benefit from the jobs and investment that come with an independent UK-wide trade policy.
Trudy Harrison
My right hon. Friend will know that Copeland is home to a thriving agriculture sector. Will he tell us more about what is being done in his Department to open up new markets?
Dr Fox
There are a number of ways in which we can do that. The traditional trade agreements are one of them, but market access is another. For example, countries such as China are huge markets for Northern Ireland dairy products and Scottish beef, and the Department is focusing increasingly on identifying regulations that, if removed, will automatically increase market access for UK exporters.
Chris Bryant (Rhondda) (Lab)
When the Foreign Affairs Committee met businesses in Hirwaun, south Wales, they were very critical of the Board of Trade. They said that it simply did not listen to Welsh concerns and did not project Wales on the international market. Is there not a danger that the Welsh Assembly might take it into its head that it wants to do that work instead of—and, I would argue, less effectively than—the United Kingdom?
Dr Fox
The hon. Gentleman may be slightly confusing the Board of Trade with the Department for International Trade. They have slightly different functions. When the Board of Trade met in Wales recently, we presented a number of awards to Welsh exporters, but the Board of Trade is an augmentation of the DIT in that it is able to take its own trade missions abroad. The advantage of the DIT to Wales is that it provides access to a much bigger network than could ever be achieved by the Welsh Government, and thus gives Welsh business a far greater capability than it would otherwise have.
Stephen Kerr (Stirling) (Con)
Dr Fox
I am delighted to say that the outcomes of the Department’s efforts have already been pretty beefy. The important point is, however, that because Scotland is part of the United Kingdom and therefore has access to a Department of State with a very large international footprint, we are better able to tackle issues such as market access to Scottish beef than Scotland would ever be if it were an independent state.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The north-east is the one region that consistently exports more than it imports, but its voice in international trade policy and its representation on trade missions do not reflect that. What is the Board of Trade doing to support the voice of the north-east, rather than providing a platform for the Secretary of State so that he can tour the regions without delivering change?
Dr Fox
The point of the Board of Trade’s visits to the regions is gathering information that the Department can use for the purpose of export policy and recognising the excellence of those who have already succeeded in exporting. I should have thought that the hon. Lady considered it a worthwhile exercise for the Government to recognise the excellent exporters in her own region.
Mr Philip Hollobone (Kettering) (Con)
Will the Secretary of State hold a meeting of the Board of Trade in Kettering, so that we can meet the Northamptonshire chamber of commerce to discuss export opportunities?
Judith Cummins (Bradford South) (Lab)
If trade is to work for all parts of the UK, all parts of the UK—including Kettering—must be heard before, during and after trade negotiations. The Government have announced the creation of a ministerial forum for international trade, but they have provided no information about its membership, how often it will meet, or what its exact terms of reference will be. Will the Secretary of State now give us some much-needed detail on how both the nations and the regions of the UK will be included in the entire trade negotiation process?
Dr Fox
As I have said, the Board of Trade’s advisers—which is what they are technically called—are the Secretaries of State for Scotland, Wales and Northern Ireland. We have visited all the English regions, and I intend in future to be constantly moving around the regions and nations of the UK, to thank the businesses that have contributed to Britain’s record export performance, to consult those businesses and to create a network of business people who will act as champions and mentors for companies that want to export.
Peter Aldous (Waveney) (Con)
Michael Fabricant (Lichfield) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
Over the past three years, the DIT has laid the groundwork for an ambitious free trade agreement with the US once we have left the EU, including through the UK-US trade and investment working group, which met for the sixth time in London yesterday. This week, I have been in Washington to discuss the progress of these preparations with my American counterparts and make sure we are ready to grasp this golden opportunity once we have left the EU.
Michael Fabricant
Is it not the case that, notwithstanding the little local difficulty—or even large local difficulty—in Washington DC at the moment, the underlying facts remain that the United Kingdom is the biggest investor in the United States and vice versa, that military and intelligence integration between the United Kingdom and the United States is bigger than any other in the rest of the world and that our strength remains with the United States?
Dr Fox
My hon. Friend is correct. The UK and the US have a deep long-standing relationship with a strong and enduring bond. We have a shared heritage, legal system and language, and we co-operate extensively in security, prosperity and defence, and at many levels of our society, culture and economy, our co-operation is closer than that of any other two countries—something that my hon. Friend contributed to in his time as shadow Trade Minister.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Has the Secretary of State woken up to the fact that when we trade with America, and with other countries, we have to take manufacturing very seriously indeed? This also involves our universities. I have a good memory and I remember that, on his first outing, he refused to meet the all-party parliamentary group on manufacturing. He has still not met it. Why does he not take manufacturing seriously? It matters for our trade relationship with America, which is very close.
Dr Fox
When it comes to the manufacturing element, we take it very seriously. Our goods exports have actually exceeded the growth in our service exports in recent times, which is testament to the way in which the manufacturing sector has been encouraged and grown under this Government, in stark contrast to what happened under the previous Labour Government, when it shrank substantially.
Ian Murray (Edinburgh South) (Lab)
The Secretary of State is obviously aware of the unprecedented way in which our ambassador in Washington was removed from his post yesterday by the former Foreign Secretary and the President of the United States. Does he think that that will harm or hinder our trade investment with the United States?
Dr Fox
I deeply regret the resignation of Sir Kim Darroch, whom I was with actually in the time before his resignation. He was a great, dedicated and professional public servant. I hugely decry the leak that led to that resignation. The leak was unprofessional, unethical and unpatriotic, and I hope that, if we are able to discover the culprit, we will throw the book at them.
Patricia Gibson (North Ayrshire and Arran) (SNP)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
We disagree with the judgment and are seeking permission to appeal. Alongside this we are considering the implications of the judgment for decision making. While we do this, we will not issue any new licences for exports to Saudi Arabia or its coalition partners which might be used in Yemen.
Patricia Gibson
Given the evidence from organisations such as the Red Cross, and given what we know about the humanitarian violations in Yemen, does the Secretary of State not think it is time, once and for all and regardless of any review, to look at the international evidence, and stop selling arms to Saudi Arabia to break international law?
Dr Fox
We take a rigorous and robust view in this country, as the court said, and we are very aware of any potential breaches of international humanitarian law. I think the hon. Lady will find that the United Kingdom has one of the most stringent sets of rules around arms exporting anywhere in the world.
Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
My Department is responsible for foreign and outward direct investment, establishing independent trade policy and export promotion. I am proud to announce that, on 17 July, my Department will be launching the MP Exporting toolkit. This will highlight the role that all MPs can play in helping to promote local businesses in their own constituencies. It says “Become a Trade Minister for your constituency”, and 650 Trade Ministers would be even more effective than the Department for International Trade.
Anne-Marie Trevelyan
My right hon. Friend is a brave man to let us all loose like that. He will be aware that the Royal Navy has done incredible work in the past couple of days to protect our British shipping as it moves through the Strait of Hormuz. Does he agree that, given that 95% of our goods travel by sea, it is imperative that our armed forces have the resources they need to keep all those exports and imports safe?
Dr Fox
Contrary to international law, three Iranian vessels attempted to impede the passage of a commercial vessel, British Heritage, through the Strait of Hormuz. HMS Montrose was forced to position herself between the Iranian vessels and British Heritage and to issue verbal warnings, which caused the vessels to turn away. Our thanks go to the crew of HMS Montrose and to all those who protect the safety of vital international maritime traffic. It is our duty as a Parliament to ensure that all those forces are adequately resourced.
Barry Gardiner (Brent North) (Lab)
Last month, the Department released the worst foreign direct investment statistics in five years. New projects were down 14%, new jobs were down 24%, and investment to safeguard existing jobs was down 54%. I know that the Secretary of State will want to explain the reasons for this to the House, but will he also tell us whether he still thinks he was right to announce that, in the event of a no deal, he would unilaterally drop more than 80% of our tariffs to zero for a period? I ask this because Canada has said that it will not now conclude a roll-over agreement conceding preferences to the UK because the Secretary of State is offering market access for free. In June, he boasted to the Select Committee that the roll-over was 99% there. Now, it is 100% not there. Was he right, or is Canada?
Dr Fox
As ever, it is nice to know that the hon. Gentleman is consistently wrong. He talks about our investment figures, but investment into the United Kingdom was the third highest of any country in the world, and it was the highest in Europe. At a time when global foreign direct investment fell, it continued to rise in the UK. When it comes to tariffs, one reason the Government introduced the temporary tariff scheme was to stop a price shock in the UK, and one of the reasons for that is that those on lower incomes spend more on goods than services. Introducing liberalisation will help to protect consumers on lower incomes, and I would have thought even today’s Labour party might have supported that.
Sir Desmond Swayne (New Forest West) (Con)
David Linden (Glasgow East) (SNP)
Dr Fox
I had a number of discussions in the United States about that issue this week, as the hon. Gentleman may have guessed. It is likely that tariffs will be applied following the WTO determination of the level of tariffs that the US is allowed by law to set following the judgment on Airbus. Of course, the judgment on Boeing, to which he alluded, is also coming. At some point, we must ensure that both European countries and the United States are able to give appropriate support to their aircraft industries, because the alternative will be market access for China, which will be in the interests of neither.
Jack Brereton (Stoke-on-Trent South) (Con)
Andrew Lewer (Northampton South) (Con)
Dr Fox
My hon. Friend makes an important point, but an article 24 agreement would cover tariffs and quantitative restrictions; it would not cover services, standards and regulations. An agreement covering those latter elements would have to be negotiated separately and would probably take longer to strike. In the meantime, the UK would be subject to the full array of existing third-country checks and controls carried out as standard by the EU. In other words, even if we both did agree an article 24 continuation, it would not cover access to the single market—it would not be trading as usual.
Thangam Debbonaire (Bristol West) (Lab)
Further to the question from the hon. Member for North Ayrshire and Arran (Patricia Gibson), is it not time that the Department for International Trade undertook a thorough review of all 29 or 30 countries identified as countries of concern for human rights by the Government’s own Foreign Office?
Export Licences: High Court Judgment
Liam Fox Excerpts(5 years, 5 months ago)
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The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
With permission, Mr Speaker, I will make a statement about the High Court judgment on military export licences to Saudi Arabia.
Today, the Court of Appeal handed down its judgment following the appeal by Campaign Against Arms Trade against the divisional court’s decision in July 2017 to dismiss CAAT’s claim for a judicial review of licensing decisions about military exports to Saudi Arabia for possible use in the conflict in Yemen. The case was heard by the Court of Appeal between 9 and 11 April this year. The original judicial review and the appeal relate to decisions made between December 2015 and February 2017.
Since the divisional court’s judgment in July 2017, the Government have continued to apply the rigorous and robust multi-layered process of analysis in making our licensing decisions, as highlighted in that judgment. We have, in the words of the 2017 judgment, engaged in
“anxious scrutiny—indeed…what seems like anguished scrutiny at some stages”.
The Government have always taken their export control obligations very seriously, and continue to do so.
There were three grounds of appeal. The judgment found in the Government’s favour on two of them, and against on the other, referred to as ground 1. We disagree with the judgment against the Government on ground 1, and will seek permission to appeal against it.
Today’s judgment is not about whether the Government have made the right or wrong decisions about granting export licences, but concerns the rationality of the process used to reach decisions. The process was upheld by the divisional court in July 2017. The central issue in relation to military exports to Saudi Arabia in the context of the conflict in Yemen is criterion 2c of the consolidated EU and national arms export licensing criteria, which states that the Government will
“not grant a licence if there is a clear risk that the items might be used in the commission of a serious violation of international humanitarian law.”
The criteria provide the rules for assessing military exports. Among other things, they cover concerns about human rights and international humanitarian law, the development of weapons of mass destruction, international obligations including sanctions and treaty commitments and the risk of diversion. They provide a thorough and rigorous risk assessment framework for the reaching of licensing decisions.
As the judgment makes clear, the Secretary of State responsible for licensing decisions has to rely on advice from those with specialist, diplomatic and military knowledge. In relation to criterion 2c, that means advice from the Foreign Secretary. Before the establishment of the Department for International Trade in 2016, the decision maker was the then Secretary of State for Business, Energy and Industrial Strategy. In July 2016, the responsibility passed to me.
So how have decisions been made under criterion 2c? We have used six strands of information and analysis to inform decisions: analysis of all allegations of breaches of international humanitarian law that are known to us; an understanding of Saudi military procedures; continuing engagement with the Saudis at the highest level; post-incident dialogue, including dialogue with respect to investigations; Saudi public commitments to IHL; and regular IHL assessments based on developments in the conflict in Yemen.
Each of these strands takes into account a wide range of sources and analysis, including those of a sensitive nature to which other parties, such as non-governmental organisations and the United Nations, do not have access. Taken together, these strands of analysis and information, which are reviewed regularly by the FCO in comprehensive reports to the Foreign Secretary and which engage continuously with the record of the Saudis in relation to IHL, form the basis of the Foreign Secretary’s advice to the Secretary of State making licensing decisions.
Given all this, why did CAAT appeal the 2017 judgment? The ground on which the Government lost in the Court of Appeal judgment concerned whether we were under an obligation to make some overall assessment of whether there had been historical violations of IHL, including whether a pattern of violations could be discerned. Our approach is in line with the EU common position; it is therefore focused on a predictive evaluation of risk as to the attitude and future conduct of the Saudi-led coalition and recognises the inherent difficulties of seeking to reach findings on IHL for specific incidents where we do not have access to the complete information. Indeed, the divisional court pointed to the “self-evident” impracticality of doing so.
Even so, we have fully and robustly engaged with incidents of concern and sought to test and understand the risk of future incidents. We have all along considered the historical record of Saudi Arabia in respect of IHL. Our whole assessment has been infused with IHL considerations; indeed, everything has been looked at through the prism of IHL.
Today’s judgment is clear that the context is not one in which the Government are sitting like a court adjudicating on alleged past violations, but rather the context is a prospective and predictive exercise as to whether there is a clear risk that exports might be used in the commission of a serious violation of IHL in the future. In this context, past incidents are only part of the picture. The judgment emphasises that Government advisers were keenly alive to the question of possible violation of IHL. It also acknowledges that the processes used to advise the Secretary of State responsible for licensing decisions were rigorous and robust, upon which a decision maker could rely and, indeed, had to rely.
Nevertheless, the judgment concludes that CAAT succeeded in the central argument advanced in relation to ground 1 of its appeal. In the Court’s judgment the question whether there was a historical pattern of breaches of IHL required to be faced; even if it could not be answered with reasonable confidence for every incident, at least the attempt had to be made. Because the Government have not reached findings on IHL for specific incidents as part of our assessment of clear risk under criterion 2c, the Court of Appeal concluded that the decision-making process was irrational and therefore unlawful. The consequence is that we are remitted to reconsider our decisions in accordance with the correct legal approach. As I said earlier, we disagree with the judgment and will seek permission to appeal.
Alongside this, we are carefully considering the implications of the judgment for decision making. While we do this, we will not grant any new licences for exports to Saudi Arabia and its coalition partners that might be used in the conflict in Yemen. As the Court of Appeal makes clear, different people may or may not approve of the sale of arms to Saudi Arabia. The judicial review is not an appeal against the Government’s decisions on their merits.
Once again, I stress that this judgment is not about whether the Government made the right or wrong decisions, but is about whether the decision-making process was rational, and the judgment emphasises that there would not be only one answer on future risk if historical violations were found to have taken place; in other words, changing the process as set out by the Court does not necessarily mean any of the decisions would be different.
The context is a complex and ever changing conflict. The Court of Appeal judgment does not undermine the UK’s overall framework for export controls as set out in the consolidated criteria. These criteria have stood the test of time and are shared by EU member states. The Court’s judgment is about how decisions were made in relation to one element of one of those criteria in a specific context, and I commend this statement to the House.
Barry Gardiner (Brent North) (Lab)
I thank the Secretary of State for advance sight of the statement. This week, the House marked in debate the 70th anniversary of the Geneva convention and the 20th anniversary of the United Nation’s Security Council first putting on its agenda the protection of civilians in armed conflict. The irony of today’s judgment by the Court of Appeal is that the United Kingdom is the penholder at the Security Council for that mandate. We are supposed to be guardians of international humanitarian law, not the people found in breach of it.
The Court of Appeal’s ruling is a damning indictment of the Government’s handling of export licences to the Kingdom of Saudi Arabia. It finds that their handling has not been lawful. The Court found that the Government
“made no concluded assessments of whether the Saudi-led coalition had committed violations of international humanitarian law in the past, during the Yemen conflict, and made no attempt to do so”.
Does the Secretary of State accept that this constitutes a clear breach of the Government’s legal obligations to assess an export destination country’s respect for human rights and fundamental freedoms and that under criterion 2c of the licensing criteria the Government should have carried out such an assessment and denied licences if there was
“a clear risk that the items might be used in the commission of a serious violation of international humanitarian law”?
The Secretary of State has tried to excuse himself by pleading that this judgment is not about whether the Government have made the right or wrong decision, but about whether the decision-making process was rational. Surely even he must understand that if the decision-making process was not rational, the Government could have had no confidence that it was correct and that it therefore follows that he could have had no confidence that there was no material risk of these exports being used contrary to international humanitarian law.
That the Government have failed to carry out such assessments is a matter of national shame. I am afraid that the Secretary of State’s suggestion that there has been anxious scrutiny of these decisions looks threadbare. I welcome his announcement that there will be a suspension of the granting of new licences to the Kingdom of Saudi Arabia, pending the Government’s appeal, but that is not enough. Given that the process itself is flawed, will he confirm whether the same process has been used for exports to Bahrain and the United Arab Emirates, which are also involved in the Yemeni conflict? Will he confirm that he is also suspending all new licences to those countries?
The Opposition believe there should be an independent investigation into the Yemen conflict and that it is shameful that the Government should seek to appeal today’s judgment. We are also concerned that there should be no sudden upsurge in open licences to these countries as a way to bypass the suspension. Can the Secretary of State confirm that this will not be allowed?
During the legal proceedings in the case against the Government, it transpired that the Government had not been properly monitoring whether the Saudi-led coalition had been engaged in breaches of IHL and had refused to properly set out whether British exports or service personnel had been directly or indirectly involved in any breaches by the Saudi-led coalition, despite widespread evidence of airstrikes on non-military targets, double-tap bombing raids and the deaths of thousands of civilians. Can the Secretary of State tell the House categorically that there has been adequate monitoring of potential breaches of IHL such that no UK personnel could be implicated in any breach?
The Secretary of State is well aware that several other countries have suspended arms sales to the Kingdom of Saudi Arabia over concerns about those breaches in Yemen, including our European counterparts Germany and Denmark. He has suggested that it is his view that the Government approach is in line with the EU common position. What assessment has he made of international reports into possible breaches and what discussions has he had with his counterparts in Germany and Denmark about the evidence upon which they have decided to suspend arms sales?
The Secretary of State, in his response to the claims brought forward by the Campaign Against Arms Trade, has stated that the Government monitor potential breaches in a number of ways, including a Ministry of Defence recording tool, extensive on-the-ground military and diplomatic staff, positive close relations with Saudi Arabian officials, and the findings of the 14 investigations by the Saudi-led coalition into whether they themselves had committed any such breaches. It subsequently transpired during proceedings that the Ministry of Defence tracker may not have been recording such data, so the Secretary of State’s review of potential breaches of international humanitarian law seems to be entirely determined by what his Saudi Arabian counterparts have advised him. At what stage did he first become aware that the Ministry of Defence tracker programme was not recording such breaches? Can he confirm whether his Department was aware that such breaches were not being reviewed or recorded?
The Court of Appeal has determined that the Secretary of State must retake the export licence decisions and must therefore conduct a conclusive review of past violations of international humanitarian law in advance. Can he confirm that he intends to adhere to the Court’s findings, and will he tell the House what steps he is taking to conduct such an investigation? Given the serious breach of this Government’s duty of care with regard to export licences, we believe that there are clear grounds for a thorough investigation into the Government’s handling of them, and that there must be a full parliamentary or public inquiry to find out how that was allowed to happen and which Ministers were responsible for those breaches.
I note that several times in his statement the Secretary of State was keen to finger the former Foreign Secretary as the one with the “specialist, diplomatic and military knowledge” whose advice he was obliged to take under criterion 2c of the consolidated criteria. The House may be surprised to learn of that official description of the right hon. Member for Uxbridge and South Ruislip (Boris Johnson). Can the Secretary of State explain, given that he has previously assured the House that he will
“personally lead on helping the defence and security industries to export and will be involved in the most significant global deals across all sectors”,
why he does not take full responsibility himself?
Dr Fox
The House has grown accustomed to the outraged tone of the hon. Gentleman, but it does not actually reflect the balanced tone of the judgment. He said in his questions that this country had been found in breach of international humanitarian law. I find that outrageous, coming from the official Opposition of this country, and I hope that he will retract it. I think the record will show that that is completely untrue. It is an outrageous slur on this country.
The hon. Gentleman raised a number of valid and important questions, and I shall try to take them in turn as best I can. He asked about open licences. They are subject to the same scrutiny, and sometimes take between two and five months to pass, so they are not a means of bypassing the scrutiny set out in the consolidated criteria. I think that the House will be clear on that. As to how we look at existing licences, and at licences elsewhere, I have made it clear that we will review all licences in the light of the Court’s judgment. It is worth noting, however, that the Campaign Against Arms Trade did not seek an order to suspend licences, and that the Court has not ordered that in its judgment.
The hon. Gentleman asked about how the UK monitors international humanitarian law allegations. The Ministry of Defence monitors incidents of alleged IHL violations arising from airstrikes conducted by the Saudi-led coalition in Yemen using all information available. This in turn is used to determine an overall view on the approach and attitude of the coalition. It informs the risk assessment made under the licensing criteria, where there is a clear risk that the items to be exported might be used in the commission of a serious violation. We consider a range of information from Government sources, foreign Governments, the media and international non-governmental organisations. We are now carefully considering the detail of the Court of Appeal judgment and its implications for this risk assessment and for decision making.
The hon. Gentleman asked about our discussions with the Germans. We of course have ongoing discussions with our European partners, but let me be clear that we are following the consolidated guidelines and the common EU position on this. I can tell him that there has been no breach in the duty of care in how the Government have approached this, and I make no allegations about any colleague, but I am not surprised that the hon. Gentleman has tried to drag personalities into this serious debate on such serious international issues. If there has been a breach of duty in this House, it is the breach of scrutiny by the Opposition.
Dr Julian Lewis (New Forest East) (Con)
Do the Government accept that, as the years have rolled by since the 9/11 atrocities, it has become harder and harder to justify the closeness of our relationship with Saudi Arabia, but in defence of what the Government are trying to do, would it not be sensible for my right hon. Friend to have conversations with the Foreign Secretary, perhaps with a view to publishing a digest of some of the representations that we make to the Saudis in trying to keep them from straying further away from acceptable standards of international behaviour?
Dr Fox
The Foreign Secretary and I have answered numerous questions on this issue in the House of Commons, and we have certainly cited some of those incidents and been questioned on specific incidents in the House. On my right hon. Friend’s key point, I do not think the proximity or otherwise to 9/11 is the key determinant here; rather, it is whether Saudi Arabia acts as an important source of intelligence for this country in our shared combat against a global terrorism. It is a valuable partner in that particular battle and has helped to keep numerous UK citizens safe.
Stewart Hosie (Dundee East) (SNP)
I thank the Secretary of State for his statement and for giving me advance sight of it. I recognise that, under criterion 2c of the consolidated criteria, the Government will not grant a licence if there is a clear risk that the items might be used in the commission of a serious violation of international humanitarian law. I also recognise that the judgment is not about whether the Government made the right or wrong decisions, but about whether the decision making was rational. I also recognise the words from the 2017 ruling that there was
“anxious scrutiny—indeed…what seems like anguished scrutiny at some stages”
over the decision making process. However, that anxiety and anguish are as nothing compared to the civilians who have been on the receiving end of Saudi armaments since the war in Yemen began.
I also note that since that war started, the UK has licensed some £4.7 billion-worth of arms sales to Saudi Arabia in a conflict whose death toll is now approaching 100,000 people. So may I ask the Secretary of State two questions? The ruling means that the UK must retake its decision on the correct legal basis, taking into account past possible human rights abuses from Saudi Arabia. Will this Government now take seriously the deep concern, anguish and anxiety that there are substantial human rights abuses emanating from Saudi Arabia? Secondly, I was disappointed to hear him say that it was the Government’s intention to appeal. I understand the legal costs so far are somewhere over £100,000. May I ask him to respect the ruling today, not to proceed with an appeal, and not to throw good money after bad?
Dr Fox
The hon. Gentleman asks an important key question on the specifics. Of course, criterion 2c is a predictive element. We have to look at what we think the future risk is in granting licences, and we take into account all the information that we have had, not least since the last licensing period decision that we have looked at. That takes into account all the sources I have already given him. He asks about the wider issues. I want to make it clear to the House that in reaching the decisions, I have to rely on advice from those with specialist diplomatic and military expertise, but the law does not permit me, in taking these decisions on licensing exports of weapons, to take into account the UK’s strategic economic, social, commercial and industrial interests. These are very important issues, but there are areas of wider policy and they are not areas that I am allowed to take into account when I take these particular decisions.
Mr Andrew Mitchell (Sutton Coldfield) (Con)
I have some sympathy with the position that my right hon. Friend has set out the Dispatch Box today. He will recall that I have had, to say the least, the most profound reservations over the past three or four years about the Government’s policy in respect of what is happening in Yemen. However, he will also know that I have never called for an arms embargo for the simple reason that it would have little humanitarian impact. Does he appreciate that the Master of the Rolls, Sir Terence Etherton, said in his judgment today that the Government
“made no concluded assessments of whether the Saudi-led coalition had committed violations of international humanitarian law in the past, during the Yemen conflict, and made no attempt to do so”?
That is the crux of the matter that is before the House today.
I say to my right hon. Friend and to the other members of the Government Front Bench that they should listen more carefully to what Parliament has said consistently in almost every debate on this matter over the past three years. As recently as Tuesday, there was a Westminster Hall debate marking the 70th anniversary of the arrangements that were made in respect of international humanitarian law. After all these investigations of breaches of international humanitarian law, the argument has been that it is wrong for Britain and one side of the conflict to mark their own homework. It is essential that such breaches are looked at by an accepted and impartial international force, such as the UN. If the Government had heeded the warnings from the House of Commons, they would not be in the position that they are in today.
Dr Fox
I agree with my right hon. Friend about the humanitarian costs involved in the conflict, and I also agree that there can be no military solution to this particular conflict. There can only be a negotiated and political solution. However, we do monitor allegations of IHL breaches, and we do take that into account when making decisions. Of course, the predictive nature of this process means that we have to look at the past pattern of behaviour, the information we have available, and what mitigations may have been put in place to ensure that any incidents are not repeated. We are unable to make absolute definitions about whether there has been a breach when we are not party to the full information, but we make those decisions based on the predictive element of criterion 2c and on the evidence that is available from both public and protected sources.
Hilary Benn (Leeds Central) (Lab)
The Government’s position is, frankly, inexplicable, because the Secretary of State referred to all the careful analysis that has been done, but anyone else undertaking an assessment of future risk—this goes to the heart of the point that the right hon. Member for Sutton Coldfield (Mr Mitchell) just raised—would look at the past behaviour of those using the weapons that we have sold to Saudi Arabia. As the Secretary of State well knows, others have done so, and the UN panel of experts found over three years ago that
“the coalition had conducted airstrikes targeting civilians and civilian objects, in violation of international humanitarian law”.
The Government cannot continue to say, “We’re sorry. We haven’t been able to make an assessment, but we are not sure that there is a risk about the future.” I will ask a direct question of the Secretary of State: is it the Government’s view that Saudi Arabia has engaged in activities that have breached international humanitarian law?
Dr Fox
I disagree with the premise of the question itself. The right hon. Gentleman says that the Government’s position is inexplicable, but it is not. We are following the EU and national criteria set out for arms exports, and we are following the EU common position. We look at all reports of potential breaches of international humanitarian law, but we must also take into account, by the nature of the predictive elements in criterion 2c, what we think the future risk will be based on, for example, any mitigations.
Tom Pursglove (Corby) (Con)
The Government have consistently maintained that this country has one of the strictest export control regimes of anywhere in the world, but on what grounds do they base those claims?
Dr Fox
The divisional court’s judgment set out in terms why we operate a robust system, and I explained in my statement that we have gone well beyond what I think is naturally expected under criterion 2c. We operate what I believe is the most robust arms export policy of anywhere in the world. We operate under the EU and national consolidated criteria and alongside the EU common position. I do not believe that anyone else operates a more robust policy.
Diana Johnson (Kingston upon Hull North) (Lab)
The Secretary of State has referred to the European common position several times. What is his assessment of the European countries that have decided to suspend arms exports to Saudi Arabia? Why does he disagree with their position?
Dr Fox
The hon. Lady asks a good question. We discuss matters with our European colleagues, including our German colleagues, at the highest level, and it is our policy to continue to apply the EU common position to licensing. We do not comment on the commercial arrangements that underpin the export of military equipment and services, which are, of course, confidential. Our European partners and others are entitled to deviate from the EU common position if they wish, but we intend to follow it.
Nigel Huddleston (Mid Worcestershire) (Con)
We all get emails from our constituents expressing concerns about the global arms trade. Will my right hon. Friend therefore assure me and my constituents that the UK does indeed have one of the most robust arms export regimes in the world? Does he share my wish that other countries had such robust regimes?
Dr Fox
I do wish that more countries shared the criteria that we and our European partners operate in this particular field. However, I also believe that countries are entitled to defend themselves. If we were to have no international rules around arms exports, the whole global arms industry would be a laissez-faire space in which many innocent citizens around the world would be denied the protections offered by our export licences.
Wera Hobhouse (Bath) (LD)
It is undeniable that the Government’s defiance in respect of the Court of Appeal ruling is disappointing. Given the public interest in the unfolding tragedy in Yemen, will the Secretary of State not at least acknowledge that there must be more transparency in how his Department deals with this issue? We understand the obvious sensitivities, but the public and the House deserve to understand how the Department is coming to its decisions.
Dr Fox
I have made it clear on a number of occasions how we come to decisions and the process of ministerial accountability in that. The Court of Appeal judged that the process needs to change in order to be lawful, but it also made the point that changing the process would not necessarily have led to different decisions from those arrived at by the Government.
I say to the hon. Lady that I took offence at the comments of the hon. Member for East Dunbartonshire (Jo Swinson), the Liberal Democrat spokesperson on this matter, when she said:
“Saudi Arabia is an enemy of British values, including human rights and the rule of law.”
Such sweeping generalisations show a lack of grasp of the detail and understanding of the complexities of international relations.
Alex Chalk (Cheltenham) (Con)
On the one hand, the Court of Appeal is saying that the British Government must investigate allegations of previous international humanitarian law violations before granting export licences but, on the other hand, the British Government are saying, “Look. That is very difficult for us to do, because some of these incidents take place in foreign countries thousands of miles away.” Does not the solution to this lie in the hands of the Saudi Arabian Government themselves? We must say to them, “If you want to buy our weapons, where allegations exist they must be properly and independently investigated, and those findings must be shared with us before licences are granted.”
Dr Fox
My hon. Friend makes an important point. The joint incidents assessment team was set up by the Saudi Government in February 2016 to help with that. It examines military activity in civilian areas to minimise possible civilian casualties and assesses the coalition’s rules of engagement. We have had input into that to ensure that the coalition is operating in a way that we would find acceptable.
Of course, we simply would not take that as being the end of the matter when it comes to information. As I have said, we look at a range of information from foreign Government sources, from our own Government sources, both those in the public domain and those that are restricted, and from NGOs and the media. It is in taking that complete picture that we are able to assess what we believe the risks to be, but we are always looking to see whether further sources of information may help to improve our decision making, alongside the decision making of our allies.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
I have just returned from the Court of Appeal, where I listened to the judgment. The judges, in paragraph 141, say there was a decision in 2016 no longer to apply criterion 2 on the checking of IHL. This resulted in 100,000 deaths. Who made that decision?
My Committees, the Committees on Arms Export Controls, have manifestly failed to hold the Government to account. We now need urgent reform of the Committees’ powers, including creating a standalone Committee. Will the Minister confirm that he will not allow the use of any existing open licences to coalition partners during this review?
Finally, after the arms scandals of the 1980s and ’90s we had the Scott inquiry, and we now need an independent judge-led or parliamentary inquiry not just on this particular issue but on the failings of our arms control system—taking it away from the political interference and political control of Ministers to a truly independent and world-class system, which we do not have at the moment.
Dr Fox
We are ultimately accountable in the courts, as we have been, and the divisional court was clear in its praise for how Government rigour was applied to this process. We are not in breach of the consolidated criteria, nor has the Court of Appeal said that. What the Court of Appeal said is that the process by which decisions are reached needs to change, and needs to take into account the possibility of international humanitarian law having been breached. To compare that, for example, to the incidents in the Scott report is simply not credible.
Of course, we will review all licences in light of today’s judgment, as we are required to do. That will include open licences.
Ruth Cadbury (Brentford and Isleworth) (Lab)
The UK’s significant levels of arms production and exports is often justified by the need to protect jobs, and today we have been told that there is a risk of terrorism if we do not export arms to this appalling regime. Rather than being complicit in killing almost 100,000 Yemenis, if the Government really want to protect jobs, reduce the risk of terrorism and enhance the UK’s reputation around the world, why not stop Brexit?
Oral Answers to Questions
Liam Fox Excerpts(5 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Michael Fabricant (Lichfield) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
Before I answer that question, on the 75th anniversary of D-day it is worth our reflecting that we in this House are able to ask and answer questions in a free and democratic Parliament because of the sacrifices made by those who went before us.
Our dedicated team at the UK embassy in Tel Aviv actively promotes UK-Israel trade, and there is extensive collaboration on medical research between the UK and Israel. The UK-Israel Tech Hub, which is based at the embassy, helps to create tech and innovation partnerships across several sectors, including healthcare.
Michael Fabricant
That is very good to hear. My right hon. Friend knows the state of Israeli technology—for example, all our chips, including the Intel fifth, sixth and seventh core chips, are developed in Israel for Intel in America. Magen David Adom, the equivalent of the Israeli Red Cross, has an app that provides live streaming, medical history and the location of people who use it, and that sort of innovation could be of great benefit to the UK. When we leave the European Union, what will be the advantages of doing business with Israel for both our nations?
Dr Fox
There are huge advantages to our collaboration in or outside the European Union. To enable us to shine a light on the excellence that my hon. Friend mentions, on my recent trip to Israel I agreed with Prime Minister Netanyahu that we will jointly sponsor a Government high-level trade and investment conference that will enable us to show the world the best of what both countries have to offer in the sector mentioned by my hon. Friend.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I congratulate the Secretary of State on mentioning D-day. My father served in the Royal Engineers throughout the war, and my thoughts are of him and our brave troops today.
The Secretary of State is right to say that global trade can take place only in conditions of peace. Will he back the small group of MPs from across the House who are trying to create close relationships between university research in the UK and university research in Israel?
Dr Fox
I thank the hon. Gentleman for his kind words. He is right—where we are able to take advantage of the innovation coming out of universities, we should make every attempt to do so. One reason that international investors give for putting money into the United Kingdom is the access to high-quality innovation that comes from the collaboration between industry and academia. Where we can take full advantage of that, including with bilateral relations elsewhere, we should do so.
John Howell (Henley) (Con)
The Secretary of State has already mentioned the UK-Israel Tech Hub, which is the first of its kind and has already generated business of £85 million. How does he see that developing over the coming years?
Dr Fox
I see it going from strength to strength, and as greater investment goes into both economies we will be able to scale up the innovation and creativity that is clearly shown in the tech sector. That will be of benefit not only to our two countries, but to the wider global economy.
Judith Cummins (Bradford South) (Lab)
I wish to associate myself fully with the Secretary of State’s remarks and pay tribute to the sacrifices of the fallen.
What assessment has the Secretary of State made of Israel’s participation in the agreement on pan-Euro-Mediterranean cumulation on the trade in medical products between the UK and the EU? What progress have the Government made in replicating other agreements between the EU and Israel, including the 2013 EU-Israel agreement on conformity assessment and acceptance of industrial products?
Dr Fox
As the hon. Lady is aware, we reached a continuity agreement with Israel on 19 February, which will come into effect as we leave the European Union. The conformity assessment element of that is very important because of the number of generic prescriptions that the NHS takes advantage of that are produced by Israeli pharmaceutical companies. We will want to see as much continuity in all those arrangements as possible.
Mr Mark Prisk (Hertford and Stortford) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
Free trade is a driver of economic growth that can trigger positive changes in a country’s economy, helping to raise incomes, create jobs and lift people out of poverty. The poorest countries have enjoyed some of the benefits of global free trade through receiving preferential access to the UK, the world’s fifth-biggest market.
Mr Prisk
I thank the Secretary of State for his answer. However, the risk of protectionism is growing and that threatens both free trade and the millions of jobs in developing countries that come with it. May I therefore urge the Secretary of State and his colleagues actively to oppose protectionism, particularly at the WTO and indeed when expressed in this Chamber, so that we can ensure that more of the world’s poorer citizens benefit by trading themselves out of poverty?
Dr Fox
Those countries that have benefited from free and open trade, and enjoy the prosperity that we do today, have not only a duty economically to ensure the best outcomes but a moral duty to ensure that those in developing countries are able to benefit from the same trading systems that we have. Simply to say that we are more advanced and are pulling up the ladder behind us would be a betrayal of all those who have believed in free trade and practised it in recent years.
Patrick Grady (Glasgow North) (SNP)
Does the Secretary of State agree that if it is going to end poverty, free trade also has to be fair trade? What steps are the Government taking to ensure that trade deals, whether through the WTO, the European Union or bilaterally, are checked against the sustainable development goals to make sure that they are poverty and development-proofed?
Dr Fox
The Government take those elements extremely seriously, which is why we actually seek a closer alignment between our trade and development policies. For example, we are able to invest in countries to give them greater capability to add value to their primary produce, while at the same time potentially being able to take advantage of tariff reduction to increase market access. By bringing the two together, that can be synergistic for this country and for developing countries.
Dr Fox
I certainly believe that the European Union’s common external tariff provides barriers to trade for many developing countries, so they are unable to take advantage of adding value to their primary produce. One of the advantages of leaving the European Union will be that Britain will have the ability to reduce tariffs to enable greater access for some of the poorest countries.
Sir Edward Leigh (Gainsborough) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
At the upcoming G20 trade and digital economy ministerial meeting I will voice the UK’s continued support for the multilateral trading system. I will work with other G20 members to reduce trade tensions, support WTO reform, and advocate new rules on e-commerce and services trade liberalisation.
Sir Edward Leigh
Relations with Japan matter enormously. Our termination of the Anglo-Japanese treaty 1923 was probably one of the worst geo-strategic mistakes we ever made, propelling that country into autarchy and nationalism. Will the Secretary of State confirm that post Brexit his priority will be to ensure a global free trade world, with us and Japan leading the way?
Dr Fox
It is absolutely essential, particularly given the rise of protectionism globally, that we commit ourselves to a rules-based system based on the WTO. Of course, we have abilities to augment that by other regional relationships, which is why we have had the public consultation and the debate in Parliament about the potential accession to the CPTPP—the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The Japanese Government have been key in encouraging the United Kingdom to seek such a membership.
Dr Fox
I do agree, but if the G20 countries are intent on doing so, they need to reverse the recent trend of increasing non-tariff barriers to trade. The largest number of new barriers to trade introduced since the financial crisis have been in G20 countries, so they do not simply have to do the preaching; they have to do the practising, too.
Mr William Wragg (Hazel Grove) (Con)
Craig Tracey (North Warwickshire) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
My Department is responsible for foreign and outward direct investment, establishing an independent trade policy, and export promotion.
Let me take a moment to thank Baroness Fairhead for all her hard work during her time as the Minister for export promotion. She has been an invaluable member of my team: diligent, intelligent and 100% committed, and she will be sorely missed.
Craig Tracey
I chair the all-party parliamentary group on women and enterprise. We are about to publish our first report, which draws attention to the huge potential for encouraging more female-owned businesses to export. What support can the Government give in that regard, particularly by identifying market-ready opportunities abroad for our female entrepreneurs?
Dr Fox
I pay tribute to my hon. Friend for the work that he does in this area. The Government’s export strategy is about breaking down barriers so that everyone can benefit from trade opportunities, but that includes understanding the distinct barriers faced by women. We will ensure that our independent policy is gender-responsive, and will actively seek to increase the role of women in trade and support female exporters in particular.
Barry Gardiner (Brent North) (Lab)
Today we remember with profound respect the importance of the multilateral alliance, and the sacrifices made 75 years ago today. Did the Secretary of State take the opportunity of the recent state visit involving those commemorations to express his dismay that UK companies might now fall foul of the Helms-Burton Act, which would subject British businesses and investors to unfair legal challenge in the United States simply because that country has a dispute with the people with whom our companies are doing business?
The extraterritorial jurisdiction that the US claims under the Act was declared unenforceable by the EU under a Council regulation which we have recently replicated in the UK, but does it not send a chill through the Secretary of State that by deciding to activate Title III, the US President is threatening companies based outside the US which are simply going about their legitimate business? Does that not make the Secretary of State question whether the great deal that President Trump says he is already discussing with the UK would be great for the UK, or just for the US?
Dr Fox
I agree that there are issues around the whole concept of extra-territorial rules on trade, which is why of course it is fundamental that we get a strengthening of the rules-based system at the WTO in Geneva. That will help us deal with some of those issues, but where the United Kingdom believes we have a unique role to play—for example in upholding the joint comprehensive plan of action—we will continue to do so, and we will resist any attempts to force UK trading entities to behave in a way that we do not believe is legal.
Mr William Wragg (Hazel Grove) (Con)
Mr Stephen Hepburn (Jarrow) (Lab)
Dr Fox
Of course post-EU it will be the Government and this Parliament that will determine what trade arrangements we have, not the European Union. I understand the hon. Gentleman’s passionate defence of the NHS: I trained and worked in the NHS as a doctor. Under this Government the NHS will not be for sale, and I would hope that is something we can agree across the House.
Damien Moore (Southport) (Con)
What steps are being taken to champion the rules-based system in emerging economies such as Tunisia?
Dr Fox
The whole issue of the WTO will be at the centre of what we discuss at the G20. The alternative to a rules-based system is a deals-based system, which would suit only the very biggest and most powerful economies, and we would lose the potential to use trade as a means of getting countries out of poverty. The rules-based system is necessary because it applies to everyone—the richest and the poorest, the strongest and the weakest—and we must give every defence to it that we can.
John Grogan (Keighley) (Lab)
Tom Pursglove (Corby) (Con)
For the benefit of my constituents in Corby and east Northamptonshire will the Secretary of State take the opportunity to knock on the head this nonsense that the NHS will be up for sale in any future free trade agreement?
Dr Rupa Huq (Ealing Central and Acton) (Lab)
Martin Vickers (Cleethorpes) (Con)
Trade with Iceland is of particular importance to my constituency and the ports of Immingham and neighbouring Grimsby. What progress is being made to develop our trading links and investment with Iceland?
Dr Fox
I visited Iceland just a couple of weeks ago and had constructive discussions with my counterpart there and with a range of businesses. We have already signed the continuity agreement, which I know will be of enormous benefit to my hon. Friend’s constituency and provide a great deal of comfort to those involved in those industries.
Nick Smith (Blaenau Gwent) (Lab)
In Blaenau Gwent, we have been working with Fujitsu to encourage our young people to go into cyber-security, but I have learned that there is a real shortage of cyber-security specialists here in the UK. What support can the Government give to training in this key sector so that we can boost our exports for the future?
Dr Fox
The hon. Gentleman makes an important point. The value of UK cyber-security exports is set to rise from about £1.8 billion at the moment to £3.2 billion by 2022, and 800 companies are currently involved in the sector. He is right to say that one of the elements we will need to provide is the appropriate education, coming from the sector, to give people the appropriate skills as well as in-house training. The Government, through their wider agenda—the skills agenda, the apprenticeship scheme and what we are doing in the Department—are well aware of the point that he has raised. Without the skills, we will be unable to take advantage of the tech and knowledge that we have.
International Trade
Liam Fox Excerpts(5 years, 6 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Dr Fox
No, I will not commit to that. I have set out the reasons why I believe the application of a common external tariff will be limiting on the UK’s ability to carry out an independent trade policy. What I would say is that we already have the Trade Remedies Authority up and running, and that is the best way to deal with any disputes over steel through WTO rules.
[Official Report, 25 April 2019, Vol. 658, c. 860.]
Letter of correction from the Secretary of State for International Trade:
An error has been identified in the response I gave to the hon. Member for Blaenau Gwent (Nick Smith).
The correct response should have been:
Dr Fox
No, I will not commit to that. I have set out the reasons why I believe the application of a common external tariff will be limiting on the UK’s ability to carry out an independent trade policy. What I would say is that we have already established our trade remedies functionality, and that is the best way to deal with any disputes over steel through WTO rules.
Oral Answers to Questions
Liam Fox Excerpts(5 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Philip Dunne (Ludlow) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
As we leave the European Union, the Government will ensure that all future trade agreements continue to protect the UK’s right to regulate public services, including the NHS. I have been clear on a number of occasions that more trade should not come at the expense of the high levels of quality and protection enjoyed in the UK.
Diana Johnson
I am pleased that the Secretary of State has made those comments, and I am sure we can all agree that, whatever happens with Brexit, our country must not be held to ransom by multinational corporate interests over the future of the NHS and other public services, so can the Secretary of State give a watertight guarantee that we will not see any trade deals that would drive up the costs of medicines and allow foreign firms to sue the UK over improvements in public health and standards in healthcare generally?
Dr Fox
As I have made clear in questions and in debate in this House, if we look at trade agreements that we have already entered into—for example, in chapter 9 of the EU-Canada comprehensive economic and trade agreement, the cross-border trade and services chapter, article 9.2 makes it very clear we see that the Government retain the right to regulate in public services. Any changes in the NHS should be a matter for domestic policy debate in the United Kingdom, and not anywhere else.
Mark Menzies
The UK is a world leader in healthcare provision, founded on the core values of the NHS. What steps is the Department taking to promote British expertise in this sector and sell those skills abroad?
Dr Fox
There is not only enormous interest but enormous demand for UK expertise in healthcare, and we are committed to sharing that expertise and knowledge with the rest of the world. Research commissioned by Healthcare UK recently identified £3 billion to £7 billion of potential contracts for UK health organisations annually over the next 10 years. That is a lot of jobs.
Mr Speaker
Mr Philip Dunne—not here. Where is the fella? I hope he is not indisposed. We will have to proceed.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Free trade agreements are, of course, needed, and the EU has some very good ones, which is why the United Kingdom Government are copying them. But trading on World Trade Organisation terms is very expensive. What is the Secretary of State doing to dispel the notion that is abroad, particularly in his own party, that leaving the EU and trading on WTO terms is a good idea? If it was, every country would be walking out of their trade blocs and every country would be ripping up trade agreements. It is a very silly and very dangerous idea, and I hope he is doing his best to combat it.
Dr Fox
I am not quite sure how that relates to the question on healthcare, but it is an important point that the WTO rules provide a baseline, and the way in which countries get preferential treatment beyond that baseline is very often through a free trade agreement. That is why we want to see free trade agreements beyond what we have today.
Judith Cummins (Bradford South) (Lab)
I welcome the assurances that the Secretary of State has given to the House here today, but can he confirm that the principal protections for public services related to the comprehensive economic and trade agreement are in fact to be found in the joint interpretative instrument, which does not have the same legal force as the treaty? Crucially, it cannot alter or override it. If we are to have confidence in the protections for our public services and the NHS in future trade agreements, these must be written into the text of the treaties. Does he agree?
Dr Fox
However we get the assurances, that is what we need to do. In CETA, for example, they are contained in chapters 9 and 28, as well as annexe 2 and the additional national reservation in annexe 2. It is up to this House how we carry out public policy. For example, in the four years from 2006, Labour outsourced 0.5% of the NHS budget to the private sector each year, which of course fell to only half that level under the coalition Government. If Labour wants to increase to its previous levels of outsourcing, it should be able to do so under a policy protection given under the treaties.
Michael Fabricant (Lichfield) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
The Government’s intention, as provided for in the political declaration, is to secure a tariff-free trading relationship with our European partners, alongside an ambitious independent trade policy with the rest of the world. A customs union would prevent the UK from varying its tariffs and could leave the UK subject, without representation, to the policy of an entity over which MPs had no democratic control.
Mr Hollobone
If we were to be part of the EU customs union after Brexit, the United Kingdom, as the world’s fifth biggest economy, could kiss goodbye to any realistic chance of an independent trade policy. For this very good reason, being a member of the customs union was ruled out in the last Conservative party manifesto. Were this to become Government policy, would not the Secretary of State and his entire ministerial team be honour bound to resign?
Dr Fox
It is very clear that we do not want to see a customs union being put in place for one of the reasons that my hon. Friend has already given, which is that, with us as a third country, the EU would be able to negotiate access to the UK market—the world’s fifth biggest market—without any due consideration of the impact on the United Kingdom. We would find ourselves in a totally new trading position in that access to our market would be traded for us.
Martin Vickers
One of the principal benefits of Brexit is of course the ability to set our own trade policies, and many businesses in my constituency—it includes Immingham, the largest port in the country—want to take advantage of the freedoms that will be forthcoming. What additional support will the Secretary of State’s Department offer those businesses?
Nick Smith (Blaenau Gwent) (Lab)
Some 9,000 people work in the Welsh steel industry, so can I ask the Secretary of State to think again, and support a permanent customs union and commit to a common external tariff on steel imports to support steel jobs in south Wales?
Dr Fox
No, I will not commit to that. I have set out the reasons why I believe the application of a common external tariff will be limiting on the UK’s ability to carry out an independent trade policy. What I would say is that we already have the Trade Remedies Authority up and running, and that is the best way to deal with any disputes over steel through WTO rules.[Official Report, 30 April 2019, Vol. 659, c. 2MC.]
Tom Brake (Carshalton and Wallington) (LD)
Does the Secretary of State accept that even outside the European Union, some other countries will seek to restrict their trade? For instance, has not the United States said about its negotiating objectives that it will seek to restrict the trading ability of any country that seeks to trade with China?
Dr Fox
The United States is perfectly entitled to set out trade objectives, as are we. We believe that trade is best operated through the rules-based international system based on the WTO. Countries can have their own opinions, but that is still the safest, best and most predictable way to carry out global trade.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
We know the benefit of a permanent customs union, particularly for the integrated supply chains on which so much of our manufacturing success is based. What assessment has the Secretary of State made of the net economic benefit of an independent trade policy in the short, medium and long term?
Dr Fox
We believe it is possible to get the benefits of a customs union—no tariffs, no quotas and no rules of origin checks—through the mechanism set out in the Government’s proposal on our future relationship with the European Union. The ability to access growing markets will depend on our ability to create trade agreements with those markets. A report by the United Nations Conference on Trade and Development suggested that by 2030 the Asian proportion of trade will be above 50% for the first time since the 19th century, and we must be in a position to take advantage of that.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
My Department is responsible for foreign and outward direct investment, establishing an independent trade policy and export promotion. I can announce to the House that UK Export Finance will support an Airbus Defence and Space UK contract worth nearly $500 million to manufacture and deliver two satellites and a ground station for Türksat, Turkey’s communications satellite operator.
May I also, with your indulgence Mr Speaker, thank two civil servants who are leaving my Department? My principal private secretary, Oliver Christian, has been an outstanding civil servant and I congratulate him on his promotion. I also thank Amy Tinley, my outgoing special adviser, who has been a force of nature in my Department and will be widely missed across the whole of the civil service.
Gavin Newlands
I congratulate the civil servants on getting out of Dodge while they can.
Scottish Enterprise told the Scottish Affairs Committee that the success of Scotland’s financial industry was based on accessing and servicing all customers in the EU, which it does currently under the free trade non-tariff EU passport system. Does that not highlight once again the vital importance of freedom of movement to Scotland, and that the Secretary of State’s Government simply do not care about Scottish interests or Scotland’s vote to remain?
Dr Fox
I will ignore the hon. Gentleman’s lack of grace in his first comment.
What that shows is the importance to Scotland of services and of access to the single market in the United Kingdom. Financial services are one of the country’s greatest and strongest exports, and Scotland benefits hugely from being part of the United Kingdom’s infrastructure.
Andrew Rosindell (Romford) (Con)
Barry Gardiner (Brent North) (Lab)
The world was shocked by the two crashes of Boeing 737 Max 8s that saw the tragic loss of 346 lives. That is, of course, a matter for the European Aviation Safety Agency to investigate, but it is for the Secretary of State to investigate whether the export capacity of Airbus was unfairly affected by Boeing’s failure to be transparent about the pitch instability of the aircraft, or to provide specific safety training on the MCAS system, which was supposed to counter that instability. He will know that in one 12-month period the concealment of those issues helped Boeing to increase its sales against the Airbus A320neo aircraft by 768 planes, while Airbus sales dropped by 748 in the same period. What support, if any, does his Department currently provide to Boeing? Does he consider that its ethical failure has had an adverse impact on Airbus’s sales? What discussions has he had about Boeing with the Directorate-General for Competition and the Directorate-General for Trade in the European Union to protect Airbus’s export capacity from unfair and potentially illegal practices by its competitors?
Dr Fox
Let me associate myself immediately with the hon. Gentleman’s sentiments about the loss of lives as a result of the tragic crashes of the 737 Max aircraft. Safety issues are, of course, the responsibility of the Department for Transport but, in the context of international competition, as he is well aware, there have been two recent cases at the World Trade Organisation relating to Washington’s state subsidies for Boeing and European subsidies for Airbus. As far as I am concerned, the issues relating to Airbus have been solved. I think that we would all benefit from a clear set of international rules on aircraft subsidy so that we could be assured that there is a genuine international level playing field, not least because of the rise of the Chinese aircraft industry and its entry into the market.
Bob Blackman (Harrow East) (Con)
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Vicky Ford (Chelmsford) (Con)
Dr Fox
It is important that we take climate issues seriously. Whether or not individuals accept the current scientific consensus on the causes of climate change, it is sensible for everyone to use finite resources in a responsible way. The United Kingdom was the first country to establish legally binding emission targets, through the Climate Change Act 2008, and we have reduced emissions faster than any other G7 country. We are leaders in clean energy production, and it is estimated that $11.5 trillion is likely to be invested globally in clean energy between now and 2050. That represents an enormous opportunity and the potential for more jobs in the United Kingdom, which, as I have said, is already a global leader in terms of both practice and exports.
John Spellar (Warley) (Lab)
Dr Fox
There is also the small matter of putting British taxpayers first, and ensuring that they are getting value for money from any contracts that we award. However, I entirely agree with what the right hon. Gentleman said about Anzac day. In fact, may I take the opportunity to invite colleagues to join me and others at the wreath-laying ceremony that will take place at the Cenotaph at 10.30 this morning, and the service at Westminster Abbey that will follow it?
Mr Philip Dunne (Ludlow) (Con)
I welcome my right hon. Friend’s comments earlier on trade agreements and the NHS. As a former clinician, can he confirm categorically that future trade agreements will not impact adversely on the values, standards or funding model of the NHS?
Dr Fox
As I said, it is very important that NHS policy and management are decided by British political debate, not from outside. We have had considerable success in utilising the private sector to augment the NHS. As Andy Burnham said, the previous Labour Government worked with the private sector to bring down NHS waiting lists, and they came right down. I would hope that any future Labour Government would have exactly the same freedoms to use the same policies.
Mr Stephen Hepburn (Jarrow) (Lab)
Tom Pursglove (Corby) (Con)
Is there any opportunity to further promote UK steel exports through the GREAT campaign in the year ahead, not least because it is the best steel in the world?
Trade Advisory Groups
Liam Fox Excerpts(5 years, 7 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
The Department for International Trade’s (DIT) has ensured that creating an open and transparent trade policy is at the heart of its mission for an inclusive trade agenda that maximises benefit for the whole of the UK. We recognise that transparency is fundamental to better outcomes. Category Name Organisations/Area Academia Prof. Holger Breinlich University of Surrey Business Representative Organisation Carolyn Fairbairn Confederation of British Industry Consumers (Standards) Dr.Scott Steedman CBE British Standards Institution Consumers Caroline Normand Which? Developmental Organisation Dr. Dirk Willem te Velde Overseas Development Institute New Entrant Business Mark Abrams Trade Finance Global Non-governmental Organisations Michael Gidney Fair Trade Foundation Northern Ireland Business Nick Coburn CBE Ulster Carpets Group Regional Business Denise Valin Alvarez Burberry Scottish Business Liz Cameron OBE Scottish Chambers of Commerce Services Gary Campkin City UK Small and Medium Enterprise Sean Ramsden Ramsden International Small and Medium Enterprise (Business Representative Organisations) Mike Cherry OBE Federation of Small Business Think Tank Sam Lowe Centre for European Reform Trade Unions Paul Nowak Trade Union Congress Welsh Business Prys Morgan Kepak Group Limited
As part of this approach the Government have created the Strategic Trade Advisory Group (STAG) to seek informed views on relevant trade policy matters. The group will be composed of 16 core members from business to trade unions, consumer groups to non-governmental organisations (NGOs). It will be chaired by the Minister for Trade Policy, alongside a co-chair from the STAG. Membership of the group has been designed to represent a diverse range of interest and expertise from across the UK, allowing the Government to harness advice, insight and evidence from a wide range of experienced voices already actively involved in trade issues.
The full list of seats includes:
Members of the group were recruited through an open call for expressions of interest which ran from 18 July to 17 August 2018 followed by a two stage sift process against the published membership criteria. The selection process followed best practice principles to ensure a fair and transparent approach.
As part of DITs ongoing commitment to transparency on trade issues, we will make dates of meetings, agendas and a summary of discussions publicly available.
The groups will have an advisory function only and will be one part of the wider engagement structure the Government are putting in place to gather insight and intelligence from stakeholders.
Another key component of our engagement infra- structure is cross-government Expert Trade Advisory Groups (ETAGs), which are being set up to facilitate expert technical policy exchanges on specific sector and thematic policy areas. Membership of the groups will vary according to the sector or policy area but will comprise relevant experts from the fields of academia, regulation, business and civil society.
We are committed to seeking views from the widest range of stakeholder groups. In addition to the above formal structures we will continue to use a variety of mechanisms and engagement structures to ensure that our trade policy works for the whole of the UK.
[HCWS1480]
Oral Answers to Questions
Liam Fox Excerpts(5 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Rehman Chishti (Gillingham and Rainham) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
How are you, Mr Speaker? It has been so long.
I met with Federal Councillor Guy Parmelin during my visit to Switzerland in February. Together we signed the UK-Switzerland trade agreement. This was an important moment, ensuring continuity of a trading relationship worth over £32 billion in 2017.
Rehman Chishti
I thank the Secretary of State for that answer. Recently we had the brilliant ambassador for Switzerland, Ambassador Fasel, visit my constituency looking at the potential for greater trade opportunities between our great countries. Can the Secretary of State clarify this point? He talks about continuity and I welcome the agreement he has signed but, on post-Brexit trading opportunities, the United Kingdom has identified the United States, Australia, New Zealand and trans-Pacific as key priorities. Can he confirm that Switzerland—our bilateral trade totals over £34 billion—will always be a key priority, certainly in looking forward to enhancing sectors such as finance and IT?
Dr Fox
The countries my hon. Friend mentions are for new free trade agreements, whereas of course the agreement with Switzerland was a continuity agreement. In fact, it was an unusual agreement because, rather than being a single agreement to roll over, there were some 58 different ones. It was to the tremendous credit of the Swiss Government that they were able to carry out that work as expeditiously as they did and we owe them a great deal of gratitude.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does not the Secretary of State realise that the Swiss deal is a tiny deal—nothing wrong with it, but it is tiny? Could we have a list of all the trade deals he has secured across the piece because, as I have been tracking them, they are very small indeed? May I also tell the Secretary of State that it was not his finest hour last night when he did not have the courage to take an intervention from the Father of the House?
Dr Fox
Sometimes one wonders how small people can actually become in this House of Commons. The Swiss deal is not small, it is not insignificant; it is worth over £32 billion a year. Switzerland is Britain’s seventh biggest trading partner globally. The hon. Gentleman should know that.
Mr Speaker
I do not want to invest levity into these important proceedings, but equally one must not lose one’s sense of humour. That £32 billion volume of trade with Switzerland is very important, but I always say the best thing about Switzerland is not its watches, its financial services or its chocolate; the best thing about Switzerland is Roger Federer.
Greg Hands (Chelsea and Fulham) (Con)
I must say that I am tempted to answer questions this morning due to the constitutional innovation of Ministers no longer having to resign when they disagree with Government policy, but I will ask this one. Trade with Switzerland represents about 21% of all the trade of all the countries that have the continuity agreement. Does my right hon. Friend agree that it shows the growing success of this programme and the importance of ensuring that we have those trade agreements in place in the event of a Brexit without a deal later this month?
Dr Fox
I half-expected to see my right hon. Friend on the Front Bench with us this morning given the turn of events, but he is absolutely right that this is an important agreement. Over 20% of all the trade done under EU trade agreements is represented by Switzerland.
Mr Speaker, it is unlike me to disagree with you, but I do wonder whether on the morning after Roger Federer has defeated Kyle Edmund it is not a touch unpatriotic to be quite so pro-Swiss.
Tom Brake (Carshalton and Wallington) (LD)
The Secretary of State may have heard an exchange a couple of days ago in which my right hon. Friend the leader of the Liberal Democrats highlighted the fact that, in the existing EU-Swiss trade deal, 19 technical standards have been brought in in common, whereas under the current UK-Swiss trade deal, only five technical standards have been brought in in common. What assessment has the Secretary of State made of the impact of that on UK business?
Mr Philip Hollobone (Kettering) (Con)
My understanding is that, of the 40 potential continuity agreements, five represent 76% of the total trade, of which Switzerland is one. Is not that a good omen for the remaining big four?
Dr Fox
Of course a number of those who are engaged in trade continuity discussions with the UK are waiting to see what we will do in terms of Britain’s approach to the EU. They will be much more likely to sign up to those agreements when this House of Commons is clear about what it is going to do.
Mohammad Yasin (Bedford) (Lab)
Sandy Martin (Ipswich) (Lab)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
The Government are considering their future approach to investor state dispute settlement. Where included in a trade agreement, ISDS will not oblige the Government to open the NHS to further competition, and overseas companies will not be able to take legal action to force us to do so.
Sandy Martin
The Secretary of State did not rule out the use of legal action against other companies in this country, so what message would he give to all those idealistic people who voted to leave the EU because they thought that the Transatlantic Trade and Investment Partnership would open us up to hostile lawsuits from US companies? Does he think that now that the truth is out they ought to have a chance for another vote?
Dr Fox
I am not sure what the connection was between some of those points. Let me be clear that, through ISDS, investment claims can be made only in respect of established investments; the mechanism cannot be used in relation to an alleged failure to open up public services to a potential investor. It could not be much clearer that what was being put about was a complete myth.
Dr David Drew (Stroud) (Lab/Co-op)
What guarantees can the Secretary of State give us that pharmaceutical companies will not relocate to the EU, meaning that in effect more and more of our drugs would be imported? Will he give a guarantee that that will not happen?
Dr Fox
It would be absolutely ridiculous of any Minister to try to tell businesses what they can and cannot do. I can tell the hon. Gentleman, though, that last year foreign direct investment into the United Kingdom rose by 20%; in continental Europe, it fell by 73%. The hon. Gentleman should draw his own conclusions.
Stewart Hosie (Dundee East) (SNP)
In the recent debate on international trade, I cited two examples of the Canadian Government’s having to withdraw public health measures after legal challenges by businesses under the terms of the North American free trade agreement. When the Secretary of State is considering health protections in future UK FTAs, will he ensure that they go wider than direct NHS provision and encompass wider public health policy?
Dr Fox
We will look to replicate the success we have already had in bilateral investment treaties. UK investors have successfully brought around 70 cases against other Governments. No private company has ever brought a successful case against the United Kingdom in respect of our bilateral investment treaties.
Judith Cummins (Bradford South) (Lab)
The British public are clear that they do not want our national health service to be bargained away as part of trade negotiations, and they do not want foreign companies to have the right to sue our Government for decisions taken in the interests of public health, yet that is exactly what could happen if we accept ISDS and the negative-list approaches in the future agreements that the Government are proposing. Will the Secretary of State now rule out agreeing to a single clause of a single trade deal that could threaten our NHS?
Dr Fox
There are days when I genuinely have to thank God that the Labour party is the Opposition and not the Government of this country. We have £1.3 trillion of outward stock invested, including things like pension funds that British people will depend on for their prosperity. Were we to abandon the concept of investor-state dispute resolutions, what would happen to the protections for our investment overseas? The Labour party needs to start to think about the wider interests of this country.
Ronnie Cowan (Inverclyde) (SNP)
Jo Platt (Leigh) (Lab/Co-op)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
Existing EU trade agreements, such as the EU-Canada comprehensive economic and trade agreement and the EU-Japan economic partnership agreement, contain provisions that ensure that it remains for the United Kingdom to decide how our public services are run. As we leave the EU, the Government will ensure that all future trade agreements continue to protect the UK’s right to regulate public services.
Ronnie Cowan
Technically, there is little that MPs and the public can do to prevent the Government from signing trade deals that could negatively impact on the NHS. Will the Secretary of State assure the House that he will expand the transparency and scrutiny mechanisms that pertain to any future trade deals?
Anneliese Dodds
Conservative Ministers chose to include the NHS in their approach to the Transatlantic Trade and Investment Partnership, which could have made it impossible to bring privatised NHS services back in-house. The Secretary of State will know that privatisation is proceeding apace in the NHS—it certainly is in my constituency, in our cancer-scanning services—so will he give us a cast-iron legal guarantee? That is what we will need to show that his Government are committed to excluding the NHS from future trade deals.
Dr Fox
Where do I start? First, this Government did not negotiate TTIP; the European Union negotiated it on behalf of this country, so it was not for the United Kingdom to determine the mandate. None the less, the hon. Lady should look at the agreements that are already out there. For example, article 9.2 of CETA talks about the exclusion of
“services supplied in the exercise of governmental authority”.
It is quite clear from what the Government included in the CETA ratification that we intend to make provision to ensure that Governments have the right to regulate public services. I think that is a good idea, so I cannot understand why the Labour party voted against it.
Jo Platt
The Secretary of State has publicly stated that he supports CETA as a model for future trade agreements—an agreement that prevents future Governments from tackling the failed privatisation agenda in both our health and transport services. Does he agree that trade agreements cannot be allowed to constrain future policy decisions?
Dr Fox
I do not know where that briefing came from, but the hon. Lady should ask for her money back. There is nothing in CETA that stops the Government regulating their own public services; that is specifically what the exclusion is for. It is in the interests of the country that we get Government regulation of our own public services so that we can have proper scrutiny, including through this House, and that is what is included in the agreement.
Kevin Foster (Torbay) (Con)
Last year I saw at first hand how the New Zealand Parliament handles the scrutiny of trade agreements to ensure that they deliver for the country’s economy and protect key public services. What learnings and reassurances is my right hon. Friend taking from the experience of the New Zealand Parliament in scrutinising trade deals and ensuring that they deliver their promised benefits?
Dr Fox
We have looked widely at what other countries are doing, particularly when they have similar legislatures and legal systems, but what we have set out in the Command Paper is a bespoke arrangement for the United Kingdom. For example, our consultation period is longer than the European Union’s because we thought that it was right to have increased scrutiny in the UK. It is a UK policy, made for the UK.
Tim Loughton (East Worthing and Shoreham) (Con)
Will Quince (Colchester) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
My Department is responsible for foreign and outward direct investment, establishing an independent trade policy, and export promotion. Following this session, I will be signing the trade continuity agreement between the UK and the Pacific Islands in the event of no deal. This is part of our commitment to reducing poverty through trade, and it will ensure continued supply of key consumer products.
Will Quince
There is a lot of scaremongering on this issue that is concerning a number of my constituents, so will the Secretary of State set out what steps the Government are taking to ensure that contracts for the delivery of NHS services will be excluded from future trade deals?
Barry Gardiner (Brent North) (Lab)
One of our most distinguished former diplomats, the noble Lord Kerr, spoke last week, during the passage of the Trade Bill in another place, of the value of having a mandate as a negotiator. He said:
“Having negotiated against Americans, I know that it greatly strengthens their hand to be able to say, ‘Here is the proof that I cannot give you what you want, because Congress would turn it down’.—[Official Report, House of Lords, 6 March 2019; Vol. 796, c. 671.]
Recently the US trade representative published the negotiating mandate for a US-UK trade deal—no concern about commercial confidentiality here, just openly and transparently setting out all the objectives they have for penetrating UK markets, with American healthcare and agribusiness to the fore. In the same week, the Secretary of State published his Command Paper. It is against mandates. Indeed, the Government tried unsuccessfully to defeat Lord Kerr and others who supported Lord Balmacara’s amendment. What does the Secretary of State know about negotiations that Lord Kerr does not, and will the Government try to reverse their lordships’ decision when the Bill returns to the Commons?
Dr Fox
The Trade Bill was and is about trade continuity, including trade agreements and including the Trade Remedies Authority. It has been used, I am afraid, in the other place to hold debates on future trade agreements that will come in due course here. There is of course a difference between setting out negotiating objectives, which the United States did, and a mandate, which is how the negotiators actually go about it. It seems that the hon. Gentleman has not grasped that point yet.
David T. C. Davies (Monmouth) (Con)
Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)
Dr Fox
The Government’s policy is that we do not have to have these rollover agreements because we want to get an agreement through the House so that we can continue with the Prime Minister’s plan. If the hon. Gentleman wants to help the businesses that he mentions, he can vote for the Prime Minister’s agreement at the next opportunity.
Nigel Huddleston (Mid Worcestershire) (Con)
Douglas Chapman (Dunfermline and West Fife) (SNP)
Dr Fox
I am grateful to the hon. Gentleman for the interest that he has shown in this issue. The experience of other countries in using the ability of free ports to increase economic activity is valuable and something that the Government are considering in an optimistic and positive way.
Mr Mark Prisk (Hertford and Stortford) (Con)
UK Export Finance does some excellent work, but some of its funding capacity goes unused. What can be done to change that to raise British exports?
Dr Fox
We have signed a memorandum of understanding with the five biggest banks so that they can encourage businesses to utilise UK Export Finance. One of the main areas where it is under-utilised is small businesses, but the positive side is that last year more than 70% of the agreements signed by UKEF were with small businesses. That is a trend that we would like to see continue.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
Dr Fox
I take the opportunity to praise the work of the Fairtrade organisation, which is so well led and co-ordinated by my very good friend Lord Price. It is essential that we look at these issues because free trade is not a free-for-all. There need to be rules around it and there needs to be fair trade. The Government will look sympathetically at what the hon. Gentleman suggests.
Sir David Amess (Southend West) (Con)
Following the visit of the Taiwanese representative and the Philippines ambassador, does my right hon. Friend join me in welcoming the announcement that the Qatari ambassador, together with a trade delegation, will visit Southend on 25 March as we move towards city status, to explore the opportunities of trade and business investment as we leave the EU?
Karen Lee (Lincoln) (Lab)
Dr Fox
This is an issue that the Government take seriously because we want to ensure that British companies have the right to trade where we think it is appropriate and where the British Government’s foreign policy indicates that. I have had and will continue to have discussions with my American counterparts on that issue.
Nic Dakin (Scunthorpe) (Lab)
Given the announcement on tariffs, what progress is being made regarding the steel industry in relation to the trade defence instruments in place at European level being transferred across to UK level at the point of departure?
Dr Fox
I am not sure whether the hon. Gentleman missed the statement we had in the House on this, but I made it very clear that those arrangements would be rolled over. It will not be the Government’s intention in any way, shape or form to leave our businesses less protected than they are today, which is why those trade remedies will continue.