UK Trade Performance

Lord Popat Excerpts

Tuesday 7th May 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

That is exactly the regime being implemented. We might even consider that some of the delays in implementing the regime are precisely for that reason—to make sure that it is light touch and not a blanket position.

We have a very interesting future on the border, largely because of the Northern Ireland situation. We had to solve the problem of how to make a meaningful trade border without recreating a hard border. The only way to do that is digital and through self-certification and pre-checking. Hence, we have ended up with the green lane and red lane and the trusted trader system—which the rest of the world is now going to adopt—where you pre-certify your goods and check them before they go through the border. The CEO of the Channel Tunnel recently said that trade is moving through the tunnel faster than when we were in the EU, because it is all on a QR code on the phone that is pre-checked and pre-certified. You certify where it is going to and what goods need to be checked. The checking being done is therefore on a confirmatory basis—an exceptional basis—and not on a blanket basis. If we include the Electronic Trade Documents Act and the single trade window, the direction of travel in the next five years will be to collapse trade very quickly into, in effect, a digital passport, which will speed things up considerably.

Yes, there will be costs in putting in place a border, but I can see you and raise you on the benefits that will come from a digital border.

[Lord Popat (Con)]

My Lords, I welcome the figures that my noble friend the Minister gave us, but our major problem is a trade deficit. This is not something new; it has been the case for the last four decades. In other words, we do not have enough exports to pay for imports. Last year, the deficit was £862 billion. What more can we do to support UK PLC—especially SMEs—to export more? The trade envoy programme supports UK PLC to export more—I am one of the trade envoys, by the way. Is there any plan to enhance this programme and increase the number of trade envoys to support UK PLC to export more?

[Lord Offord of Garvel (Con)]

I thank my noble friend, and I am delighted that he is a trade envoy. It has been a very worthwhile initiative. All the embassies and high commissions I go to are delighted with how that is working. Of course, we can do more. Companies themselves feel that they are getting a lot of support and have a direct line to government through the trade envoys.

The balance of trade is something that economists love to talk about. At the end of the day, do not forget that we import to export. The modern British economy is not so much a primary manufacturer as a designer, assembler and manufacturer of added value to goods. For example, with a number of our pharmaceuticals, 80% of the input is imported. Therefore, that balance of trade belies the fact that we enhance, improve and sell back out what we are taking in.

The direction of travel is to increase our exports and, ultimately, that is what our free trade agreements will do. We talk to our companies about the CPTPP and the fact that you can go to Mexico, Canada, Peru, Chile, Singapore, Malaysia, Brunei, Vietnam, Australia, Japan and New Zealand—then add all the others that want to come in. They now have new markets to go to.

One of the SMEs at breakfast this morning was a manufacturer of women’s sporting apparel. When it was doing its business plan, it was selling only to Europe and could not sell to Australia. Now, since we have done the Australian free trade agreement and taken the tariffs off, margins have improved by 12% to 14%. We passed the Electronic Trade Documents Act, which now means it can get its goods made in the UK into Australia within 48 hours. That business is booming on the back of the Australia free trade agreement. That is the opportunity we have now to boost exports across our economy.