UK-Israel Trade

Mark Garnier Excerpts

Tuesday 3rd July 2018 Westminster Hall

[Mark Garnier (Wyre Forest) (Con)]

Like just about everyone else in the Chamber I want to draw my attention to my entry in the Register of Members’ Financial Interests. I, too, have been to Israel on many occasions. One of the last couple of times was as an International Trade Minister—it is good to see my successor in his place—and the other was as a member of the trade delegation.

We have heard a great deal about Israel, including a lot of statistics, but we need to note the vibrant atmosphere there, which has led to its becoming one of the greatest countries for technology start-ups in the world. The combination of an extremely energetic population, national service that seeks out elite individuals for elite units, a willingness to support innovative technology and the ability to network results in Israel having the greatest density of technology company start-ups. There is one start-up for every 1,600 people, 4.25% of GDP is invested in research and development, and it has one of the best start-up company success rates. As a result, extraordinary things are done in areas such as telecoms, cyber-security, information technology, biomed, environmental sciences and FinTech. All those are things that this country wants to take advantage of. They are the cutting edge of technology, and where we trade with Israel in those areas we will improve our productivity and intelligence. We welcome those companies coming to invest in the UK, and we need to do as much as we can to help them.

As to comments that have been made about problems in Israel, only someone with a completely tin ear would not understand that there are worries, but, as we heard from the hon. Member for Liverpool, Riverside (Dame Louise Ellman), the best way to get positive outcomes for populations is by trading with the countries in question, doing as much as we can to bring wealth and prosperity to Israel, the occupied territories, the west bank and the Gaza strip. We need to do as much trade as we can.

My hon. Friend the Minister has one of the best jobs in the world and works with some of the best civil servants that the Government have to offer. It is a great pleasure to see some of my former colleagues from my private office here. They work extraordinarily hard. My hon. Friend’s job is to go out and make companies and businesses wealthy. By creating wealth through the Department we can generate more tax revenue and, as a result, we can have more hospitals, police on the streets, schools and all the good things that taxation brings.

I shall not let the Minister off without a task: will he share with us the budgeting decisions that have been made about our Department for International Trade friends in Tel Aviv? As his predecessor I am worried to see that there has been a 9% budget cut for the DIT in Israel. The Government are under a certain amount of pressure, but is it not right to increase the budget for a wealth-creating Department such as DIT, rather than decreasing it, particularly in a country such as Israel?

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[Graham Stuart]

My right hon. Friend is absolutely right. The Department for International Trade was set up precisely to promote trade around the world, not only to enrich this country but in the sure knowledge that trade and an open, liberal, rules-based system enriches everybody, and most of all the poorest. In places such as Palestine, which are on a developmental path, it is absolutely essential that we engage with business, and it was inspiring to hear stories of businesses acting as a facilitator to bring different communities together. I am sure he is right that, through the building of prosperity, security and development go hand in hand.

[Mark Garnier]

rose—

[Graham Stuart]

I give way to my predecessor.

[Mark Garnier]

This is just a very quick intervention. May I gently press the Minister to make a comment about the budget for the excellent—indeed fantastic—Department for International Trade staff in Tel Aviv?

[Graham Stuart]

I thank my hon. Friend for that intervention. Of course, it is always a pleasure to take a job and have one’s predecessor giving instructions on how to carry out that job.

Any decision about the resourcing in Israel is subject to a decision by Her Majesty’s trade commissioner for Europe, and that will come about in due course. However, I will take this intervention as strong lobbying by someone with a clear knowledge of the importance of DIT that it needs to be resourced appropriately in the future.

I will turn, if I may, to the effect of the trade agreements on the Occupied Palestinian Territories. I want to be absolutely clear that we believe that the level of control that Israel has over the west bank, East Jerusalem and the Gaza strip amounts to occupation under international law. As has been said, the existing EU-Israeli agreements do not extend to Israeli settlements in the Palestinian territories, and we intend there to be a technical transfer of those agreements as they stand.

A particularly strong area of co-operation is science and technology, which is another subject that came up in so many speeches, not least that of my hon. Friend the Member for Bolton West who secured the debate and began it. The respective strengths of Israel and the UK complement each other. The UK has one of the world’s strongest science bases, with four of the world’s top 10 universities, and we are ranked third worldwide for academic citations.

Meanwhile, Israel—as has been said—is the start-up nation, and it spends 4.3% of GDP on research and development, which is the highest figure in the OECD. We are seeing UK-Israel business-to-business links grow and grow. For example, Israel’s Orbotech, a micro-electronics company that has had a Welsh-based subsidiary since 2014, last year won the Queen’s award for enterprise in international trade.

European Affairs

Mark Garnier Excerpts

Wednesday 14th March 2018 Commons Chamber

[Matthew Pennycook]

The hon. Lady has great expertise in this area, but I think she has slightly misjudged the fact, as I understand it, that that is not about customs, but about the elements that make up the single market. We have said that we would seek, in principle, to negotiate protections, clarifications or exemptions where necessary, but I cannot imagine a situation in which those exemptions would be necessary. As I think the Leader of the Opposition said on “Peston on Sunday” some time ago, there is nothing in the current state aid rules that would prevent us from implementing, for example, our manifesto.

Many hon. Members have already mentioned this, but Sir Martin Donnelly, the former permanent secretary at the Department for International Trade, said that the reality is that what the Government are proposing is akin to giving up

“a three-course meal... for the promise of a packet of crisps in the future”.

The EU currently constitutes 44% of our exports and 53% of our imports. It must be our priority. Increases in trade from new free trade agreements with the USA, Canada, Australia and New Zealand combined would be worth less than 3% of our current trade in goods and services.

[Mark Garnier (Wyre Forest) (Con)]

Will the hon. Gentleman give way?

[Matthew Pennycook]

I will make a bit of progress.

FTAs with the BRIC countries would be worth just over 2%. Any such trade deals, even if they could be secured reasonably quickly, would in all likelihood also involve detrimental trade-offs and compromises in standards and regulations with which the British public would rightly take issue.

[Matthew Pennycook]

I thank my hon. Friend. That is certainly the fear. I read the same analysis as he did—I had to surrender my phone to do so and then found that it had been released publicly a week later—and it does say in several places that there are opportunities to deregulate. Perhaps the Minister can tell us why those things are being modelled and to what they might refer.

One has only to listen to the noises coming from the United States Government on issues ranging from the replacement of the EU-US open skies treaty to the inclusion of agriculture in any FTA to get a sense of how difficult things will be even when it comes to new deals with some of our closest allies, and that is irrespective of who occupies the White House. The prospect of new free trade agreements might give the International Trade Secretary a purpose, but they would be good for little else.

[Mark Garnier]

I want to go back to the comments that the hon. Gentleman made about Sir Martin Donnelly, whom I worked with for a number of months; he is a civil servant of extreme ability and wisdom. When he made the banquet versus the packet of crisps analogy, I think he was looking to a certain extent at some of those simple gravity models used by the Treasury—the simple mathematical trade-off between tariffs with the EU and tariffs elsewhere.

What is missed in all this debate is the ability of the UK to find itself at the centre of a network of trade deals. For example, a US manufacturer might see the advantage in moving its manufacturing operations to the UK to take advantage of a UK-India trade deal, for example, if the trade relationship between the UK and India was greater and better than that between America and India directly. That is the unknown that we are struggling to analyse, to get the true comparison between one type of relationship and the other.

[Matthew Pennycook]

I simply do not think that that stacks up. I listened to Sir Martin’s comments very carefully, and I am not sure that he was referring to that. However, if the hon. Gentleman makes a speech, I will be personally interested in hearing his points.

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[Mark Garnier]

My hon. Friend is right to raise the issue of non-tariff barriers. The World Trade Organisation itself identified that there were 300 non-tariff barriers in 2010, and the figure rose to 1,200 by 2015. Does she agree that Great Britain can be a strong advocate of free trade in the WTO and can try to drive a reduction in not only tariffs, but non-tariff barriers?

[Antoinette Sandbach]

Of course there is nothing to prevent us from doing that at the moment. In fact, the number of non-tariff barriers has increased during our membership of the WTO, even though we are also a member of the EU. That is a real and significant danger to the UK economy.

I hope that we will look in detail at sectors such as the three that I want to address: digital, insurance and legal. The digital sector covers a huge range of industries. They are not just new tech businesses; they cover a wide range of services for many companies. They are exposed to the same risks as many other service industries, but they also have to contend with data protection rules that will impact on data flows after Brexit.

TechUK says that digital makes up 16% of UK output and 10% of UK employment. It is a significant export sector, and about 96% of output and 81% of exports are in services. That is key. It is vital that we look at an agreement that deals with cross-border data flows with not only Europe, although 75% of our data flows are with Europe. We are one of the most advanced countries for trading online. Our consumers are extremely educated in and knowledgeable about buying goods and services online. It is important that we look at how we address these issues in a future deal.

Even if we maintain identical regulation with the EU, there are questions regarding the legal basis on which companies can transfer data between the UK and the EU27. It would be for the European Commission to assess whether we had achieved adequacy. Failure to achieve adequacy could force localisation or the redirection of an EU citizen’s data. That fragmentation could create significant costs for UK businesses, which would have to implement alternative legal structures. According to one study, cross-EU data localisation could cost between 0.4% and 1.1% of GDP, and lead to significant drops in private investment and a drop in service exports. The uncertainty over whether a deal will be struck could see companies restrict the amount of data they store and process in the UK in the short term. Clearly, we welcome the Prime Minister’s recognition that we will seek more than just an adequacy arrangement and that we want an appropriate ongoing role for the UK’s Information Commissioner’s Office, but it is vital that we actually deliver on that and do so quickly.

The second area I want to address is UK legal services. The UK legal services industry has made it absolutely clear that the CETA model does not provide a comprehensive framework for professional services. I would argue that the Government need to be looking at Norway-minus, not Canada-plus-plus-plus. It is clear that the impact of no deal on services in the legal industry would be more dramatic than it would be on the insurance industry. That is because a widely established series of EU directives has created a really well functioning market in legal services in the EU. The sector is worth £26 billion to the UK, which is the equivalent of 1.5% of GDP, and employs more than 3,800 people, often in highly paid and high-skilled jobs. In 2016, there was a net export of £4 billion from the legal services sector into Europe.

It is vital that, when we look at the customs union, the EEA should be the plan B. I agree very much with what my hon. Friend the Member for East Renfrewshire (Paul Masterton) said. We absolutely support the Prime Minister in going out and getting that deep and special partnership and deal, but if for any reason we cannot achieve that deal, the plan B should be an EEA/EFTA-style deal. That should be the fall-back, not WTO arrangements. If any of my constituents wonder how I have reached that conclusion, they should look online—it is on the parliamentary website—at the analysis that has been produced across Departments indicating that an EEA-style departure or agreement would be the least damaging option for the UK economy. That would still allow us to go out and strike trade deals—there are trade deals with 57 other countries—and to go into a potential market of 900 million people. We could still do fantastic trade with the Chinese, because when the Prime Minister returned from her recent China visit, she had signed £9 billion-worth of trade deals. I would argue that that option needs to be very seriously considered by the Government as a plan B.

Oral Answers to Questions

Mark Garnier Excerpts

Thursday 23rd November 2017 Commons Chamber

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

5. What recent discussions he has had with the Secretary of State for Business, Energy and Industrial Strategy.

[The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)]

The Department for International Trade has overall responsibility for both inward direct investment into the UK from abroad and outward direct investment from the UK to markets overseas. Officials in my Department and the Department for Business, Energy and Industrial Strategy have numerous discussions on how we can support our businesses. DIT is currently undertaking an export strategy to better understand the needs of businesses seeking to export, as well as identifying those opportunities via the GREAT.gov.uk website.

[Ian C. Lucas]

Exporting manufacturing businesses in north Wales such as Magellan Aerospace and Airbus are world-beating organisations, but they desperately need infrastructure, investment and support from the Government to face the challenges ahead. Why are this Government so reluctant to invest in and support north Wales?

[Mark Garnier]

I believe that a north Wales growth deal was announced in the Budget. It is also important to remember that the industrial strategy will be announced next week. That will talk about exactly how we can improve the infrastructure to support the great businesses in north Wales that the hon. Gentleman represents very well.

[Mr Speaker]

I have noticed a phenomenon of what I will call inconsistent bobbing in the Chamber. A Member bobs once and thinks that that is sufficient signal of a desire to participate. Repeated bobbing has always been required, as the hon. Member for Huddersfield (Mr Sheerman) can well testify. I encourage the hon. Member for East Renfrewshire (Paul Masterton) to increased athleticism.

[Mark Garnier]

Scottish whisky is one of our greatest export success stories, and my hon. Friend is right to say that it is worth £4 billion a year. It is this Department that leads, in every sense, on promoting exports of food and drink across the world. With the Department for Environment, Food and Rural Affairs, we look, in terms of agricultural exports, at where we have market access and at standards. We have to agree that separately.

[Tom Brake (Carshalton and Wallington) (LD)]

6. Whether he received a briefing on human rights in Ethiopia from the Foreign and Commonwealth Office before his recent visit to that country.

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[Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)]

13. What steps his Department is taking to promote to British companies the use of UK Export Finance.

[The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)]

We are putting export finance at the heart of trade promotion by enhancing the financial support available to exporters and smaller companies in their supply chains. This is a new guarantee to banks designed to increase liquidity in the supply chain, improving exporters’ access to capital and enabling their suppliers to fulfil new orders. As my right hon. Friend the Chancellor stated yesterday, UK Export Finance will launch a targeted campaign to promote the support they offer to exporters and overseas buyers, as part of the wider GREAT campaign.

[Luke Graham]

Would the Minister agree that supporting British business, especially outside London, is crucial for a successful Brexit? Will he consider visiting my constituency to discuss boosting exports and inward investment for Scotland?

[Mark Garnier]

In the few short months my hon. Friend has been a Member, he has proved a doughty campaigner for the whisky industry and the agricultural industry in his patch, and I would be delighted to come along and visit him. I would point out that the Board of Trade has been established across the whole country to promote the interests of regions. We have regional international trade advisers, and they work through the Scottish Government, fully supported by the Department for International Trade.

[Mrs Trevelyan]

Berwick-upon-Tweed, Alnwick and Amble now have innovative high-tech software businesses designing unique products that have serious global market potential. Can the Minister confirm that these businesses will be able to access UK export finance to reach into new countries, boost British exports and bring new high-tech jobs into my constituency? He is, of course, welcome to stop off on his way to Scotland.

[Mark Garnier]

I would love to go to Berwick-upon-Tweed, and I cannot wait to go. It is absolutely right that UK Export Finance has introduced a number of measures, including passing delegated powers to the high street banks to offer up to £2 million of export credit. It is important that we recognise that this resource is vital to financing exports. My hon. Friend will know from the recent briefing session we held for Members of Parliament that we are keen to engage with all Members of Parliament to see how UK Export Finance can help their constituents.

[Jim Shannon (Strangford) (DUP)]

Can the Minister give an indication of the expressions of interest thus far received from small and medium-sized enterprises, which are now able to access UK export finance through high street banks? Does he believe that that could be promoted to allow SMEs to safely expand?

[Mark Garnier]

I will have to get back to the hon. Gentleman on the exact figures, but he is absolutely right to highlight the fact that we need to do more to promote this opportunity for SMEs to get this high street financing through UK Export Finance. To that end, in the Budget, we have allocated an advertising budget in order to be able to promote UK Export Finance.

[Kerry McCarthy (Bristol East) (Lab)]

Some 99% of UK Export Finance spending on energy goes on the most polluting fuels. Does the Minister consider that his Department is exempt from the Government’s commitments under the Paris climate change treaty?

[Mark Garnier]

It is perfectly reasonable that the whole Government adhere to the objectives of all the agreements we have undertaken, so no Department would go against any of that. However, I would also point out that we are undertaking financing for offshore wind farms, so we are actually helping to build more carbon-neutral capacity.

[Mr Philip Hollobone (Kettering) (Con)]

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

Oral Answers to Questions

Mark Garnier Excerpts

Thursday 12th October 2017 Commons Chamber

[Chris Williamson (Derby North) (Lab)]

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

[The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)]

The Secretary of State for Exiting the European Union will be leading negotiations on our trade relationship with the EU, aimed at the greatest possible tariff and barrier-free trade with our European neighbours, including for the automotive sector. The UK will also be able to negotiate our own trade agreements around the world, and it is a high priority that we achieve the best possible deals with global partners. We are in close contact with stakeholders across the automotive industry to that end.

[Chris Williamson]

Last month, in a speech to the Bank of England, the Prime Minister described the free market economy as

“the greatest agent of collective human progress ever created.”

In view of the Prime Minister’s ideological objection to Government intervention, will the Minister say how the highly skilled workforce at Toyota in Derbyshire will be able to find comparable employment, in the event that of Toyota relocates thanks to the Government’s botched Brexit negotiations?

[Mark Garnier]

I know the hon. Gentleman stands up for those constituents of his who work at the Toyota plant, but we need to look more carefully at what Toyota is doing. It has made a £240 million investment in the Burnaston factory, to make a commitment to the UK after Brexit, and that has been supported by a further £21.5 million from the Government, who are also committed to the workers he describes in his constituency.

[Andrew Bridgen (North West Leicestershire) (Con)]

Given that the United Kingdom imports £30 billion worth of vehicles—more than we export each year—does my hon. Friend agree that it is in the interests of not just the UK but the EU for us to have barrier and tariff-free trade on vehicles in the future?

[Mark Garnier]

My hon. Friend is right. We are absolutely committed to a tariff and barrier-free relationship with the European Union in the future. It is worth remembering that the European Union exports twice as many cars to Britain as we export to the EU. It is in all our interests—it is in the interests of all the workers in the European Union—for us to achieve a successful and fruitful outcome.

[Kelvin Hopkins (Luton North) (Lab)]

Following the referendum and the subsequent depreciation of sterling, a number of car manufacturers in Britain have announced plans for further investment and an expansion of production. Nissan, in particular, says that it will expand production by 20% and invest more in the supply chain in Britain. Does that not augur well for Britain’s exports, and should we not start to look towards a time when we can export more than we import?

[Mark Garnier]

The hon. Gentleman is absolutely right. One of the characteristics of the UK car industry over the last few years is the fact that UK components of the supply chain now represent 42%, up from 38%. We have a great opportunity in the whole European Union automotive sector, and our Department is working incredibly hard to ensure that we take advantage of it.

[Mr Philip Hollobone (Kettering) (Con)]

Given that this country voted to leave the European Union, is it not the duty of every Member to talk up the British economy and the chances that are available to British manufacturing to exploit the new opportunities that will be presented to it around the world?

[Mark Garnier]

My hon. Friend, too, is absolutely right. I travel the world—as, indeed, do all our Ministers—and meet representatives of businesses in countries around the world who see the huge value that this country has, and the great British brand that the Department is representing and selling abroad. What we have to offer is fantastic, and I am an unashamed patriot when it comes to our great exports from fabulous businesses such as Aston Martin, and any number of others. It is the duty of everyone in the House to support all those businesses, and to talk up the British Isles when they travel, not just around the world but in the United Kingdom.

[Tom Brake (Carshalton and Wallington) (LD)]

The Secretary of State has just said that he wants the Government to be judged by their actions. Can the Minister tell us what the cost of the Nissan deal was, whether deals have been struck with other car manufacturers, and whether the Government have set aside a large budget to ensure that other sectors can continue to export successfully?

[Mark Garnier]

The right hon. Gentleman knows full well that, under state aid rules which apply not only to the European Union but to the World Trade Organisation, the Government cannot give subsidies to businesses to create unfair competition against other countries. However, as I said in an earlier answer, the Government have supported Toyota with a £21 million investment. Any support that is given to any businesses—in the automotive sector, and across the piece—will be fully compliant with all the rules by which we abide. Subsidies such as those from the European regional development fund are widely known about, and they are perfectly fair and perfectly legal.

[Jeremy Quin (Horsham) (Con)]

3. What his policy is on attracting foreign direct investment into the UK.

[The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)]

The Department supports foreign investment in all parts of the United Kingdom through our overseas network, international events programme, bespoke sector support, online services and regional teams. We serve the whole UK by working closely with investment promotion bodies in the devolved Administrations and local enterprise partnerships in England to co-operate effectively across a range of investment support activities.

[Jeremy Quin]

We have already heard positive news this morning about Toyota and Nissan. Will the Minister join me in welcoming recent work by EMY Consulting which proves that the United Kingdom remains the most attractive place in Europe for foreign direct investment?

[Mark Garnier]

My hon. Friend is absolutely right. We have seen some truly amazing numbers coming in. Britain has a record number of inward investment projects, and it is worth bearing in mind the fact that 158,000 jobs have been created and a further 66,000 safeguarded over the past year or so as a result of foreign direct investment.

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

What about the voters?

[Mark Garnier]

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

[Jo Churchill (Bury St Edmunds) (Con)]

I thank the Minister for coming to my constituency and talking to my exporters and the Port of Felixstowe, and ask him to assure me that he took on board the takeout that they want us to be oven ready with regulations and so forth as we look to move out of the common market.

[Mark Garnier]

It was a great pleasure to visit Muntons in my hon. Friend’s constituency. Her constituency produces a huge number of ingredients that go into Scottish whisky, beer and any number of fantastic products across the country. It is absolutely right that in addressing the question of regulations going forward into a post-Brexit era we in this country maintain our incredibly high standards of regulation, including workers’ rights as well as food standards.

[Mr Speaker]

The Minister is assuring his hon. Friend that he is indeed oven ready. That is a new one on me; the hon. Lady has very helpfully added to the collective lexicon of the House of Commons.

[Sir Vince Cable (Twickenham) (LD)]

Why do the Government not draw a clearer distinction between inward foreign investment, which adds capacity and jobs and is welcome, and inward investment for acquisitions in devalued pounds, which often detracts from our science and technology?

[Mark Garnier]

The leader of the Liberal Democrats raises a very important point in respect of looking at the statistics. He is absolutely right that fresh investment that comes into this country that creates and safeguards jobs must be disaggregated from, say, stock market transactions, where there is a significant investment in that type of thing. We are looking very carefully at how to disaggregate these two types of investment to get a much clearer picture, but he raises an important point and I assure him that the Department’s economists are looking at this.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

In the 12 months since the EU referendum in 2016, 32 Israeli companies have invested in new business ventures in the UK, bringing an increase in capital investment of 32% from that country. Does that not demonstrate, first, a strong vote of confidence in the UK economy, and, secondly, that Israel should be a natural partner for any future free trade agreement?

[Mark Garnier]

Indeed. I have visited Israel; we do a lot of trade with it, and the investment it is making in this country is very welcome. Importantly, since the Brexit vote, a huge number of investment projects are coming to the UK, which is creating new jobs. Doom mongers like me who during the referendum were part of the “Project Fear” campaign have been proved wrong, and it is important that we stand up and say that so far we have not got this right, and that is incredibly good news for both Britain and our individual constituencies.

[Bill Esterson (Sefton Central) (Lab)]

The Government’s own figures show a 9% drop in the number of new jobs created through foreign direct investment projects and a record trade deficit in goods exports. In the real world, that means thousands of workers losing their jobs, as we have seen at BAE Systems. Does the Minister accept that it will take a fully aligned trade and industrial strategy to protect jobs in this country? The current policy of relying on a falling pound is simply not good enough.

[Mark Garnier]

I would refer the hon. Gentleman to the fact that we now have record numbers of people in work, record employment and record low unemployment. None the less, he raises an important point on the relationship between this Department and the Department for Business, Energy and Industrial Strategy. It is absolutely the case that in creating a pitch book for the UK, we must offer a number of different opportunities for companies around the world. Part of that is our tax regime, part of it is our tax credits regime, and part of it is our enthusiasm to legislate, for example, to allow autonomous vehicles to be tested on all British roads. This is a whole package from the entire Government working together. The hon. Gentleman is absolutely right to raise the industrial strategy as part of what we are presenting to the rest of the world, but this also involves the whole Government.

[Thangam Debbonaire (Bristol West) (Lab)]

4. What steps he is taking to ensure that the principles of fair trade, workers’ rights and environmental protection are included in future trade agreements after the UK leaves the EU.

Foreign Direct Investment 2016-17

Mark Garnier Excerpts

Tuesday 12th September 2017 Westminster Hall

[The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)]

I thank my hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) for securing the debate. It is encouraging to see him coming along, and he has been supportive of the work of the Department for International Trade since he became a Member of Parliament.

The Prime Minister has been absolutely clear about this Government’s ambition to build a global Britain, which is about being the most passionate advocate for free trade in the world. That means championing British business in global markets; remaining a hub for global inward investment and a source of outward investment; and building a competitive trade policy for when we leave the European Union. I have been struck by one thing in the debate, which is that everyone across the House seems to believe in that idea of global free trade and a global Britain. It is encouraging to have no protectionist dissenters among us in Parliament, and that is a good thing for this country.

For the first time since 1983, a Department dedicated to international trade exists to drive forward that global ambition and meet the global challenges that face us. Personally, I am delighted that, following a departmental reorganisation, I am now the Minister for Investment, covering foreign direct investment and a renewed emphasis on overseas direct investment out of the country. Responsibility for FDI, which was previously held by UK Trade and Investment, now falls directly under the remit of the Department for International Trade—we are the Department responsible for going out and harvesting opportunities from around the world and bringing investment to the UK.

We intend to leverage our presence in 108 markets around the world—we are in 179 diplomatic posts in 108 countries—where we will harness the capabilities of the most revered diplomatic network to bang the drum for UK plc to overseas investors. Trade and investment is a key pillar of the Government’s industrial strategy, and I will convene colleagues from across Government to ensure that we target investment in the right areas and build an economy that works for everyone throughout the UK, including in all our devolved regions.

As we have discussed, FDI creates jobs, develops our skills and makes us more innovative. Global investors do not simply provide capital, but facilitate the transfer of technological know-how and new ideas, which increase our skills base and our productivity. Billions of pounds have poured in since the referendum from the likes of Toyota, Facebook and Google. To respond to the point about Japan made by the shadow Minister, the hon. Member for Sefton Central (Bill Esterson), FDI from Japan actually rose in 2016-17, with new jobs provided from Japan rising from 2,600 in 2015-16 to more than 3,500. Global investors therefore continue to see opportunity in the UK. They realise, as the Government have said all along, that Britain remains open for business.

The Department for International Trade was established just over a year ago. As I said, this is the first time since 1983 that we have had a Department dedicated exclusively to promoting trade policy and investment. That was as a consequence of the EU referendum result. Our purpose is absolutely simple: to turn the UK into the most passionate advocate for free trade.

We have heard a number of people speaking about the changes brought about by Brexit. I for one was a very passionate remainer; I campaigned fervently to stay in the European Union. As a Minister in the Department for International Trade, however, I absolutely recognise that we have enormous opportunities around the world that we must go out and seek. As last night showed us, we must not disrupt the will of the electorate and try to frustrate the Brexit process. We must realise that the remain side lost and that we must get on with this, embrace the opportunities, and not hold back and come up with a fudge that prevents us from striking new free trade deals with countries which we could not otherwise do.

The DIT promotes the UK as a destination for investment by providing specialist support for foreign investors in 60 markets worldwide. In 2016-17 we supported the creation or safeguarding of more than 91,600 jobs through our work with foreign direct investors. That equates to nearly 50 new and safeguarded jobs per project that we undertake. A key part of our investment approach is to leverage the power of the GREAT Britain campaign, the Government’s flagship international marketing and branding platform for the UK. It represents the whole of the UK and is present in more than 144 countries. The GREAT campaign effectively signposts the wealth of opportunity in the United Kingdom, including Northern Ireland.

In January we launched the Invest in GREAT Britain and Northern Ireland international campaign to promote the UK as a natural choice for overseas investment. Since its launch, the campaign has generated more than 600 inquiries, which have so far resulted in 89 qualified leads for investment into the UK. The campaign’s focal point is a new website—invest.great.gov.uk. One of the key aims of the marketing activity is to direct traffic to the website, where prospective investors can find out more about the UK as a destination for investment.

We have a strong global footprint. The UK leads Europe in foreign direct investment and is third in the world for inward FDI stock. DIT welcomed a record-breaking number of FDI projects to the UK in 2016-17, at 2,265—up 2% on 2015-16. The level of FDI stock in the UK is currently at £950 billion. Inward investment into the UK is estimated to have created and safeguarded nearly 108,000 jobs in 2016-17 alone.

According to official figures, just 1.1% of registered non-financial businesses in the UK are owned by foreign investors, but they account for 34% of annual turnover and 38% of gross value added. Only one European country featured among the top six individual countries of origin for foreign investment projects in 2016-17. The USA was our largest source of investment. American FDI stock in the UK stands at £252 billion and accounts for 27% of inward investment stock. The whole of the UK continued to attract FDI, with parts of England and Scotland seeing growth above the national average. I am pleased to tell my hon. Friend the Member for Mid Dorset and North Poole that the south-west had one of its strongest annual results in 2016-17, with a 13% rise in FDI projects to 101.

Although those figures look very good, it has been said that the jobs numbers are not keeping pace with the increase in the number of investment projects. It is fair to say that we need to do more work to analyse how those numbers are collected. The data are collected on the basis of investment projects. If, for example, somebody invests in a new factory in the midlands costing £50 million, they would have the same representation as somebody opening a chip shop in Barnsley for £50,000. We need to do more work to understand exactly how much money is coming in and how many jobs are being secured.

More productive businesses coming to the UK will not necessarily employ more people. Higher productivity does not necessarily increase the number of people employed, but we see different patterns, from one year to the next, with different types of business coming to the UK. Ultimately, we want to create the wealth of this country, which includes good, high-paying, productive jobs; that is absolutely crucial to what we do. Moreover, and I will return to this point later, we are keen to spread that activity throughout the entire region—most people say from John O’Groats to Land’s End, but I say from the Scilly Isles to Shetland. We are absolutely determined to ensure that that work leaves no part of the United Kingdom untouched.

Global investors repeatedly say that the strength of the UK’s economic fundamentals is the reason they choose the UK. They cite our political and regulatory stability, our transparent rule of law, our low regulatory environment and our low-tax economy, including some of the lowest business tax rates in the G20. We have some of the best universities in the world—and now the top two—feeding a highly skilled workforce and fostering world-leading R and D hubs across the country. We speak the international language of business, and the UK offers a perfect time zone for global trading, where someone can do business with China in the morning and with the US in the afternoon. There is also our cultural diversity and quality of life—but not, sadly, our weather. Those economic fundamentals mean that the UK is now considered one of the easiest countries in the world with which to do business. It is ranked seventh, according to the World Bank. At the start of 2016, the UK had 1 million more small businesses than it had in 2010—a total increase of 23%—and our tax system ranks in the top 10 most business-friendly in the world.

The prospect of taxation was raised, and the shadow Minister responded to the prospect of a Labour Government introducing higher taxes. He was absolutely right that if he adheres to the manifesto pledge from the recent election, the business tax rate would merely rise back to where it was at the beginning of the coalition Government.

[Bill Esterson]

It would be lower than that.

[Mark Garnier]

Indeed, lower. A really important point is that businesses look not necessarily at absolute numbers, but at the direction of travel. One of the things behind businesses coming to this country is the fact that the direction of travel for businesses taxes—which, frankly, raise only about 8% of total taxation—is downward. That creates a greater opportunity for business. If businesses see that direction of travel reversing and taxation going up, they will not know where it will stop. The problem is the direction of travel, not the absolute numbers.

[Bill Esterson]

I do not want to wander too far from FDI, but most businesses I talk to tell me that improving the incentives in taxation is more important to them than dealing with the taxation of the results and successes. It is the tax level in business rates that needs reform, not the rate of corporation tax. Does the Minister agree?

--- Later in debate ---

[Mark Garnier]

The hon. Gentleman is right that taxation is not simply about the headline corporation tax rate. It includes, of course, business rates, and businesses that operate factories do not necessarily pay the higher business rates for retail spaces, which are calculated per square foot. It is also about national insurance and various other taxes, so we need to bring together a package. Taxing a population too much stifles growth and investment into that economy. The whole package has to come together to ensure that the businesses that invest in the UK can be confident that the Government recognise that those businesses’ taxes—not just business rates, corporation tax and national insurance, but all the money that gets paid to workers, who then pay tax and spend money and pay VAT—buy the hospitals, schools and public services that we value so much in this country. It is vital that we get the business environment right and attract businesses to this country to ensure that we continue to provide the public services that all of us, across the whole of the House, hold so incredibly dear. We do not want to lose any of them.

The hon. Member for Livingston (Hannah Bardell) talked about business certainty and the uncertainty of Brexit, and so far people like me, the remainers, have been proved wrong—thank goodness, because none of us wants anything to go wrong with our economy, and we are very keen that things progress. The prospect of a second independence referendum, which the Scottish National party could put forward, although Westminster would not necessarily recognise it, is creating more uncertainty. Businesses need to know what is going to happen. One thing we can say about Brexit is that it is a quantifiable uncertainty: we know that, in the worst-case scenario, our trading relationship will go to World Trade Organisation rules.

What was not decided and resolved during indyref 1 was the fundamental issue of what currency Scotland would use. I think it will be very difficult for businesses to invest in Scotland if they do not even know in which currency they will do their accounts and charge their customers. I do not want to castigate the SNP; I want to work hard with Scotland—and, indeed, Northern Ireland, Wales and all the regions—to ensure we are working together to the benefit of the whole of the country. We see Scotland not as a different part of the United Kingdom but as our friends, whom we want to support. I am incredibly proud, as Minister with responsibility for the food and drink sector, that I spend a lot of time dealing with the Scottish Whisky Association, which generates £3.9 billion-worth of exports and benefits all of us in this country. That is fantastic. We are going to do whatever we can to support the devolved Administration in their efforts to boost investment in Scotland. We do not see Scotland separately; we will always be there to help, and we are doing as much as we can to ensure investment comes into Scotland.

My hon. Friend the Member for Richmond (Yorks) (Rishi Sunak) raised our industrial strategy, and said that we need to look at science research and innovation, the skills agenda and infrastructure. The industrial strategy is about delivering those incredibly important things, and we need to look at supporting business to grow—also in the industrial strategy—and several other areas. My hon. Friend referred to three important and fundamental points, and the industrial strategy is part of the package. In some respects, the Department for International Trade is the sales force of the country. We are the hard-working salesmen with a trolley bag behind us going through airports around the world making sure we are banging the drum for British business. At the end of the day, the product that is being sold is the industrial strategy, plus a number of other items. We are out there. Of course, we feed back and say what the international world is saying; that is very important.

The industrial strategy is about building an economy that works for everyone, improving living standards, creating good jobs for all and cultivating the conditions for competitive, world-leading businesses to start and grow. Encouraging trade and investment is one of the key pillars of the industrial strategy. The right investment in the right areas builds world-leading sectors and develops our skills base. Targeted investment also strengthens our supply chains, putting UK companies in a better place to work together and present a “Team UK” offer for some of the biggest global contracts.

The industrial strategy will use our record investments in infrastructure to unlock and drive growth in every part of the country and it will use major new investments in research to support innovative businesses across the country. I want to reiterate the point that we are a Department for the whole of the UK. We will look to attract investment across all of the English regions, all of the devolved regions, including Greater London, the midlands engine and the northern powerhouse, and, of course, the south and south-west. We will also work with our partners in the devolved Administrations, because investment in one part of the UK has a positive knock-on effect for all of us in every part of the UK.

In March, I launched the midlands engine investment hub, which acts as a focal point for FDI. Its priority is developing and articulating a pan-midlands FDI offer. The northern powerhouse investment taskforce was established in 2016 as part of the cross-Government northern powerhouse strategy, of which trade and investment is one of the main strands. FDI into the northern powerhouse continues to rise. In 2016-17, it grew by 5%, attracting 348 projects and creating nearly 15,000 new jobs.

I think it is fair to say that the south of England looks to the super-region, and quite a significant amount of FDI comes into the region near London because London is a natural hub. However, I have recently been to visit boat-builders as far afield as Falmouth, just about 20 miles from the end of the country, where we see truly global brands such as Pendennis yachts building luxury yachts for oligarchs and big investors around the world. It is a great topic of ridicule: those who have yachts and those who have not. None the less, those who build yachts provide jobs. It is important to remember that building those luxury boats brings in a lot of money. There are some fantastic businesses down there—Rustler Yachts is another—and we are all about promoting every one of those businesses. It is important that my hon. Friend the Member for Mid Dorset and North Poole can take back to his constituents that we are working hard on that.

The shadow Minister also made a great deal of reference to the Automotive Council UK, the car industry and what is going on in terms of investment. It is right to highlight the car industry, which is an amazing example of a great success story in the UK. By the way, we can look at the experience of Jaguar Land Rover as a historic example. It has always been a great British brand that has built some fantastic cars, but it is the Indian production techniques that have turned it into a truly profitable and successful business. The foreign direct investment coming into JLR and continued investment of the UK demonstrates more than anything else how productivity and jobs are increased by FDI.

[Bill Esterson]

The Minister is right about JLR, the value of the FDI from Tata and the partnership between Government and investor in achieving that. Is he aware of comments from the head of JLR last week who said that, should we end up paying the tariffs implied by the WTO, that would cost his business £1.1 billion extra a year? Does he share my concern? I urge him and his colleagues to do everything they can to avoid ending up in that situation.

[Mark Garnier]

Absolutely. I met the chief executive of JLR and he shared those concerns with me. We have concerns—actually “concerns” is the wrong word. We are striving to have a Brexit that feels, in every commercial sense, exactly the way things are at the moment.

It is worth bearing in mind that the history of trade negotiations has been one where we have started with a bad position and tried to work out how to go forwards. People go into a negotiating room and say to the two people across the table, “This is how we trade”—let us say it is under WTO terms—“How are we going to improve this?” What is fascinating about the proposed free trade arrangement with the European Union is that, for the first time ever, people are suggesting that we will have negotiators going into a room, saying, “We have the best outcome that we could want in terms of free trade. How are we going to make this worse?”

It is in everyone’s interests to maintain the trading relationship we have, whether we be in the UK or the European Union. It is a different dynamic, but from the conversations we have with people and businesses in the European Union—bear in mind that we also talk to them about what they want from Brexit—it is crystal clear that no one wants to run into a position where WTO tariffs are being charged. We are doing everything we can to ensure that we get to a tariff-free and customs-free outcome of Brexit.

[Hannah Bardell]

On tariffs, does the Minister share my concerns and those of others, including business, about the comments made by the EU negotiators that no progress has been made because issues such as the border in Ireland and the position of EU nationals have not been sorted out, and trade agreements cannot be struck until that point? Similarly, his boss has said that the UK Government do not have the capacity to strike trade deals. Surely that is of significant concern to him and to others.

[Mark Garnier]

The hon. Lady is mixing up a couple of things. The Department for International Trade is doing trade deals, but not the one with the European Union; that is being done by the Department for Exiting the European Union, which does have the capacity to strike that trade deal.

On the wider piece, we are currently having conversations with 15 countries where we are looking potentially to strike trade deals. It is worth bearing in mind that America finds running three trade negotiations at a time slightly taxing and would not want to do more than that. We are trying to do 15, and we are getting on with it. We have 350 trade negotiators and have taken on Crawford Falconer, who has an extraordinary amount of experience. We have therefore upskilled to do that.

To return to the automotive industry, the shadow Minister is right. Since Brexit, we have seen Nissan commit. We have also seen Toyota commit, and we have seen BMW commit to build electric motors in Cowley. That is significant. On the question, “Is Brexit holding this up?”, it is not.

It is widely agreed that FDI has a positive effect on the host country, especially when the supportive business environment is strong. That increases productivity. The Department for International Trade will lead the way in convening the whole of Government to ensure that the UK remains an attractive destination for FDI in Europe and one of the most attractive in the world. A global Britain will always welcome foreign investment for the innovation it spurs and the skills it brings.

As a vital part of the Government’s industrial strategy, inward investment will fuel science and innovation, upgrade our infrastructure and cultivate the world-leading sectors that will allow our businesses to thrive on the global stage. The debate has demonstrated the important role that foreign investment plays in building a stronger and more sustainable economy that works for all. While we have one or two differences of opinion, it seems that the House is united behind the idea of a global Britain.

Exiting the European Union and Global Trade

Mark Garnier Excerpts

Thursday 6th July 2017 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

Labour’s manifesto stated:

“Labour is pro-trade and pro-investment. The UK’s future prosperity depends on minimising tariff and non-tariff barriers that prevent us from exporting and creating the jobs and economic growth we need.”

The negotiations for the UK’s exit from the EU have already begun, and our future prosperity as a nation is vitally dependent on our international trading relationships. Of those relationships, the UK-EU trade deal must be the Government’s priority. A no-deal with the EU is the worst possible deal and must be ruled out. Anyone who has run a business knows that you look after your existing business relationships first—if you do anything else, you do so at your peril.

We have heard many speeches today. The hon. Member for Livingston (Hannah Bardell) spoke about the transitional arrangements and the question of how to deliver frictionless trade.

The right hon. Member for Wantage (Mr Vaizey) gave the first of the many speeches that we could call pro-Chancellor, given the interesting interrelationship between the Chancellor and the Secretary of State for Exiting the European Union.

My hon. Friend the Member for West Bromwich West (Mr Bailey) spoke about the car industry’s importance to the UK economy and the need to ensure that we continue to support car exports. He also spoke of the damage that no deal would do to that industry.

The hon. Member for Hornchurch and Upminster (Julia Dockerill) made her maiden speech; I congratulate her on the enthusiastic way she spoke about her constituency.

My hon. Friend the Member for Bishop Auckland (Helen Goodman) spoke about her commitment to her constituents and their need for a Brexit that supports exports and jobs. She also spoke about the importance of the European Medicines Agency to this country and about the need to support the hill farmers in her constituency.

I think the hon. Member for Rochford and Southend East (James Duddridge) spoke in support of the Secretary of State for Exiting the European Union.

My hon. Friend the Member for Lincoln (Ms Lee) made an excellent and passionate speech and spoke about the importance of the transport hub delivered by the Labour council of which she was part. Support for transport infrastructure is of course crucial to backing the businesses and jobs of her constituents, including those involved in international trade.

The hon. Member for Gloucester (Richard Graham) clearly backed the Chancellor.

The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) reminded us of his late friend, Charlie Kennedy, who was much respected by Members from all parties. I congratulate him on his confident maiden speech; I enjoyed his story about his predecessor, Charles James Fox.

The hon. Member for Bromley and Chislehurst (Robert Neill) was with the Chancellor.

My hon. Friend the Member for Midlothian (Danielle Rowley) made an excellent maiden speech in which she reminded us that she is the first woman to represent her constituency. She comes from a family of miners and is keeping that Midlothian tradition going. I was pleased to hear her remind us that she was elected, as I was, on a platform of hope for the many, not the few.

The hon. Member for South Suffolk (James Cartlidge) was clearly with the Chancellor—[Interruption.] I think he was, anyway. He gave a good example from his constituency of the dangers of a cliff-edge exit and spoke about the importance of transitional arrangements.

The right hon. Member for Carshalton and Wallington (Tom Brake) made a good speech, and the hon. Member for Hitchin and Harpenden (Bim Afolami), who I think was backing the Chancellor, gave another good short speech.

The debate finished with a great speech by my hon. Friend the Member for City of Chester (Christian Matheson), who reminded us of the importance of fair and free trade and how it engenders prosperity and peace. He, like me, will be supporting a Brexit that promotes jobs and retains environmental and consumer protections—

[The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)]

He, like I.

[Bill Esterson]

I thank the Minister for the correction. No doubt the fee note will be in the post.

The Government have promised to deliver the “exact same benefits” as we currently have inside the single market and customs union, and Labour will hold them to account on that commitment. We recognise that once we leave the EU a transitional period is vital to avoid a cliff-edge for the UK economy.

The Government have still failed to set out a coherent international trade strategy for when the UK has formally left the EU. We have called on them to publish an international trade White Paper. The UK needs clarity on this issue as never before. It is unacceptable to take the country into an uncertain future that includes our exiting the EU without a comprehensive plan on international trade. Such a plan must be presented to and properly scrutinised by the British people and their elected representatives in Parliament.

A White Paper must set out what the Government’s plans are for future international trade, outlining negotiating principles and trade policy objectives, including which industry sectors will be prioritised and which will not. Clarification of what was meant in the Lancaster House speech by hybrid customs arrangements needs to be set out. The Government say that they intend to pursue closer trade links with Commonwealth partners to make up for any lost trade with the EU, which currently accounts for 44% of our exports. However, none of the UK’s top 10 export partners is a Commonwealth country.

The spring Budget statement revealed that this Government are out of ideas when it comes to boosting exports and tackling the productivity slump forecast by the Office for Budget Responsibility. This is a Government who talk big on trade and Brexit, but who have failed to provide the support for British businesses wishing to export and grow into new markets.

The latest Office for National Statistics figures show that the UK’s trade in goods deficit has increased by £2.6 billion. Our imports are on the rise while our exports are failing to catch up. Despite the Government’s bombastic talk of Britain leading the world as a trading nation, our trade performance on their watch has been weak.

British small and medium-sized enterprises and trade bodies have repeatedly called on the Government to do more to deliver real support to potential exporters. The Government have ignored them, focusing instead on the big corporations and on arms sales. They have systematically delayed SME funding for overseas trade shows and have, over the years, decreased the budget for such funding. They should be maintaining the tradeshow access programme and, crucially, delivering it on time—not delaying it by four months as has just happened.

The Government need to maximise support for those wishing to export and make it clear what their mission is and what their vision of trade is. They need to bring forward the White Paper and say what their view is of transitional arrangements, how they will deliver frictionless trade outside the EU with the EU and, above all, to put forward the priority of jobs and British businesses first.

Oral Answers to Questions

Mark Garnier Excerpts

Thursday 6th July 2017 Commons Chamber

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

2. What steps he is taking to encourage businesses to take advantage of new opportunities for international trade.

[The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)]

The Department for International Trade provides market access, support and advice to UK business in the UK and in 109 markets overseas. Through the GREAT campaign, we build the global appetite for British goods and services, and give UK companies access to millions of pounds’ worth of potential business through the digital services offered on the GREAT.gov.uk digital platform.

[Geoffrey Clifton-Brown]

It is a great tribute to my hon. Friend’s Department that in the first year of its operation, the Office for National Statistics reports that exports went up by a huge 7% to £548 billion. Does he agree that with the increase in demand for British exports, UK Export Finance, with its widened role, has an important part to play?

[Mark Garnier]

My hon. Friend is absolutely right to raise that matter. I thank him for the work he does on the all-party parliamentary group for international trade and investment. He is absolutely right that the Department for International Trade needs to provide a suite of services, and that includes UK Export Finance. Some 7,000 businesses have been helped by UK Export Finance, the appetite for risk has been doubled and we have increased the number of currencies we can use from 10 to 40, from the Australian dollar to the Zambian kwacha. That is part of a very wide range of things and we have been successful so far.

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

This Front-Bench team must know that a silly attack on the BBC cannot be used as an excuse for policy. This is a Secretary of State who has refused to meet the all-party parliamentary manufacturing group. The manufacturers I know have no confidence in this Secretary of State. They think he is living in cloud cuckoo land and is not competent, and they want his resignation.

[Mark Garnier]

I will take note of the hon. Gentleman’s comments.

[Dr Julian Lewis (New Forest East) (Con)]

Will the Minister explain what steps the Government are taking to ensure that, following our departure from the European Union, our export manufacturing businesses do not face high tariffs from other nations?

[Mark Garnier]

The Department for International Trade is embarking on a series of talks with the World Trade Organisation and individual countries to, in the first instance, secure continuity of business with those countries with which we already have agreements. I speak as a remainer from the campaign, but this is a fantastic opportunity to forge new trade deals and take advantage of the opportunities that Brexit presents.

[Tom Brake (Carshalton and Wallington) (LD)]

To grow their international trade, many businesses need to be able to call on the best possible members of staff. What will the Minister do to ensure that freedom of movement is retained for those businesses, and that the investment they get through initiatives such as Horizon 2020 is still available to them?

[Mark Garnier]

It has always been the case that the Government have had not an open policy, but a mature policy for people who come from outside the European Union. Britain will certainly be open to the best and the brightest people in the world, who will want to come and work in what is, frankly, one of the best places to enlarge those skills.

[Mr Laurence Robertson (Tewkesbury) (Con)]

3. What recent discussions he has had with the Government of Brazil on a trade agreement with that country after the UK leaves the EU.

--- Later in debate ---

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

12. What estimate he has made of the value of the contribution of the food and drink sector to UK exports.

[The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)]

With your permission, Mr Speaker, I will answer questions 4, 9 and 10 together. The food and drink sector makes an important contribution to exports. In 2016, UK food and drink exports reached £20.1 billion, an increase of 9% from the previous year. This represented 6.6% of our total goods exports. For the first quarter of this year, food and drink exports reached £4.9 billion, up 8.3% on 2016, representing the highest first quarter exports value on record.

[Mr Speaker]

I gently say to the Minister that the grouping is with Nos. 10 and 12. [Interruption.] No, a question was withdrawn, and it might well be the case that the briefing had not kept up with the evolution of events, I say to the hon. Member for Huddersfield (Mr Sheerman). That should satisfy him; he does not seem easily satisfied this morning, but that will have to do.

[Luke Hall]

I know that my hon. Friend the Minister understands the importance of the food and drink sector to the south-west of England, so may I ask what he is doing to promote growth and trade across the south-west?

[Mark Garnier]

The answer to my hon. Friend’s question exemplifies the type of tailored help the Department for International Trade can give. Working with our officials in the south-west and local producers and businesses, we have created the Great British Food programme, which is designed specifically to allow south-west food and drink businesses to interact directly with overseas buyers. We have already seen them working with the EU, Turkey and China, and since April 2016 we have won over £19 million-worth of business across more than 30 export markets.

[Jo Churchill]

As the Minister knows, food and drink manufacturing is an enormous market, particularly in my constituency. Issues over regulations, sampling and tariffs are among the concerns of global leaders such as Muntons, as well as some of my smaller exporters. Will he agree to meet me and them to discuss these issues further?

[Mark Garnier]

My hon. Friend had a number of such meetings when she brought her local chamber of commerce down to London, and I believe that Muntons was part of that. She is absolutely right, however, to say that regulations, sampling and tariffs are an important part of doing trade deals, and it is important that we maintain those standards ourselves as well. It is absolutely the job of the Department for International Trade to interact with those people who need help at any level, and I would be very happy to visit my hon. Friend’s constituency and meet not only Muntons but others as well.

[Dr Johnson]

Lincolnshire has a proud tradition of producing food, and the food and drink industry is very important to my constituency. What is the Minister doing to help the food and drink manufacturers in Lincolnshire with their exports?

[Mark Garnier]

The Department for International Trade spans the whole of the country, and when it comes to specific areas, we look at specific needs. For example, in October, the Department and the midlands engine trade mission will be going to Anuga trade fair in Cologne, which is the leading international trade fair for food and beverages. I hope that we will be taking firms from my hon. Friend’s constituency to promote their goods and opportunities there.

[Rachael Maskell (York Central) (Lab/Co-op)]

9. York has a food manufacturing sector, and it has real concerns over the increases in import and production costs and over labour; we are all, of course, concerned about the environment. Can the Minister tell the food manufacturing sector what new trade opportunities he has secured for it, and what their value will be to the economy?

[Mark Garnier]

The value to the economy of the food exporting sector is absolutely enormous. I think it is the biggest manufacturing sector in the world. We have already seen a number of opportunities for going out and exporting it, and trade figures are up by some 7%. We can give a breakdown of the actual data, and I would be happy to write to the hon. Lady about that later. Without a shadow of a doubt, the Department for International Trade is successful in what it does. We have seen exports increase across all sectors and, as I pointed out earlier, we have seen record numbers in food and drink exports.

[Bill Esterson (Sefton Central) (Lab)]

Why have the Government done nothing to stop Nestlé moving production from the United Kingdom to Poland, with the loss of 300 jobs? The Government confirmed this week in a written answer that Ministers met Nestlé in April. Nestlé has said that it would take an investment of £1 million to keep production in the UK. The Government found £1 billion to save one job in Downing Street, but they cannot find £1 million to save 300 jobs at Nestlé. Unbelievable!

[Mark Garnier]

The hon. Gentleman raises a number of issues. The hon. Member for York Central (Rachael Maskell) has been working hard on behalf of her constituents to try to help with the redundancies at Nestlé, as indeed has the Department for Work and Pensions, which is standing ready to put in place its rapid response service. We are happy to meet representatives of Nestlé, and I would be very happy to meet them again. [Interruption.] Fantastic. Thank you.

[Hannah Bardell (Livingston) (SNP)]

Scottish food and drink exports have doubled since the Scottish National party Government came to power in 2007. This has been key to the development of the Scottish economy. What does the Minister think about Michel Barnier’s comment that frictionless trade in goods is “not possible” outside the single market and the customs union? Given the concerns of the Scottish Food and Drink Federation and the Scotch Whisky Association, and the huge reliance of the Scottish economy on this sector, will the Minister consider a transitional arrangement?

[Mark Garnier]

The total value of Scottish exports is some £62 billion a year, of which £50 billion is exported to the rest of the United Kingdom. That is as good a statement as any as to why Scotland should remain in the Union of the United Kingdom, rather than in the European Union.

[Mr Ben Bradshaw (Exeter) (Lab)]

More than 80% of the fish caught around the south-west coast and 30% of our lamb is exported straight to the rest of the EU, yet under World Trade Organisation rules, that produce would face very high tariffs. What guarantees can the Minister give that our fishermen and our agricultural industry will not face tariffs or any other barriers if we leave the European Union?

[Mark Garnier]

This is all part of our negotiations with the European Union. It is an ongoing process, which will hopefully reach its end by March 2019. The United Kingdom Government are very keen to secure a deal with the European Union that sees no change whatever for businesses. We want as smooth a transition as possible into independence from the European Union, and the interests of fishermen down in the south-west are as important as those of everyone else.

[Dr Sarah Wollaston (Totnes) (Con)]

More than £30 million-worth of fish was sold through Brixham fish market last year, the most valuable catch in England. Will the Minister meet me and industry representatives to discuss opportunities for expanding markets after we leave the European Union, as well as frictionless trade and smooth transfer across the border?

[Mark Garnier]

The Secretary of State is a Member of Parliament for the south-west, and he is happy to come and have that meeting, as am I as the departmental lead on the food and drink sector. Between the two of us, my hon. Friend the Member for Totnes (Dr Wollaston) may get twice as many meetings as she anticipates. We look forward to coming to help.

[Hywel Williams (Arfon) (PC)]

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

Oral Answers to Questions

Mark Garnier Excerpts

Thursday 23rd March 2017 Commons Chamber

[David Rutley (Macclesfield) (Con)]

9. What steps his Department is taking to help businesses build trading opportunities abroad.

[The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)]

The Department for International Trade provides market access, support and advice to UK businesses both in the UK and in 109 markets overseas. Through the GREAT campaign we build the global appetite for British goods and services, and give UK companies access to millions of pounds’ worth of potential business through the digital services offered on the great.gov.uk website.

[Sir David Amess]

My hon. Friend the Minister leads the buy British goods campaign. Does he agree that taking companies that make British goods on trade delegations is an excellent way of ensuring that companies make the most of our opportunities as we leave the European Union?

[Mark Garnier]

My hon. Friend is absolutely right. Trade delegations give an opportunity for small businesses to be put in front of buyers, and the Department for International Trade runs about 1,000 of them every year; I have been on a number, as have my colleagues, and they are extraordinarily successful in developing opportunities.

[David Rutley]

What steps is my hon. Friend the Minister taking to help first-time entrepreneurs become first-time successful exporters?

[Mark Garnier]

The great.gov.uk website is a tremendous opportunity, whereby entrepreneurs, many of whom are very tech savvy, can take advantage of the opportunities that we provide through our subsidised access to global e-marketplaces. They can also access the advice we provide through the website for exactly that type of business—they are supported as well.

[Derek Twigg (Halton) (Lab)]

May I ask the Minister specifically what advice there is, and what the Government are doing, to help small businesses in that respect?

[Mark Garnier]

The Department for International Trade has available a network of international trade advisers throughout the English regions who can be contacted through local chambers of commerce and are specifically there to hand-hold individual companies that need help.

[Caroline Flint (Don Valley) (Lab)]

Is the Minister looking at the trade differences between the English regions? One of the reasons that lots of people in the English regions outside London voted to leave was that they did not feel they were getting the benefits of the European Union. What is he going to do to help those areas improve their trading links?

[Mark Garnier]

We certainly look at foreign direct investment into the regions through trading links. That is why we see inward investment in areas such as Sunderland, which has benefited from Nissan. The right hon. Lady’s point about trade is absolutely right. The UK needs to trade more with the rest of the world—just 11% of businesses that could conduct such trade are actually doing so. One of the prime concerns and objectives of the Department for International Trade is promoting trade to the whole of the UK to ensure that we up our offer to the rest of the world.

[Henry Smith (Crawley) (Con)]

What steps is the Department taking to enhance trade between India and the UK?

[Mark Garnier]

My right hon. Friend the Secretary of State has certainly held meetings in India, and we are having ongoing talks to try to facilitate opportunities there. I will visit India in the next couple of weeks with my right hon. Friend the Chancellor of the Exchequer to explore more opportunities with financial services.

[Bill Esterson (Sefton Central) (Lab)]

May I associate myself and my colleagues with the Secretary of State’s remarks about yesterday’s terror attacks?

The Federation of Small Businesses reports its members’ concerns that there should not be a cliff edge when we leave the European Union. Smaller businesses want to continue with tariff-free access and to minimise non-tariff barriers. What is the Minister’s Department doing to support small businesses and allay their concerns?

[Mark Garnier]

The Department for International Trade absolutely shares those desires for a disruption-free exit from the European Union. We are certainly representing those interests to the Department for Exiting the European Union, which is tasked specifically with the objectives described by the hon. Gentleman.

[Tom Pursglove (Corby) (Con)]

11. The United States is the UK’s single biggest export market. What early discussions has the Minister had with his new US counterparts about trying to secure a timely new trade deal?

[Mark Garnier]

My hon. Friend is absolutely right to identify the United States as our single biggest trading partner, with 23% of the UK’s exports going to the United States. We are waiting for confirmation of when we can start having conversations.

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

May I associate myself and my party with the Secretary of State’s opening remarks? We will have an opportunity to pay our respects later, but we are grateful that we are here because of the bravery of others.

The rise in Scottish exports has been one of the major success stories in the Scottish economy over the past decade. What lessons does the Minister believe the rest of the UK can learn from this, given that we have seen exports double in the past 10 years?

[Mark Garnier]

Like everybody else, I am delighted that exports from Scotland have done particularly well, but I stress that trying to promote exports is part of an ongoing process through the whole UK, not just one region. I celebrate the fact that Scotland has a number of tremendous exports, particularly Scottish whisky. Nearly £4 billion-worth of whisky is exported from Scotland, and the rest of the world sees a great deal of value in the brand.

[Jeff Smith (Manchester, Withington) (Lab)]

6. What discussions he has had with businesses, trade bodies and industry representatives on the potential effects of World Trade Organisation rules in the event that the Government do not secure free trade agreements with other countries after the UK leaves the EU.

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[Justin Madders (Ellesmere Port and Neston) (Lab)]

14. What discussions he has had with businesses, trade bodies and industry representatives on the potential effects of WTO rules in the event that the Government do not secure free trade agreements with other countries after the UK leaves the EU.

[The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)]

International Trade Ministers and officials regularly meet British businesses to discuss trade policy matters. These discussions have included our position in the WTO, work under way to avoid the loss of trade preferences that UK firms currently access via EU trade arrangements, and future trade negotiation priorities. The Department for Exiting the EU is also engaged fully with British businesses.

[Jeff Smith]

As an EU member state, we are party to free trade agreements with countries such as Mexico, South Korea and South Africa. Is it the responsibility of his Department or the Department for Exiting the European Union to negotiate the grandfathering or replacement of those agreements?

[Mark Garnier]

I can absolutely confirm that DIT leads in every sense on the trade negotiations with the rest of the world. The Department for Exiting the European Union is restricted to the European Union.

[Paula Sherriff]

How does the Department intend to help businesses trading with non-EU countries overcome trade barriers such as tariffs and rules of origin requirements if the Government are unable to secure continuation of preferential trading terms?

[Mark Garnier]

When we leave the European Union, it is the intention of the Department for International Trade to carry over the existing trade deals that we enjoy through our membership of the European Union. Countries such as Mexico, for example, have trade deals with the EU, and it is our intention to carry over such trade deals in the first instance in order to avoid any cliff edge.

[Justin Madders]

The Minister will be aware of statements made by the head of the PSA Group, following the takeover of Vauxhall-General Motors group, that when new models are awarded plants across Europe will be judged on their competitiveness. A 10% tariff on cars would have a huge impact on the competitiveness of the UK car industry, so what contingency plans do the Government have to ensure that the UK car industry remains competitive?

[Mark Garnier]

The hon. Gentleman is right to raise this point; he speaks on behalf of his constituents in an area that manufactures these vehicles. It is the intention that the UK can achieve tariff-free, customs-free access to the single market. That benefits not only the UK car manufacturers that produce 1.9 million cars, but the European manufacturers that export to the UK.

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

Many countries breach WTO rules by using a whole series of non-tariff barriers such as local content requirements. What discussions have the Government had to get the WTO to enforce those rules, and what can we do to ensure that those countries are persuaded against this practice?

[Mark Garnier]

My hon. Friend is right. Non-tariff barriers are incredibly disruptive to free trade, and we take that very seriously. We will be looking at our own system of trade remedies, but at the moment everything has been done through the European Union. We need to start engaging in that. To a certain extent, we have had conversations with other countries through the joint economic and trade committees, where we can deal with that.

[Mr Steve Baker (Wycombe) (Con)]

The Government will know that WTO rules are not something that we fall back on, but the ultimate foundation of all international trade. Will the Minister bear in mind the advice of Economists for Free Trade, which has said that a UK free trade policy could add 4% to GDP in the long term and reduce consumer prices by 8%?

[Mark Garnier]

Free trade is absolutely the key to giving prosperity to the world, including the UK—it is a huge benefit to developing nations, as well as developed nations. For consumers, there is the opportunity to have market choice, and therefore price choice, which can be incredibly helpful to the economy.

[Mr Edward Vaizey (Wantage) (Con)]

Tech City UK published its excellent “Tech Nation” report yesterday, showing that investment in digital companies in the UK is 50% higher than in any other European country. I know that my hon. Friend and his fellow Ministers are supporting the tech industry strongly, but has he made an analysis of how WTO rules will affect it?

[Mark Garnier]

The Department for International Trade is carrying out an analysis of how WTO rules will affect every sector of our economy. This is an ongoing process, but my right hon. Friend is absolutely right to highlight the technology sector as one in which this country is leading, and that is a fantastic opportunity.

[Barry Gardiner (Brent North) (Lab)]

Mr Speaker, you and I have been in this House for 20 years, and after yesterday’s attack, I have never felt more proud or more grateful to be speaking in this Chamber.

What assessment has the Secretary of State made of the need to deploy WTO trade remedies? We know that the Government opposed anti-dumping measures in Europe that would have protected British industries. Earlier, he spoke of a balance of interests between UK producers and UK consumers. If there is to be a balance, how many specialist staff has he recruited to deploy successful anti-dumping measures and protect vital UK jobs in the steel and ceramics industries from dumping by China?

[Mark Garnier]

We will bring forward our proposals on this to the House in due course, but at the moment we are looking to adopt a rules-based process to deal with it.

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[Peter Aldous (Waveney) (Con)]

T2. There has been considerable investment in the offshore wind sector off the East Anglian coast in recent years. With article 50 being triggered next Wednesday, will the Minister set out the Government’s plans to strengthen the UK’s position as a world leader in the sector, and to attract global investment in innovation and research, so that local businesses are well placed to win contracts at home and overseas?

[The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)]

The Department for International Trade works with, and will continue to work with, key UK suppliers, potential and existing inward investors, foreign Governments and offshore wind developers. The UK is building a competitive and innovative supply chain that creates and sustains jobs, exports and economic benefits for the UK as we leave the European Union.

[Barry Gardiner (Brent North) (Lab)]

Now that the Secretary of State has revealed to The Sun his plans for a trade Bill in the Queen’s Speech, will he do Parliament the courtesy of publishing a trade White Paper that sets out clearly what markets he wishes to liberalise and what measures he will take in future trade agreements to protect and enhance International Labour Organisation principles, sustainable development, human rights, environmental protection, intellectual property rights, food standards, future options on state-owned enterprises and the ability to nationalise particular sectors? If he develops an informed, consultative international trade policy, the Government may be able to restore confidence that they are holding trade dialogues that are backed by a clear and strategic plan.

[Nigel Mills (Amber Valley) (Con)]

T4. The aerospace sector is of great importance in Derbyshire. What steps are the Government taking to promote the UK’s excellence in this sector around the world?

[Mark Garnier]

Our aim is absolutely to keep the UK as a leading aerospace—and, indeed, space—nation. We will continue to work with the industry through the aerospace growth partnership and to promote foreign investment, boost exports and grow high-value jobs here in the UK.

[Daniel Zeichner (Cambridge) (Lab)]

T3. The UK video game sector is one of our great success stories. I was with Ninja Theory in Cambridge on Friday. The trade body UKIE has consulted its members, who have told it that maintaining data flows in Europe is essential. Can the Minister tell us what progress has been made on securing a data adequacy agreement with the European Union?

[Mark Garnier]

The hon. Gentleman is absolutely right to celebrate the activities of this creative industry sector. However, since we have not started the article 50 process, we have not entered into any specific talks.

[Henry Smith (Crawley) (Con)]

T5. What discussions has my right hon. Friend had with Commonwealth countries about trade and investment opportunities?

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[Mark Garnier]

The subject of product standards is incredibly important. My hon. Friend will be aware that the great repeal Bill will bring across a great deal of what relates to the European Union, and that Bill will contain detail about product standards.

[Graham Evans (Weaver Vale) (Con)]

What influence can my right hon. Friend bring to the showcasing of great British beer in embassies around the world?

Oral Answers to Questions

Mark Garnier Excerpts

Thursday 9th February 2017 Commons Chamber

[Mr Ranil Jayawardena (North East Hampshire) (Con)]

3. What steps his Department is taking to support trade and investment in the space exploration sector.

[The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)]

The Department for International Trade supports efforts to grow the UK space sector. We are working closely with the UK Space Agency, Innovate UK and the industry to provide sector growth. In January, I led a DIT and UK Space Agency mission to the US, where I advocated the UK as an attractive market for space sector companies. We intend to highlight progress at the UK space conference in Manchester in May. UK Export Finance offers finance and insurance to help UK-based companies in the space sector.

[Mr Jayawardena]

It is really great to hear that the UK is fast becoming a world leader in the space sector. Will my hon. Friend inform the House about his efforts to secure foreign direct investment into the United Kingdom to support domestic growth in this industry?

[Mark Garnier]

My hon. Friend is right to raise the importance of this sector. The numbers are absolutely fantastic: it has six times the average research and development investment, and it has 2.7 times the average productivity in the UK. During the past couple of years, the DIT has supported 19 successful inward investment projects in this sector, and we will continue to work with the Department for Business, Energy and Industrial Strategy to deliver the UK space innovation and growth strategy in the future.

[George Kerevan (East Lothian) (SNP)]

The encrypted public service channels of the new Galileo space navigation system are restricted to EU member states. What steps will the Government take post-Brexit to ensure that the UK has access to Galileo, in which we have invested?

[Mark Garnier]

Galileo is the satellite navigation system that is being put up by the European Space Agency and the European Union. That is one of the many things we have to negotiate over the coming years. The use of spectrum is incredibly important, because spectrum is limited. The Government will look at that among many other important things, but I assure the hon. Gentleman that spectrum is a very valuable asset for this country, and we will work with Ofcom to ensure that we get our fair share.

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

4. What steps his Department is taking to increase exports from and foreign direct investment in the technology sector.

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[Derek Thomas]

In west Cornwall and the Isles of Scilly, a flurry of businesses have been producing food, drink and other goods. There is no doubt about the quality of their produce, but the reality is that very few of those products—food and drink—go beyond Cornish borders, let alone overseas. Will the Minister accept an invitation to meet these producers and help them to expand their markets?

[Mark Garnier]

As my hon. Friend knows, my family has roots in Cornwall that go back over 100 years, which I think means that we are now no longer incomers. The Secretary of State, of course, is a south-west MP and I believe he has met Cornish producers, and I am a frequent visitor to the extraordinary county that produces such fabulous produce. At the very first opportunity, I will go with my hon. Friend to meet his constituents and, indeed, people across the whole of Cornwall to explore ways in which we can push this fantastic county’s product.

[Mrs Sheryll Murray (South East Cornwall) (Con)]

7. What recent discussions he has had with the Government of New Zealand on future bilateral trade and investment.

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[Craig Tracey (North Warwickshire) (Con)]

T2. I welcome the recent establishment of a UK-Israel trade working group. Bilateral trade between the two countries has increased year on year, and our close co-operation in cyber, academia and medicine continues to grow. Can the Minister provide any further information about how the group will work, and does he share my view that we should strike one of our first trade deals with the middle east’s only democracy?

[The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)]

My hon. Friend is absolutely right to highlight the very good trading relationship we have, and hope to continue to have, with Israel. The Prime Minister announced the trade working group when the Israeli Prime Minister visited earlier this week, but it is worth bearing it in mind that the EU already has a trade arrangement with Israel, and this is something that, in the first instance, we would look to continue. I am sure, however, that there will be many opportunities to improve on that, given that that trade deal was done between one country and 28 countries, whereas a bilateral deal will be easier to negotiate.

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

The Secretary of State promised that Parliament would have the opportunity to debate the important comprehensive economic and trade agreement between the EU and Canada on the Floor of the House. Unfortunately, he broke that promise and the debate was sidelined to an obscure Committee of the House earlier this week. Given that the UK will soon be responsible for negotiating its own international trade deals following Brexit, what assurances can the Minister give the House that parliamentarians will have an opportunity to scrutinise such trade deals fully in the future, and not be afforded the discourtesy we unfortunately were in relation to CETA?

[Mrs Sheryll Murray (South East Cornwall) (Con)]

T5. Many Cornish men and women emigrated to seek work in New Zealand in the late 19th century. Will my hon. Friend now support other great Cornish exports of our wonderful produce, such as Cornish cider produced by Cornish Orchards in my constituency?

[Mark Garnier]

It is good to see the far west of this country being so well represented today, on a one-line Whip just ahead of the recess. My hon. Friend is absolutely right. There are fantastic products coming from her constituency, including award-winning brands such as Cornish Orchards cider, Cornish Blue and Cornish Gouda. It is absolutely the job of the Department to go out to the rest of the world and, as I said before, to push Cornish exports far beyond the Tamar to the four corners of the globe.

[Barry Gardiner (Brent North) (Lab)]

When I wrote to the Secretary of State in November to ask for an investigation into his Department’s support for any British businesses engaged in corrupt practices, he replied that his Department had no power to conduct such an investigation. Last week, after the publicity surrounding Roll-Royce’s deferred prosecution, he announced precisely such an investigation. When did the powers of his Department change, when will the inquiry report back, and will he explain why he has refused to comply with the open government principles of the OECD anti-bribery convention?

[Richard Graham (Gloucester) (Con)]

Continuing the trend of exporting from the south-west, last week Gloucestershire-based SME Fluid Transfer International won a £6 million contract to supply aircraft-refuelling vehicles to Indonesian airports. The key ingredients were British manufacturing, a strong commitment to the market, and a very good local partnership. Will my hon. Friend join me in congratulating Fluid Transfer, and will his Department work with me to produce a short video to capture the story and inspire other small and medium-sized enterprises by showing them what can be achieved?

[Mark Garnier]

I am sure that my hon. Friend played a part in that deal, given that he is a trade envoy to Indonesia and given the extraordinary work that he does in some of the ASEAN countries. We shall all be delighted to help to promote investment of this kind in every way we can.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

T3. A hard Tory Brexit will damage the Scottish aerospace industry, which contributes more than £130 million to the Scottish economy. Will the Secretary of State assure us that that sector will continue to have barrier-free access to the European single market?

Oral Answers to Questions

Mark Garnier Excerpts

Thursday 15th December 2016 Commons Chamber

[Craig Williams (Cardiff North) (Con)]

1. What steps his Department is taking to support foreign direct investment into the UK.

[The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)]

My Department is working globally to attract foreign firms to set up or expand their businesses in the UK and to generate new jobs and contribute to national wealth creation. We are promoting the UK as a prime destination for inward investment from across our global network, with dedicated support for investors in 50 overseas markets. With the support of sector specialists, we are ensuring that the UK has the best opportunities to attract higher-quality foreign direct investment.

[Craig Williams]

Latest gross value added figures show that Wales is the fastest growing area outside London, and Cardiff is unabashedly the engine room of the Welsh economy. What positive steps is the Department taking to ensure that Welsh businesses and Cardiff businesses get the help they expect to get?

[Mark Garnier]

Let me say that my hon. Friend, given that his constituency is Cardiff North, is the engine-room of the Cardiff economy. The Department for International Trade works for the whole of the UK, but I stress that my right hon. Friend the Secretary of State has already visited Wales, and I am working with the Wales Office to see what more we can do. We also support the Welsh Government by offering them support in posts overseas. We see the opportunities presented by Wales as very exciting.

[Bill Esterson (Sefton Central) (Lab)]

Today we are told that it could take up to 10 years to reach a trade agreement with the EU after we leave, while research from the National Institute of Economic and Social Research suggests a drop in trade of up to 60% if we are outside the customs union. Foreign investors are vital for the British economy, so will the Minister give those investors some of the certainty they so desperately need—and that we need, as well? Will he tell them whether he wants Britain to be inside the customs union and whether he wants tariff-free access to the single market or not?

[Mark Garnier]

It has been made very clear that the Government are not going to give a running commentary on what we are proposing to do. I also stress that the comments of Ivan Rogers are opinions and words taken from interlocutors and do not necessarily define how long it will take to create a trade deal. It is worth bearing in mind, if we look at various trade deals around the world, that while the Trans-Pacific Partnership has taken potentially eight years, the US-Jordan trade deal took just four months. It is very difficult to establish exactly how long any trade deal will take.

[Mr Alan Mak (Havant) (Con)]

As the UK becomes a world leader in the fourth industrial revolution—new technology—will the Minister update the House on what steps his Department is taking to secure foreign direct investment in this vital new sector?

[Mark Garnier]

I congratulate my hon. Friend on launching the all-party parliamentary group on the fourth industrial revolution. This type of innovative approach by businesses moving forward is incredibly important to the success of this country’s economy. We are working extraordinarily hard to make sure that this innovative approach is being transmitted around the world through our posts overseas, and that we can secure foreign direct investment to support it.

[Nick Smith (Blaenau Gwent) (Lab)]

What is the Minister’s best estimate on when an EU trade deal will be completed?

[Mark Garnier]

I refer the hon. Gentleman to my earlier answer.

[Callum McCaig (Aberdeen South) (SNP)]

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

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[Sir Edward Leigh (Gainsborough) (Con)]

8. What steps his Department is taking to support businesses in establishing future trading opportunities abroad.

[The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)]

The Department is working across the UK, as well as in both current and future export markets overseas, to help British businesses. We are helping them to export their goods and services, identify new export opportunities and win those export sales. We are doing this digitally, through the GREAT.gov.uk website, and in person, through our network of international trade advisers across the UK and through our overseas staff in 109 countries.

[Wendy Morton]

Businesses in my constituency do not always have the resources to explore export markets but are keen to maximise opportunities. What is the Department going to do to help those businesses, so that they can find more opportunities abroad?

[Mark Garnier]

May I refer my hon. Friend, who is a champion of businesses in her constituency, to the GREAT.gov.uk website? Although it has been going for only one month, 174,000 users have visited it, more than 6,000 users have already made use of our selling online overseas services and nearly 1,000 businesses have created a profile on our “Find a buyer” service. This was highlighted to all hon. Members when the Department sent out our MPs’ toolkit, so that all MPs can help their constituents to find new markets and raise their eyes to the horizon.

[Sir Edward Leigh]

With only 5% of businesses trading directly with the EU, surely leaving the internal market will allow us to relieve the other 95% from the shackles of over-regulation? Will the Minister say a bit about the balance his Department is going to strike between inward and outward investment?

[Mark Garnier]

I thank a member of the Select Committee for his very wise question. It is a new approach by this Department to look equally at overseas direct investment for businesses looking to move overseas. This is incredibly important because it provides opportunities for many businesses to create new opportunities and new markets overseas. It is worth bearing in mind that, as British businesses invest overseas, they take with them skills and expertise, which can only help those developing economies to grow, thus creating even more opportunities for British businesses in further developed markets.

[Christina Rees (Neath) (Lab/Co-op)]

9. The Secretary of State for Exiting the EU said yesterday that he is considering four options for the customs union: completely inside; completely outside; the Turkish model, which is partially inside but outside the single market; and the Swiss model, which is outside but with customs arrangements. Are there enough staff in the International Trade Department and the Brexit Department to assess by February the concerns of UK businesses that leaving the customs union would devastate their complex cross-border EU supply chain by exposing new paperwork hurdles and tariffs?

[Mark Garnier]

The Department for International Trade is currently recruiting some of the finest people known in this country to help us to develop that. I stress to the hon. Lady that this whole exercise is not just defined by one Department or by the Department for Exiting the European Union; every Department is working to help to maximise the assistance that we can give both to British businesses and to the entire economy.

[Jim Shannon (Strangford) (DUP)]

Expanding UK global trade will mean that we need better connectivity within the UK. With that in mind, does the Minister agree that expanding Heathrow and adding more flights from Northern Ireland will enable more of our exporters in Northern Ireland to reach clients, particularly in new and emerging markets outside the EU?

[Mark Garnier]

I certainly agree that greater connectivity through airports is incredibly important for the whole country. However, I must stress that the details for such arrangements are for Ministers in the Department for Transport, so perhaps I can refer the hon. Gentleman to them.

[Several hon. Members rose—]

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[Bob Blackman (Harrow East) (Con)]

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

[The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)]

My hon. Friend is right. We have an extraordinarily good relationship with Israel, and we are the second biggest export market for Israel. Currently, we are governed by the association agreement that the EU has with Israel, and we are certainly keen to engage with Israel to make sure that in a post-Brexit world there is no disruption to the trade that we have.

[Helen Goodman (Bishop Auckland) (Lab)]

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

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[Mr Philip Hollobone (Kettering) (Con)]

T6. In prioritising a post-Brexit free trade deal with Israel, will the Minister ensure that as far as possible the Palestinian Authority is included, because enhanced trade between the UK, Israel and the Palestinian Authority will be an essential part of building a sustainable and lasting peace?

[Mark Garnier]

I wholeheartedly agree with my hon. Friend. The British Government absolutely support a negotiated settlement leading to a safe and secure Israel living alongside a viable and sovereign Palestine state. We should continue to engage with those countries. I was in Israel not so long ago, but I also visited Ministers in Palestine. We are very keen to engage with both Israel and Palestine.

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

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