UK Trade Performance

Viscount Waverley Excerpts

Tuesday 7th May 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank my noble friend for that contribution on a subject that he knows well. I will come to his specific question on auto in a moment. I will say that we are in a strong position here, but of course there is more that we can do. One of the focuses of DBT and my portfolio is to try to increase the number of companies that export. At the moment, we have 300,000 companies exporting. My personal ambition is to try to get that up to 500,000, which would be 20% of the 2.5 million registered companies.

The reason why we want these companies to be exporting is that we discover that they share some very interesting characteristics. First, they are well managed; they have ambitious management teams and are quite often owner managed. Secondly, if they are selling goods and services around the world, it is because they are world class and will get high margins for those products and services, so they will be more profitable. And here is the silver bullet—they pay higher wages. If 70% of them are based outside London and the south-east, that is real levelling up. So of course there is more that we can do, but there is a strong recovery going on in our economy right now.

On the specific issue of automotive, obviously we have had a discussion with Stellantis and have talked about Nissan et cetera. Sometimes these discussions are described as U-turns, but I see them as part of a practical journey to net zero. We have to move in a practical way and take the public with us. Right now, we have a direction of travel but we have to be flexible, as we have been with heat pumps and indeed cars, to make sure that we take the public with us. The market itself has not yet landed and has to decide exactly how this will be fulfilled.

I do not see this as in any way reneging on our net-zero commitments. Right now, 75% of our economy is powered by petrochemicals and 25% by renewables. The 2050 target is to flip that on its head and make it 25% hydrocarbons, which would be green and clean hydrocarbons, and 75% renewables. How we get there is to be done over a generation. We have a direction of travel, but we will be flexible about it as we go, as we already demonstrated with heat pumps and cars. I am very clear that we will get there and in a way that continues to make sure that our industries are profitable and that our workers are well paid.

[Viscount Waverley (CB)]

My Lords, putting fresh produce on the table might become a challenge, as a result of the customs controls that took effect from 30 April. The Minister referred to the Electronic Trade Documents Act, but that needs a boost, with HMRC accepting that we are now potentially in a paperless environment. Yet I have heard that, in the Port of Dover, although the Act is in place, staff are still asking for paper to support the process—so work clearly needs to be done.

Trade matters. It is the engine room of the economy. The Statement referred to

“exporters firing on all cylinders”,

and went on to say that

“some people seem unaware of the progress that we have made as an independent trading nation”.

Does the Minister accept that much more could be done? I have in my sights the UK’s membership organisations. Does the Minister recognise the role of trade in fostering co-operation and development? Will he convene a meeting of individual chambers of commerce and trade associations, and listen to what they have to say?

Support is required, sharing challenges and solutions to deepen economic co-operation in the UK’s national interest, including making themselves available to engage with opposite numbers globally and away from a rather patchy record—as identified, for example, by the Turkish manufacturers association wishing to sit with Make UK to discuss mutual co-operation in both countries’ best interests. We are just about to start an FTA, but we have to have the trade associations that represent these organisations engaging—they do not even answer the phone.

[Lord Offord of Garvel (Con)]

I thank the noble Lord for those comments. On the border target operating model and the new checks coming in, as part of Brexit, which the UK voted for, we need to protect our borders in all respects. As we have said before, we need border checks, especially when it comes to SPS. There will be costs to bear, but they will be outweighed by the benefits and the farming community has been very vocal in support of that measure. Let us remind ourselves of the costs if things go wrong: foot and mouth cost us £13 billion. So it is obvious that we need to do this and do it in a light-touch manner.

On stakeholder associations, I absolutely agree. I have regular dialogue with all the names given. We are in a bit of a transition with these organisations after having 50 years of being very focused on Europe. There is now a need for us to raise our sights, and there is a need for those organisations to go more global—no question about it. I am staggered as I go to our embassies and commissions around the world to find the strength in depth that we have in terms of trade teams in-country. We need to get them more joined up with stakeholder organisations. I will be happy to take that initiative forward in my portfolio.