Extracts from Parliamentary proceedings - Nov 27

Tuesday, 28 November 2017 07:55

Extracts from Lords debate on Exports: Africa and the Commonwealth Lord Howell of Guildford (Con):...Fifthly, there is the China factor. This does not much feature in a lot of the briefing I have seen for this debate, but everyone is interested in trade with China. China is deeply involved in almost every economy in Africa and we have to work alongside China and, in many cases, have a triangular relationship with it when developing joint projects in a way that we would never have...Request free trial

Extracts from Lords debate on Exports: Africa and the Commonwealth

Lord Howell of Guildford (Con):...Fifthly, there is the China factor. This does not much feature in a lot of the briefing I have seen for this debate, but everyone is interested in trade with China. China is deeply involved in almost every economy in Africa and we have to work alongside China and, in many cases, have a triangular relationship with it when developing joint projects in a way that we would never have dreamed of doing in the past. This is the new pattern of the future. China and to some extent India are both deeply involved in Africa, so we have to be involved with China and India to be effectively involved in Africa...

Lord Bilimoria (CB): My Lords, the EU as a bloc is the UK’s largest trading partner by far. In 2016, it accounted for 43% of UK exports of goods and services and 54% of imports. Among individual countries, the United States is of course by far the biggest trading partner, with 18% of the total, and Germany comes second, with £49 billion. Ten of the UK’s top 25 export markets in 2016 were European Union member states, as were 13 of the top 25 countries from which the UK imports. Trade with China is growing, as it is with India, while the Commonwealth accounts for just 10% of the UK’s trade...

...What is certain is that, following Brexit—this is a point that is missed—we will lose our influence in the world, and that will be important. The weakening of the pound affects countries that export to us. Everyone says that it is great for British exports, but what about African countries exporting to us? India is the most effective Commonwealth country, and it is potentially forgoing close to $1.4 billion out of its exports and remittances received from the UK. The UK is the fifth-largest economy in the world, so this could have a huge impact on us.

Most Commonwealth nations are also members of several trading blocs involving non-Commonwealth countries, and they are all looking for greater deals with the big countries: the USA, Japan and the big bloc, the EU. If you were to ask India what is more important to it, the EU/India free trade agreement or a potential free-trade agreement with the UK—let us get real, the EU is far more important to India. Commonwealth countries include existing European Union countries, so that makes the situation even more complicated. As we have heard, the Commonwealth makes up a very small part of UK trade: 9% of total UK exports go to Commonwealth countries compared with 44% to EU countries, while 53% of the UK’s imports come from the EU but only 8% from the Commonwealth.

So we have to put this all in context. Some of the major trading partners in the Commonwealth, specifically Australia, Canada and India, are among the largest economies in the world, while a number of Asian and African countries are fast growing—so there is potential. India is of course a great country, but then the UK exported much more to Germany alone—£48.5 billion-worth in 2015—than to Australia, Canada, India, Malaysia, New Zealand and Singapore combined. South Africa is the UK’s biggest trading partner among the African Commonwealth countries but overall exports to Africa remain strikingly low. This is the reality of it all. Africa accounted for 5.1% of global GDP compared with 2.4% for the UK—UK GDP is half that of the whole continent.

Looking ahead, the export potential for Commonwealth countries is there and we could increase it. UK trade is heavily focused on these few countries—Australia, Canada, India, Singapore and South Africa —which accounted for 70% of UK exports to Commonwealth countries. With regard to trade, as I said, two Commonwealth countries being members of the EU further complicates the whole issue...

...The British Government have repeatedly promised to get immigration down to the tens of thousands, and recently the Indian high commissioner, Mr Sinha, said that a free-trade deal between the UK and India might be possible by 2030 because we need to talk about the movement of people. He said:

“I’m not talking about unfettered access or unrestricted travel, I’m talking about movement of professionals, movement of doctors, technicians, engineers. I think both sides will benefit”.

This is the key. Boris Johnson was told in no uncertain terms when he went to India that the UK would have to change its immigration rules and its attitude to students, who are still categorised as immigrants, and to their not being allowed to work after they study.

Last week Liam Fox repeated himself by saying he cannot do these free trade deals because British businesses do not want to export. How dare he insult us as businesses? Does he realise how hard it is to start and build a business and raise finance for it? I have exported for 25 years, and it is tough—but I want to export more. Who is he to say I am not exporting enough?

I conclude by saying that the UK has amazing soft power, but that is no good without the hard power. If we have defence cuts coming along, that will hamper our ability to export and trade. The work of DfID is so important. The GREAT campaign has been great: it has been a wonderful benefit to our country.

I sum up with this. Liam Fox and the Brexiteers say, “Let’s go out and go global”. The Canada-EU free trade deal has just taken eight years. What proportion is EU to Canada trade? Ten per cent. What proportion is the EU’s trade to us? Fifty per cent. If you add to that 17% for the 50 countries who have free trade agreements with the EU, and Japan, which is just signing a free trade agreement with the EU, and you have 70% of our trade with and through the EU. Would you want to jeopardise that by leaving the EU to go after 30%? India has nine free trade agreements, not one with a western country.

It is madness. We have a partner in this world. This is a debate about Africa, and I conclude with the famous African saying, If you want to go fast, go alone; if you want to go far, go together.

Lord Mendelsohn (Lab):...We have a new reality and are looking to significantly boost trade relations between the UK, Africa and the Commonwealth in the long term. We have to recognise that, in the short to medium term, there are as many problems as opportunities. The UK is held in high esteem across Africa and the Commonwealth for the British model of doing business: an open and dynamic method, underpinned by UK law. However, the Brexit process will take its toll and create obstacles to trade deals. The noble Lord, Lord Bilimoria, made very careful note of many of the challenges that we face. Africa is very close to us; there is an advantage in its location. For example, our country is still responsible for 40% of exports to Botswana and the Seychelles and for 20% to Gambia, Equatorial Guinea, Mauritius, Kenya and South Africa. However, our overall trade performance has not been excellent. Among the seven Commonwealth countries which the UK exports most to, we are the largest EU exporter to none. Germany exports more goods than the UK to Australia, Canada, Singapore, India, South Africa and Malaysia. Switzerland, Germany and Belgium all export more goods to India...

...As the noble Lord, Lord Howell, said, the issue of China looms large. The EU in general has declined in significance as a trading partner because of the interest of China in Africa as well as much greater intra-African trade. We face remarkable competition with China’s belt and road approach. African development relies on the right infrastructure—electricity and transport—and on expansion of the internet, as penetration in Africa is quite low. Nigeria’s internet penetration is 97%, but Egypt’s is the next largest at 48% and Kenya’s is under 35%. Feature phones are common across Africa and we face a huge challenge with the Chinese devotion to getting their equipment and platforms—Alibaba, Baidu, Weibo and the others—there, as well as the China Bank. The noble Lord, Lord Howell, might be better directed to creating a triangular partnership with India into Africa than with China...

The Minister of State, Department for International Trade (Baroness Fairhead) (Con) (Maiden Speech):...I turn first to Africa, a glorious, dynamic region whose workforce is predicted to exceed that of China and India by 2034, and where business spending and household consumption is growing. Yet, as many noble Lords pointed out, the UK is not taking full advantage of these huge trading opportunities. Indeed, although UK trade with Africa has doubled since 1999, trade with this great continent has decreased since its peak in 2012. There must be no shying away; we need to act...

To read the whole debate, CLICK HERE

Extract from Commons statement on the Industrial Strategy

Graham Stringer (Blackley and Broughton) (Lab): The key to any successful industrial policy must be low and competitive energy costs. Energy costs in the United States have halved, and the reductions in China and India have been similar, but ours have gone up. How will the Secretary of State change that damaging trend?

The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark): The industrial strategy is very clear and makes that precise point. We have a substantial report from Professor Dieter Helm, the energy economist, looking at how we can meet our carbon reduction commitments but at the minimum cost to consumers, whether they be domestic or industrial consumers. I hope that the hon. Gentleman will have a chance to look at the report, which we will be responding to shortly, because our ambition is as he describes: to minimise the energy costs facing businesses.

To read all the exchanges, CLICK HERE

Extracts from Commons debate on the Budget

Tim Loughton (East Worthing and Shoreham) (Con): In terms of grasping opportunities, does my right hon. Friend acknowledge that one in 12 people on this planet is an Indian under the age of 28? Does he agree that that is where the future lies, that that is where the opportunities for this country lie and that we can forge a trade relationship with those people only outside the customs union?

The Secretary of State for Foreign and Commonwealth Affairs (Boris Johnson): My hon. Friend is absolutely right, and I might point out to him as well that India is just one of 52 Commonwealth nations that together comprise 2.4 billion people and some of the fastest-growing economies in the world, with whom we can now do free trade deals, as he rightly says, outside the customs union...

...I say again that not only is a global Britain in our national interest, but we have an obligation to promote the general good. It is an astonishing fact that, when we include our overseas territories, this country is responsible —in addition to all the other aspects of global Britain that I have described—for 2.6 million square miles of ocean. That area is more than twice the size of India and 30 times bigger than the UK. Britain is responsible for a greater expanse of the world’s oceans than are Brazil, Canada or even China. It is possible that some hon. Members are unaware that one third of the world’s emperor penguins are British....

Ross Thomson (Aberdeen South) (Con): I am genuinely grateful to the hon. Gentleman for giving way. Scotland is part of the United Kingdom, so it has access to the Foreign and Commonwealth Office, its embassies—there are hundreds across the world—and the Department for International Trade, which ensures that Scottish fish products are sold in China and Vietnam, and that Scottish whisky is on its way to markets in India. Is that not a great direction of travel for Scotland in the United Kingdom?

Tim Loughton (East Worthing and Shoreham) (Con):...We cannot be complacent, and I certainly welcome the renewed urgency in tackling the productivity deficit and the industrial strategy, which concentrates on smart technologies, clean technologies, fast technology and preventive technology, because that is key. This year alone, China and India will each produce 1 million engineering graduates, many of them working in manufacturing and service sectors in high-tech industries. In 20 years, many of the growth jobs will be jobs that do not exist today, so education is key. That is why I welcome the investment in research and upskilling that is a hallmark of this Budget and today’s vote of confidence by the pharmaceutical companies in this country’s future in that area...

Alex Cunningham (Stockton North) (Lab): The future of global Britain will start with Britain facing greater isolation in the world. We are taking a begging bowl around the world and pleading for trade deals to give our nation a future beyond Brexit, and it is not going well. Sadly, the Chancellor’s Budget has nothing to ease the way. Yes, he has set aside £3 billion to help us over the shock, but I remind him that it cost £1 billion just to buy off the Democratic Unionist party to prop up a weak Government. No one should be in any doubt that, although countries may want special trade deals with Britain, they will exact a challenging price. Two examples: the USA wants us to drop our food safety standards, and India suggests that the UK must be prepared to allow more immigration if it is to agree a deal....

Paul Masterton (East Renfrewshire) (Con): I start by welcoming the news from India about the Chennai Six. I very much hope that those men will be home soon...

Ross Thomson (Aberdeen South) (Con):...There is more to Aberdeen and the north-east than oil and gas. The region is also home to a thriving food and drink industry, and it is known for its whisky exports. That is why I am delighted that, in this Budget, Scottish Conservative MPs have delivered for the industry a further freeze on the duty on spirits, making a bottle of whisky £1.15 cheaper than it would otherwise have been since the duty rise ended in 2014. With the opportunity to forge our own new bilateral trade deals and agreements, we can take Scottish whisky to growing markets of the world such as India, and with the support of this Government, whisky will thrive with Brexit. As we have heard, there are huge opportunities for the United Kingdom. We have a new and historic opportunity to design a new trade policy and sign new deals. Let us seize that opportunity, and let us make the most of it....

To read the whole debate, CLICK HERE