Trade Bill: Lord Purvis

Speaking at the House of Lords on the Trade Bill, Lord Purvis said:
Lord Purvis

My Lords, I am very grateful to the noble Lord, Lord Lansley, for moving this amendment. It has allowed us to generate a very high degree of cross-party support, and it is to be ​commended for that. I will try to respond to a valid point made by the noble Baroness, Lady Noakes, with regard to how reports are put together and where they best fit. I hope she does not mind me saying from these Benches that she made a good point, and that she can accept that, but maybe we need to just tweak it. If we tweak it, we may generate overwhelming consensus on this point.

I preface my remarks by referring to the work of the new all-party parliamentary group, which was so well laid out by the noble Viscount, Lord Waverley. I declare that I too am an office bearer for that group. I commend the noble Lord, other members, and the International Chamber of Commerce on their energy and direction in getting this group established. The noble Lord will forgive me if I ask that he does not invite me to any 4 am calls with the group, but I will be glad for him to send me the minutes of any discussions. In a moment I will touch on why that might be important.

I have been involved in politics since before I was elected as a Member of the Scottish Parliament representing the Borders constituency, an area extremely rich in textile heritage and industry. Having been born and brought up in that region, I have an enormous admiration for exporters. They are in many respects unsung heroes and the work that they do in supporting the UK economy can never be overestimated. They are not only men and women who trade, but pioneers searching out competitive new markets. They have to overcome many barriers, from languages to what can be very bad behaviour by companies in other countries, often on very low margins. They are at the front end. We can perhaps help them with getting cross-party support in our new trading relationships going forward from next January. I hope that the all-party group will focus on that.

I hope the Minister knows that I am sincere when I say that I will look at the Japan agreement. I will be looking at whether we are securing better market access for our textile exporters as well as guaranteeing Japanese market access to ours. As for myself and many friends of mine in the Borders, we are still stung by the multifibre agreement and the “cashmere wars”, and we know some of the challenges. This has been a long preface, but I am passionate about this.

In many respects, the support that we need to give our exporters as we go forward will be meaningfully different from what it has been in the past. I want to reflect on the different profile of trade. The noble Lord, Lord Lansley, mentioned this; I want to add some figures that I have seen from the WTO, which are quite stark. Between 1995 and 2015, the overall global most-favoured-nation tariff rate had declined from 6% to 4%; the tariff reductions had been very good. However, over a fairly comparable period from mid-2000 to 2015, non-tariff measures had grown from just over 1,000 to 2,500 as recognised by the WTO. By and large, that is because countries that are becoming more prosperous regulate their own domestic markets, introducing more standards—this links with the debate on the previous groups. On the one hand it is harder to export to those markets; on the other, those countries are operating on a basis comparable to us.​

In many respects, the support that we give to our businesses allows them to understand some of these markets much more and to navigate their way around the non-tariff measures that those countries have put in place. Our whisky industry has become expert at this. In many respects, the Government learn as much from our whisky industry as many other businesses can learn from government about how to operate in the competitive global market; as we go into the “new world”, this will be important. As much as we want to advance and support our exporters, our competitor countries are doing that as well if not better.

Just before I came into this House seven years ago, the coalition Government proposed an export strategy linked with an industrial strategy. When Vince Cable, who was in the business department, launched the strategy, he highlighted an interesting figure, saying that we had 220,000 online retailers, exporting more than the rest of Europe’s exporters combined. We were leaders in online retail, by far. We have lost the edge on that now; our competitors, including Germany, have seen a comparable exporting advance while we have plateaued. In no area where the UK leads in one year can we assume that we will lead in every year to come. As the world becomes more competitive, so do our major competitors in Europe and other developed countries.

That is reflected in some of the figures with regard to our overall trade approach. It has been interesting to see the negotiating objectives for our prospective American agreement and, now, the Japan agreement. I searched the two substantial documents concerned and in neither was our trade deficit with those countries mentioned at all. We have significant trade deficits with Japan and with America. Germany and France have trade surpluses in both goods and services, although we have seen a huge growth in services.

There are no easy answers, but growing our exporters through an updated export strategy, as the noble Lord, Lord Lansley, indicated, would be a very worthwhile objective for the Government. Even if we realised all the potential benefits in the new Japan agreement, we would still have a trade deficit with Japan. Our focus should be how we operationalise any of these agreements —the Minister and I agree strongly on this—to create an advantage.

I read a slightly worrying report in September in the Financial Times, where concern was expressed by Export Partners UK, which represents 41 trade associations. The article highlighted the fact that the trade show access programme funding has been cut as a result of the lack of physical trade shows, while other countries such as Italy, France and Brazil have given extra support to their exporters within the virtual world. I am sure that the Minister will not be able to answer straightaway but, if can he confirm the position on support for our exporters at this very difficult time, that would be very useful.

Before I conclude, I will respond as promised to the valid point made by the noble Baroness, Lady Noakes. She is absolutely right regarding the annual report. I had an inkling that she might mention, or question, the validity of putting in reports, and whether this ​would be overburdening the Civil Service; she has mentioned requests for certain reports in debates on previous groups. I looked again at the DIT annual report. There is certainly scope for it to be expanded, but this is very much a report about the DIT’s performance as a government department, its accountability, auditing and finance. It has sections on overall exports, investment and trade policy and global Britain. However it does not get to the nub of the point made correctly by the noble Lord, Lord Lansley, about how we operationalise our trade agreements, and the markets within the countries concerned, and where particular business support is necessary rather than looking at this in totality.

I thought that the Government would move ahead of what they had said they would have. This addresses the point made by the noble Baroness directly. On page 9 of the Command Paper of spring 2019, the Government said:

“We will … publish an Annual Trade Report.”

I believe the Government’s intention was that this would be an update on all negotiations, but they did not leave it at that. As far as I understand it, the Government committed in that Command Paper to an annual trade report. That would be very much in the spirit of this amendment. If it is still the intention—and if it were to highlight areas of the market and sector support for our exporters—we would be able to benefit from that.

Can the Minister clarify that it is indeed the Government’s intention to publish an annual trade report? If not, we may have to revisit this issue because it is important if we are to benefit, as the Government say we will, from our new trading environment. We must make sure that our businesses understand where and how significant the support is and, ultimately, how successful it is. We will not be able to stand alone when our competitors are moving apace. None of us want that because we all want the UK to prosper. I therefore hope that the Minister can give a positive response.

Lord Purvis of Tweed View in Hansard: https://bit.ly/3lZIx9N