With permission, I will update the House on my visit last week to China and Japan, where we delivered for the British people.
With events overseas directly impacting on our security and the cost of living, I made it a founding principle of this Government that, after years of isolationism, Britain would face outwards once again. This was an 18-month strategy to rebuild our standing and we have delivered: strengthening our US relationship with our world-first trade deal; resetting our relationship with the EU; striking a groundbreaking free trade agreement with India; and now, thawing our ties with China to put this relationship on a more stable footing for the long term.
China is the second biggest economy in the world. Including Hong Kong, it is our third biggest trading partner, supporting 370,000 British jobs. It is also an undeniable presence in global affairs. It would be impossible to safeguard our national interests without engaging with this geopolitical reality. Yet we inherited a policy from the previous Government not of engagement with China, but of hiding away and sticking their heads in the sand. While our allies developed a more sophisticated approach, they let the UK fall behind. We became an outlier. Of my three predecessors, none held a single meeting with President Xi. For eight years, no British Prime Minister visited China—eight years of missed opportunities. Meanwhile over that period, President Macron visited China three times, German leaders four times, the Canadian Prime Minister was there a few weeks ago, and Chancellor Merz and President Trump are both due to visit shortly.
Thank you. Can we calm it down? I am sure you will want to catch my eye and I would like to hear what you have to say, so let us not ruin the opportunity.
In this context, refusing to engage would be a dereliction of duty, leaving British interests on the sidelines. Incredibly, some in this House still advocate that approach. But leaders do not hide. Instead, we engage and we do so on our own terms, because, like our allies, we understand that engagement makes us stronger.
Protecting our national security is non-negotiable. We are clear-eyed about the threats coming from China in that regard, and we will never waver in our efforts to keep the British people safe. That is why we have given our security services the updated powers and tools they need to tackle foreign espionage activity wherever they find it, and to tackle malicious cyber-activity as well. The fact is that we can do two things at once: we can protect ourselves, while also finding ways to co-operate. It was in that spirit that we made this visit.
I had extensive discussions, over many hours, with President Xi, Premier Li and other senior leaders. The discussions were positive and constructive. We covered the full range of issues, from strategic stability to trade and investment, opening a direct channel of communication to deliver in the national interest, enabling us to raise frank concerns about activities that impact our national security at the most senior levels of the Chinese system. We agreed to intensify dialogue on cyber issues and agreed a new partnership on climate and nature, providing much-needed global leadership on this vital issue.
I raised a number of areas of difference that matter deeply to this country. I raised the case of Jimmy Lai and called for his release, making clear the strength of feeling in this House. Those discussions will continue. My right hon. Friend the Foreign Secretary is in touch with Mr Lai’s family to provide further briefing.
I raised our human rights concerns in Xinjiang and Tibet. We discussed Taiwan, wider regional stability, Iran and the middle east. I called on China to end economic support for Russia’s war effort, including the companies providing dual-use technologies, and urged it to use its influence on Putin to push for the much-needed ceasefire in Ukraine.
I thank the Prime Minister for advance sight of his statement, but it is utterly reprehensible that he began it by accusing the previous Government of isolationism—the same Conservative Government who—[Interruption.] The Business and Trade Secretary is laughing, but let me tell him this. That same Conservative Government led the world in our response to the invasion of Ukraine and signed the vital strategic alliance of AUKUS—[Interruption.] The Business Secretary asks how many free trade agreements we did. We signed Britain’s biggest post-Brexit trade deal—the CPTPP—bringing us closer to the 11 Indo-Pacific nations, including Japan. I know about that deal because I signed it myself.
I welcome the Prime Minister’s efforts to collaborate more with our long-standing ally Japan, but let me turn to China. Of course Britain should engage with China. Even though the Chancellor was not allowed to go, even though it is an authoritarian state that seeks to undermine our interest, even though it spies on us—sometimes within the walls of this building—and even though it funds regimes around the world that are hostile to our country, China is a fact of life, a global power and an economic reality. Let me be clear: it is not the Prime Minister engaging with China that we take issue with. What we are criticising is his supine and short-termist approach.
I am sure that the Prime Minister means well, but his negotiating tactic has always been to give everything away in the hope that people will be nice to him in return. Before the Prime Minister had even got on the plane, he had already shown that he would do anything to demonstrate his good relationship with China. China, however, uses every interaction to improve its own position. The Prime Minister looked like he enjoyed his trip—in fact, it looked like a dream come true for a man who was virtually a communist most of his life.
Order. Mr Kyle, you said to me when you were going to China how well you would behave and how you owe me a big thank you. You are not showing it today!
Mr Speaker, I am not worried about the Business Secretary; the entire business community thinks he is a joke and does not know what he is talking about.
As I was saying, of course we should engage with other countries, even hostile ones, but we need to do so with our eyes open and from a position of strength. That requires a Prime Minister and a Government who put our national interest first.
Let me see if I understand the right hon. Lady’s position. This is the Leader of the Opposition who said we should empty-chair the most important NATO summit for years, who would not turn up to the G7 and who would rip up our valuable trade deals with the US, India and the EU. This is the Leader of the Opposition who characterised Greenland as a “second-order issue”, and then undermined the Government’s position on sovereignty. When it comes to China, her policy is to stick her head in the sand, unable to influence anything. In a volatile world, that is not policy; that is an abdication of responsibility—no wonder members on her Front Bench are leaving in droves.
The Leader of the Opposition talks of the embassy. China has had an embassy in the UK since 1877. It is currently spread across seven sites. She is so busy trying to hold her party together that she has clearly not read the letter from the security and intelligence services. She claims great interest in the China embassy. She was offered an invite for a Privy Council briefing on the issue. What did she do? She chose not to attend. That is a dereliction of duty. Even worse, she sent in her place the shadow Home Secretary, the right hon. Member for Croydon South (Chris Philp)—that is a double dereliction of duty. Instead of taking up a Privy Council briefing, she took up a megaphone on the streets outside the embassy. I changed my party from a party of protest to a party of power. She is rapidly going in the opposite direction. Her reply this afternoon seems to be that we should engage with China, but not engage with China, and that, instead of leader-to-leader discussions where we raise all the opportunities and the difficult issues, each and every one of them, she would get a bag of sand and put her head in it and influence absolutely nothing. The Conservatives are so unserious about world affairs.
I thank the Prime Minister for his statement, and I am pleased to see that his trip went so well. This morning, I was in touch with the Scotch Whisky Association, which wants me to convey its congratulations to the Prime Minister on securing reduced tariffs on exports to China. There is, of course, more work needed, however—a Prime Minister’s job is never done. The biggest overseas market for whisky is, of course, the US, where the tariff is still too high. Will the Prime Minister confirm that this will not be the end of his support for the Scotch whisky industry and that he will continue to be an advocate for it?
With your indulgence, Mr Speaker, I start by paying tribute to my friend Jim Wallace, one of the great Scottish Liberals. I offer our thoughts and prayers to his family and many friends. Jim devoted his life to public service, his Christian faith and the cause of liberalism. But his judgment was not always impeccable, for it was Jim who gave me my first job in politics. We will miss him.
I thank the Prime Minister for advance sight of the statement. I listened to the Conservative leader, whose position now seems to be to oppose trade with the world’s biggest economies—so much for global Britain. With President Trump threatening tariffs again, just because of the Prime Minister’s trip, and with Vladimir Putin still murdering civilians in Ukraine, now more than ever the United Kingdom must forge much closer alliances with nations that share our values, our belief in free trade and our commitment to mutual defence. China shares none of those.
The Prime Minister’s main focus should be on the closest possible ties with our European neighbours, our Commonwealth allies and our friends such as Japan and Korea. Once again, he has made the wrong choice. However, unlike the Conservative party, we think he was right to go and engage. But just like with President Trump, he approached President Xi from a position of weakness instead of a position of strength, promising him a super-embassy here in London in return for relatively meagre offers from China.
The Prime Minister rightly raised the case of Jimmy Lai, whose children fear for his health after five years held in captivity, so will he tell us what Xi said to give him confidence that Mr Lai is now more likely to be released? Did he also challenge Xi on the bounties on the heads of innocent Hongkongers here in the United Kingdom, or the revelation that China hacked the phones of No. 10 officials for years? In other words, did he stand up for Britain this time?
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I also raised the fact that Members of this House have been sanctioned by the Chinese authorities. In response, the Chinese have now made it clear that all such restrictions on parliamentarians no longer apply. I want to be clear: this was not the result of a trade. Yes, Members will want to see more—I understand that—but that is precisely the point: ignoring China for eight years achieved nothing. This step is an early indication, not the sum total, of the kind of progress that this sort of engagement can achieve through leader-to-leader discussion of sensitive issues, in standing up for British interests.
My visit was also about creating new opportunities for British businesses to deliver jobs and growth for the British people. We took with us a brilliant delegation of nearly 60 businesses and cultural powerhouses—the very best of British—as an embodiment of what this country has to offer. If anyone is in doubt as to why this matters, I urge them to spend a few minutes with any one of those businesses; they will describe the incredible potential there and the importance of getting out there and accessing the market.
We made significant progress, paving the way to open the Chinese market for British exports, including in our world-leading services sector. We secured 30-day visa-free travel for all Brits, including business travellers. We secured China’s agreement to halve whisky tariffs from 10% to 5%, which is worth £250 million to the UK over the next five years—a significant win for our iconic whisky industry, particularly in Scotland. That lower tariff comes into force today. In total, we secured £2.3 billion in market access wins, including for financial services, £2.2 billion in export deals for British companies and hundreds of millions of pounds-worth of new investments.
In addition, we agreed to work together in some key areas of law enforcement. Last year, around 60% of all small boat engines used by smuggling gangs came from China, so we struck a border security pact to enable joint law enforcement action to disrupt that supply at source. We also agreed to scale up removals of those with no right to be in the UK and to work together to crack down on the supply of synthetic opioids.
We will continue to develop our work across all these areas, because this is the start of the process, not the end of it. My visit was not just about coming back with these agreements, but about the wider question of setting this relationship on a better path—one that allows us to deal with issues and seize opportunities in a way that the previous Government failed to do.
Finally, I will say a word about my meetings in Tokyo. Japan remains one of our closest allies; together, we are the leading economies in the comprehensive and progressive agreement for trans-Pacific partnership, and we are partners in the G7, the G20 and the coalition of the willing. Japan is the UK’s largest inward investor outside the United States and Europe.
I had an extremely productive meeting with the Prime Minister of Japan, where we set out our shared priorities to build an even deeper partnership in the years to come. Those include working together for peace and security, supporting Ukraine as we work for a just and lasting peace, and deepening our co-operation in cutting-edge defence production, including through the global combat air programme. We discussed how we can boost growth and economic resilience by developing our co-operation: first, in tech and innovation, where we are both leaders; secondly, in energy, where Japan is a major investor in the UK; and, thirdly, in trade, where we are working together to maintain the openness and stability that our businesses depend on. That includes expanding the CPTPP and deepening its co-operation with the EU. We will take all of that forward when I welcome the Prime Minister to Chequers later this year.
This is Britain back at the top table at last. We are facing outward, replacing incoherence and isolationism with pragmatic engagement, and naive posturing with the national interest. In dangerous times, we are using our full strength and reach on the world stage to deliver growth and security for the British people. I commend this statement to the House.
Apart from the Labubu doll in his suitcase—which I hope he has checked for bugs—the Prime Minister has come back with next to nothing. We all want cheaper tariffs for Scotch whisky, but if the Prime Minister had bothered to speak to the whisky industry, as I did two weeks ago, he would know that what it really needs is cheaper energy and lower taxes. The Prime Minister also got us visa-free travel, but China already offers that to other countries. It is not big enough for a prime ministerial visit.
The worst thing was the Prime Minister claiming a glorious triumph with the lifting of sanctions on four Conservative MPs, as if he had done us a favour. Let me tell him this: those MPs were sanctioned because they stood up to China. They stood up against human rights abuses, and they stood up against a country that is spying on our MPs in a way that the Prime Minister would not dare to do. Those Members do not want to go to China. The Chinese know that. They know that they are giving him something that costs absolutely nothing. Why can the British Prime Minister not see that?
I say to you, Mr Speaker, and to the whole House that, like with the Chagos islands, the Prime Minister has been played. China is about to build an enormous spy hub in the centre of London—a ransom he had to pay before he could even get on the plane. I would never allow Britain to be held over a barrel like that. Yet again, the Prime Minister has negotiated our country into a weaker position in the world. His entire economic policy is to tax businesses more, regulate them harder and make energy so expensive that we deindustrialise, and then we can import Chinese wind turbines, solar panels and batteries for electric vehicles—all manufactured in a country that builds a coal-fired power station every other week. Did he speak to the Chinese about that?
What did the Prime Minister’s trip achieve for Jimmy Lai? Nothing. Did China promise to stop fuelling Putin’s war machine in Ukraine? It does not sound like it. What did this trip achieve for the Uyghurs who are being enslaved? Absolutely nothing. Has China agreed to stop its relentless cyber-attacks? We all know the answer to that. The reality is that China showed its strength, and Britain was pushed around, literally. It is no wonder that President Xi praised the Labour party; the Conservatives stood up for Britain—we do not get pushed around.
Britain is a great trading nation. Of course we should engage with other countries, even hostile ones—[Interruption.]
Yet again, the Prime Minister had to spend time on a foreign trip responding to revelations about the vile paedophile and sex trafficker Jeffrey Epstein’s relationship with Lord Mandelson. The Prime Minister has rightly said that Mandelson should resign from the other place, but since he has not, will he back a simple piece of legislation to strip him of his peerage? Surely this House could pass it tomorrow.