Trade: UK and California

12. What steps she is taking to promote trade between the UK and California.

Across the US, we are unlocking barriers for business at state level, while also engaging at the federal level. There is huge potential for growing trade in California, and I have visited California three times as part of the Department for International Trade stateside tour.

I thank my right hon. Friend for that answer, but as California is the fifth largest economy in the world, will she redouble her efforts and, in particular, give us a timescale for securing a memorandum of understanding with the state of California similar to that which she successfully negotiated with Indiana?

We are currently talking to about 25 states with regard to memorandums of understanding, including California. Larger economy states will take longer than smaller economies to arrive at the final MOU. We think that within the first eight we will have some super-economy states, including Texas. California will be a little way off, but I hope to conclude a large number of these MOUs by the end of this year, and we expect to sign further in the coming weeks.

The UK Government, as we have heard, are in talks with 25 individual US states, in the hope of establishing tailored free trade agreements. I believe that the Cabinet has set California and Texas in its immediate sights. If the UK Government have no qualms in entering into trade agreements with sub-state actors such as those US states and do not think that that violates US sovereignty, why do they oppose the Scottish Government entering into their own free trade negotiations?

This argument, I am afraid, is a false one, and it has also been perpetrated with regard to the Australia deal. The structures and kinds of regulations and laws that we are talking about are not equivalent. In Australia’s case, we are not talking about law or EU retained law; we are talking about guidelines that sit at state level. Obviously, the MOUs that we are agreeing with US states are not free trade agreements in terms of tariffs; they talk about our regulation, mutual recognition of qualifications and all of those things. Within those MOUs, we are actually doing partnerships between particular locations of the UK, which could include the devolved nations. Northern Ireland has such an MOU with other parts of the US, and I encourage the Scottish Government to get on board, because there would be massive advantages to people in Scotland if they did so.

I commend my right hon. Friend’s progress in her discussions with California, but she will know that many leading companies have left California for Texas because of that state’s low-tax, light-touch, pro-growth regulation. Will she update the House on the progress that she is making in her discussions with Texas? What lessons has she learned and passed on about the scope for regulatory reform in this country?

There is massive scope for such reform, which is one reason why we are pursuing this agenda. My hon. Friend is absolutely right that business is seeking out business-friendly states in the United States. There is now some competition to secure MOUs with us, and we are going after states that are really open for business and open to bringing people, ideas and money together to solve the world’s problems. Texas will be a trailblazer state; we have signed with Indiana; and Oklahoma, the Carolinas and others are really pushing the agenda forward. There are massive potential benefits for us, and for the United States too.