UK-EU Trading Relationship: Industrial Strategy

3. What assessment he has made of the effect of uncertainty of the UK’s trading relationship with the EU on the delivery of the industrial strategy.

As the hon. Gentleman will know, there are huge opportunities for advanced manufacturers, especially in his region, and the sector benefits from a minimum of frictions in trade, so it is very important that we conclude a deal with the European Union.

I thank the Secretary of State for that reply and commend him for his approach. Boosting productivity is the declared objective of the industrial strategy, but it is plummeting at the moment due to Brexit uncertainty. Does he agree that it is absolutely essential that we get an early Brexit deal that delivers both a customs union and frictionless market access to the EU, because otherwise it is doomed to failure?

I am a bit more optimistic than the hon. Gentleman in that respect, not least because of the announcement just yesterday from the Advanced Propulsion Centre, which he knows very well, about the opportunity of nearly £5 billion for manufacturers, including in the west midlands, to participate in the growing market for electric vehicle batteries. It is therefore crucial that we drive productivity forward. He will also know of the work that Jürgen Maier is leading, as part of the Made Smarter Review, to capitalise on the opportunities. However, as I have always been clear with the House, we can best advantage those manufacturers if they are able to continue to trade freely and without frictions with the European Union.

Can the Secretary of State confirm that the Government have held discussions with a range of businesses, including those with complex customs requirements and those that export and trade mainly with the European Union, in formulating all their plans?

I and my colleagues meet very regularly—every day—with businesses in all sectors and in all parts of the country. I think that there is a strong feeling in the business community that we need to bring to a resolution the question of our future relationship with the European Union. The longer this situation goes on, the more attractive investment decisions are put on hold, and they could be creating jobs now.

The most recent quarterly economic survey from the North East England chamber of commerce shows a reported mark-down in sales and exports from the north-east. It states:

“We frequently hear from members that uncertainty over Brexit is delaying investment and hiring decisions for their businesses and their customers.”

What specific north-east-focused steps are the Government taking to ensure that the north-east business community and local jobs will not be affected by that, given that the Government’s own analysis shows that any Brexit outcome will affect the north-east the hardest?

One specific north-east-focused step is to invite the hon. Lady to vote for the deal that has been put before the House.

The steel industry is, rightly, a key part of the industrial strategy. In that context, what early discussions has the Secretary of State had on the steel charter and the key asks contained within it?

The discussions that we have had are intended to ensure that the steel sector, which is of fundamental importance to this country, can benefit from some of the manufacturing opportunities that we have talked about. As we expand our production of vehicles, as I hope we will do, there will be a strong requirement for steel, and through the proposed strategy we will ensure that that is British steel.

The Secretary of State’s industrial strategy states that manufacturing is crucial to the economy and promises to support businesses to access international markets and drive up exports. However, according to Make UK, stockpiling in the UK is now the highest of any G7 nation ever, as manufacturers try to protect themselves from Brexit uncertainty. Chambers of commerce across the country report falls in cash flow because money tied up in stock is not available to drive exports or pay wages. Cash flow is the lifeblood of manufacturing and the cause of up to 90% of business failures. Whatever the eventual outcome of the Government’s Brexit shambles, British manufacturers must be in business to meet its challenges, so will he now commit to providing financial support?

The hon. Lady quotes Make UK. The chief executive of Make UK, with whom I meet almost every week, has said:

“Make UK has consistently supported the Government’s withdrawal agreement as it removes the risk of no deal and delivers a sensible transition period which is vital for the needs of manufacturers.”

I think the hon. Lady and I have a joint view on the importance of manufacturing, not least in the north-east. I hope that she will have the flexibility and pragmatism to come together—I am talking to her colleague the shadow Secretary of State—and agree a way forward in line with what Make UK recommends.